FOKKER BROTHERS INC LIMITED v FOKKER BROTHERS LIMITED [2020] NZHC 953

FOKKER BROTHERS INC LIMITED v FOKKER BROTHERS LIMITED [2020] NZHC 953 [11 May 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-548[2020] NZHC 953UNDER the Trade Marks Act 2002IN THE MATTER OF an appeal from the decision of the AssistantCommissioner of Trade Marks dated 28February 2019, [2019] NZIPOTM 2BETWEEN FOKKER BROTHERS INC LIMITEDAppellantAND FOKKER BROTHERS LIMITEDRespondentHearing: 3 February 2020 with supplementary submissions on 20 and 27February and 2 March 2020Appearances: M C Hayes for the AppellantC L Elliott QC for the RespondentJudgment: 11 May 2020JUDGMENT OF PALMER JThe judgment was delivered by me on Monday 11 May 2020 at 11.00 am.Pursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarCounsel/Solicitors:C L Elliott QC, AucklandAJ Park Law Ltd, WellingtonBotting Legal Ltd, AucklandSummary[1] Ms Ingrid Molloy was the sole shareholder, and her husband Mr Leo Molloythe sole director, of Fokker Brothers Ltd (FBL). FBL registered a trademark over"Fokker Brothers". Ms and Mr Molloy separated, acrimoniously. Mr Molloy cut offMs Molloy from involvement in aspects of their businesses. He assisted his sister, MsJulie Christie, to set up a new business in a company called Fokker Brothers Inc Ltd(FBIL). Ms Molloy removed Mr Molloy as director of FBL and refused to allow FBLto sell the Fokker Brothers trademark to FBIL. FBIL applied to revoke FBL's trademark on the basis it had not been used for three years, under s 66 of the Trade MarksAct 2002 (the Act). The Assistant Commissioner of Trade Marks declined theapplication on the basis the non-use of the trade mark was due to special circumstancesoutside the control of FBL. FBIL appeals.[2] The appeal is governed by the principles usually applicable to appeals byrehearing: I must make my own assessment of the merits. I find there was genuineuse of the trade mark in the course of trade by the sale at Harry's Place, Parnell,Auckland, from February to November 2014, of "Fokker Bros gravy" on a roast of theday and duck-fat chips. Regarding the non-use otherwise, the threshold of "specialcircumstances" in s 66 is not particularly high. It simply requires that there are specialcircumstances, the non-use of a trade mark is due to those circumstances and thecircumstances are outside the control of the owner of the trade mark. I accept that thebreakdown of a personal relationship between a shareholder and a director of acompany, leading to the director assisting another business to develop the same trademark before being removed, is sufficiently unusual to qualify as special circumstances.I accept the non-use was due to those circumstances, which were outside the owner'scontrol. I uphold the Assistant Commissioner's decision and dismiss the appeal.What happened?The Molloys, FBL and the trade mark[3] Mr and Ms Molloy married in 2000. They operated a number of restaurantsand bars. They intended to develop "Fokker Brothers" as a themed hospitality brand.In January 2006 they incorporated FBL for that purpose. In February 2006, FBLapplied to register a trade mark for "Fokker Brothers". It was registered over fiveclasses of goods and services relating to foods and drinks, business services, transportand home delivery services and takeaway and restaurant services.1[4] Apparently, the brand was envisaged to be used for pizza, complete with "bigFokkers", and "little Fokkers", "fat Fokkers" and "skinny Fokkers". There was evento be a "Mother Fokker", a "wee jockey Fokker" and a "12" lucky Fokker".2[5] By 2008 the concept had evolved into a Fokker Brothers steakhouse and sportsbar. Mr Molloy would be the manager of a new company which would run out ofParnell premises leased by his sister, Ms Julie Christie.3 Mr Molloy entered a Headsof Agreement regarding this but it did not proceed.[6] There was more planning for a Fokker Brothers business in 2013, with thedevelopment of a menu, a restaurant and bar operation, merchandising ideas andengagement of a graphic designer.4[7] In 2014 to early 2015 gravy products and beer were sold under the FokkerBrothers brand in Harry's Place, a restaurant and bar which the Molloys operated inParnell, Auckland. Fokker Brothers advertisements were also run on three televisionscreens there from February to May 2014.The Molloys, Ms Christie and FBIL[8] The Molloys' marriage ended in December 2014. Mr Molloy was the soledirector of FBL. Ms Molloy was and still is the sole shareholder.[9] Ms Molloy made handwritten notes in April 2015 for ideas for the furtherdevelopment and use of the Fokker Brothers mark. She prepared a business plan fora Fokker Brothers burger bar as part of a proposed application to a bank for financebut it did not proceed.1 Classes 29, 30, 35, 39 and 43 of the Nice Classification system.2 Fokker Brothers Ltd v Fokker Brothers Inc Ltd [2019] NZIPOTM 2 at [37].3 At [38]-[39].4 At [94]-[96].[10] The Molloys were also involved in Cowboys Bar in Queenstown. Ms Latu,the General Manager of Cowboys, gives evidence that Mr Molloy held meetings todiscuss plans for a restaurant serving a Big Fokker steak and a Mother Fokker burger.In 2015, Mr Molloy was solely running Cowboys, and he instructed Ms Latu not toallow Ms Molloy into the bar and to trespass her if she turned up. From December2014 to July 2015, Mr Molloy attempted to persuade Ms Molloy to sell the trade markto his sister, Ms Christie. She refused, wanting FBL's assets, including the trade mark,to be dealt with as part of an overall settlement of their relationship property.5[11] In July 2015, Ms Christie incorporated FBIL and is its sole director andshareholder. FBIL applied for a Fokkers Brothers trade mark. But FBL's trade markwas cited against FBIL's application and prevents FBIL's trade mark from beingaccepted and registered. On 24 July 2015, FBIL applied for revocation of the FokkerBrothers trade mark on the ground it had not been put to genuine use.[12] As director, Mr Molloy did not resist the application for revocation. But on28 August 2015, as sole shareholder of FBL, Ms Molloy removed Mr Molloy as soledirector of FBL and appointed herself in his place. Ms Molloy's evidence is that wasbecause of his failure to properly protect the FBL's assets and act in its best interests.6She did resist FBIL's application. Lawyers' letters ensued.[13] Despite that, in September 2015, FBIL opened a Fokker Brothers hamburgerrestaurant in Market Square, Auckland. Ms Christie's evidence is that Mr Molloyhelped with the interior design and menu.7Decision by the Assistant Commissioner of Trade Marks[14] On 19 February 2019 Jane Glover, an Assistant Commissioner of Trade Marks,declined the application to revoke FBL's trade mark.8 She dealt with a variety ofevidential objections. She found the relevant period for the alleged non-use of the5 Affidavit of Ms Molloy, 25 September 2015 [Ms Molloy], at [32].6 At [34].7 Second Statutory Declaration of Julie Christie, 22 February 2018 at [15].8 Fokker Brothers Ltd v Fokker Brothers Inc Ltd, above n 2.trade mark was 24 June 2012 to 24 June 2015.9 She considered five alleged uses ofthe mark in the relevant period, holding:(a) the preparatory steps in 2013 showed a subjective intention to use themark but no objective commitment;10(b) although the mark had been used for "beer" and "gravy" products atHarry's Place in 2014, these were not covered by the registration soFBL had not put it to use;(c) Ms Molloy's actions in 2015 were merely exploratory in nature;11(d) Mr Molloy's actions in 2015 were not attributable to FBL as he wasworking to assist his sister to open a Fokker Brothers restaurant;12 and(e) there is insufficient evidence to attribute use of the mark to either Mr orMs Molloy, on behalf of FBL.13[15] However, Assistant Commissioner Glover found that the non-use of the trademark was due to special circumstances outside the control of FBL. She held that"special circumstances" must relate to external forces, as distinct from the voluntaryacts of an owner, and do not need to be trade-related.14 She found Mr Molloy's actionswere external to FBL.15 She held that "[f]rom December 2014 onwards, thecompany's actions were seriously hampered by the relationship breakdown betweenits sole shareholder and its sole director, and the actions that Mr Molloy took after therelationship ended", in helping a third party competitor get there first.16 She also foundthe ability of FBL to access funds and other resources was seriously restricted from9 At [9] and [88].10 At [98].11 At [111].12 At [117]-[118].13 At [122].14 At [129].15 At [133].16 At [135].December 2014 onwards and Mr Molloy banned Ms Molloy from contacting staff attheir other ventures and those same staff from contacting her.17Appeal[16] FBIL appeals the finding of special circumstances. Originally, FBIL had cross-appealed the finding of non-use but it discontinued that before the hearing on 3February 2020. During the hearing, I gave counsel leave to file further memorandaregarding whether, where only part of a judgment is under appeal, the Court is able tomake a decision in respect of other aspects of it. In their further memoranda, counselcorrectly agreed that the Court may decide aspects of a decision that are not the subjectof appeal, under r 20.19 of the High Court Rules 2016 (the Rules) and s 173 of theTrade Marks Act 2002. They each sought leave to file further brief writtensubmissions regarding the Assistant Commissioner's findings on non-use of the trademark, which I granted.[17] I have considered the submissions. They are not directly relevant to the issueunder appeal, which is whether there were special circumstances justifying non-use ofthe mark. But they do affect the pre-condition for that issue, which is whether therewas non-use of the mark. I consider the Assistant Commissioner was wrong in oneaspect of her findings of non-use. I consider there was genuine use of the mark in thecourse of trade by the sale at Harry's Place, from February to November 2014, of aroast of the day and duck-fat chips, both with "Fokker Bros gravy".18 Gravy fallswithin class 30 of the registration as "sauce". To that extent, the trade mark was putto genuine use in the course of trade, for the purposes of s 66(1) of the Act.Relevant lawLaw of appeals of Trade Mark decisions[18] Section 170 of the Act provides that a person aggrieved by a decision of theCommissioner of Trade Marks (which includes Assistant Commissioners) may appealto the High Court. In determining an appeal, under s 173, the court may confirm,17 At [138]-[139].18 Ms Molloy, Exhibit I, CB 126; Affidavit of Pauline Viggo, 25 September 2015, Exhibit A, CB190.modify or reverse the decision or exercise any of the powers that could have beenexercised by the Commissioner.[19] Mr Elliott QC submits the Assistant Commissioner's decision was an exerciseof a discretion and, accordingly, should be less easily disturbed on appeal. I do notaccept that. Under r 20.18 of the Rules, the appeal is by way of rehearing. Thedecision-making involves an evaluation of fact and law and a reasoned application ofone to the other. In accordance with Austen Nichols & Co Inc v Stitching Lodestarwhich concerned appeals under the previous Trade Marks Act 1953, as Mr Hayessubmits, I must come to my own view of the merits of the decision.19Trade Marks Act 2002[20] The Supreme Court has noted that the Act passed in 2002 replaced the TradeMarks Act 1953 "which was considered no longer fit for purpose".20 Its text is basedon the Trade Marks Act 1998 (Singapore) which is based on the Trade Marks Act 1994(UK) which was in turn based on a 1988 European Directive.21 I proceed on the basisof the version of the Act in force when the application for revocation was made here,on 24 July 2015.[21] Under s 3, the purposes of the Act include:(a) more clearly define the scope of rights protected by registered trademarks; and(b) simplify procedures for registering a trade mark in order to reducecosts to applicants and to reduce business compliance costs generally;(e) ensure that New Zealand's trade mark regime takes account ofinternational developments.19 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [3].20 Crocodile International Pte Ltd v Lacoste [2017] NZSC 14, [2017] 1 NZLR 679 at [6], citingMinistry of Commerce papers.21 At [6]. And see Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai XinyuanForeign Trade Co Ltd [2009] SGCA 9, [2009] FSR 13.[22] Part three deals with the process for obtaining registration. Section 65provided that an aggrieved person may apply for revocation of the registration of atrade mark. Section 66 provided, relevantly:66 Grounds for revoking registration of trade mark(1) The registration of a trade mark may be revoked on any of thefollowing grounds:(a) that at no time during a continuous period of 3 years or morewas the trade mark put to genuine use in the course of tradein New Zealand, by the owner for the time being, in relationto goods or services in respect of which it is registered:(c) that, in consequence of acts or inactivity of the owner, thetrade mark has become a common name in general publicuse for a product or service in respect of which it isregistered:(1A) For the purposes of subsection (1)(a), continuous period means aperiod that commences from a date after the actual date of registrationand continues uninterrupted up to the date 1 month before theapplication for revocation.(2) However, despite subsection (1), a trade mark may not be revoked forits non-use if its non-use is due to special circumstances that areoutside the control of the owner of the trade mark.(3) The registration of a trade mark must not be revoked on the ground insubsection (1)(a) if that use is commenced or resumed after the expiryof the 3-year period and before the application for revocation is made.[23] Section 67 provided that, if the owner of a trade mark intends to oppose anapplication for revocation, the owner must provide proof of the use of the mark ifs 66(1)(a) is the basis of the application and must raise the special circumstancesjustifying the non-use if s 66(2) applies. Section 68 provided that revocation relatesonly to those goods and services for which there are grounds for revocation.[24] In Manhaas Industries (2000) Ltd v Fresha Export Ltd, Collins J traces theexception through previous incarnations from s 37 of the Trade Marks Act 1905 (UK)which used the phrase "special circumstances in trade".22 Since the 1990s, lessonerous tests have been enacted in the United Kingdom, Australia and New Zealand,with New Zealand ceasing to require proof of a direct link between specialcircumstances and trade.23[25] There is little in the legislative history illuminating the policy behind theremoval of trade in relation to "special circumstances" in s 66(2). But the Ministry ofCommerce's 1991 Report recommending reform of the Trade Marks Act 1953 saidthis:24At present non-use of a trade mark cannot be relied upon to support theremoval of the trade mark if the non-use is due to special circumstances in thetrade. The Ministry considers that it is appropriate to widen the scope of thedefence to allow the Commissioner to take into account any specialcircumstances outside the control of the registered proprietor. This is in linewith international trends and would also absorb the present defence relatingto warfare.Australian jurisprudence on special circumstances[26] In Australia, the equivalent of the "special circumstances" exception in s 66(2)is s 100(3)(c) of the Trade Marks Act 1995 (Cth) which says: "because ofcircumstances (whether affecting traders generally or only the registered owner of thetrade mark) that were an obstacle to the use of the trade mark during the period".[27] In Woolly Bull Enterprises Pty Ltd v Reynolds, a severe illness was considerednot to meet this test.25 Drummond J in the Federal Court of Australia set out sixpropositions based on the authorities considering the earlier legislative incarnations.26He accepted the wording of s 100(3)(c) was wider than before and it is not nownecessary to show unusual or abnormal trading conditions or an impact on more thanjust the registered owner.27 He considered "circumstances" do not embrace any eventof any kind and must arise from or comprise "events external to the registered ownerin the sense of not having been brought about by the voluntary act of the owner".2822 Manhaas Industries (2000) v Fresha Export Ltd [2012] NZHC 1815 at [23].23 At [27].24 Reform of the Trade Marks Act (Ministry of Commerce, December 1991) at 21.25 Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261, (2001) 51 IPR 149.26 At [45].27 At [46].28 At [47].This could include financial impecuniosity or illness and possibly a falling outbetween joint registered owners.29[28] But Drummond J also considered the words in parentheses were "someindication" that the required circumstances "must not only arise externally to theregistered owner, but must also be circumstances of a trading nature".30 Relying onParliamentary reference to article 19(1) of the international Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS) which states:If use is required to maintain a registration, the registration may be cancelledonly after an uninterrupted period of at least 3 years of non-use, unless validreasons based on the existence of obstacles to such use are shown by the trademark owner. Circumstances arising independently of the will of the owner ofthe trade mark which constitute an obstacle to the use of the trade mark, suchas import restrictions on or other government requirements for goods orservices protected by the trade mark, shall be recognised as valid reasons fornon-use.[29] Accordingly, Drummond J considered:[55] In my opinion, circumstances within s 100(3)(c) will only exist whenevents arise that are capable of disrupting trade in the area of commercialactivity in which goods bearing the registered owner's mark are traded. Forthe statutory excuse to be made out, those circumstances must cause (in apractical business sense) non-use of the particular mark by the owner, whetheror not they have an impact on any persons other than the owner of that markwho are also involved in that same area of commercial activity. There mustbe a causal link shown between the relevant circumstances and the mark'snon-use. [56] Circumstances that do not have a trade character but which only affect amark owner in his personal character, such as illness afflicting the owner ofthe mark that is sufficiently disabling to prevent the owner using the mark, cannever therefore found an answer within s 100(3)(c) to an application forremoval of the mark for non-use.[30] In Dick Smith Investments Pty Ltd v Ramsey, Katzmann J in the Federal Courtof Australia considered there was insufficient evidence of difficulties in obtainingaccess to brewer's yeast and developing a formula similar to Vegemite to amount toan obstacle to the use of a mark.31 But she questioned Drummond J's construction of29 At [48].30 At [49].31 Dick Smith Investments Pty Ltd v Ramsey [2016] FCA 939, (2016) 120 IPR 270 at [[164].s 100(3)(c), relying on art 19(1) of the TRIPS Agreement, that an obstacle has to beindependent of the will of the mark owner and said:32Moreover, circumstances may arise which are independent of the will of thetrade mark owner but are nevertheless not external. In a small business, forexample, illness of the trade mark owner, the very matter found in Woolly Bullnot to constitute an obstacle under the section, may well constitute such anobstacle.New Zealand case law special circumstances[31] The revocation provisions of the Act are known as the "use it or lose it"provisions.33 In Crocodile International Pte v Lacoste, the Supreme Court stated thatall policy indications support trade mark protection only when a trade mark is in use.34It cited three arguments for why the traditional justifications for trade mark protectiondo not apply where a trade mark is not used:(a) the mark's effect in reducing consumer search costs falls away;(b) there is no reward for the creation of the mark; and(c) the mark may present a large barrier for new market entrants.35[32] Similarly, the High Court has observed that the policy rationale underlying therevocation provisions of the Act is the public interest in the commercial andcompetitive effects of only marks that are actually being used being registered.36[33] In Crocodile International Pte v Lacoste, the Supreme Court of New Zealandaccepted that s 66(2) has broader grounds for declining removal than its predecessorprovision.37 But it has not been called upon to interpret their meaning. In the HighCourt, in Manhaas Industries (2000) Ltd v Fresha Export Ltd, Collins J upheld a32 At [175].33 Crocodile International Pte v Lacoste, above n 20 at [51], citing Tasman Insulation New ZealandLtd v Knauf Installation Ltd [2014] NZHC 960, (2014) 108 IPR 162 at [72].34 At [80].35 At [79], citing Rob Batty and Richard Watts "Aggrieved No More: Is There a Need for Standingto Remove Unused Trade Marks?" [2013] NZ L Rev 1.36 Heinz Watties Ltd v Goodman Fielder Consumer Foods Pty Ltd HC Auckland, CIV 2007-404-6946, 10 December 2008, at [47]; La Chemise Lacoste v Crocodile Garments Ltd HC Wellington,AP32/02, 18 November 2002 at [22].37 Crocodile International Pte v Lacoste, above n 20, at [93](a).decision of an Assistant Commissioner relying on Woolly Bull, where inadequateefforts were made to use a trade mark in four months of the three-year period.38Collins J extracted three key points as still relevant from Woolly Bull, from the sixpoints Drummond J identified in the previous case law:39(1) For circumstances to be special they must be "peculiar or abnormal"and arise through "external forces as distinct from the voluntary actsof" the registered owner of the trade mark in question.(2) It is not necessary to show that the "special circumstances" made useof the trade mark impossible. It is enough to show that thosecircumstances made it impracticable in a business sense to use [the]trade mark.(3) There must be a causal link between any special circumstances andthe non-use of the trade mark.And Collins J said:40These authorities make it clear that the threshold that a registered ownerof an unused trade mark must meet is particularly high. The phrase"special circumstances" in a statute invariably involves the need toestablish rare and highly unusual factors that are beyond the control of theperson who seeks to [rely] upon those special circumstances. The inquiryin this context is very fact specific.[34] Moore J, in Cure Kids v National Sids Council of Australia Ltd, consideredthere were special circumstances in the non-use by Cure Kids of a trade mark in RedNose Day, arising from attacks on it by Dr Jim Sprott.41 He cited the three pointsextracted by Collins J from Woolly Bull.42Was non-use due to special circumstances?Submissions[35] Mr Hayes, for FBIL, submits the Assistant Commissioner erred in fact and lawin finding the factual circumstances of FBL's non-use of the registration were "specialcircumstances" and those circumstances prevented FBL's use. He submits:38 Manhaas Industries (2000) v Fresha Export Ltd [2012] NZHC 1815.39 At [28].40 At [30].41 Cure Kids v National Sids Council of Australia Ltd [2014] NZHC 3366.42 At [136].(a) Any special circumstances under s 66(2) must have arisen during therelevant period and circumstances arising outside that period cannot berelied upon. Special circumstances do not need to be confined to trade.(b) None of the circumstances identified in the decision are or could becharacterised as special circumstances preventing FBL from using theregistration:(i) The roles and responsibilities of the shareholder and director ofa company should not be conflated, as the AssistantCommissioner did. There is no evidence that caused non-use.(ii) The marriage breakdown is expressly excluded from beingspecial circumstances by the legal test and is not peculiar orabnormal. There is no evidence it caused FBL to fail to use themark, which it had no developed plans to do.(iii) Ms Molloy's financial status is not relevant to FBL's ability touse the mark. There is no evidence that FBL's ability to accessfunds from December 2014 was seriously restricted.(iv) Ms Molloy's plans in 2015 were not relevant to FBL's inabilityto use the registration because she was a shareholder, not adirector.(v) There is no evidence Mr Molloy acted as a director of FBL tocreate special circumstances that prevented use, that FBL haddeveloped any plans to use the registration or that Mr Molloywas an employee, contractor or director of FBIL.(c) Any special circumstances did not prevent use of the registration. Whatevidence there is demonstrates only interest in using the registration for"restaurant services" and not the other classes of goods or services.So the court should order only partial revocation at most.[36] Mr Elliott QC, for FBL, submits:(a) The Assistant Commissioner found the mark had been used on some,but not all, of the goods and services. The mark was used on gravy atleast.(b) Aspects of Manhaas Industries (2000) Ltd and Woolly Bull arequestionable. Section 66(2) does not impose a "particularly high"threshold, the natural and ordinary meaning of "special" is "out of theordinary" (rather than "peculiar or abnormal") and specialcircumstances need not be "external" to the owner.(c) In any case, the circumstances here, where a marriage breaks down anda key asset becomes a pawn in the separation, are most unusual, are"external" and meet the threshold. It is even open to infer Mr Molloyacted in an underhanded way to divert the mark to his sister, as avindictive husband or contrary to his duties as a director. Evidence afterthe relevant period can be relevant to conduct within it.(d) There was a direct causal link between the marriage breakup,Ms Molloy's financial difficulties and FBL's inability to implement itsplans for the mark. Ms Molloy had no intention to abandon the mark.Rather there is evidence she did intend to use it. There is alsouncontradicted evidence of FBL's limited financial resources.(e) While Ms Molloy was the shareholder and Mr Molloy the director untilremoved, they were also husband and wife going through a breakup.The factual situation should be considered as a whole.Was non-use due to special circumstances?[37] I am not comfortable with the three points in Manhaas Industries (2000) Ltd,extracted by Collins J from Woolly Bull. Those points are adapted from six points inWoolly Bull which related to earlier versions of the Australian legislation and werebased on earlier judicial interpretations of English legislation. But in Woolly Bull,Drummond J accepted that s 100(3)(c) was wider than its predecessor provision.Similarly, the New Zealand Supreme Court has accepted that s 66(2) is wider than itspredecessor provision. The Ministry of Commerce discussion paper indicates that wasintended, at least by the executive in proposing the Bill. The plain words of the sectionsuggest as much.[38] It is perfectly appropriate to interpret s 66(2) with the aid of art 19(1) of theTRIPS agreement, as Drummond J did. But, as is implicit in Katzmann J'sobservations in Dick Smith Investments Pty Ltd, that agreement does not determine themeaning to be accorded to s 66(2).43 That is especially so when s 66(2) was amendedby the New Zealand Parliament in 2002 to omit the requirement, which predatedTRIPS, that special circumstances be "in trade". Article 19 itself refers only tocircumstances "arising independently of the will of the owner" and gives twoexamples of government restrictions. As Katzmann J points out, that is not necessarilythe same as "external" events.44 And the art 19 wording is directly reflected in thewording of s 66(2). I do not accept that Drummond J's proposition in Australian law,that only events capable of disrupting trade can constitute the exception to revocation,applies to a differently worded New Zealand provision. In coming to this conclusion,I agree with Assistant Commissioner Glover. I do not understand either counsel todisagree.[39] Neither do I consider there is good reason to characterise the s 66(2) thresholdas "particularly high" in abstract. The threshold was certainly higher than the facts inManhaas Industries (2000) Ltd. But it is only as high as the plain meaning of thewords "special circumstances". I accept Mr Elliott's submission that that is equivalentto "out of the ordinary", though it does not necessarily seem very different to "peculiaror abnormal" in abstract. The key point about the test of "special circumstances" isthat it is very fact specific, as Collins J observed.45[40] As the Supreme Court noted in Crocodile International Pte, there are clearpolicy considerations underlying the Act which require use of a trade mark. But the43 Dick Smith Investments Pty Ltd v Ramsey, above n 31, at [175].44 At [175].45 Manhaas Industries (2000) v Fresha Export Ltd, above n 22, at [30].purpose of the exception to revocation for non-use is to recognise that, sometimes, anowner cannot use the trade mark within the required three-year period due tocircumstances beyond their control. The incentives otherwise created by therequirement to "use it or lose it" within three years do not operate in suchcircumstances. I consider the best guide to the test is the wording of s 66(2). Theplain text of s 66(2) requires that, to qualify as an exception to revocation:(a) there must be special circumstances;(b) the non-use of the mark must be due to those circumstances; and(c) those circumstances must be outside the control of the owner of thetrade mark.[41] Here, first, the special circumstances identified by Assistant CommissionerGlover related to the relationship breakdown between the Molloys and the actions ofMr Molloy. It is not unusual for relationships to break down, unfortunately. ButI accept that the breakdown of a personal relationship between a shareholder and adirector of a company, leading to the director assisting another business to develop thesame trade mark before being removed, is sufficiently out of the ordinary to qualify asspecial circumstances.[42] Second, I agree the non-use of the Fokker Brothers trade mark was due to thosecircumstances. There is evidence of steps by FBL to test the mark at Harry's Place in2014, when the Molloys were still together. There is evidence of Ms Molloy'sintentions to use the mark within the relevant period. There is evidence that both MsMolloy and FBL had financial difficulties after the relationship breakdown. With aclosely held company, it is perfectly reasonable to take into account the resources ofthe sole shareholder in assessing the resources of the company. A reasonable inferenceis available that the financial difficulties directly contributed to the failure to use themark within the relevant period.4646 Ms Molloy at [27]; Second Affidavit of Ms Molloy, 29 January 2016, at [8](e); Third Affidavit ofMs Molloy, 1 November 2017, at [9].[43] Third, I agree these circumstances were "outside the control of the owner ofthe trade mark". FBL was not able to control the marriage breakdown or the actionsof Mr Molloy. There is no evidence Ms Molloy was able to control them either. Inthis regard also, I accept that the factual context needs to be assessed through a lens ofrealism rather than according to the artificial legal personality of, and roles of officerswithin, companies.[44] I do not consider Assistant Commissioner Glover erred in concluding that thenon-use by FBL of the Fokker Brothers trade mark was due to special circumstancesthat were outside the control of the owner.Result[45] I dismiss the appeal. I award costs for the appeal, and reasonabledisbursements, to FBL on a 2B basis.Palmer J