OUTER HOUSE, COURT OF SESSION

 

[2008] CSOH 46

 

A123/08

 

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD MATTHEWS

 

in the cause

 

WISE PROPERTY CARE LIMITED

 

Pursuers;

 

against

 

(FIRST) WHITE THOMSON PRESERVATION LIMITED, (SECOND) WHITE THOMSON PRESERVATION (NORTHERN) LIMITED and (THIRD) EWAN MACGREGOR WHITE

 

Defenders:

 

 

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Pursuer: Delibegović-Broome; Maclay Murray and Spens

Defenders: Logan; Drummond Miller LLP

 

20 March 2008

 

[1] This is an action of passing off. It called before me on 4 March 2008 on the motion of the defenders to recall an interim interdict granted before calling by Lord Macphail on 26 February 2008. The terms of the interlocutor were as follows:

"The Lord Ordinary, having heard Counsel on the unopposed motion of the Pursuers, before calling, no caveat having been lodged, ad interim interdicts the Defenders or any of them, whether acting by themselves, their agents, employees or anyone acting on their behalf or under their instruction from passing off as those of the Pursuers any service or business provided by the Defenders and in particular by trading or carrying on business under or using in their brochures, business cards, stationery, promotional material and signage or in any other manner in connection therewith (including but not limited to any use on the internet) the names 'White', 'White Thomson', 'White Preservation', 'White Thomson Preservation' and 'White Thomson Preservation (Northern)' or any other word or combination of words colourably similar thereto and likely to cause confusion with the business of the Pursuers trading as 'White Preservation, a division of Wise Property Care Limited'."

[2] Mr Logan, who appeared for the defenders, drew my attention to defences which had been lodged as well as to two inventories of productions for the defenders.

[3] There was also an inventory of productions for the pursuers to which reference was in due course made by Ms Delibegović-Broome who appeared for them. I refer to them in the plural, although they are a limited company, since this seems more natural. The background is that they are a firm of specialist property surveyors and consultants and their business includes the investigation and treatment of problems such as dry rot, rising damp and woodworm. The pursuers aver that they are one of the leading businesses in that sector in Scotland but this is not admitted.

[4] In or about January 2006 the pursuer acquired the business and assets of a company called White Preservation Limited, which was a well-known property preservation business in the Fife and Kinross area. It is said that the assets acquired included the goodwill of the business and the right to use the name "White Preservation". White Preservation Limited changed its name to Gragav Limited on 13 February 2006 and was dissolved on 24 November 2006 according to the averments of the pursuers.

[5] The pursuers aver that a company controlled by them called Devonside Limited changed its name to White Preservation Limited on 20 February 2006 and the latter company is a wholly owned subsidiary of theirs. It is a dormant company used to preserve the company name "White Preservation" for the benefit of the pursuers. It is averred by the pursuers that the business acquired by them has since January 2006, traded as "White Preservation, a division of Wise Property Care Limited". It is admitted by the defenders that the pursuers trade as such. The turnover of this business is said by the pursuers to have been around г900,000 in 2007 with the projected turnover for 2008 being around г1,070,000. It is also said that the company handles around 560 customer contracts annually and employs 3 surveyors and 9 specialist technicians. The work is said to be predominantly based in the Fife and Kinross area, although it has customers from wider afield who come to it by recommendation. These details are not known and not admitted according to the defenders' averments.

[6] There is a dispute between the parties as to the precise history of White Preservation Limited.

[7] For present purposes it is sufficient to note, I think, that the third defender's father, Thomas White, set up a business in 1976 with a gentleman called Ken Thomson. In the early 80s that business was split into two, namely White Thomson Preservation (Southern) Limited operating in Edinburgh under the guidance of Ken Thomson and White Thomson Preservation (Northern) Limited operating in Fife and Elgin under the guidance of Thomas White.

[8] The Edinburgh operation has ceased trading.

[9] Thomas White's three sons, Gavin White, Grant White and Ewan White, the third defender, joined him in the "Northern" company, with the third defender becoming a director in 1984.

[10] In 2002 the three brothers left the company and set up their own business known as White Preservation Limited. This company traded alongside and in competition with White Thomson Preservation (Northern) Limited.

[11] The pursuers aver that the latter company went out of business in or around December 2003, whereas the defenders say that it continued until 2005 when Thomas White retired. His company was dissolved on 22 October 2005.

[12] It appears that both companies had traded in competition with each other until the "Northern" company went out of business.

[13] The pursuers aver that White Preservation Limited attracted a significant amount of business formerly done by the "Northern" company and that when the latter went out of business the former was perceived by the market both as a building preservation business in its own right and as a successor to the business of the latter.

[14] It is averred by the defenders that White Preservation Limited never acquired the "Northern" company or any of its assets and also refused to accept its liabilities. White Preservation Limited refused to take on any timber preservation treatment guarantees which had been granted by the "Northern" company. All of the introducers in the market were aware that that was so and knew that White Preservation Limited was not a successor to the "Northern" company.

[15] In or about July 2004 the third defender's shares in White Preservation Limited were transferred to his brothers.

[16] The pursuers aver that from 2002 until the business was sold in 2006 the remaining brothers, Gavin and Grant White, worked hard on building up the goodwill and the business of White Preservation Limited and that they remained in that business as employees of the pursuers after it was sold. It is said that the business has gone from strength to strength and is a well-known business in the Fife and Kinross area.

[17] The averments about goodwill are not admitted and it is pointed out by the defenders that Grant White left the business shortly after the sale and is employed elsewhere. That does not matter for present purposes.

[18] It is averred by the pursuers that due to the early history of White Preservation Limited, customers often refer to it not just as White Preservation but still also as White Thomson Preservation and White Thomson.

[19] That averment is denied. It is averred by the defenders that the pursuers have no right, title or ownership of the names "White Thomson Preservation" or "White Thomson".

[20] In or about October 2007 the third defender set up the first defender and in or about January 2008 he set up the second defender. He is the only director of these companies.

[21] Mr Logan explained to me that the third defender was simply set up to protect the name and did not trade. The first and third defenders were therefore the real defenders in the action.

[22] The first defenders began trading in or about January 2008 and they trade inter alia in Kinross and Dunfermline.

[23] The third defender's business card is produced as 7/12 of process. It shows the first and third defender's names and indicates that they are consultants and contractors in woodworm, dry rot and rising damp. It gives telephone numbers in Kinross and Dunfermline as well as a mobile number and the third defender's email address. It also refers to the first defenders as having been originally established in 1976 and contains a logo which is the same as that used by White Thomson Preservation (Northern) Limited. A number of White Thomson Preservation Limited documents are also produced which have the same general layout.

[24] A business card for one of the surveyors employed by the pursuers is produced along with a sample document.

[25] There is no physical resemblance between the documentation of the parties.

[26] I will deal with the remaining averments which are concerned with the substantial dispute between the parties and the pursuers' apprehended loss when I consider the submissions made on each side of the bar.

[27] The broad thrust of the pursuers' case is that the defenders have been offering their services in a way which is calculated to cause customers and prospective customers to believe that their services are those which will be provided by the pursuers. In other words they are passing off their business as that of the pursuers.

[28] They point to a number of instances which they say indicates customer confusion, and again I will deal with these in due course. The broad position for the defenders is that they are the effective successors of White Thomson Preservation (Northern) Limited. They took on the responsibility for their guarantees as is known to the various introducers and the third defender is entitled to use the name White. He is also entitled to use the names White, White Thomson and White Thomson Preservation (Northern) Limited. White is his own name and the pursuers have never traded under the other names.

[29] It is denied that there was any question of passing off. It is averred that the pursuers are likely to suffer a loss of goodwill and trade as a result of the activities of the defenders, but it is said that that is because the parties are in competition and the pursuers have no right to prevent that.

[30] It was against that broad background that the submissions of counsel were made.

 

Submissions for the defenders
[31] Mr Logan indicated at the outset that the third named defender undertook not to trade as White Preservation.

[32] He was the owner of the domain name whitethomson.co.uk and he had been stopped from using that as well, because of the interim interdict.

[33] He submitted that the pursuer had no right to the names White Thomson, White Thomson Preservation or White Thomson Preservation (Northern) Limited. These names had nothing to do with their business and the use of them did not amount to passing off. Mr White was prevented at the moment from using his own name.

[34] Mr Logan said that Ewan White had been in the business in Fife for over 20 years through White Thomson Preservation Limited, White Thomson Preservation (Northern) Limited and White Preservation Limited and he had also had a connection with another preservation firm by the name of Richardson and Starling (Northern) Limited. He was not therefore someone who was coming into an area where he had no contacts or reputation of his own. The timber preservation market was an unusual one. Most of its clients were introduced through intermediaries, principally solicitors, surveyors and estate agents. The key market consisted of the intermediaries and most of them had known the third defender for many years.

[35] Mr Logan drew my attention to the case of Dunlop Pneumatic Tyre Company Limited v Dunlop Motor Company Limited (1906) 8 F. 1146, and in particular to the Opinion of Lord Kyllachy starting at page 1158.

[36] His Lordship was there criticising the assumption that the pursuers had some right to the name Dunlop because they were trading under it. They had no such ownership.

[37] Lord Kyllachy approached the issue on the basis that he accepted that a number of people would be confused. That, however, was not enough. As his Lordship put it at page 1160:

"But the question really is, whether the average citizen of Kilmarnock, or perhaps rather such average citizen proposing to purchase or hire a motor car, would be likely to be deceived or even confused in the way supposed."

His Lordship went on as follows:

"It remains, however, to consider whether the complainers have any right to protection against the respondents' use of the name 'Dunlop' in connection with the sale of articles - pneumatic tyres etc., and the like - in which the complainers actually deal. And it is no doubt true that to some extent both parties appear to deal in tyres and other accessories of motor vehicles, the complainers doing so as they did during the subsistence of the Dunlop patents, and the respondents doing so as they did from 1898 to 1904 when they dealt both in cycles and motors under the name of R & J F Dunlop. As to this, however, it has, in the first place, to be kept in mind (at least as regards tyres, the articles mainly in question) that tyres, whether pneumatic or solid, are always, or almost always, what are called proprietary goods - goods that is to say, sold under the name of the makers or patentees, and, as a rule, stamped with a trade-mark, or at least with some name or device."

[38] At page 1161 his Lordship said the following:

"Finally - and this is an observation which applies to all the minor accessories in which both parties (the respondents mainly in connection with their repairing business) to a certain extent deal - the complainers have not proved that they, any more than the respondents, have acquired an exclusive right in connection with the sale of those articles to the use of the name Dunlop. Nor have the proved that the name in question has any special reputation or special value in connection with such articles."

[39] Mr Logan submitted that there was nothing distinctive about the name or the services of the pursuer. They were a large company, but there was nothing unique about their services that was entitled to protection.

[40] Lord Kyllachy went on to observe at page 1161 that the law had not

"gone the length the debarring any merchant or manufacturer from selling his goods under his own name, unless there has been, in addition to the use of that name, some overt act or course of conduct plainly indicative of fraud - that is to say, of dishonest effort to pass off his own goods as the goods of another."

Mr Logan submitted that fraud had to be very specifically averred and that had not happened in the instant case. When someone was trading under the name of a company which included his own name, unless there was a fraud or deliberate deception he could not be stopped from so doing. In these circumstances the interdict granted was inept.

[41] The House of Lords' decision in Dunlop was at 1907 S.C. (H.L.) 15 and Mr Logan however drew my attention to the speech of the Lord Chancellor at page 15, where he said the following:

"The real complaint in this case was as to the use of the name 'Dunlop'. That name is the true name of the two brothers who got up the respondent company. I can see very little proof that anyone was misled by its use and I can see no proof that any article was bought by anyone from the respondents in the belief that they were a branch of the appellant company. The two companies do not, to any considerable extent, in fact deal in the same articles, and I see no ground for thinking that the little repairing business in Kilmarnock does or can do any unlawful harm to the appellant company."

[42] Mr Logan agreed with me that the circumstances of the current case are somewhat different in that other parties dealt in the same area, namely timber preservation.

[43] Lord James of Hereford said the following in his speech at page 16:

"Now, in what does the deception consist, and who were the persons deceived? The complainers have no claim to the exclusive use of the name Dunlop. It is a common name in Scotland. The respondents had traded as R & J F Dunlop. The appellants have chosen to announce themselves as the Pneumatic Tyre Company preceded by the name Dunlop, and their case seems to be that, having done so, they shut out persons named Dunlop from employing that name in connection with a company at all similar in object to the tyre company. I agree that the objects of the two companies need not be absolutely identical in order to entitle the complainers to relief, but there must be great similarity. In this case I do not think that the measure of similarity established is sufficient, either in the name employed or in the objects of the trade sought to be carried on."

[44] He then went on to discuss the question, who would be deceived by the name used by the respondents? It appeared to be admitted that an ordinary business person would not be misled but it was alleged that the unwary would. He adopted the judgment of Lord Lowe in the Division where he said, inter alia:

"I do not think that the respondents are liable to have their business practically stopped unless they changed their name simply because a thoughtless person might unwarrantably jump to the conclusion that they were connected with the complainers."

[45] In Mr Logan's submission the test really was whether confusion would be likely to be caused to people if they really thought about the matter.

[46] He then referred to the case of Phones 4U Limited v Phone4U.Co.Uk.Internet Limited [2007] R.P.C. 5.

[47] I do not intend to go into the details of this case but Mr Logan referred me firstly to paragraph 21 of Jacob L.J.'s judgment, where he said the following:

"In this discussion of 'deception/confusion' it should be remembered that there are cases where what at first sight may look like deception and indeed will involve deception, is nonetheless justified in law. I have in mind cases of honest concurrent use and very descriptive marks. Sometimes such cases are described as 'mere confusion' but they are not really - they are cases of tolerated deception or a tolerated level of deception."

Paragraphs 22 and 23 of that judgment are to the following effect:

"An example of the former is the old case of Dent v Turpin (1861) 2 J & H 139. Father Dent had two clock shops, one in the City, the other in the West End. He bequeathed one to each son - which resulted in two clock businesses each called Dent. Neither could stop the other; each could stop a third party (a villain rather appropriately named Turpin) from using 'Dent' for such a business. A member of the public who only knew of one of the two businesses would assume that the other was part of it - he would be deceived. Yet passing off would not lie for one son against the other because of the positive right of the other business. However it would lie against the third party usurper.

[48] An example of the latter is Office Cleaning Services Limited v Westminster Window & General Cleaners Limited (1946) 63 R.P.C. 39. The differences between "Office Cleaning Services Limited" and "Office Cleaning Association," even though the former was well-known, was held to be enough to avoid passing off. Lord Simmonds said:

"Where a trader adopts words in common use for his trade name, some risk of confusion is inevitable. But that risk must be run unless the first user is allowed unfairly to monopolise the words. The Court will accept comparatively small differences as sufficient to avert confusion. A greater degree of discrimination may fairly be expected from the public where a trade name consists wholly or in part of words descriptive of the articles to be sold or the services to be rendered."

[49] In short, therefore, where the "badge" of the plaintiff is descriptive, cases of "mere confusion" caused by the use of a very similar description will not count. A certain amount of deception is to be tolerated for policy reasons - one calls it "mere confusion".

[50] Mr Logan submitted that the facts of the current case were similar to those in Dent.

[51] He then drew my attention to paragraphs 9 and 10 of Jacob L.J.'s judgment, where he referred to the definition of goodwill given by Lord Macnaughton in Inland Revenue Commissioners v Muller & Co's Magazine Limited [1901] A.C. 217 at 223 to the following effect:

"What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start."

[52] Paragraph 10 went on to quote from the leading speech of Lord Oliver in the case of Reckitt & Colman Products Limited v Borden Inc [1990] 1 W.L.R. 491 (the Jif Lemon case) where he summarised the law in this way at pages 499D - H:

"It has been observed more than once that the questions which arise are, in general, questions of fact ... The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, you must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labelling a packaging) under which his particular goods or services are offered to the public, such that the get up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Second, he must demonstrate a misrepresentation by the defender to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely on a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Third, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."

[53] The pursuers therefore had to prove that they had goodwill in the name which was likely to be damaged by deception.

[54] Paragraphs 16 to 19 of the judgment are to the following effect:

"The next point of passing off law to consider is misrepresentation. Sometimes a distinction is drawn between 'mere confusion' which is not enough, and 'deception' which is. I described the difference as 'elusive' in Reid Executive plc v Reid Business Information Limited [2004] R.P.C. 40. I said this [111]:

'Once the position strays into misleading a substantial number of people (going from "I wonder if there is a connection" to "I assume there is a connection") there will be passing off, whether the use is as a business name or a trademark on goods.'

This of course is a question of degree - there will be some mere wonderers and some assumers - there will normally (see below) be passing off if there is a substantial number of the latter even if there is also a substantial number of the former.

The current (2005) edition of Kerly contains a discussion of the distinction at paragraphs 15-043 to 15-045. It is suggested that:

'The real distinction between mere confusion and deception lies in the causative effects. Mere confusion has no causative effect (other than to confuse lawyers and their clients) whereas, if in answer to the question: "What moves the public to buy?", the insignia complained of is identified, then it is a case of deception.'

Although correct as far as it goes, I do not endorse that as a complete statement of the position. Clearly if the public are induced to buy by mistaking the insignia of B for that which they know to be that of A, there is deception. But there are other cases too - for instance those in the Buttercup case. A more complete test would be whether what is said to be deception rather than mere confusion is really likely to be damaging to the claimant's goodwill or divert trade from him. I emphasise the word 'really'."

Mr Logan also emphasised that word.

[55] He said that the test, when one was looking for a prima facie case, was quite a high one. It was not enough for there simply to be a possibility of confusion. There must be a genuine possibility and it must involve a significant impact. The defenders were running a perfectly proper business and were entitled to do so. Mr White had taken out proper insurances and the requirements of trade associations and for the court to interfere there had to be something very compelling to stop him. The pursuers in this case did not come close.

[56] All that the pursuers offered in this case were a few instances of alleged confusion.

[57] I was reminded that there was no interdict sought against the use of the word "preservation" per se and that was properly the case. That was merely descriptive of the services offered by both companies.

[58] As far as the facts were concerned, Mr Logan said there was not a great deal between the parties.

[59] I have already dealt in some detail with the background and I do not think I need cover this again.

[60] There was no averment by the pursuers that there was any connection between White Preservation Limited and White Thomson Preservation (Northern) Limited other than the suggestion that the former were perceived by the market as a successor to the latter.

[61] That was not the case, but matters went further than that. When White Thomson Preservation (Northern) Limited ceased to trade, their guarantees effectively died with them. There was another scheme under which these guarantees could be honoured, run by Guarantee Protection Insurance Limited.

[62] The pursuers had been asked if they would honour the guarantees of the defunct company, but they had refused to do so. Mr White's company on the other hand had accepted that responsibility as was shown by the emails contained in 7/11 of process.

[63] That showed a clear distinction between the two companies.

[64] Mr Logan said that he was not suggesting that Mr White was a saint. He had a clear business strategy. The introducers had been delighted to learn that his company would take over the guarantees and that had created a lot of goodwill. He had designed his business cards and documentation etc., to look in every way as much like those of the old White Thomson business as possible. As indicated already, the get-up on the documents was different from that employed by the pursuers.

[65] The reference to the establishment in 1976 was made because that was when the original White Thomson Preservation Limited was incorporated. It was Mr White's company which was the true successor of that company.

[66] The companies admittedly traded in the same general area but a person who was confused would have had to be determined to be so.

[67] Mr Logan then turned to the specific averments of confusion set out in Article 13 of condescendence. 13c averred that the appearance of the first defender in the area of building preservation work in Fife and Kinross prompted Mr John Haxton of Messrs Ross & Connell, Solicitors in Dunfermline and Ms Julie Craigie of Andrew Price, Solicitors in Kirkcaldy to enquire of Mr Gavin White of the pursuers whether he was going into business with the third defender. Referrals from other professional advisers are a critical source of business for the pursuers.

[68] Mr Logan referred to an affidavit from a Hugh Gerard Short, a solicitor and a senior partner of Ross & Connell. He deponed that he had known Ewan White for years and generally that he was aware which company was which.

[69] An affidavit from Julie Craigie indicated inter alia that she did not make any enquiry of Gavin White about whether he was going into business with his brother. She had a conversation with Grant White on or around 14 January 2008. She had become aware that Ewan White was going into business and simply asked Grant White if he was doing so on his own or with Grant White and/or Gavin White. She was wondering this simply because she had learned that the brothers were now on good terms again, having previously fallen out for a few years.

[70] In relation to 13a and 13b it appeared that the pursuers had been contacted by people who were really wishing to engage the defenders. In these circumstances, the pursuers could hardly complain of suffering any loss.

[71] Article 15 of condescendence made reference to a report by a firm of professional investigators named Grant & McMurtrie. That was said to show, amongst other things, that the third defender claimed to have a mail drop facility at the pursuers' premises and that the first defenders' receptionist claimed that the first defenders had been established since the 1970s. As far as the second point was concerned, Mr Logan said that the report indicated that the receptionist had confirmed that they were two separate companies. In relation to the first, he referred to the transcript of a telephone conversation referred to in the report. While not accepting that the transcript was necessarily accurate, he was prepared to deal with it on its terms. His position broadly was that Mr White had referred to his company as White Thomson on two occasions, but had then realised that something was afoot and simply played along, assuming that an investigator was involved.

[72] One particular difficulty the third defender had was that he was afraid of answering the telephone in his own name in case that would render him guilty of contempt of court.

[73] For all the reasons he had gone into he submitted that the pursuers did not have a prima facie case. Apart from anything else, their name was White Preservation Limited while the defenders operated under the name White Thomson Preservation Limited.

[74] If I were against him he submitted that nonetheless the balance of convenience favoured the recall of the interim interdict. Mr White had set up a new business. He had incurred considerable costs and had accepted guarantees. He had taken advantage of materials used by the old company in the past. All that effort and expenditure would be wasted.

[75] Mr White was a man of means and would be able to meet any damages found due, although the prospect of any finding of liability to pay damages was remote.

[76] As matters stood he would have to cease trading immediately. The claims of the pursuer were highly speculative and the balance of convenience favoured the defenders.

 

Submissions for the pursuers
[77] In the first place counsel submitted that this case was not about who owned the goodwill, if any, in White Thomson Preservation Limited or White Thomson Preservation (Northern) Limited. She submitted that the pursuers had established a prima facie case and that there were reasonable prospects of success. Reasonable apprehension of injury would suffice.

[78] There were three elements which she had to prove, namely goodwill, misrepresentation in the relevant sense and damage or the apprehension of it.

[79] The authorities showed that a misrepresentation did not have to be intentional. It really meant the causing of confusion or a realistic foreseeability of that happening. In addition the use of any name which was likely to be confused with the established name of another was actionable per se.

[80] Damage did not only consist in trade diversion. There would be damage if the pursuers' business was wrongly associated with another's.

[81] She submitted that the case of Dunlop, to which I have referred, was a decision on its own facts after proof.

[82] In the current case we were discussing the question of interim interdict, the parties were involved in the same field and in any event the law had not remained static.

[83] She referred me to the case of William Grant & Sons Limited v Glen Catrine Bonded Warehouse Limited 2001 S.C. 901.

[84] Before turning to the Inner House decision, however, she examined the opinion of Lord Cameron of Lochbroom, dated 19 February 1999 which was not reported.

[85] The cases of Erven Warnink Besloten Vennotschap etc. v J Townend & Sons (Hull) Limited etc. 1979 A.C. 731 (the Advocaat case) and the Reckitt & Colman case were discussed by his Lordship and I do not think I need repeat what was said.

[86] As far as goodwill was concerned I was reminded of the averments as to turnover. Goodwill had been adequately averred in her submission.

[87] She reminded me that a misrepresentation did not require to be intentional and she then turned to pages 68 and 69 of his Lordship's opinion, dealing with misrepresentation and confusion.

[88] His Lordship said the following:

"For the pursuers it was submitted that the law was clear. In the first place, an intention to deceive was not a necessary component of passing off, although if such an intention was established by evidence, it could assist the court in reaching a conclusion favourable to the pursuers on the issue of whether there had been either actual or likely confusion and damage."

[89] In this regard reference was made to a number of cases and to the dicta therein. These were Cellular Clothing Company v Maxton & Murray 1 F. (H.L.) 29, Chill Foods (Scotland) Limited v Cool Foods Limited 1977 S.L.T. 38, Stringfellows v McCain Foods (GB) Limited 1984 R.P.C. 501 and Parker Knoll Limited v Knoll International Limited [1962] R.P.C. (265). From these cases I selected two of the dicta referred to. In his speech in the Cellular Clothing Company case, at p. 31, Lord Halsbury L.C. referred to the proposition that no man has a right to sell his goods or say they were goods of another man. In relation to an argument presented upon that matter he said this:

"The only observation that I wish to make upon that part of the argument is that it seemed to be assumed that a fraudulent intention was necessary on the part of the person who was using a name in selling his goods in such a way as to lead people to believe that they were the goods of another person. That seems to me to be inconsistent with the decision given something like sixty years ago by Lord Cottenham, who goes out of his way to say very emphatically that that is not at all necessary in order to constitute a right to claim protection against the unlawful use of words of things - I say things, because it is to be observed that not only words but things, such as the nature of the wrapper; the mode in which the goods are made up, and so on, may go to make up a false representation; but it is not necessary to establish fraudulent intention in order to claim the intervention of the court."

[90] Again in his speech in the Parker Knoll case at page 278 Lord Morris referred to the straightforward principle that trading must not only be honest but must not even unintentionally be unfair. He pointed out that that case was concerned with the selling of goods "under a mark or name" and that the fear of the respondents was that if the appellants were allowed to sell furniture in the way they desired to do, a great many people would buy furniture in the belief that they were buying the respondents' furniture whereas they would in reality be buying the appellants' furniture. He went on to set out a number of propositions in the following terms, which seem apposite to the present case:

"1. No one has any right to represent his goods as being the goods of someone else ...

2. The court will restrain the making of any such representation even though it is not made fraudulently ... If A represents his goods as being the goods of B, then B is likely to suffer and is entitled to be protected whether A makes a representation innocently or fraudulently. If there is room for doubt as to whether A has represented his goods as the goods of B, then if there is evidence that A deliberately intended to and set out to make such a representation that evidence will in some cases assist to prove that there was in fact such a representation.

3. A name may be used as a mark under which a person's goods are sold so that the name comes to denote goods made by that person and not the goods made by anyone else or even made by anyone else who has the same name ... The name ... will have acquired a secondary meaning.

4. If follows that someone may, even by using his own name and using it innocently, make a representation that is untrue, that is a representation that goods which in fact are his are the goods of someone else ...

5. It is a question of fact ... whether it is proved that a name ... has acquired a secondary meaning so that it denotes or has come to mean goods made by a particular person and not goods made by any other person even though such person may have the same name.

6. If it is proved on behalf of a plaintiff that a name ... has acquired such a secondary meaning, then it is a question for the court whether a defendant, whatever may be his intention, is so describing his goods that there is a likelihood that a substantial section of the purchasing public will be misled into believing that his goods are the goods of the plaintiff ... In arriving at a decision the court must not surrender in favour of any witness its own independent judgment ...".

[91] Once a distinctive association between a name and a trader is proved, the question of course then becomes one whether the use of the same name by another is calculated to "mislead incautious purchasers" or to "deceive the unwary" to use phrases which appeared in the speeches of Lord Blackburn in Johnston & Company v Orr Ewing 1882 7 A.C. 219 and by Lord President Dunedin in Charles P Kinnell & Company Limited v A Ballantyne & Sons 1909 S.C. 246.

[92] In approaching this question it appears to me that regard must be had to the nature of the market and hence of the purchasers within it in which the respective goods appear ...".

[93] At page 70 his Lordship said the following:

"The question in the end of the day becomes that postulated by Lord Diplock in the Advocaat case, namely, whether the use of the word, name or mark by the other trader is calculated to injure the business or goodwill of the first trader in the sense that this is a reasonably foreseeable consequence. That question is an objective one which the court requires to answer having regard to the whole evidence led before it."

At page 71 he said the following:

"It was further submitted that there is no doubt on the authorities that the use of any name which is likely to be confused with the established name of another will be actionable per se, whether design or get up are also copied or not. Provided that the necessary element of confusion is satisfied, even bona fide use on goods of a genuine personal or geographical name could be restrained. I consider that this submission is well founded on the authorities cited to me."

[94] Counsel repeated then that one needed to establish goodwill, that an intention to deceive was not necessary, that even if using one's own name innocently one could be making a misrepresentation which was challengeable and there was no need for there to be any copying of designs or get up.

[95] The question to what extent a different get up or business card or the like affected the issue was one of fact. People might not necessarily have regard to business cards when making telephone calls and the like so the style of cards might be irrelevant.

[96] I was reminded that the decision in the Grant case was reached after proof.

[97] My attention was drawn to paragraph 50 of the Lord President's opinion at page 925 of the report to the following effect:

"The present case relates to passing off - a delict which correspondents to the tort of passing off in English law. As the facts of the present case illustrate, moreover, passing off may arise out of activities occurring in different parts of the United Kingdom and, indeed, far beyond. It would, therefore, be unfortunate if the result which I have reached on the basis of the Scottish authorities were out of line with the result that would be reached, on similar facts, by the English courts. Happily, in the light of the authorities to which we were referred, I see no reason to believe that there would be any significant difference."

[98] In the Grant case the pursuers had not sought interim interdict and that was referred to in paragraph 59 of the Lord President's opinion. In paragraph 60 he went on to indicate his view that the difficulty of quantifying the damage which the pursuers might suffer as a result of the defenders' passing off, was in itself a powerful reason for saying that damages were not the most appropriate remedy in a case like this. It was an equally powerful indicator that the remedy of choice was interdict.

[99] It was irrelevant that the potential interdict would cause actual loss and damage to the defenders. This was dealt with at paragraph 64.

[100] Of particular significance though was paragraph 79, which was to the following effect:

"I consider that the submissions on behalf of the pursuers are to be preferred. The starting point is the statement of Warrington L.J., as he then was, in Ewing v Buttercup Margarine Co Limited at p. 13 where he said that the plaintiff 'has proved that the defendants have adopted such a name as may lead people who have dealings with the plaintiff to believe that the defendants' business is a branch of or associated with the plaintiff's business. To induce the belief that my business is a branch of another man's business may do that other man damage in various ways. The quality of goods I sell, the kind of business I do, the credit or otherwise which I enjoy are all things which may injure the other man who is assumed wrongly to be associated with me.'

Here, by parity of reasoning, the pursuers may suffer damage in a variety of ways if customers or suppliers are misled into thinking that the defenders' business is associated with the pursuers'. That may be particularly the case where, as here, the pursuers aim to project a particular image of their business which is very different from that of the defenders' business. In that situation the goodwill attaching to the pursuers' business is likely to be damaged. Since the Lord Ordinary had accepted that confusion has occurred, I consider that it would have been appropriate for him to grant interdict in terms of the first conclusion."

[101] The Lord Ordinary had granted interdict in respect of the defenders' products but refused it in respect of their business.

[102] Counsel then referred to the Parker Knoll case to which I have already drawn attention.

[103] The rubric suggests that Lord Guest approved and applied the Dunlop case but in fact at page 287 he said the following:

"I should like to reserve my opinion upon the question which does not arise for decision in this case as to whether a person can be restrained from trading under his own name, where this may lead to confusion with another name. I should add that Scots law upon the general question does not, in my opinion, differ in any respect from English law, despite the opinion expressed by Lord Kyllachy in Dunlop Pneumatic Tyre Company Limited v Dunlop Motor Co Limited. The opinion which he expressed that the law has never gone the length of preventing a man from selling goods under his own name unless there is fraud was obiter, the decision of the court being that on the facts there was no proof of passing off."

[104] As I read that case, their Lordships appeared to distinguish between the carrying on of business in one's own name and the marking of goods with a person's own name. Lord Denning drew no distinction between the two but the speech of Lord Hodgson in particular at page 284 suggests that the distinction is still operative.

[105] Counsel also referred to the case of Sir Robert McAlpine Limited v Alfred McAlpine plc [2004] R.P.C. 36.

[106] In that case both the claimant and the defendant were well known construction companies. The family business had been set up by Robert (later Sir Robert) McAlpine and in 1935 it was split, essentially on geographical lines. One company always had the word Alfred in its title and the other always had the word Robert.

[107] In 2001 the defendants began a re-branding exercise and dropped the word Alfred from the trading company.

[108] It was common ground that both parties shared the goodwill in the name "McAlpine".

[109] The claimants' case was that by using the name McAlpine without a distinguishing feature there was a misrepresentation to the effect that the services provided or offered by the defendant were those of or associated with the claimant, or alternatively it was a misrepresentation that there was only one owner of the reputation and goodwill attaching to the name McAlpine.

[110] The claimant did not assert that it was likely to suffer damage by divergence of business because by the time contracts were signed a customer was likely to be well enough informed to know that he was dealing with the defendant and not the claimant. It argued that it was likely to suffer damage through loss of business because of an erroneous association with the defendant in the mind of a customer who had views about McAlpine but who was not sufficiently well informed to know that there were two and that his views in fact related to the defendant. The defendant might sustain some bad publicity which was in fact attributed to McAlpine which rubbed off on a general way onto the claimant and the defendant might get what he would not otherwise get because of the exploitation of the joint reputation built into the name.

[111] It was held by Mann J that passing off had been established.

[112] In his judgment he quoted the speech of Lord Oliver in the Jif Lemon case to which I have already referred.

[113] The law was generally agreed between the parties, but he made a number of observations on it. At paragraphs 19 and 20 he said the following:

"It is not necessary to go so far as to suggest that one business is that of another. It is sufficient, for purposes of passing off, if there is a misrepresentation that one business is associated with another. In Clock Ltd v Clock House Hotel Ltd (1936) 53 R.P.C. 269 at page 275 Romer L.J. said:

'The principle is this, that no man is entitled to carry on his business in such a way or by such a name as to lead to the belief that he is carrying on the business of another man or to lead to the belief the business which he is carrying on has any connection with the business carried on by the other man.'

When it comes to considering damage, the law is not so naяve as to confine the damages to directly provable losses of sales or 'direct sale for sale substitution'. The law recognises that damage from wrongful association can be wider than that."

[114] He quoted from Ewing v Buttercup Margarine Limited and went on:

"In so saying, he was not limiting the kinds of potential damage to those listed by him. Rather, he was indicating that the subtleties of the effect of passing off extend into effects that are more subtle than merely sales lost to a passing off competitor."

[115] At paragraph 39 he indicated that he accepted that most professionals in the market knew that there were two McAlpine companies and that those who are actually dealing with either of them would by and large know with whom they were dealing once they started to deal in earnest. He also accepted that in some contexts and to many people it would be appreciated that McAlpine or McAlpines would be correctly understood to mean Alfred. None of that, however, detracted from the fact that Alfred was seeking to use a word which was frequently associated with and taken to denote Robert and use it to promote itself.

[116] He continued:

"The fact that some are not misled does not prevent there being a misrepresentation and a person who corrects himself or is corrected by others has still been misrepresented to."

[117] As far as damage was concerned, counsel referred to paragraphs 44 and 45 of the judgment, which are to the following effect:

"I therefore have to weigh and assess the risks of damage relied on by Robert in the light of the evidence. First, there is the question of the level of risk of a tarnishing of the McAlpine name. This is impossible to quantify, but it is a possibility. With one exception, no witness suggests that Alfred enjoyed anything other than a good current reputation in terms of its work, payment record, creditworthiness, health and safety matters and all other things that would establish a good business reputation ... There were no positive indications that its good reputation was about to change. However, that is not entirely the point. There is a risk. A number of things might plausibly happen. Alfred's business reputation in one or more of the areas might change; or its reputation might be affected by some engineering misfortune which gains some publicity. Since Alfred is involved in railway maintenance, views were expressed by one witness that accidents in that area might affect its reputation, though it was pointed out that Alfred's railway maintenance activities related to such fixtures as embankments, and not to such things as the track and signalling, where reputations might be said to be more vulnerable. Other work was put forward as possibly causing public opprobrium, such as participating in an environmentally sensitive road building project.

I do not think that it can be said that any of these things are probable, but it certainly cannot be said that they are fanciful. They are a real possibility in the modern commercial world. I do not think that Warrington L.J. was insisting in proof of his various items on a balance of probabilities before they could count as damage for the purposes of passing off. It seems to me to be sufficient that there is a real risk that the claimant would be affected by one or more of them, or by similar matters."

[118] I was reminded that this was another case where evidence had been led.

[119] Nothing in the Phones 4U case was in any way in conflict with the principles counsel had enunciated.

[120] She had a number of comments to make on the case nonetheless. Paragraph 6 at page 86 indicated that Phones 4U had an established goodwill in August 1999 and there could not be any realistic use of "Phones 4U.co.uk" albeit innocent, without causing deception.

[121] Paragraph 7 made it plain that the distinction between mere confusion, which was not enough to be a misrepresentation, and deception, which was, could be elusive. It was a question of degree. There could be deception if a person was induced to believe that there was a connection between two businesses.

[122] All she required to do at this stage was establish reasonable prospects of success.

[123] She also drew my attention to paragraph 11 of the rubric at page 86 to the following effect:

"The judge had erred in concluding that the absence of actual instances of deception during over five years side by side user indicated that none had occurred and that the instances relied on by the appellants were instances of mere confusion. He had failed to consider the size of the second respondent's business over this period. The evidence showed that it was exiguous. The judge had also failed to bear in mind that it was seldom the case that all instances of deception came to light because the more perfect the deception the less likely that would be so."

[124] From all these cases counsel drew a number of propositions. Three factors were needed to establish passing off. The first was the existence in the pursuers of goodwill, although there was no need to show any copying of their design or get up. A name could have a secondary meaning. This was the case with White Preservation Limited.

[125] In the second place there was no requirement to show intentional misrepresentation. The question was whether confusion was a reasonably foreseeable consequence of the defenders' actings.

[126] In the third place relevant damage was not just trade divergence. There could be many types of damage caused by passing off.

[127] Counsel then turned to the facts.

[128] She was content to proceed on the basis that White Thomson Preservation (Northern) Limited ceased trading in 2005.

[129] From then until now the pursuers' business had been operating in the market place with no one else operating in the area with a similar name. Whatever had happened to the goodwill of White Thomson Preservation (Northern) Limited, the pursuers had operated for three years. The relevant averments as to goodwill were contained first of all in Article 5.

[130] As I indicated already, their turnover for 2007 was around г900,000 with the projected turnover for 2008 being around г1,070,000. They handled around 560 customer contracts annually and employed 3 surveyors and 9 specialist technicians.

[131] According to Articles 9 and 10 Gavin and Grant White had worked hard on building up the goodwill and the business had grown from strength to strength. It was a well known business in the Fife and Kinross area and it was often referred to not just as White Preservation but still also as White Thomson Preservation and White Thomson. I did not understand her to disagree with the proposition which I put to her that perhaps Thomas White could have sued his sons for passing off when they set up the rival company but in the event that is probably neither here nor there.

[132] As far as misrepresentation in the relevant sense was concerned, Ms Delibegović-Broome referred me to Article 13. While the instances in 13a and 13b were those of people contacting the pursuers instead of the defenders, that did not matter. The difficulty was that the two companies were being falsely associated.

[133] As far as 13c was concerned, the question of confusion was what mattered. As far as Article 15 was concerned the subterfuge employed by the private investigators was something which was commonly employed in the field of passing off because of the nature of it.

[134] The report of the investigators was No.6/9 of process.

[135] It seemed to me that the first taped telephone conversation was only notable for the fact that the receptionist answered it by using the name White Thomson Preservation and later indicated that the company had been established since the 70s.

[136] In the second conversation the telephonist specifically drew a distinction between White Preservation and White Thomson Preservation.

[137] Those circumstances did not appear to be of assistance to the pursuers.

[138] Counsel however drew my attention specifically to the contents of the third conversation, which was with the third defender.

[139] The first few exchanges are as follows:

"Ewan White: Hello.

David Nelson: Hi there, is that White Preservation?

EW: White Thoms ... yes, yes.

DN: White Preservation?

EW: Yes, White Thomson Preservation, yes.

DN: White is that the name?

EW: Yes.

DN: Same company?

EW: Yes.

DN: Right, ok, erm, and is it 22 Viewfield Terrace you are at in Dunfermline?

EW: Eh no, it's 14 Viewfield Terrace.

DN: 14, ok, so is that the same company at 22 or?

EW: (hesitating) No they have a mail drop there.

DN: They have a what sorry?

EH (sic): I have a mail drop at 22.

DN: Ok, alright, so that is your company but it's just a mail address?

EW: Exactly."

[140] There was thereafter a discussion about the cost of a survey.

[141] The submissions for the defender were that he had simply been playing along but counsel asked me to exercise caution in accepting that.

[142] Prima facie this conversation appeared to be of great relevance to the pursuers' case, as I will expand on shortly.

[143] My attention was then drawn to an advertisement in the Kinross Community Council newsletter of March 2008. That consisted of nothing more than a copy of a business card. "White Thomson Preservation Limited" was written on it in block capitals and underneath that was written "Consultants and Contractors". Under that again was "Orig. Est. 1976". Under that, in the middle of the card, was written in block capitals, "Woodworm - Dry Rot - Rising Damp". Under that to the left in block capitals was written "Kinross 01577-842115" and to the right was written in block capitals "Dunfermline 01383-722307". At the bottom in lower case was written "email: sales@whitethomson.co.uk".

[144] This indicated that the defenders were advertising to the general public and not just professionals.

[145] The fact that confusion could arise was shown by the defenders' first inventory of productions. 7/6 of process was described in the inventory as an invoice from Carrick Neill to White Preservation Limited dated 7 February, 4 February and 25 January all 2008. In fact the document was an invoice to White Thomson Preservation Limited.

[146] Articles 16 to 19 of condescendence contained the pursuers' averments about loss. They went further than mere trade diversion.

[147] The fear of unquantifiable damage was a very real one. Counsel urged me to bear in mind that the parties were competing in the same market and it was therefore easier to cause confusion.

[148] As far as the balance of convenience was concerned counsel submitted that it lay firmly with the pursuers. The pursuers were an established business with a significant turnover, a number of employees and valuable contacts. On the other side the defenders had just started trading. They could have called themselves anything but they chose the name White Thomson Preservation.

[149] The pursuers were in a difficult position. In the William Grant case the Lord President had indicated that interdict was the appropriate remedy.

[150] In the circumstances the status quo should be preserved.

[151] It would not be a difficult thing for the defenders to re-brand.

[152] Counsel then turned to look at some of the submissions made by Mr Logan.

[153] As far as the Phones 4U case was concerned, she said that the use of the word "really", to which I have already referred, did not mean that there was some higher standard of proof required.

[154] If the pursuers were the fortunate beneficiaries of the goodwill of the older companies, as had been suggested by Mr Logan, then that was neither here nor there. It did not matter who was entitled to the goodwill of the old companies.

[155] It had been suggested by Mr Logan that the terms of the interdict meant that the third defender was afraid to use his own name when answering the phone but counsel submitted that the meaning of the interdict was clear and it was not meant to prevent the third defender from doing so.

 

Response for the defenders
[156] As far as the advertisement was concerned Mr Logan said that the publication was run by the Community Council. The third defender had paid г10 to place an advertisement in January with no idea when it would be published. The funds simply helped the Community Council with their projects and their publications.

[157] As it happens the issue came out after the interim interdict was granted, but there had been no intentional breach.

[158] As far as the Dunlop case was concerned, Mr Logan submitted that it was still good law, although it was admittedly a case on its own facts.

[159] Phones 4U was the most recent case on this issue and he highlighted again the contents of paragraphs 21 and 22.

[160] The complaint in the William Grant case arose from the distinctiveness of the brand name. Where the general public had come to know a particular product by a name, if anyone else made it under the same name there would be confusion.

[161] One could understand distinctiveness applying to whisky and to Parker Knoll chairs, but it was difficult to see how that could apply to a damp proof course.

[162] If all there was was a trading name then we were firmly in the Dunlop territory. As was pointed out in Phones 4U in the paragraphs referred to, there was an accepted or tolerated level of deception.

[163] Ms Delibegović-Broome's position had been that the pursuers were merely trying to protect their goodwill in White Preservation Limited. They were seeking to do that by preventing the defenders from using the name White Thomson Limited. The third defender was in fact trying to take advantage of the benefits flowing from the name White Thomson. He was presenting himself as a successor to an older company.

[164] That did not assist us in dealing with the question whether there was fraud or misrepresentation and Mr Logan accepted that it did not have to be intentional. The matter had to be looked at objectively. One also had to look at the get up. Was there likely to be any misunderstanding or confusion in the minds of the public? Until 2005 it was a fact that there were two companies in the field. The market knew that there were two distinct companies. This was a different situation from that which pertained where one was in place and a new one was set up. Parker Knoll was a well-established company before Knoll International came in, but that was not the factual situation we were dealing with. The fact that there had originally been two companies was something which I had to take into account. It impacted on the knowledge and understanding of the market place and that could be seen in the affidavits.

[165] The averments in Article 13 did not support the pursuers' case. There was no question but that introducers were fully aware of the position.

[166] In relation to the Phones 4U case, he again emphasised the word "really". He said that that meant that there had to be a significant impact. Was there a real risk of damage?

[167] The McAlpine case was also distinguishable. The defenders in that case had originally had a distinct name, but they had removed the distinction. In the current case the defenders had created a distinction by the addition of the word Thomson.

[168] McAlpine had also referred to the question of the market place. Mr Logan submitted that there was a difference between professionals who were simply involved in dealings with a company and those who contacted them in the exercise of a choice to do business with them.

[169] I confess that I found this to be a distinction without a difference.

[170] He accepted that any loss to the defenders was irrelevant if perpetual interdict was under consideration but that did not apply when an interim interdict was being considered and the balance of convenience had to be dealt with.

[171] As far as that aspect was concerned, I was urged to hold that were the interim interdict to remain in place it would not in fact preserve the status quo. Prior to its grant there had been two companies, both offering their services in Fife. Until 26 February the defenders had been trading under the name White Thomson Preservation Limited.

[172] They already employed 4 specialists, but they had had to stop trading.

[173] The pursuers were said to be an established business who might suffer damage. The issue of turnover was overstated. If there was any loss of goodwill or business, it would be at the margins.

[174] The defenders had incurred costs in setting up the business, they had taken on guarantees and fulfilled the requirements of trade organisations. Everything they had done to date would be rendered worthless. Letterheads and cards could be changed, but that was not satisfactory. The important feature for the defenders was that White Thomson Preservation Limited was a name they had taken on deliberately because of its relationship with the name of the old company and to show that White Thomson was back in business. Their loss was an inability to trade in that name and use the goodwill which it had generated.

[175] There was thus clear loss to the defenders but none to the pursuers.

[176] If they were suffering actual loss then they could be compensated by way of damages.

 

Discussion
[177] This was a somewhat lengthy and complicated motion, but at the end of the day it seemed to me that the issues were fairly clear cut.

[178] I have already dealt with the background.

[179] From at least 2005 until 2008 when the third defender set up his companies, the pursuers had traded in the market place under the name White Preservation Limited.

[180] The incorporation of White Thomson Preservation Limited has undoubtedly led to competition in the very same market place.

[181] It seemed to me that in order to succeed in the action of passing off the pursuers required, as did not appear really to be in dispute, to establish that they owned sufficient goodwill, that there was a misrepresentation in the relevant sense and that damage was reasonably to be anticipated.

[182] I had little difficulty in holding that there was a prima facie case that the pursuer had goodwill which they were entitled to protect.

[183] Was there likely to be confusion? It seemed to me on the authorities that this was a question which had to be answered looking at the matter objectively. The pursuers' company is called White Preservation Limited and it operates in the Dunfermline and Kirkcaldy area as well as in St Andrews and Angus.

[184] In particular they have a place of business at 22 Viewfield Terrace, Dunfermline. Whether or not that is a mail drop does not matter. It is an address associated with them.

[185] The defenders White Thomson Preservation Limited operate in the same field from Kinross and Dunfermline. Their address in Dunfermline is 14 Viewfield Terrace.

[186] Right away one can see that there is room for confusion.

[187] It struck me as obvious that even discerning customers might well assume that the business were associated in some way or other.

[188] The pursuers are entitled to prevent such association in the minds of customers in line with the authorities to which I have referred.

[189] I agreed with Ms Delibegović-Broome that loss through diversion of trade is not the only type of damage which may be prevented.

[190] Thus far I do not think that what I have said is particularly controversial or difficult. However, the case of Dunlop as well as the Parker Knoll case and authorities referred to therein, are authority for the view that there is a distinction between applying a name to goods which are sold and operating a business under that name.

[191] If Mr Logan is right then a man may operate a business under his own name, even if it causes confusion, provided he does not do so dishonestly.

[192] Even if the comments of Lord Kyllachy in Dunlop were obiter, which I think they were, can the same be said of the comments of Lord Hodgson at page 284 of the report of the Parker Knoll Limited case?

[193] He referred to the decision of Romer J in Joseph Rodgers & Sons Limited v W.N. Rodgers & Company (1924) 41 R.P.C. 277, 291 where he said this:

"It is the law of this land that no man is entitled to carry on his business in such a way as to represent that it is the business of another, or is in any way connected with the business of another; that is the first proposition. The second proposition is that no man is entitled so to describe or mark his goods as to represent that the goods are the goods of another. To the first proposition there is, I myself think, an exception: a man, in my opinion, is entitled to carry on his business in his own name so long as he does not do anything more than to cause confusion with the business of another, and so long as he does it honestly. It is an exception to the rule which has of necessity been established ... To the second rule, to which I have referred, I think there is no exception at all; that is, that a man is not entitled so to describe his goods as to lead to the belief that they are the goods of somebody else. It is not necessary that there should be an exception to that."

[194] Lord Hodgson went on to say the following:

"The statement of Romer J in Rodgers' case notes the distinction which is drawn between trading under a name and passing off of goods by the use of a name. The distinction noticed by Romer J was accepted as correct by Viscount Simonds in Marengo v Daily Sketch & Sunday Graphic Limited. The exception to the rule in the case of trading under a name is exemplified by authorities such as Turton v Turton (1889) 42 Ch. 128 which was a case of trading, not passing off, in which strong and unqualified language was used upholding the right of persons to use their own names provided they did so honestly. Other cases in the books contain similar language, but with the exception of Lord Greene's observations in Wright's case there is no trace of this exception being applied to cases of passing off of goods in this country."

[195] Lord Morris of Both-y-Guest also referred to the Rodgers' case in his speech. Furthermore, at p.279, he quoted Lord Simonds in the Marengo case (Marengo v Daily Sketch & Sunday Graphic Limited (1948) 65 R.P.C. 242, 251) as follows:

"It is an unassumable general proposition that the interests alike of honest traders and of the public require that the goods of A should not be confused with the goods of B. But that proposition is subject to the qualification that a man must be allowed to trade in his own name and, if some confusion results, that is a lesser evil than that a man should be deprived of what would appear to be a natural and inherent right. But ... it is a fantastic gloss upon this well-established qualification to say that it justifies a trader in placing upon his goods a mark which, however much he may intend it to signify his name, is yet liable to suggest to reasonable men the name of another."

[196] The use of one's own name as a trading name may have different consequences from the use of one's own name on goods, in particular circumstances.

[197] In most cases I would expect that the evidence in favour of passing off would be such that any defence of using one's own name would fall by the wayside because the dishonest intention to cause confusion could readily be inferred.

[198] I do not think that I need to develop the point further at this stage in this case.

[199] In the first place, as Ms Delibegović-Broome pointed out, the name of the offending company is not simply the third defender's own name. It has added to it the word Thomson and the word Preservation Limited. The word Preservation is of course merely descriptive, the word Limited has no significance in the current context and the addition of the word Thomson is a point of distinction.

[200] Nonetheless it is not simply a family name.

[201] In any event I was satisfied that the contents of the telephone conversation with the third named defender provide a prima facie basis for an assertion that he was acting dishonestly and was deliberately fomenting confusion, albeit he may have been led into it.

[202] The averments as to potential loss and damage were in my opinion sufficient also to establish a prima facie case.

[203] In short, therefore, I was satisfied that the pursuers had presented a prima facie case.

[204] I was also satisfied that there were reasonable prospects of success.

[205] That left me with the question of the balance of convenience. On the one hand I was conscious that the maintenance of the interim interdict would effectively stop the defenders in their tracks as they were currently constituted. If they wished to continue in this business then they will have to re-brand. Once they had done that, it might be that there would be little point in their reverting to the White Thomson name in the event that they were ultimately successful. That would mean that the maintenance of the interim interdict would almost be determinative of the issue, other than in relation to damages.

[206] On the other hand I had been told that Mr White was himself well-known in the business and had been for around 20 years. I did not recall any suggestion that he would have any difficulty in establishing contacts if he were to re-brand and whilst there would be a certain amount of inconvenience and expense involved in that it would not present insurmountable difficulties.

[207] If I recalled the interim interdict then in my judgment there was likely to be confusion of the sort which has been averred in Article 13 and that would have an unquantifiable effect on the pursuers' business.

[208] They had been in business, on any view for 3 years, without competition from a similarly named firm. The fact that there had been such competition until 2005 was of no significance in my opinion.

[209] Matters might have been different had the third defender carried on his father's business in a seamless transition, but even then, pace what was said in Phones 4U about the Dent v Turpin case, he would not have been allowed to pass his established business off as being in some way associated with the other one.

[210] It will be seen that the contents of the telephone conversation were of significance in my opinion.

[211] While it would not have been appropriate to form a concluded view in the absence of evidence, the defenders' explanation for what he said, assuming it was accurately recorded, appeared prima facie implausible.

[212] That was not quite an end of the matter though.

[213] There was plainly no intention on the part of the pursuers to prevent the third defender from answering the telephone in his own name and the like.

[214] I could nonetheless understand why that caused him some anxiety.

[215] In the circumstances while I was not prepared to recall the interim interdict I decided that I should attempt to make the position clear.

[216] There were probably a number of ways in which this could have been done, but I decided to follow the lead of the Court of Appeal in the Parker Knoll case which found favour with the House of Lords.

 

Decision
[217] I varied the interim interdict of 26 February 2008 by the addition at the end of the words "provided that this order is not to interfere with any bona fide use by the third defender of his own name as an individual". Quoad ultra the motion to recall the interim interdict was refused.

[218] Needless to say, I was very grateful to both counsel for their diligent researches and presentation of the issues.