Author

Simon Jupp

Senior Counsel

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Author

Simon Jupp

Senior Counsel

Read More

31 July 2018

Court of Appeal considers passing-off case

The Court of Appeal has rejected an appeal brought by the National Guild of Removers and Storers against an IPEC decision.

The Court of Appeal has considered what constitutes a misrepresentation for the purposes of passing off.

The IPEC case involved the National Guild of Removers and Storers (NGRS), a UK trade body which represents and provides services to its members in the removal and storage business, and Bee Moved, a removal and storage company which had ceased to be a member of NGRS in 2010. A company stops being a member of NGRS when they do not adhere to specific rules or pay the annual fee. As such, Bee Moved was no longer a member and therefore was expected to remove all references to NGRS on its website and advertising.

In 2016, NGRS claimed that Bee Moved had been passing off in respect to two statements that were published on separate websites. NGRS brought this claim against Bee Moved, and the two shareholders, namely Mr Burns and Mr Sampson.

The first statement was on Bee Moved's own website which declared that consumers should "use a removal company who is a member of the National Guild of Removers and Storers." This statement amounted to an actionable misrepresentation. The second statement, however, was published on an independent website 'Really Moving' which stated that Bee Moved was a "Member of NGRS" in its directory listing. The IPEC judge held that the statement did not amount to a misrepresentation and subsequently passing off. NGRS challenged this on appeal.

There were two significant questions being considered in the appeal. Firstly, whether the second statement was, in fact, able to amount to a misrepresentation, and secondly, whether the oral evidence given by Bee Moved that they had no prior knowledge of the listing was inaccurate and if NGRS could produce further evidence to rebut this.

In respect of the first argument, the Court of Appeal upheld the IPEC decision in 2016 that the second statement was not a misrepresentation. This was on the basis that Bee Moved, and their two shareholders, could not be responsible for the statement since they had not made the statement and had no prior knowledge of the Really Moving Advert or had intended it to be there. Mr Sampson even stated that he had logged onto the Really Moving site and removed any accessible reference to Bee Moved being a member of NGRS before the membership ended. Even when they became aware of the statement, they had contacted Really Moving who had said that they had experienced a problem with their site crashing and reverting to an earlier version. The appeal was dismissed on account of this argument since the Court of Appeal decided that Bee Moved could not be responsible for a statement that they had not made.

The Court of Appeal further clarified that it was not a question of intention or knowledge of misrepresentation, but rather the 'real question' was simply whether the misrepresentation could be said to have been made by the company. Expanding on this, the Court of Appeal formed the view that a claim for passing off in respect to a misrepresentation made by another independent company would not be successful unless they had implied their consent to the statement being made or had a relationship with this other company. If Bee Moved had found out about the statement before and subsequently had asked Really Moving to take the advert down but they had refused to do so, Bee Moved would have remained primarily liable forever which the court stated 'could not be right.'

The second question that was considered was whether NGRS could bring more evidence to the case. It argued that the previous decision had inaccurately accepted the oral evidence of Mr Sampson that he had not known about the wording on their site. The court approached this with caution. The Court of Appeal held that it was not appropriate to admit new evidence. If they did this then there would be a retrial which would inevitably delay the process and be of substantial cost to both companies. This would not be in line with the overriding objective. In light of this, the second argument was rejected and the new evidence was refused by the court.

Case Ref: (2018) EWCA 1302

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