Sonca Industries Ltd v. Tong Pak-ki and Another
Read the full judgment text of HCA 4322/1979 on BabelCite. This High Court CFI judgment was delivered on 19 November 1979.
1. This is an inter partes summons in the action making an application for the following relief:
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HCA004322/1979
Coram: Silke, J. Date of Judgment: 19 November 1979 ----------------- JUDGMENT ----------------- 1. This is an inter partes summons in the action making an application for the following relief: (a) An injunction to restrain the 1st and 2nd defendants or either of them by themselves their servants or agents or otherwise howsoever from designing manufacturing advertising for sale or selling any product or products the idea designs or information relating whereto the 1st defendant obtained during the course of his employment with the plaintiff in breach of an undertaking given by the 1st defendant on the 3rd day of May 1979, and (b) an injunction to restrain the 1st defendant whether by himself, his servants or agents or otherwise from using or disclosing any secret or confidential technology, information or trade secrets the knowledge of which was obtained by the 1st defendant while on the plaintiff's employment. 2. The writ in the action was issued on the 2nd of October 1979 and served on both defendants on the 9th October and the summons was filed on the 3rd October. 3. The plaintiff is a company incorporated in Hong Kong and is a subsidiary of Union Carbide Corporation of New York. Another company, the Eveready Hong Kong, is a partnership between the plaintiff and Union Carbide Asia Limited. 4. Eveready - whose products, at the least, are a household word - is a marketing and trading company and the plaintiff is both a manufacturing and marketing company. 5. The 1st defendant, Tong Pak-ki, entered into the employment of the plaintiff company in April 1976 starting his work as a marketing executive in the Marketing and Promotion Division of the plaintiff - referred to hereafter as "Sonca" - on 3rd May 1976. On that date he signed that which has been referred to as a "covenant" which reads as follows:-
the second portion is not of relevance here. 6. On the 31st March 1979 as the result of a conversation Mr. Tong had with Mr. Wong Chung-chee, the Senior Divisional Manager of the Lighting Products Division of Sonca, Mr. Tong resigned and forthwith left Sonca's employment. I shall revert to this at a later stage. 7. He was to come back on the 9th April to collect his personal things and to see Mr. T.C. Chan, the Assistant Managing Director. 8. Prior to this happening Mr. Tong in late 1978 had met Mr. Howard Fung, of a firm Howard Trading Company Limited, on a social and business basis - Mr. Tong says that he tried, on occasions, to obtain information from Mr. Fung about local prices of flash lights and lanterns. 9. He was required, he says, in the course of his employment by Sonca, to seek information from that firm's rivals. 10. After his departure from Sonca Mr. Tong, in mid May 1979, again met Mr. Fung who suggested that Mr. Tong might assist him in the business of Royce Manufactory Limited. Mr. Tong, being then unemployed, accepted a position as executive director in the 2nd defendant company and began his duties on 1st June 1979. 11. On the 20th August 1979 Rela Egil Namork - hereafter referred to as Rela - wrote a terse letter to Sonca reading "For the sake of order we are sending you enclosed the offer from Royce Manufactory Limited, Hong Kong." 12. The enclosure was a letter of 9th August 1979 which, together with a set of photographs, a description sheet and a comparison table, had been sent by "Royce" to Rela under the signature of Mr. Tong who signed as Executive Director of Royce. 13. Rela, a Norwegian Company, was an old and substantial client of Sonca. 14. That letter (WCC 8) described Royce as:
15. It went on to offer to supply to Rela "the same good quality products with much lower costs"; and it referred to the development of an all plastic flash light and a hand lantern with independent blinker unit. 16. The set of photographs enclosed showed these items and the description sheet was that of a "wide angle spotlite (sic) plus Detachable Blinker" lantern. I shall refer to this from now on as the defendants' latern. 17. It is noteworthy that the all plastic flash light photograph (WCC 9) shows a flash light very similar to one made elsewhere by an associate of Sonca (WCC 16) and bore the legend, just below the switch, "Use Eveready Batteries". 18. The plaintiff says this, and the opening paragraph of the Royce letter to Rela, were both intended to give colour to Royce's marketing of item similar to if not identical with the products of Sonca or its associates. But they made no specific complaint as to the flash light before me. 19. Their real concern is with the defendants' lantern - depicted in WCC 11 and WCC 12 shown in action in WCC 13 - 14 and 15. All of this included in the photographs attached to Royce's letter to Rela. 20. It is the plaintiff's case that at meetings held on the 5th and 7th of April 1978 that the design and manufacture of a lantern very similar in format to the defendants' lantern was discussed. That sketches of that lantern could have been seen by Mr. Tong who attended the second or part B meeting where these sketches were displayed. That there had been a coffee shop meeting between Mr. Tong, a person said to be his girl friend and a Mr. Hui Yin, a mechanical engineer in Sonca. This meeting, according to Mr. Hui, took place on the 19th March 1979 and he says he went there at the invitation of Mr. Tong who started to discuss the design of a lantern with him and who showed him a drawing of a design for a lantern which featured an angled lamp. He was also asked by Mr. Tong as to the merits of the design and costs of manufacture. 21. A Mr. Y.K. Chow, who is the technology manager in the Lighting Products Division of Sonca, was also in the coffee shop and he says he could see a drawing of a design of a lantern on the table in front of Mr. Tong, the girl and Mr. Hui. He was at a distance from the table but could see that the design showed a lantern with a black body and a yellow and white top. He further says that, having examined the photographs WCC 11 and 12 - these being the photographs attached to the Royce letter to Rela - that they bear substantial similarities in both shape and design to the lantern in the drawing he saw at the coffee shop meeting. He goes on to say that at a time not mentioned he had seen a sketch showing a lantern of a similar design in the Products Development Department of Sonca. 22. Mr. Wong Chung-chee, to whom Mr. Chow reported that which he had seen at the coffee shop meeting, says Mr. Chow drew a sketch for his benefit of that which he had seen at that coffee shop. This sketch I have not seen. 23. Mr. Wong, on the instruction of his superior in Sonca, had a meeting on the 31st March 1979 with Mr. Tong and at that meeting told Mr. Tong that "it was known that he was working on lighting products contrary to the interests of my company". He further said to Mr. Tong that "I did not make an accusation of this nature unless I had sufficient evidence to back up my accusation". It was then that having been told by Mr. Wong that he could either challenge the accusation in which event the matter would be litigated or alternatively he could resign forthwith, Mr. Tong resigned. 24. On the evidence which I have before me, all on affidavit or affirmation, of which there are sixteen, it does not appear that any specific details of his alleged transgressions were put to Mr. Tong on the 31st March. 25. There are two other main matters upon which the plaintiff relies in making its case for an injunction - these in addition to the meetings of the 5th and 7th of August and that which went on there. 26. These are the use of a car as a background to the photographs of the defendants' lantern and its promotion: and the metal shop 'Ching Ngai' visit of Mr. Hui Yin. 27. It will be convenient to deal with these here. 28. Mr. Kung Chi-hung, who is employed by Sonca as Assistant Industrial Designer, stated that in March 1979 Mr. Tong approached him and asked him to lend his car. Mr. Kung was reluctant to do so but eventually agreed. He is a little vague as to the actual date but said he was positive the loan was made while Mr. Tong was still employed by Sonca. 29. The car in the photographs showing the use of the defendants' lamp is that same car. I do note however that despite Mr. Kung's reference to the car depicted in WCC 15 as being his it clearly is not. WCC 13 and 14 only show Mr. Kung's car. 30. A photographer, Mr. Tong Wai-hang, states that he was approached in May 1979 by Mr. Tong and asked to take photographs of a new product of "the company he is working in, by the name of Royce ..". He goes on that he did so on the evening of the 22nd May 1979 and that the photographs TWH 1 and TWH 2 are these photographs. These on the face of them appear to be enlargements of WCC 14 and 13 - in the order shown. 31. They were taken, if Mr. Tong Wai-hang is correct, after the 1st defendant left the employ of Sonca and before he took up employment with Royce. 32. The metal shop incident. It is Mr. Hui Yin's evidence that he saw Mr. Tong in the month of April 1979 after his "dismissal" from Sonca, as Mr. Hui puts it, at the Ching Ngai Factory Kowloon City. Ching Ngai are a firm of jobbers who do some manufacturing work for Sonca. 33. Within the Ching Ngai premises was a metal die making shop set up by one Ho Ki. 34. Having told Mr. Wong Chung-chee of this sighting of Mr. Tong Mr. Wong asked him to clear with Ching Ngai or Ho Ko whether they had any information about Mr. Tong or the defendants' lantern. 35. On the 3rd September 1979 - about five months after the sighting - he contacted Ho Ki and he says he was told that on the day of the April sighting Mr. Tong had taken "a mock up sample of the lantern there to ask Ho Ki to quote for the manufacturing of the metal discs for the metal components in the lantern", that later a complete set of metal dies had been manufactured and delivered to Mr. Tong and that on the 3rd September - the very day of Mr. Hui Yin's contact - two working samples of completed lanterns, moulded and made from newly finished toolings had been delivered to Mr. Tong. 36. A Mr. Ho Lap, who is also known as Ho Ki and who describes himself as a metal dies manufacturer, deposes that Mr. Hui telephoned him on the 3rd September and asked what the price of manufacturing a mock up sample would be and further asked him about Mr. Tong. 37. He denies he ever gave the information, retailed by Mr. Hui, to him. He denies that anything of the kind in fact happened. 38. He does say that at the end of July, that is after his employment with Royce, Mr. Tong approached him to make some metal dies of metal spare parts which are still being made and are not yet complete. 39. Mr. Hui Yin, in a supplemental affirmation, filed after he had read Ho Lap alias Ho Ki's affirmation, confirmed that that which he had said earlier had been told to him was correct with the exception that he does not now, having given thought to the matter, recall that Mr. Ho Ki told him that he had delivered a complete set of dies to Mr. Tong. He regrets his error in his earlier affirmation. He confirms that he had received the rest of the information he retailed therein. 40. As to the meetings of the 5th and 7th of August 1978, Mr. Wong Chung-chee at first referred to them as having taken place on the 24th and 26th of that month. The error, he says, was occasioned by the minutes of those meetings being dated as of the later dates. 41. Part A on the 5th August had a heading - "3. Progress Report by Mr. C.C. Wong on development and industrial designs of new models" 42. At 3.8 in these minutes there is the heading "Blinker Lantern". 43. A working model was said to have been shown to those present - there was a reference to a "4 position slide switch" controlling the operation of an electrical circuit comprising a blinker bulb and an ordinary bulb. 44. The minute further went on that Mr. Kung presented 5 versions of the outer appearance design of the lantern: that one design was selected featuring a square lens and a handle which could be used as a supporting foot. 45. There were suggestions as to the making of a non-blinking lantern and discussion as to the advantage of such a lantern. A market survey was to be undertaken and it was decided that the design registration of the new blinker lantern be proceeded with. 46. Mr. Tong was not present. There is exhibited to the affirmation of Mr. Wong Chung-chee as WCC 7 that which he describes as the sketch displayed at the second meeting - B - on the 7th August. I have had the benefit of seeing the actual sketches in colour. It is to be noted that the two bear the date "9/78" immediately before the signature of Mr. Kung. 47. The minutes of the two meetings are also exhibited to Mr. Wong's affirmation as WCC 6. 48. Mr. Tong was noted as present at the B meeting at which Mr. Kung attended for the section numbered 8 only. "8" is headed "Any Other Business" and 8.5 referred to "Brinker (sic) lantern". The B meeting was a Marketing Sales and Administration (Lighting Division) one. 49. This said Mr. Kung produced a mock up - not a sketch - of the blinker lantern and told those present that a sample of the lantern, which would contain a new circuit enabling the lantern to have a fixed light and a blinker light going at the same time, would be prepared for the next conference. 50. Mr. Kung Chi-hung states that in July 1978 he attended another conference where a two-function blinking lantern was discussed and a mock-up of the lantern was produced based on designs prepared by him. The design was thought to be old and he was asked to present a more modern design. 51. He says he then prepared five sets of drawings and these were presented to the A meeting. These drawings included the artwork sketches WCC-7, and exhibited as KCH-1 and KCH-2 to Mr. Kung's affirmation. 52. He goes on that all the drawings including the artwork sketches were left in the conference room until the B meeting. At that meeting he says that the artwork sketches were, amongst others, displayed and were discussed by those present, including Mr. Tong. 53. No decision was made concerning these artwork sketches nor was any decision made as to the manufacture of the lantern. 54. It is not disputed that the lantern was never produced by Sonca. It is said to be still under consideration. 55. Mr. Kung says his design, as shown roughly in the artwork sketches, was based by him on his knowledge of a telephone and a walkie-talkie which were on the market in Hong Kong and which had the same angled format as shown in the artwork sketches. He used the idea of an angle as a basic form for the sketches. 56. He goes on to depose that there are substantial similarities as between his artwork sketch and the defendants' lantern both in shape, design and layout, though he admits there are some differences in design. He suggests that the defendants' lantern is copied from his artwork sketches. 57. In a supplemental affirmation he seeks to explain the "inconsistency" - his word - between the assertion that the artwork sketches were prepared in August 1978 and the date appearing thereupon of September 1978. He says the preparation was rushed and he was not able to record the dates until sometime later. The September date was simply placed there for record purposes. 58. It is, as I have said, the plaintiff's case that the defendants' lantern stemmed directly from Mr. Kung's artwork sketches and the sight of them Mr. Tong had at the B meeting. It is further their case that Mr. Tong, while not dealing directly with Rela must have, in the course of his duties come upon the name and have become conversant with Sonca's dealings with one of its oldest customers. 59. There are, says Mr. Rodway, who appeared for the plaintiff, too many "coincidences" - though he thought that might be a wrong word - the car incident, the Ching Ngai incident if accepted, the coffee shop incident, the matter which occurred before Mr. Tong was engaged by Royce and the Rela letter. He suggests, as I understand him, that, taking all these, together with the use of a torch very similar to one manufactured by Union Carbide in the United States but which Mr. Wong Chung-chee states the manufacture of which in Hong Kong was discussed at conferences attended by Mr. Tong, the design style and in particular the angle of the defendants' lantern, go to show a breach of confidentiality by Mr. Tong which should be restrained. Indeed a breach of the covenant Mr. Tong signed on the 3rd May 1976. 60. He would further argue that as the confidence was breached to Royce of which firm Mr. Tong is now an executive director they should also be restrained. All this as an interim measure until the hearing of the action. 61. I would interpolate here that the writ, while seeking the reliefs sought in the inter partes summons seeks further reliefs, damages for breach of contract against Mr. Tong, damages or an enquiry as to damages or an account of profits from Mr. Tong and Royce, damages for detinue and/or conversion and copyright damages. 62. It is of note that one relief claimed in the writ is not a relief claimed in the inter partes summons, that is:
63. Mr. Tong Pak-ki in his affirmation denies ever knowingly using confidential or secret information obtained in the course of his employment with Sonca. 64. He denies ever seeing the plaintiff's artwork sketches until he saw the exhibits to the various affirmations filed on behalf of the plaintiff. 65. He denies ever seeing any sketches at the B conference at which he was present. He says he did see a mock-up sample of a blinking lantern and he exhibits as TPK-1 sketches of this made to the best of his recollection. It is different in format from either the defendants' lantern or that depicted in the artwork sketches. 66. "TPK-2", which was produced at the hearing of the summons is, he says, an example of Eveready Lantern No. 74, and that this is the one to which the A meeting minutes refer as 64/74. 67. He denies over using confidential information, after he left Sonca, contained in such things as the Sales Department files and the marketing information library of the firm. 68. He says he got Rela's name as a contact from a friend - unnamed - and that he has sent out over 40 letters of the type sent to Rela. These to contacts whose names he obtained from Mr. Howard Fung of Royce. 69. He goes into detail as to his job with Sonca and makes specific allegations to the effect that he was required to obtain market intelligence and to purchase information from other manufacturers and exporters. He does not condescend to the particulars of that last allegation. It is denied by Mr. Wong Chung-chee. 70. He says it was Hui Yin who drew sketches at the coffee shop meeting and that these were of various kinds of lights, including lanterns, being ideas for entering the Canadian market. He asserts that everything done on that occasion was with the sole view to facilitating the business of Sonca. He further says, which Mr. Hui Yin denies, that the girl was in fact a secretary who had just left Sonca and that the meeting was arranged by Mr. Hui Yin to bid her farewell. 71. As to his departure from the employment of Sonca he says that, when Mr. Wong Chung-chee tackled him, he decided to leave of his own accord. That he was amongst other things dissatisfied with his job - an assertion supported to some extent by the plaintiff's records of Mr. Tong's employment. 72. He denies that he was concerned in the design of the defendents' lantern, and further denies that he was in any way concerned in advising on Royce's products before 1st April 1979. 73. He denies arranging to have moulds made in the Ching Ngai additional shop. 74. He denies borrowing Mr. Kung's car in March 1979. 75. He asserts he met Mr. Fung in May of 1979 when, and only when, his employment by Royce was discussed. 76. He asserts hardship both to himself and Royce if the injunction sought were granted. 77. Mr. Howard Fung Hin-wing, a director of Royce, denies that he has used any confidential information belonging to the plaintiff. 78. He says that the defendants' lantern is his inspiration, the whole design being made by him and a Mr. Siu Wun-pui. 79. He goes on that Royce was formed in July 1978. Prior to this he had been dealing in flash lights and other such like items in the export business which he has carried on for the past twenty years. He then goes on to describe his forming of Royce and its objects. 80. It was his intention to base the fortunes of Royce on the production of a lantern and a hand sewing machine, with other products which he did not wish to disclose. 81. He says blinking lanterns have been known for many years and that he has in his sample room no less than three different types of lanterns - none of which were produced to the court. He refers to a type of "well known Czechoslovakian battery flashlight for use on bicycles" upon which he says the defendants' lantern design is based. He has tried to find one of these flashlights which he says were very popular in Hong Kong and China thirty years ago. None has been produced. 82. He gave his ideas he says to Mr. Siu in 1978 and it was not until 1979 that a design which satisfied both himself and Mr. Siu was achieved. Prior to this there had been many sketches and drawings which were discarded. 83. Mock-up samples of the defendants' lantern were made in about April 1979 and Royce filed an application for a Registered Design certificate, which was in fact issued as of the 5th June 1979. 84. Some of the moulds were made by Ching Mei Plastic Mould Factory in April 1979 and later the same work was continued by Shun Sang Machinery Mould Factory. He does not know either Ho Ki or Ching Ngai. The moulds have not yet been delivered. 85. He says the photograph sent to Rela was taken on the 22nd May 1979 which date is also given by the photographer, and further in July. 86. He denies that the artwork sketches by Mr. Kung contain the same idea as the defendants' lantern. The latter being primarily a hanging lantern with a detachable blinking red portion. 87. The Sonca lantern design has a fixed red portion and, in effect, the break of the angle is different in respect of the direction in which the white light would point. 88. He makes reference, though not in great detail, to the estimate of $200,000 already spent in developing the defendants' lantern and says that, if restrained in its production of the lantern, Royce would be severely crippled. The profits from the sale of the defendants' lantern are intended to finance Royce in its further development. He delineates on the disadvantages which would accrue to Royce from any restraint imposed. 89. In his supplemental affidavit Mr. Fung makes reference to the torch in the photograph sent to Rela which he says was designed by one of his own designers. He does not refer to the "Use Eveready Batteries" slogan on the article. 90. He offers a personal guarantee of $50,000 in respect of the first one million dollars worth of sales of the defendants' lantern and is prepared to increase that guarantee to cover 5% of the selling price of the lantern made and sold. He avers himself to be the registered owner of property in the New Territories. 91. The Mr. Siu, to whom Mr. Fung refers, in his affirmation states that he has been employed by Royce since October 1978 and that he was engaged in the design of the defendants' lantern. The design was he says finalised on the 25th January 1979. 92. He exhibits as SWP-1 a copy of his original drawing and says that the idea was given to him by Mr. Fung. 93. He states that, to the best of his knowledge information and belief, Mr. Tong had nothing to do with the design of the defendants' lantern. 94. Let me hasten to add here that while the exhaustive review of the material I have before me might tend to suggest otherwise, I am aware that I should not try this matter on affidavits. 95. Mr. Rogers', who appears for the defendants, first submission is to pose the question: even if that which the plaintiffs say is right are they entitled to an injunction in the first instance? 96. He has cited to me the judgment of Megarry J., as he then was, in Coco v. A.N. Clerk Engineers Ltd.(1): one described by Denning M.R. in Potters Ballotini Ltd. v. Weston-Baker & Others(2) as a "valuable judgment". 97. As I understand Mr. Rogers, he is submitting on the "spring board doctrine" so lucidly summarised by Megarry J. The learned judge refers to the equitable jurisdiction in cases of breach of confidence being ancient and goes on at p.46 ".... confidence is the cousin of trust". In Coco the court had for consideration the pure equitable doctrine of confidence, unfettered by contract. Here I have for consideration both confidence and a breach of the covenant - whatever may be said about the scope of that covenant - of 2nd May 1976 entered into by Mr. Tong. 98. At p.47 Megarry J. had this to say:
99. He then goes on to examine each of these requirements. 100. I would say now that, if information which would satisfy the first or these requirements was passed at the meeting of the 7th August 1978 to Mr. Tong, then it would satisfy the second requirement of being imparted in circumstances importing an obligation of confidence. 101. As the third requirement is very much bound up with the first - for if the first is not satisfied then the third cannot arise - it shall refrain from dealing with it at this point. 102. I have had my attention drawn to the judgment of Lord Denning M.R. in Seager v. Copydex(3) and to the judgment of Lord Denning M.R. in Potters Ballotini Ltd. v. Weston-Baker & Others(2) which impinge on another issue raised by Mr. Rogers, that of the wideness of the scope of the injunction sought. 103. The Master of the Rolls had this to say in Ballotini at p.204:
At p.205:
And again:
104. Mr. Rodway says that the matter here is precisely on point. There was confidential information, imparted in conditions of confidence and made use of to the detriment of the imparter, Sonca, and Sonca is entitled to be protected. 105. He seeks to emphasize that last point by showing the defendants, by the use of the torch and the letter to Rela, to be seeking to cover themselves with the reputation of the plaintiff. But, with respect to him this is not a passing off action, it is squarely based on breach of confidence and of the covenant enforcing confidence. 106. In Ballotini Lord Denning put the difficulties as to what extent the information is to be regarded as truly confidential far more succinctly than I can. He said, at p.205:
He then quotes himself in Stephenson Jordan & Harrison Ltd. v. McDonald & Evans(4) as saying:
He goes on at p. 206:
and again
107. I would, with respect, echo those words in relation to the injunction sought in this instant case. 108. Mr. Rodway has argued that on the plaintiff's material there are reasonable grounds for the granting of an injunction in the wide term sought. He suggests that if I did think the terms too wide I could, in effect, narrow them in making an order. 109. I would accept that I could do this - for there must both be certainty and the capability of their being complied with in the terms of any injunction issued. 110. But the wideness of the injunction sought is a matter for my consideration in the exercise of my discretion whether to grant or not the reliefs sought. And the words of Whitford J. in Reinforced Plastics v. Swansea Plastics(5) where he said:-
are also for consideration. 111. Mr. Rogers has further urged that the plaintiff has failed to show any irreparable damage. He refers me to Mothercare Ltd. v. Robson Books Ltd.(6): and both counsel refer to American Cyanamid Ltd. v. Ethicon Ltd.(7) - this now the classic in this genre - in particular to the passage of Lord Diplock's judgment at p. 405 which reads:
and then at p. 406
Further
112. Both the existence of the plaintiff's right and its violation are uncertain in this instant case. It is no function of the court to try to resolve the conflicts of evidence on affirmation or affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult question of law which call for "detailed argument and mature consideration". 113. I would not go so far here as to say that the material put before me by the plaintiffs fail to disclose that they lack any real prospect of succeeding. And I bear in mind Mr. Rodway's point as to giving of teeth to the covenant and his query: what is the point of a multinational corporation requiring its employees to sign such a covenant if it is to be of no effect. 114. I am aware that the locqus of these proceedings is the cut-throat commercial world of Hong Kong where copying has, in certain circumstances, been elevated to the status of almost normal business. But the validity of the covenant itself may well be a matter to be canvassed before the trial judge. 115. I now go on, and without expressing any opinion on the merits of the plaintiffs' case either as against Mr. Tong or as against Royce, to consider where the balance of convenience lies in granting or refusing the interlocutory relief sought. 116. The governing principle of that is: if the plaintiffs were to succeed at the trial, and if in that eventuality damages would be adequate compensation for any loss the plaintiff would have sustained as a result of the defendants continuing to do what it is sought to enjoin them from so doing between now and that trial, an injunction should not issue. It was held in Mothercare's Case, p. 467, that an award of damages would not adequately compensate the plaintiffs if they won at the trial after failing to get an interlocutory injunction and, if an interlocutory injunction were granted, but the defendants succeeded at the trial, there was a substantially greater prospect of damages providing an adequate recompense. 117. The plaintiffs here seek to enjoin Mr. Tong in the widest of terms - Mr. Rogers has put it that he would have to go to sleep until trial to avoid contravening an injunction issued in those terms. Even if they are right that the defendants' lantern is their idea and should not be developed by the defendants, they have not sought themselves to bring their lantern any further than the drawing board for over a year. 118. Mr. Rogers has also urged on me the factor of delay as a matter to be considered in the exercise of my discretion but I do not think this to be sufficient, of itself, to disentitle the plaintiff to the reliefs sought. 119. Royce have shown me their capability of paying damages. Mr. Tong has not. I have no doubt that if I were to ask Sonca to give the usual undertaking in damages they would have no difficulty in making payment should they fail at trial. 120. In my judgment, having considered all the material put before me, damages would adequately compensate the plaintiffs were they to succeed at trial as against Mr. Tong and Royce. 121. I do not think that damages to the defendants would be an adequate recompense. On the material before me they are a firm starting to go into business. If an injunction were to be granted their whole course of development would be stunted and, apart from the inadequacy of damages, those damages would be most difficult to quantify. 122. There is no question here of preserving status quo. The defendants are developing their lantern the plaintiffs are static on theirs. 123. Therefore subject to two undertakings: these being that Mr. Fung is prepared to give the undertaking set out in paragraph 4 of his affidavit sworn and filed on the 8th November - which I think to be an adequate undertaking - further that either he or Royce are prepared to undertake to be responsible for the payment of any sum in damages awarded as against Mr. Tong - subject, as I have said, to these undertaking I would refuse the application.
Representation: Mr. Rodway (Deacons) for Plaintiff. Mr. Rogers (Woo, Kwan, Lee & Lo) for defendant. (1) [1969] R.P.C. 41 (2) [1977] R.P.C. 202 @ 206 (3) [1967] R.P.C. 349 (2) [1977] R.P.C. 202 (4) [1952] 69 R.P.C. 23 (5) [1979] Fleet Street Reports @ p.182 (6) [1979] Fleet Street Reports 466 (7) [1975] A.C. 396 |