IN THE COMPANIES TRIBUNAL OF SOUTH AFRICA

Case No: CT01279/ADJ/2023

In the matter between:

STEELFORM KZN CC
(2009/073164/23)	FIRST APPLICANT

And

SENDEX SA CC (trading as Steelform KZN)
(2001/024603/23)	SECOND APPLICANT

STEELFORM KZN FORWORK SYSTEM (PTY) LTD.
(2022/570344/07)	RESPONDENT

Coram: N. CAWE
Decision and Order delivered on: 28 June 2023

DECISION: Reasons and Order

1.	INTRODUCTION

1.1.	The First Applicant, A Close Corporation duly registered in terms of the Close Corporations Act 69 of 1984 (“”the Close Corporations Act”) and having its registered business address at 22 Beechgate Crescent, Southgate Business Park, Umbongotwini, KwaZulu-Natal, brings an application on behalf of the Second Applicant in terms of Section 11(2)(a);11(2)(b);11(2)(c)(i) and 160 of the Companies Act 2008 (“the Act”) read with Regulation (Reg.) 153 of the 2011 Regulations for an order that the Respondent change its name so that it does not incorporate the trademark “STEELFORM” and the qualifier “KZN” or any mark confusingly similar thereto.

1.2.	The Respondent is Steelform KZN Formwork System (Pty) Ltd, a company incorporated in terms of the Companies Act 71 of 2008 (“the Act”), bearing the registration number 2022/570344/07, and having its registered address at 23 Weltervreden Crescent, Glen Erasmia Boulevard, Kempton Park, Gauteng.

1.3.	In an application in terms of Section 160 of the Companies Act 71 of 2008 (“the Act”) for a determination that theFirst Respondent’s company name ‘’STEELFORM  KZN  FORWORK  SYSTEM  (PTY)  LTD’’.  Reg.  No: 2022/570344/07 does not satisfy the requirements of Section 11(2)(a) and (c) of the Act.

2.	BACKGROUND

2.1.	The First Applicant filed an objection to the Respondent’s name on 6 February 2023 on form CTR 142 as prescribed by Regulation 142 (1)(a), together with a Founding Affidavit deposed by Joseph Mare Puren (“Puren”) as required by Regulation 142 (1)(b).

2.2.	The affidavit deposed to by Puren discloses that an exclusive license (under Patent No. 2004/0117) agreement was entered into in 2008 among STEELFORM SA, the First Applicant and Darrian Christopher Hill (Hill). Hill is described by Puren as “a principal actor in conducting the business of the Respondent and its related activities”. The verbal agreement, was that the Second Applicant would fabricate, market and sell steel products covered by the patent.

2.3.	It was agreed further that the Second Applicant would pay agreed royalties on sales of steel products covered by the patent and that the license was exclusive in respect of the province of KwaZulu-Natal, in that Sendex SA and Hill undertook not to manufacture, market or sell fabricated steel products in the province of KwaZulu-Natal as part of the Patent agreement referred to above. The Second Applicant would have the exclusive use of the name “STEELFORM KZN”, while Sendex SA and Hill undertook to trade simply as “STEELFORM”

2.4.	On the strength of this verbal agreement the First Applicant and Second Applicant incorporated the First Applicant in April 2009 under the name STEELFORM KZN CC, with the stated intention of conducting the steel fabrication business under the name “Steelform KZN”.

2.5.	According to Puren a written agreement was later entered into between the First Applicant and Second Applicant. No date is given as to when the said agreement was entered into. This agreement terminated in 2009 due to the effluxion of time.

2.6.	Despite the effluxion of time terminating the agreement, the parties continued doing business and the Applicant paying royalties as per the verbal agreement.

2.7.	Puren avers further that the First Applicant’s use of the trading style “STEELFORM KZN” is and has been exclusive, in the sense that no other person, incorporated or otherwise, uses or has used the trading style “STEELFORM KZN” as a company name or trading style, that is until the Respondent’s adoption of the name “STEELFORM KZN” as a company name in 2021.

2.8.	On realizing that the Respondent had registered the trademark/ patent ‘’STEELFORM KZN’’, the Applicant’s sought to resolve the matter amicably but did not receive any response from the First Respondent.

2.9.	On 6 February the Companies Tribunal stamped the Applicant’s CTR 142 application for relief. The First Applicant emailed the stamped CTR 142 on the same date to the Respondent. The Respondent did not file an answering affidavit within twenty (20) business days, following which on 13 June 2023 the First Applicant applied for a Default Order in terms of Regulation 153 of the Companies Regulations (the Regulations) (of GN R351 in GG34239 of 26 April 2011). Joseph Mane the Applicant’s Managing Director deposed to the affidavit in support of the application for default judgement.

3.	ISSUES TO BE DECIDED

3.1	The Applicants want the Respondent to use the name ‘’STEELFORM’’ without the qualifier ‘’KZN’’. This is what triggered the instant application.

3.2	The Applicant’s alleges bad faith on the part of the Respondent in registering the name “STEELFORM KZN”, on 14 June 2022, under the registered trademark application 2022/19103 in class 37, Registration took place on 27 June 2022.

3.3	Attorneys on both sides of the dispute exchanged letters, with the Respondent’s attorneys claiming “passing off” by the applicant’s arising out of their use of the name “STEELFORM KZN” and in which demands cessation of such use.

3.4	Attorneys for the Applicants responded by denying “passing off” in using the name “STEELFORM KZN”

3.5	In the paragraph 7.3 of his affidavit, Puren avers that: 

“The applicants submit this application in terms of Section 160(1) and 160(2)(b) of the Companies Act read with Regulation 13, on the basis that the use of “STEELFORM” and “KZN”, in combination in the respondent, is confusingly similar to the “STEELFORM KZN” name of the applicants and that this is intended to, or has the potential to mislead or confuse consumers, placing consumers at risk of having their rights violated.

4.	RELEVANT LAW

4.1	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;”

4.2	Section 160 of the Act deals with disputes concerning 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.” (Emphasis added)

4.3	Companies Regulation 153 of 2011 provides for Default Orders as follows: 

(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. 

5	EVALUATION

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

5.2	The Applicant’s name is not the same as the Respondent’s name and Section 11(2)(a) of the Act is consequently not applicable

5.3	In Bata Ltd v Face Fashion CC 2001 (1) SA 844 (SCA) it was held that similar in Section 11(2) (b), is stated to mean “having a marked resemblance or likeness and that the offending mark (or name) should immediately bring to mind the well-known trade mark (or other name)”.

5.4	The name ‘’STEELFORM KZN’’ has a marked resemblance to the First Applicant’s name and would immediately bring to mind the trade mark of the Second Applicant especially as it bear the qualifier “KZN”.

5.5	Would Section 11 (2) (c), apart from the requirement of fault, reasonably mislead a person/member of the public to hold a certain belief? I submit that the answer is affirmative.

5.6	Regarding the test to be used J.B. Cilliers in JB Cilliers “Similar company names. A comparative analysis and suggested approach” 1998, THRHR 582 and 1999 THRHR 57 stated the following;

“the likelihood of the names being abbreviated and the form of abbreviation; evidence of actual confusion or deception; the degree of confusion and its consequences, including inconvenience caused; whether a name could or might itself mislead the public or a recognized section of the public in any particular locality, or would be likely to cause confusion in the sense that the public would think that there is some actual connection or association between the companies”

“Each company name must be considered in the light of its individual merits or demerits. In doing the assessment, the courts use the reasonable man test, namely that of an average person with average memory and imperfect recollection, not one with an extraordinary or photographic memory”

5.7	In Link Estate (PTY) Ltd v Rink Estates (PTY) Ltd 1979 (2) SA 276 (E) at 280, it was held that the similarity must be as like in manner as would confuse the man i.e. not the very careful man nor the very careless man.

5.8	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. Whether there is such a reasonable likelihood of confusion or deception is a question of fact to be determined in light of the particular circumstances of the case.” (Adidas AG & Another V Pepkor Retail Limited (187/12) [2013] ZASCA 3 at paragraph 28)

6.	FINDINGS

6.1	I submit that Section 11 (2)(b ) has been satisfied in the instant case in light of the of both JB Cilliers and the dicta in the Link case (both cited above)

6.2	The Applicants have demonstrated that there is a reasonable likelihood of the First Applicant and the Respondent causing confusion in the sense that the public would think that there is an actual connection or association between the two (2) companies, if the ‘’KZN’’ qualifier is not removed from Respondent’s name.

6.3	In my view the Applicants have discharged the onus of proving that Respondent has transgressed Sections 11(2) (a), (b) and (c): its name is confusingly similar and falsely implies, or could reasonably mislead a person to believe incorrectly, that 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.

6.4	The Applicants are granted the relief as set out in the Order below.

7.	ORDER

7.1	Taking all of the above into consideration, the Tribunal has ordered the following on 28 June 2023 on a default basis.

7.2	An administrative order is made in terms of Section 160(3) (b)(ii) that Respondent change its name to one which does not consist of or incorporate the word ‘’STEELFORM and KZN’’, in combination, or any other mark, which is confusingly similar to Applicants’ ‘’STEELFORM KZN’’ trademark within thirty (30) business days from the date hereof, as it is in contravention of Sections 11(2)(b)(iii) and (c) (i) of the Act.

7.3	This Determination must be served on the Applicants, Respondent and the Registrar of the Close Corporations of the Companies and Intellectual Property Commission (“Commissioner”).

7.4	The Respondent must file a Notice of amendment of its Memorandum of Incorporation, within one (1) calendar month from the date of receipt of this determination, with the CIPC.

7.5	In the event that the Respondent does not comply with this Order, the Commissioner is directed to deregister the Respondent within thirty (30) business days from the date of the Respondent’s failure to comply with the Order.

7.6	Any other person with an interest in the name that is the subject of this application may, within thirty (30) business days after receiving the Notice of this Determination and Administrative Order, apply to a court to review the Determination.

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

N CAWE