-

Campany NomR
INTHE HIGH COURTQF BOTSWANA
HELD AT LOBATSE

1SCA 350OF 1997

In the matter between:

PIE CITY INVESTMENTS [PTY] LIMITED APPLICANT

A. GRAHAM AGENCIES .PTY] LIMITED 2hD APPLICANT

AND

PIE CITY BOTSWANA IPTY] LIMITED 1ST RESPONDENT

REGISTRAR OF COMPANIES 2 RESPONDENT

MR. V. VERGEER FOR THE APPLICANTS

MR. Y.D. PETKAR FOR THE RESPONDENTS

JUDGMENT

GITINGS
By Notice of Motion dated 6 August 1997, the Applicants sought an or der in the

following terms

Interdic ting and restraining the First Respondent from passing

off ts busines as being connected to or associated with the

business of the First Applicant. ..

2. Interdicting and restrainíng First Respondent from using the name

or words "Pie City" in connection with the

manufacture, distribution
and marketing of pies;
 3. Declaring the registratlon of the First Respondent by the name Pie City
Botswana [Proprietary] Limited in conflict with the provisions of Section

20[2] of the Companies Act [CAP 42:01] and consequently the registration
by such name is invalid.

4. Declaring that there exists no lawful impediment preventing the

registration of the change of name of the Second

Applicant from
A.
Graham Agencies [Proprietary] Limited Pie
to City [Proprietary
Limited
5. Directing the First Respondent to pay the costs of this application.
6. Further and or alternative relief.

Mr. Petkar on behalf of the 1* Respondent filed Heads of Arguments both on

Points in Limine and on the merits. He submitted that the main order
sought by
the Applicants against the 1" Respondent was the order sought in paragraph 3 of
the Notice of Motion and conceded that the Orders sought in paragraphs ,2 and
4 "simply follow the order sought in paragraph 3." He submitted that the orders

sought in Paragraphs 3 and 4 of the Notice of Motion are Declaratory orders and
he argued that because of the provisions of Sectdion 20 [5] of the Companies Act

which I set out hereunder the Court had no jurisdictlon to make such orders.

Section 20I5] of the Companies ACt states as follows:s

 "If a Company through inadvertance or otherwise is registered, whether
originally or by reason of a change of name, by a name which would not,
under the provisions of this section be permited to be used for the
registration of a company, the Minister within five years of the regístration of

that name may by writing order the company to change its name and the
company shall thereupon do so within a period of six weeks from the date of
the written order or such longer period as the Minister may see fit to allow. "

Despite the provisions of Sections 20[5] of the companies Act Mr. Vergeer argued.
that the High Court has unlimited
jurisdiction to hear and determine any civil

proceedings under any law.

He quoted from Van Winsen, Ciliers Loots which states superior Courts "may do

anything that the law does not forbid"

He argued that the High Court of Botswana s not deprived of jurisdiction by the
mere act that the legisiature, in this case by virtue of Section 2015] of the

Companies Act, has provided an extra judicial remedy or procedure.

See Golube v Oosthuizen and Another 1955 13] SA 1 at 4F -

G and

Frost v Peninsula Rent Board and Another 1968

[3] SA 303 [c].

T do not consider that Section 20[5] of the Companies Act Cap 42:01 ousts the

jurisdiction of this Court and I therefore do not uphold the argument of Mr. Petkar
 on that point as I intormed him at the conclusion of the argument on his first Point

n Limine.

Mr. Petkar then submitted that as tar as the order sought in Paragraph 4 of the

Notice of Motion Was concerned, the provisions contained in Section 21 of the

Companies Act provided the means for the 2" Applicant to change its name.

Section 2 1 [I] of the Companies Act states-

"A Company may, by special resolution and with the Written approval of the

Registrar, change its name."

Mr. Petkar submitted that for of

an act a Company to be valid, there must be a

resolution passed at a properly constituted meeting and he submitted that in terms

of Section 106 [1] of the Companies Act to pass a special resolution it is necessary
to give special notice to the Company 28 days before the meeting.

Mr. Vergeer argued that Section 21 [] of the Companies Act sets out the

requlrement for the change of a

company's name and contends that that Section
does not make reference to the giving of special notlce.

He then dealt with the

requirements of a special resolution and submitted that
Annexure FAB [The Speclal Resolution] somplied with the Companies Act.
Mr. Petkar then further submitted that the 2"
Applicant's request to the Registrar
of Companies to reserve the Pie
name City [PTY] LTD and dated the 28 February
 was an invalid document [as that letter Annexture FA 3 in the bundle] was
1996

of namie procedure cannot

made with a view to changing its name and the change

complying with the provisions of Section 106[1] of the

be initiated without first

Companies Act.

to get the name

Mr. Petkar argued that anything done by the tWo Appllcants

changed required a resolution as a prerequisite. It may be that Mr. Petkar s

that what is required to be done

correct in that assertion but Mr. Vergeer argued

is quite different from what is required to make an

to change a company's name

Mr. Vergeer said that

application to the Registrar of Companies to reserve a narme.

apply to the Registrar of

asking the two Applicant's company secretaries to

Companies to reserve the name Pie City .Pty] Ltd does not require a special

resolution as t was merely 3 request to reserve à name wnich, even on it being

reserved by the Registrar of Companies, need not be a request that had to be acted

on as it was purely and simply a preliminary request and enqguiry.

IfI agree with the view and argument of Mr. Vergeer on this all-important letter

requesting reservation of the name Pie Ciry [Pty] Ltd, and I do agree with him, the

position of the 1" Respondent is that the Certificate of Incorporation of the I"

Respondent dated 13 March 1996 is an invalid registration as Section 20[2j of the

Companies Act states

. [2] No name shall be reserved and no company shall be registered

by a name which is identical with that for which a reservation

 -

is current or with that of a registered company or a registered

external company or which so neariy resembles any such name

as to be calculated to deceíve unless the registered company or

regstered external company is in liquidation and signifies ts

consent to the registration in Such manner as the Registrar my

require."
In the light of the provisions of Section 20 12] above, and on the Registrar o

Companies realizing the mistake which had been made, the Acting Registrar of

Companies wrote to the Company secretaries for the 1* Respondent K 8 M

Business Services [Pty] Ltd a letter dated the 25 February 1997 [FA 12 in the

bundle] which said

"Dear Sir,

PIE CITY BOISWANA IPROPRIETARYILIMITED

My attention has been drawn to the fact that the above named company Was
With the name that had ben reserved 1.e.
incorporated on
the 12" March 1996
Pie City Botswana [Proprietary] Limited.

This registration was effected through inadvertance and contrary to specific

provision of the Companies Act. As your cllent would not be permtted to use the
name which is ldentical to that for which a reservation had already been sought.

Yours falthfully

. Mphuting

ACTING RECGISTRAR OF CcOMPANIES

Cc:

MBI [Pry] ltd"

 of the " Respondent was in
From the above facts it is clear that the registration
clear breach of Section 20 [2] of the Act due to the inadvertance of the 2

Respondent.

There is no doubt in my mind that Pe Ciry Botswana Ltd is a name virtually

identical to Ple City [Pty] Ltd or so nearly resembles it as to be "calculated to

deceive."
I therefore do not uphold the argument of Mr. Petkar in his Points in Limine

he argurment on the merits involves the interdicting and restraining of the Tst

Respondent from passing off its business as being connected to or associated with

the business of the 1st Applicant; Interdicting and restraining the Ist Respondent

from using the name or words "Pie City" in connection with the manufacture,

distribution and marketing of pies; declaring the registration of the First Respondent

by the name Pie City Botswana [Proprietary] Limked in conflict with the provisions

of Section 2012] of the Companies Act [CAP 42:01] and consequently the

such is
registration by name
invalid.

The undisputed and unchallenged facts in this case are that the 2" Applicant trades

as Pie City and its business involves inter alia, the manufacture, selling and

distribution of pies to the public as take away food.

 The 1st Applicant is the holding company of a nerwork of subsldiary retal outlets

which trade under franchise agreements as Ple Ciry. In February or March 1996,

the 2 Applicant became a franchisee to trade as Pie City in Botswana and on 12

March 1996 and pursuant to an earlier application by the 2" Applicant, the 2

Respondent confimed that the name Pie City [proprietary] Ltd was "both

available and acceptable for your use and has been reserved.."

On 12 April 1996 the 2d Applicant passed a special resolution for its name to be

changed to Pie City Pty Ltd and it is clear from the document that when the 1st

Respondent company was registered on 13 March 1996 there was an invalid

registration as Pie City Pty Ltd was reserved.

It is not dlsputed that the name Pie Ciry [Botswana] Pty Ltd is substantially

identica, to or so nearty resembles as to be calculated to deceive, the name Pie

City [Pty] Ltd.

Mr. Vergeer informed the Court that the business activities of Ple had
City greatly
expanded and he indicated the trading figures in francistown and Gaborone and

quoted from the Founding Affidavit of Mr. West, à Director of the 2 Applicant

that Pie City was going from "strength to strength" and the tumover in Gaborone

Was nearily P3 million up to the end of 1997.

 Mr. West deposed to the fact that further branches were to be opened ana t Is

Intended that there would be at least seven out lets in BoSWana. Mr. West

indicated that by the end of February 1997 P60,000.00 had been spent in direct

advertising and Mr. Vergeer said in his argument that the 1st Respondent has noo

challenged the reputation of the Applicant or the account of their sales or the sums

spent on àdvertising or the close resemblence of the name of the Tst Respondent.

He argued that factors of importance in a passing off action include whether the

Defendant is engaged in the same busines as the Plaintiff; whether the Plaintiff 's

trade or business narme has acquired a reputation; whether the name adopted by

the Ist Respondent for its business resembles that used r reserved by the

Applicants and whether such resemblence is such that there is a reasonable

likelihood of the pubiic being confused or deceived into beleving that the business

connected therewith.
ofthe Ist Respondent is that of the Applicant's business or

He also told the Court that a further consideration is that Ist Applicant is entitied

to royalies from all its licensees trading under the name and mark Pie City. If the

1st Respondent is allowed to trade under the name and mark Pie iry it would

unfairly appropriate for iself the goodwill and repute of the Pie City franchise whist

the ist Applicant wouid not be able to recover any royalties for the use of its
 He also dealt with the qualityY of the goods sold to the public under Pie City

franchise and said if the Ist Respondent were allowed to continue incorporating the

words Ple City in lts name it would not be subject to any quality control in its

products as it was not a licensee. This could result in the Ist Respondent producing

inferior goods which in turn would seriously reduce the value of the First

The reputation of the Ple City name would also be

Applicant's licensing rights.

debased with the result that the urnover [and profts] of the Applicants would

in the franchise. The distinctiveness of

drop and no one would be wiling to invest
the Pie City name would also be eroded and this would inevitably lead to the

damage of the goodwill of the Pie City name."

Mr. Vergeer finally conceded that there was no evidence before the Court that

there had been an advertisement in the newspaper with reference to the change of

name provision under Section 21 [1] and therefore did not ask an order in terms

of paragraph 4 of the Notice of Moion.

consider that the registration of the 1" Respondent on 13 March 1996 of the

name Pie City Botswana is in conflict with the provisions of Section 20l2] and

therefore is an invalid regstration and having heard 'the full arguments from both

counsel I consider the Appficants are entitled to the relief sought in paragraphs

1,2, and 3 of the Notice of Motion.

The 1" Respondent to pay the costs of the Applicants.

 3Dant
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