Montres Tudor S.A. v. Concord Watch Co. S.A.

HCMP005789/2000

HCMP 5789/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 5789 OF 2000

Coram: Hon. Sakhrani J in Court

Date of Hearing: 5 and 7 July 2001

Date of Judgment: 25 July 2001

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J U D G M E N T

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1.This is an appeal from the decision of Mr Kestutis Stasys Kripas acting for the Registrar of Trade Marks ("the acting registrar") dated 18 August 2000.

2.The appellant ("the opponent") was the opponent to a trade mark application No 6531 of 1993. The application was made by the respondent ("the applicant") on 28 June 1993 to register in part A of the Register in Class 14 the trade mark "君皇" ("the suit mark") which is transliterated as "Kwan Wong" or more accurately as "Gwun Wong". The Chinese characters in the suit mark mean "a monarch, emperor or king". The goods to be covered by the registration were :

" precious metals and their alloys and goods in precious metals or coated therewith, not included in other classes; jewellery, precious stones; horological and chronometric instruments."

3.The Registrar of Trade Marks accepted the suit mark for registration subject to the following conditions :

" the transliteration of the Chinese characters forming the mark are 'Kwan Wong' meaning 'a monarch, Emperor'."

The application was advertised in the Government Gazette on 16 December 1994. On 28 April 1995 the opponent filed a notice of opposition to the application. The opponent opposed the application on the basis that it was the proprietor of the registered trade mark "帝舵" (Tai To or Tai Tor) and "TUDOR MONARCH and shield device" registered in Hong Kong under No. 3975 of 1991 and No. 333 of 1991 in Class 14. The opponent also relied on the extensive use in Hong Kong of the unregistered marks "MONARCH" in English and in Chinese "王者" (Wong Tse) in respect of watches made and sold by the opponent. The opponent claimed to have a substantial reputation and goodwill in its registered and unregistered marks. It was alleged that the suit mark so closely resembled the opponent's marks as to be likely to deceive or to cause confusion.

4.The applicant filed a counter statement on 20th July 1995. The opponent filed evidence by way of the statutory declarations of Cheung Kam Ping ("Cheung") and Stephen Martin Hayward ("Hayward") both made on 26 June 1996. Thereafter the applicant filed evidence by way of the statutory declaration of Shirley Mok ("Mok") made on 15 December 1997. Although the opponent had the opportunity to file evidence in reply, it chose not to do so. The matter was then fixed before the acting registrar for hearing. The opponent's agent informed him that they were instructed not to appear at the hearing. The hearing before the acting registrar proceeded in the absence of the opponent or its representatives. On 18 August 2000 in a careful and reasoned decision given by him, the acting registrar held that the opposition failed and that the application should proceed.

5.The acting registrar dealt with the matter on the basis that the opponent opposed the application on a number of grounds as set out in its notice of opposition. However, at the hearing of the appeal before me the opponent relied only on the ground that the suit mark is unregistrable as a trade mark under s. 12(1) of the Trade Marks Ordinance (Cap. 43). This provides as follows :

" It shall not be lawful to register as a trade mark or part of a trade mark any matter the use of which would be likely to deceive or would be disentitled to protection in a court of justice or would be contrary to law or morality .............................."

6.It was contended that the suit mark would be likely to deceive or would be disentitled to protection in a court of justice.

7.By s. 79(2) of the Ordinance the court shall have and exercise the same discretionary powers as under the Ordinance are conferred upon the acting registrar. Although the appeal is by way of rehearing, it is well established that at the hearing of the appeal great weight should be attached to the decision of the acting registrar. In Prince Sovereign and Device Trade Mark [1989] 2 HKC 247 Jones J held that great weight must be attached to the decision of the Registrar who was an expert in his field dealing with such applications and his decision should not lightly be disturbed unless he had improperly exercised his decision either by making a mistake of law or had clearly come to a wrong conclusion. This was also the effect of Wellcome Foundation Ltd -v- Otsuka Pharmaceutical Co. Ltd.[1989] 2 HKLR 365 and Re Mitac [1992] 2 HKC 22. In my view those authorities should be followed. In my judgment great weight must be attached to the decision of the acting registrar which should not be lightly disturbed.

8.As is correctly stated by the acting registrar in para. 41 of his decision, before an opponent can mount an opposition under s. 12(1) it must first overcome the burden of establishing that its mark or marks are known to a substantial number of persons in Hong Kong. If the opponent discharges this burden the onus shifts to the applicant to satisfy the tribunal that there is no reasonable likelihood of deception arising among a substantial number of persons if the mark proceeds to registration. It is accepted that the acting registrar correctly stated the onus of proof.

9.On the material before the acting registrar he proceeded on the basis that the opponent relied on its reputation in Hong Kong in two registered trade marks "帝舵" (Tai To) being No. 3975 of 1991 and "TUDOR MONARCH and shield device" being No. 333 of 1991 and also in its two unregistered marks namely, the English mark "MONARCH" and the Chinese mark "王者" (Wong Tse) which is a translation of "MONARCH". He held that in respect of the marks "帝舵" (Tai To), "TUDOR" and "MONARCH" the opponent had established sufficient cognizance of these marks to mount the opposition under s. 12(1) (paras. 60 and 61 of his decision). Thus the threshold onus was established by the opponent. That being so, the onus then shifted to the applicant to satisfy him that there was no reasonable likelihood of deception arising among a substantial number of persons if the mark proceeded to registration. The applicant duly discharged that onus. The acting registrar held that having regard to the use of the marks "帝舵" (Tai To), "TUDOR" and "MONARCH" by the opponent there was no reasonable likelihood of deception arising among a substantial number of persons if the suit mark "君皇" (Gwun Wong) proceeded to registration. The acting registrar compared "帝舵" (Tai To), "TUDOR" and "MONARCH" with the suit mark "君皇" (Gwun Wong) and came to the view that there was no deceptive similarity between the opponent's marks and the suit mark.

10.In the course of the hearing of the appeal it became clear that Ms. Tam, counsel for the opponent, was not challenging the acting registrar's findings in respect of his comparison of the opponent's marks "帝舵" (Tai To), "TUDOR" and "MONARCH" with the suit mark "君皇" (Gwun Wong). She clarified that the opponent's case was that the suit mark "君皇" (Gwun Wong) was deceptively similar to the opponent's unregistered mark "王者" (Wong Tse).

11.The acting registrar dealt with the opponent's use of the mark "王者" (Wong Tse) in para 62. He said this :

" This mark has not been registered. It does not appear on any watch face and no evidence has been adduced that it has ever been used as a trade mark alone, or even in close proximity to the English word "MONARCH". I have already referred to the advertisements exhibited as "SMH-6". In these, the characters appear only as part of the overall expression "帝舵表王者系列". There is no evidence relating to the sales of any watch of the opponent sold by reference to "王者" as a trade mark. The characters do not appear in any catalogue or price list issued by the opponent. I am not satisfied that the opponent has discharged its burden in establishing a sufficient cognizance of this mark to mount an objection under section 12(1)."

12.As he was not satisfied that the opponent had discharged its burden in establishing a sufficient cognizance of the mark "王者" (Wong Tse), that was the end of the matter in respect of the opposition under s. 12(1). The acting registrar did not need to consider anything further as the onus did not shift to the applicant to satisfy him that there was no reasonable likelihood of deception arising amongst a substantial number of persons if the suit mark proceeded to registration.

13.Ms Tam submitted that the acting registrar was wrong to hold that the opponent failed to discharge its burden in establishing a sufficient cognizance of the mark "王者" (Wong Tse).

14.The questions to consider are :

（1） whether the opponent had discharged the threshold onus in regard to the mark "王者" (Wong Tse); and if so,

（2） whether the suit mark "君皇" (Gwun Wong) is deceptively similar to the mark "王者" (Wong Tse).

15.On the first question, Mr Yan, counsel for the applicant, submitted that the acting registrar was clearly correctly in concluding that the opponent had not established sufficient use of the mark "王者" (Wong Tse) to mount an opposition based on s. 12(1). There was evidence before the acting registrar in the form of the statutory declarations of Cheung and Hayward to show that since 1992 the opponent had extensively advertised its marks "帝舵" (Tai To), "TUDOR" and "MONARCH". In the same advertisements exhibited as SMH 6 one can see the mark "王者" (Wong Tse) being used. However, Mr. Yan submitted that the use of the mark "王者" (Wong Tse) was not use as a trade mark but merely use as an advertising slogan.

16.It is relevant to consider the use only up to the date of the application namely 28 June 1993. Any use by the opponent after that date is to be disregarded for the purpose of the opposition.

17.The evidence of use which is relied on by the opponent are the advertisements which have been exhibited as SMH 6 to the statutory declaration of Hayward. The exhibit SMH 6 contains numerous very similar, if not identical, advertisements appearing mainly on the back cover of various publications circulated in Hong Kong.

18.There is however, no evidence of any sales of watches by reference to the mark "王者" （Wong Tse). There is also no evidence that the mark "王者" (Wong Tse) has ever appeared in any catalogue or price list issued by the opponent prior to the relevant date, 28 June 1993. Ms. Tam submitted that catalogues and price lists are not intended for ordinary consumers but are for wholesalers and that it was the use in the advertisements that was important. However, Mr. Yan correctly submitted that the opponent's own evidence shows that the catalogue referred to in para. 7 of Hayward's declaration was widely distributed by a well known watch retailer, Dickson Watch & Jewellery Co Ltd. albeit that such catalogue was issued after the relevant date. In my view, this demonstrates that Ms. Tam's submission that catalogues and price lists are not intended for ordinary customers but only for wholesalers cannot be accepted.

19.The evidence shows that by the relevant date the only relevant use of the mark "王者" ( Wong Tse ) has been in the advertisements of the type exhibited as SMH 6. The mark has not been used as a trade mark alone. The advertisement at page 173 of Bundle E1, which is very similar to the other advertisements, shows a picture of a watch with the marks "TUDOR" and "MONARCH" on the face of the watch. The first line of the advertisement contains the Chinese characters "帝舵表王者系列”(Tai To Biu Wong Tse Hai Lid) meaning 'Tudor watch Wong Tse range'. The 1st three characters "帝舵表" (Tai To Biu) are emphasized in script in stylized characters and the emphasis is on these characters. "王者" (Wong Tse) appears as the name of a range of "TUDOR" watches. The other characters are not stylized. The 2nd line of the same advertisement contains the Chinese characters "一表人材王者之選" (Yat Biu Yan Choi Wong Tse Chee Suen) meaning "Dashing (handsome) - The choice of kings". I bear in mind that the translation of "MONARCH" is "Wong Tse". Despite this, I am satisfied that the use of the mark "王者" (Wong Tse) as shown in the advertisements has not been use of the mark as a trade mark. Apart from the Chinese text of the advertisements, the English mark 'TUDOR' appears prominently in the advertisement. I am satisfied that the mark "王者" (Wong Tse) has not been used as the brand name of the opponent's watch but as a range of the opponent's "TUDOR" watches and as an advertising slogan. In short, it is not trade mark use.

20.I am satisfied that the acting registrar correctly held that the opponent had failed to discharge the threshold onus necessary to mount the opposition under s. 12(1).

21.In case I am wrong on this, I go on to consider whether the mark "王者" (Wong Tse) is deceptively similar to the suit mark "君皇" (Gwun Wong).

22.It is common ground that the test to be used in applying s. 12(1) is the Smith Hayden test (Smith Hayden & Co's application [1946] 63 RPC 77 as modified in "Bali's" [1969] RPC 472). The test as adapted for this appeal is as follows :

" Having regard to the use of "王者" (Wong Tse) in Hong Kong by the opponent is the Court satisfied that "君皇" (Gwun Wong) if used in a normal and fair manner in connection with any goods covered by the proposed registration will be unlikely to cause deception amongst a substantial number of persons?"

23.There is no dispute that "王者" (Wong Tse) and "君皇" (Gwun Wong) mean the same thing. The two characters mean "king" or "emperor".

24.In para. 8 of his statutory declaration Cheung pointed out that the pronunciation of "君皇" (Gwun Wong) was very different from the English word "CONCORD". He also stated that "CONCORD" meant "agreement, harmony," which is different from "king" or "emperor" which is the meaning of "君皇" (Gwun Wong).

25.However, in the statutory declaration of Mok filed thereafter, she stated in para. 6 as follows :

" As Asia has increasingly become an important market for "CONCORD" watches and as many customers or potential customers for these watches in Asia are Chinese, the Applicant had, for a number of years, wanted to adopt and use a Chinese mark in relation to "CONCORD" watches. The mark which was ultimately devised and chosen in 1993 was "君皇" ("Gwun Wong"). The Applicant intends to use this mark alongside the "CONCORD" Trade Mark on and/or in relation to its "CONCORD" watches. As in the case of other Chinese marks adopted by the manufacturers of other Swiss watches (including the Opponent), the Chinese mark will not be applied on the watches themselves but will be used on tags or labels attached to the watches and in Chinese language advertising, promotional and sales literature. In devising the mark "君皇", the Applicant was concerned to devise a Chinese mark which was as close in pronunciation as possible to "CONCORD" whilst at the same time conveying a meaning and idea which was consistent with the image of "CONCORD" watches."

26.This evidence, as Mr Yan has correctly submitted, was unchallenged. No evidence was filed by the opponent in reply nor was there any attempt made by the opponent to cross-examine Mok. Indeed, the opponent did not even appear at the hearing before the acting registrar. As that evidence is unchallenged I have no doubt that it should be accepted by the Court.

27.Cheung also stated that there was a likelihood of confusion between the applicant's watches and related products and the opponent's watches and related products. He stated that the likelihood of confusion was enhanced by the fact that the majority of people in Hong Kong are Chinese speaking and do not read English and will, therefore, refer to the trade marks of both the applicant's and the opponent's products by reference to their Chinese names. On the other hand, Mok did not agree with this view. Her experience has been that in relation to imported items, such as Swiss watches, members of the Chinese speaking trade and public in Hong Kong would use both the English and Chinese marks to identify such items and would not, or only very seldom, use only the Chinese mark. She also stated in para. 14 of her statutory declaration that :

" ......... Indeed, it would be very difficult, if not impossible, to use only the Chinese mark to identify Swiss watches as invariably, the only mark appearing on the watch face is the English mark and not the Chinese mark. Indeed, it can be seen from all of the opponent's own advertisements that even if the whole advertisements is in Chinese, the English mark "TUDOR" will invariably be represented very prominently somewhere in the advertisement."

28.It seems to me that Mok's evidence is to be preferred to Cheung's evidence. Mok is certainly much more experienced in the watch trade in Hong Kong having been involved in it for over 15 years. She also has experience in the advertising and public relation activities of various brands of timepieces including Swiss watches. Cheung, on the other hand, is the chief accountant of Rolex (Hong Kong) Ltd. which is a subsidiary of the opponent and it is not known for how long he has held this position. There is no suggestion that he has been involved in the marketing or the advertising of Swiss watches. I am satisfied that it is not likely that the majority of the population in Hong Kong would identify the opponent's watches only by reference to the Chinese mark "王者" (Wong Tse) without reference to the English mark "TUDOR". The advertisements produced show that the English mark "TUDOR" is a prominent feature of the advertisements as are the stylized characters "帝舵表" (Tai To Biu).

29.The opponent relies on the fact that both marks mean the same thing and convey the same overall idea and meaning and it was submitted that therefore the marks are deceptively similar.

30.In the Australian case of Cooper Engineering Company Proprietary Limited -v- Sigmund Pumps Limited (1952) 86 CLR 536 the question that the Court considered was whether the word "Rainmaster" so resembled the word "Rain King" as to be likely to deceive. It was held that "Rainmaster" did not so resemble the word "Rain King" as to be likely to deceive. The fact that two marks may convey the same idea is not sufficient in itself to create a deceptive resemblance between them. The Court said in Cooper at 538 :

" The proper approach to the answer to this question is well settled. It was summed up by Lord Parker (then Parker J.) in In the Matter of an Application by the Pianotist Company Ltd. for the Registration of a Trade Mark (1), "You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion ― that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods ―then you may refuse the registration, or rather you must refuse the registration in that case." To the same effect see Australian Woollen Mills Ltd. v. F. S. Walton & Co. Ltd. (2); Reckitt & Colman (Aust.) Ltd. v. Boden (3), in this Court. It is sufficient if persons who only know one of the marks and have perhaps an imperfect recollection of it are likely to be deceived : Aristoc Ltd. v. Rysta Ltd. (4). The onus of proving that there is no reasonable likelihood of deception lies upon the applicant for registration. If the question is left in dubio the application must be refused : Eno v. Dunn (5).

In the present case the prefix of the two words is the same word "Rain", but the suffix "master" differs from the suffix "King" in appearance and in sound. This makes the two marks as a whole quite distinct and the marks must be judged as a whole. "Rainmaster" does not look like "Rain King" and it does not sound like it. There is not a single common letter in master and in King. The two words are so unlike to the eye and to the ear that counsel for the appellant was forced to rely on the likelihood of deception arising from the two words conveying the same idea of the superiority or supremacy of the article as a mechanism for making a spray similar to falling rain or artificial rain as it was called during the argument. But it is obvious that trademarks, especially word marks, could be quite unlike and yet convey the same idea of the superiority or some particular suitability of an article for the work it was intended to do. To refuse an application for registration on this ground would be to give the proprietor of a registered trademark a complete monopoly of all words conveying the same idea as his trademark. The fact that two marks convey the same idea is not sufficient in itself to create a deceptive resemblance between them, although this fact could be taken into account in deciding whether two marks which really looked alike or sounded alike were likely to deceive."

31.The acting registrar followed the decision in Cooper's case and in my view he cannot be faulted for doing so. I respectfully adopt the Court's approach in Cooper's case and have no hesitation in following it. In my judgment it is important to bear in mind that the two marks should be judged as a whole and not as to a part or parts thereof. Also, the fact that two marks convey the same idea is not sufficient in itself to create a deceptive resemblance between them.

32.It is also stated in para 17 - 08 of Kerly's "Law of Trade Marks and Trade Names" 12th Edn. that :

" ........with word marks, the court is apt to be more impressed by the dangers of giving the plaintiff what amounts to a monopoly in a large class of words"

33.Taking the marks as a whole I have no hesitation in coming to the view that "王者" (Wong Tse) and "君皇" (Gwun Wong) look different. In my view the two marks also sound different. As they look and sound different, in my judgment, the two marks are not deceptively similar.

34.I have taken into account the imperfect recollection test which the acting register correctly stated as follows :

" The question is not whether if a person is looking at two trade marks side by side there would be a possibility of confusion; the question is whether the person who sees the proposed trade mark in the absence of the other mark, and in view only of his general recollection of what the nature of the other mark was, would be liable to be deceived and to think that the trade mark before him is the same as the other, of which he has a general recollection."

Even taking this into consideration the two marks do not appear to me to be deceptively similar. There are not similar either in appearance or in sound so as to be likely to cause confusion.

35.It is accepted that the two marks convey the same idea or meaning namely, "king" or "emperor". The concept of royalty is, on the evidence, a concept which watch traders do wish to use in their marks for watches and timepieces. The evidence shows that there are in Hong Kong registered trade marks as well as applications for registration for various marks conveying the idea of royalty e.g. the mark "AIR KING", "ORIENT KING DIVER", "ROY KING", "KING STAR", "海皇" (Hoi Wong) (meaning Sea King), "IMPERIAL", "EMPEROR", to name a few. The evidence demonstrates that watch traders do want to use the concept of "king" or "royalty" or "emperor" to sell watches. The Court should not grant a monopoly to the opponent over the concept of royalty for watches and timepieces. This is particularly so where, in my judgment, the two marks are not deceptively similar.

36.An important feature to bear in mind is that the applicant's "CONCORD" watches are not cheap items but are marketed as exclusive high-class timepieces aimed at the top end of the market. Likewise, the opponent's watches are by no means cheap. The acting registrar found, correctly in my view, that both the applicant's and the opponent's watches are likely to be found for sale in the same outlets. As these are expensive items it is important to consider whether a purchaser would purchase the watches by way of a casual purchase or on impulse. When considering whether or not confusion is likely to arise, it is necessary to consider all of the surrounding circumstances which are likely to exist when a purchase is made. The fact that the watches and timepieces are expensive items makes it likely that purchasers would buy them after time and thought rather than on impulse. (Re Mitac [1992 ] 2 HKC 22). In my view it is important to bear this factor in mind. As these are not items which a purchaser would, in my view, purchase by way of a casual purchase or on impulse, it is, in my judgment, unlikely that confusion would arise as sufficient care would be exercised by the purchaser when purchasing the watches. In my judgment there is no reasonable likelihood of confusion.

37.The opponent's mark is to be considered as it has in fact been used and the applicant's mark in notional fair use i.e. any normal and fair use which as registered proprietor the applicant would be entitled to make use of the mark in the ordinary course of business in respect of the goods for which it is registered (para. 10 - 04 Kerly's "Law of Trade Marks and Trade Names" 12th Edn.). In "Black Magic" [1940] 58 RPC 91 Morton J. @ 103 considered that the true test is whether the use of the mark by itself, in any manner which can be regarded as fair use of it, will be calculated to deceive or cause confusion.

38.In my view, it is important to consider notional fair use of the mark "君皇" (Gwun Wong) not notional unfair use of it.

39.The evidence shows that the applicant is the registered proprietor of the trade mark "DELIRIUM" registered in Hong Kong. By the application no. 9539 of 1993 the applicant applied to register the Chinese version of this mark namely "帝龍" (Tai Lung). This is the subject matter of the appeal in Miscellaneous Proceedings No. 5788 of 2000 which is also before me. Ms Tam submitted that in considering notional fair use of the mark "君皇" (Gwun Wong) the Court should consider as notional fair use the use by the applicant of the suit mark together with the Chinese mark "帝龍" (Tai Lung) to denote that DELIRIUM was a range of CONCORD watches. She submitted that on the evidence "DELIRIUM" was indeed a range of "CONCORD" watches and fair notional use of "君皇" (Gwun Wong) would suggest that it would be used in the same manner as the opponent has used the mark "王者" (Wong Tse) in advertisements namely, "帝舵表王者系列" (Tai To Biu Wong Tse Hai Lid) meaning 'Tudor watches Wong Tse range'. It was submitted that if used in the same manner, the mark "君皇" （Gwun Wong） would appear in advertisements as "君皇表帝龍系列”(Gwun Wong Biu Tai Lung Hai Lid) meaning 'Concord watches Delirium range' and the risk of confusion was obvious. I cannot accept Ms. Tam's submissions. There is no evidence at all that the applicant has advertised or will advertise the suit mark in the same manner as the opponent has advertised its mark "王者" (Wong Tse). It is notional fair use that has to be considered not notional unfair use. Notional fair use does not, in my judgment, embrace use of the mark in a manner which is confusingly similar to the manner in which the opponent has used the mark. To suggest that the applicant will or may use the suit mark in such a manner as that used by the opponent for its mark in a particular way which is confusing is not notional fair use.

40.In any event, even if the mark "君皇" (Gwun Wong ) is used in advertisements together with the mark "帝龍" (Tai Lung) in the manner suggested by Ms. Tam or indeed in any other way together with the mark "帝龍" (Tai Lung) so as to indicate that it is a range of "CONCORD" watches, I am satisfied that because of the dissimilarity between the two marks there is no reasonable likelihood of confusion.

41.It follows from my decision that I am also the view that if the suit mark is applied to the same type of goods which are sold by the opponent that would not amount to passing off.

42.In my judgment the opposition under section 12(1) fails. The appeal is dismissed. I make an order nisi that the costs of the proceedings be paid by the opponent to the applicant such costs to be taxed and paid forthwith.

Representation:

Ms Winnie Tam instructed by M/s Lovells for Appellant (Opponent)

Mr John Yan instructed by M/s Wilkinson and Grist for Respondent (Applicant)

The Department of Justice for Registrar of Trade Marks (absent)

(1) (1906) 23 R.P.C. 774, in a passage appearing on p. 777.
(2) (1937) C.L.R. 641, at p. 658.
(3) (1945) 70 C.L.R. 84.
(4) (1945) A.C. 68, at p. 86
(5) (1890) 15 App. Cas. 252, at p. 256.