Transital Engineering (Pty) Ltd v Transitalworx (Pty) Ltd (CT00560ADJ2021) [2021] COMPTRI 86 (21 June 2021)

Key Facts

Issues

• Whether the name 'TRANSITALWORX' is confusingly similar to 'TRANSITAL ENGINEERING' under section 11(2)(b)(i) of the Companies Act, and whether it falsely implies an association between the parties under section 11(2)(c)(i).
• Whether the Companies and Intellectual Property Commission (CIPC) should have been joined as a party to the proceedings to facilitate the name change process, as the Respondent argued the non-joinder of CIPC rendered the application defective.
• Whether the Respondent's historical use of the name 'TRANSITAL' since 1981 (prior to the Applicant's incorporation in 1998) affects the Applicant's right to object to the name change to 'TRANSITALWORX' under the Companies Act's provisions.
• Whether the Applicant's delay in filing the objection (after the Respondent changed its name in July 2020) constitutes a breach of section 160(2) of the Companies Act, which requires applications to be filed within three months of receiving notice of a name change.

Holdings

• The respondent's preliminary objection regarding the non-joinder of the CIPC was dismissed. The court determined that the CIPC does not need to be joined as a party because the relief sought under s 160(3)(b)(ii) requires only the respondent to change its name, not a direct administrative order to the CIPC. The court emphasized that the CIPC's statutory role in name changes does not necessitate its inclusion in the proceedings.
• The application to object to the respondent's name TRANSITALWORX under s 160 of the Companies Act was dismissed. The court held that the applicant did not invent the word 'TRANSITAL' and thus has no right to exclude the respondent from using it. The respondent's name was determined not to be confusingly similar to the applicant's name or to falsely imply an association, as the addition of 'WORX' and 'ENGINEERING' sufficiently distinguishes the names. The respondent's preliminary objections regarding the applicant's delay in filing and the non-joinder of the CIPC were also dismissed. The court further ruled that no costs order would be made against either party.
• The respondent's preliminary objection that the applicant delayed in filing the application was dismissed. The court found the applicant became aware of the name change in November 2020 and filed the application within the three-month period stipulated in s 160(2)(a). The court rejected the respondent's argument that the applicant should have known earlier, citing insufficient evidence to support the claim of prior knowledge.
• The court exercised its discretion to not make a costs order against either party. Despite the applicant's unsuccessful application, the court found the applicant was entitled to bring the case under the Companies Act and that the circumstances did not justify a costs award. Both parties are responsible for their own legal expenses.

Remedies

• The Applicant's objection to the Respondent's name TRANSITALWORX is dismissed, as the court found no confusing similarity or misleading association.
• The Respondent's first and second preliminary objections (regarding delay in prosecution and non-joinder of CIPC) are dismissed by the Tribunal.
• The court decides not to make an order for costs, with each party responsible for its own expenses.

Legal Principles

• The Tribunal applied a purposive interpretation of the Companies Act, emphasizing its objectives to promote transparency, avoid confusion, and create a predictable regulatory environment. This approach was critical in determining that the historical use of the name 'TRANSITAL' by the Respondent since 1981 negated the Applicant's claims of confusion or misassociation under section 11(2)(b)(i) and (c)(i).
• The Applicant failed to meet the burden of proving that the Respondent's name 'TRANSITALWORX' was confusingly similar to 'TRANSITAL ENGINEERING' or falsely implied association. The Tribunal held that the Applicant did not demonstrate exclusive rights to the word 'TRANSITAL' and could not establish the required fault or intent to mislead under the Act.
• The Tribunal exercised its discretion under regulation 156(1) of the Companies Regulations, 2011, to refuse a costs order against the Applicant despite its unsuccessful application. This reflected the principle that costs should not penalize parties who acted within the law's entitlement, even if their claims were ultimately dismissed.

Precedent Name

• Fibreglass Grating CC v Fibreglassgratings SA (Pty) Ltd
• Thusanang Gast (Pty) Ltd & others v Gast Consulting (Pty) Ltd and another

Cited Statute

Judge Name

Passage Text

• I agree with the submissions by Mr Viljoen on behalf of the Respondent that the inclusion or addition of the word 'WORX' to 'TRANSITAL' to make it 'TRANSITALWORX' and the word 'ENGINEERING' to make it 'TRANSITAL ENGINEERING' distinguish the two company names from each other.
• Held, that the applicant did not invent the word or name TRANSITAL and thus has no right to exclude the respondent from the use of the word and that the respondent's name does not offend the provisions of the Act. Also, held - with regard to the respondent's preliminary objections that the applicant delayed in the prosecution of this application in breach of s 160(2) of the Companies Act and that the Companies and Intellectual Property Commission ought to have been joined as a party to these proceedings - that the objections are dismissed.
• Once it is accepted that the Respondent was already using a name which incorporated the word TRANSITAL before it amended it to the now challenged TRANSITALWORX this puts paid to the Applicant's case based on section 11(2)(c)(i). The requirement of fault as intent to mislead or the alternative effect of misleading is impossible where the party so accused was already using the impugned name or the impugned word as part of its name.