Hashim Yeop Sani SCJ:

To the uninitiated this case provides an excellent illustration of the intricacies of the business world where rivalry even between business partners is not uncommon. The respondent and the second appellant were partners in business in 1973 but in less than a year thereafter became rivals in the same undertaking.

A brief background note on the case is necessary. On 20 March 1973 a company by the name of Sanita Manufacturing Co. Ltd., Bangkok (the Bangkok company) engaged in the manufacture of sanitary napkins of which the repondent was the managing director entered into an agreement with the second appellant for the sale and distribution of sanitary napkins in Malaysia and Singapore. In the agreement the second appellant was appointed sole agent to distribute the goods in the territories concerned.

There are four important provisions in the 1973 agreement. The first provision dealt with the conferment on the second appellant the exclusive rights to purchase for resale of the goods produced by the Bangkok company in the territories concerned. The second provision dealt with the covenants by the Bangkok company and the agent. The covenants included the undertaking not to sell any of the products to any other person within the territories concerned. The covenants also included the undertaking to safeguard the sole and exclusive rights granted to the agent. The covenant by the agent was expressly to sell the products and to promote the products as much as possible. The third provision dealt with the authorisation by the Bangkok company to the agent to make application to the Registry of Trade Marks or any other government body for registration of all trade marks, emblems, designs, patterns and all other industrial or commercial monopoly rights within the territories concerned and such applications to be made in the name of the company. The fourth provision dealt with the operation of the agreement which provided to the effect that after the expiration of ten years from the date of the agreement either party shall have the right to determine the agreement by giving six calendar months' notice in writing.

Pursuant to the 1973 agreement the second appellant on 28 March 1973 submitted to the Registry of Trade Marks, Kuala Lumpur to have the "Sanita" trade mark registered in the name of the respondent. By virtue of the said registration the respondent became the registered proprietor of the trade mark. However it was alleged by the respondent as plaintiff in the Court below that on 28 January 1974 the second appellant without his authority or consent fraudulently submitted form TM 35 to replace the respondent as the registered proprietor of the trade mark and to insert the name of the first appellant, that is Sanita Manufacturing (Malaysia) Sdn. Bhd. (the Malaysian company). On 19 September 1983 the first appellant applied for a trade description order under sub-section (1) of s. 16 of the Trade Description Act 1972.

On 11 March 1984 the respondent filed a notice of originating motion for an order that the entry in the Registry of Trade Marks on 28 January 1974 pursuant to form TM 35 submitted by the second appellant be expunged from the said register and the respondent to restored as the registered proprietor of the said trade mark.

In his affidavit in support of the notice of motion the respondent alleged fraud on the part of the second appellant and that the second appellant in submitting Form TM 35 to effect the alteration was acting outside the purview of his capacity as agent under the 1973 agreement and as a result of the deprivation of his proprietary rights in the trade mark the respondent has suffered losses.

There are many subsidiary issues which need not be resolved presently. For example what was the effect on the 1973 agreement by the formation of the Malaysian company which began to manufacture the same products between October 1975 and August 1981 when the factory was destroyed by fire. Af