Hong Kong Transit Publishing Co. Ltd. v. The Director of Intellectual Property in His Capacity As the Registrar of Trade Marks

HCAL002061/2000

HCAL 2061/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO. 2061 OF 2000

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Coram: Hon Hartmann J in Court

Dates of Hearing: 9, 10, 12 January 2001

Date of Handing down Judgment: 31 January 2001

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J U D G M E N T

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1. In terms of a letter dated 12 June 2000, the Registrar of Trade Marks ('the Registrar') refused to allow the Applicant an extension of time within which to file notices of opposition to the registration of certain trade marks. The Applicant contends that the decision was unlawful in that it contained errors of law, was a decision no reasonable Registrar could make and was vitiated by procedural impropriety. The Applicant seeks an order of certiorari quashing the decision and an order of mandamus obliging the Registrar to reconsider the decision in accordance with law.

The relevant background

2. On 26 March 1999, a company called Morgan & Banks Ltd applied to the Registrar to register 4 trade marks. The Registrar was satisfied that no grounds existed to refuse the applications (or accept them subject to conditions) and, in terms of section 14 of the Trade Marks Ordinance Chapter 43 ('the Ordinance'), required Morgan & Banks to advertise the applications. The first two were advertised in the Gazette of 21 January 2000 and the remaining two in the edition of 11 February 2000.

3. The Ordinance provides that persons who wish to oppose the registration of advertised trade marks must file a notice of opposition with the Registrar and must do so within a prescribed time. In respect of this prescribed time, Rule 23 of the Trade Mark Rules directs that a notice is to be filed with the Registrar 'within 2 months from the date of any advertisement in the Gazette'. In the absence of any such notice, the Registrar is obliged to proceed register the trade mark unless the application has been accepted in error or the Chief Executive otherwise directs. However, the strict mandate of the time limits are ameliorated by vesting in the Registrar a discretion to grant extensions of time. This discretion, contained in Rule 91 of the Trade Mark Rules, states:

"If in any particular case the Registrar is satisfied that the circumstances are such as to justify an extension of the time for doing any act or taking any proceeding under these rules, not being a time expressly provided in the Ordinance or prescribed by rule 45(3) or 49(5), he may extend the time for so doing upon such terms as he may direct, and shall give notice thereof to other interested parties. The extension may be granted though the time has expired for doing the act or taking the proceeding in question."

4. The discretion is a wide one. There are no stated restrictions. The Registrar must be satisfied in each case placed before him that 'the circumstances are such as to justify an extension'. The discretion is equally wide as to the terms of any extension, the Registrar being entitled to impose 'such terms' as he thinks fit.

5. In the present case, when the applications by Morgan & Banks came to the attention of the Applicant, it sought to oppose the registration of 3 of those marks. However, the 2 month deadline for the filing of notices of opposition had already expired in respect of 2 of the applications; that is, the 2 advertised in the Gazette of 21 January 2000. Accordingly, the solicitors representing the Applicant applied to the Registrar to be granted an extension. The Registrar replied to the effect that the application for extensions of time had been provisionally refused. This was subject to the Applicant's right to have an oral hearing before any final determination was made. The Applicant requested that such an inter partes hearing take place and it was set down for 7 June 2000.

6. At the hearing both parties were legally represented and submissions were made. At the conclusion of the hearing the Registrar reserved her decision.

7. On 12 June 2000, some 5 days after the hearing, the Registrar declined to grant the Applicant's request for extensions of time, ordering the Applicant to pay costs. It is this decision which is the subject of review. The Registrar's decision was communicated to the parties in terms of a letter. This letter, some 3 pages in length, set out the general background, gave a summary of the submissions made and ended with brief reasons why the Registrar had decided not to grant the Applicant's request.

Applicable law on 7 June 2000.

8. In 1994, in the case of Bristol-Myers Squibb Company v. the Director of Intellectual Property in her capacity as the Registrar of Trade Marks [1995] 1 HKC 171 ('Bristol-Myers'), Kaplan J laid down guidelines concerning the manner in which the Registrar was to exercise his discretion under Rule 91 of the Trade Marks Rules. Expressed broadly, Kaplan J directed that, in considering whether or not to grant an extension of time, the Registrar must first be satisfied that a satisfactory or adequate explanation for the delay had been given. In this regard the learned judge held that it was:

"incumbent upon the extension seeker to first satisfy the Registrar that there was an explanation as to why the generous two month limit had not been complied with." [my emphasis]

9. He concluded:

"I am quite satisfied that the decision was wrong in law because the decision maker [the Registrar] did not direct herself properly on the law. She should have directed herself that before exercising her discretion a satisfactory or adequate explanation for the delay had to be given. Had she done this, she would have found that there was no satisfactory explanation put forward and that in those circumstances, it could not have been a proper exercise of discretion to extend time." [my emphasis]

10. In light of this judgment, the Registrar issued a circular dated 30 December 1994 for the guidance of the profession. That circular read (in part) as follows:

"Following the judgment of Kaplan J in [Bristol-Myers] dated 22 November 1994 the Registrar will, when considering the exercise of his discretion under Trade Marks Rule 91 to grant or refuse a request for an extension of time, be guided by the principles laid down in Atwood v Chichester (1878) 3 QBD 722 as amplified by Revici v Prentice Hall (1969) 1 AER 722 and Regalbourne Ltd v East Lindsey District Council (1992) COD 493. Those seeking the Registrar's indulgence to grant an extension of time must provide the Registrar with a satisfactory explanation as to why the relevant time limit was not met. Delay is not adequately explained by merely provided an account of the time scale involved."

11. This then was the law applicable to the exercise of the Registrar's discretion on 7 June 2000 when the Applicant's legal representatives sought their extensions of time by making oral representations to the Registrar.

12. The following day, however, the applicable guidelines were to be materially changed.

The 'T-Mobil' judgment.

13. On 8 June 2000, the day after the hearing and when the Registrar was still considering her decision, a judgment written by myself in the matter of Mobil Petroleum Company Inc v. the Director of Intellectual Property in his capacity as the Registrar of Trade Marks HCAL 19/2000 ('T-Mobil') was handed down.

14. In this judgment, I considered recent developments in the law concerning the principles applicable generally to the exercise of discretion by persons in the position of the Registrar. I concluded that, while there had been 2 contending schools of thought - the approach adopted in Bristol-Myers and what I will call the 'generalist' approach - it was clear that the law was now settled and that the 'generalist' approach was to be preferred. I based this conclusion essentially on 2 recent decisions of the English Court of Appeal in Mortgage Corporation Ltd v. Sandoes, the Times, 27 December 1996 and Finnegan v. Parkside Health Authority [1998] 1 WLR 411. In particular, I accepted the dicta of Hirst LJ in Finnegan (at page 420 and 421) when he said:

"If there was any doubt as to the strength and breadth of guidance given by Costellow's case in the general application of R.S.C., Ord. 3, r. 5, that in my judgment was finally laid to rest to Mortgage Corporation Ltd v. Sandoes, which follows precisely the same line of principle, and again expressly rejects the notion that the absence of a good reason is always and in itself sufficient to justify the court in refusing to exercise its discretion; that case moreover lays down clear guidelines requiring the court to look at all the circumstances, and to recognise the overriding principle that justice must be done."

15. I concluded my judgment by saying the following:

"While there may, at the time when Kaplan J gave his judgment in Bristol-Myers, have been two differing approaches, I am satisfied that with the judgments in Mortgage Corporation and Finnegan the law is now settled as to the correct principle to be adopted in the exercise of the court's discretion under Ord. 3 r. 5. It is not the principle adopted by Kaplan J; namely, that before any discretion is exercised, there must first be an acceptable reason for any delay. It is instead the principle that all matters, including the adequacy of any reason for delay, must be considered, the one to be weighed against the other, in the exercise of the court's discretion.

I agree with the observation of Hirst LJ that the wording of Ord. 3 r. 5 confers the widest measure of discretion. I would add that so too does the wording of Rule 91 of the Trade Marks Rules and it is, in my judgment, a discretion which must now in law, be exercised in accordance with the principles laid down in Mortgage Corporation and Finnegan."

The Registrar's decision to follow 'T-Mobil'.

16. In her affirmation of 28 November 2000, the Registrar confirmed that, although the T-Mobil judgment had only been handed down the day after the hearing, she nevertheless acted upon it. As she said in paragraph 20 of that affirmation:

"After I had read the decision in the T-Mobil Case, I applied the principles laid down herein, namely, in exercising my discretion in respect of an application for extension of time, I need to look at 'all the circumstances of the case' before reaching a decision."

17. She did not, therefore, consider herself bound by the principles laid down in Bristol-Myers, a judgment which at the time of the hearing had been binding upon her. Put simply, she heeded a different, broader set of principles in deciding how best to exercise her discretion.

18. The Applicant complains, however, that, while the Registrar may have purported to follow the principles laid down in T-Mobil, nothing appears from the face of her letter of 12 June 2000 or from the reasoning contained therein to illustrate that she did in fact follow those principles. Mr Yan, for the Applicant, argued that it was inexplicable that, in light of such a 'watershed change', the Registrar had not once referred to the T-Mobil decision by name or clearly spelt out the new principles by which she had been guided. I find his submissions persuasive in this regard although, on close examination, the reasons spelt out by the Registrar in her letter can perhaps be interpreted as following the new broader approach. She begins her reasoning, for example, by writing:

"Having carefully considered all the circumstances of the case and submissions made by both parties, I am not satisfied that the Intended Opponent has pursued with reasonable diligence."

19. But, even accepting that the Registrar did adopt the new guidelines, it still raises the fundamental question: why did she not in those circumstances inform the parties that she intended to be guided by a revised framework of principles and gave to the parties an opportunity to advocate their positions in the light of that revised framework?

The issue of procedural impropriety.

20. In her affirmation of 28 November 2000, the Registrar said that it was the practice of the Trade Marks Registry to give only 'brief reasons' in its letters of decision and thereafter to give a fully ruling if an aggrieved party sought it. In fact, annexed to a later affirmation was a draft of her full ruling. What is notable about this draft is that the Registrar has gone to considerable pains to record the change in law brought about by T-Mobil and to analyse the impact of the new principles. Clearly, therefore, from the face of her own carefully structured reasoning, this change in the law was for her a matter of decisive importance. But if that was the case, why did the Registrar not call for a second hearing or advise the parties of the new judgment and seek written submissions?

21. It has been contended that the Registrar's failure in this regard could have been of no real consequence as she already had all the salient facts and submissions before her and it was simply a question of approaching them with a changed emphasis. With respect, I believe that avoids the issue. The decision which the Registrar had to make was whether or not she would exercise the broad discretion vested in her to grant the Applicant extensions of time. In such circumstances, how she approached the exercise of her discretion was of critical importance: it was the heart of her decision.

22. Procedural fairness dictates two essentials on the part of a tribunal given the power to make administrative decisions which may act to the detriment of persons appearing before it. First, it must act without bias and, second, it must afford the parties an opportunity to present their case. As Lord Denning said in Kanda v Government of Malaya [1962] AC 322 (at 337): 'The rule against bias is one thing. The right to be heard is another. These two rules are the essential characteristics of what is often called natural justice. They are the twin pillars supporting it.'

23. While not every decision of an administrative character attracts to it the duty to act fairly, I am satisfied that the Registrar, in performing her statutory duties, is at all times constrained to act in accordance with the rules of procedural fairness.

24. If one of the twin pillars of procedural fairness is the right to be heard, in my view that must give to parties before a tribunal the right not simply to present facts relevant to its case but to advocate that case by way of submissions and argument. Put another way, procedural fairness demands not only a fair hearing before an unbiased tribunal but a decision that is based on evidence and is attentive to the arguments presented. In this regard, for example, see R v Deputy Industrial Injuries Commissioner ex parte Moore [1965] 1 QB 456 where, in a Court of Appeal decision, Diplock LJ said that, where personal bias is not in question, the rules of natural justice can be reduced to two. First, the tribunal must base its decision on evidence and, second, it must listen fairly to the contentions of all persons who are entitled to be represented before it. In respect of this second rule, he continued (at page 489G):

"The second rule simply requires that a deputy commissioner, in determining an appeal, must give fair consideration to the contentions of all persons who are entitled under the Act and regulations to make representations to him...

Where ... there is a hearing, whether requested or not, the second rule requires the deputy commissioner (a) to consider such "evidence" relevant to the question to be decided as any person entitled to be represented wishes to put before him; (b) to inform every person represented of any "evidence" which the deputy commissioner proposes to take into consideration, whether such "evidence" be proffered by another person represented at the hearing, or is discovered by the deputy commissioner as a result of his own investigations; (c) to allow each person represented to comment upon any such "evidence" and, where the "evidence" is given orally by witnesses, to put questions to those witnesses; and (d) to allow each person represented to address argument to him on the whole of the case. This in the context of the Act and the regulations fulfils the requirement of the second rule of natural justice to listen, fairly to all sides."

25. In my judgment, when it is relevant, there can be no difference in principle between 'evidence' and 'legal precedent' which a tribunal proposes to take into consideration in reaching its decision.

26. What, in my view, amounted in this case to a breach of procedural fairness was the fact that, after the parties had been given an opportunity to make their representations, the Registrar came across a legal authority which materially - indeed, decisively - changed the manner in which she believed she must approach the exercise of her discretion. Notwithstanding this, she failed to give the parties an opportunity to make fresh representations, either in writing or orally.

27. I accept that T-Mobil was advantageous to the Applicant, the unsuccessful party before the Registrar. But, if anything, I am of the view that this makes the Applicant's grievance the greater. The new judgment presented to the Applicant an opportunity to advance its case on more open and friendly terrain. It was, however, denied the opportunity to attempt to exploit that advantage.

28. It has been suggested that the Applicant's representatives must have become aware of the new judgment and accordingly they could have sought a new hearing. But the obligations of procedural fairness to which reference has been made are imposed on the tribunal not on the parties who may appear before it. It is for the tribunal - in this case the Registrar - to ensure its procedures accord with what has traditionally been called natural justice.

29. On the basis, therefore, that the Registrar chose to rely on the principles laid down in T-Mobil in exercising her discretion without giving the parties the opportunity to make representations as to how they believed she should, in the materially altered circumstances, approach the exercise of her discretion, I am of the opinion her ruling cannot stand. Her decision must be quashed and the matter remitted back so that this time representations may be made.

30. Counsel for the Applicant and the Respondent have addressed me (both cogently and in depth) on the remaining issues which fall under the general heading of 'Wednesbury' unreasonableness. While I am indebted to them for their assistance, I do not believe it would be proper for me to embark now on what would be an essentially academic exercise when my findings on the law as read with the facts may perhaps impair the Registrar in the future exercise of her discretion.

Conclusion.

31. My orders, therefore, are that there will be an order of certiorari to remove into the High Court and quash the decision of the Registrar made on 12 June 2000 declining to grant the Applicant extensions of time. There will be an order of mandamus remitting the matter to the Registrar to reconsider her decision in accordance with law.

32. As for costs, there will be an order nisi in favour of the Applicant, that order to be made final if neither of the parties makes application to argue the matter within 30 days.

Representation:

Mr John M Y Yan, instructed by Messrs Sit Fung Kwong & Shum, for the Applicant

Mr Martin Liao, instructed by the Department of Justice, for the Respondent