Falcon Travel Ltd v Owner's Abroad Group Plc

JurisdictionIreland
JudgeMr. Justice Murphy
Judgment Date01 January 1991
Neutral Citation1990 WJSC-HC 1843
CourtHigh Court
Docket Number[1988 No. 7660P],No. 7660P/1988
Date01 January 1991
FALCON TRAVEL LTD v. OWNERS ABROAD GROUP T/A FALCON LEISURE

BETWEEN

FALCON TRAVEL LIMITED
PLAINTIFFS

AND

OWNERS ABROAD GROUP PLC T/A FALCON LEISURE GROUP
DEFENDANTS

1990 WJSC-HC 1843

No. 7660P/1988

THE HIGH COURT

Synopsis:

ACTION

Cause

Passing off - Proofs - Damage - Goodwill - Misappropriation - Parties" businesses - Distinct fields - Absence of competition - (1988/7660 P - Murphy J. - 28/6/90) - [1991] 1 I.R. 175 1991 ILT 148

|Falcon Travel Ltd. v. Owners Abroad Group Plc.|

COMPANY

Goodwill

Misappropriation - Passing off - Proofs - Damage - Parties' businesses - Distinct fields - Absence of competition - (1988/7660 P - Murphy J. - 28/6/90) - [1991] 1 I.R. 175 1991 ILT 148

|Falcon Travel Ltd. v. Owners Abroad Group Plc.|

TRADE

Protection

Company - Goodwill - Misappropriation - Passing off - Proofs - Damage - Travel business - Established travel agents - New tour operators - Distinct business activities as retailers and wholesalers - Tour operators choosing to use established business name of Falcon - Confusion in the trade and by the public - (1988/7660 P - Murphy J. - 28/6/90) - [1991] 1 I.R. 175 1991 ILT 148

|Falcon Travel Ltd. v. Owners Abroad Group Plc.|

Citations:

UNITEX LTD V UNION TEXTURING CO LTD 1973 RPC 119

WARNINK (E) BV V TOWNEND (J) & SONS (HULL) LTD 1979 AC 731

SPALDING & BROS V A W GAMAGE LTD 84 LJ CH 449

STRINGFELLOW V MCCAIN FOODS (GB) LTD 1984 RPC 501

DRAPER V TRIST 1939 3 AER 513

C & A MODES V C & A (WATERFORD) LTD 1976 IR 198

KERLY ON TRADE MARKS 12ED P346

1

Judgement of Mr. Justice Murphy delivered the 28th day of June 1990

2

This case raises the question as to whether, and if so, in what way, damages are an essential ingredient in the tort of "passing off".

3

There is no dispute with regard to the material facts which may be summarized as follows.

4

Alan Perkins, who is a director of and the principal shareholder in the Plaintiff Company, has been involved in the travel agency business for upwards of 34 years. He started in the business as a youth of 14 with Thomas Cook & Co. Limited and about 25 years ago commenced business as a travel agent on his own account in Wicklow Town. He incorporated that business under the name Falcon Travel Limited on the 12th August 1970. About the year 1985 the business of the Plaintiffs expanded to Dublin where they took shop premises in Wexford Street. After some months the Plaintiffs moved their premises a short distance to Camden Street Dublin. An indication of the extent and progress of the business was given by figures for turnover as follows:-

1986/87

£750,000

1987/88

Over £1 million

1988/89

Over £1 million

5

Mr. Perkins estimated that the business of the company was divided as to approximately 40% between selling package holidays and as to the remaining 60% other bookings. It appears that Mr. Perkins had a particular connection with religious and missionary orders who provide a significant part of his business.

6

What appeared very clearly from the evidence of all of the witnesses whether called on behalf of the Plaintiffs or the Defendants that Mr. Perkins was well known in the travel agency business and that he enjoys an enviable reputation therein.

7

The Defendants are a member of a group of companies which have carried on business as travel agents and more particularly as tour operators based in the U.K. since the early 1980s. The parent company in the group is a company quoted on the Stock Exchange in London and again it is common case that the Defendants are one of the major tour operators in the U.K. Tour operators are described as the wholesalers of the travel business. They block book accommodation in hotels and charter aeroplanes or reserve substantial numbers of seats on planes chartered or provided by other operators. Their product is sold on a national basis and availed of by local travel agents such as the Plaintiffs who may be regarded as the retailers in the industry who sell holidays out of the packages assembled by the tour operators and based largely on the brochures published by them. The contract ultimately entered into by the customer is in fact made with the tour operator and the travel agent obtains a commission on the sale.

8

The brochures published by the Defendants and their associate companies and directed primarily towards the British market were circulated in Ireland to some extent during the 1980's and a number of Irish customers booked holidays with them. However it was not until 1988 that the Defendants decided to launch a brochure in Ireland and directed to the Irish market. At the same time the Defendants decided to open an office here.

9

In July 1988 the Defendant Company appointed Mr. Frederick O'Neill as Chief Executive of the company. He had previous experience of the travel business with Joe Walsh Tours and in that connection was aware of the existence of the Plaintiff Company but he had not anticipated any confusion between the business of the Defendants in Ireland with that of the Plaintiffs. He emphasised that the business of the Defendants was different from that of the Plaintiffs in that the Plaintiffs were (by comparison to the Defendants) relatively small retail travel agents whereas the Defendants were undoubtedly very substantial wholesalers.

10

In July 1988 Mr. Perkins saw certain advertisements which indicated that the Defendants proposed to carry on business in Ireland using the name "Falcon". In those circumstances he wrote to the Defendants calling upon them to refrain from using the name "Falcon" for the purpose of trading on the Irish market. In the correspondence to which this letter gave rise the Defendants took the point (among others) that they did not intend to operate a retail business in Ireland under the name "Falcon" and therefore there would be no confusion. The present proceedings were instituted in September of 1988 and in October of that year the Plaintiffs threatened to bring an application for an injunction to restrain the launch by the Defendants of their business here but eventually the Plaintiffs agreed not to take that step as they were persuaded that the intended launch was confined to a limited group. It was, however, the contention of Mr. Perkins that the use by the Defendants of the name "Falcon" in connection with their business based in the Republic of Ireland would necessarily give rise to confusion. His fears in that regard have been fully justified. Records were kept by the Plaintiffs" employees logging the number of calls received by them which it was established (after some discussion) were intended for the Defendants. Correspondence intended for the Defendants was received by the Plaintiffs and accumulated by them for delivery once or twice per week. Travel agents and carriers have contacted the Plaintiffs in the mistaken belief that they are the Defendants. Solicitors have written to the Plaintiffs threatening proceedings against them under the mistaken belief that they are identified with the Defendants. An important example of confusion arose in relation to several hundred Irish tourists who were apparently stranded in Turkey in the Summer of 1989 when travelling on a tour organised by the Defendants. Both the television and the newspaper accounts blamed "Falcon Travel" for the mishap or at any rate looked to Falcon Travel for an explanation as to what had gone wrong. Numerous enquiries or complaints were received from the public in relation to this incident but perhaps the greater significance is that journalists possessing some measure of expertize in relation to the industry confused the Irish company with the English company.

11

It is true to say that the administrative problems deriving from confusion have diminished significantly but they still continue. Likewise it may be said, as Mr. O'Neill has sworn, that problems such as those which arose in relation to the Turkish holiday were caused by problems outside the Defendants" control and even then were remedied effectively and expeditiously by them. However, the most significant point made by the Defendants in relation to the effect of confusion is that it has not, and in the nature of their respective businesses could not, result in the Plaintiffs losing business to the Defendants. In fact the Defendants can argue with considerable justification that the confusion is more likely to result in an increase of business to the Plaintiffs. It is pleasing to recognize that both parties are sufficiently mature to trade with each other notwithstanding the present litigation so that it can be seen that the Plaintiffs place a very significant part of their business with the Defendants. It would seem that business which was formerly placed with or directed to other tour operators by the Plaintiffs has in the past two years been redirected or for some reason gone to the Defendants.

12

The material facts of...

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