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[2010] ZAWCHC 522
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Cetrecore CC and Another v Timbacore CC and Others (7268/09) [2010] ZAWCHC 522 (1 November 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
CASE
NO: 7268/09
In
the matter between:
CENTRECORE
CC
….............................................................................
1
st
Applicant
TIMBERCORE
CC
….............................................................................
2
nd
Applicant
And
TIMBACORE
CC
…...........................................................................
1
st
Respondent
NATHANIEL
ROBERTS
…..............................................................
2
nd
Respondent
UNIFORM
SA LTD
…........................................................................
3
rd
Respondent
THE
REGISTRAR OF CLOSE CORPORATIONS
…........................
4
th
Respondent
and
in the counter-application between:
TIMBACORE
CC
…......................................................................................
Applicant
And
CENTRECORE
CC
…........................................................................
1
st
Respondent
TIMBERCORE
CC
…........................................................................
2
nd
Respondent
UNIFORM
SA LTD
…........................................................................
3
rd
Respondent
THE
REGISTRAR OF CLOSE CORPORATIONS
…........................
4
th
Respondent
JUDGMENT
DELIVERED ON 1 NOVEMBER 2010
YEKISO,
J
[1]
This matter concerns an application, on the one hand, and a
counter-application, on the other hand, for interdictory relief
based
on the common law delict of passing off. These applications will be
referred to as the main application and the counter application
as
and when a need will arise to specifically refer to each such
application.
[2]
Two applicants have been cited in the main application whilst only
one applicant has been cited in the counter-application.
[2.1.]
The first applicant in the main application is Centrecore CC
("Centrecore"), bearing registration no 1986/017212/23,
a
close corporation duly incorporated in terms of the Close Corporation
Act, 69 of 1984 ("the Close Corporation Act")
having its
registered address at 20 Station Road, Maitland
[2.2.]
The second applicant is Timbercore CC ("Timbercore"),
bearing registration no 1989/020923/23, similarly a close
corporation
duly incorporated in terms of the Close Corporation Act, having its
registered address at 33 Station Road, Maitland.
[3]
[3.1.]
By way of a notice of motion issued out of this Court, the applicants
in the main application seek an interdictory relief
against Timbacore
CC ("Timbacore") and a Nathaniel Roberts ("Roberts"),
cited as the first and the second respondents,
respectively,
interdicting and restraining the first and the second respondent from
passing off their business and the goods sold
in their business as
being those of the applicants or, as being associated with those of
the first and the second applicant, by
the use of the trade marks
Centrecore and Timbacore, or any other mark that is deceptively or
confusingly similar to the trade
marks Centrecore and Timbacore, in
relation to their business and goods sold in their business.
[3.2.]
A further interdictory relief sought against Timbacore and the said
Roberts is an order directing both Timbacore and Roberts
forthwith to
do all that is necessary to cancel the registration of the domain
name
www.timbecore.co.za
www.timbecore.co.za
which
is being controlled and administered by Uniform SA Ltd.
[3.3.]
Uniform SA Ltd and the Registrar of Close Corporations have been
cited as the third and the fourth respondents, respectively,
in their
capacities as the controller of co.za domain names and the controller
of the register of Close Corporations. No relief
is sought against
Uniform SA Ltd and the Registrar of Close Corporations in the event
both these entities not opposing the granting
of the relief sought.
[4]
The applicant in the counter application is Timbacore CC, bearing
registration no 2000/033041/23, a close corporation, similarly
incorporated in terms of the Close Corporation Act and having its
place of business at 15 Farad Street, Stikland. Timbacore seeks
a
similar relief against Centrecore and Timbercore to the one sought in
the main application except that, in the instance of the
counter
application, the domain name sought to be cancelled is
www.timbercore.co
,za
as
opposed to the domain name
www.timbacore.co.za
www.timbacore.co.za
the
cancellation of which is sought in the main application. Uniform SA
Ltd and the Registrar of Close Corporations have similarly
been cited
as the third and the fourth respondents in the counter-application.
[5]
A further relief sought, both in the main application and the
counter-application, is an order directing Timbacore and Roberts,
the
first and the second respondents in the main application and, in the
instance of the counter-application, an order directing
Centrecore
and Timbercore, the first and the second respondents in the
counter-application, to do all that is necessary to change
the names
of the respective close corporations to a name, in each case, that is
not confusingly or deceptively similar to the trade
name and trade
mark complained of. Before setting out the legal position relating to
the law of unlawful competition, in particular,
that of passing-off,
it is appropriate at this stage to determine if the relief
contemplated in this paragraph, namely, an order
directing the
respondents in the instance of both the application and a
counter-application to change the names of the close corporations
concerned, is competent. In the paragraphs which follow, the parties
shall be referred to as cited in the main application.
ORDER
TO CHANGE NAME
[6]
Mr
Sholto-Douglas
SC,
for the first and the second respondents, makes a point in his
submissions, and in argument before me during the hearing of
the
matter, that the relief sought by either of the parties contemplated
in paragraphs 4 and 5 of the both notice of motion and
the notice of
counter-application in regard to change of names of the close
corporations is not competent. He submits that the
provisions of
section 20(1) and (2) of the Close Corporation Act expressly
prohibits the granting of the relief of the kind sought
both in the
instance of the main application and the counter-application.
[7]
Section 20(1) and (2) of the Close Corporation Act, in broad terms,
provides that if, within one year after incorporation of
a close
corporation it appears to the Registrar that a name as included in
the founding statement is undesirable, he or she must
order the close
corporation concerned to change the offending name. Furthermore, the
section provides that any interested person
may, similarly within a
period of one year after the registration of a founding statement
and, on payment of the prescribed fee,
apply in writing to the
Registrar for an order directing the close corporation concerned to
change its name on the ground of undesirability
or on the ground that
such a name is calculated to cause damage to the person making such
an application.
[8]
The section further provides that any interested person may also,
within a period of two (2) years after registration of a close
corporation, on the same grounds as indicated in the preceding
paragraph, apply to court for an order directing the close
corporation
to change its name, and the court may, pursuant to such
an application, make such order as it deems fit. However, whatever
prohibition
there may be in regard to change of name or any right to
apply to court for such change of name, does not in any way detract
from
the common law right to institute an action against a close
corporation for passing-off a business, goods or services as that of
another.
[9]
A close corporation is a creature of statute, created as it is in
terms of the provisions of the Close Corporation Act. Any
relief
sought against an entity incorporated in terms of the Close
Corporation Act should be consistent with its provisions.
Accordingly,
no order is competent if the execution thereof will
constitute a violation of any of the provisions of the Close
Corporation Act.
There does not appear to me, apart from the
provisions of section 20 of the Close Corporation Act, to be any
legal basis for ordering
a close corporation to change its name. Both
the main application and the counter-application were brought about
long after a period
of two (2) years referred to in section 20(2)(b)
of the Close Corporation Act had expired. The provisions regarding
the period
within which the application for change of name must be
brought are peremptory. Thus any application made after the expiry of
a
period of two (2) years referred to in section 20(2)(b) of the
Close Corporation Act, as has happened in the instance of this
matter,
is fatally defective. (See
Computer
Training College BK v Registrateur van Beslote Korporasies
1996(1)
SA 1122 (T) at 1125) It therefore follows that the relief sought
regarding the change of name, both in the instance of the
main
application and the counter-application, is not competent. However,
and as correctly pointed out by
Mr
Sholto-Douglas
in
his submissions, the relief sought in relation to the internet domain
names can be granted if it is found that the applicants
or the first
respondent have, in relation to their respective applications,
established a passing-off.
THE
LAW RELATING TO PASSING-OFF
[10]
It has been stated in numerous authorities that a plaintiff in a
passing-off action has to prove two elements, the first being
that
the trademark, get-up, service mark or trade name which he or she
says has been imitated has become distinctive, that is,
that it has
acquired with the public a reputation associated with his or her
goods, service or business and, secondly, that the
conduct of the
offending party is likely or calculated to deceive the public.
(Joubert:
The
Law of South Africa
Second
Edition Part 2 par 264 at p252 and other authorities cited therein)
[11]
It has often been said that passing-off is one of the most common
forms of unlawful competition. It normally takes a form of
a trader
representing to the public that his or her enterprise, goods or
services are those of his competitor. He or she does so
by using or
imitating his or her competitor's distinctive marks. Rabie JA
provides a succinct definition of passing-off in
Capital
Estate & General Agencies (Pty) Ltd v Holiday Inns Inc &
Others
1977(2)
SA 916 (A) at 929 C-D:
"The
wrong known as passing-off consists in a representation by one person
that his business (or merchandise, as the case may
be) is that of
another, or that it is associated with that of another and, in order
to determine whether a representation amounts
to a passing-off, one
enquires whether there is a reasonable likelihood that members of the
public may be confused into believing
that the business of one is, or
is connected with, that of another."
[12]
From the navigation of authorities, it emerges that in a passing-off
action a plaintiff must prove the following two things:
[12.1] That
the trade mark, get up, service mark or trade name which he or she
claims has been imitated is known in the market
and has acquired with
the public a reputation associated with the goods, services or
business. Reputation has been said to mean
that a substantial number
of persons (not every one) are aware of the product and its
qualities.
[12.2.]
That the defendant's conduct is calculated to deceive the public.
Thus,
each one of the applicants, in both the main application and the
counter-application, in order to succeed in their respective
claims,
must prove the existence of reputation at the time of the commission
of the conduct complained of and a representation
made by the
offending party that is likely to cause confusion amongst purchasers
or potential purchasers of the product.
[13]
The business activities of all the three entities mentioned in the
main application and the counter-application, must be
assessed on
the basis of the evidence made available to me in order to determine
if passing-off has been established. I commence
this exercise by
casting my search light on Centrecore.
CENTRECORE
[14]
Nathaniel Roberts, the second respondent in the main application,
explains in his answering affidavit and the founding affidavit
in
the counter-application, the circumstances under which he initially
conducted business, for his own account, initially under
the name
Centrecore North and, ultimately, under the name and style
Centrecore Timbers. According to
Roberts'
version, sometime towards the end of 1999 or the beginning of 2000
he made a proposal to one Harvey Downes, who had a
member's interest
in both the first and the second applicant, to commence his own
business under a separate legal entity. With
Downes' express
permission he had a close corporation registered under the name
Centrecore North. Centrecore and Centrecore North
initially shared
the same premises at Maitland. Whilst Centrecore carried on with the
manufacturing and supply of timber products,
Centrecore North's
business activity was only limited to the installation of the
finished timber products. According to Roberts,
from the beginning
of 2001 until towards the end of 2006, and with full knowledge and
consent of Centrecore, he carried on trade
under the name and style
of Centrecore Timbers. During that time, according to his version,
he (Roberts) was responsible for
advertising and the promotion of
Centrecore brand and trade mark, thus contributing to building up
Centrecore's reputation.
[15]
Sometime in January 2006 Roberts approached Downes of the first
respondent and asked him if he could use the name Timbercore
CC in
carrying on trade to which request Downes agreed. Up until then,
there had been a raging dispute between the first applicant
and
Roberts regarding the use of the trade name and trade mark
Centrecore. On 11
August
2006 the name Centrecore North was changed to Timbacore CC. Towards
the end of 2006 Roberts had the domain name
www.timbacore.co.za
www.timbacore.co.za
registered.
Since January 2007 Roberts had been and is still trading under the
name and style of Timbacore CC. According to Roberts,
he thus ceased
to trade under the Centrecore brand since the beginning of January
2007. He denies that he is passing off his
business as that of
Centrecore. Evidence on record indeed shows that Timbacore CC
commenced trading under that brand since the
beginning of January
2007. There is thus no evidence on record to show that, since the
beginning of January 2007, Timbacore CC
made any representation
causing the members of the public to be likely to be deceived or
confused into believing that the business
of Timbacore is that of
or, is in any way associated in the course of trade with the
business of Centrecore. Furthermore, there
is absolutely no evidence
on record to suggest any likelihood of a confusion of the trade mark
Timbacore to the business undertaken
under the name Centrecore.
[16]
In paragraph 116 of his answering affidavit and a founding affidavit
to the counter-application, Roberts states that Centrecore
CC had
been aware that the first respondent (Timbacore) had been carrying
on trade as Timbacore; that since then Timbacore (first
respondent)
advertised in many of the same publications as did Centrecore; that
they have had frequent dealing with each other,
being in the same
industry and, despite this, Timbacore has never received either a
call or a letter of demand demanding that
Timbacore desist from
carrying trade under that name. Under these circumstances, it can
thus clearly be said that the first applicant
acquiesced in the use
of the trade name and the trademark of Timbacore. Thus, the first
applicant, Centrecore, would be precluded,
at this late stage, to
start complaining that Timbacore is passing off its goods, services
or business as that of Centrecore.
[17]
The first applicant complains that Timbacore CC advertised as
Centrecore in the 2008/2009 and 2009/2010 White and Yellow
Pages
telephone directory and right above the Centrecore CC entry. The
first respondent's (Timbacore CC) response to this complaint
is that
since it had since 2000 traded under the name and style of
Centrecore North until it changed its name to Timbacore CC,
it had
to accommodate clients for whom work had been done under the name
Centrecore North who may have wished to follow up with
the first
respondent, as for an example, pursuant to a guarantee in respect of
work done but who may not have been aware of the
first respondent's
name change. Roberts thus explains that the listing was not intended
to constitute use as a trade mark and
that he will in any event not
renew the listing when it comes up for renewal at the end of 2010,
since most guarantee period
would have run out by then. In my view,
this is a plausible explanation. The conduct of the first respondent
(Timbacore) cannot,
in circumstances outlined above, be construed as
constituting passing-off.
[18]
Whilst the first applicant admits that an agreement was reached in
terms of which Roberts would starts his own business under
the name
Centrecore North, it is stated on behalf of the first applicant that
this was subject to a number of conditions, a breach
of which would
entitle the first applicant to withdraw the authority to use the
name Centrecore. The first respondent denies
that the agreement to
use the trademark Centrecore was subject to any conditions. The
conditions referred to have in any event
not been specified, so that
there is no basis to reject the first respondent's version that no
conditions were attached to the
use of the brand or trade mark
Centrecore in circumstances stated by Roberts as being improbable.
TIMBERCORE
[19]
It is stated in the applicant's founding affidavit to the main
application that the applicants and their predecessor-in-title
have
since
1978
made continuous use of the Centrecore and Timbercore trade marks in
relation to goods, such as fences, decks, cabins, garden
poles and
services relating to such goods in, amongst others, Western Cape and
that the marks have become synonymous with the
applicants. And then,
of course, claims are being made of significant amounts of money
having been spent on advertising the Timbercore
mark and that income
has been generated through use of the Timbercore trade mark. A
reference is then made to a March 2007 copy
of a Homemakers
publication wherein the logo "Centrecore Timbers" appears
as suppliers and installers of timber products.
For the period 1
July 2006 to 30 June 2007 an amount of R240,000-00 is claimed to
have been spent on advertisements and for the
period 1 July 2007 to
30 November 2008 an amount of R406,000-00 is claimed to have been
spent on advertising. Prior to 2006,
an approximate amount of
R16,000-00 is claimed to have been spent on advertising and other
promotional efforts.
[20]
Only composite figures have been furnished in respect of the
advertisements of both the Centrecore and Timbercore trade marks
with no indication as regards how much was specifically spent in
respect of the Timbercore brand. In the advertisement in the
Homemakers publication referred to in the previous paragraph there
is only a reference to
Centrecore
and there is no specific mention of an entity Timbercore. No
particulars relating to the turnover made in respect of
Timbercore
have been supplied; no financial records or statements, duly
verified by Timbercore's accounting officer have been
supplied; no
income tax returns have been supplied in proof of a contention that
Timbercore has been trading since 1978; no bank
statements have been
supplied to indicate income generated and expenditure incurred in
the course of trade. No annual financial
statements which are
required to be made in terms of section 58 of the Close Corporation
Act, have been supplied. The only documents
annexed to the replying
affidavit, in an attempt to show that Timbercore was trading, are
annexures COR2.1, being a letter from
Spoornet dated 15 April 1991
demanding payment of outstanding municipal rates; annexure COR2.2
being a letter from Intersite
dated 10 July 2002 demanding payment
of arrear rentals; annexure COR2.3 being a diagram of the leased
premises in Maitland and
dated 8 December 1989 in which reference is
made to "lease of land to Harvey Downes trading as Timbercore".
This in
no way indicates that the entity concerned was effectively
carrying on trade at the time, and particularly at the time the
first
respondent commenced trading under the name and style of
Timbacore on 1 January 2007.
[21]
The evidence of Roberts, on the other hand, is that he first became
aware of the name Timbercore either during 1996 or 1997
when he
answered the phone while employed by Centrecore, the first
applicant, when a caller asked for Timbercore. Roberts states
further in his affidavit that that was the only time he came across
the name Timbercore during the entire period he was employed
by the
first applicant. In the course of investigating the name change in
respect of his close corporation, the name Timbercore,
which he
became aware of during 1996 or 1997, came to his mind. On
investigation, with the assistance of the first applicant's
accounting officer, he discovered that Downes and one Andrew Botha
were members of Timbercore which appeared dormant at the time.
Roberts is adamant in his evidence that at the time he was employed
by the first applicant, Timbercore was not trading at all.
To the
extent that there appears to be a dispute as to whether Timbercore
was trading or not trading at the time, the rule in
Plascon
Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) applies, and in terms of that rule, Roberts' version
has to be accepted.
[22]
On the basis of the evidence before me, there does not appear to be
any evidence to show that, at the time Timbacore commenced
trading,
Timbercore was indeed carrying on trade. Accordingly, no credible
evidence has been adduced to show that Timbercore,
at the time
Timbacore commenced trade at the beginning of January 2007, was
trading and had thus acquired any reputation worthy
of protection.
TIMBACORE
[23]
Timbacore is the subject of the application in the
counter-application. It seeks an order to interdict and restrain the
first applicant (Centrecore CC) and the second applicant (Timbercore
CC) from passing off their business and the goods sold in
their
business as being those of the first respondent (Timbacore). For
Timbacore to succeed in the relief sought, it has to prove
all those
elements referred to in paragraph [12] of this judgment, namely,
that it has acquired with the public a reputation
associated with
its goods, service or business and that its business activity is not
calculated to deceive members of the public.
[24]
As has already been pointed out elsewhere in this judgment, Roberts
of the first respondent approached Downes in late January
2006 and
asked Downes if he (Roberts) could use the trade mark Timbercore to
which request Downes agreed. Once Downes had acceded
to Roberts'
request, that accession constituted a binding agreement in terms of
which Roberts could change the name of his business
undertaking and
to carry on trade under the Timbercore trade mark. The fact that
Downes subsequently demanded that Roberts pay
him an amount of
R5,000-00 for having permitted Roberts to do so, does not alter the
initial agreement that Roberts could use
the trade name Timbercore
in carrying on trade. Subsequent to this agreement, the first
respondent changed its name from Centrecore
North to Timbacore. Once
the first respondent was incorporated, it had the domain name
www.timbacore.co.za
www.timbacore.co.za
registered
and this appears to have been towards the end of 2006. When the
first respondent commenced trading under the name and
style of
Timbacore at the beginning of January 2007, it already had the
domain name
www.timbacore.co.za
www.timbacore.co.za
registered
in its name.
[25]
In paragraph 30 of the founding affidavit to the counter-application
Roberts states how the marketing material, signage,
advertisements
and branding was changed from the name Centrecore North to Timbacore
and all costs attendant to such change. He
estimates that the name
change alone cost him approximately R100,000-00; he comments about
the registration of the domain name
towards the end of 2006 and
simultaneously ran a website; copies of advertisements in the
publication "Elegance at home
- Blaauwberg" wherein the
trade mark Timbacore is clearly depicted, is attached; a reference
is also made to copies of the
first applicant's advertisements
annexed to the founding affidavit in the main application wherein
the trade mark Timbacore is
clearly depicted; the costs of branding
for the period 2007 to May 2009 being in the order of R1,256,610-00
and a copy of a statement
of account from Home Focus magazine in
respect of advertisements for the period up to March 2009 to the
tune of R181,262-00 is
similarly attached over and above the costs
of advertising on Cape Talk which for the year 2008 amounted to
R192,000-00. Roberts
further states in his affidavit that as a
result of marketing and promotional activities of the first
respondent in respect of
its Timbacore brand, its business has grown
substantially and produces a healthy turnover; that a turnover for
the year ending
30 June 2007 was R7,684,382-00; for the financial
year June 2008, the turnover was in an amount of R8,213,819-00 and
for the
period ending January 2009 the turnover was in an amount of
R5,960,176-00.
[26]
Roberts concludes by stating that as a result of the extensive use
of the trade mark Timbacore by the first respondent (Timbacore),
the
trade mark Timbacore has become synonymous with the goods and
services of the first respondent in the minds of the purchasing
public, and that the first respondent has built up a substantial
reputation and goodwill which is associated with its Timbacore
trade
mark.
[27]
The first and the second applicants naturally deny the averments by
Roberts which denials, in my view, are bald ad unsubstantiated.
DECEPTION
[28]
As has already been pointed out in paragraph [24] of this judgment
the first respondent (Timbacore) registered the domain
name
www.timbacore.co.za
www.timbacore.co.za
towards
the end of the year 2006 and simultaneously ran a website. Long
after the first respondent had commenced trade under the
name and
style of Timbacore and, in particular, during October 2008, it was
brought to the attention of Roberts that another
entity, other than
Timbacore, was using the first respondent's (Timbacore) trade mark
in relation to its business. This was in
the form of annexure NR13
annexed to the founding affidavit in support of the
counter-application, which annexure is also annexed
as annexure
"CA0.2" to the founding affidavit in support of the main
application where the domain name
www.timbercore.co.za
www.timbercore.co.za
is
clearly emblazoned. The advertisement appeared in the September 2008
issue of the Northern Showcase publication. According
to Roberts,
the domain name complained of simply diverts users to the first
applicant's Centrecore website with no reference
being made to
Timbercore at all.
[29]
The first applicant does not dispute the advertisement complained of
in its answering affidavit, but adopts the position
that the second
applicant (Timbercore), who enjoys a senior Timbercore corporate
name registration, is entitled to register and
to use the domain
name
www.timbercore.co.za
www.timbercore.co.za
and
that if both Centrecore and Timbercore choose to divert customers to
the first applicant (Centrecore) it is their right to
do so.
[30]
Once the advertisement referred to in the preceding paragraphs had
come to the attention of Roberts, he immediately called
Ontong (who
had since purchased Downes' membership interest in Centrecore) to
find out why he had commenced using the name Timbercore
and why he
had registered the Timbercore website. According to Roberts, Ontong
simply laughed when confronted about the use of
the Timbercore trade
mark and responded "every one needs to find ways to get
business". Ontong does not dispute having
uttered these words
except to say they were uttered in the context of a tirade launched
at him by Roberts coupled with baseless
accusations. Roberts
concludes by stating that the domain name
www.timbercore.co.za
www.timbercore.co.za
was
emblazoned on Ontong's bakkie which hitherto used to simply have the
Centrecore branding and trade mark displayed on
it.
[31]
The first respondent, as has already been pointed out, had had the
domain name
www.timbacore.co.za
www.timbacore.co.za
registered
towards the end of 2006. As early as March 2007 it had already
commenced its advertising campaign as annexure "CA0.7"
annexed to the founding affidavit in support of the main application
would confirm. According to the applicants (Centrecore and
Timbercore), the domain name
www.timbercore.co.za
www.timbercore.co.za
was
registered during July 2007 well knowing that
■
the
first respondent (Timbacore) already had its domain name
www.timbacore.co.za
www.timbacore.co.za
registered
and the domain name was depicted in the first respondent's
advertisements. I have already pointed out elsewhere in
this
judgment that there is absolutely no evidence at all to suggest that
either Centrecore or Timbercore ever used the trade
name Timbercore
in the course of trade, at least not before 1 January 2007 when the
first respondent (Timbacore) commenced trade
under that name. The
applicants (Centrecore and Timbercore) had the domain name
www.timbercore.co.za
www.timbercore.co.za
,
which is confusingly similar to the domain name
www.timbacore.co.za
www.timbacore.co.za
registered,
well knowing that the domain name concerned was registered in the
name of the first respondent (Timbacore).
That
conduct constitutes deception, in the absence of clear evidence that
the trade name Timbercore was used in the course of
trade and in
circumstances where the first respondent (Timbacore) was given
permission to carry on trade under that name.
[32]
It therefore follows that the first respondent (Timbacore) has
discharged the onus resting on it, to show that the trade
mark, and
the domain name it subsequently registered, which it claims is being
imitated, is known in the market and has acquired
with the public a
reputation associated with its goods, services and business; and
that the registration of the domain name
www.timbercore.co.za
www.timbercore.co.za
is
calculated to deceive the public.
[33]
In their notice of motion, the first and the second applicants, in
the event of the main application being successful, seek
an order of
costs against the first and the second respondents, jointly and
severally, the one paying the other to be absolved.
The second
respondent is a member of the first respondent holding a 50%
membership share. The first respondent is a separate
corporate
entity existing independently of its members. Being a separate legal
entity, the first respondent is unable to execute
its functions and
relies on its member to do so or those persons authorised to act on
its behalf. The second respondent,
vis-a-vis
the
first respondent, is in the position I have just described. This
then raises the question whether it was appropriate for the
applicants to have cited the second respondent as a party over and
above the first respondent.
[34]
As I have pointed out in the previous paragraph, it is trite that
corporate entities exist independently of their members.
Proceedings
against members individually, can only be instituted against those
members individually, in the case of close corporations,
in those
circumstances set out in sections 63 and 64 of the Close Corporation
Act. In these proceedings, it has not been shown
that the second
respondent has fallen foul of any of the provisions of sections 63
and 64 of the Close Corporation Act so as
to trigger personal
liability. It therefore follows that the citation of the second
respondent, as an independent party, is not
appropriate.
[35]
In paragraph [9] of this judgment I found that the relief sought
regarding the change of name of the close corporations concerned,
both in regards to the main applicant and the counter-application,
is not competent. In paragraph [15] of this judgment I found
that
there is absolute evidence adduced to suggest a likelihood of a
confusion of the trade mark Timbacore
to
the business undertaken under the name Centrecore. In paragraph [22]
I found that no credible evidence has been adduced to
indicate that
at the time Timbacore commenced trading on 1 January 2007,
Timbercore was carrying on trade and had acquired reputation
worthy
of protection. Lastly, in paragraph [32] I found that Timbacore has
succeeded to discharge the onus resting on it to show
that it has
established reputation, in the course of trade, which is worthy of
protection in law and that the registration of
the domain name
www.timbercore.co.za
www.timbercore.co.za
is
deceitful and is calculated to deceive the public.
[36]
In the result, the following order is made:
[36.1.]
The relief sought in terms of paragraphs 4,5 and 6 of the notice of
motion and the notice of counter-application is not
competent and,
accordingly, no order is made for the relief contemplated in those
paragraphs.
[36.2.]
The application of Centrecore CC (the first applicant) and
Timbercore CC (the second applicant) is dismissed with costs.
[36.3.]
As to the counter-application, the relief sought in terms of
paragraphs 1, 2, 3 and 7 of the notice of counter-application
is
hereby granted.
[36.4.]
The first and the second applicants in the main application are
ordered to pay the first and the second respondents' costs
in the
main application and the applicant's costs in the
counter-application, duly taxed or as agreed, such costs to include
costs arising from citation of the second respondent, as a party, in
the main application.
N
J YEKISO, J