Probus South Pacific Limited v Probus New Zealand Incorporated [2015] NZHC 2250 (17 September 2015)

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UNDER	The Incorporated Societies Act 1908
IN THE MATTER	of an appeal of the decision of the Registrar of Incorporated Societies dated 18 December 2014
BETWEEN	PROBUS SOUTH PACIFIC LIMITED Appellant
AND	PROBUS NEW ZEALAND INCORPORATED First Respondent
AND	FITZHERBERT PROBUS CLUB INCORPORATED Second Respondent
	_{continued over page}

Hearing:	21 May 2015
Appearances:	AH Brown QC and CM Fry for Appellant ARB Barker for Respondents
_Judgment:	_{17 September 2015}

PROBUS SOUTH PACIFIC LIMITED v PROBUS NEW ZEALAND INCORPORATED [2015] NZHC 2250 [17 September 2015]

AND	MILSON PROBUS CLUB INCORPORATED Third Respondent
AND	PROBUS CLUB OF WHITIANGA INCORPORATED Fourth Respondent
AND	THE PROBUS CLUB OF DEVONPORT INCORPORATED Fifth Respondent
AND	THE WAIKANAE MILLENIUM PROBUS CLUB INCORPORATED Sixth Respondent
AND	WANAKA GRANDVIEW PROBUS CLUB INCOPORATED Seventh Respondent
AND	WELLINGTON LADIES' PROBUS CLUB INCORPORATED _{Eighth Respondent}

The incorporation and role of Probus NZ [9] The duties of the Registrar of Incorporated Societies [14] The application to the Registrar by Probus South Pacific [20] The decision of the Registrar [26] Approach to appeal [28]

Is it a requirement under the “undesirable” ground that the complainant company be “carrying on business in New Zealand”?

If “carrying on business in New Zealand” is either a requirement or a relevant consideration, what does it mean?

Are the names of the second to eighth respondents “for the time being ... undesirable” in terms of s 11A(1)(b) of the Act?

Did the name Probus New Zealand Incorporated, as at its registration, so nearly resemble Probus South Pacific Limited as to be “calculated to deceive” in terms of s 11(1) of the Act?

[1] This is an appeal by an Australian-registered company, Probus South Pacific Limited (“Probus South Pacific”), against a decision of the Registrar of Incorporated Societies refusing to direct under ss 11 and 11A of the Incorporated Societies Act

1908 (“the Act” or “the ISA”) that the following parties change their names:

(b) The second respondent, Fitzherbert Probus Club Incorporated; (c) The third respondent, Milson Probus Club Incorporated;

[2] Probus clubs are set up for members of the community who are retired or semi-retired. Their basic purpose is to advance intellectual and cultural interests among those individuals, to provide regular opportunities to progress healthy minds and active bodies through social interaction and activities and to expand their

interests and to enjoy the fellowship of new friends. These clubs are structured either as incorporated or unincorporated societies.

“Probus” is a term coined from a combination of the words ‘professional’ and

‘business’. In the 1970s, a number of Probus clubs were set up in New Zealand and

[4] Because of the rapid development of Probus clubs in the South Pacific region in the 1970s, the Probus Information Centre – South Pacific (“PCSP”) was established to:

(a) promote the development of Probus throughout the South Pacific; (b) arrange the preparation and distribution of a club directory;

[5] The PCSP was subsequently endorsed in 1983 by the Rotary District Governors for both New Zealand and Australia as a community service activity. The PCSP was to be responsible for the accreditation and support of Probus Clubs in Australia, New Zealand and the South Pacific Region. The Governors decided:

(a) To delegate to the PCSP the authority to accredit properly formed Probus clubs and Probus associations, and to ensure that all accredited clubs and associations met such other requirements for accreditation as may be determined from time to time for PCSP.

(i) to promote the formation of Probus Clubs in Australia, New Zealand and South Pacific region as a Rotary community service programme;

(ii) to assist Rotary Clubs in the sponsorship of Probus Clubs and provide appropriate guidelines;

(iii) to maintain liaison with Rotary District Probus Chairmen; (iv) to assist and advise Probus Clubs as required;

(v) to maintain a register of accredited Probus Clubs and Associations and to publish annually a directory of Probus Clubs;

(vi) to facilitate regular communication between Probus Club members through an appropriate medium;

(vii) to take all steps necessary to protect the Probus name, Probus emblem and the integrity of the Probus organisation.

[6] In September 2011, the PCSP became a company limited by guarantee in Australia under the Corporations Act 2001 (Cth) as Probus South Pacific, the appellant.

(b) Ensuring the partnership between Rotary clubs and Probus clubs is upheld and strengthened.

(c) Promoting the formation and sponsorship of Probus clubs by Rotary clubs as a community service to retired persons and to seniors in the community.

(d) Accrediting Probus clubs and Probus associations after meeting the correct terms and conditions for formation as determined by Probus South Pacific.

(e) Licensing the manufacture and distribution of Probus lapel badges and other regalia.

(f) Publishing, at regular intervals, an official Probus magazine giving information on the activities of Probus clubs.

(g) Taking all steps deemed necessary to protect the Probus name, Probus emblem and trade marks and the integrity of the Probus organisation.

[8] Probus South Pacific is the owner of a number of New Zealand trade mark registrations and applications comprising or incorporating the word “Probus”. Probus South Pacific says that the Probus name, emblem and trade marks may only be used by accredited Probus clubs, associations and other bodies authorised by Probus South Pacific.

[9] On 26 March 2014, Probus NZ was incorporated under the Act by individuals who were once members of accredited Probus clubs in New Zealand. It appears that the members of Probus NZ assert that the support services offered by Probus South Pacific were inadequate, unnecessary and based on a wrong philosophical, conceptual and business model. Probus NZ promotes itself as being a local Probus centre in New Zealand.

[10] In contrast, Probus South Pacific says that since 1981 it has been the only Probus centre for Australia, NZ and the South Pacific. Probus South Pacific claims that Probus NZ has provided no explanation to it as to where the individuals which formed Probus NZ drew their authority to use the Probus name or trade mark, to act as the Probus accreditation agency for NZ, or to manage the national accounts of Probus.

[11] Furthermore, the establishment of Probus NZ does not, according to Probus South Pacific, comply with the requirements for establishing a Probus club in New Zealand. It is not sponsored by a local Rotary club and even if it were, it is not associated with or accredited by Probus South Pacific or by the Governors of the Australian or New Zealand Rotary Districts.

[12] Following its formation, Probus NZ and its individual members have encouraged Probus clubs based in New Zealand and accredited by Probus South Pacific to separate from Probus South Pacific and join Probus NZ. Six of the seven respondent Probus clubs have chosen to alter the rules of their incorporated society so as to no longer comply with and abide by the articles of the Standard Probus Constitution which they initially adopted. The clubs which chose to disaffiliate, therefore, are no longer accredited by or associated with Probus South Pacific. Accordingly, Probus South Pacific disputes the use of the Probus name by Probus NZ and the clubs that chose to disaffiliate.

[13] In separate proceedings before the Intellectual Property Office of New Zealand (“IPONZ”), Probus NZ has opposed one of Probus South Pacific’s current New Zealand trade mark applications for the word “Probus”.

[14] The Act establishes the position of the Registrar of Incorporated Societies.¹

	4	Incorporated societies
	(1)	Any society consisting of not less than 15 persons associated for any lawful purpose but not for pecuniary gain may, on application being made to the Registrar in accordance with this Act, become incorporated as a society under this Act.
[15]	The	Registrar maintains the register of incorporated societies and is

_{responsible for registration.}²_{She must be
satisfied that a society complies with the}

minimal statutory requirements before she enters the society’s name on the register.³

In addition, the Registrar plays a supervisory role. She may verify whether an incorporated society continues to comply with the requirements of the Act and can also notify a society to desist from activities beyond its objects.⁴The Registrar has

the power to inspect society records⁵and may cancel a society’s registration if the

[16] The statutory responsibility of the Registrar to approve the name proposed for a society either on original incorporation or a change of name is central to the present dispute. Section 11 of the Act provides:

11 Name of society not to be the same as the name of another society or body corporate

(1) No society shall be registered under a name which is identical with that of any other society registered under this Act, or of a company carrying on business in New Zealand (whether registered in New Zealand or not), or of any other body corporate established or registered in New Zealand under any Act, or so nearly resembles that name as to be calculated to deceive, except where that other society or company or body corporate, as the case may be, signifies its consent in such manner as the Registrar requires, and the Registrar is satisfied that registration of the society by the proposed name will not be contrary to the public interest.

(2) Except with the consent of the High Court, no society shall be registered by a name which, in the opinion of the Registrar, is undesirable.

[17] It is not necessary for a society to have prior name approval. The Registrar

needs only to approve of the name on registration. The Registrar’s website notes:⁷

Although you do not reserve the name (as you must do for a company) you should conduct some searches to make sure the name is available.

The name you choose for your society cannot be identical or deceptively similar to that of another incorporated society or other body corporate.

If you do choose a name that is identical to the name used by another body corporate (for example, a company, incorporated society, charitable trust) it

⁷New Zealand Companies Office: Societies and Trusts Online “Choosing a Name”:

[18] Where the Registrar considers an incorporated society’s name to be similar to that of another or of a company, or is otherwise undesirable, the Registrar may require the society to change its name under s 11A of the Act:

(a) Through inadvertence or otherwise, a society at its first registration, or on its registration by a new name, is registered by a name which is in contravention of section 11 of this Act, or of any enactment, other than this Act, relating to restrictions on the use of any name; or

(b) A society is for the time being registered by a name which, in the opinion of the Registrar, is undesirable,—

the society shall, within a period of 6 weeks from the date of its being required by the Registrar to do so, or such longer period as he may allow, change its name in accordance with section 21 of this Act to a name that is not in contravention as aforesaid and is not, in the opinion of the Registrar, undesirable.

[19] Section 11A is in mandatory terms: once the Registrar forms the opinion that a society’s name is undesirable, the requirement for a change of name necessarily results.⁸

[20] On 6 October 2014, the solicitors for Probus South Pacific wrote to the Registrar seeking a direction that Probus NZ and the disaffiliated clubs change their names. I summarise the grounds relied on in the application:

(a) Although Probus South Pacific is a registered Australian company and is based in New Zealand, its activities encompass New Zealand. The name “Probus New Zealand Incorporated” and the names of the individual clubs named as second to eighth respondents so nearly

⁸Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland

calculated to deceive. Probus South Pacific has not consented to the use of the Probus name by Probus NZ or the clubs. Accordingly, Probus NZ was registered in contravention of s 11(1) of the Act.

(c) Each of the disaffiliated Probus clubs is for the time being registered by a name which is undesirable under s 11A(1)(b) of the Act. At one stage the names of the disaffiliated clubs complied with the requirements of the Act but now, because of a change in circumstances, the names no longer comply with ss 11 and 11A.

[21] Probus South Pacific accordingly requested that the Registrar direct under s 11A(1) of the Act that Probus NZ and the disaffiliated Probus clubs change their names to names that are not in contravention of the Act and that are not desirable. In essence, Probus South Pacific wanted all reference to “Probus” to be removed from the names.

[22] In a letter dated 13 October 2014 to the Registrar, Probus NZ requested that the matter be deferred until the proceedings which are currently before IPONZ have been determined by the Commissioner of Trade Marks. Those proceedings relate to the proprietorship of the word “Probus” in New Zealand.

[23] Probus South Pacific’s solicitors responded to the letter on 17 October 2014 stating that it does not agree to a deferral of a decision regarding its application. It said that Probus South Pacific’s current trade mark application is irrelevant to its application to the Registrar; contrary to what Probus NZ asserts, the proceeding does not deal with proprietorship of the “Probus” name in New Zealand – it simply deals with one trade mark application for the word “Probus” filed by Probus South Pacific.

[25] On 12 November 2014, at the request of the Registrar, Probus NZ wrote a letter in response to the submissions made by Probus South Pacific in the 6 October

[26] On 18 December 2014, a solicitor employed by the Registrar wrote to Probus South Pacific setting out the Registrar’s decision which is under appeal, in the following terms:

I refer to your letters of 6 and 17 October. With respect, the names of Probus New Zealand Incorporated – 2600066 and of the disaffiliated Probus incorporated societies do not contravene the Incorporated Societies Act

1908. The Registrar will not direct them to change their names. The reasons for this are as follows.

1. The name Probus New Zealand Incorporated, and the names of the disaffiliated Probus societies, do not, in the Registrar’s view, so nearly resemble the name Probus South Pacific Limited, as to be calculated to deceive.

1.2 The geographical qualifiers in each of the names are sufficient to distinguish them.

2.1 The Registrar considers that the names of the societies are not undesirable.

2.2 The name Probus New Zealand Incorporated and each of the names of the disaffiliated Probus societies are descriptive names with geographical labels included (e.g. – New Zealand, Devonport, Wanaka, Wellington etc). The only commonality in the names is the use of the word Probus.

NZCLC 260,612 (HC), Blanchard J held that where a descriptive name [had] a geographical label attached, the same name with a

2.4 On the basis of the approach in Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland Province) Inc (CA 162/05, 19 September 2006), the names of the disaffiliated Probus societies are not undesirable.

indicated that the Northland branch had a status within, and a relationship with, Federated Farmers of New Zealand Incorporated.

2.6 To be analogous to this case, the names of the disaffiliated Probus societies would need to use the distinctive name of the parent body and therefore be in the style of Probus South Pacific (Devonport Branch) Incorporated.

2.7 This is also consistent with the initial position of the Registrar in the Federated Farmers case where the Registrar was of the view that the names Northland Federated Farmers Incorporated or Northland Farmers Federation Incorporated would comply with the Act.

3.1 The Registrar will not direct Probus New Zealand Incorporated or the disaffiliated Probus societies to change their names.

[27] Mr Brown QC for Probus South Pacific referred to correspondence with the Registrar subsequent to the decision being issued in which the Registrar expressed the opinion that because Probus South Pacific was not a registered company in New Zealand, it was not “carrying on business” in New Zealand for the purposes of s 11 of the Act, and accordingly it had no standing to appeal its decision to the High Court. As this correspondence occurred after 23 December 2014 when the appeal was filed, it does not form part of the record on appeal.

(1) Any person who is aggrieved by the refusal of the Registrar to register a society, or to register or receive any document submitted to him under this Act or who is aggrieved by any other act or decision of the Registrar under this Act, may appeal to the High Court within

21 days after the date of the refusal or other act or decision, or within such further time as the High Court may allow.

[29] The powers conferred on the High Court by subsection (2) in an appeal under s 34B are broad. On hearing the appeal, the High Court may confirm the refusal or other act or decision of the Registrar, or give such directions or make such determination in the matter as the High Court thinks fit.

[30] Section 34B, therefore, confers a general right of appeal which proceeds by way of rehearing. The appellate Court must come to its own view on the merits in accordance with the Supreme Court’s statement in Austin Nichols & Co Inc v Stichting Lodestar: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. In such circumstances it is an error for the High Court to defer to the lower Court's assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

[31] It is noteworthy that the Supreme Court’s statement quoted above was made with reference to the decision of the Court of Appeal in Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland Province) Inc,¹⁰which concerned an identical statutory context to the one at hand: the consideration of whether a company name was “undesirable” under s 11A(1) of the Incorporated Societies Act 1908.¹¹The approach mandated by the Supreme Court applies in this case.

(a) Is IPONZ the appropriate forum for the dispute between the parties? (b) Was the name ‘Probus New Zealand Incorporated’, as at its

¹⁰Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland

(ii) Is it a requirement under the “undesirable” ground that the complainant organisation be “carrying on business in New Zealand”? Alternatively, is it a relevant consideration?

(iii) If “carrying on business in New Zealand” is either a requirement or a relevant consideration, and what does it mean?

(d) Did the name ‘Probus New Zealand Incorporated’ and the names of the clubs named as second to eighth respondents, as at their registration, so nearly resemble ‘Probus South Pacific Limited’ as to be “calculated to deceive” in terms of s 11(1) of the Act?

[33] On behalf of Probus NZ, Mr Barker submitted that it was open to this Court to wait to find out whether Probus South Pacific actually has a trade mark in the name “Probus” before considering whether the name “Probus New Zealand Incorporated” is “undesirable” or “calculated to deceive”. He noted that Probus South Pacific has applied for a trade mark in respect of the word mark PROBUS, but that Probus NZ has objected to that application, which is presently the subject of proceedings before IPONZ. Until those proceedings are resolved, Mr Barker submitted, Probus South Pacific does not have any statutory rights in respect of the name and it cannot be said that the respondents’ names are “undesirable” merely because they include the word “Probus”.

Mr Barker’s suggestion would amount to this Court deferring to a decision of a

hearings officer at IPONZ having a much narrower and very specific jurisdiction, confined to a single trade mark application. That is an untenable proposition, for these reasons:

(a) The Court of Appeal in Federated Farmers was prepared to determine the naming dispute in that case, and to sanction the Registrar’s election to make a decision, despite the existence of a wider dispute as to legislative changes requiring the Federation to restructure its funding.¹²

(b) IPONZ hears disputes concerning trade marks, applying trade mark law whereas this proceeding concerns the names of incorporated societies and addresses different statutory criteria. The Commissioner of Trade Marks has no jurisdiction to require an incorporated society to change its name. That jurisdiction is contained solely in s 11A of the Act.

(c) The IPONZ proceedings comprise a single opposition against trade mark application number 968687 for the word mark PROBUS filed by Probus South Pacific on 10 November 2012.

(d) The IPONZ proceedings will not determine any of the right to the use of the “Probus” name in New Zealand. Probus South Pacific is owner of numerous other trade marks comprising or incorporating “Probus” which are not affected by the IPONZ proceedings. Those trade mark registrations have not been challenged by Probus NZ.

(e) Probus South Pacific claims that it is the owner of substantial goodwill, reputation and common law rights in the PROBUS mark which are not in contention in the IPONZ opposition but are relevant

¹²Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland

(f) The Court has before it sufficient information to answer the questions which the proceeding raises.

Was the name “Probus New Zealand Incorporated”, as at its registration, or is it now, “undesirable” in terms of s 11(2) or 11A of the Act?

[35] I address first the challenge to the Registrar’s decision on the ground that she erred in not concluding that the name “Probus New Zealand Incorporated” was undesirable: s 11(2) and s 11A of the Act. The answers to the four sub-questions identified at [32](b) will inform the answer to the question of whether any of the names of the respondents are undesirable.

[36] Sections 11 and 11A do not prescribe a legal test for when a name is “undesirable” and the case law makes no distinction between the use of “undesirable” in the two sections. The only difference is the time at which the undesirability arose.

[37] The statutory criterion “undesirable” appeared in s 31(1)(a) of the old Companies Act 1955 in relation to company names. The Court of Appeal said in Federated Farmers, its most recent decision on s 11A, that the cases considering the term “undesirable” in the old Companies Act are relevant to ascertaining the legal test in ss 11 and 11A.¹³

[38] The name of an incorporated society or a company may be undesirable for any number of reasons but commonly, as in this case, the argument is that the name is undesirable because of its close similarity to a name already in use. The key concern in the old Companies Act cases concerning undesirability was whether there was “a confusing similarity between the subject name and the name of some other company”.¹⁴Similarity in names is not alone sufficient to demonstrate

_{undesirability; it is a matter of fact and degree.}¹⁵_{In Vicom New Zealand Ltd v}

¹⁴New Zealand Conference of Seventh Day Adventists v Registrar of Companies [1997] 1 NZLR

¹⁵Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland

Vicomm Systems Ltd¹⁶the Court of Appeal approved the following statement by McGregor J in South Pacific Airlines of New Zealand Ltd v Registrar of Companies:¹⁷

Each name must be considered by the Registrar in the light of its own merits or demerits, but it is clear that any name that might mislead the public or a recognised section of the public in any particular locality, or would be likely to cause confusion, is undesirable, irrespective of the intentions or the motives or purposes of the applicant.

[39] It is clear from the old Companies Act case law that the name itself should not be considered in isolation. The Registrar (and the Court) should have regard to all the circumstances. Relevant factors that need to be taken into account include:¹⁸

(a) the extent to which the areas of the operation and the nature of the business are, or are likely in the future to become, similar;

(e) the degree of inconvenience consequential upon requiring an existing business to change its name;

(g) whether there is the existence of a trade mark, in particular where the trade mark is to protect the name in relation to the same class of goods or services as those sold or provided by the company whose name is

Province) Inc, above n 8, at [35]; Sika (New Zealand) Ltd v Sika Technology Ltd [1994] MCLR

¹⁶_{Vicom New Zealand Ltd v Vicomm Systems Ltd [1987] NZCA 109; [1987] 2
NZLR 600 (CA) at 605.}

¹⁷_{South Pacific Airlines of New Zealand Ltd v Registrar
of Companies [1964] NZLR 1 (SC) at 5.}

¹⁸Sika (New Zealand) Ltd v Sika Technology Ltd, above n 15, at 267–269 and Vicom New Zealand

[40] The test of undesirability in a case such as this is whether confusion or deception is likely to arise. Whether the test is met will be determined by reference to the extent to which the existing organisation has a presence in New Zealand, and the extent of its activities in New Zealand, whether or not it might be said that the organisation’s activities in New Zealand can properly be described by reference to Companies Act criteria as carrying on business. As the cases referred to indicate, it is not the mere similarity in the names which establishes undesirability but, as a matter of fact and degree, the extent to which the similarity in name is likely to cause confusion, bearing in mind the nature of the activities undertaken by the respective organisations.

[41] The greater the presence and extent of the activities that the courts have identified as going to establish that a company is carrying on business in New Zealand, the more likely it is that confusion will occur between organisations having similar names. To that extent, therefore, it will be helpful to the Registrar and the courts to consider the matters referred to in cases such as Sika and Vicom, and the Visy Board case discussed below,¹⁹when making a decision under ss 11(2) or 11A.

Is it a requirement under the “undesirable” ground that the complainant organisation be “carrying on business in New Zealand”?

[42] Mr Brown QC submitted that it is clear from the wording of s 11(1) and (2) that the statutory requirement that Probus South Pacific be “carrying on business in New Zealand” only arises under s 11(1), the “calculated to deceive” ground. He argued that there is no warrant for reading a specific requirement of “carrying on business in New Zealand” into subsection (2). Mr Brown acknowledged, however, that for the “undesirability” ground to be made out there must be some pre-existing activity or reputation in New Zealand but submitted that this may fall short of “carrying on business in New Zealand”. It may comprise the ownership of a

[43] Mr Barker submitted for Probus NZ that although “carrying on business in New Zealand” is not an express requirement for the “undesirable” ground in s 11(2), the territorial focus must also be a critical part of the definition of “undesirable” so as to make it an implicit requirement. In particular, he argued:

(a) It makes no sense to allow overseas companies that do not carry on business in New Zealand to nevertheless object to the names of New Zealand incorporated societies. The legislature cannot have intended that New Zealand incorporated societies should be required to change their names because of the potential for confusion with the name of a company that does not carry on business in New Zealand.

(b) It would not make much sense to impose a jurisdictional requirement under s 11(1) (the “calculated to deceive” ground) and then allow that limitation to be ignored by reference to the term “undesirable” when the test for what is ‘undesirable’ is essentially the same as that for what is “calculated to deceive”. It would be ridiculous, counsel submitted, to allow a business to get around the requirement of “carrying on business in New Zealand” in s 11(1) by arguing under the “undesirability” ground rather than the “calculated to deceive” ground.

[44] It is worth observing that it is likely that, when the Registrar is contemplating the registration of an incorporated society, her opinion as to undesirability will not be informed, at least initially, by representations from an existing organisation, whether incorporated under the ISA or the Companies Act or not, arguing that the proposed name is so similar as to cause confusion or deception. No doubt the Registrar’s inquiries will include searches of the registers of incorporated societies and registered companies and may also incorporate the services of internet search engines. Such searches may set the Registrar on a course of further inquiry if the potential for confusion exists, but details of the existing organisation’s activities in New Zealand may not be readily apparent. It may be that, although it is not in evidence before the Court, that the Registrar will contact any organisation with which the potential for confusion arises, to obtain further information.

[45] It appears from the correspondence from the Registrar referred to at [27] above that she may hold the view that it is necessary, in order to find that a proposed name is undesirable on account of similarity with an existing organisation under s 11(2) or s 11A, that the existing organisation should be carrying on business in New Zealand. If that is the Registrar’s opinion then, in my view, it is wrong.

[46] Notwithstanding Mr Barker’s submissions to the contrary, I see no principled basis upon which it would be right to imply into s 11(2) or s 11A a statutory requirement that, in order for a proposed name to be “undesirable” on account of similarity leading to confusion, the proposed name must be similar to that of another organisation which is carrying on business in New Zealand. To ask whether an existing organisation is carrying on business in New Zealand is to ask only part of the question, as the discussion above makes clear.

[47] Nevertheless, although I have held that establishing the criterion of undesirability through confusion does not depend on proof that the similarly named organisation is carrying on business in New Zealand, it is obviously relevant to the determination to make that inquiry.

If “carrying on business in New Zealand” is either a requirement or a relevant

[48] Notwithstanding my rejection of the proposition that an existing organisation must be carrying on business in New Zealand before any confusion arising from the similarity of names satisfies the test of undesirability, it is necessary to address counsel’s arguments about what is meant by “carrying on business” to the extent that Probus South Pacific relies on the “calculated to deceive” ground in s 11(1). Under that section, the prohibition on registering the name of a society which so nearly resembles the name of a company as to be calculated to deceive relates only to a company carrying on business in New Zealand, whether registered or not. Further, as I have indicated, cases under the Companies Act and other statutory provisions addressing the type of activity that informs that test should be considered relevant to determining whether an organisation has such presence in New Zealand as to give rise to confusion with a similarly named incorporated society.

[49] Mr Barker suggested that the most relevant authority on the meaning of “carrying on business in New Zealand” is the decision of the Court of Appeal in Commerce Commission v Visy Board Pty Ltd.²⁰That case concerned s 4(1) of the Commerce Act 1986, which provides that the Commerce Act “extends to the engaging in conduct outside New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct affects a market in New Zealand”. The Court confirmed that the question of whether a company carries on business is a broad question of fact:²¹

In summary, we consider that whether or not a person is “carrying on business in New Zealand” is a question of fact where a number of factors are relevant. But the analysis is not confined to whether or not the company maintained a systematic and continuous physical presence in New Zealand; that states the test too highly and does not serve the purpose of the Act. We add that the approach to be taken requires recognition of the practical modes of transacting business. The reality of modern day commerce necessitates dealing with consumers through a variety of methods of communication including the internet. Inevitable developments in globalisation of commerce are also relevant. The definition of market in s 3(1A) underscores these factors.

[50] The Court then proceeded to identify eight factors which suggested that Visy

(a) Visy Board operated Visy Board NZ as an integrated division of Visy Board and presented itself to trans-Tasman customers as one business including the New Zealand division.

(e) Visy Board staff regularly came to New Zealand, including to meet with customers.

(f) Visy Board communicated directly into New Zealand both to executives of Visy Board NZ and with customers.

(h) Industry practice saw Australian firms carrying on business here in respect of trans-Tasman customers.

[51] For Probus South Pacific, Mr Brown QC submitted first that “carrying on business in New Zealand” contemplates that a company may carry on business without being registered in New Zealand. The words in s 11(1) are: “No society shall be registered under a name which is identical with that ... of a company carrying on business in New Zealand (whether registered in New Zealand or not)”. Counsel argued that it would not be right to imply into subsection (2) a requirement for registration that is expressly irrelevant under subsection (1).

[52] In response to Mr Barker’s submissions, Mr Brown QC submitted that the meaning of the words “a company carrying on business in New Zealand” takes colour from its context. The purpose of s 11(1) and (2) is that, in order for there to be a need for protection against incorporation of a society with an identical or so nearly resembling name, there needs to be some activity by the complainant in the jurisdiction which will give rise to consumer deception or confusion and therefore the need for protection. Obviously, without some qualifying business activity in New Zealand – particularly in relation to the activities of an organisation with a nearly resembling name – it is unlikely that consumers will be deceived or confused. I accept those propositions.

[53] Section 334 of the Companies Act 1993 provides that an overseas company that commences to carry on business in New Zealand must apply for registration under Part 18 of that Act within 10 working days of commencing to carry on business. Section 332 of that Act prescribes the circumstances under which an

overseas company will be “carrying on business” in New Zealand and the circumstances that alone are insufficient for an overseas company to be “carrying on business” in New Zealand. The section has not been judicially considered in New Zealand and, in any event, the limited purposes for which the definition is relevant in that Act may mean that the criteria which are referred to are too narrow in scope to be of much assistance in the present inquiry.

[54] The term has been considered by the High Court of Australia in relation to a more or less identical statutory provision. In Luckins v Highway Motel Carnavon Pty Ltd & Anor,²²Gibbs J said the expression “carrying on business” may have different meanings in different contexts but that it would usually connote, at least, the doing of a succession of acts designed to advance some enterprise of the company pursued with a view to pecuniary gain. He concluded that the question whether a company is carrying on business is simply one of fact and must be decided by having regard to all the circumstances of the case.²³

[55] That view accords with the approach under the Commerce Act of the Court of Appeal in Visy Board. I conclude that the Visy Board case is helpful in identifying the types of activity proof of which may contribute to a conclusion that confusion or deception may occur.

[56] Applying that approach, Mr Barker submitted that these are the only connections Probus South Pacific has with New Zealand:

²²Luckins v Highway Motel (Carnavon) Pty Ltd [1975] HCA 50; [1975] 7 ALR 413 (HCA).

(d) It sends out a newsletter, throughout the South Pacific, which is received by clubs in New Zealand.

[57] Mr Barker submitted that this is the barest possible relationship to New Zealand and it does demonstrate any of the usual criteria for “carrying on business”. In particular, he argued, Probus South Pacific does not:

(b) have any place of business in New Zealand; (c) have any address for service of documents; (d) have any meetings in New Zealand;

(e) have any formal relationship with the New Zealand clubs (e.g. a branch relationship);

(g) exercise any control over the New Zealand clubs other than through its alleged right to licence the use of the word “Probus”.

[58] Mr Barker adds that the people who are carrying on the “business” of Probus in New Zealand are the various Probus clubs. They have what could best be described as licensing arrangements with Probus South Pacific, but little more than that. The existence of a licensing arrangement in the context of non-commercial business such as Probus South Pacific, does not mean that it carries on business in New Zealand.

(b) It has, and has had previously, a formal relationship with the New Zealand Probus clubs as the accrediting party since the formation of the predecessor to Probus South Pacific.

(c) It advertises and promotes Probus clubs in New Zealand. It has published a directory of Probus clubs. It has also consistently published a newsletter delivered to Probus clubs around New Zealand.

(d) It owns registered trade marks in New Zealand. (e) It licensees Probus clubs to use those marks.

(g) It charges a capitation and insurance levy to New Zealand Probus clubs and has done so for many years.

[60] The factors referred to by Mr Brown, particularly the ownership of registered trade marks involving the “Probus” name, establish that Probus South Pacific has a presence in New Zealand. There is no evidence, however, that it conducts any activities or, to adopt the expressed used by Gibbs J in Luckins,²⁴that it is doing a succession of acts designed to advance some enterprise. While the activities identified by Mr Brown have consequences in New Zealand for the Probus clubs

affiliated to the Australian company, most if not all of those activities would appear to be conducted in Australia rather than New Zealand. This state of affairs may be compared with the active involvement of Visy Board in the New Zealand market in conjunction with and on behalf of the New Zealand business. The evidence in the

Visy Board case of regular staff visits and direct contact in New Zealand with New

[61] I conclude that, although Probus South Pacific has a presence in New Zealand, it is not carrying on business. To the extent that any business has been, and is being, carried on in New Zealand under the Probus name, it is carried on by the New Zealand clubs affiliated to Probus South Pacific.

[62] I have held that Probus South Pacific is not “carrying on business in New Zealand”, in the sense in which that expression is used in s 11(1) of the ISA. If that view is correct, it disposes of the appellant’s alternative, “calculated to deceive” ground of appeal under that subsection. But it remains necessary to consider whether the Probus NZ name and/or the names of any of the individual clubs named in the proceeding²⁵is or are “undesirable” under s 11(2).

(b) The names of the respondents do not suggest any direct relationship with Probus South Pacific. They are not, for example, “Probus South Pacific (New Zealand) Inc.” This can be contrasted with the decision in the Federated Farmers case.

(c) The only thing that relates the names of the respondents to that of Probus South Pacific is the common use of the word “Probus”. This is a name that is widely used throughout New Zealand and the world and it is not unique to Probus South Pacific. The real objection is not confusion as such, but rather that the respondents are not entitled to use the name “Probus” because of proprietary rights. It is a claim for

broader market-based confusion, breach of licence or some other civil wrong. Such concerns can be addressed in a variety of different ways but these are not issues appropriately resolved in the context of an application to change a name. In any event, if a broader market-based confusion is relevant, the exclusive right of Probus South Pacific to

[64] Mr Barker argued that even if there was similarity between the name Probus South Pacific and the names of the respondents, there could be no confusion because the respondents, particularly the individual clubs named as second to eighth respondents, were engaged in the club activity whereas Probus South Pacific was simply a corporate entity having a business relationship with its affiliated clubs.

[65] It does not matter, in my view, that the individual affiliated clubs are not applicants in this proceeding. The question to be determined by the Registrar was whether the name Probus New Zealand Incorporated was undesirable by reason of confusion. That inquiry was not limited to confusion arising because of the similarity of the name to that of an entity objecting to the registration. As I have indicated above, the decision made by the Registrar may in many cases, if not most, be made irrespective of any complaint or objection by an existing organisation. It follows that the present applicant is entitled to succeed in its argument that the Registrar’s decision was wrong, notwithstanding that the confusion may arise because of an unfounded inference as to an association between the first respondent and the New Zealand clubs rather than between the first respondent and the applicant.

[66] “Probus” is an invented word distinctively identifiable with clubs set up for retired and semi-retired members of the community to advance their intellectual and cultural interests through social interaction and activities. The name was established in New Zealand by its use in the names of organisations under the sponsorship of local Rotary clubs in New Zealand and elsewhere in the South Pacific in the 1970s. It was consolidated in New Zealand long-term use in connection with the club

activities I have described and by the trade marks owned by Probus South Pacific. Probus clubs, as originally constituted conduct their activities throughout New Zealand.

[67] While details of the constitutional arrangements for the New Zealand Probus clubs, and their relationship with Probus South Pacific, may not be understood by outsiders, including those who deal with the clubs, the natural assumption to be drawn from the name “Probus New Zealand Incorporated” is that the first respondent is a parent or overseeing body linked directly to the clubs affiliated to Probus South Pacific. The assumption is reinforced by the identical nature of the activities of the existing Probus clubs and those of the second to eighth respondents.

[68] In the Federated Farmers case, the Court of Appeal endorsed the finding at first instance of Fogarty J that the name “Federated Farmers” was not descriptive but rather distinctive in New Zealand of the Federation.²⁶The Court held that the coupling of the geographical reference “Northland Province” connotes a Northland provincial branch of the Federation. Similarly, the name “Probus” is distinctive in New Zealand of the clubs originally founded and now affiliated to Probus South Pacific. And as in the Federated Farmers case, the geographical reference “Probus New Zealand” in the name of the first respondent connotes an overall, New Zealand-

wide supervising or managerial relationship between the first respondent and the clubs which does not exist.

[69] Mr Brown argued that the first respondent’s name was undesirable not only because of the inevitability of confusion over the relationship between the first respondent and the existing Probus clubs but also because the registration would amount to or, at least, sanction the misappropriation of the word “Probus” in breach of Probus South Pacific’s trade marks. I do not consider it necessary to rely on that proposition to reach the conclusion that the first respondent’s name is undesirable. Probus South Pacific has remedies available in other proceedings if it wishes to

²⁶Federated Farmers of New Zealand Incorporated v Federated Farmers of New Zealand

[70] In my view, the Registrar was wrong to decide that the names of the respondents were descriptive names with geographical labels included. The word “Probus” which, I accept, is the common denominator, is not a descriptive word as the Registrar held. The Registrar’s reliance upon the judgment in Flight Centre New Zealand Limited was misplaced, for the reasons identified by the Court of Appeal in the Federated Farmers case. The Court of Appeal’s decision has direct application here and is not distinguishable, contrary to the view taken by the Registrar.

[71] It follows from the reasoning leading to my view that the first respondent’s name is undesirable that I consider the Registrar was wrong to conclude that the names of the individual clubs, the second to eighth respondents, are undesirable for the same reasons.

Did the name Probus New Zealand Incorporated and the names of the second to eighth respondents, as at their registration, so nearly resemble Probus South Pacific Limited as to be “calculated to deceive” in terms of s 11(1) of the Act?

[72] I turn to consider the alternative argument raised by the applicant, that the Registrar erred in her decision that the name Probus New Zealand Incorporated and the names of the “disaffiliated Probus societies” do not so nearly resemble the name Probus South Pacific Limited as to be calculated to deceive in terms of s 11(1) of ISA.

[73] The applicant’s case under s 11(1) is defeated by my finding that the applicant is not “carrying on business in New Zealand”. In case I should be wrong in that conclusion, however, I address briefly the issues arising on the applicant’s argument.

[74] The Registrar’s decision under s 11(1) was founded on the conclusion that the use of the geographical qualifiers in the names of the respondents was sufficient to distinguish those names from Probus South Pacific Limited. The prohibition on resemblance under s 11(1) may be distinguished as being on narrower grounds than the more general prohibition on undesirability in s 11(2).

[75] It does not appear that any New Zealand court has considered the meaning of “calculated to deceive” in the Incorporated Societies Act. The leading case on “calculated to deceive” decided under the Companies Act 1955 is the decision in South Pacific Airlines of New Zealand Ltd v Registrar of Companies.²⁷In that case, McGregor J noted that “the matter is centred on the similarity of names, a question of fact and opinion” and that “intention to deceive is not necessary”.²⁸Referring to National Timber Co Ltd v National Hardware, Timber & Machinery Co Ltd,²⁹the Judge identified the essential question to be whether the names of the companies were so much alike that persons who under ordinary circumstances would be

customers of such companies for the commodities in which they deal are likely to be deceived into dealing with a new company in mistake for the old, to the detriment of the latter.

[76] I am not persuaded that the likelihood of deception is made out in this case. First, the applicant is an Australian registered company. Although Australian registration does not disqualify it from consideration under s 11(1), the fact that it is not registered in New Zealand goes to distinguish it from the first respondent which is registered as an incorporated society in New Zealand. Second, the name is distinguishable, albeit only by virtue of the geographical qualifiers. Applying the test described by McGregor J in South Pacific Airlines, there is no evidence that the names of the applicant and the first respondent or any other respondent are so much alike that persons who, under ordinary circumstances, would be dealing with the applicant are likely to be deceived into dealing with any of the respondents.

[77] The applicant’s presence in New Zealand is confined to its relationships with the affiliated clubs and, to the extent that the applicant is in business in Australia, there is no evidence of dealings in New Zealand beyond that described in terms of the relationship with the New Zealand Probus clubs. Mr Barker’s point about the

_{dissimilarity in the nature of the businesses of the applicant and the
respondents,}

²⁷_{South Pacific Airlines of New Zealand ltd v Registrar
of Companies, above n 17.}

²⁸At 3. It is evident that “calculated” is used in the section in the somewhat archaic sense,

_{frequently encountered in legal matters, of meaning “likely”
rather than “intended”.}

while not assisting the respondents with regard to the undesirability argument under s 11(2), succeeds in respect of the argument under s 11(1).

[78] I have held that the Registrar was wrong to refuse to direct that the first to eight respondents change their incorporated society names.

2014 in which the Registrar held that the names of the respondents were not “undesirable” in terms of ss 11(2) and 11A(1)(b) of the Incorporated Societies Act and in which she refused to direct the respondents to change their incorporated society names.

(b) I direct the first to eighth respondents to change their incorporated society names to names that do not contravene ss 11 and 11A of the Incorporated Societies Act 1908.

[80] The appellant, having obtained the relief it sought, would appear to be entitled to costs. The costs are to be fixed on a category 2B basis, with disbursements as fixed by the Registrar. If the parties cannot agree, the appellant shall file and serve a costs memorandum on or before 8 October 2015; the respondents shall have until 29 October 2015 to file and serve a memorandum in reply.

[81] Costs shall then be determined on the papers unless the Court directs otherwise.

High Court of New Zealand Decisions

Probus South Pacific Limited v Probus New Zealand Incorporated [2015] NZHC 2250 (17 September 2015)