As a result the respondents then launched the present application in which they claimed an order:
Directing third and fourth respondents to change their names in terms of section 20(2)(b) of the Close Corporations Act, Act No 26 of 1988 (as amended by section 12 of Act 8 of 1994) within a period of 30 (thirty) days from date of the order of the above Honourable Court, alternatively within such period as the above Honourable Court may direct.
Directing first and second respondents to give effect to the order set out in prayer 1 above.
Interdicting, prohibiting and restraining first, second, third and fourth respondents from:
Using, trading under, adopting or imitating the name “Asco” either as part of a business or trade name or in any other manner, other than trading under the name and style of fifth respondent or the name and style of “Asco Car Hire”.
Applying the name “Asco” to any business or product other than the business of fifth respondent or the business known as “Asco Car Hire”, so as to prevent first to fourth respondents from passing off their businesses as that of applicants or to be connected in the course of trade with applicants or to infringe upon the copyright of applicants to and in respect of the name “Asco”.
That the costs of this application be paid by first to fourth respondents jointly and severally, the one paying the other to be absolved on the scale as between attorney and client.
Costs against such other respondents only in the event of them opposing this application.
Further and/or alternative relief.”
When the application was filed the fifth and sixth respondents were Asco Car Hire CC and the Registrar of Close Corporations. However, no relief was claimed against them, save an order for costs, if they should oppose the application. Otherwise they were cited only for the interest they might have had in the outcome of the application. They did not oppose the application and hence no order was made against them.
The respondents were successful in the Court a quo and they obtained an order as prayed for in the Notice of Motion. First to fourth appellants were not satisfied with this outcome and they appealed against the whole Judgment and Orders handed down by the Court a quo. Dr. Henning, SC, with him Mr. Dicks, appeared on behalf of the appellants and Mr. Tötemeyer appeared on behalf of the respondents.
Various applications for condonation were filed by both parties and also an application, on behalf of the appellants, to file further affidavits. This latter application was withdrawn and costs were tendered. It follows that the respondents are entitled to an order for costs up to the date when the matter was withdrawn. An application to condone the late filing of security in terms of Rule 8(3) was not opposed by the respondents and was granted by this Court and the appellants were ordered to pay the costs of the application.
The application for condonation by the respondents concerns a point taken by counsel for the appellants and of which notice was given in the Heads of Argument filed on behalf of the appellants. The issues raised in this regard were:
That the replying affidavit of first respondent in the Court a quo was not attested by a commissioner of oaths as prescribed by regulation GN R1258 of 21st July 1972; and
That the confirmatory affidavit of the second respondent in the Court a quo (see record, vol.1 p. 71) was undated. This constituted non-compliance with regulation 4(1) of the abovementioned regulations which require that the date of taking the oath and declaration should be stated.
It now seems that the confirmatory affidavit of the legal practitioner of the respondents was likewise not dated and consequently the Court was asked to also condone this omission.
Affidavits to support the application for condonation were filed. In regard to the two affidavits which were not properly dated the deponents stated the date on which they appeared before the Commissioner of Oaths, who then completed the necessary declarations. In regard to the replying affidavit of the first respondent where the declaration by the Commissioner of Oaths did not contain the particulars as required by regulation 4(1), an affidavit was filed by the Commissioner from which it is clear that she is a legal practitioner and ex officio a Commissioner of Oaths.
Dr. Henning contended that the Court could not receive the above evidence in view of the provisions of sec. 19(a) of the Supreme Court Act, Act No. 15 of 1990. That section provides as follows:
“The Supreme Court shall have power-
on the hearing of any appeal to receive further evidence, either orally or by deposition before a person appointed by the court……”
Counsel submitted that the application for condonation by the respondents was not covered by the above provision, which, so it was argued, is not meant to cure a defective application in another Court ex tunc. That Court, i.e. the Court a quo, heard the case and gave judgment under the illusion that non-existent facts were present.
Mr. Tötemeyer pointed out that the point taken on appeal by Dr. Henning was now, on appeal, taken for the first time. If the point was taken when the matter was heard in the High Court, the respondents could have placed evidence, by affidavit, before that Court and so cure any defects which may have existed in terms of the relevant regulations. To allow this point to be raised now would be unfair to the respondents and the Court should therefore decline to entertain this objection. Counsel referred the Court to various cases where, so it was alleged, this submission was supported. Only if this submission was not accepted by this Court would the respondents have relied on their application for condonation.
From the authorities it is clear that non-compliance with the provisions of the relevant regulations, namely Government Notice R1258 of 21 July 1972, does not amount to a nullity as compliance with the regulations is directory and not peremptory. See in this regard S v Munn, 1973 (3) SA 734 (NCD) at 737E; S v Msibi, 1974 (4) SA 821 (TPA) at 829C; Dawood v Mahomed, 1979 (2) SA 361 (D&CLD) at 367A-E; Cape Sheet Metal Works (Pty) Ltd v J.J. Calitz Builder (Pty) Ltd, 1981(1) SA 697 (OPA) at 699B and Standard Bank of South Africa Ltd And Another v Malefane and Another: In Re Malefane v Standard Bank of South Africa Ltd and Another, 2007 (4) SA 461 (Tk) at 465A-D.
A reading of the above cases shows that a Court has a discretion whether to accept or reject an affidavit not complying with the said regulations. The Court would generally accept the affidavit if it was of the opinion that there was substantial compliance with the provisions of the regulation or if evidence was placed before the Court that showed compliance with the regulations. In the latter instance the filing of further affidavits by the deponent and the Commissioner of Oaths, setting out that that which was omitted in the first place was complied with, was allowed to cure any defect.
Where a point is raised for the first time on appeal the Court will not allow it if its consideration involves unfairness to the party against whom it is directed. It would be unfair if the party against whom such point was taken, could have avoided it by e.g. amending his pleadings if the point had been taken timeously, or, where it was not clear that the point had been fully investigated, and further evidence might have been placed before the Court if the point had been taken timeously. (See Herbstein and Van Winsen: The Civil Practice of The Supreme Court Of South Africa; 4th Edition by van Winsen et al, page 912 -913).
In Cole v Government of the Union of South Africa,1910 AD 263, Innes, J, (as he then was) stated the principle as follows on p 272:
“It does not appear, however, that plaintiff’s counsel either waived or agreed to abandon that point, he simply did not advance it, and it was not discussed. Under these circumstances, it has been suggested that the appellant should not be allowed to take advantage of the point on appeal…But there seems no reason, either on principle or on authority, to prevent him. The duty of an appellate tribunal is to ascertain whether the Court below came to a correct conclusion on the case submitted to it. And the mere fact that a point of law brought to its notice was not taken at an earlier stage is not in itself a sufficient reason for refusing to give effect to it. If the point is covered by the pleadings, and if its consideration on appeal involves no unfairness to the party against whom it is directed, the Court is bound to deal with it. And no such unfairness can exist if the facts upon which the legal point depends are common cause, or if they are clear beyond doubt upon the record, and, there is no ground for thinking that further or other evidence would have been produced had the point been raised at the outset.”
“But where a new law point involves the decision of questions of fact, the evidence with regard to which has not been exhausted, or where it is possible that if the point had been taken earlier it might have been met by the production of further evidence, then a Court of Appeal will not allow the point to prevail. Because it would be manifestly unfair to the other litigant.”
The principles set out in the above case were regularly followed afterwards. See Marks Ltd v Laughton, 1920 AD 12; Applebee v Berkovitch, 1951 (3) SA 236 (CPD); Mörsner v Len, 1992 (3) SA 626 (AA); Greathead v SA Commercial Catering & Allied Workers Union, 2001 (3) SA 464 (SCA) and Carmichele v Minister of Safety and Security, 2001(4) SA 938 (CC).
Looking at all the circumstances I have no doubt that it would be manifestly unfair to allow the appellants to rely on the point now taken for the first time. This is an instance where, if the point was timeously taken, the respondents would have been able to put evidence before the Court a quo which would have regularised the whole situation. The point is also one which has no effect on the merits of the application and, if the Court should decline to allow it, would not result in the perpetuating of a nullity or an illegality, and would not interfere with the duty of this Court, as an appellate tribunal “to ascertain whether the Court below came to a correct conclusion on the case submitted to it.” (Per Innes, J, in Cole’s-case, supra, p 272). In fact this may very well have been an instance where the Court a quo could have condoned non- compliance with the provisions of the regulation on the basis that there was substantial compliance. The omission of the dates on the two affidavits only concerns the specific day when the oath was administered. Both were administered in March 2006 and were in all other respects regular. Although the specific date may become relevant and important in certain circumstances in the present instance it ostensibly played no role in the adjudication of the disputes between the parties and nothing turns upon it.
In regard to the non-compliance with regulation 4(2) a comparison shows that the affidavit of first respondent and that of Mr. Pfeifer, the legal practitioner of record, was sworn to before the same Commissioner of Oaths, namely Ms Bergh, on the same date and most probably on the same occasion. In the first instance she did not put her stamp, containing all the necessary particulars, on the affidavit. She did however do so on the affidavit of Mr. Pfeifer so that any person who wanted to know who the commissioner was and what her address was and in what capacity she signed as such, could gain that information from the affidavit of Mr. Pfeifer. Bearing in mind that the regulation is directory and that it could be rectified I can see no reason why a Court, in the present instance, could not use the information so obtained.
Dr. Henning referred the Court to the case of Paddock Motors (Pty) Ltd v Igesund, 1976 (3) SA 16 (AD), where on appeal, counsel for the appellant was allowed to argue a point abandoned in the Court below. In this case the Court a quo was called upon to adjudicate on a stated case and had to answer three questions of law. When the matter was argued in the Court of first instance, counsel for the plaintiff abandoned, as it transpired, incorrectly, the first question of law. On appeal counsel for appellant/plaintiff was allowed to argue the point because the facts on which the Court had to adjudicate were agreed and beyond dispute and it was found that the Court of Appeal was not bound by an order given by the Court a quo as a result of an abandonment of a legal contention flowing from a mistaken view of the law.
It is in my opinion clear that the case of Paddock is distinguishable from the present case. One needs only draw attention to the fact that the stated case could not be altered or be supplemented by further evidence so that this was clearly an instance where, had it been a new point of law, raised for the first time on appeal, the principles applied in the Cole–case, supra, would have bound the Court of Appeal to consider it and to adjudicate it. That, as I have tried to point out before, is not the position in the present case.
I must point out that Dr. Henning did not appear in the Court a quo and how much this Court would want to reward such meticulous scrutiny of the Court documents to ensure that such documents comply with the tenets and standards that this Court requires from those practising before it, the fact of the matter is that to allow the appellants to take this point for the first time now would be manifestly unfair to the respondents and consequently the point is dismissed.
A further point raised by Dr. Henning was the authority, or lack of authority, of the first respondent to act on behalf of the second respondent. This is firstly based on the allegation by the first respondent that he was “duly authorised to depose to this affidavit, also on behalf of my wife,” Counsel referred to the South African case of Marvanic Development (Pty) Ltd & Another v Minister of Safety and Security and Another, 2007 (3) SA 159 (SCA) where the Court found that it was not proven nor alleged that the deponent to the affidavit was authorised to act on behalf of either appellants. See also Ganes and Another v Telecom Namibia Ltd, 2004 (3) SA 615 (SCA) ( 2 All SA 609) where the majority of the Court concluded that authority to depose was meaningless and what should have been alleged was authority to institute the action and to prosecute it. See also Duntrust (Pty) Ltd v H Sedlacek t/a G M Refrigeration 2005 NR 147 (HC).
The present case can in my opinion be distinguished from the above cases. Both respondents act herein in their personal capacity, which is different from the two mentioned cases where the legal representatives of the parties deposed to affidavits on their clients' behalf. What is more the second respondent filed a confirmatory affidavit in which she stated that she has read the affidavit of the first respondent and that she verified and confirmed the truth and correctness of the affidavit in so far as it referred to her.
The first respondent needed no authority to act on his own behalf and by her affidavit the second respondent associated herself with the proceedings instituted and the prosecution thereof. If that was not so she would certainly have said so and to suggest otherwise in these circumstances would be pedantic in the extreme.
Because the confirmatory affidavit of the second respondent was not properly dated Dr. Henning further submitted that it should have been ignored by the Court a quo and if that is so then what was alleged by the first respondent would not have constituted proper authority to institute and prosecute the proceedings also on behalf of the second respondent. It seems on the strength of the above quoted cases that could very well have been so. However also in this regard there was no challenge to the authority of the first respondent, when the matter came before the Court a quo, to act for and on behalf of the second respondent. I have however dealt with this issue previously and have rejected counsel’s argument concerning the alleged irregularity of the affidavit and the competence to take this point for the first time on appeal. Consequently the point cannot succeed.
This brings me to the merits of the appeal. The answering affidavit of the appellants was deposed to by the first appellant who stated that he was duly authorised by the second to fourth appellants to make the statement on their behalf.
The appellants stated that they always considered the businesses Asco Car Hire, Asco Panelbeaters and Asco Motors as one business, more so because the principal business of Asco Car Hire CC, a close corporation registered by the respondents, was described as “car rental, trading in motor vehicles and accessories, spare parts, camping equipment and related matters” which was wide enough to include the trade of the other two ASCO businesses. What is more it was alleged that this change in the principal business of the CC was done by the respondents after the contract of sale was signed. Appellants therefore alleged that by the sale of the Asco Car Hire the respondents forfeited exclusive use of the name ASCO as well as their entitlement to do business under the name ASCO.
Flowing from this the appellants stated that they caused the name ASCO to be registered as a trade mark in their favour and they attached the necessary documents evidencing such application and alleged confirmation of the registration by the Registrar of Trade Marks dated 30 November 2005.
Appellants alleged that in any event the business done by Asco Motors, subsequent to the conclusion of the sale agreement, was limited to a few vehicles during the financial year 2005 and was managed from the home address of the respondents. They also complained that the VAT registration and business statements, supporting the business done by Asco Motors, were not attached. They also pointed out that they bought all the assets of Asco Panelbeaters which included the tools and machinery and that they bought the workshop tools and machines of Asco Motors. The telephone and fax numbers of Asco Panelbeaters were also transferred to them.
Appellants also pointed out that the close corporation Asco Properties CC was a property holding company with property in the Republic of South Africa and that Asco Yacht Charter (Pty) Ltd possessed two sailing boats, one in the Seychelles and the other in the Caribbean. It was therefore denied that the respondents had any company or business in Namibia with relevant reputation or goodwill and the appellants alleged that the changed description of the principal business of Asco Car Hire CC was done to give effect to the common intention of the parties when the sale agreement was concluded. Appellants therefore alleged that they had acquired a general right to use the name Asco in the motor trade and related matters.
On the strength of these allegations the appellants stated that if the respondents should again commence to trade actively under the name Asco Motors, Asco Panelbeaters or Asco Car Hire they would be met with appropriate action as the name ASCO belonged to appellants and was protected.
In a replying affidavit the first respondent reiterated that the businesses were separate entities with separate books and assets and that as far as the name ASCO was concerned it was only sold in regard to Asco Car Hire. The first respondent explained why the Asco Car Hire CC was established and why the close corporation, for all intents and purposes, remained dormant.
First respondent further explained that he, during the sale negotiations, mentioned the existence of this close corporation and offered it to the appellants and did not intend to ask any purchase price for it. The respondents also denied that they authorised, or brought about, any extension or amendment of the description of the principal business of the close corporation. None of the relevant documents bore the signatures of the respondents. First respondent alleged that as the statement was changed after the sale agreement it could only have been done on the authority of one of the appellants. It was further pointed out that the claim that the name ASCO was now registered as a trade mark in their favour was misleading and untrue. First respondent stated that there was no proof that any of the steps provided for in sec. 37 of the Trade Marks in South West Africa Act, Act 48 of 1973, were complied with, such as advertising the application and inviting objections thereto. An inspection of the relevant documents in the office of the Registrar of Trade Marks proved that this was the case. It was also clear that no registration or certificate to that effect was issued by the Registrar.
First respondent reiterated that Asco Motors was a running business with a turnover of N$1,259,353.00 in 2004 and N$1,425,262.00 in 2005. Certain invoices were also attached which showed work done, during June 2006, to the motor vehicle of a customer.
The respondent now also provided the VAT registration number of Asco Motors and reference was made to Annexure “L” which was a copy of an import licence for the importation of motor vehicles to the value of N$500.000.00 in favour of Asco Motors.
It seems to me that as far as general principles, applicable to passing off, were concerned, counsel were more or less in agreement. It was in respect of the application of those principles that counsel differed and more particularly whether the sale of most of the assets and equipment of Asco Motors and Asco Panelbeaters and the sale of the name Asco Car Hire afforded the appellants a right to the use of the name ASCO. Furthermore it was argued that after such sale nothing much remained in the way of a reputation and goodwill which needed protection and that the appellants were therefore entitled to use the name ASCO.
The case of the respondents was firstly based on the provisions of sec. 20(2)(b) of the Close Corporation Act, Act No. 26 of 1988 (the Act), as further amended by Act No. 8 of 1994, and interdictory relief based on passing off.
The relevant section in the Act provides as follows:
Any interested person may –
within a period of two years after the registration of a founding statement apply to a Court 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, and the Court may on such application make such order as it deems fit.”
(The words ‘calculated to cause damage’ were inserted by Act 8 of 1994.)
Although at the root of both sec. 20(2)(b) and passing off lies the likelihood of confusion between the names, as was argued by Dr. Henning with reference to "calculated to cause damage", a reading of the authorities shows that the enquiry in terms of sec 20(2)(b) is much wider and that an applicant would be successful if it can show either undesirability or that the name was calculated to cause damage. (See Peregrine Group (Pty) Ltd and Others v Peregrine Holdings Ltd and Others, 2001 (3) SA 1268 (SCA) at 1274 A – E and Azisa (Pty) Ltd v Azisa Media CC and Another, 2002 (4) SA 377 (CPA) at 391 E – F.)
However, it seems to me that the defence by the appellants, namely that they have a right to the name ASCO, and even registered a trade mark in that name, must be dealt with first. If it is so that the appellants acquired a right to the name ASCO, which goes wider than Asco Car Hire, which was bought in terms of the sale agreement, then the respondents claim to the name ASCO cannot be upheld and that would be the end of the matter.
At the outset I must mention that neither party showed much respect for the principles contained in the ‘parole evidence rule’ and both freely tried to prove negotiations and what the intention of the parties was over and above what was stated in the agreement itself. This would only be permissible if the wording of the agreement of sale was ambiguous and needed to be cleared up by further evidence. (See in this regard MTK Saagmeule (Pty) Ltd v Killyman Estates (Pty) Ltd, 1980 (3) SA 1 (AA).)
However, before coming to the agreement three ancillary issues can immediately be dealt with. The first is the so-called registration of a trade mark by the appellants. In my opinion the replying affidavit of the first respondent made short shrift with this claim and showed that the allegation was incorrect and, at best for the appellants, irresponsibly made. None of the steps, prescribed by the provisions of sec. 37 of Act 48 of 1973, have yet been taken and Dr. Henning, correctly, also did not place any reliance on this allegation.
The second issue raised by the appellants was that the three businesses were one entity and were also treated as such by the respondents. This was no more than a bold allegation by the appellants which could not in anyway refute the evidence by the first respondent that the businesses were three different entities which were established at different times, with separate books of account. This was supported by the agreement of sale where the assets of each of the businesses were separately listed and separately sold.
The third issue concerned the statement of principal business of Asco Car Hire CC, the fifth respondent in the Court a quo, which was amended after the sale agreement was concluded. The respondents denied these allegations in a replying affidavit. This was a further bold allegation made by the appellants without any evidence to support their claim and which was, correctly, also not relied upon by Dr. Henning. (See in this regard Annexure “B2”.)
The agreement of sale was entered into between C. Asmus, the second respondent who was the owner of Asco Car Hire, and the appellants. The relevant part of the agreement, as far as Asco Car Hire was concerned, reads as follows:
the Seller is presently carrying on business at 10 Diehl Street, Windhoek as car and camping equipment rental under the name and style of Asco Car Hire
The seller has agreed to sell and the purchasers have agreed to purchase parts of the said business as a going concern;
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
Sale and purchase. The seller hereby sells to the Purchasers who hereby purchase at the price and upon the terms and conditions hereinafter mentioned the business as a going concern.
Assets The assets of the said business shall comprise:
all stationery relating to the said business
the goodwill of the said business including
the name Asco Car Hire
the benefit of all subsisting contracts and orders
the postal, fax and e-mail address
all other assets of the said business except as hereinafter provided