Buildtech Enterprise International Ltd and Others v. Ok Construction Materials (Supply) Co Ltd
Read the full judgment text of HCIP 14/2021 on BabelCite. This High Court CFI judgment was delivered on 22 June 2021.
1. This is the substantive hearing of the summons dated 13 April 2021 (“Summons”) for security for costs by the Defendant against the Plaintiffs in the sum of about $1.28 million under O 23 r 1(1)(c) of the Rules of the High Court (“RHC”), Cap 4A and s 905 of the Companies Ordinance (“CO”), Cap 622. In the hearing on 22 June 2021, I dismissed the Summons with no order as to costs. I now give my reasons.
Cited by 5 cases · Cites 3 cases
|
HCIP 14/2021 [2021] HKCFI 1837 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE INTELLECTUAL PROPERTY PROCEEDINGS NO. 14 OF 2021 (formerly HIGH COURT MISCELLANEOUS PROCEEDINGS NO. 132 OF 2021) ________________________
________________________ BETWEEN
________________________ Before: Hon Lok J in Chambers Date of Hearing: 22 June 2021 Date of Decision: 22 June 2021 Date of Reasons for Decision: 25 June 2021 _________________________ REASONS FOR DECISION _________________________ 1.This is the substantive hearing of the summons dated 13 April 2021 (“Summons”) for security for costs by the Defendant against the Plaintiffs in the sum of about $1.28 million under O 23 r 1(1)(c) of the Rules of the High Court (“RHC”), Cap 4A and s 905 of the Companies Ordinance (“CO”), Cap 622. In the hearing on 22 June 2021, I dismissed the Summons with no order as to costs. I now give my reasons. Background 2.This action concerns the Plaintiffs’ application for invalidation of Trade Mark No. 302462085 “ 3.In gist, the Defendant’s grounds in support of the security for costs application are that:
4.The following facts are not in dispute:
The relevant legal principles 5.O 23 r 1 of the RHC provides:
6.An order for security for costs is not intended to be a sanction against the use of an incorrect address without a proper explanation. There should be an element of deception in the misstatement in order to justify an order for security for costs. This is why a plaintiff can avoid giving security by showing that he did not have any intention to deceive under r 1(2). The purpose of an order for security under O 23 r 1(1)(c) is not to facilitate enforcement of judgments. It is targeted at deceitful plaintiffs only and not those who do not have assets readily amenable to easy execution.[1] 7.The principles governing the application for security for costs under s 905 are also well established. 8.The burden is on the defendant to establish by credible evidence that there is reason to believe that the plaintiff company will not (as opposed to may not) be able to pay the costs of the defendant if it is successful in its defence. The defendant is not expected to produce conclusive evidence of the plaintiff’s lack of means. It suffices for the defendant to point to the surrounding circumstances or adduce some credible evidence in support of such belief. It is then up to the plaintiff company to adduce such evidence as it thinks fit to demonstrate its means or to contradict the defendant’s evidence. The court shall decide whether a reasonable person with ordinary experience of daily life would consider the plaintiff unable to pay such costs. The fact that the plaintiff has a nominal paid-up capital is not by itself sufficient to trigger the court’s jurisdiction to order security.[2] Discussion 9.In my judgment, the evidence available at this stage does not justify the court to order any of the Plaintiffs to pay security for costs whether under O 23 r 1(1)(c) of the RHC or s 905 of the CO. 10.It is true that the registered office addresses of the 1st and 2nd Plaintiffs were incorrectly stated in the OS. In November and December 2020, they had already informed the Companies Registry that their registered office addresses were changed to the DD114 Address. In such case, the old address, i.e. DD106 Address, stated in the OS must be incorrect. 11.It was odd that when the Defendant’s solicitors made enquires with the Plaintiffs’ solicitors on such issue, the Plaintiffs’ solicitors initially insisted that the addresses stated in the OS were correct. Nevertheless, this could not have been an attempt to mislead or deceive the Defendant as the correct addresses can easily be found in the updated returns of the 1st and 2nd Plaintiffs at the Companies Registry. If they had any intention to deceive the Defendant about their registered addresses, they would not have bothered to inform the Companies Registry of their change of registered office addresses. 12.The 3rd and 4th Plaintiffs have provided the House 137 Address as their addresses in the OS. According to the Defendant, such address is “incomplete” or “non-existent”, based on its inquiries with real estate agents and the Lands Registry. However, based on the various correspondence (including electricity and water bills and correspondence with the Inland Revenue Department, insurance companies and banks) supplied by the Plaintiffs, it can be seen that the family of the 3rd and 4th Plaintiffs could be contacted through the House 137 Address. If the House 137 Address is an incomplete or non-existent address, one cannot explain why the 3rd and 4th Plaintiffs could have obtained such correspondence. Whether Madam Yau stated in some of these correspondence is indeed the wife of the 4th Plaintiff is quite a non-issue. The fact remains that the mailings can reach the House 137 Address. 13.Another issue is why the 3rd Plaintiff has provided the House 137 Address as his address in the OS when he had bought the Ma On Kong Property in January 2020. According to the 3rd Plaintiff’s explanation, he had lived in the House 137 Address before the purchase of the Ma On Kong Property in early 2020. After the purchase, there was decoration work to be done in the Ma On Kong Property and so he continued to use the House 137 Address as his residential address. Ms Cheung, solicitor for the Defendant, queries the genuineness of such explanation. According to her, the 3rd Plaintiff could have provided photos of the Ma On Kong Property to show the progress of the decoration work and other documents to show his intention to use the Ma On Kong Property as his matrimonial home. 14.Despite the lack of such evidence, I accept the 3rd Plaintiff’s explanation as a genuine one. If the 3rd Plaintiff had intended to deceive the Defendant or tried to avoid disclosing his ownership of the Ma On Kong Property, there was simply no need for him to have informed the Companies Registry of his change of address. It would have been a routine in litigations to conduct companies searches of the parties involved in the proceedings. Despite the provision of the House 137 Address in the OS, there should be no difficulty for the Defendant, through searches to be made in the Companies Registry and the Lands Registry, to find out the 3rd Plaintiff’s ownership of the Ma On Kong Property. Under such circumstances, I do not accept that the provision of the House 137 Address was a deliberate attempt made by the 3rd Plaintiff to deceive or mislead the Defendant. 15.Now I turn to the s 905 application. The contention that the 1st and 2nd Plaintiffs will not be able to satisfy any adverse costs order made against them is based solely on the observations of the Defendant’s manager, Mr Wong Wai Cheung, about the nature of the office premises of the 1st and 2nd Plaintiffs at the old DD106 Address as “merely a shack covered by metal sheets” and without “any proper flooring”. The Defendant then says that “if the conditions of their previous place of business are anything to go by, it is likely that this is a similar shack type of place, and unlikely to have much valuables there to satisfy any execution on a costs order made against the 1st and 2nd Plaintiffs”. 16.However, observations of the old DD106 Address back in 2019 can hardly amount to an accurate reflection of the present financial position of the 1st and 2nd Plaintiffs as of 13 April 2021 (the date of the Summons). Further, I agree with Mr Tse, counsel for the Plaintiffs, that observations of the physical appearance of the premises cannot constitute “credible testimony” that the 1st and 2nd Plaintiffs are financially incapable of satisfying an adverse costs order for there is no correlation between the two. If anything, the condition of the premises simply reflects the nature of the businesses of the 1st and 2nd Plaintiffs, namely the supply of construction materials and equipment. 17.It is not disputed that that the 1st and 2nd Plaintiffs have been carrying on their business for the past 20 years and both are very much a going concern. This is substantiated by: (i) the presence of vehicles, building materials, machinery and office accommodation owned by the 1st and 2nd Plaintiffs at the new DD104 Address; and (ii) a signed tenancy agreement for the lease of the said address until 14 December 2023 at a monthly rent of $55,000. Despite the lack of perhaps vehicles registration documents, all these show that the 1st and 2nd Plaintiffs are continuing to operate the same business that they have running for the past 20 years. 18.In view of the aforesaid, I agree with Mr Tse that the Defendant has failed to meet the threshold of adducing credible evidence to substantiate the belief that 1st and 2nd Plaintiffs will be unable to pay the Defendant’s costs if it is successful in its defence. Hence, despite the lack of evidence about their financial conditions produced by the 1st and 2nd Plaintiffs, there is no justification for the court to order security under s 905 of the CO. 19.I therefore dismissed the Summons in the hearing. Despite that the Plaintiffs are successful in resisting the Summons, I take the view that the Plaintiffs are somewhat responsible for bringing suspicions upon themselves. The addresses of the 1st and 2nd Plaintiffs were incorrectly stated in the original OS. For the addresses of the 3rd and 4th Plaintiffs, there is no official record showing that there is actually a House 137 at the site in issue. For the 3rd Plaintiff, there is still a discrepancy between his address given to the Companies Registry and that stated in the OS. Though I accept that the mistake and confusion are genuine, the Plaintiffs are mainly responsible for bringing suspicions upon themselves. I therefore ordered that there be no order as to the costs of the Summons.
Mr William Tse, instructed by Anthony Evans & Co, for the Plaintiffs Ms Stephanie SY Cheung, of Raymond Siu & Lawyers, for Defendant [1] Cheng, Henry v Imperial Sierra Group Holdings Ltd & Or [2020] HKDC 977 at §§27, 35 per Kent Yee DJ [2] E-Global Ltd v Trenda Ltd [2012] 2 HKLRD 1211 at §§6, 8 and 12 per To J |
in Class 19 in the name of OK Construction Materials (Supply) Company Limited (可以建材(供應)有限公司)
” registered in class 19 on 10 December 2012 by the Defendant pursuant to, amongst other grounds, ss 53(3) and 11(5)(b) of the Trade Marks Ordinance, Cap. 559.Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under HCIP 14/2021