Montres Rolex S.A. and Another v. Tsang Yiu Chung t/a Leighton Trading Co. and Another

HCA015349/1999

HCA15349/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.15349 OF 1999

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Coram: Hon Yam J in Chambers

Date of Hearing: 1 June 2001

Date of Judgment: 1 June 2001

Date of Handing Down Judgment in Court: 20 June 2001

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J U D G M E N T

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1.This is an action basically instituted by the Rolex watch companies in Switzerland and in Hong Kong ("Rolex watch") against the 1st defendant, Tsang Yiu Chung ("Mr Tsang") trading as Leighton Trading Company ("Leighton") and the 2nd defendant, Morich Trading Limited ("Morich") in a passing off action.

2.The allegation of Rolex watch is that the defendants have infringed their trade marks by offering for sale or selling watches not of the manufacture of Rolex watch featuring or sold by reference to the trade marks of Rolex watch or confusingly similar trade marks.

3.There were two occasions alleged by the plaintiffs. The first allegation was that Mr Tsang in the name of Leighton on 19 December 1996 sold, in his own capacity and/or on behalf of Morich, to one Elegant Jewellery Company Limited in respect of what is now called "the 1st watch" purporting to be a new Rolex watch model with reference number 68278 (Oyster Perpetual Datejust) and bearing the serial number S975297. Rolex watch alleged that the original watch manufactured by Rolex of model reference 68278 did not bear such a serial number. Instead they said that the serial number S975297 actually belonged to another model reference 68240 (Oyster Perpetual Datejust). There are other allegations concerning the difference between the two models.

4.In respect of what is now called "the 2nd watch", the second allegation of Rolex watch is that on 23 July 1997, Mr Tsang sold this watch to one Trans Mondiale Watch Company Limited, purported to be a new Rolex watch model reference number 18388 (Oyster Perpetual Day-Date) and bearing the serial number W144266. In respect of the 2nd watch, again Rolex watch alleged that the serial number W144266 has been applied by them to a different model reference 69190 instead of 18388 and there are also other differences between the two kinds of watches.

5.There is an alternative allegation that these two watches were adulterated and/or modified by person other than Rolex watch without their licence or authorisation by re-engraving the serial number and the watches were used by the defendants without licence or consent of Rolex watch.

6.The original allegation was infringement by offering for sale of these watches. The allegation or adulteration or modification is an alternative allegation of the plaintiffs. In the defence of the 1st and 2nd defendants, they denied these allegations. Paragraph 5 of the defence pleaded that :-

"On 19 December 1996, the 1st defendant sold to Elegant Jewellery Company Limited a watch purporting to be a Rolex watch with model reference 68278."

I do not understand what the defence meant by the word "purporting". Is it an admission that they were selling fake Rolex watch or not? I do not quite know but it is really a matter for the plaintiffs to ask for Further and Better Particulars on the defence. Be that as it may, the defence admitted the sale of certain watches but it denied the allegation of passing off, modification and adulteration.

7.There is a further plea that the defendants were selling on an "as-is" basis. I do not want to go into detail in order not to prejudice the trial. However this is the first time I have ever heard of a defence to an infringement of trade mark and passing off action which said that the defendant was only selling on an "as-is" basis, even though it bears a trade mark of another person without his licence or consent and the defendant therefore has no responsibility or liability. Obviously, if they say that the watch bearing that trade mark is a genuine Rolex watch, it would be a complete defence, but it is not what they have pleaded specifically. In any event even in a defence of sale on "as-is" basis on a vendor and purchaser dispute as to landed property, it is only a defence to the buyer's suit and not to the whole world.

8.Be that as it may, it is not the time to make this criticism about the defence because I am not concerned with further and particulars of the defence. On the contrary, I am concerned with the very lengthy Requests for Further and Better Particulars of the plaintiffs' Statement of Claim, drafted or at least settled by counsel, Mr Adex Tsui with 86 paragraphs in about 11 pages. The matter came before Master De Souza and the application was dismissed. Now the defendants appeal before me.

9.After I have read Mr Tsui's long and convoluted submissions in a bundle of documents titling "skeleton argument" comprising of 30 pages (in which some of the points raised by him are quite convoluted and some are quite incomprehensible), I came to a firm conclusion and agreed with Miss Wong, solicitor for the plaintiffs, that all these Requests for Further and Better Particulars are unnecessary, inappropriate, incomprehensible and oppressive.

10.First, some of the particulars sought are not necessary, for example, Request No.4 :-

"4) state the method and in what way the unique serial number was determined and assigned."

I do not know what is the relevance of this particular in deciding the real controversy between the parties.

11.Secondly, they are asking for evidence and not fact, for example, Request No.1 :-

"1) state the exact position of the case of each watch on which the alleged unique serial number engraved."

12.Thirdly, some requests amounted to a cross-examination of the plaintiffs which is premature, for example, Request No.10 :-

"10) state whether 'will not service' means

(1) 'will not provide paid maintenance service to'; or

(2) 'will not provide free maintenance service to' or both"

13.Fourthly and finally, these requests are quite incomprehensible and sometimes drafted in ungrammatical manner, for example, Request No.23 :-

"23) specify each and every documents belonging to the Plaintiffs which the Plaintiffs relied on in support of the allegation that the 1st Defendant sold on behalf of the 2nd Defendant to Elegant Jewellery Company Limited the 1st Watch."

14.In the written submissions of Mr Tsui (at page 7, paragraph 43), he submitted that in general the defendants asked the following particulars, inter alia :-

"(ii) on which facts relied on by the plaintiffs to know that transaction details, inter alia, the watches sold at the model numbers and serial numbers pleaded and the identity of documents and watches and these particulars of the documents and watches relied on?"

This paragraph is totally incomprehensible and ungrammatical. I have spent quite some time in analyzing this paragraph and regretted for doing so. I am afraid I have to say that this is a shame to the profession.

15.All in all, these requests are oppressive. They are unnecessary and irrelevant. The plaintiffs have clearly stated all necessary facts in the Statement of Claim. Clearly, it is a straightforward case of passing off with an alternative allegation of adulteration and modification. How the plaintiffs are going to prove their case as pleaded in the Statement of Claim is a matter of evidence.

16.In some cases, I must say, it is difficult to distinguish, in a limited grey area, between evidence and fact. The guiding principle is whether a plaintiff should plead these facts in order to establish his cause of action, and further, whether the plaintiff could lead evidence in support of certain factual allegations and the same must be specifically pleaded. But this is not a case where those requests are concerned with the grey area wherein it is difficult to distinguish between evidence and fact. The difficulty in distinguishing, within a very limited marginal grey area, between fact and evidence does not pose any difficulty to practitioners nowadays. Now in every action for trial, parties are required under the rules to exchange witnesses' statements which would state all the evidence intended to be adduced by the parties. No one should be taken by surprise. Seldom do we have the difficulty to resolve the theoretical distinction between evidence and fact. Those requests before me are not concerned with such a distinction at all.

17.Accordingly, I am afraid this appeal has to be dismissed with costs to the plaintiffs and I understand Miss Wong is asking for an order that such costs shall be taxed and paid forthwith. Costs have to be taxed and paid forthwith simply on the ground that these requests are irrelevant, unnecessary and oppressive.

Epilogue

18.Finally, I hate to add this but I cannot restrain myself from adding this as an epilogue to my judgment since I must send a clear message to practitioners in respect of the way they should handle litigation. I make no apology for quoting my usual speech which I used to deliver in the proceedings of admission of solicitors and barristers since 1998 which is relevant to the matter before me today. This is what I said :-

"It is our duty as lawyers to provide an efficient legal service to the general public which they could well afford to pay. We are experiencing an economic crisis now and lawyers, of course, are by no means immune from this effect. Most lawyers are facing a tremendous drop in their income especially in the area of conveyancing. There is a tendency for lawyers to find new channels of revenue. Lord Hoffman, who sat in the CFA recently, delivered a speech to the Judiciary. He opined that since lawyers are remunerated by the amount of time they have spent on a piece of work instead of being paid by a lump sum in respect of the whole piece of work like our counterpart in Germany, there is a strong motivation for lawyers to create more works for themselves. Thus in a common law system like England, Australia and Hong Kong, there are much more interlocutory applications in civil litigation. Request for Further and Better Particulars became lengthier and there are more incidents of applications for discovery, interrogatories and the like. Even examination-in-chief in the trial became longer than necessary. Lord Hoffman's conclusion is that there is no point in developing a legal system which is near perfection but eventually no one can afford it.

From this day onwards, the profession demands the highest integrity from lawyers. The word 'integrity' in respect of providing an efficient and affordable legal service to your client means that you have to decide conscientiously what is in the best interest for your client. Sometimes it is against your own interest which you must readily put aside. Further we must develop a system which would enable everyone to obtain justice from the court expeditiously and economically. This is something which can easily be forgotten when we are in financial crisis."

19.I am afraid in this case, the sentiment is that lawyers sometimes are creating works for themselves unnecessarily. All these requests, to say the least, are entirely unnecessary. I really feel sorry for those litigants who have to bear the costs as a consequence.

Representation:

Miss K. Wong of Messrs Lovells, for the Plaintiffs

Mr Adex Tsui, instructed by Messrs Y.S. Lau & Partners, for the Defendants