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Pacific Manufactures Pte Ltd v Kalabo Investment Pte Ltd [2022] FJHC 165; HBC307.2020 (1 April 2022)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION


Civil Action No. HBC 307 of 2020


BETWEEN:


PACIFIC MANUFACTURES PTE LIMITED a limited liability company having its registered office at Suva in the Republic of Fiji.


PLAINTIFF


AND:


KALABO INVESTMENT PTE LIMITED a limited liability company having its registered office at 411 Fletcher Road, Suva carrying on business in Suva and elsewhere in Fiji under the name and style of “SHOP N SAVE SUPERMARKET”


DEFENDANT


BEFORE:
Honourable Mr. Justice Vishwa Datt Sharma


COUNSEL:
Mr. Fatiaki S. for the Plaintiff
Mr. Young C. B. for the Defendant


DATE OF DECISION:
Friday, 01st April 2022 @ 9.30am


DECISION


[Interlocutory Injunction in pursuant to Order 29 Rule 1
of the High Court Rules 1988 and Inherent Jurisdiction
of this Honourable Court]


INTRODUCTION


  1. The Plaintiff has filed these proceedings alleging the Tort of Passing Off and seeks the following orders in terms of its Interlocutory Amended Notice of Motion as follows:-
  2. A substantive Writ of Summons has been filed by the Plaintiff on 15th October 2020.
  3. Prayer (i) for Interlocutory Injunction is identical to the substantive relief sought in the within action and prayer (ii) is for an Interlocutory mandatory injunction.
  4. The Defendant is opposing the Plaintiff’s Interlocutory Injunction.
  5. Grounds for opposing the Interlocutory Injunction are the following:-
  6. The parties to the proceedings have filed the following documents and affidavits:-

Plaintiff

Defendant

Plaintiff’s Case (summarized)

  1. The Plaintiff is a company that has been in the business of importing, manufacturing, packaging, distributing and marketing safety matches since 1970 under the brand name ‘Hibiscus Safety Matches’.
  2. The Plaintiff’s product is safety matches and its commercial get-up/write up over the past 50 years has included and maintained the use of the word ‘Hibiscus’ and the image of a ‘Hibiscus Flower’.
  3. The Defendant is a company that operates a chain of large supermarkets around Fiji under the name and style of Shop N Save Supermarket. The Plaintiff’s Hibiscus Safety Matches is sold at the Defendant’s respective supermarket premises located throughout Fiji.
  4. The Defendant has since July 2020 imported (through its related company) and started packaging, marketing and selling safety matches under the brand name of ‘Bezt (picture of Hibiscus flower) Safety Matches’. The Defendant’s product also includes the use of images of a ‘hibiscus flower’.
  5. The Plaintiff after becoming aware of the Defendant’s infringing product by an advertisement in a national newspaper, through its Solicitors, issued a notice on 25th August 2020 to the Defendant to desist from its infringing and passing-off activity.
  6. Despite the Plaintiff’s notice and further correspondence from the parties respective solicitors, the Defendant has failed to stop its infringing activity and continue to import, package, sell and markets its product under the current brand name which incorporates the use of the word “Hibiscus” and the images of a ‘hibiscus flower”.
  7. Thereafter the Plaintiff on 15th October 2020 instituted this action by filing a Writ of Summons and Statement of Claim together with the current Notice of Motion for interim injunction.”

Defendant’s Case (summarized)

  1. The Defendant owns and operates 16 supermarkets throughout Fiji.
  2. The Defendant is the owner of the registered trademark “Bezt” in class 47 which includes safety matches and since July 2020 it has been importing “Bezt safety matches” and selling them in its 16 stores.
  3. The Defendant is a new entrant to the safety matches market in Fiji.
  4. The Defendant’s match box is distinguished from the Plaintiff’s match box by its trademark “Bezt” and the design and colours of the top label and by the product advertisement and wording on the label at the back of the box. Compare Defendant’s labels Exhibit JTL-5 & Exhibit JTL-6 with Plaintiff’s labels Exhibit JTL-3 & Exhibit JTL-4.
  5. The Defendant’s label gives prominence to the words ‘Bezt Safety Matches’ and to the picture of the matchsticks. The hibiscus flower in the Defendant’s label is not an imitation of the several hibiscus flowers on the Plaintiff’s label Exhibit JTL-3. It is a single flower much smaller in size and not in the middle of the label. Further, the hibiscus flower border on the Defendant’s label is not in the Plaintiff’s label. The advertisements on the label at the back of the matchbox are totally different and contain clear reference to Shop N Save to indicate it is not the Plaintiff’s product.
  6. The Defendant also sells Plaintiff’s safety matches in its stores. The Plaintiff’s and the Defendant’s safety matches are displayed for sale near each other in the display selves in the Shop N Save stores. The Defendant’s matches are clearly distinguished from the Plaintiff’s. The selling price of the Plaintiff’s safety matches is $2.45 per pack of 10 boxes and the selling price of the Defendant’s safety matches is $1.75 per pack of 10 boxes. The customer is free to browse the products, compare them side by side and pick the pack of safety matches of his or her choice from the shelf before proceeding to pay at the checkout.
  7. The customers of Shop N Save have not had any difficulty distinguishing between the two brands of safety matches displayed in the stores because so far no complaint or query has been received from any customer in the 16 stores around Fiji.
  8. There is no evidence that the Defendant has advertised its Bezt safety matches as the matches of the Plaintiff or that the Defendant’s safety matches has any association with the Plaintiff.
  9. On the contrary, the Bezt safety matches is advertised in newspapers as part of the Shop N Save specials indicating they are the matches of the Defendant. The advertisement, Exhibit JTL-7 refers. The back label of the match box also bears the name Shop N Save, Exhibit JTL-6 refers.
  10. There is nothing in Exhibit JTL-7 which suggests that the Defendant’s safety matches are associated in any way with the Plaintiff or the Plaintiff’s matches. Contrary to Plaintiff’s submissions the use of a single tropical hibiscus flower does not do so.
  11. Sections 66 & 67 of the Fijian Competition and Consumer Commission Act 2010 prohibit misuse of market power and anti-competitive conduct.

Law of Passing Off

  1. The tort of “Passing Off” protects the goodwill of a trader from misrepresentation.
  2. Clark & Lindsell on Torts, 11th Ed. p.990 para.1698 states:

“It is an actionable wrong for a trader so to conduct his business as to lead to the belief that his goods or business and the goods or business of another. 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 limitation of a mark, trade name or get-up with which the goods of another and answered in the minds of the public”.

  1. The principles governing Passing Off are generally well settled. The tort gives effect to the notion that a trader must not pass off the trader’s goods or services as the goods or services of another. That is, a trader is not permitted to use names, marks, get-up, or other characteristics of another trader’s goods so as to induce purchasers to believe that the goods that the trader is selling are the goods of the other. The tort is designed to protect a trader’s intangible property rights in the trader’s business, goodwill or reputation, which is likely to be injured by the misrepresentation involved in a passing-off.
  2. The elements of the tort were confirmed by Lord Diplock in Erven Warnink BV v J Townsend & Sons (Hull) Ltd (No. 1) (1979) 2 All ER 927 (HL) at p 932:

“My Lords, A. G. Spalding & Bros v A. W. Gamage Ltd and 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 prospective 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.”

  1. Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc [1990] UKHL 12; (1990) 1 All ER 873 at 880(f) noted that:

“The law of Passing Off can be summarized in one short general proposition – no man may pass off his goods as those of another.”


Determination

  1. The cause of action in the current action is that of “Passing Off”. The Plaintiff seeks an Interim Injunction and a Mandatory Injunction as follows:-

(i) Whether an Interim Injunction ought to be granted restraining the Defendant by itself and/or through its servants and/or agents and/or howsoever from importing, manufacturing, packaging, distributing, selling and marketing safety matches under the brand name of “Bezt (picture of hibiscus flower) Safety Matches” and/or any other name incorporating the “use of the picture of the hibiscus flowers” or use of the word “Hibiscus” until the hearing and determination of this action.

(ii) That the Defendant forthwith remove its safety matches under the brand name “Bezt (picture of hibiscus flower) Safety Matches” from all supermarkets, sops and other outlets until the hearing and determination of this action.

  1. The Plaintiffs have been in the business of importing, manufacturing, packaging, distributing and marketing safety matches since 1970 under the Brand name ‘Hibiscus Safety Matches’.
  2. The Plaintiff has been using the ‘get-up’ long before the Defendant.
  3. The Defendant’s product of safety matches under the Brand name of ‘Bezt’ (picture of flower) also includes the use of images of a ‘hibiscus flower’.
  4. The Plaintiff’s contention is that the Defendant’s package that is, its ‘get-up’ is so similar to the Plaintiff’s that it causes confusion in the minds of the consuming public.
  5. However, the Defendant’s contention is otherwise and in that the Defendant submitted that there is no evidence from any representative or customer to support the Plaintiff’s contention. The Defendant added that Mr Leqa at paragraph 10 of his Affidavit in Support deposed that ‘I verily believe that the general public in Fiji is being misled into believing that the Defendant’s safety matches are that of the Plaintiff.
  6. The Defendant also contended that the Defendant’s label gives prominence to the words ‘Bezt Safety Matches’ and to the picture of the matchsticks. The hibiscus flower in the Defendant’s label is not an imitation of the several hibiscus flowers on the Plaintiff’s label Exhibit JTL-3. It is a single flower much smaller in size and not in the middle of the label. Further, the hibiscus flower border on the Defendant’s label is not in the Plaintiff’s label. The advertisements on the label at the back of the matchbox are totally different and contain clear reference to Shop N Save to indicate it is not the Plaintiff’s product. There is nothing in Exhibit JTL-7 which suggests that the Defendant’s safety matches are associated in any way with the Plaintiff or the Plaintiff’s matches. Contrary to Plaintiff’s submissions the use of a single tropical hibiscus flower does not do so.
  7. The question then arises herein is “Whether the Defendant is passing off his safety matches as those of the Plaintiff’s or has the Defendant sufficiently differentiated his matches from the Plaintiff’s by use of marks, labels and colours as not to mislead or deceive the consumer?” In other words, the question of whether there is any similarity in the package and the get-up and that there is confusion in the minds of the consumers or not of the product.
  8. At this stage of the proceedings, I am only concerned about the Infringements of Passing-Off and nothing more.
  9. Reference is made to Shanahan’s Australian Law of Trade Marks & Passing Off (6th ed, 2016, para 100.1005);

“The “get-up” of a product is the dress in which the product is presented for sale, that is to say the shape, size, and colouring of the container or packaging, the design of the label, and to some extent, the design of the product itself.”

  1. This being a Passing Off case, the Plaintiff is seeking an interlocutory injunction which must show more than that there is an arguable case. The reason being that the Defendant will often adopt a different label in order to continue in business once the injunction is granted and the injunction will be final in effect and not in name: per Whitford J in Parnass/Pelly Limited v Hodges [1982] FSR 329.
  2. As per Lord Diplock in American Cyanamid [1975] UKHL 1; [1975] 1 All ER 504, 510(d) HL:-

“It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.”

  1. The guidelines laid down by Lord Diplock in American Cyanamid Co. v Ethicon Ltd [1995] AC 396 are still regarded as the leading source of the law of injunction where it was held that the following guidelines can be taken into consideration when granting or refusing an interim injunction:

(a) A serious question to be tried at the hearing of the substantive matter.

(b) Whether the damages is an adequate remedy.

(c) In whose favour the balance of convenience lie if the injunction is granted or refused.

  1. In the case of Cambridge Nutrition Ltd v BBC [1990] 3 All ER 523 at 534j Kerr L.J. made the following observations;

“It is important to bear in mind that the American Cyanamid case contains no principle of universal application. The only such principle is the statutory power of the court to grant inunctions when it is just and convenient to do so. The American Cyanamid case is no more than a set of useful guidelines which apply in many cases. It must never be used as a rule of thumb, let alone as a straightjacket....The American Cyanamid case provides an authoritative and most helpful approach to cases where the function of the court in relation to the grant or refusal of interim injunctions is to hold the balance as justly as possible in situations where the substantial issues between the parties can only be resolve by a trial.”


  1. In Hubbard & Another v Vosper & Another [ 1972] 2 Q.B. 84 Lord Denning said:

“In considering whether to grant an interlocutory injunction, the right course for a judge is to look at the whole case. He must have regard not only to the strength of the claim but also the strength of the defence, and then decide what is best to be done. Sometimes it is best to grant an injunction so as to maintain the status quo until the trial. At other times it is best not to impose a restraint upon the defendant but leave him free to go ahead. ....The remedy by interlocutory injunction is so useful that it should be kept flexible and discretionary. It must not be made the subject of strict rules.”


Serious Questions

  1. The Plaintiff must satisfy the Court that there is a serious question to be tried and that the balance of convenience favours the grant of the injunction: Klissers v Harvest Bakeries [1985] 2 NZLR 140 (CA) At p.142 Cooke J delivering the judgment of the Court said [20]:

“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. As the NWL speeches bring out, the balance of convenience can have a very wide ambit. In any event the two heads are not exhaustive Marshalling considerations under them is an aid to determining, as regards the grant or refusal of an interim injunction, where 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 or very clearly one way – as the Chief Justice did here – 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.”

  1. Serious question is not a step to be brushed over lightly. In Air Pacific Ltd v. Air Fiji Ltd [2006] FJCA 63 the Court of Appeal said at [24]:-

“The two stages in American Cyanamid are not to be regarded as an inflexible process, and in the end the question is where overall justice lies: Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 110, 128 (NZCA). However, as the High Court of New Zealand has said, the establishment of a serious issue is not a step to be brushed over lightly: "It is not sufficient for a plaintiff just to say there is a tenable cause of action from a legal point of view, and a conflict of evidence on the facts": Ansell v NZ Insurance Finance Ltd Wellington A434/83, judgment 30 November 1983, Eichelbaum J. In the present case the Judge dealt with the facts relating to this issue in a single sentence and, with respect, may not have appreciated that despite the considerable quantity of material, on analysis the evidence gave little if any support for the assertions made by the plaintiff in its statement of claim and affidavits. We conclude that on the existence of an agreement, there was insufficient material to allow the Judge to find there was a serious issue.”

  1. The Defendant submitted that there is no serious question to be tried in this case because two (2) fundamental elements of passing off are missing:-

(a) The reputation that is relevant: That is the reputation in the get-up or label that existed when the Defendant entered the market July 2020. In July 2020 only the Plaintiff’s label Exhibit JTL-3 (with 6 hibiscus flowers) was in use, and not label Exhibit JTL-2 (with single hibiscus flower). The Plaintiff therefore cannot claim reputation in a single hibiscus flower even if used previously; and

(b) There is no evidence of misrepresentation, deception or probability of deception by the Defendant. The competition by the Defendant does not suggest that the “Bezt Safety Matches” with a hibiscus flower is the product of the Plaintiff or that Bezt Safety Matches with a hibiscus flower is merely another name for Hibiscus Safety Matches.

  1. The element of misrepresentation requires the Plaintiff to establish that the public has been or is likely to be misled or deceived. Whether or not this is the case is a question of fact, and involves a comparison between the Plaintiff’s product presentation, as a whole, and the defendant’s product presentation, as a whole, in the circumstances of actual use. Further, it must be proved that a substantial number of purchasers will be misled or deceived.
  2. The Defendant’s contention is that the Plaintiff has simply made assertions and failed to put forward evidence of reputation or confusion or likely deception by the Defendant’s Brand Name or Label.
  3. However, a careful perusal of the facts, Affidavits and Documentary Evidence together with oral and written submissions, the following issues are ascertained that needs determination at the trial:-

(i) Whether or not the Defendant’s safety matches product brand name ‘Bezt (picture of hibiscus flower) Safety Matches’ is too similar to the Plaintiff’s product brand name of ‘Hibiscus Safety Matches’ and whether it is likely to cause confusion amongst the public?

(ii) Whether the Defendant is passing off its products as that of the Plaintiff’s or not?

(iii) Whether the write-up and use of the hibiscus flower on the Defendant’s product is calculated to deceive and will deceive customers and/or potential customers of the Plaintiff and/or the public at large?

(iv) Has the Plaintiff acquired goodwill and reputation through the continued use of the word ‘hibiscus’ and the image of the hibiscus flower in conjunction with its safety matches product over the last 50 years?

(v) Is the Defendant’s use of the image of the hibiscus flower in its brand name and on its product together with the colour scheme/combinations therein an actionable passing off of the Plaintiff’s product?

(vi) Whether the Plaintiff has a registered trademark or registered design giving it exclusivity to the word ‘Hibiscus’ or to the picture of a Hibiscus flower?

(vii) Whether the Plaintiff’s registered trademark expired in 1998 and had a picture of ‘one hibiscus flower’?

(viii) Whether the condition of that registration was that the mark shall only be used on ‘matches being manufactured of Fiji’ and that the Plaintiff will not have an exclusive use of the words “Safety Matches” in terms of Annexure JTL-1 within the Affidavit in Support of Joeli Tokisuva Leqa?

  1. The ‘Safety Matches’ and ‘Hibiscus’ are words of common use and Hibiscus flower is a common tropical flower in Fiji.
  2. The Court needs to carry out a comparison between the Plaintiff’s label shown in Annexure JTL-3 and JTL-4 and the Defendant’s label JTL-5 and JTL-6 within the Plaintiff’s Affidavit in Support deposed by Joeli Tokisuva Leqa. Further, the Court needs to determine if the Brand Names and Labels of the Plaintiff and the Defendant are the same or not.
  3. After a careful perusal of the abovementioned disputed questions of facts, Affidavit with annexures, Statement of Claim and Statement of Defence raised triable issues therein that needs determination by this Court in terms of oral and documentary evidence at the trial.

Adequacy of Damages

  1. As a general rule, the question of whether damages are an adequate remedy must be considered upon an application for an interlocutory injunction as has been filed in the current application.
  2. The balance of convenience is only to be resorted to if damages are not an adequate remedy for the Plaintiff (Bank of Baroda v Akhila Nand Chaudary, unreported, FCA 50 of 1986).
  3. Lord Diplock said in American Cyanamid [1975] UKHL 1; [1975] 1 All ER 504, 510(D) HL said that once he is satisfied that there is a serious question to be tried:

“the Court should go on to consider whether...if the Plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequated compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages.......would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage” [American Cyanamid p.408 B-C]”

  1. The Plaintiff’s contention is that if the Injunction is refused the Plaintiff will suffer irreparable damage and that damages will not be an adequate compensation. On the other hand, the Defendant’s contention is that damages are an adequate remedy for the Plaintiff.
  2. The Plaintiff’s substantive claim is for general damages sought under s.146 of the Fijian Competition and Consumer Commission Act 2010. These general damages are the loss of profit resulting from Defendant’s competition which have yet to crystalize and would become known at the end of the Plaintiff’s financial year. On the other hand, the Defendant’s loss will be loss of opportunity to establish in and gain market share which would be virtually impossible to assess. The Defendant may never gain the lost market share. The Defendant’s potential loss is harder to assess than the Plaintiff’s potential loss.

Balance of Convenience

  1. “Balance of convenience” has been variously described but none better than as “balance of the risk of doing an injustice”: per May L J in Cayne v Global Natural Resources Plc (1984) 1 All ER 225 at 237(H). Lord Diplock had said in American Cyanamid “that the granting or refusal of an injunction will inevitably involve some disadvantage to one or the other side which damages cannot compensate”.
  2. There will be less risk of injustice if an injunction is refused than otherwise. The balance of convenience favours the Defendant. On the one hand if the injunction is granted, the Defendant will suffer loss which will be harder to assess. On the other hand, if injunction is refused the Plaintiff will suffer loss of profits which can be easily assessed.
  3. The facts before Court prompts Court not to accede and/or grant the Interim Injunction and the Mandatory Injunction as the orders sought herein in the Plaintiff’s amended Notice of Motion.
  4. The impending issue has to be decided and/or determined in the substantive action at the trial.
  5. At this prima facie stage of the proceedings, I am not convinced with the Plaintiff’s contention that the general public in Fiji is being misled into believing that the Defendant’s ‘Safety Matches’ are that of the Plaintiff’s. This issue is premature and remains to be determined in terms of evidence including documentary evidence at the trial.
  6. I am not satisfied that the Plaintiff has made out a case which would prompt me to grant the Orders sought for Interlocutory and Mandatory Injunctions as sought for within the Plaintiff’s Amended Notice of Motion.


Status Quo

  1. Status quo is the state of affairs existing during the period immediately preceding the issue of the writ (Garden Cottage Foods Ltd v Milk Marketing Board [1983] 2 All E 770 HL).
  2. The current status quo before this Court is of two traders competing for the share of the ‘Safety Matches’ market in Fiji.
  3. The Plaintiff is endeavouring to resist the entry of the Defendant to that market and hence the competition with the Defendants.
  4. The status quo herein is to be maintained until the hearing and determination of the impending issues accordingly.

Conclusion

  1. I find that there are triable issues that needs to be determined at the trial.
  2. There are also serious questions that are raised herein that needs determination by the Court.
  3. The Balance of Convenience lies with the Defendant and is only to be restored to if damages are not an adequate remedy for the Plaintiff.
  4. Damages are an adequate remedy for the Plaintiff since the application for the Interim Injunction and the Mandatory Injunction have both been refused by this court.
  5. The status quo of the matter is to be maintained until the hearing and determination of the impending issues.
  6. For the aforesaid rationale, I have no alternative but to refuse the Plaintiff’s application seeking for the Interim and the Mandatory Injunction and accordingly the Dismiss the same respectively.

Costs

  1. The Application herein of the Plaintiff proceeded to hearing with the filing of Affidavits and written submissions. It is only appropriate that the Defendant is granted a sum of $650 as summarily assessed costs by the Plaintiff.

Orders


(i) The Plaintiff’s Amended Notice of Motion seeking for an Interim Injunction restraining the Defendant by itself and/or through its servants and/or agents and/or howsoever from importing, manufacturing, packaging, distributing, selling and marketing safety matches under the brand name of “Bezt (picture of hibiscus flower) Safety Matches” and/or any other name incorporating the “use of the picture of the hibiscus flowers” or use of the word “Hibiscus” until the hearing and determination of this action is refused and accordingly dismissed.
(ii) The Order seeking that the Defendant forthwith remove its safety matches under the brand name “Bezt (picture of hibiscus flower) Safety Matches” from all supermarkets, shops and other outlets until the hearing and determination of this action is also refused and accordingly dismissed.
(iii) The Plaintiff to pay the Defendant a sum of $650 as summarily assessed costs.

(iv) The substantive Writ action to take its normal cause and the parties to complete the cause of action accordingly.

Dated at Suva this 01st day of April 2022.


..............................................

Vishwa Datt Sharma
Judge


cc:
Sherani & Company, Suva.
Young & Associates Solicitors, Lautoka.



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