Confusion worry over Council new name, legal advisor

(Originally published at http://www.themud.co.nz/#!council-name-confusion-worry/c8yk)

12 December 2014

The Rotorua District Council was warned before making a decision that its new name may cause confusion in the marketplace.

The legal advice 25 November, two days before the meeting that agreed to the change, says the council cannot change its official name without an Order in Council but can adopt a “brand name”.

The advice was provided by Lachlan Muldowney, a partner in the legal firm Tompkins Wake Lawyers, Hamilton, and discusses the name change in terms of the Local Government Act 2002 and other relevant laws.

The Mud requested a copy of the legal advice from the council. The lawyer says that the new name Rotorua Lakes Council is lawful but he adds a rider about how the name is used.

He notes that managing the relationship existing name and the proposed Rotorua Lakes Council brand name should be a priority to avoid confusion.

The advice was not in the pre-published agenda and was not recorded in the minutes published after the meeting. The decision to change the name was passed by a vote of seven against five.

The council subsequently changed the name to Rotorua Lakes Council, and The Mud questioned whether it might be in breach of the Act which stipulates the use of the word “District” in any name used.

Although Lachlan Muldowney says it is within the council’s power to adopt the new name, he says it “does present one issue which should be carefully considered in the context of the principles of sound business practices” as set out in the Act.

Other territorial which have changed their names have chosen brands clearly different from their legal title, so are “sufficiently distinct” to avoid all confusion.

“The market clearly understands that these are simply ‘brand names’ for its regional councils.

“Because the properly constituted name of the Rotorua District Council will still be regularly used in your day to day business….this name, in combination with Rotorua Lakes Council, will mean there will be two similar names regularly used and seen in the market.

“This has the potential to cause some level of confusion. The market may be confused as to whether these two entities are in fact separate and distinct, or whether one is simply the trading name of the other.”

While the council doesn’t intend to change its territorial name it can do so using the mechanism’s available in law, effectively requiring the Governor-General to make an Order in Council.

All commercial agreements and legally binding commitments must be made under its proper name. The council’s legal standing does mean it has the fully capacity to carry out any activities or business it chooses.

“This means that if Council wishes to adopt a brand name which it uses to promote Rotorua, and further advance the various strategies which it has adopted, it is opened for it to do so.”

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