Auckland Campervan Limited v Travel Cars NZ Limited
[2018] NZHC 3122
•29 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-1948
[2018] NZHC 3122
UNDER S 9, 37, & 41 of the Fair Trading Act 1986 & r 7.53 of the High Court Rules 2016 BETWEEN
AUCKLAND CAMPERVAN LIMITED
Applicant
AND
TRAVEL CARS NZ LIMITED
Respondent
Hearing: 29 November 2018 Appearances:
D Purusram for Applicant
No appearance for or on behalf of the Respondent
Judgment:
29 November 2018
JUDGMENT OF LANG J
[on application for interim injunctive relief]
This judgment was delivered by me on 29 November 2018 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
AUCKLAND CAMPERVAN LTD v TRAVEL CARS NZ LTD [2018] NZHC 3122 [29 November 2018]
[1] The applicant, Auckland Campervan Ltd (Auckland Campervan), has carried on the business of buying and selling campervans in Auckland since 2012. It says the respondent, Travel Cars NZ Ltd (Travel Cars), has engaged in misleading and deceptive conduct in breach of s 9 of the Fair Trading Act 1986 (FTA).1 The claim flows from the fact that Travel Cars is currently trading under the name Auckland Campervan Sales, and is using a website having a domain name very similar to the domain name used by Auckland Campervan.
[2] Auckland Campervan initially filed a proceeding in the District Court seeking an order preventing Travel Cars from trading under the name Auckland Campervan Sales and/or operating the associated website aucklandcampervansales.com. The statement of claim also sought an order directing Travel Cars to pay compensation to it. Auckland Campervan sought an interim injunction from this Court to protect its position until the substantive claim can be heard in the District Court. This Court is the only Court having jurisdiction under the FTA to grant relief in the form of an injunction.2
[3] The application for an interim injunction was first called before Davison J in the Duty Judge List on 1 October 2018. The proceeding had been served on the registered office of Travel Cars on 25 September 2018 but it had taken no steps. There was no appearance by or on behalf of the respondent on 1 October, so Davison J directed that the application be set down for hearing by way of formal proof. It was then set down to be heard by way of formal proof on 19 November 2018.
[4] On the afternoon of 28 November 2019 Travel Cars’ director or manager, Mr Luis Garcia, sent the registry an email advising that he would not be attending the hearing. Attached to the email was material Mr Garcia wished the Court to take into account in reaching its decision today. The material is not formally before the Court as either evidence or submission but I take it into account to the extent I am able.
1 The statement of claim also contains a claim based on the tort of passing off but Auckland Campervan does not rely on that cause of action for present purposes.
2 Fair Trading Act 1986, ss 37(b) and 41.
Preliminary issue
[5] The procedure that Auckland Campervan initially adopted to advance its claims is unusual to say the least. The application for interim relief was the only application filed in this Court. It was not accompanied by any application for substantive relief. Furthermore, the statement of claim filed in the District Court sought substantive orders that appear to be in the nature of injunctive relief. I very much doubt that the District Court has jurisdiction to make those orders.
[6] It is also inherently unsatisfactory for two courts to be dealing contemporaneously with different proceedings regarding the same subject matter because it can lead to significant confusion in a variety of ways. In addition, the applicant would be required to ask this Court to grant relief based on factual findings made in the District Court. That may also be problematic.
[7] These concerns led me to convene a telephone conference on 26 November 2018 with Ms Purusram, counsel for the applicant. In a memorandum filed after the conference Ms Purusram agreed it would be preferable for all matters to be determined in a single forum. She therefore applied for an order under s 89(1) of the District Court Act 2016 that the proceeding filed in the District Court at Auckland under CIV 2018 404 1882 be transferred to this Court with immediate effect.
[8] A High Court Judge has the power to transfer a proceeding from the District Court to the High Court where he or she considers it desirable to do so.3 The issues to which I have referred persuaded me that it was desirable that all issues be determined in this Court, particularly given the fact that only the High Court has the power to grant the relief sought by the applicant. I therefore granted the application on 26 November 2018 and made an order under s 89(1) transferring the proceeding filed in the District Court to this Court.
[9] I now make a further order under r 10.12 of the High Court Rules 2016 that the two proceedings are to be consolidated under the number CIV 2018-404-1948.
3 District Court Act 2016, s 89(1).
Grounds for application for interim relief
[10] Mr Lakhvir Singh Gill, Auckland Campervan’s sole director, has sworn an affidavit in support of the application. He deposes that Auckland Campervan has been operating since March 2012, having changed its name from Gill Campervan Trading Ltd to Auckland Campervan Ltd on 25 May 2018. The company has been using the domain name aucklandcampervan.com since May 2015.
[11] Mr Gill says it came to his attention in June 2018 that in November 2017 an unknown person had registered the domain name aucklandcampervansales.com. He says the website displays a banner with the words “Travelcars New Zealand”. The website travelcarsnz.com shows the same contact details as those provided on the website aucklandcampervansales.com. Both websites displayed campervans for sale. This led Mr Gill to conclude the two websites were operated by the same entity.
[12] Mr Gill located the details for Travel Cars by searching the Companies Register. He says it also has a Facebook page on which it advertises its business using the name Auckland Campervan Sales. Mr Gill annexes printouts from Travel Cars’ website and Facebook page as exhibits to his affidavit.
[13] Mr Gill believes the trading name “Auckland Campervan Sales” is so similar to his company’s trading name that it will undoubtedly cause confusion for members of the public. He says the similarity between the two trading names will inevitably cause members of the public to believe there is a relationship or association between the two companies when that is not the case. He also considers this will damage his company’s goodwill and reputation. Auckland Campervan has already been the subject of several negative reviews on Google in which customers have described issues they have encountered in dealing with his company. His company has no record of dealing with these persons. Mr Gill therefore believes they must have dealt with Travel Cars.
[14] Auckland Campervan’s solicitors wrote to Travel Cars on 3 and 13 July 2018 asking it to discontinue use of the trading name and associated website. On both occasions Mr Garcia replied by email declining to do so.
[15] Auckland Campervan originally applied for injunctive relief on a without notice basis. Wylie J was not prepared to deal with the application in that way and directed that the application be served forthwith. Despite receiving service of the proceeding Travel Cars has elected not to defend it.
[16] Auckland Campervan has also provided an undertaking as to damages as is generally required before the Court will grant injunctive relief of this nature.4
Approach
[17] The test for interim relief in relation to claims under the FTA remains that adopted by McGechan J in E R Squibb & Sons (NZ) Ltd v ICI New Zealand Ltd.5 McGechan J held that the principles to be applied in this context were not dissimilar to those used in other areas of the law where the applicant seeks interim relief. The ultimate and controlling requirement is the overall justice of the case.6 This will usually be ascertained by assessing whether the applicant can establish a serious question to be tried and whether the balance of convenience favours the granting of interim relief.7
Serious question to be tried
[18] The primary purpose of the FTA is consumer protection8 and not the vindication of competitors’ rights.9 As Cooke P observed in Taylor Bros Ltd v Taylors Group Ltd, members of the public have a right not to be misled about with whom they are dealing.10
[19] The test of whether conduct is misleading or deceptive is an objective one.11 It is therefore not necessary for the applicant to prove an intention on the defendant’s part to mislead or deceive. Nor is it necessary to prove that the conduct has resulted in any person being misled or deceived. Logic suggests, however, that it may be easier
4 High Court Rules 2016, r 7.54.
5 E R Squibb & Sons (New Zealand) Ltd v ICI New Zealand Ltd (1988) 3 TCLR 296 (HC).
6 At 310.
7 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 140 (CA) at 142.
8 Fair Trading Act 1986, s 1A.
9 Tots Toys Ltd v Mitchell [1993] 1 NZLR 325 (HC) at 368.
10 Taylor Bros Ltd v Taylors Group Ltd [1988] 2 NZLR 33 (CA) at 40.
11 Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].
for an applicant under the FTA to establish such conduct where it can establish the defendant intended to mislead or deceive the relevant audience or market and/or where the conduct has resulted in persons within that audience or market being misled.
[20] In this context it may also become a matter of fact and degree as to whether a person trading under a name similar to that of another in the same marketplace is engaging in misleading or deceptive conduct. Conduct that merely causes some uncertainty in the minds of relevant members of the public may not be sufficient to amount to misleading or deceptive conduct so as to constitute a breach of s 9 of the FTA.12
[21] The material provided in support of the application certainly suggests Travel Cars is trading under a name likely to be confused by relevant members of the public with that used by Auckland Campervan. Relevant members of the public in the present case comprise those persons seeking to sell or purchase campervans. The confusion may arise because the two trading names are very similar. Furthermore, Auckland Campervan and Travel Cars trade in the same market both in geographic terms and in terms of the products they sell. These factors mean there must be a risk that members of the public will mistake the advertisements and activities of one company for that of the other. That risk appears to have been realised in the case of customers who have posted negative feedback about Auckland Campervan when it appears they must have dealt with Travel Cars.
[22] In addition, there is no obvious legitimate reason why Travel Cars would wish to trade under a name that is quite different from its own. This is not a case where two businesses are trading under the same or similar names because their owners or principals have the same or similar names. Furthermore, Travel Cars has chosen to ignore Auckland Campervan’s requests that it cease using the name and website. The present application provided Travel Cars with a further opportunity to explain why it has chosen to trade under a name that is so similar to that of an established player in the same market. It has failed to take advantage of that opportunity.
12 Taylor Bros Ltd v Taylor Group Ltd, above n 10, at 40 citing the headnote describing the majority judgment in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191.
[23] All these factors suggest Travel Cars has deliberately chosen to use the name because it knows potential customers are likely to believe they are dealing with Auckland Campervan when in fact they are not. In other words, it has decided to obtain a commercial advantage for itself using Auckland Campervan’s name and reputation within the relevant market.
[24] These factors alone are sufficient, in my view, to establish a serious question to be tried in relation to the alleged breach of s 9 of the FTA.
Balance of convenience
[25] This aspect of the application is more finely balanced. The only harm Auckland Campervan can point to is the negative feedback from persons it says are likely to have dealt with Travel Cars rather than itself. There is no evidence Auckland Campervan has suffered financial loss to date as a result of Travel Cars’ activities.
[26] The most important aspect of the case is that the solicitors who formerly acted for Auckland Campervan received an email from Travel Cars on 7 October 2018 indicating that Travel Cars would be ceasing to use the website within the next one to two weeks. In the material Mr Garcia has provided to the Court also states that the website has been removed. That has not occurred, but the statements made by Mr Garcia on Travel Cars’ behalf suggest the trading name and website may not be of huge importance to it.
[27] I have therefore concluded the balance of convenience lies with granting the application so that Travel Cars may not continue to trade or use websites having names so very similar to those used by Auckland Campervan. It follows that the overall justice of the case favours the granting of relief as sought by Auckland Campervan.
[28]I make interim orders as sought by Auckland Campervan in paragraphs 1(a),
(b) and (c) of the without notice application dated 10 September 2018.
Costs
[29] Auckland Campervan is entitled to an award of costs against Travel Cars on a Category 2B basis together with disbursements as fixed by the Registrar.
Next event
[30] Auckland Campervan is now to serve the sealed orders of the Court on Travel Cars’ registered office forthwith. It should also forward a copy to Mr Garcia at his email address.
[31] The proceeding is now to be listed for mention in the Duty Judge List on 17 December 2018 at 10 am for review. Auckland Campervan will need to be in a position to advise the Court at that time whether it proposes to proceed with its claim for a permanent injunction and compensation.
Lang J
Solicitors:
Victorian Lawyers, Auckland
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