Vo-Ko Industries Ltd v Fish Canners (Fiji) Ltd [2003] FJHC 295; HBC0311d.2002s (7 October 2003)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0311 OF 2002

Between:

VO-KO INDUSTRIES LIMITED
Plaintiff

and

FISH CANNERS (FIJI) LIMITED
J. SANTARAM (STORES) LIMITED
Defendants

Mr. R. K. Naidu for the Plaintiff
No appearance for the 1st Defendant
Mr. G. P. Lala for the 2nd Defendant

DECISION
(Interlocutory injunction)

This is a passing off action. By motion dated 22 July 2002 the plaintiffs are seeking orders as follows:

(1) an injunction restraining the Defendants by themselves and/or through their servants and/or agents and/or howsoever from canning, distributing, marketing and selling canned mackerel, using picture, bar code, label colour, front and write up similar to that of the Plaintiff on the labels of their canned mackerel, in such a manner as to deceive purchasers into belief that they are purchasing the Plaintiff’s canned mackerel and from passing off their canned mackerel as that of the Plaintiff until the hearing and determination of this action.

(2) The 1^st and 2^nd Defendant forthwith remove its canned mackerel from all supermarkets, shops and other outlets (unless they are packaged with labels which is not similar to that of the Plaintiff) until the hearing and determination of this action.

The plaintiff filed a writ of summons herein on 22^nd July 2002 and at the same time filed this motion.

The Statement of Defence by the second defendant (D2) was filed on 19 August 2002. An Affidavit in Opposition to plaintiff’s affidavit in support of motion was filed on 2 September 2002 by the second defendant followed by Affidavit in Reply thereto by the plaintiff on 11 December 2002. As ordered, last of the written submissions were filed on 10 March 2003.

Neither is there an Acknowledgement of Service of Writ by D1 nor is there an appearance by it or on its behalf let alone the filing of a written submission. In fact there is no response to the motion for injunction at all by D1.

The matter could not have been dealt with earlier than now as not only counsel took time filing submission but because of shortage of judges I am overloaded with work and decision could not be written in good time.

The plaintiff’s submission

The plaintiff says that it is engaged in the business of canning and marketing canned mackerel with the brand name of “HOPE” since 1986.

The plaintiff says:

“That since 1986 the Plaintiff Company has been using same type of label and on it the same picture, design, writing and colour for packaging its canned mackerel. The label has a red colour background with a picture of one whole fish in white/blue colour and on the other side one sliced piece of fish on a plate garnished with greens, lemon, chillies and onion. The label has writing in white, black, blue and yellow and has other designs features.

The plaintiff alleges that since August 2001 the first defendant (1^st) ‘started canning, offering for sale and supplying canned mackerel under the brand name “Reshma” in Fiji. It also started using labels on its canned mackerel very similar to that of the Plaintiff’’. This has misled the public into believing that the defendant’s canned mackerel fish is that of the plaintiff.

It says that the second defendant has since August 2001 started to offer for sale from its shop “Reshma” brand canned mackerel supplied to it by the 1^st Defendant.

The similarities in the two labels as stated by the plaintiff are as follows:

1. The background colour of the label on both cans is red.
   
2. There are two pictures of fish appearing on the label. On one side of the can there is a picture of a whole fish in white/blue colour and on the other side appears one sliced piece of fish on a plate garnished with greens, lemon, chillies and onion which is exactly the same as the Plaintiff’s label.
   

100. That there is a square with a design of a canoe on the label used by the Defendant which is exactly the same as that of the Plaintiff.
     

4. That the layout and colour combination of the label is very similar to that of the Plaintiff.
   
5. That the colours, artwork and writing style are designed in such a manner that it could be easily confused with that of the Plaintiff i.e. white, black, blue and yellow.
   

Counsel submits that this is a proper case for the grant of an interlocutory injunction. The D2 does not deny in its affidavit that there is a likelihood of confusion being caused among the general public; it submits that if injunction is not granted it will cause incomparable damage to the plaintiff’s reputation as a quality manufacturer and to its market. This will not be compensatable in damages.

Second defendant’s contention

The second defendant in its opposition in an affidavit sworn 30 August 2002 by Santa Ram, the Managing Director of the second defendant company (the ‘D2’) stated, inter alia, that the ‘brand name ‘Hope’ is no longer being sold and in fact has not being selling in its stores or any other supermarket in town for quite sometime’. The D2 further states that it ‘only received and sold a small batch of the D1’s canned mackerel and thereafter stopped selling it with the labels for which D2 is being sued now’.

It further stated that prior to receiving notice dated 12 April 2002 the ‘Reshma’ labels in question were changed by the first defendant and is sold since then by the D2 till to date under a new label which is a black and white label, copy whereof is an annexure to the said affidavit of the second defendant.

The D2 says they are no longer selling the ‘Reshma’ band mackerel with labels similar to that of the plaintiff.

The second defendant therefore says that the claim against it is frivolous and vexatious.

Consideration of the application

The issue for Court’s determination is whether on the affidavit evidence before it and bearing mind the submissions made by Counsel for the plaintiff and D2 an injunction ought to be granted or not as prayed.

The Law

Both counsel argued the matter having regard to the principles enunciated in the leading case of American Cyanamid Co, v Ethicon Ltd (1975)A.C. 396 H.L. The House of Lords there decided that in all cases, the Court must determine the matter on a balance of convenience there being no rule that an applicant must establish a prima facie case. The extent of the court’s duty in considering an interlocutory injunction is to be satisfied that the claim is not “frivolous or vexatious,” in other words, “there is a serious question to be tried”.

In Cyanamid (supra) at page 406 Lord Diplock stated the object of the interlocutory injunction as follows:

“.........to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the plaintiff’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff’s undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial. The court must weigh one need against another and determine where “the balance of convenience” lies.

A similar view was expressed by McCarthy P. while delivering the judgment of the Court of Appeal in Northern Drivers Union v Kawau Island Ferries Ltd [(1974) 2 NZLR 61] when he said:

“The purpose of an interim injunction is to preserve the status quo until the dispute has been disposed of on a full hearing. That being the position, it is not necessary that the Court should have to find a case which entitle the applicant to relief in all events: it is quite sufficient if it finds one which shows that there is a substantial question to be investigated and that matters ought to be preserved in status quo until the essential dispute can be finally resolved........”(Ibid, 620).

“It is always a matter of discretion, and......the Court will take into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted.........and that which the plaintiff, on the other hand, might sustain if the injunction was refused.....”(Ibid, 621).

In considering whether to grant an interim injunction the factors which ought to be considered are:

(a) is there a serious question to be tried,
(b) is damage an adequate remedy, and
(c) where does the balance of convenience lie.

This is a “passing off” action and an interim injunction is sought. What is “passing off”? It is an actionable wrong for a trader so to conduct his business as to lead to the belief that his goods or business are the goods or business of another. This wrong is known as “passing off”. It is immaterial whether the fatal representation, as to goods or business, involved in passing-off, is made expressly by words or impliedly by the use or imitation of a mark, trade name or get-up with which the goods of another are associated in the minds of the public. (Clerk & Lindsell on Torts, 11^th Ed.p.990 para.1698).

The plaintiff’s contention is that the defendant’s package, that is, its ‘get-up’ is so similar to its that it causes confusion in the minds of the consuming public.

In a passing-off action when one is considering an application for interlocutory injunction, the plaintiff must show more than that there is an arguable case, because the defendant will often adopt a different ‘get-up’ or name in order to continue in business once the injunction is granted and the injunction will be final in effect if not in name (Parnass/Pelly Limited v Hodges [1982] F.S.R 329 per Whitford J). At this stage the Court is not required to go into the merits of the case. On the facts and circumstances of this case I am persuaded to consider seriously the following passage from the judgment of Hoffman J in Films Rover International Ltd & Ors v Connon Film Sales Ltd [1987] 1 W.L.R. 670 (Ch.D) at 680:

“The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that that court may take the “wrong” decision, in the sense of granting an injunctcion to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong” in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle”.(emphasis added).

It is the plaintiff’s contention that by the packaging and marketing the defendant (1^st) has endeavoured to pass off its canned mackerel as that of the plaintiff and its labelling is calculated to deceive and will deceive the purchasers of the plaintiff’s canned mackerel fish into belief that the canned mackerel as packaged and marketed by the 1^st defendant and as offered for sale by the 2^nd defendant is that of the plaintiff. It says that the general public in Fiji is being misled into believing that the defendant’s canned mackerel fish is that of the plaintiff.

The first defendant has neither appeared nor responded to the plaintiff’s motion. It is only the second defendant which is represented by Mr. Lala opposing the application. Mr. Lala has filed written submissions on its behalf.

On the affidavit evidence and the submissions made by both counsel, also taking into account that D1 has not appeared to oppose the motion, it is clear that impliedly D1 agrees with the plaintiff’s allegation that, inter alia, its said label (in red) is very similar to that of the plaintiff. Also, it appears from D2’s affidavit that the ‘red label’ was changed to ‘black and white’ label and that is the product under the brand name of ‘Reshma’ that it is selling now.

Now, comparing the two ‘red labels’ of the plaintiff and D1, trusting to my own eyes so to say, looking at them as exhibits tendered there is likelihood of confusion. There are so many similarities in the ‘wordings’ on the label that a buyer is most likely to be confused.

As far as the ‘black and white’ label is concerned D1 has said nothing about it. All that the Court has before it is what D2 has stated. It appears therefore the ‘Reshma’ brand with ‘black and white’ label is still being canned by D1 and sold by D2. In this situation once injunction is granted against D1 it is not likely that any of D1’s products with red label will come to D2. The second defendant is merely the seller of the D1’s product and that the sale of product with red label will stop if injunction is granted against D1; it is the ‘red label’ about which the complaint is by the plaintiff.

Although, the Court is not required at this stage in an application for interlocutory injunction to decide on the likelihood of confusion, nevertheless there is such a stark similarity is the ‘red labels’ that it leaves the court with no alternative but to grant an injunction.

In considering this aspect of the matter I have not lost sight of the following passage from the footnote to the Supreme Court Practice 1979 29/1/11) pertaining to the grant of interlocutory injunction:

“the grant of an interlocutory injunction is a remedy that is both temporary and discretionary, and in exercising its discretion whether or not to grant such an injunction, the Court is not justified in embarking upon anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of either party’s case”.

The question that arises is whether the Court should consider the status of the ‘black and white’ label when the application by way of motion is confined to the ‘red’ label. The plaintiff has stated that it is the ‘red’ label brand that is canned and sold. Whether the red label brand is still being sold is not entirely clear.

In these circumstances I am of the view that the Court should confine itself to the motion before it which concerns the ‘red’ label of the D1. The plaintiff at the time of the making its submissions still maintained that the D1 was guilty of passing off.

Whether or not the defendants are infringing the rights of the plaintiff is a matter to be determined in the trial of the action.

The action of passing off is essentially a cause of action arising out of confusion. How to establish confusion and the law relating to it is set out in Halsbury 4^th Ed. Vol. 48 para 163 et seq. In para. 163 (ibid) it is stated:

“In arriving at the conclusion of fact as to whether deception or confusion is likely, the court will have regard to (a) the nature and extent of the reputation relied upon, (b) the closeness or otherwise of the respective fields of activity in which the plaintiff and the defendant carry on business, (c) the similarity of the mark, name etc. used by the defendant to that of the plaintiff, (d) the manner in which the defendant makes use of the name, mark etc. complained of and collateral factors, and (e) the manner in which the particular trade is carried on, the class of persons who it is alleged is likely to be deceived and all other surrounding circumstances”.

The relevant test as to confusion is not “whether many intelligent and discerning people would avoid confusion but whether a substantial section of the public is likely to be deceived’: (compare Treasure Cot Company Ltd v Hamley Bros Ltd (1950) 67 RPC 89 at 91, lines 1-4 per Harman J)” (My Kinda Town Ltd v Soll and Another 1983 No. 2 RPA 15 at 42). Also in considering whether deception is probable, account is to be taken, not of the expert purchaser, but of the ordinary ignorant and unwary member of the public (Reckitt & Colman Products Ltd v Borden Inc & Others. [1990] UKHL 12; (1990) 1 WLR 491.

Having expressed my views as hereabove, applying the Cyanamid principles, I find after analysing the affidavit evidence before me, there is a serious question to be tried and that damages as a remedy is insufficient to determine the matter. It would be difficult to compensate the plaintiff by an award of damages in this type of situation with the continuation of the alleged passing off.

Dealing with ‘balance of convenience’, the scale tips in favour of the plaintiff for granting an interim injunction. I have borne in mind the fact that evidently either before notice was given or after the alleged ‘passing off’, the first defendant realizing the similarity in the ‘get-up’ changed the colour of label from ‘red’ to ‘black and white’ and although D1 has remained mute in this regard the second defendant has spilled the beans so to say.

Further, in regard to ‘balance of convenience’, in Chung Exports Limited, John Chung v Food Processors (Fiji) Limited (Court of Appeal, Civil App. No. ABU0012 of 2003S), the Court dealt with the approach that should be adopted in deciding an application for an interlocutory injunction and stated that “in the end, the court is required to determine where the overall justice lies” and in this regard referred to the following passage from the judgment of Cooke J in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] NZCA 70; [1985] 2 NZLR 129 (CA) AT 142:

“Whether there is a serious question to be tried and the balance of convenience are two broad questions providing an accepted framework for approaching these applications.... The balance of convenience can have a very wide ambit. In any event the two heads are not exhaustive. Marshalling consideration under them is an aid to determining, as regards the grant or refusal of an interim injunction, where the overall justice lies. In every case the judge has finally to stand back and ask himself that question. At this final stage, if he has found the balance of convenience overwhelmingly all very clearly one-way... it will usually be right to be guided accordingly. But if the other rival considerations are still fairly evenly poised, regard to the relative strengths of the cases of the parties will usually be appropriate. We use the word ”usually” deliberately and do not attempt any more precise formula: an interlocutory decision of this kind is essentially discretionary and its solution cannot be governed and is not much simplified by generalities.”

Conclusion- the Order
For the above reasons and bearing in mind the fact and circumstances of this case I grant an interlocutory injunction.

It is therefore ordered, varying the orders sought in the motion, as follows:

(1) The first defendant itself and/or through its servants and/or agents and/or howsoever is hereby restrained from canning, distributing, marketing and selling canned mackerel, using picture, bar code, label colour, front and write up similar to that of the Plaintiff with the red labels of their canned mackerel, in such a manner as to deceive purchasers into belief that they are purchasing the Plaintiff’s canned mackerel and from passing off their canned mackerel as that of the Plaintiff until the hearing and determination of this action.

(2) A grace period of one month is given to the second defendant to dispose or otherwise sell its stock of ‘Reshma’ canned mackerel (in red label) if it has any in stock and thereafter any stock remaining with the second defendant to be withdrawn from all wholesale and/or retail outlets.

(3) The Plaintiff is further ordered to give its undertaking as to damages.

(4) The first defendant is ordered to pay plaintiff’s counsel costs of this application the sum of $350.00 to be paid within 21 days of this decision.

D.Pathik
Judge

At Suva
7 October 2003