About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2012
>>
[2012] ZAGPPHC 172
|
|
Kgatla-Kgaphola v Davel, De Klerk, Kgatla Inc (10636/10) [2012] ZAGPPHC 172 (16 August 2012)
NOT
REPORTABLE
NORTH
GAUTENG HIGH COURT, PRETORIA
CASE
NO: 10636/10
DATE:16/08/2012
In
the matter between:
NTHABISENG
MATSHWENE EVELYN
KGATLA-KGAPHOLA
..................................
Applicant
and
DAVEL,
DE KLERK, KGATLA
INC
..................................................................................
Respondent
JUDGMENT
MSIMEKI,
J
INTRODUCTION
[1]
This is an application for a final interdict ordering the Respondent
to refrain from using the Applicant's name as part of the
Respondent's registered name.
[2]
Mr H M Barnadt represented the Applicant while Ms C Naude represented
the Respondent. The condonation for the late filling of
the
Respondent's Short Heads of Argument requested for in the heads
deserved to be granted. Seemingly that was not opposed and
is
granted.
BRIEF
FACTS
[3]
The Respondent is a duly incorporated Company which practises as a
firm of Attorneys. The Applicant and the other directors
of the
Respondent entered into a written memorandum of intent on 21
September 2004. On 1 October 2004 the Applicant became a director
of
the Respondent. On 6 December 2005 the Applicant and other
shareholders of the Respondent entered into a written Shareholders'
agreement with the effective date being 1 October 2004. Before the
Applicant joined the other director's of the Respondent the
name of
the company was Corrie Nel Incorporated and the company traded as Nel
Davel De Klerk. The name of the company after the
Applicant joined
the company became Davel.De Klerk.Kgatla Inc. and the company traded
as " Davel. De Klerk.Kgatla Attorneys
at 27 A Gen Joubert Street
Polokwane". The name of the Respondent consisted of all the
directors of the Respondent who each
held 25% shares in the
Respondent. The directors were each allocated duties. The Applicant
was to be responsible for marketing
and the image of the company. The
Shareholders agreement would terminate if a party died or became
permanently unable to practise
as an attorney or no longer wished to
be a shareholder of the company in which case the provisions of
clause 13.2 would apply.
On 27 January 2009 the Applicant received a
Notice in terms of clause 13.3 of the shareholders agreement dated 26
January 2009
notifying her that the remaining shareholders had
unanimously decided that her conduct amounted to a serious and
material breach
of the provisions of their agreement and was not
compatible with the terms of the agreement. Her shareholding and
directorship
in the Respondent was terminated with effect from 25
January 2009. The Applicant alleged that she was requested to vacate
her office
by 12h00 on 27 January 2009, the day on which she was
informed of the termination of her shareholding and directorship. On
12 February
2009 the Applicant's attorney addressed a letter to the
Respondent calling on it to remove the Applicants particulars from
the
Respondent's letterhead as, as it was put, failing to do so would
confuse clients and create the impression that the Applicant or
her
firm was still part of the Respondent. On 13 February 2009 the
Respondent responded and said:
"
We have no intention of changing our firms name at this stage, so
your clients demand cannot be adhered to. We have however
instructed
all our secretaries to delete your clients name at the bottom of our
letterhead, as she is no longer a shareholder or
director."
The
Applicant, from 25 January 2009, practises under the name and style
of Kgatla Inc. at 3 Drakenstein 84 Hans Van Rensburg Street
Polokwane, which is said to be less than 5 km away from the
Respondent's offices. The response prompted the Applicant to bring
this application which the Respondent opposed.
[4]
The Applicant's case is that she is entitled to have her name removed
from the registered name of the Respondent and that her
name may not
be used by the Respondent based on the fact that:
4.1.
her rights to privacy, personality and identity are infringed by the
Respondent
4.2.
the Respondent is committing an offence of fronting by representing
to prospective clients and the public at large that it
is BBBEEE
compliant.
4.3.
the use of the name by the Respondent causes confusion to the members
of the public
4.4.
the use of the name " Kgatla " can only be authorised by
the elders of the Bakgatla - clan. She alleged that she
does not have
such authority.
[5]
It is the Rspondent's view that all the grounds that the Applicant
relies on for its claim are baseless and without substance.
[6]
COMMON CAUSE FACTS .
These
are that:
6.1.
The Respondent is a duly incorporated company which practises as a
firm of attorneys at Watermelon Street, Platinum Park, Polokwane.
6.2.
The name of the Respondent, when the Applicant joined it, was Corrie
Nel Incorporated and, it at the time, traded as Nel Davel
De Klerk.
6.3.
On 21 September 2004 the Applicant and the shareholders of the
Respondent entered into a written memorandum of intent to practise
together as attorneys, notaries and conveyancers.
6.4.
On 1 October 2004 the Applicant became a director of the Respondent.
6.5.
On 6 December 2005 the Applicant and the then shareholders of the
Respondent concluded a written shareholders' Agreement with
the
effective date being 1 October 2004.
6.6.
The parties agreed that the name of the company would be changed to
Davel. De Klerk. Kgatla Attorneys which would also be the
company's
trading name. The company, at the time, traded at 27 A Gen Joubert
Street, Polokwane.
6.7.
In terms of clause 2.1.2. of the Shareholders' Agreement the word
"company" is defined as Davel.De Klerk. Kgatla
incorporated.
6.8.
The Applicant, in writing , agreed to the name change.
6.9.
Each of the parties held 25% shares in the Respondent.
6.10.
The Shareholders would act as directors of the company (the
Respondent) while practising as attorneys for the benefit of the
company, with each having official duties. The Applicant would be
responsible for marketing and the image of the company.
6.11.
The Applicant's shareholding and directorship in the Respondent were
terminated with effect from 25 January 2009 and she was
to vacate her
office by 12h00 on 27 January 2009.
6.12.
On 2 February 2009, about a week after the termination of her
shareholding and directorship, the Applicant registered a company
called Kgatla Incorporated.
[7]
A COMPANY
"Associations
which are of a character and fulfil the conditions provided for by
the Act may become incorporated by taking
the steps prescribed by the
Act and being registered by the official registrar" (Herbstein &
Van Winsen: Civil Practice
of the High Courts Of South Africa, Fifth
Edition, Vol 1 at page 178 under general Acts) The Companies Act 61
of 1973 as amended
is the main Act which makes provision for the
registration of associations of natural persons. A registered
association becomes
a legal persona with life of its own. It is
distinct from the natural persons who compose it. (See Dadoo Ltd and
Others v Krugersdorp
Municipal Council
1920 AD 530.
The legal persona
is capable of suing and being sued in its own name. The Respondent is
one such legal persona.
[8]
FORMATION OF THE RESPONDENT
As
shown above, when the Respondent was formed, a written memorandum of
intent was entered into between the Applicant and the other
directors
of the Respondent. The Applicant, without any coercion, became one of
the directors. The Applicant, on 6 December 2005
entered into a
written shareholders' agreement which had an effective date of, 1
October 2004. the name of the then company, with
the written
agreement of the Applicant, was changed to Davel. De klerk . Kgatla
Incorporated. The Applicant willingly became a
shareholder and
director of the Respondent and with her permission her name became
part of the Respondent's name. The Respondent
is a legal persona with
life of its own and distinct from the natural persons composing it.
[9]
As already shown above, it is the Applicants contention that the
Respondent, by the non-removal of her name from the name of
the
Respondent infringes her right to privacy, personality and identity.
She contends that the Respondent is committing the offence
of
"fronting"; that the use of her name causes confusion to
members of the public and that the use of the name requires
special
authority from the Bakgatla clan. The argument advanced, on behalf of
the Respondent, is that the Applicant is not entitled
to the relief
that she seeks because the Respondent is not infringing any of her
rights. It is further submitted that there is
no basis in law which
is supported by facts in casu on which the Applicant can rely for the
relief that she seeks.
[10]
The Applicant in casu has relied heavily on the case of Grutterv
Lombard and Another 2007 (4) SA 89 (SCA) in support of her
application. Ms Naude submitted, on behalf of the Respondent, that
the facts of Grutter matter (supra) are distinguishable from
the
facts in casu. The submission seems to have substance. Indeed, in the
Grutter matter the court had to deal with a case where
the facts did
not disclose the features of a partnership. Grutter and Lombard had
pursued their independent practices. They had
their own clients, bore
their own expenses peculiar to their practices and independently
received the rewards of their own endeavours
to the exclusion of the
other. They only shared the premises and certain administrative
facilities and the overhead expenses that
that entailed. The name of
their practice was found not to have been an asset that fell to be
utilised and disposed of in accordance
with the principles of
partnership. The court in the matter found that Lombard and Grutter
had merely agreed " to associate
with one another for the
limited purpose of sharing facilities and expenses and to pursue
their respective practices under their
joint names. One can
understand why the SCA found that Grutter was entitled to the order
that he claimed.
[11]
We are here concerned with an incorporated company and an entity
which has life of its own. The entity was formed with the
consent and
permission of the relevant parties for the benefit of the Respondent
and themselves. As Ms Naude correctly submitted,
we here are dealing
with " a legal entity that has a specific registered name
recognised in law, that has traded with the
specific name and that
used a person's name as part of its registered name with her
consent.1' The submission, indeed, has merit.
The facts of the two
cases are, indeed, distinguishable.
[12]
The facts of this matter clearly demonstrate that none of the
Applicant's rights were or are infringed by the Respondent as
averred
and submitted. The Respondent in the circumstances of this case
cannot be said to be committing an offence of fronting.
Neither can
it be said that the use of the Applicant's name in the registered and
trading name of the Respondent is causing confusion
"amongst
members of the public". It must be borne in mind that the
Applicant, indeed, when entering into the shareholders'
agreement,
consented to the registration of the
Respondents'
name in its current format, and as a legal person, aware of the
implications of what she was doing. Regarding the authority
of the
Bakgatla clan, there was no problem when the Applicant agreed to the
use of the name, this did not seem to be an issue when
the consent
was given. The Applicant, at the time, did not disclose that the use
of the name had been conditional or subject to
a term or resolutive
condition that the name of the Respondent would be changed as soon as
a shareholder or director ceased to
be such. It also does not appear
from the papers that the Applicant, at any stage, disclosed that
there would be problems with
the name when she left the company. The
issue of authority from the Bakgatla clan does not seem to have
merit. There is nothing
to support the mere allegation of the
Applicant in this respect.
[13]
Ms Naude submitted, correctly in my view, that the shareholders'
agreement clearly makes provision for the termination of a
shareholder's shareholding and directorship and
that the following
clauses are note-worthy.
"17.1
This agreement constitutes the sole and exclusive agreement between
the parties relating to the subject matter hereof
and no warranties,
representations, guarantees, or other terms and conditions of
whatever nature, not contained or recorded herein
shall be of any
force or effect.
17.2.
No variations, alterations, amendment, cancellation or.
waiver
of the terms and conditions of this agreement including this clause
shall be of any force or effect unless reduced to in
(sic) writing
and signed by the parties hereto, or their duly authorised
representatives." Ms Naude further and correctly
submitted that
the contention by the Applicant that she only consented to the use of
her name as part of the Respondent's duly
registered name for the
duration of her shareholding and directorship should be rejected. The
Applicant seems to want to rely on
what does not form part of the
agreement when that is specifically excluded by the agreement.
[14]
It is, indeed, correct that the Applicant willingly associated
herself with the Respondent. She consented to everything that
was
necessary to bring the Respondent into being. She was aware of the
implications of what she was involving herself in. She is
indeed, a
practising lawyer and was at the time of the formation of the
Respondent. She duly considered what she was doing when
she entered
into the shareholders' agreement. She also must have sought and
obtained legal advice before she committed herself
as her actions
involved her future.
[15]
The submission by Mr Barnardt that the memorandum of intent and the
shareholders' agreement do not provide that the name of
the company
would be changed in the event of any change of shareholders or
directors does not help the Applicant if regard is had
to clauses
17.1 and 17.2 referred to in paragraph 13 above. That the parties
never contemplated that the Respondent would continue
to use the
Applicant's name after her departure does not help the Applicant
either.
[16]
The further submission by Mr Barnardt that the argument that the
Respondent invested effort and money into ,marketing the Respondent
under the name Davel. De Klerk. Kgatla Attorneys is not convincing
cannot be correct. Evidence demonstrate the contrary. At any
rate the
Respondent has life separate from that of those who formed it. It is
an independent entity which is entitled to keep its
name. I have
noted the excerpts that come from the Grutter matter that Mr Barnardt
has referred the court to but those do not seem
to assist the
Applicant as the facts of that case and this case are, indeed,
different and distinguishable.
[17]
The facts of this case clearly demonstrate that the Applicant has not
made out a proper case for the relief claimed and that
the Respondent
has every reason to continue to use the Applicant's name, the
Applicant's application, therefore, stands to be dismissed
with costs
which include the reserved costs.
[18]
I have, in the light, of the circumstances of this matter, found it
unnecessary to deal with the issues pertaining to the rules
of the
Law Society.
[19]
I, in the result, make the following order:
The
application is dismissed with costs which costs include the reserved
costs of 20 April 2010 and 21 February 2011.
MSIMEKI
J
JUDGE
OF THE HIGH COURT NORTH GAUTENG HIGH COURT
Counsel
for applicant: AcM H.M. Barnardt
Counsel
for respondent: Adv C Naude
Attorneys
for applicant: Maenetja Attorneys
Attorneys
for respondent: C/O Jacques Roets Attorneys
Date
heard:28/03/2011
Date of judgment:16/08/2012