Neale v Nine Squares: Trust, Trade Marks & Partnership Dispute over 'KU DE TA' Brand
In Guy Neale and others v Nine Squares Pty Ltd, the High Court of Singapore addressed a dispute between partners of the Ku De Ta Bali restaurant and Nine Squares Pty Ltd regarding ownership of the Singapore trade marks for "KU DE TA". The plaintiffs sought a declaration that the trade marks were held on trust for the partnership or, alternatively, invalidation of the trade marks. The court, per Judith Prakash J, dismissed the plaintiffs' claim, finding no express or constructive trust and no grounds for invalidating the trade marks. The court determined that Nine Squares was the rightful owner of the Singapore trade marks and that Chondros, a partner in Ku De Ta Bali, did not breach his fiduciary duties in registering the marks.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiffs' claim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Partnership dispute over 'KU DE TA' brand. Court rejects trust claim, upholds Nine Squares' trade mark ownership.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Guy Neale | Plaintiff | Individual | Claim Dismissed | Lost | Ang Cheng Hock, William Ong, Kristy Tan, Jacqueline Lee, Bryna Yeo |
| Aki Kotzamichalis | Plaintiff | Individual | Claim Dismissed | Lost | Ang Cheng Hock, William Ong, Kristy Tan, Jacqueline Lee, Bryna Yeo |
| Made Wiranatha | Plaintiff | Individual | Claim Dismissed | Lost | Ang Cheng Hock, William Ong, Kristy Tan, Jacqueline Lee, Bryna Yeo |
| White Horses Trading Company Limited | Plaintiff | Corporation | Claim Dismissed | Lost | Ang Cheng Hock, William Ong, Kristy Tan, Jacqueline Lee, Bryna Yeo |
| White Horses Investments Limited | Plaintiff | Corporation | Claim Dismissed | Lost | Ang Cheng Hock, William Ong, Kristy Tan, Jacqueline Lee, Bryna Yeo |
| Arthur Chondros | Plaintiff | Individual | Claim Dismissed | Lost | |
| Nine Squares Pty Ltd | Defendant | Corporation | Judgment for Defendant | Won | Cavinder Bull, Kelvin Tan, Priscilla Lua, Lee Xin Jie |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ang Cheng Hock | Allen & Gledhill LLP |
| William Ong | Allen & Gledhill LLP |
| Kristy Tan | Allen & Gledhill LLP |
| Jacqueline Lee | Allen & Gledhill LLP |
| Bryna Yeo | Allen & Gledhill LLP |
| Cavinder Bull | Drew & Napier LLC |
| Kelvin Tan | Drew & Napier LLC |
| Priscilla Lua | Drew & Napier LLC |
| Lee Xin Jie | Drew & Napier LLC |
4. Facts
- The plaintiffs sued as a partnership in relation to a restaurant, bar and club business in Bali, Indonesia.
- Nine Squares is the registered owner of two trade marks in Singapore bearing the name “KU DE TA”.
- The plaintiffs sought a declaration that the Singapore Marks are held on trust for them or invalidation of the marks.
- Chondros was one of the founders of Ku De Ta Bali and shareholder of Nine Squares.
- The founders entered into an agreement entitled “Heads of Agreement” in February 2000.
- In 2003, Chondros procured the incorporation of Nine Squares, a private company in Australia.
- In 2004, Nine Squares applied for international registration of “KU DE TA” as a trade mark, designating Singapore.
5. Formal Citations
- Guy Neale and others v Nine Squares Pty Ltd, Suit No 314 of 2011, [2013] SGHC 249
- Guy Neale and others v Nine Squares Pty Ltd, Civil Appeal No 172 of 2013, [2014] SGCA 64
6. Timeline
| Date | Event |
|---|---|
| Chondros moved to Bali to open a restaurant. | |
| Chondros located a beach-front site for a restaurant. | |
| Kadek applied to register the trade mark “KU DE TA” in Indonesia. | |
| Founders entered into the Heads of Agreement. | |
| Trade Mark No 469240 registered under Kadek’s name. | |
| Chondros asked Ellaway to register the name “KU DE TA” as a trade mark in Australia. | |
| Chondros enlisted Ellaway to assist him in running the restaurant. | |
| “KU DE TA” trade mark registered in Australia in Chondros and Ellaway's names. | |
| Chondros procured the incorporation of Nine Squares. | |
| Founders met to discuss appointing Nine Squares as the management company. | |
| Chondros and Ellaway assigned the Australian trade mark to Nine Squares. | |
| Nine Squares applied to the World Intellectual Property Organization for international registration of “KU DE TA”. | |
| “KU DE TA” registered in Singapore as a trade mark (Singapore Trade Mark No T0405181Z). | |
| Ellaway proposed that the business should engage Nine Squares as Ku De Ta Bali’s management company. | |
| Ellaway sent an email to the founders to clarify rumours that Ku De Ta was opening in Singapore. | |
| Kotzamichalis, Neale and Kadek attended a partnership meeting at Ku De Ta Bali. | |
| Neale sent an email memorandum to all the founders. | |
| Ellaway sent an email to the founders informing them of a potential expansion opportunity. | |
| Chondros asked Collins whether he would be interested in purchasing part of Chondros’ equity share in Ku De Ta Bali. | |
| Patel introduced Chris Au to Chondros and Ellaway. | |
| Chondros, Neale, Kotzamichalis and Kadek executed another Heads of Agreement. | |
| Chondros’ share transfer to WH Trading was effected. | |
| Chondros confronted Ellaway about inflated invoices. | |
| Chondros sent an email to Ellaway asking him for an accounting of amounts paid to Ellaway by Nine Squares. | |
| Ellaway caused Nine Squares to enter into a licence agreement with Chris Au. | |
| Ellaway caused Nine Squares to apply in Singapore to register “KU DE TA” as a trade mark in classes 9 and 25. | |
| A joint venture agreement was executed between Retribution Limited and Rocky Cape International Limited. | |
| KDTSG was incorporated with Kudeta Limited as its sole shareholder. | |
| Chris Au assigned his rights under the Licence Agreement to KDTSG. | |
| Chondros found out about the Licence Agreement. | |
| KDTSG and Chris Au commenced legal proceedings in Victoria, Australia, against Nine Squares. | |
| The Australian proceedings were settled. | |
| Collins (through WH Investments) acquired that 4% stake. | |
| KDTSG opened Ku De Ta Singapore. | |
| The plaintiffs commenced Suit 955 against KDTSG. | |
| Plaintiffs started Suit 314. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that Chondros did not breach his fiduciary duty to the plaintiffs.
- Category: Substantive
- Express Trust
- Outcome: The court found that Nine Squares did not hold the Singapore Marks on an express trust for the plaintiffs.
- Category: Substantive
- Constructive Trust
- Outcome: The court found that Nine Squares did not hold the Singapore Marks on a constructive trust for the plaintiffs.
- Category: Substantive
- Trade Mark Invalidity
- Outcome: The court found no grounds for invalidating the Singapore Marks under the Trade Marks Act.
- Category: Substantive
- Goodwill
- Outcome: The court found that there was no goodwill in Singapore belonging to the plaintiffs in either February 2004 or June 2009 which obligated Chondros not to procure the registration of, respectively, the 1st and 2nd Singapore Marks on those respective dates.
- Category: Substantive
- Usurpation of Corporate Opportunity
- Outcome: The court found that the registration by Nine Squares of the Singapore Marks could not have entailed any breach by Chondros of his fiduciary duty to the plaintiffs.
- Category: Substantive
- Passing Off
- Outcome: The plaintiffs have failed to establish an essential element of passing off and cannot invalidate the registration of the Singapore Marks under s 23(1) read with s 7(5) of the TMA.
- Category: Substantive
- Bad Faith
- Outcome: The Singapore Marks cannot be declared invalid on the ground that Nine Squares applied for registration in bad faith as proscribed by s 23(1) read with s 7(6) of the TMA.
- Category: Substantive
8. Remedies Sought
- Declaration of Trust
- Invalidation of Trade Marks
- Injunctive Relief
9. Cause of Actions
- Breach of Fiduciary Duty
- Trust
- Trade Mark Infringement
- Passing Off
10. Practice Areas
- Commercial Litigation
- Intellectual Property Litigation
11. Industries
- Hospitality
- Food and Beverage
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Weardale Coal and Iron Co Ltd v Hodson | Queen's Bench Division | Yes | [1894] 1 QB 598 | England and Wales | Cited for the principle that commercial contracts should be given the ordinary sense that business men would give to it. |
| Ratna Ammal v Tan Chow Soo | Federal Court of Malaysia | No | [1964] MLJ 399 | Malaysia | Cited to distinguish the present situation from a case where property rights in a trade mark were vested in one partner alone. |
| Tee Yok Kiat and another v Pang Ming Seng and another | High Court | Yes | [2012] SGHC 85 | Singapore | Cited for the definition of express trust. |
| Don King Productions Inc v Warren | Chancery Division | Yes | [2000] Ch 291 | England and Wales | Cited for the principle that a settlor's intention deduced as a matter of business common sense may be sufficient for certainty of intention. |
| Jones v Lock | Court of Appeal in Chancery | Yes | (1865) LR 1 Ch App 25 | England and Wales | Cited for the principle that words spoken in loose conversation would not amount to an effective declaration of trust. |
| Paul v Constance | Court of Appeal | Yes | [1977] 1 WLR 527 | England and Wales | Cited for the principle that repetition of similar words in conversation over a period of time may be sufficient to create an express trust. |
| Re Vandervell’s Trust (No 2) | Court of Appeal | Yes | [1974] Ch 269 | England and Wales | Cited for the principle that an effective declaration may also be inferred from conduct. |
| Carl-Zeiss-Stiftung v Herbert Smith & Co (No 2) | Court of Appeal | Yes | [1969] 2 Ch 276 | England and Wales | Cited for the principle that constructive trusts are imposed by equity whenever a want of probity would make it unjust and against the demands of good conscience to allow an owner or recipient of property to retain the same. |
| Westdeutsche Landesbank Girozentrale v Islington London Borough Council | House of Lords | Yes | [1996] 1 AC 669 | England and Wales | Cited for the distinction between institutional and remedial constructive trusts. |
| Low Heng Leon Andy v Low Kian Beng Lawrence (administrator of the estate of Tan Ah Kng, deceased) | High Court | Yes | [2011] SGHC 184 | Singapore | Cited for the categories of facts or circumstances that will generally found an institutional constructive trust claim. |
| Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull | Court of Appeal | Yes | [2007] 1 SLR(R) 377 | Singapore | Cited for the principle that a fiduciary obligation arising out of a contractual relationship between parties is governed by the proper law of the underlying contract. |
| Novelty Pte Ltd v Amanresorts Ltd | Court of Appeal | Yes | [2009] 3 SLR(R) 216 | Singapore | Cited for the essential features of goodwill. |
| Edmonds v Donovan | Supreme Court of Victoria | Yes | (2005) 12 VR 513 | Australia | Cited for the principle that breach of fiduciary duty occurs when the fiduciary exploits for himself a maturing business opportunity which his company is actively pursuing. |
| Canadian Aero Service Ltd v O’Malley | Supreme Court | Yes | (1973) 40 DLR (3d) 371 | Canada | Cited for the principle that breach of fiduciary duty occurs when the fiduciary exploits for himself a maturing business opportunity which his company is actively pursuing. |
| Doctor’s Associates Inc v Lim Eng Wah (trading as SUBWAY NICHE) | High Court | Yes | [2012] 3 SLR 193 | Singapore | Cited for the principle that it might not be of much significance if Singapore adopted the hard-line approach, which approach would require an entity to have done business in the jurisdiction in which it was suing for passing off. |
| Orkin Exterminating Co Inc v Pestco Co of Canada Ltd | Ontario Court of Appeal | Yes | (1985) 19 DLR (4th) 90 | Canada | Cited for the principle that an entity did not require a business presence in the jurisdiction in which it was now bringing a passing off action – all that was required was that the entity possess a sufficient degree of reputation in that jurisdiction. |
| ConAgra Inc v McCain Foods (Aust) Pty Ltd | Federal Court of Australia | Yes | (1992) 23 IPR 193 | Australia | Cited for the principle that an entity did not require a business presence in the jurisdiction in which it was now bringing a passing off action – all that was required was that the entity possess a sufficient degree of reputation in that jurisdiction. |
| Jet Aviation (Singapore) Pte Ltd v Jet Maintenance Pte Ltd | High Court | Yes | [1998] 1 SLR(R) 713 | Singapore | Cited for the principle that the existence or otherwise of goodwill and reputation is a question of fact and degree to be proved in a particular case without the constraint of any rule or presumption. |
| Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd | Court of Appeal | Yes | [2009] 2 SLR(R) 814 | Singapore | Cited for the test for bad faith under s 7(6) of the Trade Marks Act. |
| Valentino Globe BV v Pacific Rim Industries Inc | Court of Appeal | Yes | [2010] 2 SLR 1203 | Singapore | Cited for the test for bad faith under s 7(6) of the Trade Marks Act. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Trade Marks Act (Cap 332, 2005 Rev Ed) | Singapore |
| Partnership Act 1958 (Act 6330 of 1958) (Vic) | Australia |
15. Key Terms and Keywords
15.1 Key Terms
- KU DE TA
- Singapore Marks
- Partnership
- Nine Squares
- Goodwill
- Fiduciary Duty
- Trade Mark
- Express Trust
- Constructive Trust
15.2 Keywords
- trade marks
- trust
- partnership
- fiduciary duty
- goodwill
- intellectual property
- KU DE TA
16. Subjects
- Trade Marks
- Trusts
- Partnerships
- Intellectual Property
- Commercial Law
17. Areas of Law
- Trust Law
- Trade Mark Law
- Partnership Law
- Intellectual Property Law