Tay Long Kee Impex Pte Ltd v Tan Beng Huwah (trading as Sin Kwang Wah)

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 22 April 2000
• Neutral Citation: [2000] SGCA 22
• Docket Number: Civil Appeal No 63 of 1999
• Date: 22 April 2000
• Year: 2000
• Published date: 19 September 2003
• Plaintiff Counsel: Adrian Tan (Drew & Napier)
• Citation: [2000] SGCA 22
• Defendant Counsel: N Sreenivasan and Toh Wee Jin (Anthony & Wee Jin)
• Court: Court of Appeal (Singapore)
• Subject Matter: Discharge and grant of fresh injunction,Material non-disclosure established,Ex parte application for interlocutory injunction,Injunctions,Words and Phrases,Courts and Jurisdiction,Jurisdiction,"Materiality",Court's discretion once material non-disclosure established,Factors to consider,Deliberate suppression of material facts,Ex parte application,Interlocutory injunction,"Material facts",Whether judge hearing such application sitting in appeal over decision of first judge,Special case for court not to discharge injunction,Inter partes application to discharge ex parte injunction,Civil Procedure

(delivering the judgment of the court): This is an appeal against a decision of GP Selvam J given on 19 March 1999 where he set aside an ex parte interlocutory injunction which the plaintiff-appellants had on 8 January 1999 obtained against the defendant-respondent.

The facts

The appellants are manufacturers and distributors of, inter alia, the common backpacks under the brand name `hayrer`, the sort which we see carried by school children all over Singapore. The appellants` backpacks are distributed to shops in Singapore for sale to the public, including large department stores like Isetan and Carrefour.

The respondent`s business was also in bags. In around November 1998, he started selling backpacks under the brand name, `devico`. In the past, he used to purchase some of the appellants` bags for resale. It was the sale by the respondent of the `devico` backpacks which gave rise to the appellants instituting this action in passing-off, as well as applying ex parte for an interlocutory injunction against the respondent.

The appellants alleged that the respondent had damaged their goodwill by passing off his inferior `devico` bags as their bags, as the respondent`s bags had copied several features of the `hayrer` bags. It should be noted that the appellants` claim does not rest on the brand name `hayrer`. They also alleged that the respondent had breached their copyright in the warranty, which accompanied each of the `hayrer` bags, as the respondent`s warranty on his `devico` bags was in identical terms, except for the difference in the brand names.

When the ex parte application first came up before the court on 7 January 1999, Lee Seiu Kin JC queried why the application was made ex parte. The following day, the appellants` general manager, Mr Low Yang Haw, filed an affidavit to explain the urgency and why the respondent should not be notified. Basically, what he said was that if notified, the respondent would most likely release all his poor quality stock into the market at an even lower price. Normally, during this period (between the date the schools re-opened for the New Year and before Chinese New Year) the sales of such bags would be high. The grant subsequently of an injunction would have been of no practical use as the losses suffered by the appellants, as a result of the damage to the goodwill, would be incalculable.

Following that clarification, Lee Seiu Kin JC on the same day granted an interim injunction, the relevant parts of which read as follows:

1 An injunction is hereby granted restraining the defendant from selling, distributing, importing, manufacturing or otherwise dealing in bags bearing bar code prefix number `8887710` where such bags are not manufactured by or originate from the plaintiffs until trial or further order.

2 An injunction is hereby granted restraining the defendant from passing off backpacks and waist pouches bearing the label shown in Annex A not manufactured by or originating from the plaintiffs until trial or further order.

3 An injunction is hereby granted restraining the defendant from infringing the plaintiffs` copyright in tags affixed to the plaintiffs` bags by reproducing the contents of the said tags until trial or further order.

Apparently, the appellants had difficulties serving the injunction order on the respondent, which they only managed to do five days later on 13 January 1999. Thereafter, the respondent filed an application to set it aside. The application to discharge the ex parte injunction was eventually heard by GP Selvam J on 19 March 1999.

Decision below

GP Selvam J, having heard the parties, lifted the injunction. First, he felt there was no `great urgency` for the appellants` application to be made ex parte. In his view, the peak period for the sales of such bags would be before the school term re-opened for the year 1999. Second, there was suppression of material facts on the part of the appellants, who had failed in their duty to make full and frank disclosure. As this duty to make full and frank disclosure is absolute, in the sense that it is `not based on a corresponding right of the (defendant)`, even a minor breach would ordinarily be a sufficient basis to set aside the order. Thirdly, where there has been a breach of that duty it would be wrong in principle to treat an application to set aside an ex parte order as a fresh hearing of an inter partes hearing. In any event, this was not a case to which an interlocutory injunction should have been granted.

The alleged infringing features

The appellants alleged that the respondent`s backpacks (bags) bore similar features to those of theirs as a result of which the public would think that the `devico` bags originated from the plaintiffs, and as the respondent`s bags were of poorer quality, the appellants` goodwill would suffer. The complaints of the appellants were broadly the following. The first related to the bar-code prefix number `8887710` which had been assigned exclusively to the appellants by the Singapore Article Number Council (SANC). The appellants said that this bar-code prefix number (BCP number) was assigned to them for the purpose of identifying them as the manufacturers of the product to which the BCP number was affixed. Because of that, retailers had come to regard goods bearing that particular BCP `8887710`, as being distinctive of goods manufactured by the appellants. However, the respondent`s backpacks also had on them a similar number. The appellants asserted that this constituted a grave and deliberate misrepresentation by the respondent that his goods were manufactured or originated from the appellants.

Secondly, the design of the `devico` logo closely resembled that of the `hayrer` logo. Everything was the same except for the difference in the two brand names. They pointed out that the shape of the logo, the choice of colours, the typeface employed, the abbreviations `USA` and `R` and even the central position of the logo on the bags followed those of their `hayrer` bags, making the two logos confusingly similar. This was how the appellants described their `hayrer` logo:

(i) a black rectangle enclosing;

(ii) a red-lined oval enclosing;

(iii) the brand name `hayrer` in white lower-case letters;

(iv) which letters are outlined in red;

(v) on a navy blue background;

(vi) with the words `U.S.A` on the bottom right-hand corner;

(vii) and a letter `R` signifying that the mark is registered as a trademark.

Thirdly, the appellants alleged that the general colour and design of the respondent`s `devico` backpacks were visually the same as the colour and design of their `hayrer` bags. In particular, `devico` bags had the following characteristics, which the appellants claimed were distinctive of their `hayrer` bags - (a) use of one primary dark coloured fabric for the side and rear panels contrasted with a secondary light coloured fabric on the front panels; and (b) use of rugged waterproof fabric material throughout.

Fourthly, on each `hayrer` bag there was a hang-tag attached thereto on which was printed the BCP number 8887710, as well as a lifetime warranty which read as follows:

Water Proof Fabric

All hayrer products are designed and manufactured to provide maximum carefree service, hayrer products carry a lifetime guarantee to be free of defects in materials or workmanship. This does not cover wear and tear or abuse. Accordingly, hayrer will repair or replace, without cost to our customers, any product which is defective in materials or workmanship promptly after its return to our sole agents.

The respondent not only used the appellants` BCP number, he also copied the wording of the appellants` warranty with only a change in the brand name.

The appellants claimed that through promotions and advertisements, their customers were aware of the lifetime warranty and did place reliance on that warranty when purchasing `hayrer` bags. By reproducing the same warranty, the respondent has misrepresented to the customers that the `devico` bags originated from the appellants. The public would assume that the respondent`s lifetime warranty was put forth by the appellants and would look to the appellants to honour that warranty. Furthermore, the respondent had infringed the appellants` copyright in the lifetime warranty, when he displayed the same on his bags.

The defendant`s case

The respondent stated that he was not a manufacturer of bags; he merely imported his products from manufacturers in China and Hong Kong. Indeed, he also said that the appellants themselves were not manufacturers of their `hayrer` bags. Like the respondent, the appellants are merely importers and distributors of the bags. The respondent claimed that he did not determine the design or get-up of the `devico` backpacks. Similarly, he had nothing to do with the wording of the warranty which were printed on a hang-tag attached to each bag. In any case, the two brand names were entirely different. There could not be any confusion.

Issues

Before us counsel for the appellants submitted that GP Selvam J should not have discharged the interim injunction as the appellants had more than established that there was a serious question to be tried in passing-off. Furthermore, in relation to the issue of balance of convenience, they claimed that they had amply shown that it should be resolved in their favour.

As the learned judge below had in his grounds of decision dealt mainly with the questions whether in this instance, the application for an injunction should have been made on an ex parte basis and whether there had been a breach of the duty to make full and frank disclosure of material facts, we will address these issues first.

Exparte application

In reliance on Griffin Steel Founderies Ltd v Canadian Association of Industrial, Mechanical & Allied Workers [1977] 80 DLR (3d) 634, the learned judge felt that an injunction should be...