Himark Martin Tailors Ltd v. Singh, Arvinder and Others

HCA 354/2021

[2022] HKCFI 3427

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 354 OF 2021

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Before:  Mr Recorder Eugene Fung SC in Chambers (Open to Public)

Date of Hearing: 3 November 2022

Date of Decision: 16 November 2022

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DECISION

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1.This is the defendants’ appeal against the Master’s Order dated 7 April 2022 ordering the defendants to file and serve answers to the plaintiff’s request for further and better particulars of the defendants’ Defence.

A.  THE RELEVANT BACKGROUND

2.According to the plaintiff:

(1)   the plaintiff was and is still a tailoring company carrying on business offering high quality clothing and services to clients in Hong Kong and other countries;

(2)   the 1^st to 4^th and 6^th defendants (“Individual Defendants”) were the plaintiff’s employees at the material times;

(3)   the 3^rd and 6^th defendants were the plaintiff’s directors at the material times;

(4)   each of the Individual Defendants collated, collected together and removed confidential proprietary data belonging to the plaintiff during their employment with the plaintiff in the form of its customer lists (“Customer Lists”) in breach of their contract with the plaintiff and duties owed to the plaintiff, and provided details of the Customer Lists to each of 5^th, 7^th and 8^th defendants (“Corporate Defendants”);

(5)   each of the Individual Defendants are in breach of contract with the plaintiff and various duties owed to the plaintiff by soliciting business from and dealing with the customers of the plaintiff;

(6)   each of the Corporate Defendants has induced the Individual Defendants to breach the latter’s employment contract with the plaintiff;

(7)   each of the Individual Defendants and the Corporate Defendants wrongfully conspired together to cause injury to the plaintiff;

(8)   the plaintiff has suffered loss and damage as a result of the wrongful acts of the defendants.

3.In their Defence, the defendants have pleaded, amongst other things, (1) the Individual Defendants’ employment history both with the plaintiff and other parties after leaving the plaintiff’s employment, and (2) certain alleged customary trade practice for tailoring companies in Hong Kong.

4.On 3 December 2021, the plaintiff made a request for further and better particulars (“Request for FBP”) of certain pleas in the Defence. 

5.By a summons dated 21 December 2021, the plaintiff took out an application for the defendants to answer the Request for FBP within 14 days.

6.On 29 December 2021, the defendants’ solicitors filed a document called “Answer to Request for Further and Better Particulars of the 1^st – 8^th Defendants’ Defence”.  However, as described by the defendants’ solicitors in an affirmation for this appeal, the document “in effect [stated] that the Plaintiff was not entitled to the particulars on the grounds that ‘the particulars sought are irrelevant to the issues of the proceedings’, and/or that ‘they are not necessary either for disposing fairly of the cause or for saving costs’, but on a without prejudice basis volunteered some uncontroversial information”.

7.The plaintiff’s summons was heard by a Master at a hearing on 7 April 2022, who ordered the defendants to answer paragraphs 1(i) to (iii), 2(i), 3(i), 4(i), 5(i) and 7(i) of the Request for FBP, with costs occasioned by the application to be in the cause of the action.

8.On 5 May 2022, the defendants filed their notice of appeal against the Master’s order out of time and have sought retrospective leave to do so.

B.  WHETHER EXTENSION OF TIME SHOULD BE GRANTED FOR FILING THE NOTICE OF APPEAL OUT OF TIME

9.In considering whether to extend time to appeal, the court has to consider all relevant factors, particularly (1) the length of the delay; (2) the reasons for the delay; (3) the merits of the proposed appeal; (4) the degree of prejudice to the other party: Hong Kong Civil Procedure 2022 vol 1, Note 58/1/9. 

10.The defendants were 14 days late in filing the notice of appeal.  An affirmation has been filed on behalf of the defendants to contend that (1) the 1^st to 4^th defendants had applied for legal aid but such applications were not approved until 4 May 2022 and (2) the notice of appeal was filed on the following day (5 May 2022) after the 1^st to 4^th defendants were granted legal aid.  The defendants submitted that retrospective leave should be granted given that (1) the length of delay was relatively short and did not cause any prejudice to the plaintiff, and (2) there are merits in the appeal.

11.I do not find the reasons put forward by the defendants to be satisfactory.  The fact that the 1^st to 4^th defendants were waiting for the result of their legal applications is not a sufficient reason for not filing a notice of appeal within time.  Further, the same reason cannot be applicable to the 5^th to 8^th defendants, who were at all material times represented by their current solicitors. 

12.However, the lack of satisfactory reasons for the delay is only one factor to be taken into account in the court’s exercise of discretion and the primary consideration is to secure the just resolution of the disputes between the parties: Hady v Bazar [2012] 3 HKLRD 29 at §49 (DHCJ Peter Ng SC).  Given that (1) the defendants’ delay was relatively short, (2) no material prejudice has been shown by the plaintiff to have been occasioned by the short delay, and (3) there are merits in some parts of the defendants’ appeal (to be elaborated further below), I would exercise my discretion to grant leave to the defendants to file their notice of appeal out of time.

C.  REQUEST FOR FURTHER AND BETTER PARTICULARS

13.The paragraphs in the Request for FBP that are being challenged by the defendants in this appeal can be put into two broad categories: (1) the requests relating to the agreement between the Individual Defendants and the other parties whom they worked for after leaving the plaintiff’s employment (namely paragraphs 1(i) to (iii), 2(i), 3(i), 4(i) and 5(i) of the Request for FBP), and (2) the request relating to the defendants’ plea concerning a trade practice for tailoring companies in Hong Kong (namely paragraph 7(i) of the Request for FBP). 

C1.  Paragraphs 1(i) to (iii), 2(i), 3(i), 4(i) and 5(i) of the Request for FBP

14.In their Defence, the Individual Defendants pleaded, amongst other things, that each of them started working for other party/parties (including the 5^th and 7^th defendants) after leaving the plaintiff’s employment.  The plaintiff asked for further and better particulars of the relevant agreement between each of the Individual Defendants and the party for whom they worked for.  For the purpose of this appeal, the plaintiff has clarified that it does not pursue any request that involves production of documents.

15.In general, the pleading should state the date of the alleged agreement, the names of all parties to it, and whether it was made orally or in writing, in the former case stating by whom it was made and in the latter case identifying the document, and in all cases setting out the relevant terms relied on: Hong Kong Civil Procedure 2022 vol 1, Note 18/12/4.

16.In the present case, the plaintiff’s case is that the Individual Defendants had started working for the plaintiff’s competitors after leaving the plaintiff’s employment.  Given that the Individual Defendants have already pleaded some working arrangements with other parties, I consider it relevant and necessary for saving costs for the plaintiff to be given further relevant particulars on such arrangements.  It seems to me that the plaintiff should be entitled to the following particulars: (1) whether the agreement under which each of the Individual Defendants worked for another party was made orally or in writing, (2) if it was made orally, (a) the date on which the oral agreement was made, (b) the parties to the oral agreement, and (c) the material terms of the oral agreement.

17.In their submissions, the defendants argue that some of the requested particulars have already been given in the so-called “without prejudice answer” dated 29 December 2021.  In my view, the “without prejudice answer” does not constitute a proper response to the Request for FBP.  The answers to a request for further and better particulars are part of the pleadings and ought to be verified by a statement of truth (RHC Order 18, rule 20A).  As mentioned above, the “without prejudice answer” was prepared on behalf of the defendants’ solicitors on the premise that the plaintiff was not entitled to the particulars sought.  It was filed without any statement of truth signed by each of the defendants.   

18.However, in the Request for FBP, the plaintiff has also sought further and better particulars of (1) the place at which the relevant oral agreement was made and (2) the gist of the words used in the making of the relevant oral agreement.  I am unable to see why it is necessary for the plaintiff to be informed of these matters.  At the hearing, the plaintiff’s counsel accepted that these requests were not commonly made in respect of an oral agreement.  It seems to me that the defendants should not be required to answer them.

19.The defendants further argued that the requests for the material terms of the oral agreement concerning the Individual Defendants’ remuneration were irrelevant and unnecessary.  However, given that the plaintiff’s claim includes a claim for an account of profits made by the defendants and that the defendants have already pleaded his/her remuneration under other agreements with the alleged competitors in the other places of the Defence, I consider that the plaintiff’s requests (for details of the Individual Defendants’ remuneration) were properly made and that the defendants should answer them.

20.In summary, it is my view that the defendants should answer paragraphs 1(i) to (iii), 2(i), 3(i), 4(i) and 5(i) of the Request for FBP except the parts involving (1) the place at which the relevant oral agreement was made, (2) the gist of the words used in the making of the oral agreement and (3) the production of any contract.

C2.  Paragraph 7(i) of the Request for FBP

21.In its Defence, the defendants pleaded (at paragraph 14.3) that “[a]lternatively, it is customary trade practice for tailoring companies in Hong Kong to keep customer lists which comprise of data pertaining to individuals who most likely require the services of a tailor [and it] is customary for such lists to be compiled by resorting to data available in the public domain”.  By the Request for FBP, the plaintiff asked for “full particulars of the customer lists of the 5^th, 7^th and 8^th Defendants…”.

22.I agree with the defendants’ submissions that the request does not arise out of the Defence.  In the relevant parts of paragraph 14.3 of the Defence, the defendants have only pleaded certain “customary trade practice” in Hong Kong.  There is no plea in paragraph 14.3 or anywhere else in the Defence that the 5^th, 7^th and/or 8^th defendants at the material times had any customer lists.  In these circumstances, I do not see how the plaintiff can request the defendants to provide particulars on something which the defendants have never mentioned in the Defence.  For the same reason, the defendants cannot be requested to state “how, when, and wherefrom the list is compiled”, as the plaintiff’s counsel attempted to rephrase the request in his skeleton submission.

23.Accordingly, paragraph 7(i) of the Request for FBP is not a proper request and the plaintiff is not entitled to an answer.

D.  DISPOSITION

24.For the reasons given above, I consider that paragraphs 1(i) to (iii), 2(i), 3(i), 4(i) and 5(i) of the Request for FBP (except the parts mentioned in paragraph 20 above) are relevant and necessary, and should be answered by the defendants within 28 days.  On the other hand, the parts of the Request for FBP mentioned in paragraphs 20 and 23 above do not need to be answered by the defendants. 

25.Paragraph 1 of the Master’s Order dated 7 April 2022 is therefore varied to the extent as referred to in the previous paragraph.

26.As far as the costs occasioned by the Request for FBP are concerned, it is necessary to take into account what has happened both before the Master and in this appeal.   Judging by the conclusion that I have reached, it seems to me that neither party has been completely successful.  The plaintiff had to come to court before the Master to obtain an order to compel the defendants to properly answer the Request for FBP.  On the other hand, the defendants had to come to court before me to vary the Master’s Order.  Looking at the matter in the round, it seems to me that the fairest costs order is that there should be no order as to the costs occasioned by the plaintiff’s summons dated 21 December 2021 and the defendants’ notice of appeal filed on 5 May 2022, and I make such an order on a nisi basis.  It follows that the costs order made by the Master (that the costs of the application should be in the cause of the action) should also be set aside.

27.The 1^st to 4^th defendants’ own costs shall be taxed in accordance with Legal Aid Regulations.

Mr Oscar Tam, instructed by Messrs Mohnani & Associates, for the plaintiff 

Mr Derek Hu, instructed by Messrs Patrick Chu, Conti Wong Lawyers LLP, for the defendants