Seapower Resources International Ltd. and Others v. Lau Pak Shing and Others

HCA010715/1993

1993, No. A10715

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: The Hon. Mr. Justice Rogers in Chambers

Dates of hearing: 13, 14, 15 December 1993

Date of delivery of judgment: 15 December 1993

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J U D G M E N T

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1. This action concerns the cold storage industry and it largely concerns the 1st Defendant in respect of whom alone I have been addressed for most of the hearing. The 1st Defendant, Mr. Lau, is a respected figure. He comes from an accountancy background and he moved into the cold storage business in about the early 1980s. Since 1984, he has been the Chairman of the Hong Kong Cold Storage Merchants Association. He became, and it is not necessary to go into the background as to this, he became the leading light of the Plaintiffs' cold storage business and he was the General Manager of the 2nd Plaintiff and basically in charge of the Plaintiffs' cold storage operations. The Plaintiffs are the largest cold storage operators in Hong Kong and they have somewhere in the region of 50%, or thereabouts, 45% of the total market so I am told. Indeed that is what the 1st Defendant says in his evidence.

2. The facts of this case really start back in August of this year. It was then that a well-known firm of what might be described as "head- hunters" approached the 1st Defendant and asked him to come and work for a company by the name of Shatin Cold Storage which is the number two in cold storage in Hong Kong, having about 30% of the market; they are owned by a very substantial company themselves, namely, the China Resources Group. On 14th September, the 1st Defendant took up their offer and he entered an agreement with China Resources that he would go and work for them, starting on 1st January next year. On the 20th September, the 1st Defendant went to Mr. Choi who is regarded as the person behind the Plaintiffs, not the owner but the person in charge, and he went to him and gave him a letter saying that he was going to resign on 20th December. At that meeting, things seemed to have gone reasonably well. Then the following day the 1st Defendant saw Mr. Ho and he told Mr. Ho that not only would he be leaving and going to Shatin, but the 2nd Defendant would also be leaving the Plaintiffs' employment. The following day, however, on the 22nd September that there was a Director's meeting and things took a slightly ugly turn. The 1st Defendant, Mr. Lau, was told that he should no longer be a director of the companies within the Seapower Group (and he seems to have had a large number of directorships within that group) and he was told to clear his desk by 25th September, which was a Saturday, and he was told to hand over to Mr. Ho.

3. The following day Mr. Ho came to see the 1st Defendant in his office. Clearly both sides are in agreement on this at any rate, that Mr. Ho's presence in the 1st Defendant's office in the way it was, caused some kind of aggravation to the 1st Defendant. Whether that was justifiable or not will no doubt be decided later. An incident occurred, however, that the 1st Defendant in the presence of Mr. Ho made a number of phone calls. The 1st Defendant says that really Mr. Ho's presence irritated him and so he went on making phone calls and he threatened to go on making phone calls whilst Mr. Ho was there until he left. The 1st Defendant says that those were pretty innocuous phone calls, not to customers of the Plaintiffs but to other people whom he had known for a long time, telling them he was leaving the Plaintiffs and going to work for Shatin Cold Storage and making no secret about it. Mr. Ho says that he phoned up half a dozen customers. He told them that he was leaving, he said he was going to Shatin Cold Storage and he wanted them to bring their custom to Shatin Cold Storage. Be that as it may, there is a dispute about that, but on the Plaintiffs' case, they appear to be saying that they knew full well in September that the 1st Defendant was approaching their customers. Whilst all this was happening, Mr. Lau had not only been told to clear his desk and leave by the 25th September, but he was also told to do a number of other things. One was to hand over the keys to his car, which was a company benefit; he had a new car and also enjoyed the benefit of a driver and that was taken away from him. He was told to hand over his Club Card, which he duly did. Apparently as of the 26th September, his medical benefits with the medical insurance company were cancelled. In effect, he felt he was being pushed out of the office and dismissed. A large part of the benefits and the remuneration which he was getting, were being taken away from him. So, far from carrying on to work until 20th December as he thought he would, he was being pushed out and in effect his employment was terminated.

4. The Plaintiffs, however, say "Oh No. He was being given garden leave". Garden leave is a new phrase on me, but apparently it means that the employee is not permitted to come into the office, but is kept on his normal salary and is kept there as an employee during the period of his notice of termination. Again, all that needs to be decided at trial, but I would say this that the 1st Defendant had clearly been deprived of some substantial parts of his remuneration which was part of his remuneration package. He was entitled to feel that his employment was at an end. Whether on a strict legal analysis that will prove to be the case at the end of the day, I know not. But I do say that from his approach to matters thereafter, I have some sympathy with him.

5. There is here in this aspect some dispute as to whether the three months salary was agreed to be paid at the meeting between the 1st Defendant and Mr. James Luk and Mr. Michael Ho on 24th September or whether it was agreed at the Directors meeting on the 22nd September. Again, that is a matter which shall have to wait until the trial. Suffice it to say that after the 25th September, the 1st Defendant never appeared in the Plaintiffs' offices again, nor was he really asked to do so, apart from a letter from the solicitors which I will come to in a moment.

6. Then on the 29th September, there was what I will refer to as the "Dinner Party". The 2nd Defendant who really has not featured very greatly in this case, apparently got wind that the Plaintiffs were about to change their normal contracts of service, indeed, they were about to introduce written contracts of service, which would include a restrictive covenant preventing the employees from taking up employment, presumably in the cold storage industry, for a period of time. When the 2nd Defendant communicated that to the 1st Defendant, they decided that they had better get a move on making approaches to employees who may wish to follow them to Shatin Cold Storage. So they arranged this dinner party on 29th September. They offered employment to some 13 employees of the Plaintiffs. As a result of that the Plaintiffs, of course, found out the next day and made efforts to try and persuade the 13 to stay with them. In the result five of those employees decided to revert to employment by the Plaintiffs, but eight decided to go to Shatin Cold Storage. On the next day also the 2nd Defendant gave 2 months notice to the Plaintiffs that he was about to leave.

7. The same day it is alleged that the 3rd Defendant asked a computer programmer, a Mr. Wong Ting Man, who was also in the Plaintiffs' employment to copy Plaintiffs' computer software. That is strenuously denied by the 3rd Defendant Mr. Fok. Again, I will come to that in due course, when I come to deal with the nature of confidential information. The 3rd Defendant gave his notice on 6th October.

8. During October it quite clearly came to the Plaintiffs' attention that the 1st Defendant was working at Shatin Cold Storage. They apparently found that out on the 20th October. What is more on the 26th October Mr. Ho, who swore the affidavits on behalf of the Plaintiffs, was allegedly informed that Mr. Lau was coming in everyday. All that the Plaintiffs did about that, however was on 28th and 29th of October, they instructed a Miss Kwok, who was a secretary of Plaintiffs to ring up the 1st Defendant and ask him to return the portable telephone which he had. That portable telephone, which had been the subject of some discussion, had been disconnected slightly earlier that month. So it is quite clear that the Plaintiffs knew that the 1st Defendant was working at Shatin Cold Storage and that the 1st Defendant knew that the Plaintiffs knew he was working there. There was never any complaint about that until the commencement of this action. Mr. Barlow agrees that the inference to be drawn was that the Plaintiffs were content for that situation to exist. He says they changed their mind when they say there was a campaign to take away the Plaintiffs' business which he said started in the middle of November.

9. To carry on with the chronology, however, in mid to late October, specifically on the 21st October, the Plaintiffs' solicitors wrote to the 1st Defendant and they enclosed a draft writ which I presume was in the same form as the writ which was eventually used but I know not, because I do not have it. On the first page they remind the 1st Defendant of his duties of good faith and they say that "the solicitation of our client's employees to work for any future employer would constitute a serious breach of your contract of employment and also of your duties as a director". Then they said that "In addition to the above our clients also believe that confidential documents which you have in your possession may be disclosed to your future employer in breach of your duty of confidentiality or that it is your intention to disclose the same. We therefore put you on notice that you must not use such information". Then they say on the second page that they have been instructed that they must request for the remainder of the 1st Defendant's employment that the 1st Defendant, must attend the head offices of the Plaintiffs on a daily basis during normal office hours at Alexandra House. That never seems really to have been pursued at all.

10. On 1st November, the 1st Defendant had by then consulted solicitors of his own and his solicitor rang up the appropriate people at the Plaintiffs' solicitors. He could not get through to the assistant solicitor and so spoke to the partner. I have an attendance to note of his conversation and that is not disputed. He informed the partner of the Plaintiffs' firm of solicitors that the Defendant had instructed him to act for him. The Plaintiffs' solicitor said that the person dealing with the matter was away that week and the matter was left that the Defendant's solicitors would take instructions and he was told that was fine and there did not seem to be any urgency about the matter. Then on 12th November the Defendant's solicitors sent a fax, again a copy of which I have, setting out their version of events. They denied that there had been any wrong doing by the 1st Defendant, they denied that he had in his possession any confidential documents belonging to the Plaintiffs, what it says in the letter is "Seapower International", but I read that as any confidential information belonging to the Plaintiffs, and they say that as far as they are concerned the Plaintiffs have breached their contract of the employment and they considered it at an end. There was never any reply to that letter.

11. On 6th November 1993, Miss Kwok apparently found out that one of the Plaintiffs' customers had been solicited by the 1st Defendant to transfer its business, or part of it, to Shatin Cold Storage. On the 15th of the same month, a major customer, probably the major customer of Plaintiffs, indicated to the Plaintiffs that they were about to transfer part of their business, because they had been offered rates of storage which the Plaintiffs were unable to match. Apparently, this customer, Mingson, is the only client that has in fact transferred part of its business to Shatin Cold Storage, but there were other customers who had been approached. When Mr. Ho returned from Australia on the 15th he set about trying to persuade all these customers to stay with the Plaintiffs. The enticement which the 1st Defendant on behalf of Shatin Cold Storage was offering was free storage of their goods that were transferred until the end of December 1993, a 30% discount on the Plaintiffs' current rates of storage with effect from January and free transport of the goods from the Plaintiffs' cold store to Shatin. Given the nature of the disruption which would no doubt be caused to the business of any customers who were to transfer their bulk cold storage, because one is talking of hundreds of tons of goods, and given the fact that the storage would now been in Shatin and not in Kwai Chung, it does not seem to me surprising that terms such as that would have to be offered to induce anybody even to think of transferring their business to a new entity.

12. Before I go on, I would summarize the situation as I see it at this stage. The 1st Defendant may have jumped the gun in acting as if he was no longer bound as an employee to the Plaintiffs, but that, as I have indicated, is a matter to be decided at trial. But I do not consider that he acted dishonestly. He never disguised what he was doing. He never did it in an underhand manner. The 2nd Defendant should not, it seems to me, have organized the dinner prior to his giving notice and leaving the employment of the Plaintiffs. But again, there was never any attempt to disguise what had happened.

13. The grounds of complaint by the Plaintiffs are that the Defendants solicited the Plaintiffs' customers, they solicited the Plaintiffs' employees and apparently that they used confidential information relating to the Plaintiffs' pricing structure. All these I shall come to in a moment.

14. On 24th November, more than two months after the 1st Defendant gave in his notice nearly 2 months after the dinner party an ex parte application was made for injunctions against the Defendants.

15. The basis on which Ex parte applications should be made are, of course, well-known. They have been expounded again in the Court of Appeal in England last July in TRP v. Thorley. I do not intend to repeat what is said there, or indeed what Mr. Justice Godfrey said in the case of Jademan (Holdings) Ltd. v. Francis Leung Pak-to & others [1989] 2 HKLR 151. Ex parte applications should only be made where either the delay would cause to the Applicant injustice or the Defendant would take action which would nullify the effect of the injunction. An ex parte injunction goes against the normal way litigation is conducted. It is an infringement of the rights of natural justice of each party to be heard. Those making such applications have a duty to bear that in mind and they cannot pass their responsibility to the Court when they do so.

16. The need for an ex parte application in this case was sought to be put upon the following grounds. First of all, urgency. For an ex parte application for an injunction to be urgent on the grounds of urgency it must be so urgent but you cannot give even five minutes warning to the other side. Here, solicitors were instructed for the Defendants, at least the 1st Defendant. The Plaintiffs' solicitors well knew it. The partners of the firm well knew it. There was no justification for not even making a telephone call or sending a fax, let alone giving 48 hours notice that an application was to be made. In so far as employees were solicited, they were solicited two months earlier. There was no suggestion that there had been any solicitation of employees thereafter.

17. The next ground on which it is suggested that an ex parte application was necessary was secrecy. I see very little in the way of enticing customers that could be done in the time required to give notice for an inter partes summons. Certainly, nothing could have happened if an hour or so's notice of the application were given to the Defendants' solicitors.

18. Lastly, it was suggested that if the Defendants were given notice they would have sought an adjournment which would have delayed matters and then the Plaintiffs might not have got their injunction. That is an argument which I find so reprehensible that will not dignify it by dealing with it. I am told that the decision was one for which the lawyers are responsible, and that I should not visit the consequences of that decision upon the Plaintiffs.

19. But the order that was granted, was in my view far too wide and vague to ever be granted inter partes, let alone ex parte. It relates to "any confidential information, confidential documents or confidential data relating to the business of the Plaintiffs", and then it goes on with the words "in particular but without restricting the generality of the foregoing relating to" and lists certain specific areas. In any interlocutory order relating to confidential information the order should spell out exactly what it is the Defendant is restrained from doing. The difficulties of orders such as I have just indicated have been expounded upon by the Lord Denning in Potters v. Ballotini [1977] RPC 202 at 206 lines 23-5. Mr. Justice Hoffman said the same thing in slightly different words in Locke v. Beswick [1989] 3 AER 373 at 389.

20. It is simply not acceptable to have an interlocutory injunction phrased in the words "any confidential information, or data relating to the Plaintiffs' business". The confidential information which is sought to be restrained, must be identified. To obtain an order like that ex parte, seems to me to be incredible. How is the Defendant to know what he may do and what he may not do. Mr. Barlow attempted to say that similar orders might have been granted in other cases. When it was analysed, it appeared that the wording of the particular order granted after the case was decided was going to be the subject of discussion. I do not regard any case that I was shown as authority for the proposition that one can have an injunction for confidential information as broad as has been suggested here.

21. The Order relates also to a blanket prohibition on approaching customers and employees, something that would prohibit even casual conversations with former colleagues and friends. No justification for this breadth of injunction was advanced in the course of argument and Counsel for the Plaintiffs impliedly accepted the strength of some of the criticisms by applying to amend the summons inter partes. Leave to do so was given this morning. In making that application, Counsel made clear that he was not pursuing para. 1(e) to prevent the 1st Defendant from taking up employment since although on the Plaintiffs' case he is employed until 20th December since that is only next week it would be futile to seek an injunction for 3 working days.

22. In my view, this application should never have been made ex parte and I will discharge it for that reason, without even going on to consider the other grounds which Mr. Graham has for discharge.

23. Mr. Barlow's submission was and I took a note of it and I confirmed it with him at the time that "The Judge having appreciated that it was an ex parte application and having granted an ex parte Order, the only Court which is competent to review the exercise of that discretion is the Court of Appeal". When I asked for authority for that proposition none was known. In my view that submission misunderstands the basis of ex parte relief. It is not only temporary but it is provisional. It is granted as I have said in the absence of the other party. As the cases say, it is therefore, prima facie in conflict with one of the cardinal rules of our system of justice that one hears both sides. That is why a Court may vary or discharge an Order it has made ex parte. That is something it cannot do if the Order is made inter partes. If a party against whom an Order has been made applies to vary the Order he is entitled to ask the Judge to look at the exercise of the discretion in-the light of his submissions. If the judge comes to the conclusion that the Order should never have been applied for ex parte, it is his duty to say so and to right the wrong that has been done. In so saying I, of course, emphasize that it is always in the Judge's discretion to order a further injunction.

24. Mr. Graham submitted that no further injunction should be granted in this case because of the abuse of the Court's process. While I am quite sure that in circumstances such as these where the Court considers that there has been an abuse of the process, it is in the Court's power to refuse any further relief, at any rate until the effect of the injunction has been dispelled, in the circumstances of this case, I do not find it necessary to rely upon these grounds.

25. Whilst on the question of the ex parte order I should also mention that it contained a provision in clause 2 which said that the Defendant had liberty to apply to discharge or vary the order on 48 hours notice of such application. I must say again that as far as I am concerned, any Defendant against whom an order has been made, has the right to apply to vary or discharge that order at any time. It is not bound to give 48 hours notice and no order that a Court makes ex parte can prohibit that right to apply at any time. In my view paragraphs such as that, which I appreciate have become common place in ex parte orders, should not be there. What should be there is an undertaking by the Plaintiffs' solicitors to explain to the Defendants their right to apply to vary or discharge the order.

26. I go on now to consider the Plaintiffs' application for an interlocutory injunction today. The basis of their action is on confidential information, breach of the terms the contracts of employment and breach of fiduciary duties. Turning to the question of breach of confidence, it seems to me that four things are necessary for an action in breach of confidence and that is in the absence of contract. First is that the information itself must be identified. Secondly, it must have the necessary qualities of confidence about it. Thirdly, the information must have been imparted in circumstances importing an obligation confidence, and fourthly, there must have been an unauthorized use or dealing with that information to the detriment of the party who communicated it in the first place.

27. The first thing which it is necessary to identify is what the confidential information is. Then I have to identify whether the Defendants have had access to it and thirdly I have to determine whether it can be said they have used it. The information, in my view, has not been properly identified in the affidavits at all. In so far as it has been identified, it is in para. 19 of Mr. Ho's first affirmation where he says "The client lists and charging rates are stored on the Plaintiffs' computer hard disk." I assume, therefore that there was, as of September this year, some identifiable stored record of this information. In para. 18 of his affirmation, he referred to the financial information relating to Plaintiffs' cold storage warehousing business. He then went on to describe it in general terms and he said "these calculations require detailed knowledge of past, present and anticipated costs of the various overhead components, such as rental of premises, staff salaries, power consumption and plant maintenance. After tallying the overhead costs, it was the 1st Defendant's responsibility to determine by judging the demand for the Plaintiffs' cold storage warehousing services and the effect of price adjustments on that demand, what storage rates should be charged in individual cases." I am not clear as to whether there is a set formula or not. I rather take it from this that there is not any set formula, that really in so far as there is specific identifiable data it is the actual prices which were charged to the Plaintiffs' customers.

28. I am not satisfied that what is referred to in para. 18 is anything other than matter which the 1st Defendant necessarily acquired in the course of his employment and was entitled to use thereafter: what would be described as his general fund of personal knowledge, skill and experience gained admittedly in the Plaintiffs' service which he is entitled to use for his own benefit. Of course, what I have just said would not relate to specific lists or data bases which are kept on the computer.

29. Then I turn to what is the alleged use of any such information which the Plaintiffs seek to rely on. There is no evidence of any use of confidential information and the whole case is based on inference which the Plaintiffs seek to draw. First of all relating to the employees there is a meeting on 29th September. As far as any interlocutory application is concerned, I would say that this now seems to be a fait accompli because the employees were enticed away and are working for the Shatin Cold Storage and it is not suggested that they can now be prevented from continuing to so work. As I have indicated no subsequent approaches to the Plaintiffs' employees have been made. But the evidence relating to the approaches to employees does not establish that there has been use of any lists, notes, records or the like obtained from the Plaintiffs. It is simply that the 1st Defendant spoke to all the employees and offered them salaries, no doubt over and above what he was told they were being paid. It does not require confidential information to say to somebody "I will pay you 30% more than you are getting plus all the benefits which you getting," which is the allegation which is made by Mr. Chow Shun Ho in his affirmation. That does not indicate that confidential information has been used.

30. Then we turn to the customers. If Mr. Ho is correct this started with phone calls on the 24th September. But again, there is no evidence that the 1st Defendant has taken any lists of customers or any notes of any customers or the charges that were made or copies of invoices or anything of that nature. The Plaintiffs wish me to draw the inference that that has happened based on the fact that their customers have been approached as has been set out in Mr. Ho's affidavit. I decline to draw any such inference because it is not a proper inference, it is not the logical cause or result of what has happened. The 1st Defendant says that he was advised by his solicitors, as we have seen they were called in at an early stage, to be cautious and that as a result he went to publicly obtainable documents, specifically such documents as lists of the Trade Development Council, which can be obtained for a small sum, and from those lists selected target potential customers whom he would approach. That is not a misuse of confidential information. Nothing which Mr. Ho has set out in his affirmation, e.g. offering a 30% reduction on the Plaintiffs' prices as he sets out in para. 48 in his affirmation, indicates that I should draw the inference that the 1st Defendant has walked off with or deliberately memorized specific pieces of confidential information for subsequent use whilst he was with Shatin Cold Storage. This case seems to me to be a prime example of the need for restrictive covenant clauses. If the Plaintiffs wish to protect themselves against competition by former employees then the proper way to do that is to draft a restrictive covenant clause. The 1st Defendant had a contract of service which may or may not have had a restrictive covenant clause which was in effect until 1990, thereafter there was a no specific contract. If the Plaintiffs choose not to have a restrictive covenant clause of some description, the Courts will not write it for them.

31. I have indicated that I find the financial information which is referred to in para. 18 of Mr. Ho's affidavit unidentified specifically enough to constitute confidential information which could be the subject of an application at this stage. If this information is or was recorded anywhere, it is or was recorded or identifiable as part of what is or was recorded on the computer. As regards what is on or was on the computer, the evidence of Mr. Wong is that he was requested by the 3rd Defendant to make copies of some unspecified computer software and that he declined to do. The evidence at the moment is that even if the 3rd Defendant did attempt to take some information from the computer that attempt singularly failed. I have no indication which would lead to the inference that the Defendants have obtained information from the computer.

32. In summary, therefore, I am not satisfied that an arguable case has been made out that any information of the nature alleged by the Plaintiffs has been used. I consider in these circumstances that finding is very important. If it is accepted, as it apparently is, that the Defendants could work for a competitor, why should they run the risk of breaching an injunction not to use confidential information relating to a customer, for example or an employee, when no case, other than an inference which I am not prepared to say could be drawn, has been made that he has been misusing confidential information, when he has access to the very same information through, for example, lists from the TDC which are not confidential. As has been pointed out in many of the cases, it is all too easy for an employer to bring an action in confidential information against a former employee and say "Oh, you had access to a large quantity of confidential information." That must be true in all this every case. It is a very different thing to say that the Defendant has taken it away with him or misused it.

33. Then I turn to the claim based on fiduciary relationship, that based on the cases of Thomas Marshall v. Guinle 1979 1 Ch 227 and GSL Engineers v. Yau 1990 unreported. The submission was that the Defendants are under a continuing duty not to use confidential information entrusted to them in the course of their employment or directorships. In the course of argument, Mr. Barlow was at pains to point out that the action was different from the action for breach of confidence and on two occasions during the argument, I understood him to agree with my summary of the propositions which are to be derived from those cases, namely, that where there was a breach of fiduciary duty committed by an employee or director, the Court will not allow that employee or director to keep the benefit of the previous breaches and, if necessary, will grant an injunction to prevent the continued use of those benefits of the wrongful acts. Those cases concerned very different situations. They were cases where the Defendants had surreptitiously set up businesses and transferred the goodwill and the business of customers, to those businesses whilst ostensibly acting in their normal capacities for the Plaintiffs. The only thing which has happened in this case which could be said to be remotely of that the nature was that the 2nd Defendant organized the dinner on the 29th September whilst still employed, which has resulted in something which now cannot be undone and in the case of the 1st Defendant he arguably did so whilst employed, but that at the time he thought he was no longer employed or at least no longer working for the Plaintiffs.

34. As I understand the nature of the case, except in so far it impinges upon breach of confidence or on breach of fiduciary duty, the case in breach of contract of employment stems from the Defendants working for Shatin Cold Storage whilst still employed by the Plaintiffs. Since it is now accepted that in respect of both the other Defendants, the 2nd and the 3rd Defendants, their period of notice has now expired and their period of employment has now expired and in respect of the 1st Defendant his will expire on next Monday, I consider that nothing further turns on this. Indeed, I indicated that as far as I was concerned, I would be treating this application as of next Tuesday, in other words, after any period in which it could be said that the 1st Defendant was still employed by the Plaintiffs had expired. At first I understood Mr. Barlow yesterday not to dissent from that, to-day he did not make his position clear but he indicated if there were to be an appeal, he did not want to make any concessions which would be contrary to his clients' interest. As I have indicated whilst I could have reserved this judgment to next Tuesday, I thought it would a legal fiction and quite stupid to do so, therefore, I would proceed on the basis that I am treating this matter as of next Tuesday and the intervening 3 working days are of no legal importance.

35. As I have indicated, in any event I would see an enormous difficulty in framing an injunction which would limit the Defendants within the bounds of anything that can at present be identified as for the Plaintiffs' legitimate protection. I have in considering an interlocutory injunction to consider the competing harms that would be suffered by the respective parties if an injunction were or were not granted.

36. The Defendants, even on the amended application which the Plaintiffs are now relying upon, would still be at a loss to know what they could do and what they could not do, but given the concession that no order I could make to day could prevent for example Mingson still being a client of Shatin Cold Storage, I see little that I could do by way of injunction in any event which would keep the injunction within bounds which are legally acceptable, but give the Plaintiffs any effective protection at all. In respect of the other Defendants; the 2nd Defendant there has been relatively little which has been said against him apart, as I understand it, from the dinner party organized on 29th September and I have dealt with the allegations made against the 3rd Defendant, which as I have said are strenuously denied and will need to be examined at trial.

37. The orders which have been sought under para. 1(c) and 1(d) of the summons could not, it seems to me, be substantiated on anything which I have seen.

38. In conclusion, I shall also make these observations : that anything which the Defendants have done which have been the subject of complaint here has been for the benefit, almost entirely, of the Shatin Cold Storage. Prima facie, therefore, they would be liable for any torts which have been committed. That, as I understood it when I put it to Counsel for the Plaintiffs, was not dissented from. But the Plaintiffs have chosen not to sue them. They would clearly be good for any damages in this case. But also they would be entitled as I have just observed to go on using a connection now built up with customers and hence I consider that the grant of any interlocutory injunction being for protection of the rights of Plaintiffs, I do not see any Order that I could make which would prevent any continuing damage. I have been asked by the Plaintiffs to make an order for a speedy trial. The Defendants have indicated that they do not object to an order for a speedy trial. I did indicate in the course of argument in any event and I stopped the Plaintiffs' Counsel on that as I thought that there should be a speedy trial and I will order it and I will give directions now for the further conduct of this Action with respect to it. I will also hear the parties as to costs.

Representation:

Mr. Barlow of Messrs. Richards Butler for Plaintiff.

Mr. P. Graham of Messrs. Slaughter & May for all Defendants.