Tan Kim Hock Product Centre Sdn Bhd v Tan Kim Hock Tong Seng Food Industry Sdn Bhd (02-6-02/2016(W))

Tan Kim Hock Product Centre Sdn Bhd

Siah Siu Eng ... Appellants And Tan Kim Hock Tong Seng Food Industry Sdn Bhd ... Respondent [ In the Matter of the Court of Appeal of Malaysia at Putrajaya Civil Appeal No. W-02(IM)(IPCV)-482-03/2015 ] Between

Tan Kim Hock Product Centre Sdn Bhd

Siah Su Eng And ... Appellants Tan Kim Hock Tong Seng Food Industry Sdn Bhd Respondent CORAM Raus Sharif, CJ Richard Malanjum, CJSS Zainun binti Ali, FCJ Zaharah binti Ibrahim, FCJ Balia Yusof bin Hj. Wahi, FCJ JUDGMENT OF THE COURT [1] This appeal centres on the scope and application of section 9 of the Trade Descriptions Act 2011 which empowers the High Court to declare an infringing mark as a false trade description. An order obtained under the aforesaid section, called the Trade Description Order may subject a trader using such infringing mark to prosecution under section 5 of the same. A Trade Description Order was obtained by the Respondent in this appeal. [2] As a background, it would be useful to narrate the facts leading to this appeal in the following chronological order as stated before the learned High Court judge. [3] The Respondent was incorporated in Malaysia in 1975 with its business address at No.153, Wisma Tan Kim Hock, Jalan Laksamana Cheng Ho, Malacca. It was established to manufacture, process, distribute and sell the Respondent's products, which products include 'dodol' products. [4] The founder of the Respondent was Mr. Tan Kim Hock, who together with his late wife, created the durian dodol, coconut dodol and coconut biscuits. Prior to the establishment of the Respondent, Mr. Tan Kim Hock and his late wife had been selling the 'dodol' products from house to house since the 1950's. [5] When their business expanded, the said products were sold at a shop called Syarikat Tong Seng in Bunga Raya, Malacca. Subsequently, the business expanded and came to be known as Tong Seng Product Centre, then 'Perusahaan Tan Kim Hock', and later to Tan Him Hock Tong Seng Sdn Bhd. [6] In 1976, based on an application by Mr. Tan Kim Hock, the trade mark application No. M/72924 was registered as shown below on 21.9.1976 under Class 30 for 'dodol being a sweet confection made of glutinous rice, kaya, coconut biscuit, coconut candy': CAP POKOK KELAPA [7] The same trade mark was renewed until 21.9.2021. It is not in dispute that the said trade mark has gained recognition, both locally and overseas. The Respondent has acquired substantial reputation and goodwill in the said trade mark. [8] In 2001, Tan Kim Hock Product Centre Sdn Bhd (the First Appellant) was established by Mr. Tan Kim Hock. The directors of the First Appellant were Mr. Tan Kim Hock and Madam Siah Siu Eng, the Second Appellant. Both Mr. Tan Kim Hock and Madam Siah Siu Eng were the shareholders of the First Appellant. [9] The First Appellant was established to sell and market the 'dodol' products, which were manufactured in the Respondent's factories. [10] In 2012, Mr. Tan Kim Hock sold his interest in the First Appellant to Madam Siah Siu Eng and her family. After this transfer, the Respondent's 'dodol' products continued to be sold by the First Appellant. [11] In November 2013, the Respondent stopped distributing its 'dodol' products to the First Appellant and subsequently found that the 'dodol' products, which were not its 'dodol' products but bearing similar trade marks, were still being sold by the First Appellant. [12] The Respondent also raised its concerns that its 'dodol' products are "halal certified" and there was the issue of whether the 'dodol' products bearing a confusingly similar trade mark being sold by the First Appellant (which were also described as 'halal') were actually "halal certified". The Respondent's concern was that if the same were not actually 'halal' certified', it would jeopardize the Respondent's reputation. [13] By way of an ex parte Originating Summons dated 26.5.2014, the Respondent applied for a Trade Description Order ('TDO') under sub sections 9(1) and (2) of the Trade Description Act 2011 ('Act 730') that the durian dodol, coconut dodol and coconut biscuits ('dodol products') bearing the trade mark in the shape of a 'T' containing a red and white coconut tree which is a stylised letter in the middle of the coconut tree consists of a logo 'S', on its packaging, which is confusingly similar to the Respondent's trade mark, to be declared as a false trade mark. [14] The TDO was granted on 4.6.2014. Pursuant to the TDO, a raid on the First Appellant's premises was carried out by Kementerian Dalam Negeri, Koperasi dan Kepenggunaan on 15.10.2014. [15] On 11.11.2014, the Appellants filed an application for leave to intervene and to set aside the TDO. The Respondent did not object to the said leave application. [16] After hearing the setting aside application, the learned High Court judge dismissed the same and on appeal to the Court of Appeal that decision was affirmed. [17] In the High Court, the issues canvassed by the Appellants in making the application to set aside the TDO were as follows:

(a) that the registered trade mark number M/72924 had been abandoned by the Respondent as a result of non-use;

(b) that both the Appellants and the Respondent were coowners or alternatively concurrent users of the mark;

(c) that there had been a failure by the Respondent to make full and frank disclosure in making the ex parte application for the TDO; and

(d) that the obtaining of the TDO by way of an ex parte application was an abuse of the court process as it was for a collateral purpose and therefore ultra vires section 9 of Act 730. [18] None of the issues raised above found favour with the learned High Court judge. [19] The same issues were regurgitated before the Court of Appeal, and that too failed. The appeal was dismissed. [20] The Appellants were given leave to appeal to this Court on the following questions of law:

(1) Where any person being a registered owner of a registered trade mark under the Trade Marks Act 1976 claim that his rights in respect of such trade mark are being infringed in the course of trade, by any other mark or get-up used by any other person, which is not identical with his registered trade mark but can be passed off as his registered trade mark, he may apply to the High Court to declare that the infringing mark is a false trade description for the purpose of section 8." [33] Section 9(1) of Act 730 does not state explicitly whether an application so made to the court may be by way of an ex parte application or otherwise. The section merely provides "may apply to the court", thus giving a discretion entirely to the court. [34] Abdul Aziz Mohamad J (as he then was) in In-Comix Food Industries Sdn Bhd v. A Clouet & Co (KL) Sdn Bhd [1997] 4 MLJ 71 had referred to the Trade Descriptions Act 1970, a predecessor to Act 730, as being penal in nature that belongs to the realm of criminal law. As such it was submitted by learned counsel for the Appellants that section 9 must be interpreted strictly as it is an instrument used to deprive a person of his rights to property. Justice requires that a person so deprived must be afforded the right and opportunity to be heard. An ex parte application such as in the instant case had denied the Appellants of such right. [35] In interpreting the said provision, we were urged to rectify the omission by the legislature in the enactment of section 9(1). Learned counsel referred to the case of Cooper v. The Board of Works for the Wandsworth District [1863] 143 ER 414 wherein Byles J made an observation that although there may be no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature. [36] We were further reminded of the observation made by Barwick CJ in Twist v. The Council of the Municipality of Randwick [1976] 136 CLR 106 on the power of the court to supplement a legislation. In the aforesaid case, the Australian High Court stated at pages 109-110 as follows: "The common law rule that a statutory authority having power to affect the rights of a person is bound to hear him before exercising the power is both fundamental and universal...But the legislature may displace the rule and provide for the exercise of such a power without any opportunity being afforded the affected person to oppose its exercise. However, if that is the legislative intention it must be made unambiguously clear. In the event that the legislation does not clearly preclude such a course, the court will, as it were, itself supplement the legislation by insisting that the statutory powers are to be exercised only after an appropriate opportunity has been afforded the subject whose person or property is the subject of the exercise of the statutory power. But if the legislation has made provision for that opportunity to be given to the subject before his person or property is so affected, the court will not be warranted in supplementing the legislation... [37] There are always two sides of a coin. While the Appellants may view Act 730 as a piece of legislation which affects his rights to use the trade mark, the Respondent may on the other hand contend that Act 730 must be seen to be much more than that. It not only protects the interest of the lawful or legal owners of trade marks, but also provides a machinery for the enforcement of the law on trade marks which is aimed at combating and eradicating the problem of imitation or counterfeit goods. The purpose for which Act 730 is enacted and the intent of Parliament in so enacting must be given paramount consideration by the courts when interpreting it. [38] In this regard, it is opportune to reiterate what Denning L.J had remarked in Seaford Court Estates Ltd v. Asher [1949] 2 KB 481 at page 499 : "It would certainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity. In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a consideration of the social conditions which gave rise to it, and of the mischief which it was passed to remedy, and then he must supplement the written word so as to give "force and life" to the intention of the legislature. That was clearly laid down by the resolution of the judges in Heydon's case (I),and it is the safest guide to-day. Good practical advice on the subject was given about the same time by Plowden in his second volume Eyston v. Studd (2). Put into homely metaphor it is this: A judge should ask himself the question: If the makers of the Act had themselves come across this ruck in the texture of it, how would they have straightened it out? He must then do as they would have done. A judge must not alter the material of which it is woven, but he can and should iron out the creases" [39] A TDO is a declaration that the infringing trade mark or get-up is for the purpose of the Act 730 a false trade description in its application to the goods that are specified in the Order. Ramly Ali J (as he then was) had referred to such an Order as a quasi-criminal type of relief made available to owners of registered trade marks in order to seek for an immediate relief from the courts. In LB Confectionery Sdn. Bhd. v. QAF Ltd; Perbadanan Harta Intelek Malaysia (interested party) and Another case [2008] 10 CLJ 264, His Lordship stated : "The TDO is a quasi-criminal type of relief made available through the TDA whereby registered owners of registered trade marks may seek to immediately prevent their registered trade mark from further infringement by getting the court to declare an infringing mark as a false trade description. Its purpose is for the speedy prevention of further damage that may be caused by the presence of the product carrying the false trade description being in the market. The enforcement of this order is done not by the applicant but by raids conducted by officers from the Enforcement Division of the Ministry of Domestic Trade and Consumers Affairs to seize the products bearing the false trade description. Such relief benefits not only the applicants but also the public at large from being deceived further by the product carrying the false trade description." (emphasis added) [40] In this instance, it bears some merit for us to refer to the observations made by Isaacs J. In the Australian case of Edison (Thomas A) Ltd v. Bullock [1912] 15 CLR 679 on the necessity of ex parte application in certain instances. At page 681 of the report, the learned judge stated: "There is a primary precept governing the administration of justice, that no man is to be condemned unheard; and therefore, as a general rule, no order should be made to the prejudice of a party unless he has the opportunity of being heard in defence. But instances occur where justice could not be done unless the subject matter of the suit were preserved, and, if that is in danger of destruction by one party, or if irremediable or serious damage be imminent, the other may come to the Court and ask for its interposition even in the absence of his opponent, on the ground that delay would involve greater injustice than instant action. But when he does so, and the Court is asked to disregard the usual requirement of hearing the other side, the party moving incurs a most serious responsibility."(emphasis added) [41] For a meaningful and effective use of a TDO, obtaining it swiftly and characterised with some elements of surprise is an essential ingredient. Hence, an ex parte application would be the most suitable and appropriate. Having obtained the Order is not the end of the matter. An owner who obtained a TDO has to go to the relevant enforcement agency, namely the Enforcement Division of the Domestic Trade and Consumer Affairs Ministry to move the machinery of the criminal law under the other provisions of Act 730. [42] Besides being evidentiary, a TDO in a sense, creates an offence. Until a TDO is made, there would have been no evidence on which to prosecute a case for an infringement. Without the same too, it would virtually be impossible for the authorities to identify and seize the imitation goods. Unless a TDO is obtained swiftly through the mechanics of an ex-parte application any effort to curtail the problem of imitation goods flooding the market would be seriously hampered. [43] In moving the Rang Undang Undang Perihal Dagangan 1972 to replace the Merchandise Mark Ordinance 1950 (Ordinance 10 of 1950), the then Minister of Trade and Industries, Tuan Muhamad Khir Johari had informed the august house: "usaha $ ^{2} $ untok menangkap peniaga $ ^{2} $ yang churang yang mengamalkan amalan $ ^{2} $ yang tidak adil dalam perniagaan mereka telah menjadi sukar dan memakan masa yang lama. Dengan hasrat untok melindongi pengguna $ ^{2} $ daripada peniaga $ ^{2} $ yang tidak bertimbang rasa saperti itu, Kerajaan telah membuat keputusan untok mengadakan satu undang $ ^{2} $ yang akan memberi perlindongan bukan sahaja kepada pengguna $ ^{2} $ malahan juga kepada peniaga $ ^{2} $ yang jujor daripada amalan $ ^{2} $ dagangan yang churang". [44] The new bill seeks to remove that impediment with the aim of giving better protection to traders and consumers alike. The Trade Descriptions Act 1972 was later replaced by the current Act 730. [45] Section 9(1) of Act 730 merely provides that any person "may apply to the High Court "... Supplementing the words 'ex parte' into the provision would certainly achieve the very purpose for the enactment of the provision and satisfy the mischief which the provision seeks to overcome. It is also in accord with the provisions of section 17A of the Interpretation Acts 1963/1967 on the purposive approach of interpretation. To borrow the words of Denning LJ in the Seaford Court Estates case (supra), it is to give "force and life" to the intention of the legislature. [46] In his book, the Discipline of Law, Lexis Nexis Butterworths, Indian Reprint at page 16, Lord Denning had penned the following on the purposive approach of interpretation: "The literal method is now completely out of date. It has been replaced by the approach which Lord Diplock described as the "purposive approach"... In all cases now in the interpretation of statutes we adopt such a construction as will "promote the general legislative purpose" underlying the provision. It is no longer necessary for the judges to wring their hands and say: "There is nothing we can do about it". Whenever the strict interpretation of a statute gives rise to an absurd and unjust situation, the judges can and should use their good sense to remedy it - by reading words in, if necessary - so as to do what Parliament would have done, had they had the situation in mind." [47] When faced with a choice of interpretations, the following observation by Viscount Simon L.C in the House of Lords case of Nokes v. Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at page 1022 is relevant: "If the choice is between two interpretations the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result." [48] It is our considered view that giving a narrower interpretation to section 9(1) of Act 730 will frustrate the mischief for which it was enacted. [49] Lest we may be misunderstood, it must be reiterated that judges must give effect to the intention of Parliament in enacting legislation and that is better done by filling in the gaps and thus making sense in the legislation. Quoting the words of Donaldson J in Corocraft Ltd and another v. Pan American Airways Inc (1968) 2 All ER 1059 at page 1071: "The duty of the courts is to ascertain and give effect to the will of Parliament as expressed in its enactments. In the performance of this duty the judge do not act as computers into which are fed the statue and the rules for the construction of statues and from whom issues forth the mathematically correct answer. The interpretation of statues is a craft as much as a science and the judges, as craftsmen, select and apply the appropriate rules as the tools of their trade. They are not legislators, but finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing". [50] Reiterating the same, Seah SCJ in NKM Holdings Sdn. Bhd. v. Pan Malaysia Wood Bhd [1987], 1 MLJ 39 at page 40 made the following reminder on the role of judges : "It must be borne in mind that we are judges not legislators. The constitutional function of the courts is not only to interpret but also to enforce the laws enacted by Parliament. In enforcing the law we must be the first to obey it. It should be noted that the power of a Court to proceed in a particular course of administering justice, was one of substance and not merely of form, The duty of the Court and its only duty, is to expound the language of the Act in accordance with the settled rules of construction. The Court has nothing to do with the policy of any Act which it may be called upon to interpret. That may be a matter for private judgement. It seems to us to be unwise as it is unprofitable to cavil at the policy of an Act of Parliament, or to pass a covert censure on the Legislature. [See Lord Chelmsford in R v. Hughes (1) and Lord Macnagthen in Vacher & Sons v. London Society of Compositors (2)]. [51] We are always mindful that it is our bounden duty to apply the laws as passed by Parliament however archaic and unfair it might seem or appear to be. The duty of making or changing the law lies with Parliament and not the courts. [52] This Court had, in Socooil Corporation Bhd. v. Ng Foo Chong & Anor [1981] 2 MLJ 7 while speaking on section 16(1) of the Trade Descriptions Act 1972 stated that, neither section 16(1) nor any other sections of the Act requires the hearing to be inter partes. Section 16 of the Trade Descriptions Act 1972 is the predecessor to section 9 of Act 730. [53] The respondents in Socooil Corporation Bhd applied ex parte for an order pursuant to section 16(1) of the Trade Descriptions Act 1972 which reads as follows: "16.(1) Where any person being a proprietor or registered user of a registered trade mark within the meaning of any written law relating to trade marks or being otherwise entitled at law to the protection of a trade or other mark or a get-up for any goods or services established—

(a) in the case of a registered trade mark, that his rights in respect of such trade mark are being infringed in the course of trade within the meaning of the written law; or

(b) in the case of a trade or other mark or get-up for any goods or services, that his rights in respect of such trade or other mark or get-up are being infringed in the course or trade as a result of which he has a right of action for passing off, the High Court may on the application of such person make an order declaring that the infringing trade or other mark or get-up as the case may be is for purpose of this Act a false trade description in its application to such goods as may be in the order." [54] Subsequently by a notice of motion, the appellant in that case claiming to have a proprietary interest in the said trade mark applied to discharge the said ex parte order. It was the appellant's contention that the learned High Court judge ought not to have exercised the summary power under section 16(1) as the said section was meant for plain and obvious cases where there would be no challenge to the right, title and registration of the trade mark. The learned High Court judge dismissed the appellant's application to discharge the said ex parte order. [55] On appeal to the Federal Court, Lee Hun Hoe CJ (Borneo) in dismissing the appellant's appeal said: "The learned judge accepted the submission of the respondents that under the above section any person having a registered trade mark who can show that his rights in such trade mark are being infringed in the course of trade may apply to the High Court for an order declaring that the infringing trade mark is a false trade description in its application to such goods as may be specified in the order. In other words, a person seeking to obtain an order under the said section need to show two things namely:-

(a) that he is the proprietor of a registered trade mark, and

(b) that some other person in infringing that registered trade mark in the course of trade. ...The learned judge was apparently satisfied on the evidence that respondents had established the two things under section 16 when he made the order. Appellants had failed to show why respondents are not entitled to protection under section 16. ... Also, there is nothing requiring respondents to serve any paper on any affected person. Further, neither section 16 nor any other section requires the hearing to be inter partes. Of course, the court may, in the exercise of their inherent jurisdiction, direct the papers to be served on an interested or affected party." (emphasis added) [56] The appellant also failed to discharge the said ex parte order on a further appeal to the Privy Council. [57] As submitted by learned counsel for the Appellants, the practice that has developed among practitioners in an application for a TDO under section 9 of Act 730 has been by way of an ex parte application. (See: In-Comix Food Industries Sdn. Bhd. v. A Clouet & Co (KL) Sdn Bhd (Supra), NV Sumatra Tobacco Trading Co v. PT Sampoerna JL Sdn. Bhd (1997) 3 CLJ 946, Hu Kim Ai (Trading as Geneve Timepiece) & Anor v. Liew Yew Thoong (Trading as Crystal Hour) (2004) 7 MLJ 590, Tohtonku Sdn Bhd. v. Superace (M) Sdn Bhd (1989) 2 MLJ 298). [58] We do not see anything wrong or illegal in such practice. It is permissible in law. [59] An ex parte order can always be set aside and a court is not functus officio to review a TDO obtained ex parte although perfected. The right of an affected person to apply to set aside an ex parte TDO is a right which exists over and above the other civil remedies available to him. That is exactly what the Appellants did in this case. In the High Court below, they applied to intervene and to set aside the ex parte TDO. [60] In Majuperak Tepung Beras Sdn Bhd v. Tiga Gajah Cho Heng Sdn Bhd [2001] 3 MLJ 508 the respondent owner of a trade mark had obtained a TDO ex parte. The appellant applied to set aside the said order and also applied to have the Register of Trade Marks rectified. It failed in both, and appealed to the Court of Appeal. The appellant contended that the ex parte TDO obtained by the respondent was seriously flawed because it failed to identify with sufficient precision the infringing trade mark. The appeal was allowed solely for the reason that order obtained failed to identify the infringing mark with precision. Under section 16 (1) of the Trade Descriptions Act 1972 the infringing trade mark must be clearly and specifically identified. [61] Similarly, in Jetaine Corporation Sdn Bhd v. JC Laboratory Sdn Bhd [2000] 4 CLJ 629 an application by the respondent to intervene and set aside an ex parte TDO was allowed by the High Court on the ground that there was no full and frank disclosure by the applicant in applying for the ex parte TDO. [62] Ramly Ali J (as he then was) in LB Confectionary Sdn Bhd (supra) approving an ex parte TDO application therein stated : "The above suggests that since the court can still review its grant of a TDO at a later stage, eg, by way of granting a subsequent application to set aside the same, therefore there are no reasons as to why an applicant may not elect for the application to be heard ex parte." [63] Contrary to learned counsel's submission, we find section 9 of Act 730 is never intended or meant to be oppressive in its operation and nature. It was enacted for the protection of both the registered trade mark owners as well as the consumers at large. We have earlier in this judgment referred to the speech of the then Minister of Trade and Industry when tabling the Bill in Parliament on this issue. We also disapprove counsel's suggestion that permitting an ex parte application under the said provision is draconian. [64] In our view, the current procedure of applying for a TDO by way of an ex parte application under section 9 of Act 730 is permissible and in accord with the legislative purpose for which it was enacted. Whether section 9 empowers the High Court to determine and declare goods as imitation goods whether on an ex parte basis or at all? [65] In granting the TDO, the learned High Court judge also declared "diisytiharkan sebagai satu produk tiruan", meaning that the Appellants' products are imitation goods. It was submitted that section 9(1) of Act 730 has, as its objective the prohibition of the use of false trade descriptions in relation to identifiable goods sold under the infringing trade marks. It does not call for the High Court to make a determination as to whether the goods are imitation or otherwise. [66] An application and the order sought for under section 9(1) of Act 730 is to declare that the infringing mark is a false trade description for the purpose of section 8 of the same. [67] Section 8 of Act 730 provides as follows: Prohibition of false description in relation to trade mark

(a) Applies a false trade description to any goods as if the goods were subject to any rights relating to registered trade mark;

(b) Supplies or offers to supply any goods to which a false trade description is applied as if the goods were subject to any rights relating to registered trade mark; or

(c) Exposes for supply or has in his possession, custody or control for supply any goods to which a false trade description is applied, commits an offence and shall, on conviction, be liable-

(A) If that person is a body corporate, to a fine not exceeding fifteen thousand ringgit for each goods bearing the false trade description, and for a second or subsequent offence, to a fine not exceeding thirty thousand ringgit for each goods bearing the false trade description; or

(B) If that person is not a body corporate, to a fine not exceeding ten thousand ringgit for each goods bearing the false trade description or to imprisonment for a term not exceeding three years or to both, and for a second or subsequent offence, to a fine not exceeding twenty thousand ringgit for each goods bearing the false trade description, or to imprisonment for a term not exceeding five years or to both.

The learned Judge's conclusion on this issue was set out at paragraph 38 of the Grounds of Decision and it was as follows: [38] With regards to the ownership of the unregistered trademarks, the same is the subject matter of the suit 22IP-59-10/2014 and is not relevant to the issue for the TDO, as we are only dealing with a registered trade mark under Section 9 of Act 175. So long as there is a registered trade mark the same has been infringed, this forms the basis of the TDO." We were in complete agreement with the learned Judge on this score." [76] Both the courts below did not make any determination on the issue of concurrent usage of the unregistered trade marks as the matter was still pending in another court. We therefore decline to answer the question posed. Conclusion [77] In conclusion, our answer to both questions 1 and 2 are in the affirmative, and we decline to answer questions 3 and 4. In the upshot, the appeal is hereby dismissed and we affirm the decisions of the courts below. Dated: 28 November 2017 Parties: For the Appellants: Tetuan Bell & Lee Datuk Jagjit Singh Dato' Cyrus Das Goh What Singh Yap Bell Pung For the Respondent: Teo Boon Kwong Damian Yeo Melvin Tay Tetuan Damian S.L. Yeo & L.C. Goh