IN THE HIGH COURT OF MALAYA AT SHAH
IN THE STATE OF SELANGOR DARUL EHSAN
CIVIL SUIT NO.: 22-705-2008
BETWEEN
BURUKAN BIN MOHAMED
ORIGINAL PENANG KAYU NASI KANDAR
TREASURY CHANNEL (M) SND BHD
PLANTIFFS
AND
SIRAJUDIN BIN Y MOHAMED MYDIN
DI KAYU NASI KANDAR SDN BHD
RESTORAN PULAU PINANG KAYU NASI KANDAR SDN BHD
KARTHIKESAN A/L SYED IBRAMSAH
DEFENDANTS
INTRODUCTION
This Court has on 22/8/2011 on its own motion under Order14A of the
Rules of High Court, 1980, and with consent of the parties directed
parties to make submissions on two questions namely:-
1.
Whether on proper construction of clause 2 of the said Agreement,
the words “continuing business” is restricted to the 2 outlets given
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to the 1st Plaintiff, and the 1st Plaintiff is not allow to use the
expression “Restoran Kayu Nasi Kandar” for other outlets?
2.
Whether the 2nd Plaintiff, in which both 1st Plaintiff and his wife are
shareholders (on equal share), has the license to use the
expression “Restoran Kayu Nasi Kandar” ?
THE PLAINTIFFS’ CLAIM AND PASSING OFF:
The Plaintiff claimed that the 2nd Defendant’s USJ Branch has modified
the sign bearing resemblance of Plaintiff’s trade sign. The Plaintiffs is
seeking a court order to bar the Defendants from using the sign as it
resembles Plaintiff’s trade sign as it causes confusion to the public, and
it is calculated to interfere with the Plaintiffs’ business and goodwill.
Therefore, there was passing-off by the Defendants of their trade or
business.
THE DEFENDANTS COUNTER CLAIM:
The Defendants claimed that the Plaintiffs have indeed infringed the 3rd
Defendant’s registered trade mark and seek an injunction to restrain the
Plaintiffs to use the trade sign.
BACKGROUND FACTS FOUND BY THE COURT:
The 1st Plaintiff and 1st Defendant are in the business of serving Indian
Food (Nasi Kandar) inherited from their father, previously known as
Restaurant Kayu Nasi Kandar Sdn Bhd. On 30.11.2004, the 1st Plaintiff
and the 1st Defendant entered into a Confirmation and Acknowledgment
Agreement.
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Clause 1 of the said agreement stated as follow:“With effect from 10/10/2003, BBM shall have full control
and management of the business outlets at:
(i) No. 64, Jalan ss2/10, 47300 Petaling Jaya, Selangor
Darul Ehsan (hereinafter referred to as ‘the SS2-Petaling
Jaya Outlet’); and
(ii) Nos. 9, 11, 11-A, 15 & 17, Lebuh Nipah 5, 11900
Sungai Nibong Pinang, (hereinafter referred to as ‘the
Bukti Jambul – Pulau Pinang Outlet’).
And SBMM shall have full control and management of the
remaining outlets of RESTORAN KAYU NASI KANDAR
SENDIRIAN BERHAD (COMPANY NO. 437295-V(‘THE
COMPANY’) to the effect that each of SBMM and BMM
shall in operating of their respective selected outlets from
the effective date be responsible for all costs and
expenses and be entitled to all profit pertaining to and
arising from such outlets.”
Clause 2 stated as follow:“SBMM and BMM shall continue to be entitled to use the
expression “Restoran Kayu Nasi Kandar” in each party’s
continuing business.”
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Upon the execution of the said Agreement, the 1st Plaintiff continues the
business in the name of Original Penang Kayu Nasi Kandar, and the 1st
Defendant continues the business in either the name of Di Kayu Nasi
Kandar and/or Restoran Kayu Nasi Kandar (later change to Restoran
Pulau Pinang Nasi Kandar Sdn Bhd)
The bone of contention between the parties was the trade sign
consisting the word “Kayu” and also the logo depicting a malay attired
man.
The Plaintiffs’ trade sign: White as base colour,
 Name of the restaurant, “Restoran Original Penang Kayu Nasi
Kandar” or “Original Kayu” being depicted in red colour;
 The logo depicting a man attired in a traditional malay outfit,
holding the hand of a young boy also attired in malay outfit,
carrying the traditional food baskets at both ends of a pole
balanced on his shoulder; and
 The word “Kayu” with the letter “K” written in stylish manner and its
bottom stroke extended and reaches the bottom level of the
subsequent letter “A”.
The Defendants’ trade sign at the USJ Branch: White as base colour (originally it was yellow);
 Name of the restaurant “Kayu Nasi Nandar” being depicted in red
colour;
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 The logo depicting a man attired in traditional malay outfit and
carrying the traditional food baskets at both ends of a pole
balanced on his shoulder.
 The word “Kayu” with the letter “K” written in stylish manner and its
bottom stroke extended and reaches the bottom level of the
subsequent letter “A”.
The Defendants were in fact the registered proprietor of a registered
trade mark No.: 03017070 in class 43 for a period of 10 years from
16/12/2003 to 16/12/2003 in class 43. The trade mark consist of the
trade name “Kayu Nasi Kandar” and the logo depicting a man attired in
traditional malay outfit and carrying the traditional food baskets at both
ends of a pole balanced on his shoulder. The Defendants have also
registered the word “Kayu” in similar pattern to that of the 2nd Plaintiff in
year 2009.
THE LAW:
In the case of Erven Warninck v. Townsend & Sons (Hull) Ltd. [1979]
AC 731; [1979] 2 All ER 927; [1989] RPC 31 (HL), Lord Diplock pointed
out that the following 5 characteristics must be present in order to create
a valid cause of action for passing-off:-
i.
A misrepresentation;
ii.
Made by a trader in the course of trade;
iii.
To prospective customers of his or ultimate consumers of goods or
service supplied by him;
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iv.
Which is calculated to injure the business or goodwill of another
trader, (in the sense that this is a reasonably foreseeable
consequence);
v.
Which causes actual damage to a business or goodwill by whom
the action is brought.
Seet Chuan Seng & Anor v. Tee Yih Jia Food Maufacturing Pte Ltd.
[1994] 3 B.L.J 301 (ref)
McCurry Restaurant (KL) Sdn Bhd v McDonald’s Corporation [2009]
3 CLJ 540 (ref)
In the case of Mun Loong Co Sdn Bhd v. Chai Tuck Kin [1982] CLJ
80; [1982] CLJ (Rep) 590, Mohamed Azmi J (later FCJ) said as follow:“At common law, it is an actionable tort for one person to
represent his business to be that of another, or to mislead
the public to believing that it is, because the person guilty
of the deception thereby profits illegitimately from the
goodwill which attaches to the other business. The
commonest means by which this deception is practiced
by the adoption of a business name which is calculated to
cause the public to confuse the spurious business with
the genuine one. If the spurious business is conducted by
a company incorporated with a name likely cause such
confusion, the owner of the genuine business may obtain
an injunction to restrain the company from trading in its
own name of even continuing to have its own name. If the
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injunction takes the latter form, the company must either
change its name or be wound up.”
In this case, both the 2nd Plaintiff and 3rd Defendant have similar
business presentation as the foods available at the outlet are similar.
Most importantly, both bear the name “Kayu Nasi Kandar”. There is a
likelihood of confusion from the customers in view of the similarity in
name, logo and type of food dealt with by both parties. Firstly, the trade
sign of the 2nd Plaintiff and that of the 3rd Defendant are similar to each
other, especially the design of the word “Kayu”. Furthermore, there is no
reasonable explanation by the 3rd Defendant to the sudden change of
the trade sign. This has indirectly misled the public into believing that the
restaurant operated by 3rd Defendant is one and the same as the
restaurant operated by the 2nd Plaintiff.
As a matter of fact, one of the food writer, Mr Sam Cheong had actually
posted an article on the internet criticizing the food of the 3rd Defendant’s
restaurant at USJ, thinking that it is one and the same with the 2nd
Plaintiff’s restaurant in SS2. Thereafter, Mr Sam Cheong wrote another
article on the internet to clarify that the restaurant at USJ and SS2 are
two different restaurants. (Plaintiff’s Additional Bundle of Documents,
pages 1-5 and 8-11 referred).
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THE 1ST QUESTION:
Whether on proper construction of clause 2 of the said Agreement, the
words “continuing business” is restricted to the 2 outlets given to the 1st
Plaintiff, and the 1st Plaintiff is not allow to use the expression “Restoran
Kayu Nasi Kandar” for other outlets?
The Rules Of Construction:
There are many rules relating to construction of contracts and other
written instruments. Lord Wensleydale’s golden rule of construction is to
be the most relevant and instruction. In the case of HB Rubber Estates
Bhd v. Director General of Inland Revenue [1986] MTC 36, the
Federal Court at page 39 held as follow:“12. Now the universal rule in construing statutes, as in
construing all other written instruments, is that the
grammatical and ordinary sense of the word is to be
adhered to, unless that would lead to some absurdity, or
some repugnance or inconsistency with the rest of the
instrument, in which case the grammatical and ordinary
sense of the words may be modified, so as to avoid that
absurdity and inconsistency, but no further (per Lord
Wensleydale in Grey v. Pearson [1857] 6 HLC 61, 106).
In the case of Kesultanan Pahang v. Sathask Realty Sdn Bhd [1998]
2 CLJ 559, the Federal Court also considered the golden rule to be the
most relevant and instructive. The court stated as follow:-
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“…I return therefore Lord Wensleydale’s golden rule cited
by Lord Blackburn in River Wear Comrs v. Adamson
[1877] 2 App. Cas 743 at 764-765, [1847-80] All ER
Rep.1 at 12:
…that we are to take the whole statute together,
and construe it all together, giving the words their
ordinary signification…”
In the case of Cargill International S.A. & Anor v. Bangladesh Sugar
and Food Industries Corporation [1998] 1 WLR 461, the Court held
that:“On the other hand, modern principles of construction
require the Court to have regard to the commercial
background, the context of the contract and the
circumstances of the parties, and to consider whether,
against the background and in that context, to give the
words a particular or restricted meaning would lead to an
apparently unreasonable and unfair result.”
Therefore, the true construction of clause 2 cannot be done in a vacuum,
but to consider the agreement as a whole together with the facts and
surrounding circumstances of the case, in order to fully appreciate the
intent and spirit of the parties.
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FINDING:
The agreement was entered by both 1st Plaintiff and 1st Defendant in
order to divide their existing businesses. At that material time, both were
shareholders in the 3rd Defendant’s company holding equal shares.
If the parties’ intention is to limit themselves to use the phrase “Restoran
Kayu Nasi Kandar” for the existing outlets, they would have use the
phrase “existing outlets”. The intention of parties under this agreement is
to divide between parties the existing outlets, and that each party shall in
operating their selected outlets be responsible for all costs and
expenses, the phrase “continuing business” relates to the respective
outlets that the parties continue to operate and also future business in
relation to selling nasi kandar.
When construing the agreement and the phrase “continuing business”,
the “good commercial sense principle” ought to apply. Taking the phrase
in its literal meaning, it cannot mean that the goodwill of “Restoran Kayu
Nasi Kandar” given to 1st Plaintiff is only restricted to the 2 existing
outlets. If 1st Plaintiff is only allow to use the phrase “Restoran Kayu Nasi
Kandar” for the 2 existing outlets, the same would apply to the 1st
Defendant and he must also only use the phrase for the existing 10
outlets that he gained control under the said agreement. The agreement
was made between two businessmen, and no businessman, who had
not taken leave of his senses, would intentionally enter into an
agreement which restrict his attempt to expand the family business
inherited from his father.
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THE 2ND QUESTION:
Whether the 2nd Plaintiff, in which both 1st Plaintiff and his wife are
shareholders (on equal share), has the license to use the expression
“Restoran Kayu Nasi Kandar” ?
THE FINDING:
Since the 1st question is answered in negative, the 2nd question would
also be answered in the negative. The license for the 1st Plaintiff and the
1st Defendant, is to use the expression “Restoran Kayu Nasi Kandar, not
only for the existing outlets, but also future development business. Even
though 2nd Plaintiff is owned by 1st Plaintiff and his wife on equal share, it
does not negate the fact that 1st Plaintiff still gain control over all outlets
operating under the name of 2nd Plaintiff.
THE DEFENDANTS’ COUNTERCLAIM:
The Defendants’ counterclaim is an injunction to restrain the Plaintiffs
from infringing their registered trademark 03017070. Trademark
03017070 is depicting a man attired in a traditional malay outfit in yellow
wearing a red songkok and a sarong in purple and red carrying a
tradional food basket in red colour, the main in this picture also has a
towel around his neck.
However, the emblem used by the 2nd Plaintiff is totally different from the
trademark 03017070. The emblem used by the 2nd Plaintiff has the
phrase “KAYU NASI KANDAR” on the top and “ORIGINAL PENANG” at
the bottom. There is also a ribbon across the emblem saying “SINCE
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1974”. The man in traditional malay outfit in the emblem is holding the
hand of a young boy who is also attired in traditional malay outfit. The
colours on the emblem are green, yellow and white. Whereas the 3rd
Defendant’s trademark has no ribbon, the main is alone, and the colours
are in red and purple. Therefore, the Defendants’ counterclaim does not
hold water.
CONCLUSION:
Based on the above reasons, the court hereby allowed the Plaintiff’s
claim.
YA DATUK NURCHAYA ARSAD
HAKIM
MAHKAMAH TINGGI NCVC 5
SHAH ALAM
17 FEBRUARI 2012
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