AUCKLAND CAMPERVAN LTD v TRAVEL CARS NZ LTD [2018] NZHC 3122

AUCKLAND CAMPERVAN LTD v TRAVEL CARS NZ LTD [2018] NZHC 3122 [29 November 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-1948[2018] NZHC 3122UNDER S 9, 37, & 41 of the Fair Trading Act 1986& r 7.53 of the High Court Rules 2016BETWEEN AUCKLAND CAMPERVAN LIMITEDApplicantAND TRAVEL CARS NZ LIMITEDRespondentHearing: 29 November 2018Appearances: D Purusram for ApplicantNo appearance for or on behalf of the RespondentJudgment: 29 November 2018JUDGMENT 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 RegistrarDate[1] The applicant, Auckland Campervan Ltd (Auckland Campervan), has carriedon the business of buying and selling campervans in Auckland since 2012. It says therespondent, Travel Cars NZ Ltd (Travel Cars), has engaged in misleading anddeceptive conduct in breach of s 9 of the Fair Trading Act 1986 (FTA).1 The claimflows from the fact that Travel Cars is currently trading under the name AucklandCampervan Sales, and is using a website having a domain name very similar to thedomain name used by Auckland Campervan.[2] Auckland Campervan initially filed a proceeding in the District Court seekingan order preventing Travel Cars from trading under the name Auckland CampervanSales and/or operating the associated website aucklandcampervansales.com. Thestatement of claim also sought an order directing Travel Cars to pay compensation toit. Auckland Campervan sought an interim injunction from this Court to protect itsposition until the substantive claim can be heard in the District Court. This Court isthe only Court having jurisdiction under the FTA to grant relief in the form of aninjunction.2[3] The application for an interim injunction was first called before Davison J inthe Duty Judge List on 1 October 2018. The proceeding had been served on theregistered office of Travel Cars on 25 September 2018 but it had taken no steps. Therewas no appearance by or on behalf of the respondent on 1 October, so Davison Jdirected that the application be set down for hearing by way of formal proof. It wasthen 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 thehearing. Attached to the email was material Mr Garcia wished the Court to take intoaccount in reaching its decision today. The material is not formally before the Courtas 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 AucklandCampervan 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 itsclaims is unusual to say the least. The application for interim relief was the onlyapplication filed in this Court. It was not accompanied by any application forsubstantive relief. Furthermore, the statement of claim filed in the District Courtsought substantive orders that appear to be in the nature of injunctive relief. I verymuch doubt that the District Court has jurisdiction to make those orders.[6] It is also inherently unsatisfactory for two courts to be dealingcontemporaneously with different proceedings regarding the same subject matterbecause it can lead to significant confusion in a variety of ways. In addition, theapplicant would be required to ask this Court to grant relief based on factual findingsmade in the District Court. That may also be problematic.[7] These concerns led me to convene a telephone conference on 26 November2018 with Ms Purusram, counsel for the applicant. In a memorandum filed after theconference Ms Purusram agreed it would be preferable for all matters to be determinedin a single forum. She therefore applied for an order under s 89(1) of the District CourtAct 2016 that the proceeding filed in the District Court at Auckland under CIV 2018404 1882 be transferred to this Court with immediate effect.[8] A High Court Judge has the power to transfer a proceeding from the DistrictCourt to the High Court where he or she considers it desirable to do so.3 The issues towhich I have referred persuaded me that it was desirable that all issues be determinedin this Court, particularly given the fact that only the High Court has the power togrant the relief sought by the applicant. I therefore granted the application on26 November 2018 and made an order under s 89(1) transferring the proceeding filedin the District Court to this Court.[9] I now make a further order under r 10.12 of the High Court Rules 2016 that thetwo 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 anaffidavit in support of the application. He deposes that Auckland Campervan has beenoperating since March 2012, having changed its name from Gill Campervan TradingLtd to Auckland Campervan Ltd on 25 May 2018. The company has been using thedomain name aucklandcampervan.com since May 2015.[11] Mr Gill says it came to his attention in June 2018 that in November 2017 anunknown person had registered the domain name aucklandcampervansales.com. Hesays the website displays a banner with the words "Travelcars New Zealand". Thewebsite travelcarsnz.com shows the same contact details as those provided on thewebsite 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 CompaniesRegister. He says it also has a Facebook page on which it advertises its business usingthe 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 similarto his company's trading name that it will undoubtedly cause confusion for membersof the public. He says the similarity between the two trading names will inevitablycause members of the public to believe there is a relationship or association betweenthe two companies when that is not the case. He also considers this will damage hiscompany's goodwill and reputation. Auckland Campervan has already been thesubject of several negative reviews on Google in which customers have describedissues they have encountered in dealing with his company. His company has no recordof dealing with these persons. Mr Gill therefore believes they must have dealt withTravel Cars.[14] Auckland Campervan's solicitors wrote to Travel Cars on 3 and 13 July 2018asking it to discontinue use of the trading name and associated website. On bothoccasions Mr Garcia replied by email declining to do so.[15] Auckland Campervan originally applied for injunctive relief on a withoutnotice basis. Wylie J was not prepared to deal with the application in that way anddirected that the application be served forthwith. Despite receiving service of theproceeding Travel Cars has elected not to defend it.[16] Auckland Campervan has also provided an undertaking as to damages as isgenerally required before the Court will grant injunctive relief of this nature.4Approach[17] The test for interim relief in relation to claims under the FTA remains thatadopted by McGechan J in E R Squibb & Sons (NZ) Ltd v ICI New Zealand Ltd.5McGechan J held that the principles to be applied in this context were not dissimilarto those used in other areas of the law where the applicant seeks interim relief. Theultimate and controlling requirement is the overall justice of the case.6 This willusually be ascertained by assessing whether the applicant can establish a seriousquestion to be tried and whether the balance of convenience favours the granting ofinterim relief.7Serious question to be tried[18] The primary purpose of the FTA is consumer protection8 and not thevindication of competitors' rights.9 As Cooke P observed in Taylor Bros Ltd v TaylorsGroup Ltd, members of the public have a right not to be misled about with whom theyare dealing.10[19] The test of whether conduct is misleading or deceptive is an objective one.11It is therefore not necessary for the applicant to prove an intention on the defendant'spart to mislead or deceive. Nor is it necessary to prove that the conduct has resultedin any person being misled or deceived. Logic suggests, however, that it may be easier4 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 thedefendant intended to mislead or deceive the relevant audience or market and/or wherethe 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 aperson trading under a name similar to that of another in the same marketplace isengaging in misleading or deceptive conduct. Conduct that merely causes someuncertainty in the minds of relevant members of the public may not be sufficient toamount to misleading or deceptive conduct so as to constitute a breach of s 9 of theFTA.12[21] The material provided in support of the application certainly suggests TravelCars is trading under a name likely to be confused by relevant members of the publicwith that used by Auckland Campervan. Relevant members of the public in the presentcase comprise those persons seeking to sell or purchase campervans. The confusionmay arise because the two trading names are very similar. Furthermore, AucklandCampervan and Travel Cars trade in the same market both in geographic terms and interms of the products they sell. These factors mean there must be a risk that membersof the public will mistake the advertisements and activities of one company for that ofthe other. That risk appears to have been realised in the case of customers who haveposted negative feedback about Auckland Campervan when it appears they must havedealt with Travel Cars.[22] In addition, there is no obvious legitimate reason why Travel Cars would wishto trade under a name that is quite different from its own. This is not a case where twobusinesses are trading under the same or similar names because their owners orprincipals have the same or similar names. Furthermore, Travel Cars has chosen toignore Auckland Campervan's requests that it cease using the name and website. Thepresent application provided Travel Cars with a further opportunity to explain why ithas chosen to trade under a name that is so similar to that of an established player inthe 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 majorityjudgment 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 namebecause it knows potential customers are likely to believe they are dealing withAuckland Campervan when in fact they are not. In other words, it has decided toobtain a commercial advantage for itself using Auckland Campervan's name andreputation within the relevant market.[24] These factors alone are sufficient, in my view, to establish a serious questionto 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 harmAuckland Campervan can point to is the negative feedback from persons it says arelikely to have dealt with Travel Cars rather than itself. There is no evidence AucklandCampervan 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 actedfor Auckland Campervan received an email from Travel Cars on 7 October 2018indicating that Travel Cars would be ceasing to use the website within the next one totwo weeks. In the material Mr Garcia has provided to the Court also states that thewebsite has been removed. That has not occurred, but the statements made byMr Garcia on Travel Cars' behalf suggest the trading name and website may not be ofhuge importance to it.[27] I have therefore concluded the balance of convenience lies with granting theapplication so that Travel Cars may not continue to trade or use websites having namesso very similar to those used by Auckland Campervan. It follows that the overalljustice 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 aCategory 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 TravelCars' registered office forthwith. It should also forward a copy to Mr Garcia at hisemail address.[31] The proceeding is now to be listed for mention in the Duty Judge List on17 December 2018 at 10 am for review. Auckland Campervan will need to be in aposition to advise the Court at that time whether it proposes to proceed with its claimfor a permanent injunction and compensation.Lang JSolicitors:Victorian Lawyers, Auckland