This case of Wyatt v Real Estate Agents Authority [2019] NZHC 3291 concerns company names and the Companies Act 1993, powers of the Registrar of Companies (the Registrar) to request name changes, and the meaning of ‘patronage’ for the purposes of the Flags, Emblems, and Names Protection Act 1981 (FENPA).
The appellant in this case, Mr Wyatt, is the director of a company (previously) named ‘Real Estate Authority Ltd’. The respondent, the Real Estate Agents Authority (the REAA), is a statutory entity and a Crown agent under the Crown Entities Act 2004.
In February 2018 Mr Wyatt applied for and received approval of the name ‘Real Estate Authority Ltd’ from the Registrar.
In 2018 the REAA began using the operating name ‘Real Estate Authority’.
In November 2018 the Registrar wrote to Mr Wyatt stating that his company’s name contravened s 14(3)(c)(vi) of FENPA. FENPA prohibits the use of words or statements that claim or imply the patronage of a Government department, such as the REAA. The letter stated that as per s 22(2)(a) of the Companies Act a company name cannot contravene an enactment and Mr Wyatt was therefore required to change his company’s name.
Mr Wyatt appealed to the High Court under s 370 of the Companies Act against the decision of the Registrar requiring the name change. The decision was delivered on 13 December 2019 by Gault J.
Mr Wyatt put forward several submissions. First, Mr Wyatt submitted that a Crown entity cannot have a different operating name unless Parliament permits it and the REAA had made no provision for a different operating name. Mr Wyatt referred to the Latin maxim expressio unius est exclusio alterius to suggest that REAA’s non-referral to an operating name was intentional and therefore exclusionary.
Secondly, Mr Wyatt submitted that the name did not contravene FENPA because it did not imply patronage. Mr Wyatt suggested that patronage refers only to the supply of goods or services to, or carrying out work for, Government departments.
Thirdly and alternatively, Mr Wyatt submitted that the Registrar’s initial approval of the name meant that the name was therefore “expressly authorised by or under any other Act” as per s 14(4)(a) of FENPA.
Mr Broadmore, counsel for the REAA, also put forward a number of submissions. Firstly, that the Crown Entities Act provides that a Crown entity, such as the REAA, may do anything a natural person may do, meaning that they are able to adopt an operating name.
Secondly, that whether a word or statement in a company’s name implies Government entity patronage should be assessed by asking whether the words or statements either claim or imply that the company is supported by, controlled by, or has the protection of, the Government entity. Mr Broadmore submitted that the name ‘Real Estate Authority Ltd’ does claim or imply the support, protection or control of the REAA.
Alternatively, Mr Broadmore submitted that use of the name ‘Real Estate Authority Ltd’ was not expressly authorised under s 22(3) of the Companies Act, and even if it had been the Registrar may direct a company to change its name as per s 24(1).
Mr Broadmore also suggested that the issue of whether the REAA is entitled to use an operating name should not be determined in the appeal.
In his judgment Gault J discusses each of the following points in turn – company names, FENPA, the definition of patronage, operating names, and what expressly authorised means.
Regarding company names, s 22(2)(a) of the Companies Act prevents the Registrar from reserving a name that would contravene an enactment. Section 24(1) entitles the Registrar to direct a company to change its name if the Registrar believes on reasonable grounds that the name should not have been reserved.
The Registrar’s ground for requiring Mr Wyatt to change his company’s name was that the name contravened s 14(3)(c)(vi) of FENPA, which provides that s 14(1) of FENPA applies to any word or statement that claims or implies the patronage of any Government department. In this context Government department includes a Crown agent or Crown entity, such as the REAA.
Patronage is not defined in FENPA. Gault J rejected Mr Wyatt’s submission that patronage only refers to the supply of goods and services. The ordinary meaning of patronage includes support, protection, custom or control. Therefore, a name that claims or implies support, protection, custom or control by a Government department would fall under s 14(3). Gault J’s purposive interpretation finds that patronage means support or custom more in the sense of protection or control. Gault J considered that s 14(3) was intended to extend to impersonating or claiming to be a Government entity. The question to be determined objectively in each case is whether the word or statement used claims or implies patronage in this sense. Whether the Government entity has an operating name may be relevant, regardless, s 14(3) should apply to full and operating names. Gault J considered that the company name ‘Real Estate Authority Ltd’ implies patronage of the REAA, and the name would be understood as a reference to the REAA, especially given their shorter operating name.
Although he considered it strictly unnecessary to decide, Gault J addressed the issue of operating names. Gault J did not accept that a Crown entity is unable to use an operating name unless expressly provided for by Parliament. Gault J did not consider that expressio unius applied or inferred that an omission to mention an operating name was intentional and prevented the use of one. The Crown Entities Act is also relevant. Section 15 states that a Crown entity is a body corporate, body corporates can adopt operating names. Section 17(1) gives Crown entities the powers of natural persons, who may also adopt operating names. The relevant question then was not whether use of an operating name is authorised by, but rather whether it is prohibited by, Parliament. Gault J determined that the Registrar was not wrong to refer to the REAA’s operating name.
Gault J found Mr Wyatt’s alternative argument that the name had been expressly authorised, and was therefore permissible per s 14(4)(a) of FENPA, could not succeed because s 21(1) of FENPA provides that a registering authority may not register a name that would constitute an offence under FENPA. Gault J held that the name implied patronage of the REAA and should not have been registered. Even if the name had originally been registered the Registrar may require a name change, and such a request would mean the name is no longer authorised for the purposes of s 14(4) FENPA.
Gault J dismissed the appeal, finding for the respondent, REAA.
By Steve Keall and Kate Macdonald.
Copyright Steve Keall 2020. All rights reserved.