---

 

IN THE COMPANIES TRIBUNAL OF SOUTH AFRICA

 

Case No: CT01408ADJ2023

 

 

In the matter between:

 

 

SUN INTERNATIONAL (SOUTH AFRICA) LIMITED    APPLICANT

1977/071333/06

 

and

 

SUN CITY TIMESHARE RENTALS (PTY) LTD

(2023/583295/07)                                                           FIRST RESPONDENT

 

COMPANIES AND INTELLECTUAL PROPERTY

COMMISSION (CIPC)                                                    SECOND RESPONDENT

 

 

Presiding Member of the Companies Tribunal: MINAH TONG-MONGALO

Date of Decision: 30 NOVEMBER 2023

 

 

DECISION (Reasons and an Order)

 

 

1.          INTRODUCTION

 

1.1.        The Applicant is Sun International (South Africa) 1977/071333/06, and its registered place of business is recorded as 6 Sandown Vally Crescent, Sandown, Sandton, 2146. Sun International Limited wholly owns it and is part of the Sun International Limited Group

 

1.2.        First Respondent is Sun City Timeshare Rentals (Pty) Ltd, a company incorporated in terms of the Companies Act 71 of 2008 (“the Act”), with registration number 2023/583295/07, and having its registered address at17 Kraalnaboom, Pretoria, 0157.

 

1.3.        The Second Respondent is the Companies and Intellectual Property Commission (“CIPC), a juristic person established in terms of s185(1) of the Act.

 

1.4.        This is an application for a determination order on a default basis:

 

1.4.1.      That First Respondent’s name does not satisfy the requirements of s11(2) of the Act, and

1.4.2.      That First Respondent be directed to choose a new name as provided for in terms of s160 of the Act.

 

2.          BACKGROUND

 

2.1.        The Applicant owns the trademark “SUN CITY” in various classes and has used it extensively.

 

2.2.        As a gaming, hospitality and accommodation player, it has a market share of an estimated US$ 1.4 billion. The Applicant invested US $ 1.5 billion in the tourism infrastructure. Furthermore, the Applicant has spent approximately R95 483 819 advertising its business.

 

2.3.        The Applicant became aware of the First Respondent’s use of the “SUN CITY” trademark around March 2023. From around 26 April 2023, the Applicant engaged the First Respondent to secure an amicable resolution to the complaint of use of the Applicant’s trademark without authorization. Despite many attempts to contact the First Respondent, no response was forthcoming.

 

2.4.        Considering the above, the Applicant applied to the Companies Tribunal (‘the Tribunal’) for an order directing the First Respondent to amend its name to one that does not incorporate its registered trademark, SUN CITY.

 

2.5.        The Applicant’s application satisfied the prescribed procedural requirements in that:

 

2.5.1.      The Applicant submitted the prescribed CTR 142 Application Form and supporting documents on 22 June 2023.

2.5.2.      On 23 June 2023, the First Respondent was duly served through one of the prescribed delivery methods: email. Proof of delivery was attached.

2.5.3.      The First Respondent was afforded 20 days to submit a reply to the affidavit but failed to do so.

2.5.4.      The representative of the Applicant has provided proof of authority to act on behalf of the Applicant in this matter.

 

2.6.        Following the failure by the First Respondent to file an answering affidavit within twenty (20) business days, the Applicant applied for a default order in terms of Regulation 153 of the Companies Regulations (the Regulations).[1]

 

3.          ISSUES

 

3.1.        The Applicant requests this Tribunal to make a finding that the First Respondent’s name does not satisfy the provisions of s11(2) of the Act. It submits that including the word ‘SUN CITY’ in the First Respondent’s name infringes its registered trademarks.

 

4.          THE APPLICANT’S SUBMISSIONS

 

4.1.        The Applicant has argued that:

 

4.1.1.      The First Respondent’s name incorporates the Applicant’s trade mark, which is the dominant and memorable feature of the First Respondent’s name. “Timeshare Rentals” in the First Respondent’s name does not serve to distinguish the two entities.

4.1.2.      The First Respondent’s name is confusingly similar to the Applicant’s well- known distinctive trademark, SUN CITY.

4.1.3.      Should the Applicant’s case not be considered, the Applicant will be prejudiced.

4.1.4.      The public will likely be confused or deceived into believing the two entities are somehow affiliated or associated.

4.1.5.      Consequently, the name “Sun City Timeshare Rentals” does not satisfy the requirements of S 11 (2) (a) or (b) or (c) of the Act.

 

5.          APPLICABLE LAW

 

5.1.        Section 11 of the Act provides as follows: “11. Criteria for names of companies. —

 

(1)…

 

(2) The name of a company must— (a) not be the same as—

 

(i) the name of another company, domesticated company, registered external company, close corporation or co-operative;

...

(b)            not be confusingly similar to a name, trademark, mark, word, or expression 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;”

 

5.2.        Section 160 of the Act deals with disputes concerning the reservation or registration of company names and enunciates the jurisdiction of the Companies Tribunal as follows:

 

(1)      A person to whom a notice is delivered in terms of this Act with respect to an application for reservation of a name, registration of a defensive name, application to transfer the reservation of a name or the registration of a defensive name, or the registration of a company’s name, or any other person with an interest in the name of a company, may apply to the Companies Tribunal in the prescribed manner and form for a determination whether the name, or the reservation, registration or use of the name, or the transfer of any such reservation or registration of a name, satisfies the requirements of this Act.

 

(2)      An application in terms of subsection (1) may be made— (a) within three months after the date of a notice contemplated in subsection (1), if the applicant received such a notice; or (b) on good cause shown at any time after the date of the reservation or registration of the name that is the subject of the application, in any other case.

 

(3)      After considering an application made in terms of subsection (1), and any submissions by the applicant and any other person with an interest in the name or proposed name that is the subject of the application, the Companies Tribunal –:

 

(a)       must make a determination whether that name, or the reservation, registration or use of the name, or the transfer of the reservation or registration of the name, satisfies the requirements of this Act; and

(b)       may make an administrative order directing-

 

(i)          the Commission to

 

(aa) reserve a contested name, or register a particular defensive name that had been contested, for the applicant;

(bb) register a name or amended name that had been contested as the name of a company;

(cc) cancel the reservation of a name, or the registration of a defensive name; or

(dd) transfer, or cancel the transfer of, the reservation of a name, or the registration of a defensive name; or

 

(ii)        a company to choose a new name, and to file a notice of an amendment to its Memorandum of Incorporation, within a period and on any conditions that the Tribunal considers just, equitable and expedient in the circumstances, including a condition exempting the company from the requirement to pay the prescribed fee for filing the notice of amendment contemplated in this paragraph.”

 

5.3.        Companies Regulation 153 of 2011 provides for default orders:

 

5.3.1.        If a person served with an initiating document has not filed a response within the prescribed period, the initiating party may apply to have the order, as applied for, issued against that person by the Tribunal.

 

6.          EVALUATION

 

6.1.        I am convinced that the Applicant has made out a case for the main application to be considered on a default basis and proceed to deal with the case's merits.

 

6.2.        Section 11(2)(b) of the Act restricts the registration of names that are ‘confusingly similar to a name, trademark, mark, or word or expression’ to that of the aggrieved party.

 

6.3.        “Similar” means the name in question has “a marked resemblance or likeness” to that of the Applicant. The offending name should immediately bring to mind the well-known trademark or name.[2] The test for “confusingly similar” is, as in the case of passing-off: “...a reasonable likelihood that ordinary members of the public, or a substantial section thereof, may be confused or deceived into believing that the goods or merchandise of the former are the goods or merchandise of the latter or are connected therewith. The names must be so alike that it may confuse the “ordinary reasonable careful man, i.e., not the very careful man nor the very careless man.”[3] The said “reasonable man” is “the class of persons who are likely to be the purchasers of the goods in question”[4]

 

6.4.        Furthermore, the trademark is considered well-known in the Republic “if it is well-known to persons interested in the goods or services to which the mark relates.”[5] The Applicant bears the onus of proving on a balance of probabilities that when comparing the two marks, there is the likelihood of confusion or deception.[6]

 

6.5.        Whether there is a reasonable likelihood of confusion or deception is a question of fact to be determined considering the case's particular circumstances.”[7]

 

6.6.        The intellectual property owners and reputable business names must be protected from ‘those passing themselves or coat-tailing’ on their reputation and goodwill.’[8] Furthermore, a determination must be made whether the proposed name may mislead the public to believe that there is a non-existent association between two companies that are, in fact not associated with each other.[9] While protecting the legitimate rights of an existing business, care must be taken not to restrict freedom of expression unfairly. The Constitutional Court said that the '[t]he question to be asked is whether, looking at the facts as a whole, and analyzing them in their specific context, an independent observer who is sensitive to both the free speech of the Constitution and the property protection objectives of trademark law, would say that the harm done by the parody to the property interests of the trademark owner outweighs the free speech interests involved. The balancing of interests must be based on the evidence on record, supplemented by such knowledge of how the world works as every judge may be presumed to have.’ [10]‘[T]he ultimate test is whether, on a comparison of the two marks, it can properly be said that there is a reasonable likelihood of confusion if both marks are to be used together in a normal and fair manner, in the ordinary course of business.’[11]

 

6.7.        The reasonable man, who need not be a cautious man as per Link Estates (Pty) Ltd v Rink Estates (Pty) Ltd is likely to be deceived that the two entities are associated.

 

6.8.        Therefore, considering the interests of both parties, irrespective of the First Respondent’s area of business, and being mindful of the freedom of expression, the First Respondent’s name is undesirable.

 

6.9.        In line with Ewing t/a The Buttercup Dairy Company v Buttercup Margarine Corporation Ltd 1917 (34) RPC at 232 and 238, I conclude that confusion and/or deception may arise from the side-by-side use of the trade mark and the First Respondent’s name, which can lead to injury of the Applicant’s business, especially since it has no control whatsoever over the quality of services rendered by the First Respondent. Our courts have explained the doctrine of imperfect recollection[12]: there is a probability that a substantial number of people will be at least confused, if not deceived, given the fact that an individual does not have the two marks before him, side by side and that memory is often imperfect.

 

6.10.  In the case of Polaris Capital (Pty) Ltd v The Registrar of Companies and Polaris Capital Management Inc. (unreported judgment, Case No. 11607/2005, CPD), the learned judge commented on undesirability in terms of Section 45 (2) of the 1973 Companies Act: “It is submitted that by allowing the close corporation’s name to remain on the register, in addition to causing deception and confusion, its registration will hinder the registrar’s role in maintaining and promoting good governance and administration of corporate entities in the interest of the general public.” Thus, permitting the First Respondent to keep the name ‘SUN CITY’ in its company name will create confusion and hinder the Second Respondent from maintaining and promoting good governance and administration of a corporate entity in the general public's interest. Evidently, the name ‘SUN CITY’, as incorporated in the First Respondent’s company name, falls within the ambit of Section 11(2), as argued by the Applicant.

 

6.11.  Finally, I am mindful of the order handed down by Mbongwe, J. in the matter of Comair Ltd v Kulula South Africa[13], wherein it was declared that this Tribunal is empowered to make an administrative order directing the Second Respondent to change the name of a company to its registration number if the First Respondent fails to change its name within a certain period as ordered.

 

7.          FINDINGS

 

7.1.        The balance of convenience favours the Applicant.

 

7.2.        The Applicant has shown that the First Respondent has transgressed Sections 11(2)(b) and (c) in that its name is confusingly similar and falsely implies, or could reasonably mislead a person to incorrectly believe, that the First Respondent is part of, or associated with the Applicant. Hence, it is entitled to an order as claimed in terms of Section 160 of the Act.

 

7.3.        The Applicant’s application is granted as set out below.

 

8.          ORDER

 

8.1.        The First Respondent is ordered to:

 

8.1.1.      change its name to one which does not incorporate the word ‘SUN CITY’ as it is in contravention of Sections 11(2)(b)(iii) and (c)(i) of the Act; and to

 

8.1.2.      file a notice of amendment of its Memorandum of Incorporation within 30 (calendar) days of the date of receipt of this order.

 

8.2.        Since the First Respondent is a profit company, per Section 11(1)(b) and (3)(a) of the Act, it can use its registration number as its company name immediately followed by the expression “South Africa,” should it not be in a position to use another name.

 

8.3.        The Second Respondent is directed to change the First Respondent’s name to its registration number if the First Respondent fails to change it within 30 days of receipt of this order.

 

8.4.        The Tribunal’s Recording Officer (Registrar) must serve this order on the Respondents.

 

8.5.        There is no order of costs against the First Respondent, as the matter has not been opposed.

 

 

MINAH TONG-MONGALO

---