Read the full judgment text of HCA 293/2011 on BabelCite. This Court of First Instance judgment was delivered on 3 January 2013 before Deputy High Court Judge Lisa Wong, SC.
Civil procedure – summary judgment – Order 14, rule 1(2)(b) – allegation of fraud – meaning of 'fraud' under Order 14, rule 1(2)(b) – whether 'fraud' confined to Derry v Peek deceit or extends to deliberate dishonesty of other kinds – whether 'fraud' must be fraud against the plaintiff – pleadings and affidavits on Li Shui Menfond – directors' fiduciary and contractual duties – property in a name – goodwill – resulting or constructive trust – domain name and website registered in name of former director – payment of registration and renewal fees by company – whether company is beneficial owner – passing off – 'Menfond' and '萬寬' name – distinctiveness of made-up word – goodwill in corporate name versus individuals – misrepresentation by use of name in 2nd defendant's company and on website – probability of damage – no need to prove actual damage or competition – mandatory injunctive relief – order to change company name – delivery-up of domain name and website – instruments of fraud. Court of First Instance held that Order 14, rule 1(2)(b) excludes from the summary judgment procedure not only actions for fraud in the Derry v Peek sense but also claims based on allegations of fraud in the Derry v Peek sense, including deliberate dishonesty of other kinds (Pacific Electric Wire & Cable Co Ltd v Harmutty Ltd, A-1 Business Limited v Chau Cham Wong Patrick), but the fraud alleged must be fraud against the plaintiff, not fraud on the public (Sony Corporation v Anand (No 2); Borri SpA v Tralco Technology Limited). The allegations in §20 of the Statement of Claim regarding transfer of customers to Li Shui Menfond, non-disclosure of share buy-out and non-production of accounts were disputes as to Li Shui Menfond's role and were not inherently or implicitly dishonest, and the alleged misrepresentations were made to customers not the plaintiff, so rule 1(2)(b) did not preclude summary judgment. On the merits, the court held that there is no property in a name per se (Burberrys v JC Cording & Co Ltd) and Wong Senior had not acquired goodwill in 'Menfond' or '萬寬' before the plaintiff's commencement of business; MCL was a mere property-holding company. The plaintiff was the beneficial owner of the domain name and website, given that it had traded for over 10 years under the 'Menfond' name, paid all fees, and used the website exclusively for its business. As to passing-off, the court applied the 'trinity' from Reckitt & Coleman Products Ltd v Borden Inc: the plaintiff had established goodwill in 'Menfond'/'萬寬' as a digital animation and CGI studio since 1990 (film credits, industry awards, HK$3.3 million valuation); the 2nd Defendant's use of the 'Menfond Digital Pictures' name and display of its details on the former Plaintiff website constituted misrepresentation with reasonable probability of deception, given the descriptive addition of 'Digital Pictures'/'數碼影畫' and the listing of a former Plaintiff employee; and there was a probability of damage to goodwill even without actual damage or competition (Bulmer (HP) Ltd v J Bollinger SA; Harrods Ltd v Harrodian School Ltd). Mandatory injunctive relief was granted under Glaxo plc v Glaxowellcome Ltd and British Telecommunications Plc v One in a Million Ltd, ordering the 2nd Defendant to change its name and delivery-up of the domain name and website, with an inquiry as to damages or account of profits. Summary judgment entered for the plaintiff; defendants to pay costs on an order nisi basis with Certificate for Counsel.
Legal issues: Jurisdictional scope of Order 14, rule 1(2)(b) fraud exclusion · Beneficial ownership of the domain name and website · Passing off: goodwill, misrepresentation and damage · Availability of mandatory injunctive relief in passing-off
Outcome: Summary judgment entered for the plaintiff on its claims for beneficial ownership of the Domain Name and Website and for passing-off against both defendants. The defendants' jurisdictional objection under Order 14, rule 1(2)(b) was rejected.
Cited by 8 cases · Cites 5 cases