The National Guild of Removers And Storers Ltd v Bee Moved Ltd & Ors

Factual and Procedural Background

This action concerns alleged passing off brought by a trade association ("Claimant") representing members of the removals and storage industry. The First Defendant is a company in the removals and storage business and was a member of the Claimant from 2006 to 2010. The Second and Third Defendants are directors and equal shareholders of the First Defendant.

The Claimant commenced proceedings in July 2014 alleging ownership of substantial goodwill in certain names associated with the removals and storage trade and contending that various advertisements by the Defendants amounted to passing off. The Defence admitted the Claimant's goodwill and reputation in the names but denied that the advertisements constituted passing off.

At a case management conference in May 2015, the Defendants accepted the Claimant's goodwill ownership. The issues for trial were whether certain acts, specifically use of the Claimant's names in advertisements on particular websites, amounted to passing off by the Defendants.

The Claimant faced difficulties proving some advertisements but maintained claims relating to two key advertisements until shortly before trial. The trial focused on (i) liability of the Defendants for an advertisement on one website ("Bee Moved advertisement"), (ii) liability of the First Defendant for an advertisement on another website ("Really Moving advertisement"), and (iii) if liable, whether the Second and Third Defendants were also liable.

Legal Issues Presented

1. Whether the use of the Claimant's names in the Bee Moved advertisement constituted passing off by the Defendants.
2. Whether the First Defendant was liable for passing off in relation to the Really Moving advertisement.
3. If the First Defendant was liable for the Really Moving advertisement, whether the Second and Third Defendants were also liable.

Arguments of the Parties

Claimant's Arguments

• The Claimant asserted ownership of substantial goodwill in the names and that the Bee Moved advertisement implied the Defendants were members of the Claimant, misleading the public and causing damage.
• The Claimant argued that the second bullet point in the Bee Moved advertisement was not mere general advice but an implied representation of membership.
• Regarding the Really Moving advertisement, the Claimant contended the Defendants were liable because the wording originated from them and relied on legal authority that knowingly exploiting a customer's mistaken belief can amount to passing off.
• The Claimant rejected the Defendants' reliance on absence of the Claimant's logo and lack of evidence on webpage views as insufficient to dispel misrepresentation.

Defendants' Arguments

• The Defendants admitted the Claimant's goodwill but denied that their advertisements amounted to passing off.
• They contended the second bullet point in the Bee Moved advertisement was general advice and did not imply membership.
• The Defendants argued the absence of the Claimant's logo on the webpage would lead the public to conclude no trade connection existed.
• They relied on evidence of a technical issue ("web crash") causing the Really Moving website to replicate an old directory page containing inaccurate membership statements, for which they were not responsible.
• The Defendants pointed out the Claimant failed to plead certain arguments (e.g., breach of contract via Schedule B) and that no agency or authorisation existed for the offending content on the Really Moving website.
• They cited a prior similar case where a similar website issue led to a finding in their favour.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Reckitt & Colman Products v Borden [1990] RPC 341, HL	Elements of passing off: goodwill, misrepresentation, and damage	Confirmed the established test for passing off applied to the case.
Society of Accountants & Auditors v Goodway [1907] 1 Ch 489	Trade associations can bring passing off actions	Supported the Claimant's standing as a trade association to sue.
National Guild of Removers & Storers v Silveria [2010] EWPCC 015	Trade association's passing off claim involving same Claimant	Referenced as precedent for Claimant's entitlement and issues.
Spalding v Gamage [1915] 32 RPC 273, HL	Likelihood of deception is a matter for the court, not witnesses	Applied in assessing whether advertisements caused deception.
Neutrogena [1996] RPC 473	Substantial number of customers need to be deceived, not all or most	Used to frame the standard of proof for deception.
Interflora v Marks & Spencer [2013] FSR 21	Assessment of deception and damage to goodwill	Supported the court's analysis of misrepresentation impact.
Woolley v Ultimate Products [2012] EWCA Civ 1038	Misrepresentation must be more than transitory	Applied to reject arguments that misleading impression was fleeting.
Moroccanoil Israel Limited v Aldi Stores Limited [2014] EWHC 1686 (IPEC)	Misrepresentation and its duration	Supported analysis on lasting nature of misrepresentation.
BSkyB v Sky Home Services [2007] FSR 14	Misrepresentation by conduct exploiting customer's mistaken belief	Discussed to examine whether Defendants failed to correct mistaken belief.
Phones4U v Phone4u.co.uk Internet Ltd [2007] RPC 5	Distinction between mere confusion and deception in passing off	Used to clarify threshold for misrepresentation and deception.
Ewing v Buttercup Margarine Co [1917] 2 Ch 1, CA	Damage caused by inducing belief of business association	Supported focus on "really likely" damage to goodwill.
Advocaat [1980] RPC 31	Emphasis on "really likely" damage in passing off claims	Reinforced the standard for assessing damage from misrepresentation.
Sea Shepherd v Fish & Fish [2015] UKSC 10	Joint liability principles for controlling minds of a company	Applied to hold directors jointly liable if company liable.
Grenade UK v Grenade Energy [2016] EWHC 877 (IPEC)	Joint liability and controlling mind doctrine	Supported joint liability findings against directors.
National Guild of Removers and Storers Ltd v Milner [2014] EWHC 670 (IPEC)	Responsibility for reappearance of offending text on third party website	Referenced to reject Claimant's argument of ongoing liability for third party acts.

Court's Reasoning and Analysis

The court analysed the Bee Moved advertisement and found that the second bullet point, advising use of a removal company who is a member of the Claimant, implied that the Defendants were members. This was not mere general advice but an implied representation that was misleading and damaging to the Claimant's goodwill. The absence of the Claimant's logo on the webpage was not established to be noticed by the public or significant enough to dispel the misrepresentation. The court rejected the Defendants' arguments that lack of evidence on webpage views meant the impression was trivial and held that the Defendants were liable for passing off in relation to this advertisement.

Regarding the Really Moving advertisement, the court accepted the Defendants' uncontested evidence that a technical issue caused an old directory page containing the misleading statement "Member of NGRS" to reappear without their knowledge or consent. The Defendants had taken steps to remove the wording once notified. The court found no agency, authorisation, or intention by the Defendants to maintain the misleading content. The Claimant's arguments that the Defendants were liable for the third party's continued use or that they exploited mistaken beliefs were rejected. The court also held that the Claimant's failure to plead certain arguments and the lack of evidence prejudiced the Defendants. The court followed a prior similar decision involving the same Claimant and concluded the Defendants were not liable for this advertisement.

The court further held that if the First Defendant had been liable for the Really Moving advertisement, the Second and Third Defendants would also have been liable due to their status as the controlling minds of the company and joint decision makers, applying established principles of joint liability in tort.

Holding and Implications

The court's final decision was as follows:

The Claimant's claim for passing off succeeds against all Defendants in respect of the Bee Moved advertisement.

The Claimant's claim fails in relation to the Really Moving advertisement.

The direct effect is that the Defendants are liable for passing off only concerning the Bee Moved advertisement, with no liability found for the Really Moving advertisement. No new precedent was established; the decision applies existing legal principles to the facts.