Judgment

[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.]

LP Thean JA (delivering the grounds of judgment of the court):

1           Both the first appellants and the respondents are engaged in the business of manufacturing and selling cakes, pastries and other confectionery products in Singapore. The first appellants were incorporated in 1991 and took over the business of a sole proprietorship under the name and style of Bengawan Solo Cake Shop which had been carrying on such business since December 1975. At present, the first appellants have a chain of 15 retail outlets. The respondents were incorporated in 1966 and were the successors of a partnership which had been carrying on the same business under the name and style of Season Confectionery and the Chinese name of the respondents is ‘时新唐果店’. The respondents do not have their own retail outlets, and their cakes, pastries and other confectionery products are distributed to and sold at various emporiums, supermarkets and stores under the brand name ‘Seasons’ represented in a particular style and logo.

2           In 1992, the Chinese Eighth Moon Festival fell on 11 September 1992. Sometime prior to that date, both the first appellants and the respondents were actively selling Chinese mooncakes. The first appellants’ mooncakes were made and supplied by the second appellants who carried on the business of manufacturing and selling confectionery in Johore Bahru under the name and style of Season Kedai Kek Dan Roti or Season Cake House. Their mooncakes had impressed on them the Chinese characters ‘时新’, the literal translation of which is ‘Always Fresh’, and the name ‘Season Cake House’ and the words ‘Season Mooncake’ appeared on all the packages or boxes and carrier bags for the mooncakes. The respondents’ mooncakes, on the other hand, were made and supplied by Standard Confectionery Sdn Bhd of Lot 20 Jalan E1/4, Taman Eksan Industrial Estate, Kepong, Selangor, West Malaysia. Their mooncakes had impressed on them ‘时代’, the literal translation of which is ‘era’ or ‘period’. These two Chinese characters also appeared on the packages or boxes. The respondent did not use as the trade mark ‘Seasons’ or ‘时新’ for the mooncakes, but the trade mark ‘Standard’. The Chinese characters ‘时新’ are not a translation of ‘Seasons’ but a transliteration rendering in Chinese of the sound of the word ‘season’.

3           On or about 25 August 1992, the respondents’ representatives made a trap purchase of a box of mooncakes sold by the first appellants bearing the name ‘Season Mooncake’, and complained that the first appellants had passed off their mooncakes as those distributed and sold by the respondents. Accordingly, on 2 September 1992, the respondents commenced an action in Suit No 1781 of 1992 in the High Court claiming that the first appellants in selling mooncakes bearing the name ‘Season Mooncake’ had passed off the mooncakes as those of the respondents. On the same day they applied ex parte for an interim injunction to restrain the first appellants from selling mooncakes under that name and also an Anton Piller order permitting the respondents and their representatives to enter the premises of the first appellants to search, inspect, photograph and also to remove all the mooncakes sold under that name and all advertising and other materials relating thereto. The ex parte application was heard before P Coomaraswamy J, at which an amendment was made to the application. On 3 September 1992, the learned judge granted to the respondents the interim injunction and the Anton Piller order. The terms of the injunction were very wide and, so far as material, restrained the first appellants from ‘parting with possession, power, custody or control’ confectionery which bore upon them the name ‘Season’ or the Chinese characters ‘时新’. The Anton Piller order directed the first appellants to permit the respondents’ solicitors and representatives to enter the appellants’ head office and 13 branches or retail outlets named therein for the purpose of searching, inspecting, photographing and removing into the custody of the respondents’ solicitors all such confectionery and all packages, carrier bags, advertising and other materials relating to the purchase, sale and distribution of such products.

4           Armed with the order, the respondents and their solicitors entered the first appellants’ head office at Harvey Road and the retail outlets at Marine Parade, Centrepoint and Tai Thong Crescent, and executed the Anton Piller order. As a result, large quantities of mooncakes and packages, carrier bags, advertising and other materials such as T-shirts, posters, paper bags, brochures, documents, boxes, hanging mobiles, plastic containers, banners with the name ‘Season’ appearing thereon were seized and removed. On the following day, the respondents and their representatives returned to the first appellants’ outlet at Tai Thong Crescent and removed a further quantity of 2,500 pieces of mooncakes as they did not have sufficient storage space on the previous day. Obviously the large quantity of mooncakes taken away was proving too much of a handful to store, and on 5 September 1992, the respondents’ solicitors wrote to the first appellants’ solicitors enquiring if the first appellants would agree to the destruction of all the mooncakes with samples to be taken and kept by each party. The first appellants’ solicitors refused and demanded that the Anton Piller order be strictly complied with and that the remaining mooncakes in the first appellants’ other outlets be removed. However, the respondents did not proceed to remove them.

5           On 8 September 1992, the first appellants applied inter partes for, inter alia, the following orders, namely:

(i)     that the firm of Season Kedai Kek Dan Roti be added as second defendants to the action;

(ii)   that the injunction and the Anton Piller order be set aside, and all the goods and materials seized by the respondents be returned forthwith; and

(iii)    alternatively, that the order dated 3 September 1992 be varied.

6           The inter partes application was heard before the learned judicial commissioner GP Selvam on 10 September 1993, which was the eve of the Eighth Moon Festival. The hearing, however, was not concluded until 12 September 1992; the learned judicial commissioner dismissed the application. Subsequently, an application was made by the second appellants in their individual names as partners of the firm to be joined as defendants and an order was then made joining them as second defendants to the action.

7           The appellants appealed against the order of the learned judicial commissioner made on 12 September 1992 dismissing the application of the first appellants. We heard the appeal and allowed it: we set aside the order of the learned judicial commissioner and discharged the entire order made on 3 September 1992. We now give our reasons.

8       The main issues raised before us were as follows:

(i)     whether in obtaining the interim injunction and the Anton Piller order the respondents had failed to give full and frank disclosure of all the material facts;

(ii)   whether in the circumstances of the case the Anton Piller order should have been obtained; and

(iii)  whether on the balance of convenience the ex parte injunction should have been continued.

9           Counsel for the appellants submitted that the affidavit filed on behalf of the respondents in support of the ex parte application gave the impression that the respondents sold their mooncakes under the brand name ‘Seasons’, whereas in fact the respondents distributed and sold their mooncakes under the brand name or trade mark ‘Standard’ and the Chinese characters ‘时代’, and the Chinese characters were impressed on their mooncakes. The respondents in fact did not use as the brand name or trade mark ‘Seasons’ or the Chinese characters ‘时新’ in their sales of mooncakes. On the other hand, the trade mark used by the first appellants in relation to their sales of mooncakes was quite different: they used the Chinese characters ‘时新’ as the brand name or trade mark which were impressed on the mooncakes. It was evident from a comparison of the first appellants’ mooncakes with the respondents’ mooncakes that the brand names or trade marks used by both of them were different; that their packaging of the mooncakes and get-up of such packages were also different. It was submitted that these differences were material facts which ought to have been disclosed in the affidavit filed in support of the ex parte application and brought to the attention of the learned judge hearing it.

10       It was further argued that the respondents sought an injunction to restrain the first appellants from using also the two Chinese characters ‘时新’ and that they asserted that the two Chinese characters were the Chinese names of the respondents. That was not so. The Chinese names of the respondents consisted of five Chinese characters ‘时新唐果店’ which included the two Chinese characters, and the two Chinese characters by themselves were not their names. The respondents also failed to disclose that their alleged reputation on the confectionery was in the English word ‘Seasons’ drawn and presented in a distinct manner. They had no reputation, and did not claim such reputation, in the two Chinese characters ‘时新’ in respect of their confectionery.

11       On the other hand, counsel for the respondents submitted that the claim against the first appellants was for passing off the mooncakes as those of the respondents by the use of the name ‘Season’, and even if the respondents did not use the Chinese characters ‘时新’ in the sale of their mooncakes, they would still be entitled to the injunction. What they complained of was the passing off of the mooncakes as the respondents’ mooncakes by the use of the name ‘Season’. Those facts referred to by the appellants were therefore not relevant or material to the claim.

12       Without expressing any views on the question of passing off, we are clearly of the opinion that the facts that the respondents were distributing and selling mooncakes under the brand name or trade mark ‘Standard’ and the Chinese characters ‘时代’; that these characters were used and impressed on their mooncakes; that the first appellants used the Chinese characters ‘时新’ as the brand name or trade mark which were impressed on their mooncakes; and that the packaging and get-up of such packages for the appellants’ and the respondents’ mooncakes respectively were different, were all material facts, and they ought to have been disclosed so that the learned judge would be informed of these differences. These facts were material and crucial in the consideration by the learned judge whether the order sought should be granted. In our judgment, the respondents had failed to make full and frank disclosure of such material facts. On examining the affidavit in support, one cannot but arrive at the conclusion that the omission to state these material facts in the affidavit was deliberate, as the respondents and those advising them must have appreciated that their disclosure might or would have considerably weakened their case for the order sought. On this ground alone, the order made on 3 September 1992 ought to have been discharged or set aside: see Brink’s-Mat Ltd v Elcombe & Ors; Lloyds Bowmaker Ltd v Britannia Arrow Holdings plc (Lavens, third party; and Tunas (Pte) Ltd v Meyer Investment Pte Ltd.

13       Our decision on this issue is sufficient to dispose of the appeal. However, as lengthy arguments had been addressed to us on the second and third issues, we should also express our views thereon.

14       On the second issue, the appellants contended that the purpose of an Anton Piller order is to preserve the evidence for the trial, and on the facts before the court there was no grave danger or real risk that any evidence would be destroyed or made to disappear by the appellants. Nor was there any evidence of any suspicious conduct on their part. The first appellants had an established business and had 15 retail outlets and were selling their mooncakes openly. In the circumstances, the Anton Piller order was unjustified and ought not to have been applied for and obtained. Further, the subject matter for seizure under the Anton Piller order was mooncakes which are perishable, and the Anton Piller order for removal of the mooncakes for the purpose of preserving them as evidence at the trial was in the circumstances clearly inappropriate. This was clearly demonstrated by the fact that the respondents on 5 September 1992 sought agreement from the first appellants that all the mooncakes removed by the respondents should be destroyed which at that time the first appellants refused to agree. Subsequently, agreement was reached for the destruction and all the mooncakes seized, with the exception of a few samples kept for trial, were destroyed.

15       Finally, it was also argued that the respondents did not claim any reputation in respect of the name ‘Season’ in Malaysia and they knew that the mooncakes came from Malaysia, ie Johore Bahru. This was evident from the box of mooncakes purchased by the respondents on 25 August 1992 which showed that the mooncakes came from Johore Bahru. By obtaining the injunction in the form and with the terms as contained in the order of 3 September 1992 and by executing the Anton Piller order, an opportunity to mitigate the loss by returning the mooncakes to Johore Bahru was not available to the appellants, and they were thereby put to suffer unnecessary loss and damage at that stage.

16       We were substantially in agreement with the arguments advanced on behalf of the appellants. There was no evidence adduced by the respondents to show that unless an Anton Piller order was granted there would have been grave danger or real risk that the evidence which they required to pursue the claim would be destroyed or dissipated by the appellants and that justice would be thwarted. The first appellants had an established business at all their retail outlets and were selling the mooncakes openly. In Systematica Ltd v London Computer Centre Ltd and Idnani at pp 316-317, Whitford J in dealing with the arguments on the question of costs upon the discharge of an Anton Piller order said:

… where alleged infringement is taking place and the alleged infringer is operating perfectly openly his business, as this was, in a shop to which people can go, the only evidence that there is as to infringement is a sale and a suspicion that other sales may be taking place, where there is nothing to show that the business is being conducted in so underhand and surreptitious a way that there may be a very good ground for supposing that unless Anton Piller action is taken at the end of the day there will be nothing left to fight on, applications of this kind will be made at the peril of a plaintiff

…

17       That observation, though made in relation to costs, was indeed most apt in the circumstances of this case, and we could find no grounds for the Anton Piller order. The respondents appeared not to have heeded the caution and stringent requirements for such an order which this court took pains to stress in Computerland Corp v Yew Seng Computers Pte Ltd at pp 205-207.

18       If indeed an order was really required to preserve some material evidence for the trial, there is no reason why the respondents could not have obtained a limited Anton Piller order empowering them to enter a couple of the outlets of the first appellants to take a few samples of the mooncakes and advertising and other materials, thus avoiding such a wide and drastic Anton Piller order as had been obtained which effectively destroyed the appellants’ sales of mooncakes at the most critical time.

19       We now turn to the issue of balance of convenience for or against the continuation of the interim injunction. Closely connected with this issue is the question whether damages would be an adequate remedy. In the leading case of American Cyanamid Co v Ethicon Ltd, Lord Diplock said, at p 408:

… the governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff’s undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.

20       In this case, if the injunction were discontinued and the respondents succeed in their claim at the trial, they could be adequately compensated by an award of damages. The sales of the mooncakes made by the first appellants were recorded and accounts were kept and in an assessment of damages the first appellants would be able, and indeed would be required, to produce their accounts and records of sales. The measure of damages would be the profits from the sale of the mooncakes which were made by the first appellants and which could have been made by the respondents: see Boots Co Ltd v Approval Prescription Services Ltd. There was no question of the first appellants being unable to meet an award of damages. On the other hand, if the interim injunction were continued, as was the case, and the respondents do not succeed in their claim at the trial, the full extent of the first appellants’ loss would be incalculable, as there would be immense difficulty in proving with reasonable certainty the volume of sales they would have achieved, if the injunction had not been granted: Boots Co Ltd, at p 50. In our judgment, the balance of convenience was plainly in favour of discontinuing the interim injunction.

21       In the result, we came to the conclusion that the entire order of 3 September 1992 ought to be discharged and we so ordered.

Order discharged.

Reported by Harpreet Singh Nehal