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

CACV 288/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 288 OF 2003

(ON APPEAL FROM HCA NO 2223 OF 2002)

____________________________

____________________________

________________

J U D G M E N T

________________

Hon Woo VP (giving judgment of the Court):

Background

1. This matter has arisen out of a passing off action brought by the plaintiff against defendant. The plaintiff claims an injunction to restrain the defendant from passing off the defendant's business, services and/or activities as and for those of the plaintiff or as having any connection thereto by the use of the names "Salvation Army" "救世軍”or any other name or combination of words and/or characters similar thereto, together with consequential relief and damages.

2. On 15 August 2003, Deputy High Court Judge Lam (as he then was) refused the plaintiff's application for summary judgment under Order 14 of the RHC and granted to the defendant unconditional leave to defend. Against that order, the plaintiff now appeals.

The law and issues

3. It was not disputed before the judge and it is not disputed before this Court that there are three elements which a plaintiff suing for passing off needs to establish, (1) reputation, (2) misrepresentation and (3) damage. In Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406, Lord Oliver of Aylmerton said:

"Although your Lordships were referred in the course of the argument to a large number of reported cases, this is not a branch of the law in which reference to other cases is of any real assistance except analogically. It has been observed more than once that the questions which arise are, in general, questions of fact. Neither the appellants nor the respondents contend that the principles of law are in any doubt. The law of passing off can be summarized in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade description, or the individual features of labeling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognized by the public as distinctive specially of the plaintiff's goods services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. ... Thirdly, he must demonstrate that he suffers, or in a quia timet action that he is likely to suffer, damage by reason or the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff." (Emphasis added)

The decision

4. In dealing with the three issues, the judge assumed that there was a goodwill or reputation attached to the plaintiff's services in the mind of the public by association with the name "Salvation Army". No issue arises before this Court in this respect.

5. The judge then considered the three actual instances of confusion as alleged by the plaintiff, the defendant's deliberate choice of its name, and the likelihood of confusion caused by the defendant's name, etc. He came to the conclusion that there was a triable issue as to the motive behind the defendant's choice of name. He also considered that the evidence of the three instances of actual confusion as alleged by the plaintiff was not safe enough for him to act on to grant a summary judgment. He was not satisfied on the evidence before him that the public would be misled to think that the activities of the defendant or itself was somehow related to the plaintiff. He came to the following conclusion:

"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 materials 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 similarity to the Plaintiff's name in the name of the Defendant."

6. As to the issue of "damage", after dealing with the law as submitted by Mr Ship, who also appeared below, the judge said:

"23. Dr Fan [the defendant's representative] 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 para 20 above, I am not prepared to say at this stage that there is no triable issue in this respect."

The grounds of appeal

7. Against the decision of the judge, six grounds of appeal are raised. Ground 6 complains that the judge failed to deal with the likelihood of damage, and the rest of the grounds relate to the judge's refusal to find that there was misrepresentation.

8. Ground 6 can be conveniently disposed of first. Before the judge Mr Shipp referred to British Legion v British Legion Club (Street) Ltd (1931) 48 RPC 555. There, Farewell J dealt with the arguments of the defendants about confusion and damage. He concluded that confusion would in the case of some persons inevitably result, and that there was a real possibility of damage to the plaintiffs. It can be seen from p 564 of the judgment that there is a close connection between confusion and damage: if a defendant's name is such as to cause inevitably some persons to confuse it to be the plaintiff's, then "it follows that there is a real possibility of damage being done to the Plaintiff association at some time or other." What we need do, therefore, is to concentrate on whether the judge was correct to conclude that there is a triable issue on misrepresentation.

9. In Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265 at 285, Lord Hodson said:

"... 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 & Co. Ltd. v. Snelling, Lampard & Co. Ltd. (1900) 17 R.P.C. 635, 'must not surrender his own independent judgment to any witness whatever.'"

10. It is therefore plain that the questions involving passing off are in general questions of fact, especially the question whether there is misrepresentation, and they are to be determined by the judge who hears the case. This also finds support in Lord Oliver's opinion in Reckitt & Colman Products Ltd v Borden Inc cited above.

11. The simple answer to this appeal is that the judge was not satisfied on the materials before him that there was an inevitable misrepresentation caused by the name of the defendant. We have to bear in mind that this is an Order 14 application. Unless the judge was not satisfied that there was any triable issue, he should not enter judgment for the plaintiff. While the judge described this matter as a "marginal case" for summary judgment, his refusal to grant judgment was basically a decision on fact with which this Court will not interfere unless it is shown that he was wrong. Despite the six grounds now raised are all couched in terms of misdirection and errors or law made by the judge, we are not satisfied that he was wrong in his assessment of the facts before him.

12. Apart from the three alleged instances of actual confusion, which will be dealt with below, we share the judge's view (expressed in para 21 of the judgment cited above) that the mere similarities between the names of the parties, namely, "The Salvation Army" and "The Cat Salvation Army" in English and "救世軍" and "愛猫救世軍" in Chinese, will not inevitably lead to confusion. This point is stronger with the version in Chinese because the characters "愛猫", in our view, stand out prominently and show a significant difference.

13. In the circumstances, it is only necessary for us to deal briefly with the grounds of appeal.

14. Ground 1 complains that the judge (in para 11 of his judgment) misdirected himself when he narrowly focused on only whether the name of the defendant leads the public to believe or is likely to lead the public to believe that the services offered by the defendant are the services of the plaintiff, but failed to consider the alternative that the activities and choice of name of the defendant are likely to lead the public to believe that the defendant is somehow connected with or endorsed by the plaintiff. The complaint is directed at paras 11 and 20 of the judgment. Reading these paragraphs and the judgment as a whole, we are not persuaded this ground is made out.

15. Ground 2 is also directed at para 20 of the judgment. The contention is that the judge erred in law in holding that there is a triable issue on whether the defendant had intended to pass off by adopting its name when the lack of intention to pass off and good faith in the choice of name are not defences in passing off. We are not persuaded that para 20 shows the mistake of law as contended. The judge was obviously dealing with the likelihood of confusion to the patrons of the defendant and members of the public.

16. Ground 4 is connected with ground 2 in that it alleges that the judge erred in law when he said (again at para 20 of his judgment) that the court will need to consider at trial how the defendant solicits support from its patrons and the likelihood of common patronage as between the plaintiff and the defendant because, it is argued, the onus of adducing such evidence is on the defendant at this Order 14 stage and the defendant failed to adduce any such evidence. What we understand the judge to mean is that the evidence on the solicitation of support by the defendant from its patrons and the likelihood of common patronage would help him assess and make a finding on the issue of misrepresentation. The onus of proving misrepresentation is squarely on the plaintiff, but the evidence on this aspect will include all the documentary and viva voce evidence from the parties at trial.

17. Ground 5 contends that the judge erred in law by stating that to succeed there must be misrepresentation in the similarities of the names of the parties when the gist of misrepresentation in a passing off action is only a likelihood of confusion and not actual confusion itself. This is directed at para 21 of the judgment, but in that paragraph, the judge never made the statement as now alleged. He had dealt with the actual instances of confusion relied on by the plaintiff and ruled that it was not safe for him to act on them, before he went on to deal with the mere similarities between the parties' names.

18. Ground 3 deals with the three instances of confusion, namely,

(1) In early 2000, a listener of a phone-in radio programme telephoned to ask the programme hostess about the Cat Salvation Army and told her that the Cat Salvation Army was part of the service provided by the Salvation Army. She telephoned the plaintiff for clarification. This incident is borne out by a statement of an officer of the plaintiff.

(2) There was an article on 3 December 2000 in Oriental Daily News that told a story of a cat found in a parking lot being adopted through the services of the Cat Salvation Army. It went on to report a statement made by a "person-in-charge of The Salvation Army".

(3) In March 2003, there was an email from the City University Final Year Project Group addressed to the University staff and students that "On behalf of the Hong Kong Salvation Army" they would hold an event named the "School Cat Adoption Day". It also offered to sell cat-related souvenirs the money from which "will help the Hong Kong Cat Salvation Army promote cat adoption and help care for stray cats."

19. Mr Shipp submits that ground 3 is directed at the following paragraphs of the judgment:

"17. .... 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 [the defendant's president and representative] 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 Defendants 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. Ground 3(a) contends that the judge failed to deal with instance (1) sufficiently or at all and simply brushed it aside by just saying that it was multiple hearsay and that the plaintiff did not regard it as significant when there was no such evidence. First, the statement of the plaintiff's officer was correctly held by the judge to be multiple hearsay, as it referred to what he had heard from the programme hostess about what she had heard from the listener. Further, the statement was supposed to be a repetition of what was heard and not even seen, which by its nature makes it less reliable. Second, we do not think that the judge was wrong to infer from the fact that the plaintiff had not taken action until 2001 when it had had knowledge of the incident since early 2000 that it did not place significance on the matter.

21. Ground 3(b) complains that the judge erred when he said that instances (2) and (3) were mere carelessness in terms of typing or editorial errors when there was no evidence to support the incident in Oriental Daily. It is argued, moreover, that even if they were mere carelessness in terms of typing or editorial errors it shows that the defendant's name has potential for causing confusion for the plaintiff has no control over third parties regarding the use of the defendant's name. Without hearing the evidence, subject to cross-examination at trial, we share the view of the judge that it would be unsafe to accept these two instances as evidence of actual confusion. We do not see anything wrong for the judge to consider tentatively that the two instances might have caused by mere carelessness or errors in typing and edition. Anyway, this is well within the realm of assessment and finding of fact made by the judge who apparently felt not confident enough to make a finding of misrepresentation without hearing viva voce evidence on the subject.

22. Ground 3(c) contends that the judge failed to consider that the project supervisor of City University stated that the name adopted by the defendant was inappropriate and had great potential to cause misunderstanding and ground 3(d) argues that the judge erred in relying on the fact that the plaintiff could only pinpoint three instances of confusion as something in favour of the defendant.

23. The answer to ground 3(c) is provided in Mr Shipp's own skeleton submission, which states (in para 11(b)(i) thereof) that "Whether there had been any misrepresentation is a matter for the judge looking at the evidence before him and not for any witness", see Parker-Knoll at p 285.

24. Regarding ground 3(d), it cannot be disputed that only three instances of actual confusion were adduced by the plaintiff. On the other hand, the defendant's affidavit evidence before the judge was that it was not aware of any instance of confusion regarding donations received by it. One has to bear in mind that the judge was dealing with an application for summary judgment and he could only enter judgment for the plaintiff if there was no triable issue. The evidence of actual confusion adduced by the plaintiff was limited to the three instances while the defendant deposed to the fact that there was no occasion of any confusion regarding the donations that it had received. The judge would have to view the evidence before him, without the assistance of cross-examination, to determine if the material was sufficient for him to conclude that there was no triable issue on misrepresentation. His comment that the fact that the plaintiff was only able to point to three instances was in favour of the defendant was, in our judgment, not undermining the plaintiff's case, but a matter that caused him to be reluctant to find that there was misrepresentation.

Conclusion

25. For the above reasons, the appeal must be dismissed. Since Dr Fan has indicated to us that the defendant will not seek any costs, we make no order as to costs of this appeal.