Polaris Capital (Pty) Ltd v Registrar of Companies and Another

JurisdictionSouth Africa
Citation2009 (3) SA 207 (C)

Polaris Capital (Pty) Ltd v Registrar of Companies and Another
2009 (3) SA 207 (C)

2009 (3) SA p207


Citation

2009 (3) SA 207 (C)

Case No

11607/2005

Court

Cape Provincial Division

Judge

Brusser AJ

Heard

March 13, 2007

Judgment

July 25, 2008

Counsel

AR Sholto-Douglas SC for the applicant.
No appearance for the first respondent.
A de Vos SC (with RW Tainton) for the second respondent.

Flynote : Sleutelwoorde G

Company — Formation and constitution — Name of company — Change — By order of registrar on ground that undesirable — Recourse to court by aggrieved party — Neither appeal proceedings nor review stricto sensu but rather amounting to rehearing — Operation of order not automatically suspended — Companies Act 61 of 1973, s 45(1). H

Company — Formation and constitution — Name of company — Change — By order of registrar on ground that undesirable — Locus standi to lodge objection to change — Including company or other body corporate — Even foreign company not registered as external company or unable to legally trade in South Africa having locus standi to lodge objection — Companies I Act 61 of 1973, s 45(2).

Company — Formation and constitution — Name of company — Change — By order of registrar on ground that undesirable — Application for relief by

2009 (3) SA p208

A aggrieved company or person — Duty of court — To decide whether reasonable for registrar to have concluded that registration did, or might, deleteriously affect maintenance and promotion of good governance and administration of corporate entities in interests of general public — Where nature and extent of goodwill or reputation of objecting company relevant, fact that name of objecting company not distinctive not fatal — Companies B Act 61 of 1973, s 48.

Headnote : Kopnota

While proceedings brought in terms of s 48 of the Companies Act 61 of 1973 are not review proceedings stricto sensu, it has been held that such proceedings are in the nature of a rehearing. Section 48 proceedings, while not being review proceedings, are also not appeal proceedings. As such rule 49(11) of C the Uniform Rules of Court will not automatically suspend the operation of the order against which proceedings in terms of s 48 have been brought pending the decision of such proceedings as it would be in the case of an appeal. Neither rule 49(11) nor the common law in this regard makes provision for a review to suspend automatically the operation of the order sought to be reviewed. (Paragraphs [46] - [49] at 216E - I.)

D Section 45(2) of the Companies Act spreads the net of persons who have locus standi to lodge an objection to a company name very widely by using the general term 'any'. The reference to person, in terms of s 2 of the Interpretation Act 33 of 1957, includes a company or other body corporate. Even a foreign company that has not been registered with the Registrar of E Companies as an external company may lodge an objection. The fact that the company (in the present case, the second respondent) is not registered with the South African Registrar of Companies as a company in terms of the South African Companies Act does not deprive it of locus standi to lodge an objection in terms of s 45 of the Companies Act. (Paragraphs [76] - [78] at 220G - J.)

F Thus the court held that the second respondent, a corporation registered according to the corporation laws of Massachusetts, United States of America, and also a registered investment adviser with the United States Securities Exchange, fell under the rubric 'any person' in s 45(2) of the Companies Act. (Paragraphs [79] - [80] at 221A - B.)

The fact that a foreign company cannot trade legally in the financial services field G within the borders of South Africa does not deprive it of locus standi to lodge an objection in terms of s 45 of the Act; on the contrary, it gives it every reason to lodge such an objection. Being a foreign-based company does not detract from its locus standi to object but may well be a good reason for the first respondent to entertain the objection precisely because the objector is foreign. (Paragraphs [82] - [83] at 221D - E.)

H In the context of a s 48 application the question upon which a court must be satisfied is whether the Registrar of Companies had exercised his discretion in terms of s 45 of the Act reasonably. In other words, whether, on the facts of the case, it was reasonable for the registrar to have concluded that the registration of name in issue does, or might, deleteriously affect the maintenance and promotion of the good governance and administration of I corporate entities in the interests of the general public. (Paragraph [98] at 224E - F.)

The nature and extent of the goodwill or reputation of a company lodging an objection in terms of s 45(2), necessary for the purposes of an application in terms of s 45 that the name objected to is undesirable, is governed by the fact that the object of such an application is to advance the good governance J and administration of companies in the interests of the general public, and

2009 (3) SA p209

not to determine issues of delictual pecuniary damages. Accordingly, for the A purposes of an application for relief in terms of s 48 of the Companies Act, the fact that the name concerned is not distinctive is not fatal. (Paragraphs [111] - [112] at 225I - 226A.)

In an application in terms of s 48 of the Companies Act, 1973, for the review of the first respondent's decision on an objection in terms of s 45 of the Act by the second respondent (Polaris Capital Management Inc) ordering the B applicant to change its name (Polaris Capital (Pty) Ltd) on the ground that it was undesirable, the court held that the first respondent had indeed exercised his discretion in terms of s 45 reasonably. The application for the review of the decision was accordingly dismissed.

Cases Considered

Annotations C

Reported cases

Southern African cases

Adcock Ingram Products Ltd v Beecham SA (Pty) Ltd 1977 (4) SA 434 (W): referred to

American Chewing Products Corporation v American Chicle Co 1948 (2) SA 736 (A): dictum at 743 applied D

Azisa (Pty) Ltd v Azisa Media CC and Another 2002 (4) SA 377 (C) ([2002] 2 All SA 488): referred to

Blue Lion Manufacturing (Pty) Ltd v National Brands Ltd 2001 (3) SA 884 (SCA) ([2001] 4 All SA 235): dictum at 890D - 891B applied

Bress Designs (Pty) Ltd v GY Lounge Suite Manufacturers (Pty) Ltd and Another 1991 (2) SA 455 (W): considered E

Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd and Another 1998 (3) SA 938 (SCA) ([1998] 3 All SA 175): considered

Charmfit of Hollywood Inc v Registrar of Companies and Another 1964 (2) SA 739 (A): applied

Deutsche Babcock SA (Pty) Ltd v Babcock Africa (Pty) Ltd and Another 1995 (4) SA 1016 (T): applied F

Hollywood Curl (Pty) Ltd v Twins Products (Pty) Ltd (2) 1989 (1) SA 255 (A): applied

Johannesburg Consolidated Investment Co v Johannesburg Town Council 1903 TS 111: referred to

Kredietbank van Suid Afrika Bpk v Registrateur van Maatskappye en Andere 1978 (2) SA 644 (W): applied G

Link Estates (Pty) Ltd v Rink Estates (Pty) Ltd 1979 (2) SA 276 (E): compared and applied

Marinpine Transport (Pty) Ltd v Local Road Transportation Board, Pietermaritzburg, and Others 1984 (1) SA 230 (N): considered

Peregrine Group (Pty) Ltd and Others v Peregrine Holdings Ltd and Others 2000 (1) SA 187 (W): applied H

Peregrine Group (Pty) Ltd and Others v Peregrine Holdings Ltd and Others 2001 (3) SA 1268 (SCA): applied

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A): dictum at 634E - 635C applied

Premier Trading Co (Pty) Ltd and Another v Sporttopia (Pty) Ltd 2000 (3) SA 259 (SCA): referred to I

Reckitt & Colman SA (Pty) Ltd v SC Johnston & Sons SA (Pty) Ltd 1993 (2) SA 307 (A): applied

South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd 1977 (3) SA 534 (A): dictum at 544H - 545A considered

Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C): dictum at 235E - G applied J

2009 (3) SA p210

Tamarillo (Pty) Ltd v BN Aitken (Pty) Ltd 1982 (1) SA 398 (A): dictum at 430G - H applied A

Triomed (Pty) Ltd v Beecham Group plc and Others 2001 (2) SA 522 (T) ([2001] 2 All SA 126): dictum at 550E applied.

Foreign cases

Daimler Motor Car Co Ltd v British Motor Traction Co Ltd (1901) 18 RPC 465: applied B

Edwin Fox Condominiums Ltd v Registrar of Companies [1989] 4 NZCLC 64, 798: dictum at 800 applied

North Cheshire and Manchester Brewery Co v Manchester Brewery Co [1899] AC 83: referred to

Sika (NZ) Ltd v Sika Technology Ltd [1992] MCLR 264: dictum at 266 - 267 applied C

South Pacific Airlines of New Zealand v Registrar of Companies [1964] NZLR 1: applied

Vicom New Zealand Ltd v Vicomm Systems Ltd [1987] 2 NZLR 600 (CA): dictum at 605 applied.

Unreported cases D

Allied Technologies Ltd v Alterno SA (Pty) Ltd and the Registrar of Companies (TPD case No 11745/88, Spoelstra J, 8 May 1989): dictum in approved

Finbanco International Ltd v Registrar of Companies Wellington HC A394/77: applied.

Rules Considered

Rules of Court E

The Uniform Rules of Court, rule 49(11): The Supreme Court Act and the Magistrates' Courts Act and Rules 6 ed (2006) at 73.

Statutes Considered

Statutes

The Companies Act 61 of 1973, ss 45, 48: see Juta's Statutes of South Africa F 2007/8 vol 2 at 1-202, 1-203

The Interpretation Act 33 of 1957, s 2 sv 'person': see Juta's Statutes of South Africa 2007/8 vol 1 at 1-821 - 1-822.

Case Information

Application in terms of s 48 of the Companies Act 61 of 1973 for the review of an order of the first respondent. The facts appear from the G reasons for judgment.

AR Sholto-Douglas SC (with MC Seale) for the applicant.

No appearance for the first respondent.

A de Vos SC (with RW...

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