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MALAYSIA: IS IT RIGHT FOR COURTS TO ALLOW COSTS ORDERS TO STATE OR STATE AUTHORITIES?

23rd January, 2019

This is a unique appeal case between the Malaysian Registrar of Trade Mark (hereinafter referred to as “the Appellant”) and two Malaysian companies, Adabi Consumer Industries Sdn. Bhd. and Sri Nona Industries Sdn. Bhd. which was previously known as Syarikat Taili Enterprise Sdn. Bhd. (hereinafter referred as “the 1st Respondent” and “the 2nd Respondent” respectively or 1st and 2nd Respondent, collectively) at the Court of Appeal, Malaysia.

During the High Court proceedings, the 1st Respondent, who is the owner for the Malaysian Trade Mark No. 85/02021 which consists of the word “adabi” in a stylized form with a depiction of a traditional Malay palace for the goods curry powder, rice vermicelli, wheat flour, in class 30.

The 1st Respondent had filed for a judicial review application against the Appellant and the 2nd Respondent under Order 53 of the Rule of Court 2012 based on the following issues: (1) an order for certiorari (a writ) that was first communicated to the 2nd respondent on 17 July 2014 for their Trademark No. 89001729 which consists of a combination of the Adabi mark with the addition of the words “KICAP TIRAM”; (2) a Court Order for the Appellant to investigate and take action based on the Appellant’s complaints in relation to fraud and/or to protect public interest and etc. Such orders were submitted to the relevant parties as the 1st Respondent was of the view that the 2nd Respondent had submitted fraud documents to the Appellant to gain rights over the trade mark which belongs to the 1st Respondent.

The High Court then had allowed a judicial review filed by the 1st Respondent against the Appellant and the 2nd Respondent and ordered the Appellant to pay the 1st Respondent a sum of MYR3000.00 (app. USD770.00).

Following the High Court decision, an appeal was filed at the Court of Appeal by the Appellant. Some of the items listed in the memorandum include:

  1. The Court should not have ordered the Appellant to pay the judicial review application fee on behalf of the 2nd Respondent as it is stated in the Trade Marks Act 1976 that the Registrar (in this case, the Appellant) should not be ordered to pay any costs to any parties during Court proceedings.
  2. The Court did not take into account that the Appellant was only doing his job as public servant, and,
  3. The Court did not consider the law as stated in the Trade Mark Act 1976 and/or other relevant laws.

Upon consideration from the submissions from both parties, the Court of Appeal had decided that the appeal should be allowed based on the following reasons:

  1. Costs orders are always at the discretion of the Court as they are purely based on public interests matters against the state or state authorities where the Applicant has no direct benefit, will not entitle any costs order to be made against the Applicant even though the Court may award costs to the Applicant, whether or not the state or state authorities succeed. The fact that the judicial precedent is now very strict, therefore, it may be agreeable that it can be reconsidered or reviewed by Court from time to time and this will be depending on nature of the injustice decisions that had been prolonged.
  2. The decision of English Courts in relation to judicial precedent based on common law as well as the concept of parliamentary supremacy cannot be blindly applied in a nation which subscribes to constitutional supremacy. As a consequence, when there is an element of public interest, Malaysian Courts will be slow in making costs orders and even in a situation where it has to make costs orders such as judicial review matters, it should be low as opposed to say reasonable and/or party to party costs.
  3. Courts should not award costs orders where a statute directly or indirectly gives some protection to the state or its agencies, etc., and they are not to be burdened with any costs order.
  4. In additional to Section 63 of the Trade Mark Act 1976, Section 4A also supports the proposition that no costs orders ought to be made against the Registrar.

As a result, the appeal was allowed with costs and the 1st Respondent was ordered to pay a sum of MYR5000.00 (app. USD1220.00) to the Appellant, subject to allocator fee.