Karibu Baby Ltd v. J Solution International Ltd and Another

HCMP 1674/2019

[2021] HKCFI 465

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1674 OF 2019

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Before: Deputy High Court Judge MK Liu in Court

Date of Hearing: 23 February 2021

Date of Judgment:  23 February 2021

Date of Reasons for Judgment:  26 February 2021

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REASONS FOR JUDGMENT

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1.By an originating summons dated 4 October 2019 (“the OS”), the applicant (“Karibu”) seeks to enforce the injunction order made by me on 22 March 2019 (“the Injunction Order”) in HCA 466/2019 (“the HCA Proceedings”) against the 1^st respondent (“J Solution”) and the 2^nd respondent (“Lau”) by an order of committal. Karibu seeks an order that J Solution be fined, and an order that Lau be committed to prison and/or fined. Karibu says that J Solution has failed to comply with the Injunction Order, and Lau has been aiding and abetting J Solution in not complying with the Injunction Order. Karibu is saying that both J Solution and Lau are guilty of contempt of court.

2.J Solution has not filed anything and has not attended any hearing in these proceedings.  Save and except filing a notice of intention to defend on 6 November 2019, Lau has not filed anything and has not attended any hearing in these proceedings.

3.The substantive hearing of the OS took place before me on 23 February 2021.  At the end of the hearing, I dismissed the OS and made no order as to costs.  These are the reasons for the judgment.

Karibu’s case

4.I would first set out Karibu’s case.

5.According to Karibu, it is at all material times a Hong Kong registered company which is:

(1)  the owner of the copyright subsisting in the relevant design works of the foldable baby bath tub (“Karibu’s Products”) (“the Copyright Works”); and

(2)  the registered proprietor of the Hong Kong Standard Patent No. HK1171532 in relation to the design and specification of the Karibu’s Products (“the Patent”).

6.J Solution is at all material times a Hong Kong registered company trading under the name of “Baby100” and “Myfunbabyshop”, as well as the operator of the website http://baby100.hk/ (“JS’s Website”) which is an online platform selling a wide variety of baby products.

7.Lau is at all material times the sole director and sole shareholder of J Solution.

8.J Solution was found selling/offering to sell products, namely foldable bathtubs that were virtually identical to that of the Karibu’s Products (“the Infringing Product”).  In the HCA Proceedings, Karibu claims against J Solution for infringement of the Copyright Works and the Patent.

9.On 22 March 2019, upon the application made by Karibu by a summons for an interlocutory injunction against J Solution, I made the Injunction Order.  J Solution is required to do or refrain to do the following by the Injunction Order:

(1)  J Solution, whether acting by itself, its directors, officers, servant or agents or any of them or otherwise howsoever, until judgment or further order, be refrained from selling, offering or exposing for sale the Infringing Product (“the No Sale Prohibition”)[1];

(2)  J Solution, whether acting by itself, its directors, officers, servant or agents or any of them or otherwise howsoever, until judgment or further order, be refrained from infringing the Patent[2];

(3)  J Solution, whether acting by itself, its directors, officers, servant or agents, to deliver up all articles and materials within 14 days in their possession, power, custody or control, the retention, use or sale or dealing therewith by J Solution would offend against any of the foregoing injunctions (“the Order for Delivery Up”)[3];

(4)  J Solution (by a director) do within 14 days file and serve an affidavit/ affirmation setting forth the names and addresses of all persons, firms and/ or companies: who has supplied and/ or provided J Solution any of the Infringing Products; and whom J Solution has by any means howsoever whether by electronic form or otherwise, supplied, provided sold, distributed, offered to sell or supply, offered to distribute and/ or exhibited in public in the course of trade any of the Infringing Goods (“the Order for Disclosure”)[4];

(5)  J Solution (by a director) do within 21 days make, file and serve an affidavit/ affirmation verifying that the Infringing Products required to be delivered up pursuant to the Order for Delivery Up[5].

10.It is Karibu’s case that on 29 March 2019, the Injunction Order with the requisite penal notice was duly served on J Solution at its registered office and also 2 shop addresses as per JS’s Website.

11.Karibu claims that notwithstanding the service of the Injunction Order on J Solution:

(1)  J Solution has failed to comply with the Order for Delivery Up and the Order for Disclosure.

(2)  J Solution was still selling the Infringing Product on 29 August 2019, in breach of the No Sale Prohibition.

12.By reason of the aforesaid, Karibu says that J Solution is guilty of contempt of court.

13.Karibu also says that Lau is guilty of contempt of court in his personal capacity, for the non-compliance with the Injunction Order by J Solution is procured by Lau, and hence Lau is a person aiding and abetting J Solution’s acts of contempt.

The evidence

14.Karibu is relying upon the evidence given by the following witnesses in support of the OS:

(1)  Mr Yiu Man Kam, Karibu’s solicitor who has made an affidavit dated 4 October 2019;

(2)  Mr So Ki Kai, the legal clerk to the Karibu’s solicitors, who has made the following affirmations of service:

(a)  2^nd Affirmation dated 16 April 2019 (filed in the HCA Proceedings);

(b)  3^rd Affirmation dated 18 September 2019 (filed in the HCA Proceedings);

(c)  5^th Affirmation dated 4 November 2019 (filed in the HCA Proceedings)[6];

(d)  Affirmation dated 4 November 2019 (filed herein);

(e)  2^nd Affirmation dated 8 November 2019 (filed herein);

(f)  3^rd Affirmation dated 18 May 2020 (filed herein);

(3)  Mr Yeung Yiu Fai, Karibu’s director, who has made an affirmation dated 9 February 2021.

15.Since Lau said that he had no question for Mr Yiu, Mr So and Mr Yeung, and with no objection from Lau, I directed that the aforesaid affidavit and affirmations be deemed as evidence before the court without requiring the witnesses to give viva voce evidence in the substantive hearing of the OS.

16.The evidence given by these witnesses is unchallenged.  There is nothing before the court contradicting their evidence. I accept their evidence.

Service of the Injunction Order

17.Although I accept the evidence adduced by Karibu, there is one crucial deficiency in Karibu’s application.  For the reasons set out below, I am not satisfied that there has been due service of the Injunction Order on Lau.  I am also of the view that there is no or no sufficient reason for me to dispense with the service. 

18.Ms Joyce MY Chan, counsel for Karibu, submits that the Injunction Order with a penal notice endorsed thereon has been duly served on J Solution in accordance with Order 45 rule 7.  In relation to Lau, Ms Chan has tried to seek an order dispensing with personal service of the Injunction Order pursuant to Order 45 rule 7(7).  Counsel submits that given Lau’s role in J Solution, Lau must be fully aware of the contents of the Injunction Order.  In her written submissions dated 9 February 2021, Ms Chan says:

“15. In relation to the case of [Lau], given his position as [J Solution]’s sole director and sole shareholder at all material times who would most probably be responsible for the day-to-day administration (if not all matters) of [J Solution] including mail and/ or documents addressed to [J Solution], and/ or sent to [J Solution]’s registered office, places of business and/ or branches, [Karibu] submits that [Lau] should be expected to have knowledge of a major litigation of [J Solution], particularly that which related to restrictions on its business involving an injunction which has been duly served on [J Solution] with requisite the penal notice endorsed. More importantly, §§4 and 5 of the Injunction Order specifically requires [J Solution] to comply with the Order for Delivery Up and the Order for by a director.

16. In the premises, [Karibu] submits that it is to the very least beyond reasonable doubt (if not an irresistible inference to be drawn) that [Lau]:

(a) was fully aware of the terms of the Injunction Order with which [J Solution] must comply;

(b) had that knowledge at the time when he could (or more appropriately, must given[7] how §§4 and 5 of the Injunction Order were termed) use his position as the sole director to ensure compliance; and

(c) was aware that if he did not so use his position, steps may be taken against him personally to enforce compliance.

17. This would be all the more so in the absence of any evidence from [Lau] to contradict the abovementioned. [Karibu] would also highlight that despite not filing any acknowledgement of service or evidence in these proceedings (including the underlying case of HCA 466/2019). J Solution did attend in person (by [Lau]) the hearing of summons for default judgment. It goes to show that [Lau] does have knowledge of these proceedings.

18. Based on the foregoing, [Karibu] respectfully urges this Court to exercise its discretion to dispense with personal service on [Lau] under Order 45, rule 7(7) RHC.”

19.With respect, I am unable to accept these submissions.

20.Order 45 rule 5 provides:

“(1) Where—

(a) a person required by a judgment or order to do an act within a time specified in the judgment or order refuses or neglects to do it within that time or, as the case may be, within that time as extended or abridged under Order 3, rule 5, or

(b) a person disobeys a judgment or order requiring him to abstain from doing an act,

then, subject to the provisions of these rules, the judgment or order may be enforced by one or more of the following means, that is to say—

(i) with the leave of the Court, a writ of sequestration against the property of that person;

(ii) where that person is a body corporate, with the leave of the Court, a writ of sequestration against the property of any director or other officer of the body;

(iii) an order of committal against that person or, where that person is a body corporate, against any such officer.” (Emphasis added)

21.Order 45 rule 7 provides:

“(1) In this rule references to an order shall be construed as including references to a judgment.

(2) Subject to Order 24, rule 16(3), Order 26, rule 6(3) and paragraphs (6) and (7) of this rule, an order shall not be enforced under rule 5 unless—

(a) a copy of the order has been served personally on the person required to do or abstain from doing the act in question, and

(b) in the case of an order requiring a person to do an act, the copy has been so served before the expiration of the time within which he was required to do the act.

(3) Subject as aforesaid, an order requiring a body corporate to do or abstain from doing an act shall not be enforced as mentioned in rule 5(1)(ii) or (iii) unless—

(a) a copy of the order has also been served personally on the officer against whose property leave is sought to issue a writ of sequestration or against whom an order of committal is sought, and

(b) in the case of an order requiring the body corporate to do an act, the copy has been so served before the expiration of the time within which the body was required to do the act.

(4) There must be indorsed on the copy of an order served under this rule a notice informing the person on whom the copy is served—

(a) in the case of service under paragraph (2) that if he neglects to obey the order within the time specified therein, or, if the order is to abstain from doing an act, that if he disobeys the order, he is liable to process of execution to compel him to obey it, and

(b) in the case of service under paragraph (3) that if the body corporate neglects to obey the order within the time so specified or, if the order is to abstain from doing an act, that if the body corporate disobeys the order, he is liable to process of execution to compel the body to obey it.

(5) With the copy of an order required to be served under this rule, being an order requiring a person to do an act, there must also be served a copy of any order made under Order 3, rule 5, extending or abridging the time for doing the act and, where the first-mentioned order was made under rule 5(3) or 6 of this Order, a copy of the previous order requiring the act to be done.

(6) An order requiring a person to abstain from doing an act may be enforced under rule 5 notwithstanding that service of a copy of the order has not been effected in accordance with this rule if the Court is satisfied that, pending such service, the person against whom or against whose property it is sought to enforce the order has had notice thereof either—

(a) by being present when the order was made, or

(b) by being notified of the terms of the order, whether by telephone, telegram or otherwise.

(7) Without prejudice to its powers under Order 65, rule 4, the Court may dispense with service of a copy of an order under this rule if it thinks it just to do so.” (Emphasis added)

22.Karibu claims that J Solution has failed to comply with the Order for Delivery Up and the Order for Disclosure, and has failed to observe the No Sale Prohibition by selling or offering to sell the Infringement Product on 29 August 2019.  In these proceedings, Karibu is enforcing the Injunction Order against J Solution by an order of committal.  In accordance with Order 45 rule 5(1)(iii), the application for an order of committal must be made against a director or an officer of J Solution[8].  As prescribed in Order 45 rule 7(3)(a), it is a prerequisite to that application that a copy of the Injunction Order has been personally served on the director or the officer against whom an order of committal is sought.

23.With regard to Karibu’s application for committal against Lau personally for aiding and abetting J Solution in its breach of the Injunction Order, it is a prerequisite to that application that a copy of the Injunction Order has been personally served on Lau.  See Order 45 rule 7(2).

24.There is no dispute that the Injunction Order has not been personally served on Lau.  Ms Chan is saying that personal service of the Injunction Order on Lau can be dispensed with.  Ms Chan submits that for the reasons advanced in her submissions, Lau must be aware of the contents of the Injunction Order and the consequence of disobedience of the same.

25.The principles concerning dispensing with service of the order with penal notice have been recently summarized by Lisa Wong J in Wong Yuk Tung v Wong Po Ling[9]. In that case, the learned judge said:

“24. It is well-established that an order dispensing with service of the order with penal notice under O 45 r 7(7) is an extraordinary order. The Court of Appeal has warned in AXA China Region Insurance Co Ltd v Li Yu Ping Ellen [2002] HKC 339, [43] (Stock JA as he then was) that the power to dispense with service should not be exercised too readily, lest what should be a dispensing power for use in exceptional cases may gradually undermine the express requirements of Order 45 rule 7(2) and (4).

25. Such power to dispense should only be used if the plaintiff can satisfy the Court beyond reasonable doubt that:

(1) the alleged contemnor knew the terms of the orders relied on;

(2) he was aware of the consequence of disobedience; and

(3) he was aware of the grounds relied on as a breach with sufficient particularity to be able to answer the charge.

See, for example, Benson v Richards [2002] EWCA Civ 1402, [29] (Carnwath LJ); Lau Yee Ching v Wong Tak Kwong, HCCW 807/2004, unreported, 6 October 2005, [39] (Kwan J as she then was); and Lucky Sun Development Ltd v Gainsmate International Ltd [2007] 4 HKC 301, [28] (Deputy High Court Judge L Chan as he then was).”

26.Unless Karibu can prove beyond reasonable doubt the matters set out in [25] of Wong Yuk Tung (“the Relevant Matters”), I cannot exercise the discretion under Order 45 rule 7(7) in favour of Karibu to dispense with the service of the Injunction Order on Lau.  Based upon the evidence before the court, I am not satisfied that Karibu has surmounted this hurdle.

(1)  Lau did not attend the hearing on 22 March 2019 in the HCA Proceedings, in which the Injunction Order was made.

(2)  J Solution has a registered office, an official website and 2 shops.  On the face of all these, J Solution does not appear to be a tiny business which can be operated by Lau alone.  Lau may have employed some staff members to assist him to run J Solution[10].  Documents left at the registered office or at the 2 shops may be read by the staff members of J Solution and may not be read by Lau.

(3)  The evidence of Mr So Ki Kai is that on 29 March 2019, he merely left copies of the Injunction Order with penal notice endorsed thereon at the registered office of J Solution and at the 2 shops.  There is no evidence showing that it is beyond reasonable doubt that these copies would be forwarded to Lau.  For the sake of discussion, if each sealed copy of the Injunction Order is placed inside a sealed envelope addressing to Lau, with the words “To be opened by addressee only, private and confidential” marked thereon, I may reach a different conclusion on whether Lau would have notice of the Injunction Order.

(4)  In the HCA Proceedings, Karibu’s application for a default judgment was heard by DHCJ Abraham Chan SC on 20 November 2019.  Lau on behalf of J Solution attended the hearing.  After hearing the parties, the learned judge granted Karibu’s application.  However, there is no evidence showing that anything concerning the Injunction Order, in particular the Relevant Matters set out in [25] of Wong Yuk Tung, has been communicated to Lau in that hearing.

(5)  Bearing the aforesaid in mind, in my view, Karibu has failed to prove the Relevant Matters beyond reasonable doubt.

27.Accordingly, Karibu’s application for an order that service of the Injunction Order on Lau be dispensed with under Order 45 rule 7(7) must be refused.

28.I have considered whether Karibu may still enforce the No Sale Prohibition against J Solution by a committal order by relying upon Order 45 rule 7(6), notwithstanding that there has not been any personal service of the order on Lau.  In relation to the No Sale Prohibition, Karibu is relying upon the incident occurred on 29 August 2019.  By reason of the matters set out in [26(1) to (3)] above, I cannot be satisfied beyond reasonable doubt that Lau must have been notified the terms of the Injunction Order at any time before 29 August 2019.

29.In my judgment, in the absence of personal service of the Injunction Order on Lau or any officer of J Solution, Karibu cannot enforce the Injunction Order against J Solution by a committal order. Karibu also cannot seek a committal order against Lau personally.  The OS must therefore be dismissed.

Disposition

30.For the reasons above, I dismissed the OS.

31.J Solution has not taken any step in these proceedings, and Lau’s participation in these proceedings is minimal.  In the circumstances, although I have dismissed the OS, I am of the view that it would not be necessary to make any costs order in favour of J Solution and/or Lau. For these reasons, I made no order as to costs.

32.I thank counsel for the assistance rendered to the court.

Ms Joyce M Y Chan, instructed by Yiu & Associates, for the applicant

The 2^nd respondent appeared in person