Singapore: Court of Appeal reversed High Court’s decision

March 1st, 2013

 

Our clients and associates will surely recall our article which was published on 28 June 2012 wherein we have reported that the Singapore High Court dismissed Singapore Professional Golfers’ Association’s action for passing off against Chen Eng Waye and others with costs as Singapore Professional Golfers’ Association could not prove the existence of “classical trinity”, namely misrepresentation.

Singapore Professional Golfers’ Association filed an appeal against the decision at the Court of Appeal, and the Court of Appeal had reversed the High Court’s decision and held Chen Eng Waye & Ors as guilty of committing the tort of passing-off.

The Singapore Professional Golfers' Association, with its initials ‘SPGA’ and shortened name ‘Singapore PGA’, (hereinafter referred to as ‘the Appellant’) is a non-profit golfing association that promotes the sport of golf in Singapore and also promotes interests of its professional golfers members. The Appellant had moved the High Court against the 1st Respondent, Chen Eng Waye, the 2nd Respondent, Roy Chen Xiangyi and the 3rd Respondent, Singapore Senior PGA LLP (collectively referred to as ‘the Respondents’) for alleged unauthorized use of the name ‘Singapore Senior PGA LLP’ and the initials, ‘SSPGA’. The High Court had ruled that although the Appellant did have a measure of goodwill, the Appellant had failed to establish any misrepresentation by the Respondents. The High Court had adjudged that the Appellant’s name and initials consisted of ordinary words that were descriptive and not distinctive in nature. The High Court had further ruled that there were sufficient differences in the names of Appellant and that of the Respondents, specifically the use of the words ‘Senior’ and ‘LLP’ by the Respondents which were not present in the Appellant’s name. Also, the High Court had dismissed the Appellant’s claim that the Respondents had acted in bad faith in their choice and use of the name and initials.

The Court of Appeal, acknowledging the High Court’s finding that the Appellant had obtained goodwill in its name, set out to find whether the Respondents’ choice of the name and initials constituted a misrepresentation.

The Court of Appeal conceded that acquiring distinctiveness for a name that is descriptive of the activities of the organization is much more difficult than acquiring distinctiveness for fancy words; nonetheless, merely descriptive words can become so associated with the organization’s business as to become distinctive. The Court of Appeal adjudged that the name ‘Singapore Professional Golfers' Association’, its shortened name ‘Singapore PGA’ and its initials ‘SPGA’ had become associated with the Appellant through continuous use for over 40 years. The Court of Appeal further stated that the use of ‘PGA’ must be seen in the light of the fact that these initials were widely used and understood in the sport of golf throughout the world to mean ‘Professional Golfers’ Association’; thereby, declaring that the Appellant’s name, its shortened form and its initials had acquired a secondary meaning such that they had come to be associated with the Appellant.

The Court of Appeal, in deciding whether there was any likelihood of confusion, accepted that the relevant segment of the public for which the likelihood of confusion needed to be assessed constituted of any person with a commercial interest in golf as well as those who had or intended to have either direct or indirect dealings with the Appellants including players, coaches, instructors etc. Subsequently, the Court of Appeal acknowledged that both the Appellant and the 3rd Defendant operated in the same field of business and that they both cater to the same market of consumers.

The Respondents contested that their name ‘Singapore Senior PGA LLP’ and the initials ‘SSPGA’ included the letter ‘A’ which stood for ‘accreditation’ instead of ‘association’ as the 3rd Respondent was not a society or association but a limited liability partnership (LLP). The Court of Appeal rejected this argument stating that to anyone in the relevant segment of the public, the letter ‘A’ would stand for ‘association’ and in case the Respondents had intended it to mean ‘accreditation’, they should have reflected it clearly in their name. The Court of Appeal further stated that the use of the word ‘Senior’ in the Respondents name aggravates the likelihood of confusion by giving a distinct impression that the 3rd Respondent was a branch of the Appellant that was catering exclusively to the senior arm of the golfing community. On similar grounds, the Court of Appeal found that the letters ‘LLP’ in the 3rd Respondent’s name could draw conclusion that the 3rd Respondent was a related arm of the Appellant, but constituted as a limited liability partnership for commercial reasons. Hence, the Court of Appeal ruled that element of confusing misrepresentation in the tort of passing off was clearly made out. Also, it was held that the use of the 3rd Respondent’s name was actuated in bad faith.

The Court of Appeal further noted that there was a real likelihood of loss to the Appellant including loss of income derived from membership and subscription fees, loss of sponsorship and funding, loss of entrance fees, members’ annual subscription fees, test administration and certification fees.

On the issue whether the 2nd Respondent was personally liable, the Court of Appeal stated that the 2nd Respondent had merely lent his name to the 1st Respondent to assist the latter in setting up the 3rd Respondent. The 2nd Respondent had been a partner of the 3rd Respondent only in name, where the 1st Respondent was the only moving force behind the 3rd Respondent. Therefore, the Court of Appeal dismissed any personal liability claims as far as the 2nd Respondent was concerned. Further, referring to Section 8(3) of the Limited Liability Partnerships Act, the Court of Appeal stated that a partner of a LLP was to remain personally liable in the tort for his own wrongful acts and this was not displaced by the fact that he might have carried out the acts in question in his capacity as a partner of the LLP. Noting that the 1st Respondent directed all the activities of the 3rd Respondent, the Court of Appeal held the 1st Respondent personally liable for the tort of passing off.