[COURT OF APPEAL]

HABIB BANK LTD. v. HABIB BANK A.G. ZURICH

[1977 H. No. 4426]

Passing Off - Risk of confusion - Use of family name - Banks incorporated by well known banking family - Banks in Pakistan and Switzerland closely associated with substantial business - Nationalisation of banks in Pakistan - Whether Swiss bank passing off in carrying on independent trading - Whether good - will and reputation exclusive - Whether nationalised banks' claim barred by acquiescence, laches and estoppel

In 1941 a well known banking family incorporated a bank in Bombay under their family name "Habib". In 1947, on the partition of the Indian sub-continent, the bank moved to Pakistan where it became very well known and developed a very substantial business both internally and internationally and had numerous branches. In 1952 another bank was incorporated in Pakistan, under the name Habib Bank (Overseas) Ltd., who took over all the international business, including the business in the United Kingdom. Both the banks remained closely associated. In 1967 when nationalisation of banks began to be discussed in Pakistan, the Habib family's, after obtaining the necessary permission from the State Bank of Pakistan, incorporated the defendants in Zurich. In May 1973 the defendants opened a branch in London. The arrangements for that and necessary permissions from the Bank of England was handled by the staff of the overseas bank. The defendants' London office opened in a very modest way and was manned by the overseas bank's staff as and when necessary. On January 1, 1974, all the banks in Pakistan were nationalised, including the two Habib banks. They became merged into a to new state corporation and their business and goodwill was vested in the plaintiffs. The Habib family's control of those banks ceased. But the plaintiffs' attempts to gain management control of the defendants was resisted and litigation to resolve that matter was pending

in Switzerland. Between 1974 and 1977 the parties entered into various agency arrangements. The plaintiffs issued a writ on September 23, 1977, seeking an injunction restraining the defendants, inter alia, from passing off their business as and for the plaintiffs' and trading under any name containing the name Habib. The judge dismissed the action.

On appeal by the plaintiffs: -

Held dismissing the appeal, that since the defendants were set up under the name "Habib" with the express consent and co-operation of the plaintiffs' predecessors and had carried on the business since nationalisation of the two banks, with their constitution, management, business style and their motto unchanged there had been no misrepresentation on their part giving rise to a claim for passing off; that, on the facts, the goodwill and reputation attaching to the family name "Habib" was such that an organisation established by that family under their name immediately acquired the family's goodwill and reputation which attached equally to any local branch set up in the same place; that the establishment in London of the defendants' office merely showed that they were loosely associated with the Habib banks and could not import representation that the responsibility for the defendants' management vested in those banks and that there were no agreed or understood limitations on the defendants' activities in London; that, accordingly, the judge did not err in principle in concluding that the evidence disclosed no passing off because there was no misrepresentation (post, pp. 1275G-H,1278G-H, 1279D-H, 1280H, 1281B-C, 1287F-G).

Held, further that, even if there had been misrepresentation, the plaintiffs had failed to establish any damage and, since the defendants were founded and carried on business with the active concurrence of the plaintiffs' predecessors and the business co-operation of the plaintiffs since nationalisation, the plaintiffs' claim, would be barred on the ground of acquiescence, laches and estoppel (post, pp. 1281F-H, 1282B, F-G,1287F-G).

Per curiam. A broad approach is required in considering the doctrine of laches or acquescence and not one based on the archaic and arcane distinctions between the assertion of equitable rights and the enforcement by equitable means of legal rights (post, pp. 1284H - 1285C, 1287F-G).

Decision of Whitford J. a affirmed.

The following cases are referred to in the judgments:

Amalgamated Investment & Property Co. Ltd. v. Texas Commerce International Bank Ltd. [1981] 2 W.L.R. 554; [1981] 1 All E.R. 923.

Bulmer (H.P.) Ltd. v. J. Bollinger S.A. [1978] R.P.C. 79, C.A.

Crabb v. Arun District Council [1976] Ch. 179; [1975] 3 W.L.R. 847; [1975] 3 All E.R. 865, C.A.

Erlanger v. New Sombrero Phosphate Co. (1878) 3 App.Cas. 1218, H.L.(E.).

Greasley v. Cooke [1980] 1 W.L.R. 1306; [1980] 3 All E.R. 710, C.A.

Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd. [1901] A.C. 217, H.L.(E.).

Inwards v. Baker [1965] 2 Q.B. 29; [1965] 2 W.L.R. 212; [1965] 1 All E.R. 446, C.A.

Jelley, Son, and Jones' Application, In re (1878) 46 L.T. 381n.

Lindsay Petroleum Co. v. Hurd (1874) L.R. 5 P.C. 221, P.C.

Marengo v. Daily Sketch and Sunday Graphic Ltd. (unreported) May 17, 1946, C.A.; [1948] W.N. 92; [1948] 1 All E.R. 406, H.L.(E.).

Pirie (Alex) and Sons Ltd.'s Application, In re (1933) 50 R.P.C. 147, H.L.(E.).

Saunders v. Sun Life Assurance Co. of Canada [1894] 1 Ch. 537.

Spalding (A.G.) and Brothers v. A.W. Gamage Ltd. (1915) 84 L.J.Ch. 449; 32 R.P.C. 273, H.L.(E.).

Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. (Note) [1981] 2 W.L.R. 576; [1981] 1 All E.R. 897.

Warnink (Erven) Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd. [1979] A.C. 731; [1979] 3 W.L.R. 68; [1979] 2 All E.R. 927, H.L.(E.).

Willmott v. Barber (1880) 15 Ch.D. 96.

The following additional cases were cited in argument:

Adrema Ltd. v. Adrema-Werke G.m.b.H. [1958] R.P.C. 323.

Banks v. Gibson (1865) 34 Beav. 566.

Barr's Patent, In re (1948) 65 R.P.C. 327.

Brestian v. Try [1958] R.P.C. 161, C.A.

Brinsmead (John) & Sons Ltd. v. Brinsmead (1913) 30 R.P.C. 493, C.A.

British Legion v. British Legion Club (Street) Ltd. (1931) 48 R.P.C. 555.

Burgess v. Burgess (1853) 3 De G.M. & G. 896.

Cluett Peabody & Co. Inc. v. McIntyre Hogg Marsh & Co. Ltd. [1958] R.P.C. 335.

Coles (J.H.) Proprietary Ltd. (In liquidation) v. Need (1933) 50 R.P.C. 379, P.C.

Dent v. Turpin (1861) 2 Johns. & H. 139.

Draper v. Trist and Tristbestos Brake Linings Ltd. (1939) 56 R.P.C. 429, C.A.

Electrolux Ltd. v. Electrix Ltd. (1953) 71 R.P.C. 23, C.A.

Ewing v. Buttercup Margarine Co. Ltd. (1917) 34 R.P.C. 232, C.A.

General Electric Co. (of U.S.A.) v. General Electric Co. Ltd. [1972] 1 W.L.R. 729; [1972] 2 All E.R. 507, H.L.(E.).

Guimaraens (M.P.) & Son v. Fonseca & Vasconcellos Ltd. (1921) 38 R.P.C. 388.

Holder v. Holder [1968] Ch. 353; [1960] 2 W.L.R. 237; [1968] 1 All E.R. 665, C.A.

Jamieson and Co. v. Jamieson (1898) 15 R.P.C. 169, C.A.

Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. [1971] A.C. 850; [1970] 3 W.L.R. 287; [1970] 2 All E.R. 871, H.L.(E.).

Lecouturier v. Rey [1910] A.C. 262, H.L.(E.).

Music Corporation of America v. Music Corporation (Great Britain Ltd.) (1946) 64 R.P.C. 41.

Parker-Knoll Ltd. v. Knoll International Ltd. [1962] R.P.C. 265, H.L.(E.).

Reddaway v. Banham [1896] A.C. 199, H.L.(E.).

Roberts Numbering Machine Co. v. Davis (1935) 53 R.P.C. 79.

Sayers v. Collyer (1884) 28 Ch.D. 103, C.A.

Southorn v. Reynolds (1865) 12 L.T. 75.

Turton v. Turton (1889) 42 Ch.D. 128, C.A.

Tussaud v. Tussaud (1890) 44 Ch.D. 678.

APPEAL from Whitford J.

The plaintiffs, Habib Bank Ltd., issued a writ on September 23, 1977, seeking an injunction to restrain the defendants, Habib Bank A.G. Zurich ("H.B.Z."), inter alia, from (i) trading in this country under the names of Habib Bank Zurich, Habib, any name containing the name Habib or any name colourably similar to the plaintiffs' name Habib Bank, (ii) trading in any manner likely to cause the business of H.B.Z. to be confused with the business of the plaintiffs, (iii) trading in any manner which did not sufficiently differentiate or distinguish the plaintiffs' bank or their branches from H.B.Z's, (iv) otherwise passing off the

business of H.B.Z. as and for the plaintiffs' business, or (v) trading under-the name of Habib Bank A.G. Zurich, Habib Bank, or any name containing the name Habib or any name colourably similar to the plaintiffs' name so as to represent that H.B.Z. were connected or associated in business with the plaintiffs or were their branch or a business under the effective control of the plaintiffs. On October 12, 1979, Whitford J. dismissed the action.

By a notice of appeal dated February 11, 1980, the plaintiffs appealed on the grounds, inter alia, (1) that the judge wrongly held as a matter of fact and/or law that the reputation in the name Habib built up in the United Kingdom prior to nationalisation of the plaintiffs was a shared reputation, that when H.B.Z. commenced business in the United Kingdom they immediately assumed part of such shared reputation, that H.B.Z. could continue to share that reputation after nationalisation, that prior to nationalisation neither Habib Bank (Overseas) Ltd. ("H.B.O.") nor Habib Bank Ltd. ("the original H.B.L.") had acquired a reputation in the name Habib to the exclusion of H.B.Z.; (2) that the judge wrongly failed to find that prior to nationalisation H.B.Z. could only trade in this country under the designation "Habib" so long as (a) such trading was limited to such activities as were strictly related to the business of H.B.Z. in Switzerland and (b) H.B.Z. was under the same effective control as H.B.O., that after nationalisation H.B.Z. no longer so acted, that after nationalisation the use by H.B.Z. of the name Habib in this country constituted a misrepresentation, and that H.B.Z.'s actions complained of constituted passing off; (3) that the judge failed to take into account or, alternatively, failed to give sufficient weight to the uncontested evidence of the plaintiffs that prior to nationalisation H.B.Z. had no reputation in this country; (4) that the judge's decision that there was a shared reputation was based on an argument that was not pleaded or advanced before him by H.B.Z.; (5) that the judge wrongly held that H.B.Z.'s activities complained of had not caused substantial damage nor were they likely to cause substantial damage to the plaintiffs and, thereunder the judge failed to take into account or failed to give sufficient weight to the evidence of the plaintiffs; that the confusion by reason of H.B.Z.'s acts complained of that had occurred and was likely to occur in the future was not great despite the plaintiffs' evidence to the contrary; that the plaintiffs were barred from obtaining relief by reason of acquiescence and estoppel and in particular (i) wrongly interpreted the law as to the requirements necessary for those defences to succeed, (ii) wrongly inferred findings of fact of H.B.Z.'s favour, (iii) made incorrect findings of fact as to the plaintiffs' knowledge as to their legal rights, as to H.B.Z.'s belief as to their rights, as to whether the plaintiffs encouraged H.B.Z. to carry out the acts complained of and that the expansion of H.B.Z.'s business after nationalisation was to a substantial extent due to the co-operation of the plaintiffs, (iv) failed to take into account or gave insufficient weight to the fact that the onus to prove the defence was on H.B.Z. and that H.B.Z. did not produce any evidence to discharge such onus.

By a respondent's notice dated February 22, 1980, H.B.Z. sought to affirm the judge's judgment on the additional grounds (1) that on the facts H.B.Z. were not doing anything more than honestly to trade under their own name which was a defence in law; (2) that by reason of the absence of any fraudulent intent on the part of H.B.Z. the plaintiffs'

claim could lie only in equity. Accordingly, the principles of estoppel by conduct, laches or acquiescence as they applied to equitable claims were applicable and, on the facts, applied; (3) that the plaintiffs on the evidence failed to shown any or any significant damage or likelihood of damage; (4) that the only type of confusion shown by the plaintiffs (namely that arising in inter-bank dealings and in the post) was irrelevant to passing off in that it did not and could not lead to any loss of custom by either party; (5) that the plaintiff showed no damage or likelihood of damage to their goodwill, which was a necessary ingredient of the tort of passing off; (6) that if, contrary to the finding of the judge, H.B.Z. had been guilty of passing off relief by way of injunction was inappropriate because the plaintiffs did not show any likelihood of significant damage.

The facts are stated in the judgment of Oliver L.J.

William Aldous Q.C. and Anthony Waston for the plaintiffs.

Julian Jeffs Q.C. and Robin Jacob for the defendants.

OLIVER L.J. delivered the first judgment. This is an appeal from a judgment of Whitford J. delivered on October 12, 1979, in which he dismissed the plaintiffs' action for passing off. The title to these proceedings indicates the close similarity of the names of the parties and it is the plaintiffs' contention that in carrying on their business under their corporate name in the United Kingdom the defendants are either directly passing off their business as that of the plaintiffs or at least holding out to the public that they are a company controlled by or associated with the plaintiffs. And indeed, so far as association goes, they are to some extent associated as the history of the matter shows, although Mr. Aldous submits that that factual association does not justify what his clients claim to be, effectively, a representation by the defendants that their business forms part of the plaintiffs' banking business.

The history of the matter goes back to the period before the partition of the Indian sub-continent into India and Pakistan, The Habibs were and are a well known banking family and in 1941 they incorporated a banking company in Bombay. That company bore the same name as the plaintiffs in the action and I will refer to it as "the original H.B.L." Upon the partition of India in 1947 the seat of this company was moved to Karachi. The business of the original H.B.L. was both substantial and international and in 1952 it was decided to incorporate a further company in Pakistan to handle the overseas business. That company was Habib Bank (Overseas) Ltd. - which I refer to as "H.B.O." for short - and it was owned as to 40 per cent. by the original H.B.L. and as to 60 per cent. by individual members of the Habib family. The affairs of the two companies were, throughout their joint corporate lives, very closely intertwined. The original H.B.L. dealt with all business in Pakistan whilst foreign business was undertaken and branches in foreign countries were operated by H.B.O. But the separation was more theoretical than real, because there seems to have been no practical separation of banking staffs who were treated as freely interchangeable between the two companies and there can be no doubt that the two companies were known to the general public as "the Habib Bank" without differentiating between the two corporate entities.

From 1970 onwards the two companies operated under the shadow of threatened nationalisation. In 1970 the elections in West Pakistan were won by Mr. Bhutto's People's Party whose manifesto included a policy of nationalisation of, inter alia, the banks, but war with India and the formation of the separate state of Bangladesh intervened and no immediate nationalisation took place. The writing was, however, very clearly on the wall and there was an obvious danger of government interference or supervision, a danger which became more acute when certain major industries were nationalised in 1972. It had, in fact, been on the wall, albeit perhaps in rather fainter characters, since early 1967 when Mr. Bhutto had formed his party and the directors of the bank saw the merit - no doubt in the bank's own interest as well as in that of its customers - in forming a branch or affiliate abroad in a country whose laws prohibited the disclosure of banking information, so that any attempted interference or inquiry could effectively be blocked. In July 1967 application was made to the State Bank of Pakistan for permission to establish a branch in Switzerland. That was approved in principle and on August 9, 1967, the defendants (to which I will refer as "H.B.Z.") were established in Zurich. The attitude of the Swiss authorities was such that the establishment was much facilitated if the new bank was established with local capital and accordingly H.B.O. had only a minority of the shares (45 per cent. initially) the remainder being issued to a Swiss company called Thesaurus. H.B.Z. formally opened for business on October 12, 1967. Thereafter until 1974 H.B.Z.'s business was in fact run by the original H.B.L. and H.B.O. as part of the Habib Bank business, even though H.B.O. was only a minority shareholder. A member of the Habib family, Mr. Rashid Habib, was chairman of the board and another, Mr. Hyder Habib, was a vice-chairman and the staff of the bank were freely interchangeable with the staff of H.B.O. and the staff of the original H.B.L. H.B.Z. was, effectively, the Zurich branch of the Habib bank. Contemporary internal correspondence at the time of its formation indicates that the primary purpose of establishing the Swiss bank was to provide a haven for customers who desired to place their funds in a hard-currency area without fear of disclosure.

In May 1973 the board of H.B.Z. decided to open a branch in London. H.B.O. was already operating there with a small head office in Finsbury Pavement and a substantial number of branches outside London in cities where there was a substantial immigrant population from Pakistan. The arrangements for the opening of the London branch of H.B.Z. were handled in London by H.B.O. Powers of attorney were given to two senior executives of H.B.O. in London, Mr. Pirbhai and Mr. Padiyar, and the latter negotiated the necessary permission from the Bank of England. It did not really make commercial sense to establish, in effect, a competitor in the United Kingdom with the same group but Mr. Padiyar's letter to the Bank of England dated June 5, 1973, indicated, perhaps rather surprisingly, that the Swiss bank "find considerable scope for expansion of their business here and they desire to participate in the banking activities of the City of London and the United Kingdom." The primary business of H.B.O. was the remittance to Pakistan of funds received from immigrants of Pakistani origin and one cannot help doubting whether in fact the opening of a branch of the Zurich business was intended to do more than provide on the spot

facilities for remittance to hard-currency areas without the risk of disclosure which would have existed if they were channelled through a branch directly controlled from Pakistan. This is consistent with the object which the then board of the original H.B.L. had in mind when H.B.Z. was formed as it appears a letter from Mr. Pirbhai (an executive of H.B.O. in London) to Mr. Rashid Habib dated February 24, 1967. Nevertheless, a contemporary note of a meeting held on February 15, 1974 (that is after nationalisation) of representatives of both H.B.O. and H.B.Z. with H.B.O.'s auditors, Messrs. Thompson McLintock, indicates that both H.B.O. and H.B.Z. then had it in contemplation that H.B.Z. would expand into a general banking business in London.

In so far as any conclusion can be drawn from this it seems to me to be merely this, that it bears out the plaintiffs' case that the Swiss branch in London was treated simply as a branch of the international business of the Habib Bank and that it was really a matter of indifference at that time by which corporate entity the actual business was conducted. The whole group was under the management of members of the Habib family.

The London office of H.B.Z. opened for business in November 1973 in a very modest way. It consisted of a room adjoining the offices of H.B.O. in 12, Finsbury Pavement. It had an independent entrance to the outside corridor but was also accessible through the telex room in H.B.O.'s office and in practice it consisted of a room, a desk and a telephone which was manned by one of the members of the staff of H.B.O. as occasion required. Up to March 1974 it had done very little business in the United Kingdom. By that time it had only three accounts, so that apart from such reputation as it may have enjoyed as part of the Habib banking group it had had very little time or opportunity to build up any independent goodwill of its own in London. On January 1, 1974, the Damoclean sword fell. The Pakistan Government announced the nationalisation of all the banks in Pakistan, which included both the original H.B.L. and H.B.O. Subsequently in the summer of 1974 both the original H.B.L. and H.B.O. were merged in a new state corporation, the present plaintiffs, and it is not disputed that the effect of this, as a matter of law, was to vest in the plaintiffs all the goodwill and rights of the original H.B.L. and of H.B.O.

The effect of nationalisation, however, was to produce a radical change in the management of the business. All the existing chief executives and directors of H.B.L. and H.B.O. were removed, so that from the beginning of January 1974 the Habib family ceased to have any say in the banks' operations. But, of course, that did not apply to H.B.Z. which was not susceptible to control from Pakistan, since H.B.O. had only a minority shareholding. That in fact had been cut down to 22½ per cent. as a result of a further issue of shares in November 1973. Matters came to a head in March 1974. Mr. Rashid Habib and Mr. Hyder Habib were persuaded to transfer their own nominee shareholdings to the direction of the Government of Pakistan in July 1974 and this resulted in their vacating office as directors of H.B.Z. for want of the essential share qualification. They actually resigned in October 1974. The plaintiffs had, in March 1974, written to H.B.Z. seeking to appoint their own nominees and had been firmly told that the composition of the board was a matter for the majority shareholders and on July 12 H.B.Z. refused to appoint the directors nominated by

the plaintiffs. Thereafter in 1976 the proportionate holding of H.B.O. in the equity of H.B.Z. was further reduced by a rights issue in which the plaintiffs were not allowed to participate and in May 1976 litigation ensued in Switzerland which is still proceeding and in which the plaintiffs are seeking (so far unsuccessfully) to establish control of or increase their shareholding in H.B.Z.

The important thing for present purposes is the effect of these upheavals on H.B.Z. in London. In January 1974 Mr. Hyder Habib came to London to discuss the setting up of an office of H.B.Z. separate from that of the now nationalised H.B.O. There is a clear history of assistance and co-operation on the part of H.B.O. in this venture but the evidence indicates that at this time there was considerable confusion among the London staff because nobody knew what was going on or exactly what the effect of nationalisation was going to be. Certainly normal banking transactions between the nationalised H.B.O. and H.B.Z. carried on and in May 1974 H.B.Z. moved to 8 City Road with the active co-operation and help of the management and staff of H.B.O. They stayed there for a little over a year and in August 1975 moved to 10, Throgmorton Avenue. There was no hint or murmur of any protest or dissatisfaction on the part of the plaintiffs until August 1977 just after H.B.Z. had moved its office once more. The new office was at 92, Moorgate just round the corner from H.B.O's office It took place in July 1977 and on August 22 the plaintiffs' solicitors wrote demanding that H.B.Z. discontinue the use of its corporate name in the United Kingdom. The writ followed on September 23.

The basic ingredients of a passing off action are not in dispute between the parties. Nor could they be for they have been well settled for years. They are set out in the speech of Lord Parker in A.G. Spalding and Brothers v. A. W. Gamage Ltd. (1915) 84 L.J.Ch. 449:

"This principle is stated by Turner L.J. in Burgess v. Burgess (1853) 3 De. G.M. & G. 896, 904-905 and by Lord Halsbury in Reddaway v. Banham [1896] A.C. 199, 204, in the proposition that nobody has any right to represent his goods as the goods of somebody else. It is also sometimes stated in the proposition that nobody has the right to pass off his goods as the goods of somebody else. I prefer the former statement, for, whatever doubts may be suggested in the earlier authorities, it has long been settled that actual passing off of the defendant's goods for the plaintiff's need not be proved as a condition precedent to relief in equity either by way of an injunction or of an inquiry as to profits or damages ... Nor need the representation be fraudulently made. It is enough that it has in fact been made, whether fraudulently or otherwise, and that damages may probably ensue, though the complete innocence of the party making it may be a reason for limiting the account of profits to the period subsequent to the date at which he becomes aware of the true facts."

There is a useful passage with regard to evidence, at p. 452. In particular it was with regard to advertisements in that case that Lord Parker said:

"It was also contended that the question whether the advertisements were calculated to deceive was not one which your Lordships could yourselves determine by considering the purport of the advertisements themselves, having regard to the surrounding circumstances, but was one which your Lordships were bound to determine

upon evidence directed to the question itself. I do not take this view of the law. There may, of course, be cases of so doubtful a nature that a judge cannot properly come to a conclusion without evidence directed to the point, but there can be no doubt that in a passing-off action the question whether the matter complained of is calculated to deceive - in other words, whether it amounts to a misrepresentation - is a matter for the judge, who, looking at the documents and evidence before him, comes to his own conclusion, and, to use the words of Lord Macnaghten in Payton & Co. Ltd. v. Snelling, Lampard & Co. Ltd. [1901] A.C. 308, 311, 'must not surrender his own independent judgment to any witness whatever.'"

More recently the principles have been reiterated in the following passages from the speech of Lord Diplock in Erven Warnink Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd. [1979] A.C. 731, 742:

"My Lords, A.G. Spalding and Brothers v. A. W. Gamage Ltd., 84 L.J.Ch. 449, and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation, (2) made by a trader in the course of trade, (3) to propsective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so."

The difficulties, as always, arise in applying these well known principles to the facts of the individual case. Mr. Aldous's case is a very simple one. Up to November 1973 the only Habib Bank presence in the United Kingdom was H.B.O. and its branches. H.B.O. (either alone or in conjunction with its associated company the original H.B.L.) had a substantial goodwill in connection with the banking business carried on from London. H.B.Z. was introduced to London by the original H.B.L. and H.B.O. as a bank operating under the same management and it was allowed to participate in the goodwill generated by H.B.O. but had no goodwill here of its own. It was simply held out or allowed to hold itself out as part of the Habib Bank - that is, as a banking organisation substantially under the same management as that of the existing and established business. In March 1974, however, it ceased in fact to be under the same management as the organisation known as the Habib Bank, not because its management had changed, but because the management of the Habib Bank had changed and H.B.Z. had refused to accept the nominees of the now nationalised Habib Bank. It had, therefore, as Mr. Aldous graphically put it, "left the club." From that moment on, it ceased to be entitled to hold itself out as a member of the club by using the Habib name and by continuing to do so it misrepresented to the public that its business was under the same management as the plaintiffs' business and thus passed itself off as or for a part of the plaintiffs' business when it was not. That, in its essentials, is Mr. Aldous' case, though there are refinements. The case is pleaded as a simple case of an interloper adopting the name of an existing business, but Mr. Aldous has to meet the difficulty that his own

clients were responsible both for the establishment of H.B.Z. in Switzerland and for its introduction to London. He meets this difficulty ingeniously, although without the assistance of any clearly pleaded case of a licence, by suggesting that the only way in which H.B.Z. could become entitled to make use of the existing United Kingdom goodwill of H.B.O. is by a licence from H.B.O. or the original H.B.L., a licence which impliedly endured only so long as the companies remained substantially under the same management. Mr. Aldous skilfully turns the lack of pleading into a weapon by suggesting that the only justification for H.B.Z.'s operation in this country under its own corporate name can be either its possession of a goodwill of its own (and it had none when it commenced business) or an irrevocable licence of some sort from the only company which did have any goodwill, namely H.B.O. And such a licence, he observes, is neither pleaded nor supported by the facts. What was pleaded was that H.B.Z. was established with the active concurrence and support of at least one of the entities now incorporated in the person of the plaintiffs and an open, public and uninterrupted course of business on the part of H.B.Z., in some respects encouraged, in some respects perhaps merely tolerated, but in no respect ever challenged from November 1973 to August 1977 - facts which are prayed in aid in support of a plea of acquiescence, laches and estoppel.

Whitford J. in a careful and detailed judgment, reviewed the relevant facts and the evidence and his conclusions may be summarised as follows. (1) The reputation enjoyed by the Habib Bank in this country was a shared reputation, part of which was assumed by H.B.Z. immediately upon entry into the United Kingdom. H.B.Z. thus acquired the right to trade in this country under its corporate name and that right remained unaffected by the nationalisation of H.B.O. and the original H.B.L. or by any refusal on their behalf to accept the plaintiffs' dictates as to their future management. (2) There was, in any event, no misrepresentation. H.B.Z., H.B.O. and the original H.B.L. had a common right to the use of the name Habib and the defendants were doing no more than to trade under the name by which they were incorporated and known and which they were entitled to use. (3) No substantial damage to the plaintiffs had in any event been shown. (4) Although this did not arise on the view which the judge took, any claim by the plaintiffs would in his view have been barred by acquiescence.

Mr. Aldous attacks the first of these conclusions on the ground that, as he submits, there was no evidence which could conceivably support a shared reputation. Up to March 1974, after which time H.B.Z. and the plaintiffs were going their separate ways, there was only one reputation here, that of the Habib Bank, as personified by H.B.O. to whom the reputation adhered. H.B.Z. had substantially no business, it was unknown, its only office was a room in H.B.O.'s office and in so far as it could claim any reputation or goodwill at all it could only be that which it enjoyed by the permissive use of its corporate name here. That permission determined as soon as it threw off the shackles of the new nationalised management. Mr. Jeffs, whilst naturally seeking to support the judgment, ventures to put the matter in a rather different way from that adopted by Whitford J. It is, he submits, not so much a matter of a shared reputation or goodwill, as of an honest and unchallenged concurrent user. There is, he points out, no evidence whatever which can properly support the suggestion that when H.B.Z. came to London there was any limitation of its activities or any condition

as to its management or policy implied, understood, or agreed to Two companies, both connected with the well known Habib banking family, were perfectly honestly and properly making a concurrent user of that family name just as, for instance, manufacturers of a substance with a well known and recognised trade description, such as champagne, may enjoy the right in common to use that description for their products: see H. P. Bulmer Ltd. v. J. Bollinger S.A. [1978] R.P.C. 79.

In the case of a trade mark section 12 (2) of the Trade Marks Act 1938 enables the registrar to permit registration of a mark in the name of more than one proprietor where an "honest concurrent use" can be shown: see for instance In re Jelley, Son, and Jones' Application (1878) 46 L.T. 381n. and Alex Pirie and Sons Ltd.'s Application (1933) 50 R.P.C. 147. Now if the statute permits registration of two or more proprietors in the case of trade marks, where there has been honest concurrent use, the case of honest concurrent use of an unregistered name or mark is, Mr. Jeffs argues, a fortiori.

I think, if I may say so, that Mr. Jeffs's submissions are too ambitious in this sense, that they seek to elevate into a doctrine dignified by a term of art - "the doctrine of honest concurrent user" - what is, in the sphere of passing off, merely a facet of Lord Diplock's first essential ingredient of misrepresentation in Erven Warnink Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd. [1979] A.C. 731, 742. As Mr. Aldous has pointed out, section 2 of the Trade Marks Act 1938 expressly provides that nothing in the Act is deemed to affect any rights of action for passing off. The fact therefore that two or more people may be entitled to rely upon honest concurrent user of a mark to achieve registration leaves quite unaffected the question of whether they may be entitled to sue one another in a passing off action. What I think Mr. Jeffs is really saying in propounding his doctrine is really this, that where you find that two traders have been concurrently using in the United Kingdom the same or similar names for their goods or businesses, you may well find a factual situation in which neither of them can be said to be guilty of any misrepresentation. Each represents nothing but the truth, that a particular name or mark is associated with his goods or business.

It is misrepresentation which lies at the root of the action and Mr. Aldous concedes that if he fails, on the evidence, to demonstrate this, then he fails on this appeal. Whitford J., as I have said, found none, and Mr. Aldous has to submit that that finding was either wrong in law or contrary to the weight of the evidence. It is, therefore, necessary to analyse and examine carefully the major premise upon which Mr. Aldous beguilingly erects the logical structure of his case. We have been treated to a detailed and fascinating guided excursion into the labyrinth of cases relating to the use by traders of their own and other's names, but in the ultimate analysis the question remains, what was the misrepresentation? The Habib Bank A.G. Zurich was set up in London as the Habib Bank A.G. Zurich with the express consent and co-operation of the plaintiffs' predecessors. It is still the Habib Bank A.G. Zurich carrying on the business which it was incorporated to carry on. Its constitution, its management, its business style and its motto remain unchanged. And it is accepted, as it must be accepted on the facts, that when it established its business here there was no misrepresentation.

I have already outlined in summary the way in which Mr. Aldous

puts his case and it bases itself, on analysis, on a number of axioms - I say axioms advisedly because they are advanced rather as matters which are self-evident than as matters which can be said to be supported by the evidence or by the judge's findings. First, it is said that the reputation and goodwill in this country associated with the name Habib was in November 1973 exclusively the property of H.B.O. because that was the only company which traded here. Then it is said that H.B.Z. was set up here and held out as a bank associated with and "under the same effective management as" - and these words are crucial to Mr. Aldous's case - "the existing United Kingdom business of H.B.O." That, the argument proceeds, was done for the limited purpose of enabling H.B.O.'s customers in England to make remittances to hard currency areas. So here, says Mr. Aldous, is the representation imported by the use by H.B.Z. of the name Habib. "We are under the same effective management as the bank known as Habib Bank Overseas Ltd. and we are here for the purpose of receiving deposits from customers of that bank for hard-currency areas."

In the spring of 1974, when the now nationalised Habib Bank Ltd. sought unsuccessfully to appoint its nominees to the board of H.B.Z., Mr. Aldous says that all that changed. The representation remained the same but it was no longer true. True it is that in the resulting confusion H.B.O. and its personnel in London assisted H.B.Z. in finding new offices and setting up its business. True it is that H.B.O. and H.B.Z. continued, as they do to this day, to do business together - substantial business: indeed many thousands of transactions. But they are not associated together. They are not under the same effective management. Indeed on April 8, 1974, a meeting of the executives of the nationalised bank resolved: "Zurich. We should continue business relations with them as before. However, rates of interest etc. should be on competitive basis."

H.B.Z. over the next few years expanded its activities. It received Bank of England permissions to operate non-resident sterling accounts in June 1974, to issue and confirm credits (June 1974 and March 1975) to remit to resident customer's non-resident dependant in the Middle East (September 1975) to open a U.S. dollar account in New York (June 1975) to open a Deutshmark account in Germany (September 1975) and finally to effect remittances in rupees to resident customers' non-resident dependent relatives in the Indian sub-continent (September 1978). It was really only this latter which trespassed in any way on the plaintiffs' principal business in the United Kingdom which is and has always been that of obtaining remittances for Pakistan.

So, says Mr. Aldous, H.B.Z. "left the club." They eschewed the same management. They traded on their own in a way quite other than that contemplated when they were established here. Yet they continued to make use of the plaintiffs' exclusive reputation in the name Habib for the purposes of their now competing business. From March 1974 onwards therefore Mr. Aldous submits that there was a continuing misrepresentation which entitles him now to an injunction. Now it is perhaps not surprising that Mr. Aldous seeks to concentrate attention on March 1974 when his clients' attempt to obtain effective management of H.B.Z. failed, for it is only thus that he can make out a case for misrepresentation at all. To some extent it does however obscure the issue because it ignores the three and a half years of independant trading which ensued thereafter before the first murmur of discontent was heard

which gave rise to this action and the question ultimately is whether there was a cause of action in passing off at the date of the writ and not whether, three years earlier, one party or the other might have succeeded if proceedings had then been commenced.

But granted for a moment Mr. Aldous' hypothesis that this is the relevant moment for testing the matter, and leaving aside all questions of laches and acquiescence, one still has to examine with some care whether he can make good his basic factual submissions.

First, let me take his tenet that in March 1974 H.B.O. had the exclusive reputation and goodwill in the United Kingdom in the name, Habib. For this Mr. Aldous relies on two passages in Whitford J.'s judgment which, he claims, constitutes findings in his favour. The judge said:

"Although H.B.Z. was and is a separate legal entity, it is clear on the evidence that it in fact operated as if it were another branch of the Habib organisation, just as had been the case with H.B.O. Effectively the control over the operations of H.B.O., H.B.L. and H.B.Z. was the same. ..."

Later the judge said:

"When H.B.Z. entered the United Kingdom, as they did at the instance of and with the approbation and assistance of H.B.L. and H.B.O., they immediately assumed a part in this shared reputation in this country. At this stage H.B.Z. would be taken, as the plaintiffs' witnesses put it, to be the same bank."

I am unable to put upon the these passages the interpretation which Mr. Aldous urges. It seems to me to be perfectly plain that when the judge used the expression "the same bank" he was referring to the whole international banking organisation run by the members of the Habib family whose name was well known to Pakistan's immigrants in this country. That emerges, I think, clearly from these further passages in the judgment. Talking of the action the judge said:

"It has only arisen because of the nationalisation on January 1, 1974, of two banking organisations which, together with the defendant bank prior to that date, constituted an international banking network owned and controlled by members of the family bearing the name Habib. I was told by Mr. Tayebi, the plaintiffs' first witness, who is an executive vice-president, chief law officer and secretary of the plaintiffs, that Habib is a not very common name, but it is a name found in Muslim countries. He also told me that, in relation to the business community and in a commercial and banking context the name Habib in Pakistan for many years was associated exclusively with the business of the family who, in 1941, established the Habib Bank Ltd. in Bombay. In the years which followed, up to 1974, this bank remained under the control of the family, but in the years intervening there have been a number of changes."

Later the judge said:

"Dealing with H.B.L. in Pakistan, or at three overseas branches which H.B.L. ran in Kuala Lumpur, Singapore and New York, and dealing with the branches of H.B.O., the customers would I think proceed upon the basis that they were using the facilities of the Habib Bank without stopping to consider whether or not there were

separate organisations running the different branches in different parts of the world and without stopping to consider for one moment who may have held the shares or the majority of the shares in one or other of these organisations. There were these two separate organisations but customers dealing with them could nonetheless be rightly confident that their interests were safeguarded by reason of the control exercised by the Habib family, whose reputation in commercial and banking circles stood and stands very high, as was said in the evidence of the plaintiffs' witnesses, in particular Mr. Bukhari ... I think, on the evidence, the goodwill and repute prior to 1973 which attached to the name Habib was a goodwill attaching to the Habib organisation at large and it was no doubt additionally built up having regard to the confidence felt in the family which started the bank and the esteem in which they continued to be held."

The judge said earlier:

"Staff were moved from one company to the other, but always considered themselves as being servants of the same organisation. The customers I am sure, whether dealing with H.B.L., H.B.O. or H.B.Z., though they were dealing with one and the same organisation - as indeed, so far as any question of effective control is concerned, they were - and the evidence that was called is in support of this view."

That was related to the period before nationalisation.

The view of the matter expressed by the judge is I think amply borne out by the evidence. [His Lordship considered the evidence of the plaintiffs' witnesses, Mr. Tayebi and Mr. Bukhari and continued:] Of course, it is perfectly true, as Mr. Aldous submits that the exploitation of the family name in the United Kingdom had taken place through only one of the three limited companies founded by the family so that in one sense the goodwill associated with the name adhered to that company, but it seems perfectly clear from the evidence - and it must be remembered that the customers were either entirely or substantially entirely Pakistanis in this country, many of whom were illiterate - the reputation attached to the family name, so that an organisation established by that family under the family name immediately acquires the reputation of the family. The judge has been criticised for his finding that there was a shared goodwill, which it is said was not a reflection of the way in which the case had been argued by either side and it may be that the expression is perhaps less than precise shorthand. But for my part I cannot see that in the essentials the judge was wrong. Where an internationally known business establishes a branch in this country through a limited company, either incorporated here or abroad, it may be that technically the goodwill and reputation of that business "belongs" to the limited company in the sense that the company may be the proper and only plaintiff in an action taken here to protect it. But it does not cease to be the goodwill and reputation of the international business because it is also the goodwill and reputation of the local branch. And that reputation inheres, as it seems to me, equally in any other local branch which the international business may set up in the same place. The expression "goodwill" has been conveniently defined in the following phrase which is quoted in Erven Warnink

Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd. [1979] A.C. 731, from the speech of Lord Macnaghten in Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd. [1901] A.C. 217. Lord Diplock, after referring to Lord Parker in A.G. Spalding and Brothers v. A. W. Gamage Ltd., 84 L.J.Ch. 449, said, at p. 741:

"In a speech which received the approval of the other members of this House, he" (that is Lord Parker) "identified the right the invasion of which is the subject of passing off actions as being the 'property in the business or good will likely to be injured by the misrepresentation'. The concept of goodwill is in law a broad one which is perhaps best expressed in words used by Lord Macnaghten in Inland Revenue Commissioners v. Muller & Co.'s Margarine Ltd. [1901] A.C. 217, 223-224: '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.'"

At the base of Mr. Aldous's submissions there lies the notion that even in the case of an international group in the sense used above, once there has been established here a corporate entity making use of their goodwill, the goodwill becomes a localised asset forming part of the exclusive property of the corporate entity, and can be attached to another corporate entity established by the international body only by some transfer from the original user in this country, for instance, by assignment or licence expressed or implied. For my part, I think that that displays an unduly and unjustifiably formalistic approach to the matter and to be an approach which ignores both substance and reality. Essentially the evidence and the judge's findings seem to me to justify the proposition that the reputation and that the establishment of a branch in this country, whether as a separate corporate entity or not, imports simply that it is part of that international organisation which is run by the Habib family.

I start therefore from the position that, for my part, I am unable to see that, however he expressed it, the judge went wrong in his rejection of Mr. Aldous's first basic assumption of an exclusive goodwill subsisting in H.B.O.

I come then to Mr. Aldous's second axiom, that the establishment here of the defendants' office under the title of H.B.Z. imported a representation that it was a company under the effective management of H.B.O. or the original H.B.L. or under the same effective management as those two companies. I do not think it imported anything of the sort save to this extent that all the companies were under the management of members of the Habib family. I can see absolutely no reason why anyone should assume from the name Habib Bank A.G. Zurich that H.B.Z. was a subsidiary of one or the other of H.B.O. or the original H.B.L. or that it was their parent company or indeed anything more than it was loosely associated with them by its ties with the same family. It is indeed instructive to see how this was pleaded. In paragraph 5 of the statement of claim it is pleaded as follows:

"The defendants have passed of and intend to continue to pass off their banking business in this country as and for the business of the plaintiffs or as a business connected or associated with the plaintiffs or a branch thereof or as a business under the effective control of the plaintiffs."

The plaintiffs were asked for particulars of that. They were asked:

"(a) State what is meant by the plaintiffs' effective control' of the defendants. (b) Identify precisely the date when it is alleged that the defendants ceased to be under the effective control of the plaintiffs. (c) State precisely the period during which it is alleged that the defendants were under the effective control of the plaintiffs and all facts and matters relied upon to establish such effective control. (d) State all facts and matters relied upon to establish that the plaintiffs lost effective control of the defendants. (e) State precisely when the nationalisation and merger are alleged to have taken place."

That request was answered:

"(a) By 'a business under the effective control of the plaintiffs', the plaintiffs mean a business wherein the majority shareholding is the same as that of the plaintiffs and/or in which the executive decisions are made by the same persons who make such decisions in the plaintiffs company. (b) The defendants ceased to be under the effective control of the plaintiffs on the date of nationalisation being January 1, 1974, or shortly thereafter. (c) The defendants were under the effective control of the plaintiffs at all times prior to the date of nationalisation. In support hereof the plaintiffs, will rely on the fact that prior to January 1, 1974, the majority shareholdings in H.B.Z. and H.B.O. were held by the same persons and that ultimately the executive decisions of the two companies were made by the same persons and in particular by Mr. Hyder Habib."

(It will be remembered that he remained and still remains to this day one of the controlling persons behind H.B.Z.).

"(d) In support of the allegation that the plaintiffs lost effective control of the defendants, the plaintiffs will rely on the fact that after nationalisation the ownership of H.B.O. and H.B.L. passed to the State of Pakistan and that shortly thereafter the executive decisions of H.B.O. were taken by persons other than those taking such decisions for H.B.Z."

It then gives the date of nationalisation.

There was never at any time a majority shareholding in H.B.Z. by H.B.O. or by the Habib family and I confess myself wholly unable to see why the mere establishment by a Swiss company of an office in London where there is already a family company doing business should import any representation at all about who is responsible for the management decisions of either. It seems to me that where you are dealing with Pakistani citizens who are familiar with affairs in Pakistan and well acquainted with the reputation of a well known banking family all that the name imports is "we are a company associated with the Habib family." That is as true today as it was in 1973.

Then turning to Mr. Aldous's third proposition that there was some agreed or understood limitation on the activities of H.B.Z. in London, which has somehow been transcended by the development of a general banking business, there is, apart from a reference to the original purpose of providing a hard currency haven safe from the prying eyes of an inquisitive government, no evidence to support any such agreement or

understanding. H.B.O.'s officers in their answers to the State Bank of Pakistan denied any agreement and simply said that the operations were to be governed by the articles of association (which I should perhaps say cover the carrying on of a general banking business). The Bank of England was informed that H.B.Z. desired to take part in the banking activities of the City of London and Mr. Hussein's evidence was that he was told in Zurich to take over the London branch which would be a general banking business. I find this suggestion of the plaintiffs really wholly unsupported by the evidence, but in any event it seems to me to have relevance only to the question of a acquiescence and not to the logically anterior question of whether there was any misrepresentation.

I think that it will have become evident from what I have said so far that I find myself wholly unpersuaded that the judge, however he may have expressed himself, erred in principle in the conclusion at which he arrived that the evidence disclosed no passing off because there simply is not and was not any misrepresentation. That really was suffcient to dispose of the case and it is sufficient, in my judgment, to dispose of this appeal.

The proposition that a nationalisation decree which deprives individuals in a foreign jurisdiction of their control of a foreign company can have the effect of forcing those individuals to give up the use of a name which they have lawfully adopted and are lawfully using in another jurisdiction is one which, in any event, I find a little startling, and Mr. Jeffs has addressed to us. under his cross-notice, an argument that the English court will not prevent a company lawfully incorporated abroad from honestly using its corporate name in connection with a business carried on here. In the view that I take it is unnecessary to decide this interesting point, although it derives some support from the decision of Stirling J. in Saunders v. Sun Life Assurance Co. of Canada [1894] 1 Ch. 537, and the judgment of Morton L.J. in particular in the Court of Appeal in Marengo v. Daily Sketch and Sunday Graphic Ltd. (unreported) May 17, 1946, although that decision was subsequently reversed on the facts in the House of Lords [1948] W.N. 92.

But even if I were in doubt about the principal ground for the judge's decision, I think that the judgment can equally be supported on the other grounds which he gave. First, the question of damage. The judge expressed himself in these terms in his judgment, having reviewed the evidence on damage:

"Had it been necessary for me to come to a conclusion on the question of damage, I am by no means certain that I could come to the conclusion that the plaintiffs have satisfactorily established their case under this head."

I think that if I have a criticism of the judge's judgment, it is only that in this he did not go far enough. It has to be remembered that damage is of the essence of the claim, although of course it may be inferred. This appears most clearly from the speech of Lord Fraser of Tullybelton in Erven Warnink Besloten Vennootschap v. J. Townend & Sons (Hull) Ltd. [1979] A.C. 731, 755-756:

"It is essential for the plaintiff in a passing off action to show at least the following facts: - (1) that his business consists of, or includes, selling in England a class of goods to which the particular trade name applies; (2) that the class of goods is clearly defined,

and that in the minds of the public, or a section of the public, in England, the trade name distinguishes that class from other similar goods; (3) that because of the reputation of the goods, there is goodwill attached to the name; (4) that he, the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value; (5) that he has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached."

But here there really was no evidence of any damage of any significance over the whole period since nationalisation. The witnesses called by the plaintiffs to establish the probability of confusion seem, judging from the transcripts, from the plaintiffs' point of view to have been disappointingly vague. It has to be remembered that these two banks had been trading together in London for three and a half years before the issue of the writ and nearly six years at the date of the hearing. Yet there was not one atom of evidence of any customer who had opened an account at one in mistake for the other, apart from one case in which a gentleman who had opened an account with H.B.Z. had subsequently closed it and transferred his business to the plaintiffs. Since he had previously transferred part of the moneys in his account with H.B.Z. to an account opened with the plaintiffs before finally closing his account with H.B.Z. this may import dissatisfaction but it hardly looks like a case of confusion. All the other evidence of confusion related to a decreasing amount of postal confusion (much of which was accounted for by carelessness on the part of the Post Office) telex confusion by junior banking staff, and a decreasing quantity of credits or debits to the wrong banks, which were swiftly rectified without loss, although this may have caused some slight administrative inconvenience on both sides. But the evidence did indicate that errors of this sort did occur, though much less frequently, even with other banks.

H.B.Z. has 21 branches in various countries, in many of which the plaintiffs also have branches, sometimes even in the same town. There was no evidence of confusion between the two except in one case of a press report where a guarantee given by the plaintiffs was described as given by the "Zurich based" Habib Bank.

Mr. Aldous says that there is a danger of some malpractice of H.B.Z. rubbing off on his clients. That is a two-way traffic. The judge dismissed this as pure speculation and so it is. Moreover, it is speculation against the background of some 12 years of concurrent international trading during which there is minimal evidence of any substantial confusion, except of a purely mechanical kind. For my part I would be bolder than the judge. I think that the plaintiffs failed to establish any substantial damage or probability of damage.

Finally I turn to the point of acquiescence, laches and estoppel. The judge would have held the claim barred on this ground if he had thought that any claim existed; and so would I.

Just consider the facts. It is common ground that H.B.Z. were formed and founded with the active concurrence of the plaintiffs' predecessors and that their staff were used to set them up in London.

After nationalisation H.B.Z. was established in its new office with the help of H.B.O.'s staff in London. It was the evidence of the plaintiffs'

own witnesses that thereafter there were literally thousands of transactions between the two banks every year and that the plaintiffs and H.B.Z. entered into a whole series of agency arrangements which were profitable to both sides.

The relationship after nationalisation is summed up in the following very significant evidence from the plaintiffs' own witness, Mr. Bukhari. He was asked:

"Q. Can you tell me, if H.B.O. (subsequently the plaintiffs) had decided to do no business after nationalisation with H.B.Z., what would be the position in relation to H.B.Z.: would they have been able to transact the same business? - A. Not after nationalisation: we could not or did not stop our dealings with Habib Bank Zurich, Neither did they stop dealing with us, because there were so many transactions, so many accounts mutual and they were so interwoven and so many clients are involved that it was not possible for us or for them to discontinue relationship between the two banks. Q. I do not think you are answering the question I asked but do finish your answer. - A. I was saying that we in London were looking after all the London business of the Habib Bank Zurich. All their investments were made to us, all their money was placed or transactions relevant were effected with us. So at that time I believe that Habib Bank A.G. Zurich could not have done without us. Of course, They could Make alternative arrangements with other banks, but it would take a lot of time. Q. What about the agency agreements: supposing you had said, 'We will take no agency work', could they have transacted that with some other bank? - A. Yes, it is always possible to make agency arrangements with other banks, but relations being what they were prior to nationalisation, it was easier and more convenient, and particularly they needed Habib Bank with a network of branches in Pakistan, and that is why they approached us and we did make agency arrangements."

There was also evidence which established that whereas H.B.Z. had from the inception used a logo consisting of a lion, not dissimilar to that used by the original H.B.L. in Pakistan, H.B.O. had right from the outset used in the United Kingdom the insignia of a flying horse. After nationalisation that was abandoned and the plaintiffs elected to use here the original H.B.L. motif thus bringing themselves nearer to H.B.Z. - a source of possible confusion compounded by their failure to comply with section 411 of the Companies Act 1948 by specifying in their letterheads that they were incorporated in Pakistan. One's initial reaction, looking at the history of the matter, is that there could hardly be a plainer case of acquiescence than this, but Mr. Aldous says first that there is no properly pleaded case of acquiescence, and, secondly, that the essential ingredients of a defence of acquiescence were never proved.

We were again referred to many authorities on this subject and to the debate which has taken place as to whether, in order to succeed in a plea of acquiescence, a defendant must demonstrate all the five probanda contained in the judgment of Fry J. in Willmott v. Barber (1880) 15 Ch.D. 96: see the recent judgment of Robert Goff J. in Amalgamated Investment & Property Co. Ltd. v. Texas Commerce International

Bank Ltd. [1981] 2 W.L.R. 554. Whether all five of those probanda are necessary or not, Mr. Aldous submits that to succeed H.B.Z. must at least establish three things. They must show, first, that H.B.Z. have been acting under a mistake as to their legal rights. That, in the instant case, must mean that they were unaware that what they were doing (that is to say, carrying on their business under the name in which they had been incorporated with the active assistance of the plaintiffs' predecessors), constituted any invasion of the plaintiffs' rights. Secondly, they must show that the plaintiffs encouraged that courser of action, either by statements or conduct. Thirdly, they must show that they have acted upon the plaintiffs' representation or encouragement to their detriment.

None of these three essentials, submits Mr. Aldous, has been pleaded or proved in the instant case. I will consider that submission in a moment, but I must first notice Mr. Jacob's submission that in any event these three allegedly essential ingredients do not constitute the test for a successful plea of acquiescence or estoppel, at any rate as the law has now developed. The true principle, Mr. Jacob suggests, is that to be found in the judgment of the Board in Lindsay Petroleum Co. v. Hurd (1874) L.R. 5 P.C. 221, 239, delivered by Sir Barnes Peacock and cited with approval by Lord Blackburn in Erlanger v. New Sombrero Phosphate Co. (1878) 3 App.Cas. 1218, 1279:

"'The doctrine of laches in courts of equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct done that which might fairly be regarded as equivalent to a waiver of it, or where, by his conduct and neglect he has, though perhaps not waving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. But in every case if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice of injustice in taking the one course or the other, so far as relates to the remedy.'"

After quoting that passage Lord Blackburn continued:

"I have looked in vain for any authority which gives a more distinct and definite rule than this; and I think, from the nature of the inquiry, it must always be a question of more or less, depending on the degree of diligence which might reasonable be required, and the degree of change which has occurred, whether the balance of justice or injustice is in favour of granting the remedy or withholding it. The determination of such a question must largely depend on the turn of mind of those who have to decide, and must therefore be subject to uncertainty; but that, I think, is inherent in the nature of the inquiry."

To this Mr. Aldous retorts that that applies only where you are considering the doctrine of laches or acquiescence in relation to the

assertion of equitable rights and not where you are considering the enforcement by equitable means of legal rights; and we were regaled with authorities on both sides for the purpose of establishing whether a plaintiff in a passing off action is protecting a legal right or an equitable right.

I have to confess that I detect in myself, despite the erudition displayed by both counsel, a strong predilection for the view that such distinctions are both archaic and arcane and that in the year 1980 they have but little significance for anyone but a legal historian. For myself, I believe that the law as it has developed over the past 20 years has now evolved a far broader approach to the problem than that suggested by Mr. Aldous and one which is in no way dependent upon the historical accident of whether any particular right was first recognised by the common law or was invented by the Court of Chancery. It is an approach exemplified in such cases as Inwards v. Banker [1965] 2 Q.B. 29 and Crabb v. Arun District Council [1976] Ch. 179. We have been referred at length to a recent judgment of my own in Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. (Note) [1981] 2 W.L.R. 576 in which I ventured to collect and review the authorities. I there said, at p. 593:

"Furthermore the more recent cases indicate, in my judgment, that the application of the Ramsden v. Dyson, L.R. 1 H.L. 129 principle - whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial - requires a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly, or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour."

Whilst, having heard the judgment read by counsel, I could wish that it had been more succinct, that statement at least is one to which I adhere.

But let me, for present purposes, assume in Mr. Aldous's favour the three essentials which he propounds. He says that there was no plea, no assertion, no evidence of H.B.Z.'s innocence in what they did: but, I ask, why should there be? In his statement of claim he asserted that H.B.Z. "intended" to pass off their business as one associated with the plaintiffs and he was asked, in a request for particulars, whether that meant deliberate passing off. That request produced a positive response but it is common ground that the allegation was withdrawn well before the trial. So that the case from thereon proceeded from first to last on the footing that the there was no suggestion of male fides. Then, again, before the trial the plaintiffs were asked to make certain admissions and the following facts were all expressly admitted.

It was admitted that H.B.Z. were incorporated under their present name with the consent of H.B.O. It was admitted that clause 2 of H.B.Z.'s statutes translated into English provided:

"The corporation may take up holdings in similar companies, establish branches in Switzerland or abroad and in general transact

any business directly or indirectly connected with realising its objects."

It was admitted by H.P.Z.'s request for admissions:

"By letter dated June 5, 1973, H.B.O. on behalf of H.B.Z. sought Bank of England consent to open an office in London ... that H.B.Z. acquired premises at 8 City Road under a lease dated May 22, 1974."

It was not admitted that the premises were found for H.B.Z. by De Groot Collis (estate agents) pursuant to instructions given by H.B.O. officials; but in fact that was proved. And it was admitted: "The London office of H.B.Z. has maintained an account with H.B.O. and subsequently the plaintiffs since July 3, 1973."

In paragraph 12 of the reply there was this admission:

"It is admitted that shortly prior to these proceedings neither H.B.L. nor H.B.O. objected to the defendants' activities. However the same does not provide any defence to this action."

There is then a very significant deletion, which was the original pleading:

"Up till that time the defendants' activities in this country had been very limited and had been purely in respect of their Swiss banking business. The first knowledge the plaintiffs had that the defendants intended to carry out banking activities in this country other than as a necessary part of their activities in Switzerland was when the defendants started preparation to open their new premises in Moorgate."

The whole of that was subsequently deleted on amendment before trial.

So here was a company against whom no male fides was alleged, as to whom it was admitted that its trading name style and objects were assumed with the consent of the plaintiffs' predecessors, that its offices were found for it by the plaintiffs' predecessors, that its very consent from the Bank of England was obtained by the plaintiffs' predecessors, and that up to and after the action it had maintained an account with the plaintiffs; and in relation to whose user of the name it was never alleged from first to last that the slightest objection was taken until about a month before the writ. I am bound to say that it struck me while Mr. Aldous was addressing us, as it strikes me now, that in these circumstances the calling of a witness to prove what the facts themselves seem to me to demonstrate beyond a peradventure, was a work of supererogation, for there could not, in the proven circumstances, have been any reason why, in the absence of any adverse claims by the plaintiffs, anyone should for a moment imagine that there could be the slightest objection likely to be raised by them to the continuation in business of what, essentially, had started life as their own creature.

As regards the second of Mr. Aldous' propositions, I challenged Mr. Aldous in the course of the argument to tell us what more the plaintiffs could have done than what they did to encourage H.B.Z. in the belief that there was no objection to their trading style and his answer was that there was more - they could have written a letter expressly stating that there was no such objection. That answer, I think, really spoke for itself, although perhaps extracted from counsel in a moment of exasperation, for really when the facts are examined - and

they show a history of continuous mutual trading over the whole period (even including the sale of equipment by the plaintiffs to H.B.Z.) - the case is really unanswerable.

Finally, there was, says Mr. Aldous, neither express allegation nor express proof that H.B.Z. had acted upon the encouragement. There is certainly an allegation in relation to estoppel in paragraph 15 of the defence that H.B.Z. have relied upon the right to use their own name and motif and have been permitted by the plaintiffs to build up a goodwill therein. That goodwill, in fact, was amply proved by the banking documents and by H.B.Z.'s witnesses. I really cannot think that it was necessary formally to call a witness to say "we did this in reliance upon the supposition that we were allowed to use our corporate name." That reliance can be inferred from the circumstances as it was in Greasley v. Cooke [1980] 1 W.L.R. 1306 (see the judgment of Lord Denning M.R., at p. 1307) and I think that the judges was perfectly justified in inferring it from the evidence before him in this case.

I have to acknowledge my indebtedness to counsel on both sides for some illuminating arguments, but at the end of them I find myself entirely unpersuaded that the judge erred in any material respect. He concluded his judgment in this way on the question of estoppel:

"Of course, estoppel by conduct has been a field of the law in which there has been considerable expansion over the years and it appears to me that it is essentially the application of a rule by which justice is done where the circumstances of the conduct and behaviour of the party to an action are such that it would be wholly inequitable that he should be entitled to succeed in the proceeding."

That, to my mind, sufficiently appears on the facts of this case.

I, too, think that it would be wholly inequitable that the plaintiffs should succeed even if, contrary to the view which I have formed, they had established their primary case. I would, therefore, dismiss the appeal.

WATKINS L.J. I agree, and there is nothing I could possibly add to that judgment.

STEPHENSON L.J. I agree and would like to express my concurrence with what Oliver L.J. has said, both about archaic and arcane distinctions and in his statement in Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. (Note) [1981] 2 W.L.R. 576 which he read from his judgment.

Solicitor: Stones, Porter & Co.; Freshfields.

A. R.