Fong Yuet Leung and Another v. Wong Wai Yu

DCCJ3482/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3482 OF 2005

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BETWEEN

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Coram : His Honour Judge Chow in Chambers

Date of Hearing : 19^th October, 2005

Date of Handing down Decision : 11^th January, 2006

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DECISION

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1.The Defendant was employed by the 1^st or 2^nd Plaintiff as an estate agent.  The employment contract contained a clause of restraint of trade, prohibiting the Defendant from engaging in the real estate agency business in Tai Po area for 3 months after leaving the 1^st or 2^nd Plaintiff’s employment. 

2.On 21 July 2005, the Plaintiffs issued a writ, claiming an injunction restraining the Defendant from:-

(1)  carrying on the business of an estate agent in Tai Po area before 15 August 2005 (“the 1^st relief”);

(2)  disclosing, divulging or making use of confidential information and/or documents acquired by her during the course of her employment in relation to lists of customers (“the 2^nd relief”).

(Underlines provided)

3.On 21July 2005, the Plaintiffs obtained an injunction as regards the 1^st relief by way of an ex-parte summons..

4.On 22 July 2005, the Plaintiffs took out an inter-partes summons seeking:-

(1)  a continuation of the ex-parte injunction until 15 August 2005 (namely the expiry of the restraint of trade clause); and

(2)  an injunction in respect of the 2^nd relief.

5.On 10 August, 2005, the partes filed a consent summons.  On 11 August 2005, H.H. Judge H.C. Wong (1) continued the ex-parte injunction until 15 August 2005; (2) granted an injunction in respect of the 2^nd relief; and (3) gave directions for filing of evidence as regards the issue of costs. 

6.The Plaintiffs submitted that they are entitled to the costs of the ex-parte and inter-parte injunction before the trial.  The Defendant submitted that the proper order for costs should be costs in the cause.

7.The Plaintiffs submit that an immediate order for costs should be made in their favour on the following grounds:-

(1)  It is unlikely that there will be a trial in the present action.  The Plaintiffs have taken no further step and the Defendant appears to accept that the prospect of trial is unlikely. 

(2)  The Defendant’s evidence that she had “withdrawn” from the clear breach of the valid and reasonable restraint of trade clause not credible.  There is evidence from Madam Siu Yi King, who was not associated with the parties that:-

(a)  the Defendant was active at the opening of the Dragon Property Agent;

(b)  on or about 16 or 17 July 2005, the Defendant was the only person working at Dragon Property Agent (when she was supposed to be working in To Kwan Wan), and actively soliciting for business;

(c)  the Defendant was constantly present at Dragon Property Agent.

8.It is not disputed that on 13 July 2005 at about 10:00 p.m. the Defendant participated in the printing out of the leaflets to be displayed at the Dragon Property Agent.  On 14 July 2005, the Defendant attended the opening ceremony of the Dragon Property Agent and that 2 or 3 days after 14 July 2005, she was present at the Dragon Property Agent at about 1:00 p.m.  The Defendant submitted that besides the allegation of sitting in the shop, there is no evidence of her the Defendant contacted or dealt with customer in order to carry out such estate agent business; alternatively, there is no evidence of any sort to show how the Defendant had done any “estate agent work” as defined in Section 2 of the Estate Agent Ordinance.

9.The undisputed facts reveal that there is prima facie evidence that the Defendant was engaging in the real estate agency business in Tai Po area.  It is not necessary for the Plaintiffs to prove that she was at the material times actually engaged with a customer in real estate agency work.  This is but only one way to prove that he was engaged in real estate agency business.

10.The Plaintiffs alleged that the Defendant utilized their confidential customer list.  The Defendant refused to return her most recent diary or note-pad which would contain essential details of the current available properties.  The Plaintiffs compared the properties displayed by the Defendant, namely “FYL - 10” (true copy of a list of some of the Defendant’s available properties according to the store front of the Defendant’s shop), “FYL - 11” (true copies of pictures of the store front of the Defendants displaying the available properties), and “FYL – 12” (true copy of the Plaintiffs’ database as at May 2005 when the Defendant terminated her employment) and submitted that the above exhibits revealed that at the least the following properties an listed as being available by the Defendant and the same properties were contained in the Plaintiffs’ database as at May 2005:-

(1)  Mee Tak Building（美德大廈）

(2)  Tai Po Building（大埔大廈）

(3)  Fu Shin Street（富善街）

(4)  Chui Ho Garden（翠河花園）

(5)  Bong Hing Building（邦興大廈）

(6)  Sun Hing Garden（新興花園）

11.However, the photos taken outside Dragon Property Agent only show building names, prices and sizes.  In order to prove that the Defendant made use of information contained in the Plaintiffs’ database, the Plaintiffs have to show that such information was the information contained in the Plaintiffs’ database.  But apparently the Plaintiffs have a hurdle to surmount, because merely by referring to building names, prices and sizes of flats, they have difficulty to show whether such information were information relating to the same details of the units in their database.  The lack of such details creates difficulty in identifying the information displayed by the Defendant as the information contained in the Plaintiffs’ database.  Further, even if the information displayed by the Defendant is related to building names, size and suggested price contained in the Plaintiffs’ database, such information could not be confidential information.  This is made clear in the affirmation dated 21 July 2005 of Fong Yuet Leung.  Under paragraph 16 of that affirmation she said:-

‘16.  I should emphasize that whilst information of available properties are at times printed on brochures which are distributed openly, the information contained on these brochures does not contain the essential details of the available properties (the exact floor and flat number).  There is now shown to me marked as exhibit “FYL-5” a true copy of one of the 2^nd Plaintiff’s brochures.  The rationale behind this is clear: the Plaintiffs treated such information as confidential and if such confidential information were available to the public, the Plaintiffs’ competitors could simply approach the owners of these properties to solicit their business.’

(Underlines provided)

Thus Fong Yuet Leung treated the information relating to the essential details of the available properties, namely, the exact floor and floor number, as confidential information.  So she must regard information other than the exact floor and floor number as non-confidential information.  In the premises, it is arguable whether the Defendant disclosed, divulge, or used confidential information under the 2^nd relief, if she did disclose, divulge or use such information.  It is therefore arguable whether the injunction relating to such heading should ultimately be granted.  These should be a trial in this regard.  If a costs order is granted at this stage, it will be prejudicial to the Defendant.  I therefore form the view that costs in the cause should be the appropriate costs order.  I therefore dismiss the Plaintiffs’ application relating to costs.

Costs

13.  I make an order nisi, to be made absolute in 14 days’ time, that the costs relating to this application be costs in the cause, with certificate for Counsel.

The Plaintiffs: represented by Mr. Johnathan Wong, instructed by M/S. Kenneth Woo & Co., Solicitors.

The Defendant: represented by Mr. Johnathan Yue, instructed by M/S. Eric Yu & Co., Solicitors.