In the case of Mohammad Hafiz bin Hamidun v Kamdar Sdn Bhd (Civil Appeal No. 02(f)-64-10/2020(W)), the Federal Court held that a person with established goodwill in his name has the standing to commence an action for passing off against another who is unauthorised to use his name. The bench at the apex court, led by the Chief Justice, shifted away from the Court of Appeal’s reversal and reinstated the High Court’s findings that a celebrity is entitled to claim for passing off over his name.
 
The salient facts 
 
The Plaintiff is a celebrity Nasyid singer and song composer. Besides being an artiste, the Plaintiff is also in the business of selling Baju Melayu and Kurtas bearing his name, ‘Hafiz Hamidun’ (“Plaintiff’s Name”), through his company Mikraj Concept Sdn Bhd, that was later renamed Haje Sdn Bhd (“Plaintiff’s Company”).  
 
The Defendant is a fabric retailer and has applied the Plaintiff’s Name on the labels of certain products that it offers for sale (“Defendant’s Products”). This has prompted the Plaintiff to receive messages from his fans and followers on social media, enquiring if the Defendant’s Products originated from the Plaintiff.
 
Upon receiving the cease and desist letter from the Plaintiff’s solicitors, the Defendant replaced the Plaintiff’s Name on the Defendant’s Products with the label ‘Afiz Amidun’. Subsequently, the Defendant ceased entirely the use of ‘Afiz Amidun’ after the Plaintiff commenced an action for passing off in the High Court.
 
Findings at the High Court
 
The issues before the High Court were whether the Plaintiff’s Name had goodwill such that it could have been passed off, and whether the Plaintiff was clothed with the requisite standing to make the claim. After assessing the evidence, the learned trial Judge found that the Plaintiff satisfied all elements for passing off over the unauthorised use of the Plaintiff’s Name as a business indicium by the Defendant.
 
In rejecting the Defendant’s contentions on the non-joinder of the Plaintiff’s Company, the High Court found that the Plaintiff has the locus to commence the claim of passing off for two reasons. First, the Plaintiff’s Name was inextricably linked to the Plaintiff and he has personally established goodwill in it. Secondly, even if the goodwill in the Plaintiff’s Name resided with the Plaintiff’s Company and not the Plaintiff, the corporate veil ought to be lifted in the interest of justice to reveal the Plaintiff as the alter ego and effective owner of the Plaintiff’s Company.
 
First reversal at the Court of Appeal
 
At the Court of Appeal, the bench decided solely on the issue and contentions on the non-joinder of the Plaintiff’s Company, and held that the Plaintiff did not have the standing to claim against the Defendant for the passing off of his name.
 
In reversing the High Court’s findings, the Court of Appeal found that the goodwill in the Plaintiff’s Name was established in the Plaintiff’s Company. Therefore, it was for the Plaintiff’s Company to prosecute the claim for passing off against the Defendant and not the Plaintiff. It also found that in the absence of any evidence of fraudulent conduct, it is not appropriate to lift the corporate veil between the Plaintiff and the Plaintiff’s Company in this case.
 
Final reversal at the Federal Court
 
Dissatisfied with the outcome at the Court of Appeal, the Plaintiff obtained leave to appeal to the Federal Court on two questions of law. The first question concerned the locus standi to commence an action in passing off where two entities may be entitled to claim goodwill. The second question concerned the distinction between lifting and piercing the corporate veil.
 
In deciding on the first question, the Federal Court found that goodwill is a flexible and malleable asset that can be manifested and generated in a myriad of ways depending on the nature of the trade or business. It also may not necessarily attach strictly to an individual or a group of persons. In doing so, the Federal Court referred to the case of Bollinger and others v Costa Brava Wine Company Ltd [1959] 3 All ER 800 where it was observed that any trader with sufficient nexus to the business with an established goodwill is eligible to sue for passing off.
 
On the subject of goodwill and passing off in the work or trade of famous individuals or celebrities, the Federal Court referred to cases from other jurisdictions such as Irvine and another v Talksport Ltd [2002] 2 All ER 414, Henderson and another v Radio Corporation Pty Ltd [1969] RPC 218 and Fenty and others v Arcadia Group Brands Ltd (trading as Topshop) and another [2015] 1 WLR 3291 involving the likes of formula one driver Edmund Irvine Jr, ballroom dancers Mr and Mrs Henderson, and R&B singer Rihanna. The apex court observed that in the context of celebrities, goodwill is generated by their personal achievements and fan base. From that, it is common for celebrities to venture into side businesses which rely on the goodwill from their name or stature.
 
The fact that celebrities might engage corporations to advance businesses which draw on their goodwill does not itself make the goodwill of those celebrities in those business any less their own. Consequently, any misappropriation and deceptive use of a celebrity’s name or stature for commercial gain, such as by causing the public into believing that the celebrity had endorsed it, is consonant with the purpose for which the tort of passing off was developed to counter and remedy the misrepresentation and the deceit caused.
 
Accordingly, in answering the first question in the affirmative, the apex court departed from the Court of Appeal’s decision and reinstated the High Court’s findings that the Plaintiff has the locus to sue the Defendant for passing off over the Plaintiff’s Name, and the goodwill in the Plaintiff’s Name still belonged to the Plaintiff even though the Plaintiff’s Company was used as a vehicle of trade.
 
The Federal Court also observed that there was an implied licence to use the Plaintiff’s name by the Plaintiff’s Company, and the non-joinder of the Plaintiff’s Company in this action is not a defeating technicality. As there was evidence to show that the Plaintiff’s fans and followers were wrongfully caused by the Defendant to believe that the Defendant’s Products were associated with the Plaintiff or that he had endorsed them, the elements of passing off were satisfied.
 
As this appeal was successful on the first question, the Federal Court did not consider the second question on the facts of this case. However, the apex court observed in passing that there is a distinction between lifting and piercing of the corporate veil, pursuant to another recent decision before it, namely Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 4 CLJ 821.  
 
Conclusion
 
As the first reported case concerning a claim of passing off over one’s name in Malaysia, this apex court decision is a welcoming development towards protecting the name and identity of famous individuals and celebrities from misappropriation and unauthorised commercial exploitation. It is also refreshing to see the Federal Court recognising that the tort of passing off is dynamic and in tandem with the development in business realities, and that the concept of goodwill is flexible and fluid which, depending on the nature and context of the claim, could cover a person’s name.
 
By rejecting the arguments surrounding the non-joinder of the trade vehicle as a party to this case, the Federal Court clarified the position that the Courts are open to consider and allow a claim for passing off by a person or another entity with sufficient nexus to the goodwill asserted for protection. An implication from this decision would mean that one or more persons may be entitled to claim for passing off, just like the group of twelve wine producers from the Champagne district of France in the case of Bollinger.
 
Case commentary by Joshua Teoh Beni Chris (Senior Associate) of the Intellectual Property Practice of Skrine.