OCEAN CONCEPT HOLDINGS LTD v. SHELTER LOUNGE LTD

HCMP 3591/2016

[2022] HKCFI 1049

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3591 OF 2016

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	IN THE MATTER OF the Trade Marks Ordinance (Cap 559)(the “Ordinance”)
	and
	IN THE MATTER OF the Application No.302585962 by Shelter Lounge Limited (the “Applicant”)  to register the following trade mark in series
	(the “Mark”)  in Class 43 in the name of Shelter Lounge Limited (the “Application”)
	IN THE MATTER OF an Appeal against the Registrar’s dismissal of the Opposition by Ocean Concept Holdings Limited (the “Opponent”)  of the Application (the “Appeal”)

________________________

________________________

________________________

DECISION

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A.  Introduction

1.  On 23 April 2013, the Respondent filed an application (Application No. 302585962, the “Application”)  with the Registrar of Trade Marks (the “Registrar”)  to register a trademark (the “Opposed Mark”)  in class 43 for “services for providing food and drink; temporary accommodation”.

2.  On 26 August 2013, the Appellant opposed the Application by filing a Notice of Opposition together with a Statement of Grounds. 

3.  On 8 June 2016, a hearing in respect of the opposition was held before the Hearing Officer acting for the Registrar (hereinafter referred to as the Registrar).

4.  On 1 December 2016, the Registrar handed down the Statement of Reasons rejecting all grounds of opposition relied on by the Appellant.

5.  The Appellant filed a Notice of Motion on 29 December 2016 (the “Notice of Motion”)  to appeal against the Registrar’s decision.

6.  On 3 February 2017, the Appellant made an application by way of a summons seeking leave to file further evidence on appeal (the “Summons”), such application being opposed by the Respondent. In simple terms, the main reason offered by the Appellant as to why further evidence has to be filed was that the Appellant was not legally represented before the Registrar, nor had it been provided with proper legal advice as to the basis upon which the Application should have been opposed, or the evidence which should have been adduced in order to oppose the Application.

7.  The parties have agreed by consent that the Notice of Motion is to be dealt with after the Summons is disposed of. The Court herein is therefore only asked to decide with respect to the Summons but not the Notice of Motion. 

B.  BACKGROUND AND THE PARTIES’ RESPECTIVE POSITIONS

B1.  Background

8.  This Court should preface matters by pointing out that the facts summarized in this sub-section are drawn from the evidence filed by the parties both at the opposition stage and for the purpose of the Summons. Relevantly, the Affirmation of Choi Yiu Ying (“Choi’s 1^st Affirmation”)  filed by the Appellant in this appeal refers to a substantial amount of additional information not placed before the Registrar and which forms the subject matter of the Summons. This Court’s determination of the Summons is set out below in Sections E and G below but for the purpose of setting out the background, this Court will also include information from Choi’s 1^st Affirmation. 

9.  The Appellant, Ocean Concept Holdings Limited, began operating a food and beverage business under the name “Shelter” in 2002 making use of the following logo:

(hereinafter referred to as the “Shelter Mark”).

10.  “Shelter” started off as an “upstairs” bar (“Shelter Bar”)  located at 27/F, Henry House, Causeway Bay, Hong Kong (the “Henry House Premises”).

11.  In July 2006, the shareholder and director of the Appellant decided to join forces with a friend (who was at that time operating bars under the names of “Census” and “C3” respectively)  to merge their existing bar businesses together under the umbrella of the “Shelter Census Group”. They expanded their business to other areas of the food and beverage industry in Hong Kong as well as in Macau.

12.  The Appellant registered the following mark with respect to the “Shelter Census Group” in Mainland China in class 43 in June 2010 and in class 35 in March 2012:

(hereinafter referred to as the “Shelter Census Group Mark”).

13.  As pleaded in the Appellant’s Statement of Grounds, the Shelter Census Group Mark has been used since August 2011.

14.  In early-2013, the Appellant was approached by Hysan Development Company Limited to establish a bar and restaurant at its then newly-developed property in Causeway Bay, namely Hysan Place (the “Hysan Place Premises”)  and a tenancy agreement was signed in March 2013. Shelter Bar ceased its operation in 2013 at the Henry House Premises although it is not clear as to exactly when it ceased its operation.

15.  The Respondent, Shelter Lounge Limited, made the Application in April 2013 to register the Opposed Mark as follows:

16.  According to Choi’s 1^st Affirmation, an application (Application No. 302589274)  was made by a company then known as Profit Ocean Holdings Limited, but subsequently re-named as Choi’s Brothers Catering Holdings Limited, (a shelf company used “for the sake of convenience”), in respect of the Shelter Mark on 25 April 2013.  Such application led to the discovery by the Appellant of the Application.

17.  In or about July 2013, the Respondent’s business “Shelter Lounge” was granted its licence by the Food and Environmental Hygiene Department. 

18.  On 31 October 2013, “Shelter Italian Bar and Restaurant” began its operation at the Hysan Place Premises.

19.  On 12 March 2014, the Appellant made an application (Application No. 30291319)  in respect of the Shelter Mark, but the Trade Marks Registry informed the Appellant of the Application which was pending and stated that the outcome of the Appellant’s application would depend on the Application.

20.  In or around late-2016, the Respondent ceased operation of “Shelter Lounge” in Sheung Wan.

B2. The Appellant’s position at the opposition stage

21.  In opposing the Application, the Appellant put forward in the Statement of Grounds (which contains only two paragraphs)  enclosed to the Notice of Opposition:-

a.  The fact that the Shelter Census Group Mark was registered in Mainland China in difference classes since 2010 and that the same has been used since August 2011;

b.  Sections 11(4)(a)  of the Trade Marks Ordinance (Cap. 559)  (the “Ordinance”)  (that a trade mark shall not be registered if it is contrary to accepted principles of morality);

c.  Section 11(4)(b)  of the Ordinance (that a trade mark shall not be registered if it is likely to deceive the public); and

d.  Section 11(5)(b)  of the Ordinance (that the Application was made in bad faith);

as the grounds of opposition. Only reference to the Shelter Census Group Mark was made and there was no mention of the Shelter Mark.

22.  In the Statutory Declaration of Mr Pang Tak Hong (“Mr Pang”)  dated 14 May 2014 who represented himself as the “Attorney of Times Intellectual Property (Hong Kong)  Limited” (“Pang’s Statutory Declaration”), the Appellant put forward the following assertions / evidence including:

a.  The Appellant “has used the “trade mark “Shelter” since 2002” and has “obtained goodwill by way of the extensive use of the “trade mark “Shelter” in the area of food and beverage restaurant area”;

b.  To show that the Respondent “should, in no doubt, has the knowledge of [the Appellant’s] extensive use of the trade mark “Shelter” in Hong Kong”, materials such as the tenancy agreements from 2007 to 2013, the various licences and business registrations from 2002 to 2013 and in particular 6 pages of newspaper clippings of articles in 2002 (i.e. when Shelter Bar was first opened)  were produced; 

c.  The Opposed Mark is “similar” to the “Shelter trade mark” and the Application therefore “violates section 11(4)(a), 11(4)(b)  and 5(b)” of the Ordinance;

d.  The word “Shelter” is the distinctive element of the Opposed Mark, which is identical to the Appellant’s ““Shelter” trade mark by way of meaning and pronunciation”; and

e.  The Shelter Census Group Mark was registered in class 43 since 2010, which was the same as the class to which the Application relates, and in class 35 since 2012.

B3. The Appellant’s position in this appeal 

23.  In summary, the Appellant put forward the following submissions / grounds of appeal in the Notice of Motion dated 29 December 2016:

a.  The Appellant maintains the “likely to deceive the public” ground as set out in section 11(4)(b)  of the Ordinance. It is the Appellant’s position that the Registrar erred in ruling that the Opposed Mark will not “be reasonably likely to cause deception and confusion among the public” and that the Registrar, inter alia: (i)  erred in not finding that the Appellant had acquired substantial goodwill and reputation in its business under the Shelter Mark and (ii)  erred in not finding the word “Shelter” used in Class 43 activities distinctive and in particular distinctive to the Appellant’s business; 

b.  The Appellant also maintained the “bad faith” ground as set out in section 11(5)(b)  of the Ordinance and that the Registrar erred in ruling that the Application was not made in bad faith. The Appellant also made the point that given the established goodwill and reputation acquired by the Appellant by 2013, the Application was “dishonest”; and

c.  The Appellant now maintains the ground pursuant to section 12(5)(b)  of the Ordinance that a trade mark shall not be registered by virtue of an earlier right. Whilst this ground was not put before the Registrar, the Appellant’s position is that the Registrar “could have and should have refused the Application by virtue of section 12(5)(b)  of the Ordinance”. 

The Notice of Motion makes no mention of section 11(4)(a)  of the Ordinance which is one of the grounds set out in the Notice of Opposition.

24.  Both in the Notice of Motion and in Choi’s 1^st Affirmation, the Appellant also makes the point that the Summons ought to be successful as it was not legally represented before the Registrar but relied on Mr Pang. It is the Appellant’s submission that the Appellant was under the impression that Mr Pang was a legal counsel who had the competency in opposing the Application on behalf of the Appellant and in the circumstances, the Appellant ought to be allowed to file further evidence on appeal and with the benefit of such further evidence, the Court would reach the conclusion that the Application ought to be refused.

B4. The further evidence which the Appellant now seeks to file

25.  It is helpful to set out the more pertinent further evidence which the Appellant now seeks to file:

  Regarding “Shelter” bar at the Henry House Premises

a.  Menus of Shelter Bar from 2002 to 2013 bearing the Shelter Mark;

b.  A photo showing the lightbox design of “Shelter” bar at Henry House, which according to the 2^nd Affirmation of Choi Yiu Ying filed on 19 April 2017 (“Choi’s 2^nd Affirmation”)  was put in place at Henry House in as early as 2002;

c.  Financial statements of the companies which operated Shelter Bar from 2002 to 2013, in order to show the turnover of Shelter Bar.

Regarding the “Shelter Census Group”

d.  One article mentioning the “Shelter Census Group” (which this Court understands from Choi’s 1^st Affirmation was from August 2008);

Regarding “Shelter Italian Bar and Restaurant” at the Hysan Place Premises

e.  Various corporate documents relating to the company which operated “Shelter Italian Bar and Restaurant” at the Hysan Place Premises in 2016-2017;

f.  Contractual and license documents with respect to the operation of “Shelter Italian Bar and Restaurant”;

g.  Financial statements of the company which operated “Shelter Italian Bar and Restaurant” in order to show its turnover for the period ended 31 March 2014;

h.  Social media page of “Shelter Italian Bar and Restaurant” with regard to its grand opening in October 2013;

i.  Photos of the lightbox shown at Hysan Place and photos taken outside the Hysan Place Premises during the renovation of “Shelter Italian Bar and Restaurant”. The Court notes that the word “Shelter” as shown on the lightbox and at the renovation site bears slight differences from the Shelter Mark which the Shelter Bar used in 2002 to 2013;

j.  VIP Card issued by “Shelter Italian Bar and Restaurant”, which shows that it is part of the “Shelter Group” (without displaying the Shelter Census Group Mark);

k.  various media clippings for “Shelter Italian Bar and Restaurant” from October 2013 to April 2016; 

l.  An Openrice.com review of “Shelter Italian Bar and Restaurant” in October 2014, which the Appellant seeks to use to demonstrate the confusion by the public as regards “Shelter Italian Bar and Restaurant” and the “Shelter Lounge” operated by the Respondent. This Court notes that the writer of the review was invited by “Shelter Group” to visit “Shelter Italian Bar and Restaurant”;

m.  Another online article posted on Sassyhongkong.com in July 2014 regarding a promotion of “Shelter Italian Bar and Restaurant” which was wrongly labelled as a promotion from “Shelter Lounge”. Readers of the article were invited to click a Sassyhongkong.com link if they wished to enter a complimentary tea set giveaway from “Shelter Italian Bar and Restaurant”; 

n.  The award given by Hong Kong Tatler to “Shelter” (namely “Shelter Italian Bar and Restaurant”)  in 2015;

Regarding businesses related to the Appellant 

o.  Correspondence with developers from 2014 to 2017 regarding various business proposals / projects;

Regarding “Shelter Lounge” operated by the Respondent 

p.  Photos taken outside “Shelter Lounge” showing that it had closed down.

Regarding trade mark applications  

q.  Materials regarding the registration of a trade mark similar to that used by “Shelter Italian Bar and Restaurant” (which, as pointed out in §25 i above, is slightly different from the Shelter Mark)  in Macau in 2015; 

r.  Materials regarding a failed trade mark application in respect of the Shelter Mark on 25 April 2013; and

s.  Materials regarding a pending trade mark application in respect of the Shelter Mark by the Appellant on 12 March 2014.

B5. The Respondent’s position at the opposition stage

26.  The Respondent denied having prior knowledge of the Appellant’s Shelter Census Group Mark registered in Mainland China, and denied that the Application was made in bad faith.

27.  In this regard, the Respondent maintains that the trade mark registration system in Hong Kong serves to provide territorial support. In other words, the fact that the Shelter Census Group Mark was registered in Mainland China does not constitute any basis for opposing the Application in Hong Kong.

28.  The Respondent also denies that the Opposed Mark would be contrary to accepted principles of morality and/or likely to deceive the public. In this regard, it is the Respondent’s position that:

a.  There was no evidence from the Appellant that the Appellant has obtained any goodwill in respect of the Shelter Census Group Mark in Hong Kong;

b.  The Opposed Mark is completely different from the Shelter Census Group Mark,  whether visually, phonetically or conceptually;

c.  The services registered under the Shelter Census Group Mark were not identical or were different in nature to that to which the Opposed Mark relates; and

d.  The fact that the Shelter Census Group Mark was registered only in Mainland China shows that the Appellant’s services are intended for customers in Mainland PRC. On the other hand, the Application was made in Hong Kong, a different market;

and by reason of points a to d above, there can be no likelihood of confusion arising from the use of the Opposed Mark.

B6. The Respondent’s position with respect to the Summons  

29.  The Respondent opposes the appeal. The Respondent also opposes the Summons and filed evidence, namely the Affirmation of Lui Hing Yip (the manager of the Respondent), in opposition. For the purposes of the Summons, it suffices to set out that:

a.  It is the Respondent’s position that as the Appellant only pleaded the Shelter Census Group Mark but not the Shelter Mark in its Statement of Grounds at the opposition stage (see §21 above), the Appellant was and is not entitled to rely on evidence which is irrelevant to the Shelter Census Group Mark;

b.  The further evidence which the Appellant seeks leave to file relates to the Shelter Mark but not the Shelter Census Group Mark and the Appellant is not entitled to rely on such further evidence;

c.  The further evidence to support the goodwill and reputation acquired came after the “Shelter Italian Bar and Restaurant” was opened and in any event it does not show that the Respondent had knowledge of the Appellant and/or the Shelter Mark prior to the Application;

d.  The Appellant made the conscious decision of not engaging legal representation at the opposition stage; and

e.  Whilst the Appellant relies on section 11(4)(b)  of the Ordinance as one of the grounds, the further evidence which the Appellant seeks to adduce is irrelevant to this ground. 

C.  ISSUES FOR THIS COURT TO DETERMINE

30.  As noted above, the present Summons relates to the filing of further evidence in the appeal.

31.  Notwithstanding this, the written submissions lodged by the Appellant, under the heading “Details of the Applications”, asked the Court to give leave to amend the Notice of Opposition pursuant to Practice Direction 22.1. In the written submissions of the Appellant, the Appellant also asked this Court to reach the conclusion that:

a.  Leave be granted to the Appellant to file further evidence;

b.  Leave be granted to amend the Notice of Opposition to include section 12(5)(b)  of the Ordinance as a ground for opposition;

c.  The Registrar be directed to refuse the registration of the Opposed Mark to which the Application relates; and

d.  The costs of and occasioned by the appeal and of the opposition proceedings be paid to the Appellant, to be taxed if not agreed.

32.  In this regard, the Notice of Motion of the Appellant states that “[i]nsofar as it is required, the [Appellant] will seek leave to amend the Notice of Opposition to properly include section 12(5)(b)  of the Ordinance as a ground for opposition”.

33.  This position of the Appellant was repeated in Choi’s 2^nd Affirmation. Choi’s 2^nd Affirmation also states that “[i]n the event leave is granted [to the Appellant] to file further evidence”, the Appellant would seek leave to amend the Notice of Opposition as well as the Notice of Motion in order to “put “non-use” in issue before the Court”, (in other words, to address the issue that the Respondent’s “Shelter Lounge” closed down in 2016 although there was evidence from the Respondent that it was planning to open another lounge under the Opposed Mark).

34.  Such position was maintained in the Appellant’s oral submissions at the hearing with the Appellant asking for leave from the Court to amend the Notice of Opposition.

35.  In this regard, it was pointed out by the Respondent that no summons has ever been taking out in respect of an application to amend the Notice of Opposition, nor has the Appellant alerted either the Respondent or the Court in respect of the exact terms of any intended amendments.

36.  Having considered both parties’ oral and written submissions, the Court agrees with the Respondent that without any formal application (accompanied by evidence in support)  being made, the Court is not in a position to deal properly with any application regarding the amendment of the Notice of Opposition.

37.  In the circumstances, this decision deals only with the Summons relating to the filing of further evidence in the appeal.

D.  RELEVANT LEGAL PRINCIPLES

D1. The Court’s approach in relation to an appeal from the Registrar 

38.  For the purpose of determining the Summons (that is, whether and what further evidence should be placed before the court hearing the substantive appeal), it is relevant for the Court first to bear in mind the approach which the court hearing the substantive appeal should take as it has a bearing on the Court’s evaluation of the potential significance of the further evidence to be adduced.

39.  Order 55, rule 3(1)  of the Rules of the High Court (Cap. 4A)  (the “RHC”)  sets out that an appeal to the Court of First Instance from the Registrar shall be by way of rehearing.

40.  In this regard, the case of Vita Green Health Products Co Ltd v Vitasoy International Holdings Ltd (unrep, HCMP 593/2014, 7 January 2015)  sets out the relevant legal principles with regard to the Court’s approach in relation to an appeal from the Registrar at §§38 to 42, which are set out as follows:

“38. Section 84(1)  of the Ordinance provides that an appeal lies to the court from any decision or order of the Registrar under the Ordinance. Section 85 goes on to provide that the court may, for the purpose of determining any question in the exercise of its original or appellate jurisdiction under the Ordinance, make any order or exercise any other power which the Registrar could have made or exercised for the purpose of determining that question.

39. An appeal from the Registrar to the Court of First Instance is a rehearing, not a review. Nevertheless, the court is not exercising a function as though it were a first instance court deciding on registration by reference to whatever might be the factual circumstances pertaining as at the date of the hearing of the motion by which the appeal is brought: see Lion Capital LLP v Registrar of Trade Mark [2011] 1 HKLRD 272 at paragraphs 21 and 25, per Deputy High Court Judge Coleman SC.

40. The following guidance was given by Rogers VP in Re NAKED [2010] 1 HKLRD 382 at paragraph 22 in relation to the approach which the court should adopt in an appeal from a decision of the Registrar:

“In my view, the correct approach is that the Registrar’s opinion has to be fully and carefully considered. The Registrar has very particular experience. Any departure from the way in which the Registrar exercised his discretion has to be made upon a sound basis after giving full and most careful consideration to the Registrar’s views and reasons. The exercise of discretion by the Registrar should not be overruled simply because the court itself might have come to a different conclusion. Essentially, therefore, a similar approach should be taken to the exercise of discretion by the Registrar as by a judge.”

41. This reflects the current English approach regarding an appeal from a decision of the registrar to the Chancery Division of the High Court or to an “appointed person” (usually drawn from a small panel of Queen’s Counsel practising in the Chancery Division and having special experience of trade mark law)  under sections 76 and 77 of the Trade Marks Act 1994. In Reef Trade Mark [2003] RPC 5 at paragraph 28, Robert Walker LJ (as he then was)  stated as follows:

“… the hearing officer had to make what he himself referred to as a multi-factorial comparison, evaluating similarity of marks, similarity of goods and other factors in order to reach conclusions about likelihood of confusion and the outcome of a notional passing-off claim. It is not suggested that he was not experienced in this field, and there is nothing in the Civil Procedure Rules to diminish the degree of respect which has traditionally been shown to a hearing officer’s specialised experience… On the other hand the hearing officer did not hear any oral evidence. In such circumstances an appellate court should in my view show a real reluctance, but not the highest degree of reluctance, to interfere in the absence of a distinct and material error of principle.”

42. In summary, the court should be slow to reverse the decision of an experienced registrar on a question which consists largely of a value judgment, but interference may be justified where, for example, the registrar erred in principle, took into consideration matters which he ought not to have considered, or omitted to take into consideration matters which he ought to have been considered: see Lion Capital LLP v Registrar of Trade Mark [2011] 1 HKLRD 272 at paragraphs 20, 21 and 24, per Deputy High Court Judge Coleman SC.”

41.  In summary, the Court bears in mind that whilst the appeal is a rehearing and not a review, the court hearing the substantive appeal is not exercising a function as though it were a first instance court deciding on registration. Generally speaking, the court hearing the substantive appeal should be slow to reverse the decision of the registrar, who has very particular experience, on a question which consists largely of a value judgment. Rather, the court’s role in the appeal is to look into the original decision to see if there are material errors of principle such that it should intervene. 

D2. Granting leave to adduce further evidence in an appeal

42.  For an appeal against the decision of the registrar, section 85 of the Ordinance provides as follows:

“The court may, for the purpose of determining any question in the exercise of its original or appellate jurisdiction under this Ordinance, make any order or exercise any other power which the Registrar could have made or exercised for the purpose of determining that question.”

43.  In terms of the procedures for the appeal, Order 55, rule 7(2)  of the RHC provides for the court’s power to receive further evidence on a question of fact, and the evidence may be given in such manner as the court may direct either by oral examination in court, by affidavit, by deposition taken before an examiner or in some other manner.

44.  In the case of Re CSS Jewellery Co Ltd [2010] 1 HKC 563, A Cheung J (as he then was)  took the view at §90 that when determining whether to admit further evidence in appeals from the Registrar:

“I agree that in this regard, the Ladd v Marshall conditions are not applicable in an appeal from the Registrar to the Court of Instance. On the other hand, one cannot assume that leave to adduce further evidence is to be had for the asking.”

45.  Furthermore, given the nature of an appeal as explained in §§39 to 41 above, an appellant does not have an absolute right to adduce new evidence. In this regard, Au-Yeung J had set out the relevant principles in the case of Gemology Headquarters International, LLC v Gemological Institute of America, Inc (unrep, HCMP 1456/2014, 15 July 2014)  at §§3 to 4 as follows:

“3. The principles for granting leave to adduce further evidence have been set out in the case of Hunt-Wesson Inc’s Trade Mark Application [1996] RPC 233 at 242 (the “Swiss Miss” case)  decided by Laddie J. In summary, the following factors are relevant to the exercise of the court’s discretion:

(a)  Whether the evidence could have been filed earlier and, if so, how much earlier.

(b)  If it could have been, what explanation for the late filing has been offered to explain the delay.

(c)  The nature of the mark.

(d)  The nature of the objections to it.

(e)  The potential significance of the new evidence.

(f)  Whether or not the other side will be significantly prejudiced by the admission of the evidence in a way which cannot be compensated, eg by an order for costs.

4.  Further, in Dualit Ltd v Rowlett Catering Appliances Ltd [1999] FSR 865, by the same learned Judge, it has been said that the onus was on the applicant to justify the exercise of the court’s discretion in its favour, and merely showing the evidence sought to be introduced was relevant is not enough.  At page 870 of the decision, it is stated that thus:

“… it is not enough simply to allow in any evidence which can be argued to be relevant and in effect to allow in any evidence which is relevant. If such a low hurdle is imposed, other applicants and opponents will no doubt look at the decision adverse to them in the Registry, redesign their evidence and start again on appeal. But proceedings before the Registry are not a dry run to test out the evidence to see which parts can be criticised so that the evidence can then be perfected for the purpose of the proper run before the High Court. It is important for parties to realise that the function of the Registry is to examine applications and to consider oppositions, and that they must put before the Registry the material which is to be relied upon in support of their cases.

In my view, it is just as important that it is brought home to litigants that they must put the best evidence available to them before the Registry as it is to ensure that the appeal is a fair resolution of the dispute between the parties.  It appears to me, therefore, that it is still necessary for the court to consider the issue of how important the evidence is, whether it could have been put in earlier and why it was not and the weight that evidence is likely to have at the appeal.”

46.  At §18 of Gemology Headquarters International, Au-Yeung J further observed that “an error of judgment on the part of the appellant in deciding what evidence to put before the Registrar... is not a ground for seeking leave to adduce fresh evidence on appeal”.

E.  DISCUSSION

E1. Explanation offered by the Appellant for the late filing of the evidence

47.  With reference to the factors summarised by Au-Yeung J in Gemology Headquarters International, it is clear that the evidence now put forward by the Appellant, save in respect of materials which post-dated the hearing before the Registrar, could have been put forward before the Registrar.

48.  In this regard, the main reason provided by the Appellant for the late filing of the evidence is the purported incompetence of Mr Pang who handled the matter at the opposition stage.

49.  The Court notes that Counsel for the Appellant in his oral submissions did mention that Choi Yiu Ying (“Mr Choi”), the shareholder and director of the Appellant and the deponent of Choi’s 1^st Affirmation and Choi’s 2^nd Affirmation, took Mr Pang to be a ‘trade mark attorney’ and referred to §48 of Choi’s 1^st Affirmation as regards the trust placed by him in Mr Pang and the deference given by him to Mr Pang’s advice. Further, as noted in §24 above, the Appellant’s submission to the Court was that the Appellant was under the impression that Mr Pang was a legal counsel who had the competency in opposing the Application on behalf of the Appellant.

50.  However, such overall submission appears to be contradicted by the evidence, (namely, Choi’s 1^st Affirmation), put forward by the Appellant in support of the Summons.

51.  The Appellant sets out in §51 of Choi’s 1^st Affirmation that:

“I was taken by surprise that there was a competing application by Shelter Lounge…Mr. Pang then said that in light of this competing application, we should oppose the Application first, rather than pursuing with our own application filed by Profit Ocean. I asked Mr. Pang if we should seek further legal advice from a solicitor or counsel for the opposition proceedings. Mr. Pang said that we had a very good case given our established goodwill and use of our Shelter mark and that he could handle the case himself…and would liaise with my staff where necessary and I had nothing to worry about. I trusted Mr Pang at that time.” (Emphasis added)

52.  The Appellant further sets out in §54 of Choi’s 1^st Affirmation that:

“…Mr. Pang would reply saying everything was under control and the proceedings were pending at the Trade Mark Registry. Finally, he said that the actual hearing of the Opposition proceedings would be held on 8 June 2016. I asked him again if we should engage solicitors/counsel to appear at the hearing and make representations on our behalf as Shelter Lounge was legally represented. He reassured me that as “an attorney”, he knew what to do in our best interests. Much to my regret, I misplaced my trust in him once again.” (Emphasis added)

53.  Whilst this Court recognizes that both the Notice of Opposition and Pang’s Statutory Declaration contain reference to Mr Pang as “an attorney”, given the evidence put forward by the Appellant as set out in §§51 and 52 above and even in the case where the Appellant was misled into thinking that Mr Pang had the competency in opposing the Application, by reason of the Appellant’s evidence the Court is not convinced that the Appellant was misled into thinking that Mr Pang was legally qualified.

54.  In other words, whilst it might be unfortunate on the part of the Appellant in engaging Mr Pang (who worked for Times Intellectual Property (Hong Kong)  Limited which, according to §48 of Choi’s 1^st Affirmation, was a company “offering trademark application service”), the Court considers the evidence put forward by the Appellant as set out in §§51 and 52 above reflects that the Appellant made the decision not to engage legal representation at the opposition stage.

55.  In any event and even assuming that the Court is incorrect in reaching the conclusion that the Appellant was aware that Mr Pang was not in fact legally qualified, the Court is similarly not satisfied that “incompetence of counsel” is, in the present circumstances, an adequate explanation in itself justifying the late filing of evidence.

56.  It appears to the Court that the present scenario falls fairly and squarely within the situation contemplated in §18 of Gemology Headquarters International, namely that there was an error of judgment on the part of the appellant in deciding what evidence to put before the Registrar.

57.  The Respondent put forward the Court of Appeal decision of Chan Koon Nam v Ng Man Sum (unrep, CACV 281/2011, 5 March 2013)  as an authority suggesting that the failure of a party to adduce evidence relying on the advice of the legal advisors could not constitute a special ground for such evidence to be adduced. The Court of Appeal in that case did not see why the incompetence of lawyers should be a factor distinguishing that case from the case of Dr Kwong Kwok Hay v Medical Council of Hong Kong (No 2) [2007] 4 HKC 446, another Court of Appeal decision in which the court refused to give leave to admit fresh evidence in the appeal. 

58.  Relevantly, the Court notes that Dr Kwong Kwok Hay is a decision based on the principles set out in Ladd v Marshall, which in the context of an appeal from the Registrar to the Court of First Instance (by way of a rehearing)  are not applicable. Indeed, the Court also bears in mind that Order 55, rule 7(2)  of the RHC provides the power for the court in an appeal to receive further evidence on questions of fact.

59.  However, the Court has not lost sight of the fact that even in such a rehearing, the court is not to exercise a function as though it were a first instance court and that even given the wide power provided to the court, a party late in adducing evidence cannot assume that leave to adduce further evidence is simply ‘to be had for the asking’.

60.  Striking an overall balance and bearing in mind both the authorities on this subject and those relevant factors set out in §§ 58 and 59 above, this Court does not consider there to be circumstances in the present case justifying the exercise of discretion to admit the further evidence purely by reason of any alleged incompetence of Mr Pang.

61.  Furthermore, just as the Court of Appeal in Chan Koon Nam expressed scepticism (at §38)  with regard to the defendant’s allegation that he failed to disclose the relevant documents as he was not advised by his lawyer to do so, in reaching its conclusion, the Court also has scepticism with regard to the level of reliance which Mr Choi said he allegedly placed on Mr Pang.

62.  Mr Choi is a qualified civil engineer (as stated in §3 of Choi's 1^st Affirmation)  who established Shelter Bar in 2002 and later became the Chief Executive Officer of the “Shelter Census Group” in 2006.

63.  As the Court of Appeal put it in §38 of Chan Koon Nam when stating that it does not think “it would require a lot of experience for a litigant in the defendant’s position to know the documents relevant to support his case and which he should provide to his lawyers”, the Court similarly does not think that Mr Choi was not in a position to appreciate the possibility of the potential relevance of at least some of the documents which the Appellant now seeks to adduce as further evidence, especially when Mr Choi himself admitted at §49 of Choi’s 1^st Affirmation that Mr Pang had, as far as he could remember, once asked for information such as the name of the company which the Appellant would like to use to hold the trademark and details of the design of the Shelter Mark.

64.  As it was the Appellant’s main point of contention at the opposition stage (and indeed at the appeal stage too)  that the Appellant has obtained goodwill by way of the extensive use of the Shelter Mark from 2002, the Court is sceptical of the fact that no one within the Appellant (either Mr Choi or the staff entrusted by Mr Choi to handle the relevant matters)  ever gave thought as to whether to provide documents regarding the Shelter Bar at the Henry House Premises such as its menus or photo showing the lightbox design (see §25a and b above)  to Mr Pang to be used for the purposes of the opposition.

65.  Notably, according to Mr Choi, Mr Pang had also told him that “we had a very good case given our established goodwill and use of our Shelter mark” (see §51 of Choi’s 1^st Affirmation). The Court can therefore infer that Mr Choi was indeed aware that whether there was established goodwill and use of the Shelter Mark would be matters relevant to the opposition of the Application.

66.  These observations of the Court also go to addressing the point put forward by the Appellant that the Appellant had satisfied the assessment which the Court of Appeal undertook in §42 of Chan Koon Nam, namely that “[a]pplying an objective standard”, it can be said that the Appellant “had exercised “reasonable diligence”” regarding the “production of relevant documents” to support its case.  For the reasons explained in §§61 to 65 above, the Court disagrees.

67.  In summary, the Court is not satisfied that any reliance on the part of the Appellant on Mr Pang and/or any incompetence on the part of Mr Pang constitute circumstances in themselves which justify the Court exercising its discretion in favour of the Appellant.

E2. Potential significance of the new evidence 

68.  The Court now turns to evaluating the potential significance of the new evidence which the Appellant seeks to file, having regard to the Opposed Mark and the other relevant marks in question and also the nature of the Appellant’s objections.

69.  In terms of the nature of the Appellant’s objections, based on the Notice of Motion, the Appellant relies on three grounds under the Ordinance, being section 11(4)(b)  (namely, the Opposed Mark is likely to deceive the public), section 11(5)(b)  (namely, the Application was made in bad faith)  and section 12(5)(b)  (namely, a trade mark shall not be registered by virtue of an earlier right).

70.  However, the Statement of Grounds enclosed to the Notice of Opposition, as it currently stands (i.e. without any amendments being made thereto), contains no reference to the ground under section 12(5)(b). The Notice of Opposition also contains an additional ground under section 11(4)(a)  of the Ordinance (namely, the Opposed Mark is contrary to accepted principles of morality), which ground the Court understands the Appellant is no longer pursuing.

71.  In this regard, rule 16 of the Trade Marks Rules (Cap. 559A)  provides for the filing of a notice of opposition including a statement of the grounds of opposition and in the context of an opposition to registration, such statement of grounds constitutes the pleadings which identify and define the issues between the parties and any amendment of which requires an exercise of discretion by the Registrar.

72.  For the sake of completeness, Choi’s 2^nd Affirmation does refer to intended amendments to both the Notice of Opposition and the Notice of Motion to address the issue of “non-use”, (namely, the fact that the Respondent’s “Shelter Lounge” has closed down in 2016), if the Court finds in favour of the Appellant in terms of the Summons.

73.  However, for the purpose of the Summons and as there is no application by way of summons before the Court which relates to the amendment of the Notice of Opposition and/or the Notice of Motion, the Court will only evaluate the significance of the new evidence based on the two grounds set out in the Notice of Opposition which are still pursued by the Appellant.

74.  As regards the various marks with which the present case is concerned, the Notice of Opposition makes reference only to the Shelter Census Group Mark, (but not the Shelter Mark), and its usage since August 2011.

75.  Pang’s Statutory Declaration refers to how the Appellant “has used the trade mark “Shelter” since 2002” and the Respondent “should, in no doubt, has the knowledge of [the Appellant’s] extensive use of the trade mark “Shelter” in Hong Kong”. However, essentially only 6 pages of newspaper clippings of articles in 2002, (i.e. when Shelter first opened), were exhibited.

76.  It is not disputed that in order to determine bad faith, (i.e. the absolute ground provided under section 11(5)(b)  of the Ordinance), the court must ascertain what the Respondent knew about the matters in question and then decide whether the knowledge of the Respondent was such that the Application would be regarded as made in bad faith by persons adopting the proper standards.

77.  In making an assessment of the Respondent’s knowledge, (and a determination of the issue of bad faith), therefore, the relevant point in time must be the date of the Application, namely 23 April 2013. 

78.  However, and putting aside for the time being the issue that the Shelter Mark was not pleaded at all in the Notice of Opposition, the Court has doubts concerning the relevance or significance of the further evidence which the Appellant seeks to adduce and how it serves to show or suggest the knowledge of the Respondent.

79.  Amongst the new evidence which the Appellant seeks to adduce, this Court takes the view that all materials relevant to “Shelter Italian Bar and Restaurant” located at the Hysan Place Premises, which was only opened after the Application was made,are not and should not be relevant to the issue of the Respondent’s knowledge (and hence the determination of the issue of bad faith).

80.  As regards the Shelter Bar at the Henry House Premises which ceased operation sometime in 2013, amongst the further evidence exhibited to Choi’s 1^st Affirmation, only the menus of Shelter Bar from 2002 to 2013 and a photo showing the lightbox design of Shelter Bar are particularly relevant. Apart from what was already exhibited to Pang’s Statutory Declaration, the Appellant does not seek to adduce any further evidence, (for example, by way of newspaper or magazine articles), to support its contention that Shelter Bar has “obtained goodwill by way of the extensive use of the “trade mark “Shelter” in the area of food and beverage restaurant area”.

81.  In the Court’s opinion, both the menus and the lightbox at Henry House are things which only patrons of Shelter Bar at the Henry House Premises or visitors of Henry House would come across respectively. It does not necessarily follow that these items could serve to show that the Respondent would have knowledge of the existence of Shelter Bar, especially in the case where it was and is recognized both by the Registrar, (making reference to the case of Royal Enfield Trade Marks [2002] R.P.C. 24 at §31), and the Court that bad faith is a serious allegation which should not be lightly made and should not be upheld unless it is distinctively proved and this will rarely be possible by a process of inference.

82.  The Court will make the same observations as set out in §81 with regard to the financial statements of the companies which operated Shelter Bar from 2002 to 2013. In any event, this Court notes that the Registrar has recognized in §48 of the Statement of Reasons for Decision that “it appears very likely that the [Appellant’s] business is ongoing at all material times up until 2013” and that “[c]hances, and the only chances, are the [Appellant’s] business is profitable, given the apparent continuity of the business” although “no relevant turnover figures have been provided”. It would appear to the Court that the Appellant is now seeking to adduce the financial statements to address this comment previously made by the Registrar.

83.  There was additionally one article entitled “Street Kings” mentioning the Shelter Census Group, (and it was, notably, the only piece of evidence which the Appellant seeks to produce with regard to the “Shelter Census Group”), which, according to Choi’s 1^st Affirmation, was published back in August 2008, namely 4.5 years before the Application was made. In the Court’s opinion, this single article provides little, if any, assistance to the court hearing the substantive appeal in terms of determining the Respondent’s knowledge as at the time when making the Application.

84.  As regards the correspondence with various developers from 2014 to 2017 regarding various business proposals or projects, whilst it may potentially serve to show that the Appellant has an established business by 2014 to 2017:

a.  Such correspondence post-dated the Application;

b.  Notably, such correspondence mostly came from staff of “Shelter Group”. Whilst the relationship between “Shelter Group” and “Shelter Census Group” has not been particularly or clearly explained to the Court, the signature blocks of staff of “Shelter Group” did not contain the Shelter Census Mark but a mark which was different from both the Shelter Census Mark and the Shelter Mark. In any event, the Court would point out at this juncture that to date, the Appellant does not seek to adduce any evidence which relates to the usage of the Shelter Census Group Mark, the only mark which was referred to in the Notice of Opposition; and

c.  Most importantly, the Court also notes from the signature blocks of staff of “Shelter Group” that there were other businesses (with names which do not bear the word “Shelter” at all)  under “Shelter Group” and if anything, in this Court’s view the correspondence serves more to show that “Shelter Group” had an established business by 2014 to 2017, but not what goodwill Shelter Bar had established by the date of the Application.

85.  As for the other evidence which is enclosed to Choi’s 1^st Affirmation and which the Appellant seeks to adduce but is not specifically mentioned above by the Court, for the avoidance of doubt, the Court is similarly of the view that it has no or little significance as to the issue of the Respondent’s knowledge.

86.  The Court now turns to the other ground, section 11(4)(b)  of the Ordinance, (namely, the Opposed Mark is likely to deceive the public), set out in the Notice of Opposition. The Court notes that the Appellant’s case in relation to section 11(4)(b)  of the Ordinance has the following particulars / aspects:

a.  In Pang’s Statutory Declaration, it was essentially stated that the Opposed Mark and the Shelter Mark  are “similar”. It appears to the Court that the gist of the Appellant’s complaint is that the “distinctive element” of the Opposed Mark is “Shelter”, which is identical to the Shelter Mark “by way of meaning and pronunciation” and hence the Application is to “share and steal” the goodwill arising from “the name of “Shelter”;

b.  According to the Appellant’s written submissions before the Court, it appears that the Appellant is suggesting that because the Appellant’s “Shelter” business, (it is not clear whether the Appellant is referring to the Shelter Bar and/or “Shelter Italian Bar and Restaurant” which was only opened after the Application was made), and the Respondent’s “Shelter Lounge” are both in the food and beverage industry and that they both have the word “Shelter” in their names, then it is “inevitable” for the public to be “confused”. The Appellant therefore seems to suggest that as long as a trade mark registration relates to a restaurant in Hong Kong Island, (when the Appellant’s business is also in Hong Kong Island), and the restaurant’s name includes the word “Shelter”, then an opposition on the part of the Appellant ought to succeed on the ground of section 11(4)(b); and

c.  Amongst the new evidence which the Appellant seeks to adduce, there is “clear evidence that the public was indeed confused”.

87.  It is the Respondent’s position that the Appellant’s case under section 11(4)(b)  of the Ordinance is built on a false premise and whilst the Appellant has provided the Court with its written submissions in reply to the Respondent’s written submissions, notably, the Appellant has not responded to this issue nor has it provided the Court with authorities which support its contention as set out in §86 a and b above.

88.  Furthermore, in elaborating on the significance of the further evidence to be adduced, the Court notes that the Appellant makes reference to both section 7(1)  and section 12(3)(c)  of the Ordinance which concern causing confusion on the part of the public. However, it is noted that neither the Notice of Opposition nor the Notice of Motion has pleaded the relative ground under section 12(3)  of the Ordinance. It is also noted by the Court that “deception” and “confusion” appear to be two distinct concepts under the Ordinance, with deceiving the public being an absolute ground under section 11(4)(b)  of the Ordinance and causing confusion on the part of the public being a relative ground under section 12(3)  of the Ordinance.

89.  In other words, bearing mind the substance of the Appellant’s case under section 11(4)(b)  of the Ordinance, the Court is not satisfied as to how any of the further evidence which the Appellant now seeks to adduce will show deception on the part of the Respondent and assist those aspects of the Appellant’s case, (as summarised by the Court in §86 above), under section 11(4)(b)  of the Ordinance.

90.  For the sake of completeness, the Appellant in particular highlights for the Court that such evidence, (as set out in §25 l and m above), which goes to the “actual confusion by the public” between the Appellant’s mark and the Opposed Mark “is crucial in supporting the [Appellant’s] grounds of opposition based on the likelihood of confusion, deception, bad faith as well as passing off”. The Court disagrees.

91.  Putting aside the issue that as matters currently stand, the pleadings at the opposition stage and at the appeal stage do not cover either issues concerning “likelihood of confusion” or “passing off”, the Court queries the weight which should be given to such evidence in showing confusion, deception, bad faith or passing off. As mentioned in §25 l above, the Openrice.com review of “Shelter Italian Bar and Restaurant” in October 2014 was prepared by someone who was invited by “Shelter Group” to visit “Shelter Italian Bar and Restaurant”. As the reviewer attended the “Shelter Italian Bar and Restaurant” pursuant to an invitation of the “Shelter Group”, any suggestion on the part of the reviewer that he or she was confused appears to be rather self-serving, especially bearing in mind that when the review was uploaded, the Appellant had already opposed the Application.

92.  The evidence set out in §25 m, namely the online article posted on Sassyhongkong.com regarding a complimentary tea set giveaway, suffers the same issue. Whilst “Shelter Italian Bar & Restaurant” was wrongly labelled as “Shelter Lounge” in the heading of the article, the giveaway appears to be some form of collaboration between Sassyhongkong.com and “Shelter Italian Bar & Restaurant” and hence, readers who wish to enter into the giveaway were asked to click into another Sassyhongkong.com hyperlink. In these circumstances, the Court queries whether this article could serve as crucial evidence in establishing “actual confusion by the public”.  

E3.  Whether the Respondent would be significantly prejudiced 

93.  Even though the Respondent’s evidence in opposition to the Summons has not specifically touched on the issue of prejudice, it is not difficult for the Court to foresee how prejudice might be caused to the Respondent if this Court were to find in favour of the Appellant in respect of the Summons.

94.  Relevantly, the Respondent may have to file new evidence in response to the further evidence adduced by the Appellant, (and indeed the Respondent has reserved its right to do so in its evidence filed in opposition of the Summons). The Appellant submits that because the Respondent will have the chance to file evidence in response to its further evidence, no prejudice would arise. The Court does not see the force of the Appellant’s argument, as the filing of further evidence would not only delay the hearing of the substantive appeal but also involve the incurrence of further costs.

95.  The Court agrees with Au-Yeung J at §14 of Gemology Headquarters International that to allow a party who loses the opposition stage to redesign its evidence having regard to the adverse decision against it and adduce new evidence on appeal would be violating the principle set out in the case of Dualit and would render proceedings before the Registrar a dry run. The fact that the Appellant now seeks to adduce financial statements of the companies operating Shelter Bar, (see §82 above), to address the Registrar’s comment made in the Statement of Reasons for Decision is an example.

96.  The Appellant also contends in its written submissions that most of the evidence was placed before the Registrar and the remainder is evidence which directly relates to the opposition as to which no prejudice arises or should arise. The Court does not agree as it is simply not correct that most of the evidence was placed before the Registrar. Relevantly, the Court notes that approximately one lever arch file of documents was placed before the Registrar and the Appellant is now seeking to adduce further evidence which amounts to three and a half lever arch files of documents. 

97.  As regards the contention on the part of the Appellant that there is no prejudice which could not be compensated by an order for costs, the Court agrees with the observation made by Au-Yeung J in §20 of Gemology Headquarters International that the factor of whether or not there is prejudice which cannot be compensated for example by an order for costs does not mean to override the other relevant factors. In other words, a party seeking to adduce new evidence cannot simply “buy an opportunity” which is neither fair nor just, and would cause both delay and unnecessary costs to be incurred.

98.  Lastly, it appears to the Court that the fact that the Respondent’s “Shelter Lounge” has closed is also neither here nor there in terms of the issue of prejudice.

F.  ADDITIONAL EVIDENCE

99.  During the course of the hearing the Court drew to the attention of those representing the Appellant that paragraph 60 of Choi’s 1^st Affirmation made reference to copies of photos being shown and produced to him, but the same were not exhibited. Subsequent to the hearing an additional affirmation on behalf of the Appellant was affirmed by Woo Choi Fong Celestine and leave to file the same was sought. The Court hereby grants leave so to file such affirmation and dispenses with service of the same. 

G.  CONCLUSION

100.  For the above reasons, the Appellant has not justified the exercise of the Court’s discretion in favour of the Appellant, and the Summons is therefore dismissed.

101.  There is no reason why costs should not follow the event. The Court therefore makes a costs order nisi that the Appellant does pay the Respondent’s costs of and occasioned by the Summons, with such costs to be taxed if not agreed with certificate for counsel. The costs order nisi shall become absolute in the absence of any application to vary the same within 14 days as from the date of this decision.

102.  It remains for the Court to thank Counsel for their able assistance.