THE GENERAL OF THE SALVATION ARMY v. HONG KONG CAT SALVATION ARMY LTD t/a HONG KONG CAT SALVATION ARMY

HCA 2223/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2223 OF 2002

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D E C I S I O N

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1. The Plaintiff in this action is a charitable organization incorporated under the Salvation Army Ordinance Cap.1062. The Salvation Army is an international movement originated in London in the 19th century. It first established its works in Hong Kong in 1930. It provides wide varieties of social services to those in need and it is one of the largest non-government agencies in the field of social service in Hong Kong. Apart from financial assistance from the government, its works are also supported by donations from members of the public. Its services ranges from childcare, children and youth centres, community development, rehabilitation centers, street sleeper centers, elderly homes, clinic and camps. It also runs a number of schools.

2. The Defendant is a company limited by guarantee. It was incorporated in November 1998. According to its website, it introduced itself as follows,

"Starting from an internet homepage for rescuing and rehoming homeless cats and kittens in December 1997, the Hong Kong Cat Salvation Army (HKCSA) is set up by a group of enthusiastic cat fanciers who would like to share their concern towards and to work for the welfare of stray, abandoned and abused cats.

All the rescuing, rehoming, care and fostering, delivery to and from vet clinics, socializing, all other operation and administration works are carried out by volunteers in their own spare time.

HKCSA is registered as a charitable organization in HKSAR in April 1999."

3. The mission of the Defendant was summarized thus, "We work for a harmonious human-cat relationship and promote humanity in the world through the love of cats." Its works included the promotion of adoption of cats, giving of assistance and support to cat shelters, education of the public on cat welfare. The Defendant has no regular funding or sponsorship. Donations and voluntary workers from the public constitute important support for their works

4. If I may say so, both the Plaintiff and the Defendant seem to adopt and pursue worthy causes and each of them makes valuable contribution to the society in their respective activities. It is therefore a pity that they have to litigate with each other. However, since they are unable to resolve their differences, the court will have to decide the matter strictly in accordance with the law.

5. The Plaintiff finds the Defendant's use of the words "Salvation army" and their Chinese equivalent "救世軍" in the latter's names and promotional material objectionable. Such conduct is perceived by the Plaintiff as a ride on the Plaintiff's goodwill. The Plaintiff also encountered instances of confusion. It had not been revealed to me as to precisely when the Plaintiff came to know about the existence and the activities of the Defendant. From the evidence before me, the Director of Internal Relations of the Plaintiff received enquiry in early 2000 from a hostess of a radio programme asking about the Plaintiff's relationship with the Defendant. Solicitors engaged by the Plaintiff wrote to the Defendant some time prior to 26 February 2001 and the Defendant responded on that day proposing a disclaimer to be added to their promotional material to avoid confusion. The Plaintiff's solicitor replied on 20 July 2001 insisting on the demand to the Defendant to change their names. I was told by counsel for the Plaintiff that there was negotiation without success. On 11 June 2002, the Plaintiff issued the writ in this action. Statement of Claim was filed on 20 November 2002 and a summons for Order 14 judgment was issued on 20 February 2003.

6. The Defendant is not represented by any lawyer. On 8 March 2003, the Registrar granted an order allowing Dr Fan Tak Wing, a director (and also the president) of the Defendant to represent the Defendant in this action. Although he was not a lawyer, Dr Fan was able to address this court in respect of various points of law and he had been very courteous throughout the proceedings. I am grateful for his assistance as well as the assistance of Mr Shipp, counsel for the Plaintiff.

7. The Plaintiff's only cause of action as pleaded in the Statement of Claim is passing off. It is not disputed that there are three elements which a plaintiff suing for passing off needs to establish, (1) reputation (2) deception and (3) damage, see Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406. Before I turn to these three elements, I wish to deal with one legal submission of Dr Fan. He argued that there must be a common field of activity between a plaintiff and a defendant before passing off is actionable. He said that there must be some common ground otherwise there could be no trespass to this form of intellectual property. Dr Fan contended that if there was no common field of activity, there could be no damage to the plaintiff's goodwill because the public would not make a connection between the two organizations and their alternate fields of activity. He therefore submitted that a common field of activity was an essential ingredient in a passing off action.

8. Insofar as Dr Fan suggested that as a matter of law a claim for passing off must fail unless there is a common field of activity between the Plaintiff and the Defendant, I hold that this is incorrect. This so-called doctrine of common field of activity should by now be laid to rest. In Harrods Ltd v Harrodian School Ltd [1996] RPC 697, Millett LJ (as he then was) reviewed the relevant authorities on this point and held at p.714,

"There is no requirement that the defendant should be carrying on a business which competes with that of the plaintiff or which would compete with any natural extension of the plaintiff's business. The expression "common field of activity" was coined by Wynn-Parry J in McCulloch v May (1948) 65 RPC 58, when he dismissed the plaintiff's claim for want of this factor. This was contrary to numerous previous authorities ... and is now discredited ... What the plaintiff in action for passing off must prove is not the existence of a common field of activity but likely confusion among the common customers of the parties."

9. But it is still necessary to take the similarity in the respective fields of activity of the parties into account in deciding whether the relevant elements are established. Thus, Millett LJ continued at p.714,

"The absence of a common field of activity, therefore, is not fatal; but it is not irrelevant either. In deciding whether there is a likelihood of confusion, it is an important and highly relevant consideration."

"Where the plaintiff's business name is a household name the degree of overlap between the fields of activity of the parties' respective businesses may often be a less important consideration in assessing whether there is likely to be confusion, but in my opinion it is always a relevant factor to be taken into account."

"Where there is no or only a tenuous degree of overlap between the parties' respective fields of activity the burden of proving the likelihood of confusion and resulting damage is a heavy one."

10. Similar views were expounded by Christopher Wadlow, The Law of Passing-off, at Paras. 4.29 and 4.30. See also Henderson v Radio Corporation [1960] RPC 218 and Totalizator Agency Board v Turf News Pty Ltd [1972] RPC 579.

11. Turning now to the three elements referred to by Lord Oliver in Reckitt & Colman Products v Borden Inc, I am prepared to assume (without deciding as it is unnecessary for me to do so for reasons which would become obvious hereinbelow) that the Plaintiff could show that there is a goodwill or reputation attached to its services in the mind of the public by association with the name "Salvation Army". I shall focus on the other two elements, viz. misrepresentation by the Defendant to the public leading or likely to lead the public to believe that the services offered by the Defendant are services of the Plaintiff, and the Plaintiff suffers or is likely to suffer damage by reasons of such misrepresentation. These are primarily questions of fact.

12. However, they are questions of fact which a court must decide by its independent judgment and evidence from witnesses, although relevant, may not be conclusive. Thus, Lord Parker said in Spalding (AG) & Bros. v AW Gamage Ltd (1915) 32 RPC 273,

"It was also contended that the question whether the advertisements were calculated to deceive was not one which your Lordships could yourselves determine by considering the purport of the advertisements themselves, having regard to the surrounding circumstances, but was one which your Lordships were bound to determine upon evidence directed to the question itself. I do not take this view of the law. There may, of course, be cases of so doubtful nature that a judge cannot properly come to any conclusion without evidence directed to the point, but there can be no doubt that in a passing-off action the question whether the matter complained of is calculated to deceive, in other words, whether it amounts to a misrepresentation, is a matter for the judge, who, looking at the documents and evidence before him, comes to his own conclusion, and to use the words of Lord Macnaghten in Payton v Snelling Lampard 'must not surrender his own independent judgment to any witness whatever.' "

(See also Lord Devlin in Parker Knoll v Knoll International [1962] RPC 265 at p.291-2)

13. Lord Diplock in GE Trade Mark [1972] 1 WLR 729 characterised the question of likelihood of deception or confusion as a 'jury question', and a judge is required not only to consider evidence from members of the public that is adduced before the court but also to use his common sense.

"The question does not cease to be a 'jury question' when the issue is tried by a judge alone ... The judge's approach to the question should be the same as that of a jury. He too, would be a potential buyer of the goods. He should, of course, be alert to the danger of allowing his own idiosyncratic knowledge or temperament to influence his decision ..."

14. Two relevant considerations in respect of the likelihood of confusion are the circumstances under which the services of the parties were supplied and the relevant members of the public to whom such services are provided (see Christopher Wadlow, The Law of Passing-off, at Paras. 6.22 and 6.23). As mentioned earlier, the overlap in the respective field of activities of the parties or the lack thereof is also relevant.

15. Bearing in mind this is an Order 14 application, the Defendant's onus is to show that there are fairly arguable points in the defence case. Mr Shipp argued that there is no arguable defence on the question of misrepresentation because this is an issue for the court and on the evidence before the court, given that there were actual instances of confusion and the Defendant's deliberate choice of a name to cause confusion, the inescapable conclusion was that the Defendant's name did cause and is likely to cause misrepresentation. He relied on Slazenger & Sons v Feltham (1889) 6 RPC 531, in particular the dicta of Lindley LJ at p.538 and Wright, Layman & Umney Ltd v Wright (1949) 66 RPC 149 at p.152. Mr Shipp asked the court to infer that the Defendant set out to pass-off itself as associated with the Plaintiff because of the choice of such a name, the Defendant's reticence in telling the court whether they had heard of the Plaintiff's name before making such a choice, the lack of satisfactory explanation as to such a choice and the manner in which the Defendant responded in their letter of 26 February 2001.

16. I need not quote in details what had been said in that letter. The Defendant provided an explanation as to why they used the words "salvation army" in their name. The same argument was advanced before me by Dr Fan. I am not convinced that I should decide this on affidavit evidence. I think there is a triable issue as to the motive behind the Defendant's choice of name. Hence, I do not think one could apply the dicta of Lindley LJ at this stage. I further note that the Defendant had taken the initiative, albeit after complaint received from the Plaintiff, to post a disclaimer on its website that it is not in any way associated with the Plaintiff. This is, arguably, an act of good faith on the part of the Defendant.

17. As regards the evidence of actual confusion, three specific instances were mentioned in the Plaintiff's evidence. The first one was confusion of an audience to a phone-in radio programme in early 2000. The second one was a newspaper article of 3 December 2000 and the third one was a email posted by a City University Student group concerning an event called "School Cat Adoption Day" in March 2003. On the material available to me, I cannot reach a firm conclusion that the second and third instances were cases of confusion as to the association between the Plaintiff and the Defendant instead of mere carelessness in terms of typing or editorial errors. I do not regard it as safe to treat these as evidence of actual confusion just on the strength of the evidence before me. Regarding the first instance, that was multiple hearsay and it seems that the Plaintiff themselves did not regard it as significant. On the evidence before me, no action was taken by the Plaintiff vis-à-vis the Defendant until early 2001.

18. As against that, Dr Fan emphasized that there was no overlapping between the fields of activities of the parties. It is not disputed that the Plaintiff has never been involved with cat welfare and the Defendant does not provide the kind of services offered by the Plaintiff. Mr Shipp argued that since both the Plaintiff and the Defendant are charities, common sense told us that they were in a common field of activities. I cannot accept this submission. In any event, since there is no rule of law that the plaintiff and the defendant must be in a common field of activities, I think it is more helpful to focus one's attention to the actual activities carried on respectively by the parties and compare between them rather than to debate the point whether they are in a common field of activities. The court can assess the significance of the similarities and differences in their activities against the facts of each case in deciding the question of misrepresentation.

19. Given that the Defendant was incorporated in 1998 and was registered as a charity since 1999, plus the fact that its website had been launched since 1 April 2000 (with 64059 visitors to the site by 7 February 2003), the fact that the Plaintiff could pinpoint only those three instances of alleged confusion appears to be something in favour of the Defendant on the question of misrepresentation. Actually, Dr Fan was able to say in his affirmation that he was not aware of any instances of confusion regarding donation received by the Defendant.

20. I do not think I have been provided with a full picture as to the manner in which the Defendant dealt with its patrons or other members of the public. However, based on the promotional material before me (including the website), I do not think an ordinary reader would have any difficulties in understanding that the Defendant is an organization specializing in dealing with cat's welfare and from the brief account given in these material about its origin, it does not even suggest remotely that it is somehow related to the Plaintiff. Of course, the court should also consider the possibility that a person dealing with the Defendant might not have read these material carefully or might not have read them at all. This is, however, in my judgment, a matter that the court will need to consider at the trial against the overall evidence as to how the Defendant solicits support from its patrons and the likelihood of common patronage as between the Plaintiff and the Defendant.

21. On the facts of the present case, although the issue of misrepresentation is ultimately a question to be decided by the court, I am not prepared to say at this stage that the Defendant does not have a bona fide defence in this regard. I do not think that this court should conclude that there must be misrepresentation simply in view of the similarities to the Plaintiff's name in the name of the Defendant.

22. I turn to the question of likelihood of damages. Mr Shipp relied heavily on the case of British Legion v British Legion Club (Street) Ltd (1931) 48 RPC 555. That was a decision after trial. The plaintiff in that case had a history of objecting to others using the name of British Legion Club unless the club was willing to submit to its supervision (see p.561). At p.564, Farwell J identified the potential damages caused to the plaintiff. That may have to be read subject to the observations of Millett LJ at p.715-6 and 718 and those of Beldam LJ at p.731 of Harrodian School.

23. Dr Fan was correct in pointing out that the Plaintiff had not put forward any specific evidence as to damages suffered by them as a result of the activities of the Defendant. Given the different scopes in the activities of the parties and the history of the matter, and also bearing in mind what I said in Paragraph 20 above, I am not prepared to say at this stage that there is no triable issue in this respect.

24. For these reasons, I do not think it is appropriate to grant summary judgment. I grant the Defendant unconditional leave to defend and direct that Defence be filed within 14 days and Reply to be filed within 14 days thereafter. List of documents shall be filed within 14 days after close of pleadings and inspection 14 days thereafter. All affirmations and affidavits filed shall stand as witness statements with leave to the parties to exchange additional witness statements within 42 days after completion of inspection.

25. Regarding costs, although the Plaintiff fails to obtain summary judgment against the Defendant, I must say that this is a marginal case. In the circumstances of this case, bearing in mind that the Defendant was not represented and no Defence has been filed before the Order 14 summons was taken out, I will make an order nisi that there be no order as to costs regarding the Order 14 application.