Gold Source Jewellery Ltd v. Jewel Arts Ltd

HCA 2708/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2708 OF 2006

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Before: Deputy High Court Judge L. Chan in Chambers

Date of Hearing: 8 April 2008

Date of Decision: 8 April 2008

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D E C I S I O N

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1.This is an application for extension of time by the defendant to vary a costs order nisi I made on 18 February 2008.  I made the costs order nisi when granting an interim injunction against the defendant from making and selling rings as per 24 ring designs.  The reason being that the 24 ring designs were identical or substantially similar to 24 ring designs of the plaintiff.  The reasons for granting the injunction are contained in my decision handed down on 18 February 2008.  The costs order nisi I made for that application was the plaintiff’s costs in the cause.

2.The defendant is desirous of having the costs order nisi varied into two parts: (1) 9/24 costs of and occasioned by the plaintiff’s application be the plaintiff’s costs in the cause; and (2) 15/24 costs of and occasioned by the plaintiff’s application be reserved for the determination by the trial judge.  However, it was late in making the application.  It now seeks an extension of time for making the application.  The plaintiff opposes the application for extension.

3.In order to obtain an extension of time, the defendant has to justify the delay and show merit for the intended application (see Tang Man Kit & Another v Hip Hing Timber Company Limited CACV137/2002, unreported decision of 24 May 2006, paragraph 12).

4.The defendant’s reason for the delay was that the defendant and its legal advisers required time to consider the full effect of the costs order nisi.  This reason prima facie does not appear to be sufficient to explain the delay.  There was a period of 14 days for the defendant to apply for the variation.  The order nisi is simple and in fact followed the usual practice.  The 14-day period should be sufficient for considering the order nisi.  However, the first time when the defendant expressed its wish for the variation was as late as 25 March 2008 when the defendant’s solicitors wrote to this court seeking an extension of time.

5.The bigger problem for the defendant is the question of merits.  In the course of the hearing of the plaintiff’s application for interim injunction, the defendant produced 15 actual ring samples, which, it said, were made according to 15 of the 24 ring designs in question.  The plaintiff disputed this.  The plaintiff said that these 15 rings samples were not made according to those designs.  In the end, I granted the injunction to enjoin the defendant from making and selling any ring as per any one of the 24 ring designs but did not extend the injunction to cover any of the 15 actual ring samples.

6.Counsel for the defendant submits this morning that the defendant may be able to show at the trial that the 15 actual ring samples were indeed made according to 15 of the ring designs in question.  In that event, counsel submits, it would be unfair to require the defendant to pay the costs of the plaintiff’s application in relation to these 15 ring designs.

7.I do not think this is the right way to consider the costs order nisi.  The costs order nisi was made pursuant to the decision of the plaintiff’s application for interim injunction, not the ultimate decision in this action.  The plaintiff has sought to have an interim injunction covering the 24 ring designs.  It has not sought to have the interim injunction to extend to the designs as reflected by the 15 actual ring samples.  The plaintiff has succeeded in its application in total.  Hence, I granted the simple costs order nisi which covered the whole of the plaintiff’s application.

8.If the defendant should succeed in defending 15 of the 24 ring designs at the trial, the trial judge will no doubt make an appropriate costs order for the action to reflect the defendant’s success, but the trial judge will not rewrite the costs order for the plaintiff’s application for interim injunction.  Indeed, the defendant may succeed in defending the action as a whole as the plaintiff may or may not be able to prove the existence of copyright and its ownership of the copyright in all 24 ring designs.  If the defendant should succeed in defending the action as a whole, in the usual course, it would also be given the costs of the action.  However, that does not mean that the costs of the plaintiff’s application for the interim injunction should be reserved for the disposal of the trial judge at the end.  The costs order nisi only reflects the merits of the plaintiff’s application for interim injunction.  The defendant’s application for extension of time to vary this order nisi is therefore dismissed.

(Discussion re costs)

9.Then I order that the costs of this application be to the plaintiff.

(Discussion re costs)

10.With the consent of both parties, I also decide the plaintiff’s application to vary the two costs orders nisi by adding a certificate for two counsel.  I therefore vacate the hearing scheduled for tomorrow.

11.This case may appear to be simple.  However, the many varied arguments presented by the defendant to oppose the grant of injunction have made it complicated.  There were many points taken by the defendant as shown in my decision of 18 February 2008.  There were also many rounds of affirmations of both sides as well as many sets of written submissions by leading counsel on both sides.  The arguments took nearly five days to complete.  All these show that the arguments were varied and the contest tough. 

12.For such a battle and with senior counsel on the defendant’s side, it would be unfair to limit the plaintiff to the service of junior counsel only.  I think it is fair and reasonable to have senior counsel to appear on both sides.  I therefore allow the plaintiff’s application by letter dated 3 March 2008 and order that there be certificate for two counsel for the two costs orders nisi contained in paragraph 63 and 72 of my decision of 18 February 2008.

13.I also order that the costs of this application by the plaintiff to vary the two costs orders nisi be to the plaintiff.

Ms Charmaine Lo, instructed by Messrs Alfred Lam, Keung & Ko, for the Plaintiff

Ms Rachel Lam, instructed by Messrs Benny Kong & Yeung, for the Defendant