NZ Tax Refunds Limited v Brooks Homes Limited & Ors

Court of Appeal
O’Regan P, Arnold and Miller JJ
27 March 2013

This case concerned rival businesses providing online tax refund services.

The appellant, NZ Tax Refunds Limited (“NZTRL”), was the largest player in the market with a 30% market share.  It had operated the and from 2008.  The respondents (collectively referred to as “MRL”) operated the rival website,, also from 2008.

In 2011 and May 2012 respectively, MRL commenced use of the following trade names and websites:

(a) “Tax Refund NZ” /;

(b) “NZ-Tax Refund” /

Each of these trade names was administratively linked to MRL’s “My Refund” business.  They were not independent businesses in their own right. Users of and websites were required to use My Refund’s forms and accept My Refund’s Terms & Conditions.

MRL explained its intention behind the adoption of the name “Tax Refund NZ” as being to obtain a web address with “NZ” in it to meet competition from overseas providers. It also referred to changing consumer practices where consumers simply put the term “tax”, “refund” and “NZ” into search engines to find a provider.

The market was not one filled with particularly distinctive trade names - the two other significant players in the market operated from the websites and, and other New Zealand websites apparently used the word “tax refund.”

NZTRL had become aware of MRL’s “Tax Refund NZ” trade name and associated website in 2011 but did not send a cease and desist letter until 30 March 2012.

NZTRL issued proceedings against MRL alleging that a breach of s9 of the Fair Trading Act 1986 (‘misleading or deceptive conduct’) and the tort of passing off, as a result of having adopted names similar to its own. It also sought an interim injunction prohibiting the use of those names.

Decision under appeal

At first instance, Fogarty J granted an interim injunction in respect of the name “NZ-Tax Refund” and its associated website, but declined to grant an interim injunction in respect of the name “Tax Refund NZ.”

In respect of “Tax Refund NZ,” Fogarty J appeared to consider that there was no serious question to be tried, and determined that the balance of convenience did not favour the grant of an injunction for the following reasons:

(a)  An injunction would be a significant immediate impairment to the “Tax Refund NZ” business;

(b)  An injunction would not necessary be to NZTRL’s immediate advantage given the other similar names in use in the market;

(c)  An injunction would force MRL into a new brand name which did not use the words “tax” or “refund”;

(d)  NZTRL had not challenged the use of another similar trade name by a third party,, despite its considerable market share.

NZTRL appealed Fogarty J’s decision not to grant an interim injunction against MRL in respect of the “Tax Refund NZ” trade name.

Held, allowing the appeal and granting the interim injunction.

Approach to appeal

(1)  The grant of an interim injunction involves the exercise of a discretion. Such a decision is amenable to appeal on the basis that the judge has erred in law, taken account of an irrelevant matter, failed to account of a relevant matter or is plainly wrong. [13]

Novartis New Zealand Limited v Aktiebolaget Hassle [2004] 2 NZLR 721 (CA) at [53]; Kacem v Bashir [2011] 2 NZLR 1 at [32]

(2)  This is subject to the qualification that whether there is a serious question to be tried is an issue which calls for judicial evaluation rather than the exercise of a discretion. Where an appellate court disagrees with a judge’s finding that there is no serious issue to be tried, the appellate court will have to carry out its own assessment of the balance of convenience and the overall justice of the case, although it may derive assistance from the judge’s analysis of those aspects. [13]

S9 Fair Trading Act 1986

(3)  S9 of the Fair Trading Act is directed to promoting fair dealing in trade by proscribing conduct which, examined objectively, is deceptive or misleading in the particular circumstances. It is not necessary to show that the person alleged to have breached the section had an intention to mislead or deceive, or actually misled, a capacity to mislead is sufficient. [15]

Red Eagle Corporation Limited v Ellis [2010] 2 NZLR 492 at [28]

(4)  Passing off also involves conduct in the course of trade which is misleading. The conduct must be directed at prospective users of goods or services and it must reasonably foreseeable that it will injure the business or goodwill of a competing trader by freeriding, or attempting to free ride, on that goodwill or business reputation. [16]

(5)  As with a breach of the Fair Trading Act, it is not necessary to show instances of confusion in order to succeed in a passing off claim, although if such instances can be shown, it will enhance a plaintiff’s case. Likewise, it is not necessary to show an intention to deceive, but proof of such intention is likely to be a powerful evidentiary factor. [17]

Anheuser-Busch Inc v Budweiser Budvar National Corporation [2003] 1 NZLR 472 (CA) at 128; Tot Toys Limited v Mitchell [1993] 1 NZLR 325 (HC) at 334; Parker-Knoll Limited v Knoll International Limited [1962] RPC 265 (HL); Black & White Cabs Limited v McEneany [1927] NZLR 862 (CA).

(6)  A significant difficulty faced by NZTRL was that its name was descriptive of the services it provided. [18] However, the courts have recognised that a descriptive name may acquire what is described as a “secondary meaning” identified with the goods or services of the relevant party. That said, this does not seem to be an invariable requirement, there being no absolute embargo on descriptive words being afforded some measure of protection. [19] to [21]

Shotover Gorge Jetboats Limited v Marine Enterprises Limited [1984] 2 NZLR 154 (HC); Airport Rentals Limited v Airport Car Rentals (Southern) Limited (1995) 6 TCLR 664 (HC).

Serious question to be tried

(7)  There was sufficient evidence to direct that NZTRL’s claim was more than vexatious or frivolous and there was a serious question to be tried. [36]

(8)  It was at least arguable that when MRL adopted the name “Tax Refund NZ” and its associated web address, it intended to free ride on NZTRL’s goodwill and business reputation, in particular:

(a)  “NZ-Tax Refund” was effectively a direct copy of the NZTRL’s name. The other name adopted “Tax Refund NZ” was simply a variation. It was not clear why MRL could not have used his existing trade name and web address and simply added the NZ – “My NZ Refund” or “My Refund NZ.” That was an obvious solution and some explanation was required as to why it was not adopted. [30]

(b)  The evidence indicated that the website was administratively linked to the My Refund website (as opposed to an independent business) suggesting the adoption of the name was simply an attempt to broaden the scope of My Refund’s catchment of customers. [31]

(c)  It was plausible that MRL intended to mislead or deceive consumers in establishing the trade names. The presence of such intention strengthened the plaintiff’s position. [32]

(d)  A point which vexed the trial judge was that no action was taken by NZTRL against another trade name in the market – The Court agreed with NZTRL that the country designator “”, should be ignored for these purposes (although the point was arguable).

Balance of convenience

(9)  While an injunction would have a significant impact on the “Tax Refund NZ” business, the evidence showed that MRL did not operate any business independent of the My Refund business.  There was no evidence as to what loss to the My Refund business was likely. [38]

(10)  While it could not be said what practical advantage there might be to NZTRL if the injunction were granted, it would at least ensure that its goodwill was not further eroded in the meantime. [39]

(11)  The conclusion of the High Court that the injunction would force MRL into a new brand name which did not use the words “Tax” or “Refund” was not correct. MRL already had an existing brand name “My Refund” which it could continue to use. It could modify that brand name by adding “NZ”. The only matter at issue was the unadorned combination of the three words “Tax”, “Refund”, and “NZ”. [40]

(12)  The plaintiff’s delay was not unacceptably long in the context where there was an arguable case that MRL intended to free ride on NZTRL’s goodwill or business reputation.


View Next Case Law

View Next