PROBUS SOUTH PACIFIC LIMITED v PROBUS NEW ZEALAND INC & ORS
21 May, 17 September 2015.
 NZHC 2250
Incorporated Societies – appellant acting accrediting agent for establishment of Probus Clubs in New Zealand – first respondent incorporating and adopting the name Probus – other existing Probus Clubs disaffiliating from appellant – continuing to use Probus name – whether respondents’ use of Probus “calculated to deceive” or “undesirable” – powers of registrar of incorporated societies – ss11 and 11A Incorporated Societies Act 1908 (NZ).
Probus Clubs are set up for members of the community who are retired or semi-retired in order to advance intellectual and cultural interests amongst those individuals. The clubs are structured either as incorporated or unincorporated societies. In the 1970’s a number of Probus Clubs were set up in New Zealand and Australia, with the clubs being sponsored by local Rotary clubs.
Because of the rapid development of Probus Clubs in the South Pacific, in the 1970’s the Probus Information Centre – South Pacific (PCSP) was established to promote the development of Probus throughout the South Pacific, to arrange preparation and distribution of a club directory, to publish a newsletter and to arrange for the supply of Probus regalia and items.
PCSP was subsequently endorsed in 1983 by the Rotary District Governors for both New Zealand and Australia as a community service activity. PCSP was to be responsible for the accreditation and support of Probus Clubs in Australia, New Zealand and the South Pacific region. Amongst other things the Governors decided to delegate to PCSP the authority to accredit properly formed Probus Clubs and Probus Associations and defined the terms of reference of PCSP as being to promote the formation of Probus Clubs in Australia, New Zealand and the South Pacific as a Rotary community service programme. Its mandate included maintaining a register of accredited Probus Clubs, publishing annually a directory of such clubs and taking all steps necessary to protect the Probus name, emblem and the integrity of the Probus organisation.
In September 2011, PCSP became Probus South Pacific Limited (“Probus South Pacific”), a company limited by guarantee in Australia. Probus South Pacific was the owner of a number of New Zealand trade mark registrations and applications comprising and incorporating the word “Probus”. Probus South Pacific asserted that the Probus name, emblem and trade marks could only be used by accredited Probus clubs, associations and other bodies authorised by it.
On 26 March 2014, the first respondent, Probus New Zealand Inc (Probus NZ), was incorporated by individuals who were once members of accredited Probus Clubs in New Zealand. Members of Probus NZ asserted that the support services offered by the appellant, Probus South Pacific, were inadequate and unnecessary, and were based on a wrong philosophical and conceptual approach and business model. Probus NZ began promoting itself as being the local Probus Centre in New Zealand.
Probus South Pacific took the view that since 1981 it had been the only Probus Centre for Australia, New Zealand and the South Pacific and that Probus NZ had provided no explanation as to where the individuals who formed it had drawn their authority to use the PROBUS name or trade mark or to act as Probus accrediton agency for New Zealand or to manage the national accounts or Probus. Further, Probus NZ was not sponsored by a local Rotary Club, nor was it associated with or accredited by Probus South Pacific or the Governors of the Australia and New Zealand Rotary Districts.
Probus NZ also encouraged existing Probus Clubs that had been accredited by Probus South Pacific to separate from Probus South Pacific and join Probus NZ. The second-eighth respondents had altered their rules so as to no longer abide by the standard Probus South Pacific constitution which they had initially adopted.
Probus South Pacific disputed the right of Probus NZ and the disaffiliated clubs to use the PROBUS name and trade mark.
On 6 October 2014, Probus South Pacific through its solicitors wrote to the Registrar of Incorporated Societies seeking a direction that Probus NZ and the disaffiliated clubs change their names under s 11and/or 11Aof the Incorporated Societies Act 1908 (the Act). On 18 December 2014, the Registrar refused to direct a name change by either Probus NZ or the disaffiliated clubs expressing the views that:
(a) Names not calculated to deceive
Each of the names did not so nearly resemble Probus South Pacific Limited as to be calculated to deceive. The geographical qualifiers in each of the respondents’ names were sufficient to distinguish them.
(b) Names not undesirable
The Registrar considered that the names of the incorporated societies were not undesirable. The name Probus New Zealand Inc and each of the names of the disaffiliated Probus societies were descriptive names with geographical labels included. The only commonality in the names was the use of Probus.
Probus South Pacific appealed from the Registrar to the High Court. In separate proceedings before the Intellectual Property Office of New Zealand (IPONZ) Probus NZ had opposed one of Probus South Pacific’s current trade mark applications for the word PROBUS. Probus NZ argued that (although Probus South Pacific had other registered trade marks containing Probus) the Court should await the outcome of the opposition proceedings.
Held, allowing the appeal:
(a) Powers on appeal
The powers conferred on the Court in an appeal are broad. Section 34B of the Act confers a general right to appeal which proceeded by way of rehearing. The appellate Court must come to its own views on the merits  – .
Austin Nichols & Co Inc v Stichting Lodestar (2007) 74 IPR 452,  NZSC 103 at  applied
(b) Was IPONZ the appropriate forum for the dispute between the parties?
It was untenable for the Court to defer to a decision of a single Hearings Officer at IPONZ having a much narrower and very specific jurisdiction confined to a single trade mark application when (inter alia):
The Commissioner of Trade Marks had no jurisdiction to require an incorporated society to change its name.
The IPONZ proceedings were a single opposition and would not determine the right to use of the “Probus” name in New Zealand. Probus South Pacific was the owner of numerous other trade marks comprising or incorporating “Probus” which were not affected by the IPONZ proceeding. Those trade mark registrations had not been challenged by Probus NZ.
Probus South Pacific claimed that it was the owner of substantial goodwill, reputation and common law rights in the PROBUS mark which were not in contention in the IPONZ opposition but were relevant to the issues in this proceeding.
The Court had before it sufficient information to answer the questions which the proceeding raised  – 
(c) Was the name Probus New Zealand Inc, as at its registration “undesirable” or was it now “undesirable” in terms of section 11(2) or 11A of the Act
Section 11 and 11A did not prescribe the legal test for when the name was “undesirable” and the case law made no distinction between the use of “undesirable” in the two sections. The only difference was the time at which undesirability arose .
Commonly the name of an incorporated society is “undesirable” because of its close similarity to a name already in use. The key concern in old Companies Act cases involving the same term was whether there was “a confusing similarity between the subject name and the name of some other company”. But similarity in names was not alone sufficient to demonstrate undesirability; it was a matter of fact and degree .
New Zealand Conference of Seventh Day Adventists v Registrar of Companies  1 NZLR 751, at 757-8 (HC); Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland Province) Inc CA 162/05, 19 September 2005 at ; Vicom New Zealand Limited v Vicomm Systems Limited  2 NZLR 600 at 605 (CA); South Pacific Airlines of New Zealand Limited v Registrar of Companies  NZLR 1 at 5 (SC) referred to.
The test of undesirability in a case like this was whether confusion or deception was likely to arise. Whether the test was met would be determined by reference to the extent to which the existing organisation had 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 could properly be described by reference to Companies Act criteria as carrying on business. It was not the mere similarity in names which established undesirability but, as a matter of fact and degree, the extent to which the similarity in name was likely to cause confusion, bearing in mind the nature of the activities undertaken by the respective organisations . The greater the presence and extent of the activities identified as establishing that a company was carrying on business in New Zealand, the more likely it was that confusion would occur between organisations having similar names .
Sika (New Zealand) Limited v Sika Technology Limited  MCLR 264 (HC) at 267-9 (CA); Vicom New Zealand Limited v Vicomm Systems Limited  2 NZLR 600 at 605; Commerce Commission v Visy Board Pty Limited  NZCA 383 referred to.
There was no principled basis on which it was right to imply into s 11(2) or 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  – . However, it was relevant to establishing the criterion of undesirability through confusion to make the inquiry whether Probus South Pacific was carrying on business in New Zealand .
The ownership of registered trade marks involving the “Probus” name together with other factors established that Probus South Pacific had a presence in New Zealand. However, Probus South Pacific was not “carrying on business in New Zealand”. To the extent that any business had been and was being carried on in New Zealand under the Probus name, it was carried on by the New Zealand clubs affiliated to Probus South Pacific  – .
As Probus South Pacific was not carrying on business in New Zealand in the sense in which that term is used in the Act, that disposed of Probus South Pacific’s ground of appeal based on “calculated to deceive” .
The question to be determined by the Registrar was whether Probus New Zealand Inc was undesirable by reason of confusion. That enquiry was not limited to confusion arising because of the similarity of the name to that of an entity objecting to the registration. The appellant was entitled to succeed in its argument notwithstanding that the confusion might arise because of an unfounded inference between Probus New Zealand Inc and the New Zealand clubs rather than between it and the appellant .
The natural assumption to be drawn from Probus New Zealand Inc was that the first respondent was a parent or overseeing body linked directly to the clubs affiliated to Probus South Pacific. This assumption was reinforced by the identical nature of the activities of the existing Probus clubs and those of the second-eighth respondents . It connoted an overall New Zealand-wide supervising or managerial relationship between the first respondent and the clubs which did not exist . “Probus” was distinctive in New Zealand of the clubs originally founded and now affiliated to Probus South Pacific .
It was not necessary to rely on issues of trade mark infringement or passing off to reach the conclusion that the first respondent’s name was undesirable .
The Registrar was wrong to decide that the names of the respondents were descriptive names with geographical labels included. The word “Probus” was not a descriptive word. The earlier decision of the Court of Appeal in Federated Farmers had direct application and was not distinguishable, contrary to the Registrar’s view 
Federated Farmers of New Zealand Inc v Federated Farmers of New Zealand (Northland Province) Inc CA 162/05, 19 September 2005 applied.
(d) Were the names of the second-eighth respondents “for the time being … undesirable” in terms of section 11A(1)(b)
It followed from the Court’s reasoning in respect of Probus New Zealand Inc that the Registrar was wrong to conclude that the names of the individual clubs, the second-eighth respondents, were undesirable [71
(e) Did the name Probus New Zealand Inc and the names of the second-eighth respondents, as at their registration, so nearly resemble Probus South Pacific Limited as to be “calculated to deceive” in terms of section 11(1)?
The appellant’s case under section 11(1) was defeated by the Court’s finding that it was not “carrying on business in New Zealand” .
(Obiter) the essential issue was one of likelihood of deception. There was no evidence that the names of the appellant and the first respondent or any other respondent were so much alike that persons who under ordinary circumstances would be dealing with the appellant were likely to be deceived into dealing with any of the respondents . The appellant’s presence in New Zealand was confined to its relationship with the affiliated clubs and to the extent that it was in business in Australia there was no evidence of dealings in New Zealand beyond that described in terms of the relationship with the New Zealand Probus clubs 
South Pacific Airlines of New Zealand Limited v Registrar of Companies  NZLR 1 (SC) applied
The following orders were made:
- Quashing the Registrar’s decision in which she held that the names of the respondents were not undesirableand in which she refused to direct the respondents to change their incorporated society names;
- Directing the first-eighth respondents to change their incorporated society names to names that did not contravene sections 11 and 11A of the Incorporated Societies Act 1908.
AH Brown QC and CM Fry for appellant
ARB Barker for respondents
 The factors were:
(a) Probus South Pacific has an address for service in New Zealand in respect of its registered trade marks;
(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 advertised and promoted Probus clubs in New Zealand and had published a directory. It also consistently published a newsletter delivered to Probus Clubs around New Zealand;
(d) It licensed Probus clubs to use its trade marks;
(e) It provided some organisational support for Probus clubs in New Zealand;
(f) It charged a capitation and insurance levy to New Zealand Probus clubs and had done so for many years;
(g) In provided insurance cover to Probus clubs in New Zealand.