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Mohammad Hafiz Bin Hamdun v Kamdar Sdn Berhad [2021] 1 LNS 590

mohd hafiz case.jpeg
Written by WENDY WEE
Case Facts

Muhammad Hafiz Hamidun (‘Appellant’) is a popular Nasyid singer-cum-song composer, who had also incorporated a company (HSB) to carry out trades in fabrics. Respondent is a company primarily engaged in the business of selling fabrics across Malaysia. The facts center around the sale of certain goods by the Defendant, bearing the label “Hafiz Hamidun”. 

This concerned the tort of passing off where Appellant successfully sued the Respondent in the High Court. However, this decision was reversed by the Court of Appeal on a technicality issue (locus standi). Hence,  it was appealed to the Federal Court. 

Issues of Law

The Appellant was granted leave to appeal in the Federal Court on two questions:

  1. In a common law claim for passing off, where two entities may be entitled to claim goodwill, who has the locus standi to commence an action in passing off as the owner of such goodwill?

  2. Is there a distinction between lifting and piercing the corporate veil based on the Supreme Court decision in Prest v. Petrodel Resources Limited and others [2013] UKSC 34?”.

Appellant's Argument

“Hafiz Hamidun” is Appellant’s own name; an unregistered trademark which was used in his own fabric line among others. A goodwill exists, which will cause or likely cause damage to the Appellant’s business, which uses the same label.

Respondent's Argument

The Appellant has no locus standi to maintain the suits in respect of the ownership of goodwill. The goodwill was established by HSB, a separate legal entity.

Decision

The appeal was allowed, setting aside the judgement and order of  the Court of Appeal; restoring the judgment and order of the High Court.

  • Question 1- Locus standi

A celebrity has the locus standi to maintain a passing off action against any misappropriation of third party. It can be further divided into two points:

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  • Goodwill

Goodwill need not necessarily be attached to any particular individual or group of persons. As long as the goodwill can be identified geographically, any trader with sufficient nexus to the business can sue (Bollinger and others v Costa Brava Wine Company Ltd [1959] 3 All ER 800). 

Thus, the Respondent’s submission to distinguish Appellant and HSB in establishing goodwill is rejected. The court endorsed the High Court’s findings that the goodwill of “Hafiz Hamidun” belongs to the Appellant and not HSB. This is evident from the goods promoted and sold based on the Appellant’s name and documentary evidence that proves the extent of his popularity.

The Court was also inclined towards the Appellant’s arguments based on Irvine and another v. Talksport Ltd [2002] 2 All ER 414 (‘Irvine’). In Irvine, the Court distinguished goodwill owned by corporations and existence of goodwill because corporations are involved in the carrying out of the trade. The reasoning of the case which falls squarely with the Appellant’s appeal was that the existence of goodwill was owed entirely to the Appellant’s own achievements in the industry and the influence he built on his own.

  • Implied License

The Appellant relied on Yong Sze Fun & Anor (t/a Perindustrian Makanan & Minuman Layang-Layang) v. Syarikat Zamani Hj Tamin Sdn Bhd & Anor [2012] 1 MLJ 585 in respect of the Respondent’s argument on the owner of goodwill. The Federal Court concurred that regardless of whether there’s a formal agreement between HSB and Appellant, the use of goodwill is a matter of business between the two parties. This is not within the purview of  Respondent, a third party who generated profit through deception.

  • Question 2

This was not within the court’s consideration since  the Appellant is the established owner of the goodwill. This is settled in Ong Leong Chiou & Anor v.Keller (M) Sdn Bhd & Ors [2021] 1 LNS 301, that had clarified on the distinction between ‘lifting’ and ‘piercing’ of corporate veil. Hence, the Court of Appeal’s findings on this matter is unsustainable.

Analysis

This was not within the court’s consideration since  the Appellant is the established owner of the goodwill. This is settled in Ong Leong Chiou & Anor v.Keller (M) Sdn Bhd & Ors [2021] 1 LNS 301, that had clarified on the distinction between ‘lifting’ and ‘piercing’ of corporate veil. Hence, the Court of Appeal’s findings on this matter is unsustainable.

Conclusion

This case highlights that a celebrity can protect their goodwill (entitlement to sue) when there’s a sufficient nexus to the business. Seeing that this is the first reported case involving passing off claim by a celebrity, this could possibly be a landmark case for upcoming claims alike.

Reference List

Case laws

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  1. Mohammad Hafiz bin Hamdun v Kamdar Sdn Berhad [2021] 1 LNS 590

  2. Mohammad Hafiz bin Hamidun v. Kamdar Sdn Bhd[2018] 1 LNS 1562.

  3. Ong Leong Chiou & Anor v.Keller (M) Sdn Bhd & Ors [2021] 4 CLJ 821. 

  4. Yong Sze Fun & Anor (t/a Perindustrian Makanan & Minuman Layang-Layang) v. Syarikat Zamani Hj Tamin Sdn Bhd & Anor [2012] 1 MLJ 585

Websites

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