Case Document

100%

HCA010374/1995

1995, No.A10374

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN
	FULL RANGE ELECTRONICS COMPANY LIMITED	Plaintiff
	AND
	GENERAL-TECH INDUSTRIAL LIMITED	1^st Defendant
	TSANG CHIU MING (a male)	2^nd Defendant

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Coram: Hon Cheung J. in Chambers

Date of hearing: 20 January 1997

Date of handing down judgment: 17 January 1997

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JUDGMENT

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The appeal

1. This is an appeal against the decision of the Master allowing the Plaintiff's application for specific discovery of documents against the Defendants.

Background

2. The Plaintiff claims ownership of drawings of a radio in the get up of a headphone. The Defendants infringed the copyright by selling a similar headphone to customers. The Defendants said that the parties agreed that they would each develop and sell the headphone. The copyright was common property of the parties and on two separate occasions, the Plaintiff informed the Defendants that the Plaintiff had no objection to the Defendants making the moulds for the headphone.

The documents

3. The Plaintiff seeks specific discovery of the following four types of documents :

1.	Documents relating to the production of moulds for the manufacture of the headphone radio the subject of this action by the Defendants, whether under the 1st Defendant's model reference GT-316 or otherwise ("the headph9one Radio"), including but not limited to engineering drawings, quotations, invoices, payments and receipts, etc.
2.	Documents relating to the sale or supply and offer for sale or supply of the Headphone Radio to Alaron Inc. or Alaron Asia or their agents, including but not limited to correspondence, contracts, purchase orders, proforma invoices, production orders, letters of credit, bills of exchange, bills of lading, airway bills, trust receipts and import and export declarations, etc.
3.	Documents and materials relating to promotions, advertisements of the Headphone Radio.
4.	Documents relating to the sale or supply and offer for sale or supply of the Headphone Radio to the Defendants' customers including those customers identified in the documents in the Defendants' List of Documents filed herein on 16th May 1996, including but not limited to correspondence, contracts, purchase orders, proforma invoices, production orders, letters of credit, bills of exchange, bills of lading, airway bills, trust receipts and import and export declarations, etc.

The principles

4. The party seeking specific discovery of documents had to make out a prima facie case that:

1.	there is in existence a specified document or class of documents;
2.	the party against whom the order is sought has or had the document in his possession, custody or power;
3.	the document or class of document relates to a matter in question in the action; and
4.	discovery thereof is necessary either for disposing fairly of the cause or matter or for saving costs.

Deak & Co. (Far East) Ltd. v. NM Rothschild 7 Sons Ltd. & Ors. [1981] HKC 78.

1. Documents relating to moulds

5. The Plaintiff has made out a case for the existence of the documents. Mr Chan, Counsel for the Defendants, argued that the documents are not relevant since the Defendants have admitted making moulds of the headphones in the Defence. Despite the admission of the Defendants, I am satisfied that the documents are still relevant to the issue of the alleged agreement between the parties and the defence of estoppel to ascertain if the moulds were indeed made the time when he Plaintiff had allegedly entered into agreements with the Defendants. Mr Chan, relying on the case of Compagnie Financiere du Pacifique v. Peruvian Guano Co. (1882_ 11 QBD 55, submitted these documents merely advanced the Defendants' case and not the Plaintiff's case. Without seeing the documents, it would not be possible to say at this state whether the documents would solely enable the Defendants to advance their case. However, it is certainly reasonable to suppose the documents contain information which may - not which must - either directly or indirectly enable the party requiting the affidavit either to advance his case or damage the case of his adversary : see Brett L.J. in Peruvian Guano.

6. I will order discovery of these documents. The abbreviation "etc" is deleted from the paragraph.

2. Documents relating to the sale to Alaron

7. The sale to Alaron has been pjarticularised as one of the Defendants' infringement of the copyright The Plaintiff has made out a prima facie case of existence. These documents are relevant to the issue of the alleged agreement and the defence of estoppel as well.

8. In Auto-Treasure Ltd. trading as Albert Jewellery Creation v. Noble Diamond Ltd. trading as Noble Jewellery & Anr. [1992] 1 HKC 117, the Court of Appeal held that in copyright action the judge will determine all issues on liability first, and if liability is proved, the judge will then direct an enquiry to damages or an account of profits to be made in chambers. Discovery relating to the question of damages will not be ordered until the defendant's liability has been established.

9. This is an approach I would respectfully adopt. However, in the present case, the documents relating to the Alaron transaction are not merely relevant to the issue of damages but also to the issue of liability as well. Furthermore the documents are also relevant to the issue of infringement.

10. The Defendants admitted that they had "dealt in" the headphones but denied that they had infringed any copyright. Mr Chan relied on the dictionary meaning of "dealing in" which includes trading. He argued that since the Defendants had admitted trading in the headphones, discovery is no longer necessary,. Under the Copyright Act 1956, as applied to Hong Kong, the word "infringement" has a technical meaning. The term "dealing in" appears in subsequent copyright legislation which is not applicable to Hong Kong. In view of the express denial by the Defendants of any infringement, the documents are relevant to the issue of infringement. In any event, the Defendants did not expressly admit that they had carried out the transactions with Alaron. The Plaintiff's entitle4ment to discovery of these documents are not defeated simply because it may be entitled to seek further and better particulars of the Defence.

11. I will limit the discovery to the period between May 1992 which was the time when the copyright was first published to the end of June1995 which was about 6 months after the time in which the Plaintiff said that the Alaron transaction was conducted. The abbreviation "etc." should also be deleted from the paragraph.

3. Documents relation to the promotion and advertising of the headphone

12. The Defendants admitted that they have advertised the headphone in 14993 and1995. While it is reasonable to find that the sale to Alaron may involve promotion and advertisement of the headphone, the Plaintiff ahs not given other instances of the promotional activities of the Defendants. Documents relating to the promotion of the headphone to Alaron are covered by the second category of documents and hence I do not see the need to make a further order under the third category.

4. Documents relating to the sale or supply to Defendants' customer.

13. I will not order these documents to be disclosed. First of all, it may relate to the question of quantum and secondly this amounts to a fishing expedition by the Plaintiff to ascertain further acts of infringement by the Defendants. No other instances of infringement have been pleaded.

Costs

14. The cots order nisi is as follows. The costs order made by the Master should not be disturbed. The Defendants have only managed to appeal successfully on two categories of documents, I will order each party to bear its own costs of the appeal.