Tim Ho Wan Pte Ltd v Viadar Holdings Pty Ltd
[2018] FCA 715
•18 May 2018
FEDERAL COURT OF AUSTRALIA
Tim Ho Wan Pte Ltd v Viadar Holdings Pty Ltd [2018] FCA 715
File number: NSD 554 of 2018 Judge: THAWLEY J Date of judgment: 18 May 2018 Catchwords: INTELLECTUAL PROPERTY – trade mark infringement – application for interlocutory relief – where first applicant is registered owner of Australian registered trade mark – claim that respondents breached ss 120(1), (2)(c) and (2)(d) of the Trade Marks Act 1995 (Cth) – where prima facie case of trademark infringement made out
CONSUMER LAW – where respondents engaged in trade or commerce in connection with the supply or possible supply of services – application for interlocutory relief –claim that respondents represented to consumers that restaurants they operated were operated with sponsorship or approval of, or with affiliation with, the applicants – claim that respondents’ representations were false or misleading in contravention of Australian Consumer Law – where prima facie case made out
PRACTICE AND PROCEDURE – application for urgent interlocutory relief – where applicants sought interlocutory orders restraining respondents from using registered trade mark, and orders requiring transfer of domain name – where applicants made out prima facie cases of trade mark infringement and contraventions of Australian Consumer Law – where balance of convenience favoured grant of interlocutory relief sought – relief granted
Legislation: Competition and Consumer Act 2010 (Cth), Sch 2
Trade Marks Act 1995 (Cth), ss 120(1), 120(2)(c), 120(2)(d)
Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Date of hearing: 18 May 2018 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: Catchwords Number of paragraphs: 34 Counsel for the Applicants: Mr A D B Fox & Mr S J Hallahan Solicitor for the Applicants: LegalVision ILP Counsel for the Respondents: The Respondents did not appear ORDERS
NSD 554 of 2018 BETWEEN: TIM HO WAN PTE LTD
First Applicant
TIM HO WAN AUSTRALIA PTY LTD (ACN 163 314 672)
Second Applicant
AND: VIADAR HOLDINGS PTY LTD (ACN 601 358 249)
First Respondent
THW CHATSWOOD PTY LTD (ACN 601 366 447)
Second Respondent
THW PITT PTY LTD (ACN 607 378 076) (and others named in the Schedule)
Third Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
18 MAY 2018
UPON THE APPLICANTS PROVIDING THE USUAL UNDERTAKING AS TO DAMAGES, THE COURT ORDERS THAT:
1.Pending further order of the Court, the first to fourth respondents, whether by themselves, their servants or agents, are each restrained as of 1 June 2018 from using the Tim Ho Wan Trade Mark, the words “Tim Ho Wan”, or any other trade mark that comprises the words “Tim Ho Wan”, in relation to:
(a)any of the Registered Services;
(b)services that are of the same description as any of the Registered Services; and/or
(c)goods that are closely related to any of the Registered Services.
2.Until further order of the Court, the fifth respondent is restrained from transferring, de-registering, or otherwise disposing or relinquishing control of, the Tim Ho Wan Domain Name or, without the consent of one of the applicants, altering, either itself or by its servants or agents, the content of any website associated with the Tim Ho Wan Domain Name.
3.If the fifth respondent opposes an order that the Tim Ho Wan Domain Name be transferred to the first applicant, the fifth respondent must file and serve submissions and any evidence in support of such opposition by 1 June 2018.
4.If no document is filed and served in accordance with order 3:
(a)the fifth respondent immediately after 1 June 2018 transfer the Tim Ho Wan Domain Name to the first applicant or its nominee; and
(b)if by 7 June 2018 the fifth respondent has not complied with order 4(a), the NSW District Registrar of the Federal Court of Australia shall, upon being provided by the first applicant or its nominee with documents necessary or desirable to cause the Tim Ho Wan Domain Name to be transferred immediately to the first applicant or its nominee, sign such documents pursuant to r 41.09 of the Federal Court Rules 2011 (Cth).
5.The respondents jointly and severally are to pay the applicants’ costs of and incidental to the applicants’ application for interlocutory relief including today’s hearing.
6.The matter be listed for a case management hearing at 9.30am on Thursday, 28 June 2018 at which directions will be made for the future conduct of the proceedings.
7.Liberty to apply on three days’ notice to the Court and the other parties.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THAWLEY J:
On 11 April 2018, the applicants filed an originating application and statement of claim seeking relief against five respondents, including Viadar Holdings Pty Ltd (Viadar), THW Chatswood Pty Ltd (second respondent), THW Pitt Pty Ltd (third respondent), THW George Pty Ltd (fourth respondent) and Gilesvale Pty Ltd (fifth respondent). The matter came before Robertson J as duty judge on 12 April 2018. His Honour made orders abridging the time for service and listing the matter for a case management hearing on 20 April 2018.
The matter was allocated to my docket. At the case management hearing on 20 April 2018, I made orders requiring the respondents to file and serve any defence by 11 May 2018. The respondents were represented at that case management hearing by solicitors who had filed a notice of acting on 19 April 2018.
No defence was filed in accordance with the orders made on 20 April 2018, and the respondents’ solicitors filed a notice of ceasing to act on 10 May 2018. The matter came before me yesterday for case management and the applicants indicated that they wished to seek interlocutory relief in substantially similar terms to the interlocutory relief which had been identified in the originating application.
Given I was duty judge and the respondents had been on notice that interlocutory relief had been sought since the originating application and statement of claim had been served, I listed the matter for an interlocutory hearing for today. In anticipation of that interlocutory hearing and in accordance with orders which I made at the case management hearing yesterday, 17 May 2018, the applicant served an outline of submissions and a bundle of documents on the respondents. That was done by way of email to Mr David Howe, who had been corresponding with the solicitors for the applicants by email apparently on behalf of the respondents.
The application for interlocutory relief was supported by an affidavit and a bundle of documents. In the bundle of documents was a letter signed by Mr David Howe and Mr Vincent Howe as directors of Viadar dated 15 May 2018. That letter stated:
We are writing to inform you that we are no longer using the services of Hicksons Lawyers for the above mentioned case.
We intend to rebrand and expect to be able to complete the rebrand by the end of June 2018.
Also contained in the material was an email from Mr David Howe to the solicitor for the applicants dated 16 May 2018 which stated:
We don’t intend to appear at the Case Management Hearing tomorrow and will not be engaging any legal representation.
We request that you seek your client’s instructions to allow us the time to rebrand by the end of June 2018.
I am satisfied that the respondents had adequate notice of the application being made today.
BACKGROUND
The following background facts are stated to identify the facts as asserted by the applicants in their evidence and pleadings only for the purpose of dealing with the interlocutory application.
In about 2009, two chefs named Mr Pui and Mr Keung opened a dim sum restaurant in Hong Kong under the name “Tim Ho Wan”. Since about 2009, a chain of restaurants trading under the name “Tim Ho Wan” has been established under the authority of those two chefs, including through a company established by them, Pui Keung Company Limited (PKC). The Tim Ho Wan chain of restaurants includes restaurants operated by franchisees under the authority of “master franchisees”, which have been authorised by PKC to grant franchises for the operation of Tim Ho Wan restaurants. Since 2009, the Tim Ho Wan restaurants have received various culinary awards and have been the subject of favourable restaurant reviews.
The first applicant (THW Singapore) is a Singapore registered company. The second applicant (THW Australia) is an Australian company. Since about December 2012, THW Singapore has been the exclusive master franchisee for the Tim Ho Wan chain of restaurants in Singapore and the Asia Pacific region.
THW Singapore is the registered owner of Australian registered trade mark number 1553202 (Tim Ho Wan Trade Mark). The Tim Ho Wan Trade Mark has been registered from 23 April 2013 in class 43 in respect of the following services:
Restaurants; services for providing food and drink; dim sum restaurants; cafes; cafeterias; snack bars; self-service restaurant services; takeaway food and drink services; food and drink catering; mobile catering services; preparation of food and drink; consultancy services relating to food preparation; Consultancy, advisory and information services in relation to the provision of food and drink (Registered Services).
On or about 16 May 2014, THW Singapore entered into a franchise agreement with Viadar in respect of Viadar opening and operating as a franchisee one or more Tim Ho Wan restaurants in New South Wales (May 2014 Franchise Agreement).
In around February 2015, THW Singapore entered into an agreement with THW Australia which entitled THW Australia to act as the master franchisee in Australia and to authorise others to use the Tim Ho Wan Trade Mark. At this time, THW Singapore and Viadar terminated the May 2014 Franchise Agreement by consent. THW Australia subsequently entered into various franchise agreements and addendums with Viadar, pursuant to which Viadar was granted rights to use the Tim Ho Wan Trade Mark. The present application concerns the franchise agreements entered into by THW Australia and Viadar on or about 28 February 2015 and on or about 28 November 2015 (together, the Franchise Agreements).
Franchise Agreements
It was a term of each of the Franchise Agreements that:
(1)Viadar would not make use of, or permit use of, the “Intellectual Property” (defined in the Franchise Agreements to include the Tim Ho Wan Trade Mark), other than for operating a Tim Ho Wan restaurant in strict compliance with the terms of each of the Franchise Agreements;
(2)Viadar would not use any trade name or trade marks that resembled the Tim Ho Wan Trade Mark, otherwise than as permitted by each of the Franchise Agreements;
(3)any domain name registered by Viadar was to be registered and held in trust by Viadar as agent and trustee for and on behalf of THW Australia (or in the case of the May 2014 Franchise Agreement, for and on behalf of THW Singapore);
(4)Viadar was to pay certain franchise fees, including an initial franchise fee and various royalty fees; and
(5)Viadar would not grant any sub-licence, appoint any franchisee or sub-franchisee, or delegate, transfer or assign any of its rights under each Franchise Agreement.
It was also a term of each of the Franchise Agreements that, following expiry or termination of each agreement, Viadar would:
(1)assign the rights in any relevant domain name to THW Australia or its nominee (or in the case of the May 2014 Franchise Agreement, to THW Singapore or its nominee);
(2)forthwith cease its operations of Tim Ho Wan restaurants, all marketing, promotional and advertising activities, and all display of signage and corporate identity elements;
(3)immediately cease use of “Confidential Information” as defined, “Proprietary Marks” as defined (including the Tim Ho Wan Trade Mark), the “Intellectual Property” and various other matters;
(4)immediately assign all domain names which it had registered or maintained and which contain or incorporate the “Proprietary Marks” as defined (including the Tim Ho Wan Trade Mark) or any similar name or mark, to any party nominated by THW Australia.
Tim Ho Wan restaurants
As at the date these proceedings were commenced, Viadar did not operate any Tim Ho Wan restaurants. Instead, corporate entities related to Viadar operated Tim Ho Wan restaurants in Chatswood, Pitt Street and George Street in Sydney, New South Wales. It is not clear whether Viadar purported to grant a licence to those companies in breach of the Franchise Agreements or whether those companies simply operated as Tim Ho Wan restaurants without any authority or purported authority.
The Chatswood restaurant has been operated since about March 2015 by the second respondent, the Pitt Street restaurant has been operated since about December 2015 by the third respondent, and the George Street restaurant has been operated since about June 2016 by the fourth respondent. THW Burwood Pty Ltd operated a Tim Ho Wan restaurant in Burwood, New South Wales between about December 2015 and March 2017.
On 13 February 2017, THW Australia issued to Viadar a notice to remedy breach. The notice referred to non-payment of, and required payment of outstanding fees (USD452,600 in “franchise fees” and “design fees” and AUD182,257.91 in “royalties”).
The applicants asserted that the breach was not remedied, and on or about 11 April 2017, THW Australia terminated each of the Franchise Agreements.
APPLICATION FOR INTERLOCUTORY RELIEF
As mentioned, the applicants seek interlocutory relief in substantially similar terms to the interlocutory relief which was identified in the originating application filed 11 April 2018.
The applicants claim that the Tim Ho Wan restaurants are being conducted by one or more of the first to fourth respondents in breach of any agreement with the applicants, such agreement having purportedly been terminated. The applicants say that the restaurants that are being operated by the second to fourth respondents are being operated in a way which infringes the Tim Ho Wan Trade Mark within the meaning of ss 120(1), (2)(c) and (2)(d) of the Trade Marks Act 1995 (Cth) (Act).
I am satisfied on the material before me that the applicants have, as against the first to fourth respondents, an arguable case to that effect, in the sense that, if the evidence remains as it is before me, there is a probability that at the trial of the action the applicant will establish that matter.
The fifth respondent appears, on the evidence before me, to be the registered holder of the domain name “timhowan.com.au”. The fifth respondent appears, on the material before me, to be related to the first to fourth respondents. A search of a domain name register indicates that the “registrant contact” is Ms Stephanie Howe and that the email address is related to Viadar. The company extract before me indicates that the registered address of the fifth respondent is the address of Mr David Howe, and that Mr David Howe is a shareholder in the fifth respondent.
Associated with the domain name is a website which contains what appears to be the Tim Ho Wan Trade Mark, or (very) similar device, and a description of the history of the Tim Ho Wan restaurants in the following form:
With several decades of experience in making dim sum, both Chef Mak and Chef Leung joined efforts in building the Michelin-starred brand – Tim Ho Wan. The name is translated from ‘add good luck’ and the single consistent message across the expansion of this brand is to focus on producing affordable, high-quality dim sum. Within a year of opening in 2009, the restaurant was awarded a Michelin star. Utilizing quality ingredients, our dim sum is freshly made-to-order.
We invite you to a way dim sum was meant to be: food so tasty you'll want to share. Tim Ho Wan’s cuisine features classic signature dishes and monthly dim sum specials from the culinary traditions, appreciated and loved by all walks of life.
To date, we have expanded to America, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, Taiwan and Thailand.
The website also contains the device (or similar) on other pages and has a reference to “Tim Ho Wan” restaurants located at Chatswood, Pitt Street and George Street. The website also contains a reference to the Tim Ho Wan restaurant in Melbourne, which is currently being operated under a valid agreement with the applicants, or one of them.
The applicants also cast their case as involving contraventions of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law). They say that the conduct of each of the purportedly infringing Tim Ho Wan restaurants was conduct in trade or commerce and in connection with the supply or possible supply of services. It was pleaded that the second to fourth respondent companies have represented to consumers that the restaurants they operated were operating with the sponsorship or approval of, or with an affiliation with, persons controlling the Tim Ho Wan chain of restaurants when, on the applicant’s case, that is not the position. The applicants claimed that such representations were false or misleading, and that by those representations, the respondents have contravened the Australian Consumer Law by engaging in conduct that is misleading or deceptive or likely to mislead or deceive. They have an Australian Consumer Law claim also against the fifth respondent concerning the domain name and the website. I am satisfied that the applicants have an arguable case, in the sense described above, in these respects.
The applicants seek urgent interlocutory relief in order to restrain the respondents from using the Tim Ho Wan Trade Mark and to secure the domain name or the transfer of it to them. The urgency arises because of a concern that the restaurants are not being operated to the expected standards. There was evidence before me to this effect concerning the quality of the food at the restaurants.
The granting of interlocutory relief requires consideration of at least the following two factors identified by the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-3 (see also: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at 65-72):
The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.
As I have said, I am satisfied that there is a prima facie case that ss 120(1), (2)(c) and (2)(d) of the Act have been breached in the sense that the registered trade mark has been infringed, and I am satisfied of a prima facie case under the Australian Consumer Law. In my view, if the evidence remains as it currently is then there is the probability that at trial the applicants would be entitled to relief.
The facts that I have set out above have been drawn from the material before me and from the statement of claim. In stating that I consider the applicants to have a prima facie case and that there is a probability that they would be entitled to relief if the evidence remains the same, these statements should not be taken to be final findings of fact. The respondents have not adduced evidence on this application and neither have they filed evidence in the proceedings, and the occasion has not arisen for making concluded findings of fact.
As to the balance of convenience, the evidence before me suggests that the respondents are prepared to “rebrand” and have asked to have until the end of June 2018 in which to do so. In light of the history of the dispute between the parties, the applicants take the understandable position that they wish for more certainty, and although the relief initially sought was for an immediate restraint, it was considered that a period of two weeks would be appropriate in order to enable the respondents to be given some time to rebrand. The providing of two weeks also enables the respondents to make an application to this Court should they wish to do so.
I have taken into account also the potential reputational damage which the applicants are concerned about, and the fact that the applicants, by their counsel, have provided the usual undertaking as to damages to the court.
As to the domain name, I propose to make orders restraining the fifth respondent from transferring or disposing of the domain name or, without the consent of the applicants, from altering the content of any website associated with the domain name. I also propose to make an order that the domain name be transferred to the applicant in the event that such an order is not opposed, and the orders that I propose to make will provide a period of time for the fifth respondent to indicate any such opposition.
In my view, it is appropriate also for the respondents to pay the costs of today’s application.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate:
Dated: 18 May 2018
SCHEDULE OF PARTIES
NSD 554 of 2018 Respondents
Fourth Respondent:
THW GEORGE PTY LTD (ACN 602 637 712)
Fifth Respondent:
GILESVALE PTY LTD (ACN 067 641 025)
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