A B VOLVO AND ANOTHER v. TANFORY CO LTD t/a CLUB VOLVO

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JUDGMENT

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Sir Derek Cons, V.P.:

1. This is an appeal from the decision of Mr. Justice Barnes given on the 15th December last year whereby he ordered that the issue of "whether or not the Defendant has committed an actionable passing off as alleged by the Plaintiffs" should be tried by a jury.

2. The Plaintiffs are a Swedish Corporation and their subsidiary trading in Hong Kong. The 1st Plaintiffs are the makers of a well known range of vehicles which they market under the tradename of "Volvo". It is suggested that they have a reputation in other fields as well. The Defendant is a Hong Kong company. It carries on business as the proprietor of the well known Club Volvo in Tsimshatsui East. That has been described as a Japanese style nightclub.

3. The Statement of Claim lists two causes of action:

Both are denied in the formal Defence that has been filed by the Defendant, so there will be two principal issues in the action when it comes on for trial: - firstly, was there any infringement of the Plaintiffs' trademark? Secondly, has there been actionable passing off? It is only the second, as we have seen, that was subject to the judge's order.

4. The material parts of Section 33A, Cap. 4 of the Supreme Court Ordinance provide as follows:

They appear to be taken from and are much the same as, though not identical with, section 69(1) and (3) of the Supreme Court Act 1981 in England. Prior to their enactment there was, as far as I am aware, no actual legislation to control the mode of trial in the High Court. That fell to be governed by Order 33 rule 5 of the earlier Rules of the Supreme Court which seems to have put the position much as it would have been in England before 1873. Section 33A was obviously intended to make changes.

5. In passing I would like to make clear, in case there should be any misunderstanding, that in these proceedings we are dealing only with civil trials. We are not concerned at all with criminal trials by jury. Furthermore the question of whether the changes introduced by Section 33A were desirable or not was a matter for the legislature. The Judiciary is concerned only to observe them.

6. I take Section 33A, from the words which therein appear, to be a clear directive by the legislature that as from their enactment, and setting aside the five excepted cases, the normal mode of trial should be by judge alone. The reasons for the change naturally do not appear in the Ordinance, but they would be well known to anyone actively concerned in litigation. For those who are not, an interesting analysis of the question can be found in Chapter 6 of "Trial by Jury" by Sir Patrick Devlin. There  is still a discretion left to the judge but, like all judicial discretions, it is not one that is to be exercised merely at his whim. It is to be exercised judicially. In this instance, bearing in mind the basic directive that I have just mentioned, that means it should be exercised only for good reason. In the present circumstances I would take good reason to be something which shows that trial by jury would overall be likely to produce a more just result than would trial by judge alone. The onus to persuade the judge to that end rests fairly and squarely upon the party which is asking for trial by a jury.

7. In support of the application below the Defendant basically relied upon two matters alleged in the Statement of Claim. The first was that the Defendant had made deliberate reference to and used the theme of motor cars, in particular the Volvo motor car, and had done the various acts complained of intentionally (the emphasis is my own); the second, was that the Plaintiffs had suffered and would continue to suffer, aggravated damages by reason of the type of business carried by the Defendant. In particular, it seems to me, the complaint was that the Club enabled patrons to hire and buy out hostesses.

8. The judge's decision appears to be based on his acceptance of a submission that the allegations called in question the integrity and reputation of the Defendant and were of such gravity that the Defendant had established a legitimate interest in having the allegations ruled upon by a jury. The judge also found that the Plaintiff had a legitimate interest in having the issues ruled upon by a jury. I don't know what he meant by that, for he did not explain further. I would have thought it was made plain to him, as it has been to us, that the Plaintiffs have no interest, legitimate or otherwise, in having the issues dealt with by a jury. They wish for trial by judge alone.

9. It is trite law that this Court will only interfere with the exercise of a judge's discretion if the judge has gone wrong in principle or is plainly wrong. Very often the former leads to the latter. With every respect to the judge below, in my view he did go wrong in principle. To have a legitimate interest in having a matter tried by a jury does not necessarily indicate that trial by jury is more apt to produce a just result.

10. Insofar as the judge considered that aspect at all, his reasoning would seem to have been firstly, that the key questions in the action would be "reputation, confusion and damage". Plaintiffs' counsel suggests that this is not so, but for the moment I am content to accept, without expressing a view one way or the other, that the judge correctly analysed the situation; then secondly, that those three matters were all well within the grasp of a common jury. The judge did not go on to consider, as in my view he should, whether those matters were equally well within the grasp of a single judge, and if not, whether the difference in grasp was sufficient to outweigh the Plaintiffs' legitimate interest in having his case tried by a method unattended by the disadvantages which are normally consequent upon a trial by jury and underlie the changes introduced by the legislature by Section 33A. In the present instance there is the further consideration, ignored by the judge, that even if the issue were tried by a jury, there would still remain the issue of infringement of trademark and the assessment of damages which would have to be dealt with in other, and to a large extent, overlapping proceedings. A still further consideration, which should not be overlooked completely, is the public interest that judges and court facilities should not be tied up unnecessarily by one case to the detriment of others.

11. The judge having failed to take into account these matters, in my view this court is entitled, and indeed required, to approach the matter afresh. In doing so I bear in mind the legislative directive as I have outlined. I look then at the two matters that have been put forward. The first is that the honour and the integrity of the Defendant company have been compromised by the suggestion that its action in this instance was calculated and deliberate, or, as some people might think, dishonest. As far as the English version of the Plaintiffs' name is concerned, there would seem little room for argument. at the trial, but we are told that the Chinese characters by which it is represented have a literal translation of "big rich man", words commonly used commercially in this jurisdiction. It may be that the Defendant's awareness of their connection in English with the Plaintiffs, and why they were chosen in this instance, will be subjects canvassed in evidence at the trial. It may not be unreasonable to think that a jury would be more appropriate to decide those questions than a judge alone, but in my view that is not a factor of much importance when compared with others which have to be considered.

12. The second matter is the nature of the Defendant's business, which would, of course, be reflected in their reputation. To put it more simply, would it be considered by the community generally as being of an unsavoury character. In this respect the wider range of personalities and occupations represented by a seven man jury may be thought to give a broader view than would the single opinion of a judge. But against that must be recognized the danger that in the undoubtedly emotive context the members of the jury might be influenced more by their own personal views rather than by what they perceive to be a true reflection of the views of the community as a whole. Moreover, should the Plaintiffs succeed in their action the character of the business will be a very important factor in the assessment of damages, which, it is accepted, will in any event not be for the consideration of the jury.

13. Taking, it all in all I do not find that these two factors, as I have attempted to analyse them, come anyway near outweighing the disadvantages of a separate trial by jury of one issue, in a case which involves one other and a separate assessment of damages which will, in any event, be dealt with by a judge alone. I would therefore allow the appeal and set aside the order of the judge below.

Penlingon, J.A.:

14. I also would allow this appeal and set aside the order made below. In doing so I have, of course, regard to the principle that this Court should not interfere with the discretion of the judge below. However I think that must be looked at in the light of various dicta, in particular in Viscount De L'Isle v. Times Newspaper Ltd. (1987) 3 A.E.R. 499 where Lord Justice Balcombe referred to the fact that by the Rules of the Supreme Court, Order 59, this is an appeal by way of re-hearing and that, subject to the established limitations, this Court can and should be prepared to review the decision of a judge at first instance both as to law and as to fact. Here I am satisfied that there is one matter which should have been given much more weight by the judge below and that was that if this order did remain it would in effect mean that there would be two trials, the first before the jury and then the second one as to damages before the judge. That in my view would be most undesirable. For those reasons I would allow this appeal.

Macdougall, J.A.:

15. I agree entirely with what My Lord, the Vice President, has said. For the reasons he has given I too would allow this appeal.