Macleod v Van Tonder and Others (3911/2010) [2010] ZAWCHC 221 (21 September 2010)

Macleod v Van Tonder and Others (3911/2010) [2010] ZAWCHC 221 (21 September 2010)

The court found that the applicant, as a minority member of the second respondent, was an interested party under section 20(2)(b) of the Close Corporations Act. The evidence established that the name 'SafariWise' was closely associated with the second respondent and that the third respondent's use of 'SafariWise CC' was likely to cause confusion and damage. The first respondent's incorporation of the third respondent constituted a breach of fiduciary duty. The court held that the jurisdictional requirements for a name change order were satisfied and granted the relief sought, including the purchase of the first respondent's member's interest in the second respondent and the direction for...

Citation
[2010] ZAWCHC 221
Parties
Applicant: Neil Macleod; Respondent: Johan Van Tonder; Respondent: Neil Macleod Safaris (South Africa) CC; Respondent: SafariWise CC
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
21 September 2010
Case Number
3911/2010
Procedural Posture
Civil Application / Final Order After Full Affidavits and Agreement on Main Relief; Determination of Remaining Issue on Change of Name
Outcome
Application granted. The applicant is to purchase the first respondent's member's interest in the second respondent at fair value, and the third respondent is ordered to change its name. Costs awarded against the first respondent.
Judges
M J Fitzgerald
Legal Topics
Close Corporation Name Change, Fiduciary Duty, Company Name Confusion, Section 20 Close Corporations Act
Commercial and Corporate Civil Procedure Close Corporation Name Change Fiduciary Duty Company Name Confusion Section 20 Close Corporations Act

Case Brief

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Parties

Neil Macleod

Applicant

Johan Van Tonder

Respondent

Neil Macleod Safaris (South Africa) CC

Respondent

SafariWise CC

Respondent

Procedural Posture

Civil Application / Final Order After Full Affidavits and Agreement on Main Relief; Determination of Remaining Issue on Change of Name

Legal Issues

  1. 1 Whether the applicant is an 'interested party' entitled to seek a name change under section 20(2)(b) of the Close Corporations Act.
  2. 2 Whether the name 'SafariWise CC' used by the third respondent is undesirable or calculated to cause damage to the applicant or second respondent.
  3. 3 Whether the first respondent breached his fiduciary duty by incorporating a rival close corporation with a confusingly similar name.

Ratio Decidendi

The court found that the applicant, as a minority member of the second respondent, was an interested party under section 20(2)(b) of the Close Corporations Act. The evidence established that the name 'SafariWise' was closely associated with the second respondent and that the third respondent's use of 'SafariWise CC' was likely to cause confusion and damage. The first respondent's incorporation of the third respondent constituted a breach of fiduciary duty. The court held that the jurisdictional requirements for a name change order were satisfied and granted the relief sought, including the purchase of the first respondent's member's interest in the second respondent and the direction for...

Court Disposition

Application granted. The applicant is to purchase the first respondent's member's interest in the second respondent at fair value, and the third respondent is ordered to change its name. Costs awarded against the first respondent.

Orders

  • The applicant is directed to purchase the 65% member's interest of the first respondent in the second respondent at fair value calculated pro rata the total issued member's interest without any benefit attached to the majority interest.
  • Fair value of the shares shall be determined with regard to the financial position of the second respondent as at 14 September 2010 and shall include the value of the trade name 'SafariWise'.