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its trade mark as contemplated in section 34(1)(a) of the Act. Further, the respondent contends that its
registered mark Town Lodge enjoys considerable reputation. The use of Cape Town Lodge which encompasses
Town Lodge is calculated to cause it damage within the meaning of section 20(2) of the Close Corporation Act.
The respondent, in insisting on this approach, was resisting the applicant's case that in essence what should
be looked at to establish whether or not there is an infringement of the respondent's mark is the whole
getup of the respondent's Town Lodge mark and compare it, with the whole getup of the Cape Town Lodge
mark. It was argued that what was essential as a guiding principle in determining whether the applicant's
name was calculated to cause damage within the meaning of section 20(2) as aforementioned, was what
becomes the outcome of an adjudication process on the reputation residing in Town Lodge when compared
with Cape Town Lodge. The respondent argued that even when considering the interdict for passing off, I was
not supposed to compare the "whole getup" of the applicant and that of the respondent, but to compare the
damage caused to the reputation of the respondent when there was a likelihood of confusion and deception
by the applicant's Cape Town Lodge that has in it the respondent's mark Town Lodge.
Legal principles
[19] Section 20 of the Act2 provides as follows:
"20
Order to change name
(1)
. . .
(2)
Any interested person may
(a)
within a period of one year referred to in subsec (1), on payment of the prescribed fee apply in
writing to the Registrar for an order directing the corporation to change its name on the ground of
undesirability or that such name is calculated to cause damage to the applicant; or
(b)
. . .
(3)
The Registrar may, after application has been made in terms of para (a) of subsec (2), in writing order
the corporation concerned to change its name if, in the opinion of the Registrar, it is or has become
undesirable.
(3A)
Any person feeling aggrieved by any decision or order of the Registrar under this section may, within
one month after the date of such decision or order, apply to a competent provincial or local division of
the Supreme Court for relief, and the Court may consider the merits of any such matter, receive further
evidence and make any order it deems fit."
[20] On behalf of the respondent, it was submitted that the Registrar's Directive issued in GN978 of 1995, on the
names of companies, was a helpful guide as to what a Registrar of Companies/Close Corporations would
consider as undesirable in the exercise of his/her discretion. The Directive, in part, reads as follows:
"Any name may be selected, provided such name does not encroach on the rights of any person or existing concern,
or is a name in which the opinion of the Registrar, is undesirable. In particular, a name will be considered to be
undesirable if
1.1
it is identical or very similar to a name already registered, but nongeneric identical words in the names will, in
exceptional circumstances,
Page 58 of [2008] 2 All SA 34 (C)
be allowed with different descriptive wording for subsidiary or associated companies;
1.2
. . .
1.3
. . .
1.4
. . .
1.5
Words pertaining to a trade mark are contained in a name which will be used in regard to the business which
relates to the class of goods or services in which the trade mark is registered while the applicant has no
proprietary rights in respect of such trademark, nor the consent of the said proprietor to use such words in a
name" (emphasis added).
[21] In Peregrine Group (Pty) Ltd and others v Peregrine Holdings Ltd and others 3 the following principles emerged,
namely, that it was inappropriate to attempt to circumscribe the circumstances under which the registration of
the company might be found to be "undesirable". It was sufficient merely to say that where there is a
likelihood that members of the public will be confused in their dealings with the competing parties, the court
would consider those as important factors to take into account when considering whether or not a name was
desirable.
See also: Azisa (Pty) Ltd v Azisa Media CC;4 Deutsche Babcock SA (Pty) Ltd v Babcock Africa (Pty) Ltd and
another.5
In all of these cases, it was the view of the courts that if there was a likelihood of confusion in registering a
company name because of the similarity of names, then it would be undesirable to register a particular
company or close corporation name, something which, according to the argument in respondent's written
Heads, was a similar trend followed by the courts in New Zealand where in Viacom New Zealand Ltd v Viacom
Systems Limited,6 the President of the New Zealand Court of Appeal spoke as follows:
"Irrespective of motives, a serious risk of confusion of the public or a section of the public is well recognised as a