| Robert John Powers School Inc and Others v Tessensohn (trading as Clea Professional Image Consultants) [1993] 3 SLR 724; [1993] SGHC 204 |
| Suit 962/1990 | |
| 01 Sep 1993 | |
| High Court | |
| Lai Siu Chiu JC | |
| Alban King (Arthur Loke & Pnrs) for the plaintiffs, G Raman (G Raman & Pnrs) for the defendant |
Judgment
[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.] Judgment reserved. Lai Siu Chiu JC: The facts 1 The first plaintiff is a company incorporated in the state of Massachusetts, United States of America. It operates the John Robert Powers School (‘JRP School’) in the United States. JRP School was first established in 1923 for the purposes of providing courses on social development and self-improvement. 2 The second plaintiff is a company registered under the laws of Netherlands and has the exclusive rights to franchise the name ‘John Robert Powers’ and to operate JRP Schools in various jurisdictions around the world, including Singapore. Under the franchise, JRP Manuals (‘the manual[s]’) are distributed to the franchisee. These manuals were first written in 1977. 3 In November 1983 the defendant became the second plaintiff’s first franchisee in Singapore under the name The Finishing School Pte Ltd (‘the School’). On 14 February 1988 this franchise agreement was terminated. Unfortunately, the termination of the franchise between the second plaintiff and the defendant was not amicable. In Suit No 321 of 1988, the second plaintiff brought an action against the School for outstanding royalties and breach of the franchise agreement. An injunction was obtained on 15 February 1988 to restrain the defendant from, inter alia, using the JRP name and to deliver up all materials obtained from the franchise. The defendant stopped using the JRP name, the materials were handed over and the royalties were paid. No notice of discontinuance has been filed for Suit 321 of 1988. 4 On 22 February 1988, the defendant set up her own school under the name Clea Professional Image Consultants (‘Clea’) and she informed the public of the change two months later by a press announcement. 5 On 1 March 1988, Jeshevio Personal Development System Pte Ltd, owned by the third plaintiff, was appointed as the new franchisee. At the commencement of this action, this franchise agreement still subsisted. However, JRP School no longer operates in Singapore as it was closed at end December 1992 although there were plans to reopen it in April this year. The claim 6 This is an action for copyright infringement under the Copyright Act (Cap 63, 1988 Ed) (‘the Act’) and passing off. In the statement of claim the plaintiffs alleged that the defendant infringed their copyright in (a) the manual (b) a course syllabus for the ‘Executive Image Programme’ written by the third plaintiff during her term as franchisee (c) she attempted to pass off Clea and the courses she conducted, as JRP School and JRP courses, respectively. 7 The statement of claim prayed for: (a) an injunction to restrain the defendant from infringing the plaintiffs’ copyright in the manuals; (b) an injunction against the infringement of the curriculum for the plaintiff’s ‘Executive Image Programme’; (c) an injunction to restrain the defendant from passingoff her school and courses as the plaintiffs’; (d) an order for delivery up of all articles with the JRP name; (e) an inquiry as to damages or at the plaintiffs’ option an account of profits and payment of all sums found due (f) interest; (g) costs and further/other relief. 8 In the defence, the defendant denied (a) that she had infringed the first plaintiff’s copyright in the manual and averred that at all material times she had (b) that the third plaintiff wrote the course syllabus and asserted that it had been in existence since 1984 and it was (c) that she had attempted to pass off and the courses she conducted at, Clea, as the plaintiffs’. 9 I shall now consider the plaintiffs’ allegations in turn. 1 Whether copyright in the JRP manual has been infringed 10 By virtue of s 31 of the Act, copyright is infringed when a non-owner does any of the acts sets out in s 26 without the licence or authority of the owner. The relevant part of s 26 states: For the purposes of this Act, unless the contrary intention appears, copyright, in relation to a work, is the exclusive right (a) in the case of a literary, dramatic or musical work, to do all or any of the following acts: (i) to reproduce the work in a material form; … (vi) to make an adaptation of the work; … The evidence 11 The plaintiffs adduced three instances of infringement of their copyright in the manual: (1) Shamini Thanasingam (‘Thanasingam’) was a freelance aerobics instructor employed by the defendant in 1988. She then went into the employ of the third plaintiff. She testified that she had been given a Diet and Nutrition Record (AB125) and a loose-leaf note on aerobics (AB126) by the defendant. She used AB125 very often but seldom used AB126. AB126 does not appear anywhere in the manual and is not alleged to be an infringement. Thanasingam testified that AB125 is the same as that she was given in the third plaintiff’s school. (2) The plaintiffs’ second contention relates to a compilation of two Shakespeare extracts and two poems found in the manual on ‘Voice Communications’. The Com 19 and 20 sections of the manual contains four poems: Act V Scene V Macbeth, Act I Scene V Hamlet, Abou Ben Adhem, and Annabel Lee. At Com 36, the poem Ozymandias is set out. The manual also contains in addition some notes to aid diction and to encourage students. The plaintiffs’ copyright in this is said to be infringed by two sheets of the defendant’s notes (AB157–158). AB157–158 contains the extracts from Com 19 and 20 with the exclusion of the Macbeth extract. AB157–158 contains no annotations at all. (3) Next there is the evidence of Brian Jeremiah (‘Jeremiah’). He tendered photocopies of two pages from the manual on figure control which he had obtained from the defendant’s premises from open shelves in what he said was the visual poise room (see AB210). These were accepted by the defendant as photocopies when she was cross-examined but her counsel submitted that it was the plaintiffs who had done the photocopying themselves and that this evidence had been fabricated. It is noteworthy that Jeremiah did not state that he had given such notes out to the students; he in fact said (in examinationin- chief): ‘I didn’t think I needed to give the notes out to students so I asked Miss Sara Dean [‘Dean’], one of the Clea staff whether I could use the notes.’ When cross-examined whether these sheets were distributed to the students he replied: ‘No I felt it belonged to the school.’ On the other hand Dean, the manageress of Clea at the material time, stated that the lecturers did not give out loose-leaf notes themselves. 12 AB125 and the relevant extracts from the manual are not exactly identical. Counsel for the plaintiffs submitted that AB125 is a colourable imitation of a chart found in the manual on Figure Control (AB110). AB125 has 15 items — item 1 advises the student to note everything eaten over a seven day period and then gives an example of a chart with four sections: day, time, food/drink, and description/quantity. The other 14 items are questions as to weight, intake of salt, protein, vitamin and similar questions. AB110 contains only a chart for the record of food taken for the same time span of seven days. The chart also contains two additional columns for calories and vitamin count. 13 It has often been said that copyright protects the form of the expression and not the substance. It appears that the defendant has copied the idea that the author of the manual had, which is a simple method to keep track of the student’s diet and to increase student awareness of matters like calorie count, vitamins, minerals, and basic food groups. It is questionable however whether the form of expressing that idea has been taken. Moreover, the idea if taken is not original; any nutritionist seeking to advise his client would need to start his client off with a basic knowledge of nutrition values and food groups. 14 The case of Kenrick & Co v Lawrence & Co is an illustration. The plaintiff published cards to aid voters bearing the picture of a hand holding a pencil in the act of completing a cross within a square. The defendant’s card utilized the same idea, but the hand on the defendant’s card was in a slightly different position. Owing to the simplicity of the original idea, the defendant’s card was held not to constitute infringement. Wills J stated at p 102: … I think I am on very safe ground in saying that the mere choice of subject can rarely, if ever, confer upon the author of the drawing an exclusive right to represent the subject … It may be also that the coarsest, or the most commonplace, or the most mechanical representation of the commonest object is so far protected on registration that an exact reproduction of it, such as photography for instance would produce, would be an infringement of copyright. But in such a case it must surely be nothing short of an exact literal reproduction of the drawing registered that can constitute the infringement, for there seems to me to be in such a case nothing else that is not the common property of the whole world. 15 Counsel for the plaintiffs referred to a line of authorities as support for the proposition that copyright is capable of subsisting in a compilation. In Ladbroke (Football) Ltd v William Hill (Football) Ltd the respondents who were wellknown bookmakers sent to their customers each week fixed odds football coupons arranged in a certain general form. These contained 16 lists each with an appropriate name. The appellants sent out forms with 15 lists which closely resembled the respondents. The House of Lords held that the respondents’ compilation was ‘original’ and capable of copyright protection. In MacMillan v Suresh Chunder Deb it was held that a selection of songs and poems by various well known authors could be the subject of copyright. In Blackie & Sons v Lothian Book Publishing Co an annotated edition of a Shakespearean play was similarly held to be protected. 16 It is clear that copyright can subsist in a compilation. The definition of ‘literary work’ in s 7 of the Act expressly includes a compilation. Whether such copyright has in fact been infringed is really the question here. Section 10 of the Act provides that copying must be ‘substantial’. Substantiality is not merely a matter of quantum, but of quality. In deciding this question of fact, the court will look at the nature of the material copied and the degree of skill, effort and labour the defendant has appropriated. 17 This view is borne out by the foregoing cases. In Warwick Film Productions v Eisinger the defendant had taken considerable extracts from the transcripts of Oscar Wilde’s trials which appeared in the plaintiff’s book, but not any of the plaintiff’s editing or accompanying commentary. This was held not to constitute a substantial part of the plaintiff’s book. Plowman J explained his decision by reference to the dicta of Lord Pearce in Ladbroke v William at p 293: Whether a part is substantial must be decided by its quality rather than its quantity. The reproduction of a part which by itself has no originality will not normally be a substantial part of the copyright and therefore will not be protected. For that which would not attract copyright except by reason of its collocation will, when robbed of that collocation, not be a substantial part of the copyright and therefore the courts will not hold its reproduction to be an infringement.’ [Emphasis added.] The findings 18 In the present case the defendant took three extracts from two pages of the manual: Act I Scene V Hamlet, Abou Ben Adhem Annabel Lee, and Ozymandias. However she did not take any of the author’s guidance notes on pronunciation. The four extracts are famous verses which are easily obtainable. The extract from Hamlet has been edited slightly. In the play, when the ghost is speaking to Hamlet, the last two lines of the extract are separated by Hamlet’s short interjection: ‘O God!’. No doubt the author of the manual expended time in choosing the four poems and editing slightly one of those extracts. However, these four extracts are not in any way a ‘substantial’ part of the manual. The whole purpose of the manual would be in the manner in which it is compiled. The student would work through each exercise and then use those extracts in context. Taken in isolation the four extracts do not form the essence of the original. The degree of plagiarism if any is nowhere to the degree in the cases relied on by the plaintiffs. 19 If the photocopying had been done by the defendant, this amounts to reproduction of work in which copyright subsists. Here the part taken is wholly original, the object of the copyist is the same as the original author’s, and it is used as a tool by a competitor. The fact that it is merely two pages does not detract from this as the crucial issue is that of substantiality. 20 Counsel for the defendant in his submissions raised the defence of fair dealing for the purpose of research or study in his written submissions. This defence however is not pleaded. Further, the exact scope of the defence is uncertain. Section 35(2) of the Act lists as matters for consideration whether the dealing is of a commercial nature and the effect of the dealing upon the potential market, and these factors weigh against the defendant. Case law indicates that research must be solely for the defendant’s own private study; it is no defence that reproduction was for use as students’ notes for examinations (see Sillitoe v McGraw-Hill). I doubt that the defendant’s general reference purposes can fall within the scope of s 35(2) of the Act. 21 Counsel for the plaintiffs sought to show that by keeping the notes in open pigeon holes and thus making these notes freely accessible for the purpose of photocopying, the defendant impliedly authorized the acts of infringement committed by her employees. The case of Moorhouse & Angus & Robertson Ltd v University of New South Wales was cited. In this case a university that had, under its control, means by which photocopying was permitted, with knowledge to suspect infringement might take place, was held to have authorized that infringement. I am not certain that this case is relevant to the issues at hand. Moorhouse is really a case concerning authorization of infringement. Here there is no evidence of infringement by the defendant’s employees. Jeremiah and Thanasingam had not said that they photocopied anything themselves, they merely took the notes from the shelves for their purposes. The infringement if any is presumably the defendant’s. Whether the defendant has infringed the third plaintiff’s copyright in the ‘Executive Image Programme’ curriculum by copying it in the form of the ‘Voice and Diction’ syllabus The evidence 22 Counsel for the plaintiffs contended that the defendant had infringed the third plaintiffs’ copyright in exh P5 by reproducing the Voice section in it into the form of exh P3. The defence case was the converse, that it had been the third plaintiff who had copied exh P3 or an earlier version (exh D3) into the form in exh P5. 23 Exhibit P3 is the curriculum for the defendant’s course entitled ‘Voice and Diction’. This had been obtained by Roy Seah (PW2) when he went to Clea at the third plaintiff’s behest to collect it. It is separated into six sections. Exhibit P5 is the third plaintiff’s ‘Executive Image Programme’ syllabus and it contains six Voice courses together with several other topics like social etiquette and business presentation. Voices 1 through to 5 of both are exactly the same, word for word. Significantly, several typographical errors are repeated in both exhibits: ‘diphthongs’ at Voice 2 is spelt ‘dipthongs’ and the phrase ‘words carelessly articulated’ at Voice 3 is used twice; Voice 6 is slightly different. Exhibit P5 merely states ‘Communication — effective Communication’ whereas exh P3 states ‘Public speaking, overcoming platform jitters, speaking effectively into the microphone, speech preparation and delivery. Presentation on video with critical analysis by the speech instructor.’ AB143 is entitled ‘The Executive Programme’. It contains four Voice courses as well as other topics like social etiquette, wine appreciation, business presentation, wardrobe, deportment and personality growth. The four Voice topics are almost identical to Voices 1 to 5 in exhs P3 and P5, except that the phrase ‘words carelessly articulated’ at Voice 3 is not repeated. There is also an additional error: ‘word substitution’ at Voice 1 is wrongly spelt as ‘work substitution’. 24 The defendant gave evidence that AB143 was written in 1986 with the help of a lady by the name of Julie Weber who has since left Singapore. AB143 is an enclosure to a letter dated 2 December 1987 addressed to Mobil Oil Singapore Pte Ltd (AB142) by a staff member of the defendant. The defendent asserted that exh P3 was written before the end of 1987 as there was an invoice from Double L Printing Co dated 14 December 1987 (AB147). Under cross-examination she maintained that the third plaintiff, who had not worked for 13 years prior to joining the School as a part-time teacher, would not have been capable of writing her own curriculum. On the other hand the defendant had in 1987, taken a course, sat for and passed, an examination of the Licentiate of the Trinity College London in speech. 25 Loy Ah Chin (‘Loy’), who has been the defendant’s printer since 1987, was called as a defence witness. She testified that the Voice and Diction curriculum in exh P3 was printed by her in 1987 as reflected in her invoice dated 14 December 1987 (AB147) which printing would have been done before the invoice date. The original for exh P3 was tendered into court (see exh D2(2)). 26 Dean (DW3) had worked with the defendant when she held the franchise. She had started as administrative assistant but eventually took on the day-to-day running of the School. After Clea was formed she became the manageress until July 1991. It was her evidence that when the defendant was operating under the franchise the Speech Improvement Programme was already in six sections and the defendant had modified the JRP programme extensively on her own. In Dean’s view it was not unusual that although the programme was called ‘Speech Improvement Programme’ exh P3 was entitled ‘Voice and Diction’ as within the industry, visual poise can be called deportment, hairstyling can be called hair flair — the same topic can be called by a different name. 27 Richard Upton (‘Upton’), a director of JRP International, admitted under cross-examination that the defendant had a course on ‘Voice and Diction’ when she was running the School. He could not, however, remember the contents of that course. 28 The third plaintiff (PW4) was employed by the defendant as an instructor at the end of 1986 whilst the defendant still held the JRP franchise. At first she taught the ‘Speech Improvement Programme’ known as ‘Voice and Diction’. Later she also taught ‘Personality and Development’. It was her evidence that she was never given an outline in the form of exh P3 as an outline did not even exist at the time and that the course was highly unstructured and disorganized whilst she was there. She sat in on one class by Vernon Palmer; thereafter she was called in to teach often only with 15 minutes preparation beforehand with some guidance from the defendant. She was given loose-leaf notes which she later realized (after taking over the franchise) were from the manual. It was her evidence that as a part-time teacher she had not seen the ‘Executive Programme Curriculum’ as she would arrive shortly before each class, gather her materials and then go in to a class to teach. She did know however, that the students had a brief outline of each module they were to do. She left the School in mid 1987. 29 Under cross-examination, the third plaintiff admitted that she had not worked for 13 years before the defendant employed her. She had no prior experience in running a grooming school. She had written no articles on speech training or grooming in general. It was put to her that exh P5 was copied from the defendant’s exh P3 or AB143. She denied this contending that exh P5 was her own original work structured from the Voice Communications section of the manual (exh P4) when she took over the JRP franchise in 1988. The findings 30 As all the phrases were originally from the manual, the defendant could well have written the syllabus whilst she was franchisee of the second plaintiff. She was certainly qualified to write it as by 1987 she had obtained a Licentiate from the Trinity College. It is noteworthy that exh D3 only contains the bare outline, ie it separates the Voice section into five divisions. It does not contain the subject of our dispute, the text of Voices 1 to 5. As exh P3 is very similar to AB143, the defendant’s copying from exh P5 to evolve exh P3 if at all, would be too insubstantial as the basic text of AB143’s four Voice sections is the same as exh D3 but divided into five sections. Passing-off The evidence 31 The plaintiffs’ contentions as to passing off can be conveniently divided into two. (a) The first is that a resume (AB170) written by the defendant for a seminar she conducted in Kuala Lumpur in October 1988 to promote herself and Clea sought to pass off JRP’s achievements as Clea’s. The first paragraph of the resume states the defendant’s name and her position as director of Clea. The second and third paragraphs form the basis of the plaintiffs’ complaint and are as follows: Miss Tessensohn is a trained lawyer who was in legal practice for eight years before opening the first school in the region in 1983. She trained in Boston, USA on finishing and grooming. She is also a licentiate of the Trinity College (London). In these five years, she has been consulted and conducted training programs in Indonesia, Malaysia, Singapore and Thailand. She is often called in to train the trainers as well as executives and frontline staff of both the private and public sectors: in airline, banking, education, health, insurance, manufacturing and shipping. Ms Tessensohn has also been invited as guest speaker for numerous organizations, among them: ministries, Rotary Clubs, Lions Clubs, SWAP, Life Underwriters Association, university staff and students. The resume then listed her memberships and stated that she was in the process of writing two books. By the defendant’s own admission there was no mention of JRP in the resume. (b) The plaintiffs’ second contention is that the defendant has injured the goodwill of the plaintiffs by associating herself with JRP and using and distributing similar notes and materials. 32 The classic example of passing off takes place when one trader represents his goods to be those of another trader with a better reputation. However modern cases show that passing off is also possible when one trader represents the inverse: that the goods of another trader are his own. It is upon this latter form of passing off action that the plaintiffs base their contentions that the defendant by her resume sought to pass off the experience of JRP as that of Clea’s. 33 The modern rules for the action of passing off were formulated by Lord Diplock in Erven Warnink BV v J Townend & Sons at p 932: My Lords, AG Spalding & Bros v A W Gamage Ltd and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. 34 In Bristol Conservatories Ltd v Conservatories Custom Built Ltd the defendants’ salesmen showed prospective customers a portfolio of photographs of ornamental conservatories as if constituting a sample of the defendants’ goods and workmanship. In fact these were photographs of the plaintiff’ ornamental conservatories. This was held to amount to passing-off as the defendants had misrepresented that they were the commercial source of those conservatories. By showing the photographs to prospective customers goodwill arose towards the supplier of those conservatories and was simultaneously misappropriated by the defendants. 35 The case of John Henderson & Sons v Alexander Munro is similar. In that case the defendant had issued circulars and claimed that a certain Mr Munro had experience in drilling artesian wells. However the circular did not state that Mr Munro had drilled the wells whilst working as managing director of the plaintiff’s company, not the defendants’. The Scottish House of Lords held that this amounted to passing off. The Lord President said at p 639: Now, it is plain that the object of this circular was to attract customers to Munro & Co … But then the circular goes on to say: ‘The following is a list of some of those for whom artesian tube wells have been put down, a special visit having been made by him, ie ‘our Mr Munro’, in each case to the different localities and positions fixed for the wells’. Then follows a long list of names. It is explained that none of this work was done by Munro & Co, but that it was all done by the [plaintiffs] during the time Munro was their managing director. It would have been easy to make a statement which would have made this quite clear. As it is, I do not think I am pressing anything unduly when I say that many people would think on reading the circular that Munro & Co had executed this work. If they took that meaning out of it, it would be misleading and untrue, and the natural result would be that they might go to Munro & Co seeing their large experience in the past. If they did so, injury would result to the [plaintiffs] because of the attribution of the experience of Henderson & Son to Munro & Co. 36 Whether a statement is misleading in the manner stated above depends upon the circumstances. The statement has to be viewed for its general effect. Lord McLaren put it thus in the Henderson case at p 640: … the question we have to consider is whether this circular amounts to a misleading statement, or, at all events, to such an ambiguous statement that may mislead the public, and so cause injury to the [plaintiffs’] business. It may be true on a critical examination of the phraseology of this document it will be seen that it never really says that the reader might, from that very circumstance, draw the inference that they were not so executed, for if they had been, the fact would have been more clearly stated in the circular. But then there are members of the public, to which this circular is addressed, who might read it in an uncritical spirit, and would only be impressed by the general effect conveyed, and if so read I think the circular is calculated to lead such a reader to the conclusion that the respondents’ firm had executed the works. 37 Jeremiah had testified that he had used two sheets from the manual on Figure Control with permission whilst teaching his students. These were not distributed to students. This was contradicted by Dean who said that visual poise was a very practical course and thus Jeremiah needed no notes at all. Jeremiah also stated that JRP notes in loose-leaf form were freely available to any students who cared to search the open shelves in the aerobics room and hallway. However he only saw one note with the JRP name on its heading. In consequence he thought the notes belonged to Clea. He stated specifically that he had seen AB118, AB120 (JRP notes) and the manual on Figure Control looked familiar as he had seen similar loose-leaf notes at Clea. He also testified that he counselled potential students. It was his evidence that Clea was JRP’s closest rival as all the students ‘either come [to us] from Clea or go to Clea’. 38 Thanasingam testified that when she taught at Clea she had been given similar materials for teaching as those at the JRP school. On cross-examination, however, she stated that the defendant had never given her the impression that her school was a JRP school and she admitted that the defendant had never represented her school to be a JRP school. After she started work with the third plaintiff she was instructed to and she went back to the defendant’s premises to, collect any JRP notes she could find and she collected AB104–126. She agreed with counsel for the defendant that the notes were only for the reference purposes of teachers and there were also other books on the premises for those purposes. On re-examination she stated that the defendant had given her instructions not to use the notes. When asked by counsel when that had happened, she said she could not remember and changed her earlier evidence stating that the defendant had not talked to her about the notes at all. 39 Seah, a student of the third plaintiff, testified that the general layout of Clea looked similar to the JRP school. When he went to make enquiries at Clea, Dean informed him that Clea could offer courses similar or identical to JRP for much less, when he said JRP prices were very high. On cross-examination, he admitted that they did not discuss exact prices or details and that JRP did not have a separate course on ‘Voice’. It was part of their ‘Executive Programme’. On reexamination his evidence was slightly different. He stated that he had said JRP’s prices were high and that Dean responded with the comment that it was due to the franchise. When asked whether Dean had said anything else, he stated, ‘Not that I can recall’. 40 Dean, on the other hand, said that Seah had asked about other grooming schools, mentioning Dale Carnegie. She had responded that the other similar schools were Alfred Lawrence, Jannah Levinge, Mary Jean and JRP. She testified that she was merely attempting to clear Seah’s confusion on the different schools. As he had mentioned that JRP was ‘bloody expensive and that they [Clea] were the cheapest in town’, she replied that they charged a reasonable fee because they did not have the additional burden of paying royalties because of a franchise. 41 The third plaintiff had testified that the Speech Programme of JRP did not sell very well and it tapered to a few enrolments a month when it used to be much more (in 1990); for that reason she combined the male and female classes for the ‘Executive Image Programme’ instead of running the classes separately. She surmised that the decline in enrolment could be because the students went to the defendant’ school. Upton (PW5) gave evidence that the royalties paid by the third plaintiff also declined with the corresponding decline in enrolment (see AB175– 176). Although the franchise agreement with the defendant contained a noncompetition clause (cl 3.3 at AB17), Upton said the second plaintiff elected not to enforce the clause ‘because it is not our desire to be in the business of putting people out of business. So when we became aware that the defendant was going to go into this kind of business we did not take action as we did not want her to be without livelihood.’ 42 In his submissions (para 68) counsel for the plaintiffs pointed out that the increase in enrolment at the third plaintiff’s school in July 1990 after the injunction was obtained against the defendant proves that damage was suffered by the plaintiffs as a result of the defendant’s activities. My only comment is that no corresponding figures are provided by the plaintiffs in AB175–177 for comparison of enrolment during the period when the defendant was the franchisee for a definite finding to be made. Even if enrolment at the JRP School fell after the defendant started Clea it could be due to any number of factors which I would not venture to speculate. 43 It was the evidence of the defendant that she had made no efforts to associate Clea with JRP; indeed she considered Clea superior to JRP. She felt that she had restructured the course and added a lot of extras like ‘Business Presentation’ to ensure the difference. However she admitted keeping ring binders with the JRP logos and also some printed sheets of JRP notes after termination of the franchise and after the injunction was granted in Suit No 321 of 1988. Some of these notes were one-sided, others double-sided. Her testimony was that these were kept as evidence for Suit No 321 of 1988 as in her mind this suit was still not settled and she had a counterclaim she still wished to pursue if and when she was financially able to do so. This, however, did not deter her from using a stack of the one-sided notes from time to time as rough paper. The printed notes were kept in 12 different locations all over the school. When these notes were delivered up in June 1990 pursuant to the plaintiffs’ injunction obtained in this suit the total number of loose-leaf sheets handed to the plaintiffs’ solicitors came to 2,692 (see AB215– 216 for the list). Given her legal background, I would say that it is a most unusual way of preserving evidence if indeed it was for that purpose, for the defendant to keep the notes at so many different locations on the school’s premises. 44 When cross-examined on the notes, Dean said that the lecturers were told not to give these out to students and she was roundly scolded by the defendant once when she put some of the notes aside with the intention of handing them out to students; in the event the notes were not handed out. When asked whether a sign was put up to forbid students from referring to these notes, at first Dean said there was none but later she added that she had put up a sign (not a permanent one) to warn students not to take anything from the shelves and this was meant for a group of dancers who were not students of the school but who had rented the room. 45 The defendant admitted keeping some titles and retaining the same syllabi but stated that she had added her own notes and that on her first visit to her solicitors she had produced one sheet of every note that she had authored. On this point Dean confirmed that the defendant had written some notes for Clea and that for some time after the termination of the franchise the instructors had no notes to work with at all. The defendant did state however that when counsellors prepared for big classes they would cut off the JRP heading and use the JRP notes. The notes authored by the defendant were handed over to the plaintiffs’ counsel during the trial on his undertaking not to show them to his clients. These totalled 28 pages. 46 The defendant testified that she took out an advertisement costing $800 in The Straits Times on 22 April 1988 to inform her clients that the name of her school had been changed to Clea. The relevant extract of that notice (at AB148 and AB166) headed Clea Notice stated: I would like to inform my corporate clients, past students and members of the public that I am since 22 February 1988 Director of Clea Professional Image Consultants. The franchise held by my company The Finishing School Pte Ltd was terminated by Ronver BV for John Robert Powers. I have placed the matter in the hands of my solicitors. A substantial claim is now pending subjudice. The school, key members of staff and teachers remain the same I am proud of them. Our curriculum however is new and totally up-to-date and reflects the four years my teachers and myself have been in the business of executivegrooming, speech improvement, personality development and the social graces in Singapore, Malaysia and Thailand. 47 It is noteworthy that in the advertisement the defendant made no efforts to disassociate herself from JRP and its courses, rather she emphasized her previous experiences without mention of the latter. The defendant also said that all subsequent advertisements were run under the name of Clea, although the courses offered remained the same, namely, ‘The Executive Programmes/Executive Grooming’, ‘The Finishing Course’, ‘Personal Grooming/Personal Grooming Plus’ (see AB150–151). She had instructed her staff not to distribute JRP material. On this Dean stated that notes were given out to students in a Clea folder on the first day of a course. 48 The defendant testified that when she started business under the franchise it was not profitable and it never did become profitable. At the time she commenced business, she actively sought speaking engagements with such organizations as Rotary Clubs and Lions’ Clubs and made herself available to the media in lieu of expensive paid advertising. The defendant disputed the third plaintiff’s claim that the franchise lost money because of unfair competition from her/Clea pointing out that the plaintiffs’ own table of royalties did not show a steady decline from $19,000 to $12,000 a month but $12,000 only for the months of February/March 1989 and April/May 1990. The findings 49 In my view, insofar as the plaintiffs sought to contend that the defendant passed off Clea as a JRP school, these contentions are not made out. The name Clea is very different from that of JRP. Clea did not use a signature-type logo. The consensus of opinion of Jeremiah and Thanasingam was that the market understood them to be two different schools. 50 However, another form of passing-off is also alleged against the defendant, that by having similar course titles and curricula she used the indicia of the plaintiffs’ business and thus sought to pass off her product as that offered by JRP but at a lower price. 51 In support, counsel for the plaintiffs cited Snyman v Cooper. In this case the plaintiff carried on business in Indooroopilly, Shoppingtown. Her customers knew that there was but one florist in that particular location. The defendants advertised their shop to be in ‘Indooroopilly, Shoppingtown’ although they were 14 km away. The Federal Court of Australia held that by using the indicia of the plaintiff’s business, customers would be confused. The plaintiff’s goodwill had been injured and the defendants could thus be enjoined. This case can be better understood in the light of the House of Lords case of William Edge & Sons Ltd v William Niccolls & Sons Ltd where the plaintiffs supplied laundry blue under a distinctive get-up but without a name attached. The defendants imitated the getup but used their own name. This amounted to passing-off. 52 The present case can however be distinguished. Although JRP may be known as a grooming school, the market would not recognize the school from the fact that for example, they had a specific course called ‘Executive Image Programme’. It is unlike the case of a florist which is seen in Indooroopilly every Saturday by shoppers or washing powder that customers buy every week. The man in the street would think in terms of JRP as a grooming school, and then if he wishes to be groomed he would check the available courses. 53 It is the inverse type of passing off as seen in Bristol Conservatories and Henderson that has to be considered here. A large number of JRP notes were lying around in open shelves for all who cared to look and take. Loy had testified that some of the printed notes were stored by her (in particular reprints of the manual (exh P7)) but a substantial amount of the 2,692 sheets delivered up to the plaintiffs’ solicitors must have been on the defendant’s premises since their presence was noticed by Jeremiah, Thanasingam and admitted to by the defendant herself. Instructors like Jeremiah and Thanasingam used these notes as part of their teaching programme. These notes had no acknowledgment. Thus all would assume that they were the work of Clea and that in itself is a misrepresentation. It would also mean that apart from the defendant’s work (28 sheets) and the difference in the instructors at both schools some part of the package offered to the students would be the product of the plaintiffs. The defendant had admitted that counsellors gave out these notes with the JRP heading cut out. Goodwill of the plaintiffs is diluted by the fact that training with reference to their materials without acknowledgement of source is available elsewhere at a cheaper price. 54 This point can be seen with greater clarity when one looks at the nature of the interest protected, which was said by Lord Parker in AG Spalding v AW Gamage at p 284 to be ‘property in the business or goodwill likely to be injured by the misrepresentation.’ Goodwill was defined by Lord Diplock in Erven Warnink BV v Townend & Sons (Hull) at p 4932: … The concept of goodwill is in law a broad one which is perhaps best expressed in words used by Lord MacNaghten in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd 55 In effect by making those notes freely accessible to all and sundry and especially to instructors who then formulated their lessons with these materials the defendant was robbing the plaintiffs of the credit and goodwill which was owed to them. Bristol Conservatories9 showed inverse passing off in the purest sense: the defendants exhibited purely the plaintiffs’ work as samples of their own. It would nonetheless still have amounted to passing off if they promised to produce what in effect were the plaintiffs’ conservatories but with extras and frills added on. In both Bristol Conservatories and Henderson it was held unnecessary to prove that the customers knew the plaintiffs’ name. The point was that goodwill owed to the plaintiffs was misappropriated by the defendants and used by the defendants to establish their own reputation. 56 The only difference between Bristol Conservatories and this case is that in the former the misappropriation was in the course of advertisement. Here the misappropriation is done in the course of the trade itself. This should make no difference to the plaintiffs’ entitlement to a remedy. Notes and work materials are only obtained by effort, enterprise and expense. It is part of the product that both schools sell. Where the defendant’s misrepresentation denies to the plaintiffs the credit due, the plaintiffs’ product is no longer unique. In these circumstances the franchise would not be viewed with value by potential customers and goodwill is thereby damaged. 57 The dicta of North J in the case of Walter v Steinkopff is interesting in this respect. This was in fact a copyright action where the proprietor of The Times sued the publisher of The St James’ Gazette for publishing large extracts from The Times, but North J mentioned in passing: A man cannot justify the taking of what he has no right to take by stating whence he has taken it, though he may thereby avoid the additional dishonesty of passing off as the product of his own labour what is really cribbed from another. [Emphasis added.] 58 The defendant’s state of mind is irrelevant as the tort of passing off does not require a mental element in the sense of a deliberate intention to injure coupled with improper motive (see Wadlow on the Law of Passing-Off (1990 Ed) at p 153 para 4-08). Hence the fact that the defendant may have thought her school was superior to JRP School does not exculpate her if in fact students thought she offered the plaintiffs’ product. 59 I would at this juncture comment on the evidence of the various witnesses of both parties. In the case of Jeremiah, I do not accept that he was an impartial witness as he was an employee of the third plaintiff (albeit part-time intially) although I am mindful that he had also worked for the defendant on a part-time basis for three months prior thereto. Equally, Thanasingam cannot be considered an impartial witness as she had to be rebuked for her openly hostile attitude in court towards counsel for the plaintiffs. Seah was another witness whose evidence has to be regarded with some circumspection since he began his testimony by describing the third plaintiff as his friend and mentor. 60 There is then the evidence of the third plaintiff. Given her total lack of working experience (apart from some part-time radio announcing) before she was employed by the defendant (which I find was at her and not the defendant’s request) in 1986/ 1987, it is difficult to believe that she could have authored the ‘Executive Image Programme’ in exh P5 four to six months after she took over the franchise even with guidance from the manual. It is more probable that she copied the defendant’s work in exh P3 or the defendant’s earlier version in exh D3. This can be seen from the fact that the mistake in exh P3 is repeated at Voice 3 of exh P5, namely, the phrase ‘words carelessly articulated’ because the third plaintiff did not have the experience or training to know that the words were indeed repeated although she had the presence of mind to realize that the phrase ‘work substitution’ at Voice 1 in exh D3 in their context must obviously read ‘word substitution’ and she corrected the error in exh P5. I am fortified in my view by Loy’s evidence who I accept was a truthful witness although counsel for the plaintiffs submitted otherwise. Loy’s invoice (AB147) proved that exh D2 which included exh P3 was printed for the defendant before the invoice date of 14 December 1987. The third plaintiff only took over the JRP franchise in March 1988. The fact that Loy was and still is the defendant’s printer does not mean, as counsel for the plaintiffs suggested, that she would fabricate evidence just to assist the defendant. 61 As for the defendant, she gave evidence with remarkable candour even when the same was clearly against her own interests (as when she admitted that her staff used JRP materials for large classes after first cutting out the JRP letterhead) although her dislike of the third plaintiff is apparent. Similarly, Dean came across as an independent and truthful witness whose recollection of events I believe is more reliable than either Jeremiah’s or Seah’s. The decision 62 I find for the plaintiffs partially on the issue of passing off but not on the issue of infringement; I dismiss the claims of the first and third plaintiffs for infringement. Therefore the injunction restraining the defendant from reproducing or distributing the ‘Executive Image Programme’ was rightly discharged on 25 July 1990. As the second plaintiff elected not to enforce the restraint of trade clause in the franchise agreement, it cannot complain if the defendant chooses to operate a grooming school in competition with JRP but she cannot pass off the courses she conducts as JRP’s. Accordingly, as regards the interim injunction granted on 4 June 1990 (as varied on 25 July 1990), I affirm and make permanent, the injunction restraining the defendant from passing off the courses she conducts, as JRP courses. The defendant shall deliver up to the custody of the plaintiffs’ counsel within ten (10) days of the date hereof all materials which originated from JRP and which remain in her possession, over and above those already delivered pursuant to the interim injunction. I further order that the registrar holds an inquiry to ascertain what damage if any, has been sustained by the plaintiffs as a result of the defendant’s passing-off and the costs thereof are reserved to abide the outcome of the inquiry. 63 As the plaintiffs have only partially succeeded in their claim I award them 40% of the total taxed costs for this suit but with full disbursements, such disbursements, however, to exclude the travelling and incidental expenses of the first plaintiff’s executive vice-president Barbara Tyler (PW6) in coming to Singapore for the trial, as her evidence pertained to the issue of copyright infringement on which the plaintifffs fail. The order for costs shall apply to all previous orders of court save where the court has directed otherwise. The security for costs furnished by the first and second plaintiffs in the sum of $12,000 by way of a banker’s guarantee pursuant to order of court dated 1 August 1990 shall be returned forthwith to the plaintiffs’ solicitors for cancellation. Order accordingly. Reported by Ng-Loy Wee Loon
and that
thereon;
used her own materials;
she who wrote the same;