Mainfreight (S) Pte Ltd v Mainfreight International Logistics Pte Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 15 August 2012
• Neutral Citation: [2012] SGHC 169
• Court: High Court (Singapore)
• Docket Number: Suit No 24 of 2011
• Year: 2012
• Published date: 27 August 2012
• Hearing Date: 24 November 2011,07 January 2012,23 November 2011,22 November 2011
• Plaintiff Counsel: G Radakrishnan and Prithipal Singh s/o Seva Singh (Infinitus Law Corporation)
• Defendant Counsel: Gill Dedar Singh (instructed) and Regina Quek (One Legal LLC)
• Subject Matter: Tort,Passing off
• Citation: [2012] SGHC 169

Judith Prakash J: Introduction

This case involves an action by the plaintiff against the defendant for passing off of the trade name and service mark MAINFREIGHT.

The plaintiff, Mainfreight (S) Pte Ltd, was incorporated in Singapore on 12 November 1988. At the time of trial, it had been in business for 22 years. It provides shipping, freight forwarding, and warehousing services to customers in Singapore and overseas. According to the plaintiff, it brings in and delivers goods to consignees and importers in Singapore. It also collects and ships out goods for consignors and exporters in Singapore. It argued that its business is international and spans many countries.

The defendant, Mainfreight International Logistics Pte Ltd, was incorporated in Singapore on 20 August 2010. It provides freight forwarding, packing and crating services.

The defendant is a wholly owned subsidiary of Mainfreight Ltd, a company incorporated in New Zealand in 1978 under the name “Mainfreight Transport Ltd”. Mainfreight Ltd is a global supply chain logistics provider and has a number of offices, branches and subsidiaries in New Zealand, Australia, the United States and Asia. The defendant referred to Mainfreight Ltd and its subsidiaries and branches as “the Mainfreight Group”. Mainfreight Ltd was listed on the New Zealand Stock Exchange in 1996. The defendant was set up as a regional office for the Mainfreight Group’s international freight forwarding business.

The proceedings

In these proceedings, the plaintiff seeks injunctive relief to, inter alia, restrain the defendant from passing off by using for the defendant’s services the trade name MAINFREIGHT (including Mainfreight in small letters) or any other name colourably similar to MAINFREIGHT as the defendant’s trade name. It also seeks to restrain the defendant from passing off by providing or offering to provide or advertising the defendant’s services as the services of the plaintiff or as being connected to the plaintiff by using the trade name MAINFREIGHT. The plaintiff also seeks an inquiry as to damages, payment of any damages found due, delivery up of articles bearing the word MAINFREIGHT and for the defendant to change its name.

In its Defence (Amendment No. 2), the defendant: did not admit that the plaintiff had valuable goodwill in Singapore; pleaded that the plaintiff did not have exclusive rights to the name MAINFREIGHT in Singapore; pleaded that Mainfreight Ltd or the Mainfreight Group was a prior and/or concurrent user of the MAINFREIGHT name and mark(s) in Singapore; pleaded that the plaintiff had acted in bad faith by registering and using the same name/mark MAINFREIGHT in Singapore; pleaded that Matthew Er (a director of the plaintiff), and by implication, the plaintiff, had acquiesced to and/or was stopped from objecting to, the use by Mainfreight Ltd and/or the Mainfreight Group (and therefore by implication the defendant, which was all times duly authorised by Mainfreight Ltd as Mainfreight Ltd’s wholly-owned subsidiary and/or as part of the Mainfreight Group), of the name/mark MAINFREIGHT in Singapore.

The defendant abandoned points (d) and (e) after the trial. With regard to point (a), the defendant in its submissions conceded that the plaintiff has goodwill in the following trade lanes: Singapore – Malaysia; Singapore – Borneo; Singapore – Myanmar. For the sake of convenience, I will refer to these as the “three trade lanes”. Notwithstanding this, however, the defendant argued that the plaintiff was not entitled to maintain an action for passing off because the plaintiff’s goodwill was limited to the three trade lanes and the plaintiff did not operate in the same lanes as the defendant and therefore the parties were not in competition with each other.

The issues

It is common ground that in order to succeed in a claim for passing off the plaintiff must show: Goodwill; Misrepresentation; and Damage.

Bearing the above elements in mind, the issues that arise out of the pleadings and the evidence are the following: Whether the plaintiff possessed goodwill in its business under the MAINFREIGHT name or mark on or before the relevant date (being 20 August 2010 according to the plaintiff and 1 January 2011 according to the defendant); Whether the defendant’s use of the MAINFREIGHT name or mark in the course of its business amounted to an actionable misrepresentation to the relevant sector of the public; Whether the plaintiff was likely to suffer damage or loss as a result; Whether Mainfreight Ltd, the defendant’s parent company, or the Mainfreight Group, enjoyed any goodwill in Singapore concurrently with that enjoyed by the plaintiff; Whether, if such goodwill was established, the defendant was entitled to ride on that goodwill.

Goodwill Relevant date

Both parties agreed that the relevant time at which goodwill was to be determined was the date at which the defendant commenced the activities complained of. As indicated above, however, the parties disagreed when it came to identifying the actual date.

The plaintiff argued that its goodwill should be assessed at the date at which the defendant actually commenced business, ie, 1 January 2011. This date was established by the evidence of Daniel Lim (“Mr Lim”), the defendant’s branch manager. The defendant’s position was that the plaintiff’s goodwill should be assessed at the date of incorporation of the defendant, i.e 20 August 2010.

In CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 1 SLR(R) 975 (“CDL”), the Court of Appeal, in discussing the concept of the relevant date, said (at [40]):

The situation here has some similarity with the New Zealand case of Crusader Oil NL v Crusader Minerals NZ Ltd (1984) 3 IPR 171. There, the plaintiffs established a large resource company in Queensland, Australia and had generated goodwill in relation to that business. However, they had no goodwill in New Zealand. In November 1982, the defendant company was registered in New Zealand with a very similar name and similar objects. However, it did not begin to trade. At that point in time, the plaintiff still had no goodwill in New Zealand. It was established that the plaintiffs acquired sufficient goodwill in New Zealand by April 1983. In June 1983, the defendant published its prospectus seeking for investors. Jeffries J of the High Court of New Zealand held that the relevant date for determining whether the plaintiffs had established any goodwill was in June 1983, when the defendant published its prospectus and sought investors, and not the earlier date of November 1982 when the defendant company was registered in New Zealand but had not begun trading. June 1983 was held to be the date on which the defendants commenced their conduct of passing off, as that was the date they commenced their act of infringement.

[emphasis added]

In line with the above authority, the relevant date for determining whether the plaintiff had established any goodwill is 1 January 2011, when the defendant actually commenced business.

It should be noted too that it was also the evidence of Mr Lim that two instances of confusion concerning mis-sent documents were due to the fact that the defendant had only recently commenced business dealings with Costar Shipping Pte Ltd and Hanjin Shipping (S) Pte Ltd. These documents were sent on 7 January 2011 and 24 January 2011 respectively. Accordingly, the 1 January 2011 date for commencement of business appears to be borne out by documentary evidence as well as Mr Lim’s testimony.

Does the plaintiff have goodwill in Singapore?

The plaintiff stated that it had used the MAINFREIGHT name and mark for 22 years for its shipping, freight forwarding and warehousing services. Whilst the legal name of the plaintiff is Mainfreight (S) Pte Ltd, the plaintiff’s evidence was that its trade name in Singapore has always been just “Mainfreight”. Save for written correspondence where the name is used in full, the plaintiff identifies itself and, it said, is identified by its customers and the trade simply as MAINFREIGHT. The plaintiff accepted that its name is a combination of the ordinary English words “main” and “freight” but asserted that over the 22 years of its existence the combined word had acquired a secondary meaning in Singapore and referred to the plaintiff and only the plaintiff in this country.

The evidence was that in the course of its business, the plaintiff deals with: Inbound and outbound cargo; Transhipment cargo to other countries in the region; and Cross-trades, namely freighting cargo between ports located outside Singapore. The goodwill is claimed for those in Singapore who do business with the plaintiff which, the plaintiff asserted, is a very wide constituency. Its customers include exporters, importers, shipping lines, container suppliers, port authorities, customs authorities, and members of the public who want to ship or to receive goods.

In its submissions, the plaintiff stated that there could be no dispute that both parties were in the same business, namely freight forwarding. Therefore, the plaintiff argued that there was a common field of activity.

Defendant’s arguments

The defendant, as mentioned above, did not dispute that the plaintiff possessed some goodwill. Its main argument was that the scope of the plaintiff’s goodwill should be limited to the trade lanes it could lay claim to. It cited the Court of Appeal’s judgment in Novelty Pte Ltd v Amanresorts Limited [2009] 3SLR(R) 216 (“Amanresorts”) for the proposition that goodwill, the “attractive force that brings in custom”, was not an “all-or-nothing attribute”. It then argued that the plaintiff’s approach to the element of goodwill was misguided, and that the correct approach was to examine the scope of the plaintiff’s goodwill to ascertain the boundaries of protection which the plaintiff was entitled to.

As stated...