Wyatt v Real Estate Agents Authority

[2019] NZHC 3291

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2880

[2019] NZHC 3291

UNDER

the Companies Act 1993

IN THE MATTER

of an appeal against a decision of the Registrar of Companies

BETWEEN

GREGORY JOHN WYATT

Appellant

AND

REAL ESTATE AGENTS AUTHORITY

Respondent

Hearing:

On the papers

Appearances:

Appellant in person

D T Broadmore and L C Sizer for the Respondent

Judgment:

13 December 2019

JUDGMENT OF GAULT J

This judgment was delivered by me on 13 December 2019 at 10:30 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

The Appellant

Mr D T Broadmore and Mr L C Sizer, Buddle Findlay, Auckland

WYATT v REAL ESTATE AGENTS AUTHORITY [2019] NZHC 3291 [13 December 2019]

[1]    The appellant, Mr Wyatt, appeals under s 370 of the Companies Act 1993 against a decision of the Registrar of Companies (the Registrar) requiring the company Real Estate Authority Ltd to change its name. Mr Wyatt is the sole director.

[2]    The respondent, the Real Estate Agents Authority (the Authority), was established under s 10 of the Real Estate Agents Act 2008 (REAA). It is a statutory entity and a Crown agent under  Schedule  1  of  the  Crown  Entities  Act  2004.  The purpose of the REAA is “to promote and protect the interests of consumers in respect of transactions that relate to real estate and to promote public confidence in the performance of real estate agency work”.1

[3]    Following the allocation of a fixture, Mr Wyatt confirmed that he wishes to have the appeal dealt with on the papers. The respondent does not oppose and abides the Court’s decision on that issue. I consider the appeal can appropriately be dealt with on the papers.

Factual background

[4]    In February 2018 Mr Wyatt applied to the Registrar for approval of the name Real Estate Authority Ltd. On 27 February 2018 the Registrar approved that name and the company was incorporated.

[5]    In 2018 the Authority began using the operating name Real Estate Authority. Its website provided the following explanation:

A clarification on our name: The ‘Real Estate Authority’ or ‘REA’ is our operating name and how we should be referred to.

Our previous name – the ‘Real Estate Agents Authority’ or ‘REAA’ – is our legal name. It is only used for contracts we enter into and in the context of disciplinary decisions from Complaints Assessment Committees and our appearance before the Tribunal or other higher courts.

Registrar’s decision

[6]    On 29 November 2018 the Assistant Registrar of Companies wrote to Mr Wyatt stating that the Registrar had become aware that the company name contravened

1      Real Estate Agents Act 2008, s 3(1).

s 14(3)(c)(vi) of the Flags, Emblems, and Names Protection Act 1981 (FENPA), which prohibits the use of any word or statement that claims or implies the patronage of any Government department, namely the Authority. The letter stated that under s 22(2)(a) of the Companies Act 1993 the Registrar is not permitted to reserve a name, the use of which would contravene an enactment, and that the application to reserve the name Real Estate Authority Ltd should not have been accepted, therefore, the company was now required to change its name.

Submissions

[7]Mr Wyatt raises two broad grounds of appeal:

(a)A Crown entity cannot have a different operating name unless Parliament says so.

(b)There is no contravention of FENPA as there is no implication of patronage and, alternatively, the company’s name was expressly authorised under s 22(3) of the Companies Act.

[8]    As to operating names, Mr Wyatt refers to s 25(1) of the Crown Entities Act which provides that the board is the governing body of a statutory entity, with the authority, in the entity’s name, to exercise the powers and perform the functions of the entity. The REAA makes no provision for a different operating name. This can be contrasted with other Crown entities, in particular District Health Boards, which may adopt an operating name that is different from the name of the District Health Board with the written permission of the Minister.2 Mr Wyatt relies on the Latin maxim expressio unius est exclusio alterius and the Supreme Court’s discussion of it in Terminals (NZ) Ltd v Comptroller of Customs,3 to warrant an inference that the omission of reference to an operating name in the REAA was intentional.

[9]    Mr Wyatt acknowledges there might be an issue with the names but submits it is not one of “patronage” under FENPA. Relying on s 15, he submits that patronage

2      New Zealand Public Health and Disability Act 2000, s 19(5).

3      Terminals (NZ) Ltd v Comptroller of Customs [2013] NZSC 139, [2014] 1 NZLR 121 at [74].

refers to supply of goods or services to, or carrying out work for, any Government department.

[10]   Mr Wyatt’s alternative argument relies on the Registrar’s approval under the Companies Act on 27 February 2018, which he submits made the name “expressly authorised by or under any other Act” in terms of s 14(4)(a) of FENPA.

[11]   The respondent submits that the name of the company implies the patronage of the Authority regardless of the weight placed on the operating name. Therefore, Mr Broadmore, counsel for the Authority, submits therefore that the issue of whether the Authority is entitled to operate under the name Real Estate Authority should not need to be determined in this appeal. In any event, he submits that the Crown Entities Act provides that a Crown entity, such as the Authority, may do anything that a natural person of full age and capacity may do.4

[12]   Mr Broadmore also submits that whether a word or statement in a company’s name claims or implies the patronage of a Government entity such as the Authority should be assessed by asking whether the words or statements either claim or imply that the company is supported or controlled by, or otherwise has the protection of, the department or entity. He submits that Real Estate Authority Ltd plainly claims or implies the support, protection or control of the Authority.

[13]   Alternatively, the use by the company of the name Real Estate Authority Ltd is not expressly authorised under s 22(3) of the Companies Act. Even if it was so authorised, the Registrar may still direct the company to change its name under        s 24(1).

Nature of appeal

[14]   An appeal from a decision of the Registrar under s 370 of the Companies Act is by way of rehearing.5 This Court’s approach on such an appeal is settled following the Supreme Court’s decisions in Austin, Nichols & Co Inc v Stichting Lodestar and

4      Crown Entities Act 2004, s 17(1).

5      High Court Rules 2016, r 20.18.

Kacem v Bashir.6 The appellate court has the responsibility of considering the merits of the case afresh.7 The appellate court must be persuaded that the decision is wrong,8 but the weight it gives to the reasoning of the decision-maker under appeal is a matter for the appellate court’s assessment.9 Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.10

[15]   Under s 370(2) of the Companies Act, on hearing the appeal, the Court may approve the Registrar's act or decision or may give such directions or make such determination in the matter as the Court thinks fit.

Discussion

Company names

[16]Section 22(2)(a) of the Companies Act provides:

The Registrar must not reserve a name—

(a)The use of which would contravene an enactment; …

[17]Section 22(3) provides:

The Registrar must advise the applicant by notice in writing—

(a)Whether or not the Registrar has reserved the name; and

(b)If the name has been reserved, that, unless the reservation is sooner revoked by the Registrar, the name is available for registration of a company with that name or on a change of name for 20 working days after the date stated in the notice.

6      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13] and [16]; and Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [31]-[32].

7      Kacem v Bashir at [31].

8      Austin, Nichols at [13].

9      Kacem v Bashir at [31]. No deference is required beyond the customary caution appropriate when seeing the witnesses provides an advantage because credibility is important.

10     Austin, Nichols at [16] and Kacem v Bashir at [32].

[18]Section 24(1) provides:

If the Registrar believes on reasonable grounds that the name under which a company is registered should not have been reserved, the Registrar may serve written notice on the company to change its name by a date specified in the notice, being a date not less than 20 working days after the date on which the notice is served.

FENPA

[19]   The Registrar’s decision was based on s 14(3)(c)(vi) of FENPA. Section 14  in full provides:

14       Unauthorised use of words suggesting Royal or government patronage

(1)Subject to subsection (4) of this section, every person commits an offence against this Act who—

(a)Causes any association (whether incorporated or unincorporated) to be formed under any name, title, style, or designation that includes any word or statement to which this subsection applies; or

(b)Publicly uses in connection with any business, trade, or occupation any word or statement to which this subsection applies.

(2)Every association (whether incorporated or unincorporated) commits an offence against this Act which carries on its activities under any name, title, style, or designation that includes any word or statement to which subsection (1) of this section applies.

(3)Subsection (1) of this section applies to the following:

(a)The word “Royal”:

(b)The word “Government”:

(c)Any other word or statement that claims or implies the patronage of—

(i)Her Majesty or any other member of the Royal Family; or

(ii)The Governor-General; or

(iii)The House of Representatives; or

(iv)The Government; or

(v)Any Minister of the Crown; or

(vi)Any Government department:

(d)Any word or statement that claims or implies connection with any society or body incorporated by Royal Charter.

(4)Subsection (1) of this section does not apply to the use of any word or statement—

(a)Expressly authorised by or under any other Act, or by—

(i)Her Majesty or the Governor-General in any case to which paragraph (a) of subsection (3) of this section applies; or

(ii)Her Majesty, in any case to which subparagraph (i) of paragraph (c) of that subsection applies; or

(iii)The Governor-General, in any case to which subparagraph (ii) of that paragraph applies; or

(iv)The Speaker of the House of Representatives, in any case to which subparagraph (iii) of that paragraph applies; or

(v)the Minister if subsection (3)(b) or (c)(iv) applies; or

(vi)The appropriate Minister of the Crown, in any case to which subparagraph (v) or subparagraph (vi) of paragraph (c) of subsection (3) of this section applies; or

(b)That comprises the whole or part of the proper name of any town or road or other place, and that name is or is to be used in full by the association or (as the case may be) the person engaging in the business, trade, or occupation; or

(c)That is the surname (not being a surname taken or used for the purpose of defeating the intention of this section) of a foundation member of the association or (as the case may be) of the person engaging in the business, trade, or occupation.

[20]   As indicated, the Registrar’s decision was based on s 14(3)(c)(vi), which provides that s 14(1) applies to any other “word or statement that claims or implies the patronage of … any Government department”. Government department in this context includes a Crown agent, such as the Authority, or other Crown entity.

[21]   It is convenient to address the issue of the meaning of “patronage” before the operating name issue.

Patronage

[22]    “Patronage” is not defined in FENPA. The meaning of an enactment must be ascertained from its text and in the light of its purpose.11 As the Supreme Court said in Commerce Commission v Fonterra Co-Operative Group Ltd:12

It is necessary to bear in mind that s 5 of the Interpretation Act 1999 makes text and purpose the key drivers of statutory interpretation. The meaning of an enactment13 must be ascertained from its text and in the light of its purpose. Even if the meaning of the text may appear plain in isolation of purpose, that meaning should always be cross checked against purpose in order to observe the dual requirements of s 5. In determining purpose the court must obviously have regard to both  the  immediate  and  the  general  legislative  context.  Of relevance too may be the social, commercial or other objective of the enactment.14

[23]The ordinary meaning of “patronage” is:15

The action of a patron in giving support, protection, custom etc.

…

The control of appointments to offices, privileges, etc. in public service.

And:16

The support, promotion, or encouragement given by a patron. The control of appointments to offices, privileges, etc.

[24]   These definitions indicate the ordinary meaning of “patronage” involves support, protection, custom or control. On this basis, a name that includes a word or statement  that  claims  or implies  support, protection  or custom  of, or control  by, a Government entity would be caught by s 14(3). However, taking those synonyms of “patronage” too literally and in isolation, the section could apply whenever a person uses a statement claiming any support or custom of a Government entity. It would be

11 Interpretation Act 1999, s 5(1).

12     Commerce Commission v Fonterra Co-Operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22].

13     “Enactment” means “the whole or a portion of an Act or regulations”: see s 29 of the Interpretation Act 1999.

14     See generally Auckland City Council v Glucina [1997] 2 NZLR 1 at p 4 (CA) per Blanchard J for the Court, and Burrows, Statute Law in New Zealand (3rd ed, 2003), p 146 and following.

15     Shorter Oxford English Dictionary (6th ed, Oxford University Press, 2007).

16     The New Zealand Oxford Dictionary (Oxford University Press, 2005).

an offence for example for any supplier to state that they supply goods or services to a Government entity. I doubt that is the intended scope of the section. Indeed, s 15, relating to advertisements claiming Government patronage, only prohibits claims of supply to Government departments if they are “contrary to the fact”.

[25]   On the other hand, I do not accept Mr Wyatt’s submission, based on s 15, that “patronage” refers only to supplying goods or services to, or carrying out work for, the Government entity. As Mr Broadmore submitted, the scope of s 14, and the meaning of “patronage”, should not be limited by reference to s 15 which concerns advertisements. Section 15(1) begins with the words “without limiting section 14”. The scope of “patronage” in s 14 cannot have been intended to be limited to such an association.

[26]   The relevant purpose of FENPA is “to make better provision for the protection of certain names and emblems of Royal, national, international, commercial, or other significance”.17 Mr Broadmore submits the emphasis is on protecting the public from being misled and seeks a broad interpretation consistent  with  such  an  objective. He points out that protecting the public is explicit in a number of provisions in the Act,18 but I note it is not explicit in s 14.

[27]   The only relevant decision identified by counsel was Re Watt’s application.19 That was a decision of the Assistant Commissioner of Trade Marks, declining an application to register the mark “POLICE” in relation to goods such as clothing, and rejecting a submission that FENPA only applies to the full name of a Government department. The word “Police” would be understood by the ordinary person as referring directly to the New Zealand Police just as the word “Customs”, on its own, would be understood as referring to New Zealand Customs. Absent the consent of the Minister, the mark was not eligible for registration under s 21(1)(a) of the Trade Marks Act 1953, which referred to ss 12 to 15 of FENPA.

17     Long title.

18     Sections 12, 13, 17, 18 and 20.

19     Re Watt [2000] NZIPOTM 39.

[28]   In  context  and given the purpose of  FENPA,  I consider that “patronage”    in s 14(3) means support or custom more in the sense of protection or control. I also consider that s 14(3) applies where the claim or implication is that the entity is itself a Government entity. That may be implicit in the ordinary meaning’s reference to control but in any event, taking a purposive approach, I consider that it must have been intended that s 14(3) extends to such impersonating or claiming to be a Government entity. The question in each case is whether the word or statement used claims or implies patronage in this sense. That must be assessed objectively. Whether the Government entity has an operating or shorthand name may be relevant to that assessment. I consider that s 14(3) should not be read down to apply only where the full legal name of the Government entity is used.

[29]   Turning to the facts here, the company name Real Estate Authority Ltd and the name Real Estate Agents Authority are similar, although the inclusion of the word “Agents” is material. The Authority’s operating name, omitting the word “Agents”, is identical to the company’s name except for the word “Limited”. The respondent does not suggest that the use of the word “Authority” in the name itself implies some public entity. But Mr Broadmore submits that the similarity between the legal names would lead a reasonable observer to conclude that the company claims or implies the support, control, or protection of Government.

[30]   I consider that the company name Real Estate Authority Ltd implies the patronage of the Authority. Given the similarity, the name would be understood as a reference to the Authority, and even more so following the Authority’s use of its shorter operating name.

Operating names

[31]   It may therefore be strictly unnecessary to decide whether the Authority is entitled to operate under the name Real Estate Authority. However, I address this briefly given the parties’ submissions.

[32]   I do not accept that a Crown entity is unable to use an operating or shorthand name unless Parliament has expressly provided for that. Section 25 of the Crown Entities Act deals with the role of boards and their authority. Reference in s 25(1) to

the board acting “in the entity’s name” says nothing about whether a Crown entity can use an operating name. Mr Wyatt is correct that there is no express power to do so. But I do not consider that the Latin maxim expressio unius est exclusio alterius applies here to warrant an inference that the omission precludes the use of an operating name.

As the Supreme Court stated in Terminals (NZ) Ltd v Comptroller of Customs:20

[74] The proper approach to statutory construction is set out in the Interpretation Act. The primary task is to interpret the text in light of its purpose.21 In undertaking this task, we accept that there may still be some place for the old canons of construction.22 However, the maxim expressio unius does little more than draw attention to what might be seen as the obvious proposition that in many contexts mentioning a particular matter may warrant an inference that other relevant matters were intentionally excluded. But whether that is so or not depends on the context. The exclusion might have been accidental or there might have been good reason for it.23

[33]   Here, Mr Wyatt’s argument relies on mention of the use of an operating name (with Ministerial permission) in a different enactment, the New Zealand Public Health and Disability Act 2000.24 I do not consider that warrants an inference that the omission of reference to an operating name in the REAA was intentional in the sense of prohibiting it. Another inference might be that the purpose of the provision in the New Zealand Public Health and Disability Act 2000 was to require Ministerial permission.

[34]   Also, ss 15 and 17 of the Crown Entities Act are relevant. Section 15 provides that a statutory entity such as a Crown entity is a body corporate. Body corporates may use operating or trading names.25 Section 17(1) gives Crown entities the powers of natural persons, who may also adopt trading names.26

[35]   It is therefore unnecessary to consider the respondent’s reliance on the Crown’s general administrative powers to carry on the ordinary business of Government which

20     Terminals (NZ) Ltd v Comptroller of Customs [2013] NZSC 139, [2014] 1 NZLR 121 at [74].

21 Interpretation Act, s 5(1).

22     J F Burrows and R I Carter Statute Law in New Zealand (4th ed, LexisNexis, Wellington, 2009) at 182-183.

23     See the discussion in John Bell and George Engle Cross Statutory Interpretation (3rd ed, Lexis Nexis, London, 1995) at 140-141.

24     Section 19(5).

25     If doing so, companies must comply with s 25 of the Companies Act 1993.

26     Section 17(2) states that s 17(1) applies except as provided in this Act or another Act or rule of law. None is applicable here.

are not exercises of the royal prerogative and  do not  require  statutory authority  (the “Third Source” principle).27

[36]   Given the provisions of the Crown  Entities Act,  the relevant  question, as  Mr Broadmore submitted, is not whether the use of an operating name is authorised by Parliament, but rather whether it is prohibited by Parliament. This approach was adopted in R (Harris) v Broads Authority.28 The Broads Authority adopted a “branding” name of the “Broads National Park” for the Broads wetlands. This was challenged, including on the basis that the Broads were not a national park under the relevant statute. The Court dismissed the argument on the ground that there was nothing in the relevant legislation to justify implying a prohibition against the Broads Authority adopting the branding name.29 The case is somewhat different in that the name was not an operating or trading name for the Authority but merely a marketing name for the area. But even so it is consistent with the permissive approach.

[37]   On that basis, I consider that the Registrar was not wrong to refer to the Authority’s operating name.

Expressly authorised

[38]   Mr Wyatt’s alternative argument is that s 14(1) of FENPA does not apply because the company name was expressly authorised by or under the Companies Act. This argument cannot succeed, for the following reasons.

[39]Section 21(1) of FENPA provides that:

Where any Act provides for the registration of any association, then, except as provided in section 20(5) of this Act but notwithstanding anything in that Act, the registering authority shall not register any association under that Act under a name, title, style, or designation if the use by that association of that name, title, style, or designation, or of any word comprising part of that name, title,

27 See R (New London College Ltd) v Home Secretary [2013] UKSC 51, [2013] 1 WLR 2358 at [28], citing B V Harris, “The Third Source’ of Authority for Government Action Revisited” (2007) 123 LQR 225; Chief Executive of The Ministry of Social Development v L [2018] NZHC 2528, [2019] 2 NZLR 135 at [56], citing Minister for Canterbury Earthquake Recovery v Fowler Developments Ltd [2013] NZCA 588, [2014] 2 NZLR 587 and Quake Outcasts v Minister for Canterbury Earthquake Recovery [2015] NZSC 27, [2016] 1 NZLR 1; and B V Harris “A Call to Maintain and Evolve the Third Source of Authority for Government Action” (2017) 27 NZULR 853 at 856.

28 R (Harris) v Broads Authority [2016] EWHC 799, [2017] 1 WLR 567.

29 At [77].

style, or designation, would constitute an offence against any of the provisions of this Act.

[40]   This indicates that, notwithstanding anything in the Companies Act, the Registrar shall not register a company if use of its name would be an offence under FENPA. Here, the company was registered. I have found that the name implies the patronage of the Authority (even before it began using its operating name) and therefore should not have been registered. Even if the name was initially authorised “under” the Companies Act and s 14(4) applied during that initial period, the Companies Act explicitly provides in s 24 that if the Registrar believes on reasonable grounds that a name should not have been reserved, the Registrar may serve notice to change the name. If the company does not do so, the Registrar may register a new name. Where s 24 has been engaged, I do not consider that the name initially approved remains authorised for the purposes of s 14(4).

[41]   Here, the process has been stalled by an appeal. It is unnecessary to decide whether s 14(4) applies during the interregnum.

Result

[42]The appeal is dismissed.

[43]   The respondent is entitled to costs. If they cannot be agreed, brief memoranda may be filed within 15 working days and I will determine costs on the papers.

Gault J