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IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA

(“The Tribunal”)                                                                 

CASE NO: CT002OCT2017

In an Application in terms of Section 160 of the

Companies Act 71 of 2008 (“the Act”) for a

determination that the company name LSM

QUALITY DISTRIBUTORS does not satisfy the

requirements of Section 11(2)(a) and (b), and c(i) of the Act

In the matter between:

LSM DISTRIBUTORS (PTY) LTD                                                                      APPLICANT

No: 2005/017923/07

AND

LSM QUALITY DISTRIBUTORS(PTY) LTD                                      FIRST RESPONDENT

(2017/205326/07)

CIPC                                                                                              SECOND RESPONDENT

Coram: Khatija Tootla

Decision handed down on 1 December 2017

DECISION

INTRODUCTION:

[1] The Applicant, is LSM DISTRIBUTORS, a private company duly incorporated under the laws of the Republic of S. Africa and having its registered office at 5 Wroxham Road, Paulshof, Gauteng. 2191, brings an application in terms of Section 160 and Sections 11 (2) (a); 11 (2) (b); 11(2) (c) (i) and 160 of the Companies Act 2008 (“the Act”) read with Regulation (Reg.) 153 for an order that the First Respondent change its name by choosing a new name that does not incorporate its name which is confusingly similar thereto as well as other relief.

[2] The First Respondent is a company incorporated in terms of the Companies Act, having its registered office at 10 Barley Court, Corner of Commissioner and Bloem Street, Boksburg, 1459.

[3] The Second Respondent is CIPC, Pretoria.

BACKGROUND:

[4] The Applicant filed an objection to the Respondent’s name ‘LSM QUALITY DISTRIBUTOR’ on 9 October 2017 on form CTR 142 as prescribed by regulation 142 (1) (a), together with a supporting affidavit as required by regulation 142 (1) (b). The Applicant then filed a default application against the Respondent under cover of form CTR 145, on 13 November 2017.

[5] A copy of the application was served on 13 October 2017 by pinning on the principal door on the registered and main place of business which was a residential address of the First Respondent as there was no other form of service possible.

[6] The Applicant’s objection is based on the fact that on 15 September 2018, it discovered that the First Respondent had been registered by the Second Respondent. The Applicant contends that the Second Respondent did not deliver nor did the Applicant receive a notice in terms of the Act that an application for reservation of a name or the registration of the First Respondent’s name had been received by the Second Respondent. The Applicant also states that it did not provide the Second Respondent consent to register the First Respondent’s name and hence its objection as the name is confusingly similar to its name and that the only difference is the word’ Quality’ inserted between the words ‘LSM and Distributors’ and that such word ‘Quality’ may simply imply that the First Respondent is a subsidiary of the Applicant.

[7] It is also contended by the Applicant that the First Respondent’s name is likely to cause confusion amongst members of the public and mislead them in believing incorrectly that the First Respondent is part of or associate with the Applicant, if the Applicant’s name and the First Respondent’s name are to be used in a normal and fair manner in the course of business.

[8] Thus, the Applicant submits that the basis of the application is that registration of the First Respondents name is inconsistent with: -

8.1             Section 11(2) (a) (i) in that it stipulates that the name of the company must not be the same as another company.

8.2             Section 11 (2) (b) in that the name of the company must not be confusingly similar to its company name

8.3             Section 11(2) ( c) (i) in that the name of a company must not falsely imply or suggest or be such as would reasonably mislead a person to believe incorrectly that the company is part of associated with, any person or entity.

[9] The application was also served on the CIPC but there has been no opposition filed by either the First Respondent or the Second Respondent.

EVALUATION:

[10] It is clear that CIPC did not in reserve a name in terms of Section 160 (1) unless the name is prohibited in terms of Section 11(2) (a) or is already reserved. After CIPC reserves the name the Second Respondent must issue a Notice Confirming Name Reservation on form CoR9.4 and simultaneously issue a Notice of Potential Contested Name being form  CoR 9.6 so that the Applicant serve the persons named in the Notice.

[11] On examination of the name of the First Respondent it is clear that the Applicant is correct in asserting that the only difference in the name is an insertion of the word ‘Quality’. It is clear that the dominant and memorable portion in the Applicant’s name and the First Respondents name are the words ‘ LSM and Distributors’ which indicates that the remaining word ‘Quality’ will not distinguish the First Respondent’s name and that of the Applicant and that could easily imply that the First Respondent is a subsidiary of the Applicant.

[12] In addition, the Applicant contends that by merely looking at or hearing the two names simultaneously or consecutively; and when the two names are to be used in the normal and fair manner in the course of business, the name of the First Respondent is confusingly similar.

[13] The First Respondent’s name is clearly not the same as that of the Applicant and the request in 8.1 supra fails. However, the First Respondent’s name is confusingly similar to the Applicant’s name in terms of Section 11 (2)(b) and in terms of Section 11 (2)(c)(i) it will falsely imply, suggest or reasonably mislead a person to believe incorrectly that the First Respondent is part of , or associated with the Applicant while that is not the case.

ORDER:

[14] The First Respondent is directed to change its name by choosing a new name that is not confusingly similar to that the Applicant’s name.

[15] The First Respondent is directed to file a Notice of amendment of its Memorandum of Incorporation with the Respondent within 30 days from the date of this order and to be exempted from the required payment of the prescribed fee for filing the aforesaid notice of amendment.

[16] In the event that the First Respondent fail to amend its name within the 30 period, the Second Respondent is directed in terms of Section 160 (3)(b)(ii) read with Section 14(2) of the Act to remove the First Respondents name and substitute it with its registration number on Second Respondent’s register.

[17] A copy of this order is to be served on the CIPC for them to ensure the aforementioned is done.

 

k.tootla

____________________

Khatija Tootla

(member of the Companies Tribunal)

1 December 2017

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