Ecopro Cleaning Services Limited v Ecopro Limited

[2018] NZHC 3075

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-001869

[2018] NZHC 3075

BETWEEN

ECOPRO CLEANING SERVICES LIMITED
Applicant

AND

ECOPRO LIMITED

First Respondent

MATTHEW JOHN ROURKE

Second Respondent

Hearing:

22 November 2018

Appearances:

E W Davies for Applicant

No appearance by or on behalf of Respondents

Judgment:

26 November 2018

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Monday, 26 November 2018 at 11.00 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:           Skinners Law, Auckland

ECOPRO CLEANING SERVICES LIMITED v ECOPRO LIMITED [2018] NZHC 3075 [26 November 2018]

Introduction

[1]    On 26 September 2018, Palmer J granted an interim injunction against Ecopro Limited and Matthew John Rourke (the respondents) on the application of Ecopro Cleaning Services Limited (the applicant) to restrain the respondents’ use of the name “Ecopro” or “Ecopro NZ”.1

[2]    The applicant now applies for a permanent injunction against the respondents as a matter of formal proof.

Background

[3]    On 30 August 2018, the applicant filed its claim against the respondents. The causes of action pleaded in the statement of claim are passing off, misleading or deceptive conduct or statements under the Fair Trading Act 1986, and breach of the Trade Marks Act 2002. The applicant sought both an interim and permanent injunction.

[4]    The proceeding was served on the respondents. Neither of the respondents have taken any steps in the proceeding despite numerous attempts by the applicant to engage with them. No statement of defence has been filed. No notice of opposition  to the application for an injunction has been filed. There was no appearance by or on behalf of the respondents when the application for an interim injunction was called before Palmer J.

[5]    Palmer J granted an interim injunction to restrain the respondents’ use of “Ecopro” or “Ecopro NZ”. He thought there was a serious question to be tried and considered that the balance of convenience favoured the applicant. He stated:2

… I infer from Ecopro’s failure to take any steps in the proceeding that it either does not oppose it or has decided to live with the consequences of failing to take steps. In that case, the inconvenience to it of the orders sought cannot be significant.

1      Ecopro Cleaning Services Ltd v Ecopro Ltd [2018] NZHC 2527.

2 At [4].

Discussion

[6]    Anne Margaret Quaid, a director of the applicant, has filed two affidavits, dated 30 August 2018 and 19 November 2018. On the basis of these affidavits, I am satisfied the tort of passing off has been proved:3

(a)there is some reputation or goodwill in the applicant’s name / mark;

(b)the respondent has used the same or a deceptively similar name / mark so as to confuse or deceive the relevant public, or if unrestrained is likely to do so; and

(c)as a result, damage has been or is likely to be caused to the applicant’s business, reputation or goodwill.

[7]    I accept the applicant’s name is distinctive of the applicant in a particular field of activity (environmentally friendly cleaning services) in a particular area (Auckland region). It has goodwill in the name / mark. The applicant provides high quality environmentally friendly services. That is reflected in its website, advertising and recognition as New Zealand’s first and only commercial cleaning company to be licensed by Environmental Choice NZ as environmentally friendly.

[8]    The respondents are using the same name, “Ecopro”, in the same industry. Confusion is highly likely, if not inevitable.

[9]    I infer damage from a tendency to impair distinctiveness. The identical names are likely to harm the applicant’s business through the erroneous association with the respondents’ business, resulting in reputational damage and with the diversion of custom. This is because the respondents’ business is a different quality enterprise with no such accreditation.

3      Tot Toys v Mitchell [1993] 1 NZLR 325 (HC) at 334; and NZ Tax Refunds Ltd v Brooks Homes Ltd

[2013] NZCA 90, (2013) 13 TCLR 531 at [16].

[10]   I am also satisfied a breach of s 9 of the Fair Trading Act has been proved. As Muir J said in National Mini Storage Ltd v National Storage Ltd:4

Passing off is frequently pleaded alongside breach of s 9 of the FTA. While the principles behind the two claims are distinct (passing off being a tort of a private nature and the FTA being directed at protection of consumers), the two are often treated similarly by the courts: where passing off is established, breach of the FTA is typically also made out.

[11]   Notwithstanding what I just said, there are differences between the two causes of action.5 But, if anything, the requirements of passing off are more stringent. For example, there is no damage or standing requirement for the Fair Trading Act claim.

[12]   Section 9 creates an objective test as to the likelihood of the respondents’ conduct misleading or deceiving the hypothetical reasonable person.6 It is neither necessary nor sufficient to show the respondents’ conduct has actually misled or deceived anyone, or that the respondents intended to mislead or deceive.

[13]   The test of likelihood in s 9 has been taken to mean a “real risk” in the sense that the misleading or deceptive conduct could well happen.7 It must be more than a mere possibility, but it need not be more probable than not.8

[14]   The Court must take into account the effect of the conduct upon the reasonable consumer.9 The reasonable consumer exercises a degree of care that is reasonable having regard to all the circumstances. He or she will not lack perception and can be expected to possess a reasonable degree of common-sense.

[15]   The affidavit evidence shows the applicant has been operating under a name which has included “Ecopro” for almost seven years. The name “Ecopro” is distinctive of the applicant’s business in which it provides environmentally friendly cleaning services and is the only commercial cleaning company to be licensed by

4      National Mini Storage Ltd v National Storage Ltd [2017] NZHC 1775 at [109].

5      See Tot Toys v Mitchell [1993] 1 NZLR 325 (HC) at 367–368.

6      Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].

7      Bonz Group (Pty) Ltd v Cooke [1994] 3 NZLR 216 (HC) at 229.

8      Bonz Group (Pty) Ltd v Cooke [1994] 3 NZLR 216 (HC) at 229.

9      National Mini Storage Ltd v National Storage Ltd [2017] NZHC 1775 at [48].

Environmental Choice NZ. Accordingly, “Ecopro” has acquired a meaning identifying solely with the applicant’s business.

[16]   The applicant and the respondents operate in the same market. The difference between Ecopro Cleaning Services Limited and Ecopro Limited is such that there is a strong likelihood of confusion. Members of the public are likely to mistake one business for the other or take the view they are essentially the same business.

[17]   The applicant is usually referred to as “Ecopro” rather than Ecopro Cleaning Services Limited. The respondents’ business name, Ecopro Limited, is essentially an abbreviation of the plaintiff’s business name, Ecopro Cleaning Services Limited. It is likely that members of the public will mistake the respondents’ business as the parent company of the applicant’s business, or otherwise think they are connected.

[18]In these circumstances, it is unnecessary to discuss the Trade Marks Act.

[19]   The only real issue is the form of the permanent injunction. The applicant seeks a permanent injunction:

(a)restraining the respondents by themselves and their servants, agents or anyone on their behalf, from using the names “Ecopro” or “Ecopro NZ”, or any other name substantially similar;

(b)requiring the first respondent to apply to the Companies Office to change its company name such that word “Ecopro” is not included in it;

(c)requiring the respondents to immediately transfer to the applicant any email address associated with the Facebook account and the Infringing Mark (including the email address [email protected]); and

(d)discontinuing the telephone number 0800 2 ECOPRO.

[20]   The last three orders sought are mandatory injunctions. Mandatory injunctions are relatively uncommon.

[21]   Ms Quaid says she requested Facebook to take down the Facebook page as an infringement of the applicant’s trademark, but that, in an email dated 23 June 2018 Facebook refused on the basis the applicant’s trademark was a logo and it was unclear that such rights as the applicant may have in the logo would allow it to exclude others from using the words depicted in the logo in any other context. It seems, however, that as at 17 July 2018, the Facebook page had been deactivated.

[22]   No approaches have been made by the applicant to the Companies Office, Google or the telecommunications provider of the 0800 number. It seems these avenues remain open.

[23]   In this case, I have taken view mandatory injunctions are not warranted given both the other avenues of complaint open to the applicant and the wording of the permanent injunction the Court proposes, which will restrain the respondents from using the name “Ecopro” or “Ecopro NZ” in the marketing and operation of their business.

Result

[24]   There will accordingly be a permanent injunction restraining the respondents by themselves and their servants, agents or anyone on their behalf, from using the names “Ecopro” or “Ecopro NZ”, or any other name substantially similar in the marketing and operation of the respondents’ business, including the use of the telephone number 0800 2 ECOPRO, the email address [email protected] and the Facebook page at respondents are to pay costs to the applicant on a 2B basis.

Woolford J