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COMPANIES TRIBUNAL OF SOUTH AFRICA

Case/File Number: CT021OCT2017

In the matter between:

CDI BROKERS CC                                                                                            APPLICANT

and

CDI BROKERS PROPRIETARY LIMITED                                                    RESPONDENT

(registration number 2016/116529/07)

in respect of objection to company name

Presiding Member                                          :           Khashane La M. Manamela (Mr.)

Date of Decision                                             :           30 April 2018

DECISION (Order and Reasons)

Khashane La M. Manamela

Introduction

[1] The applicant complains that, “contrary to its policy” the Companies and Intellectual Property Commission or the CIPC, has allowed the registration of the respondent’s name, which appears to be identical or similar to the applicant’s name. It is submitted, in this regard, that the respondent’s name is likely to cause confusion, negative perception of the applicant, as well as, potential financial loss to the applicant.

[2] The application was served by way of registered post on the respondent. Amongst the documents filed, there is one titled “Certificate of Posting of an Insured Parcel”, reflecting the date stamp of 30 October 2017 and an address in Domerton, KwaZulu Natal. This address is reflected on a certificate issued by the CIPC dated 26 September 2017 as the postal address of the respondent, as well as, of its two directors. Postage by secure or registered mail is one of the recognised or prescribed methods of delivery of documents in terms of regulation 7 and Annexure 3 of Table CR3 of the Companies Regulations, 2011 (the Companies Regulations).[1]

[3] However, no answer was served and filed by the respondent, as contemplated by regulation 143 of the Companies Regulations, and the applicable time period has since elapsed.[2] Consequently, the applicant has filed a request for default order in terms of regulation 153 of the Companies Regulations.[3] I am satisfied that the application was adequately served on the respondent, for purposes of determining the application on unopposed basis.[4]

Applicant’s case

[4] The application is somewhat very cryptic in its submissions. In fact, the entire application is contained in the following part from the supporting affidavit attached to the Form CTR142 dated 27 September 2017:

“It has come to my notice that CIPC on the 23 March 2016, allowed CDI Brokers CC’s name to be registered to another entity under the form of a Proprietary limited company.

CIPC policy is to allow only a single user to make use of a registered name in order to avoid confusion in the market place. CIPC has clearly acted against their official policy. This may lead to my Close Corporation being negatively perceived in the market place and may lead to financial loss.”[5]

[underlining added for emphasis]

[5] Regulation 142(3)(a) of the Companies Regulations requires that an application to this Tribunal “indicate the basis of the application, stating the section of the Act or [the Companies Regulations] in terms of which the Application is made”. However, the applicant had omitted to state or to disclose the section or regulation relied upon for relief. But, from the part quoted from the applicant’s supporting affidavit above, one can deduce that the application is based on the provisions of section 11 of the Companies Act 71 of 2008 (the Companies Act).[6] And, to the extent necessary, I will overlook the omission to state the applicable provision or condone same as a technical irregularity in terms of regulation 154(3) of the Companies Regulations.[7]

[6] Further, the applicant does not state when it became aware of the existence of the respondent’s name. The respondent was registered on 23 March 2016 and the first of the activities relating to the applicant’s objection to the respondent’s name was only in September 2017. In terms of section 160(2) of the Companies Act an application for objection to registration or use of a company name by another has to be made within  three months after the date of receipt of a notice in terms of section 160(1) and where no notice was received, at any time after the date of the registration of the name that is the subject of the application, on good cause shown.[8]  Be that as it may, from the submissions above, it appears that the applicant may have acted instantaneously in bringing this application. Therefore, I will let nothing turn on this aspect.

[7] As stated above, the applicant’s objection appears to be located within the provisions of section 11(2)(a), 11(2)(b) or 11(2)(c)(i) of the Companies Act. Section 11(2) of the Companies Act reads in the material part:

“(2) The name of a company must-

(a)  not be the same as -

(i) the name of another company…

…

(b)  not be confusingly similar to a name…contemplated in paragraph (a) unless -

(i) in the case of names referred to in paragraph (a)(i), each company bearing any such similar name is a member of the same group of companies;

…

(c)  not falsely imply or suggest, or be such as would reasonably mislead a person to believe incorrectly, that the company –

(i) is part of, or associated with, any other person or entity…”

Conclusion

[8] From even the most superficial of comparisons, save for the statutory ending or expressions (i.e. CC, in respect of the applicant and Proprietary Limited or its abbreviated form (Pty) Ltd), in respect of the respondent),[9] the respondent’s name “CDI BROKERS” is indeed the same or identical to the applicant’s name, word for word or syllable for syllable.  Therefore,  I  find  that  the  respondent’s  name  clearly  does  not  satisfy the requirements of section 11(2)(a) of the Companies Act in respect of the applicant’s company name.

[9] I will, consequently, direct that the respondent chooses a new name, which name ought not to include the words “CDI BROKERS” jointly, and ought to be compliant with the criteria for company names set in section 11(2) of the Companies Act.

[10] In order to facilitate the above and to ensure that the transgression does not inordinately endure to the prejudice of the applicant, I will direct that the respondent be exempted from paying the fees prescribed for amendment of its name occasioned by this order. I make the latter part of the order, as I have no evidence suggesting that the respondent may have been mala fide or deliberate in its transgressions of the impugned provisions of the Companies Act.

Order

[11] Therefore, the following order is made:

a)    the respondent’s registered company name “CDI BROKERS” does not satisfy the requirements of the Companies Act 71 of 2008;

b)    the respondent is directed to choose a new name and file a notice of amendment to its Memorandum of Incorporation;

c)    the respondent is directed to complete the activities ordered in b) hereof within three (03) months of service of this order upon the respondent in terms of regulation 153(3) of the Companies Regulations, 2011, and

d)    the respondent is and be exempted from paying the fees prescribed for amendment of its name occasioned by this order.

________________________

Khashane La M. Manamela

Member, Companies Tribunal

30 April 2018

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