Tsit Wing (Hong Kong) Co Ltd and Others v. Twg Tea Co Pte Ltd and Another

HCA 2210/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2210 OF 2011

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D E C I S I O N

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Introduction:

1.In a reserved judgment handed down by me on 24 July 2012 I found the defendants (TWG Tea) liable to the plaintiffs (Tsit Wing) for infringement of Tsit Wing’s registered trademarks contrary to s 18(3) Trade Marks Ordinance Cap 559 (TMO) and the tort of passing off.  An order nisi was made that Tsit Wing should have its costs in the action, including all reserved costs, to be taxed on a party and party basis.  A certificate for three counsel was ordered.

2.The issue of the precise relief to be granted was reserved to be argued on Monday, 29 July 2013 as there was insufficient time available at the conclusion of the trial to deal with that issue. Further, the nature of the relief to be granted was dependent upon the extent of liability found.

3.In the event, counsel were not available on Monday 29 July 2013 and the question of relief and costs has been dealt with by way of written submissions.  This is my decision on those issues.

Relief:

4.A draft set of orders reflecting the judgment was prepared by the solicitors for Tsit Wing and, using the track changes procedure, was amended by the solicitors for TWG to reflect their views on the proper format of the orders (Tsit Wing’s revised draft).  The solicitors for Tsit Wing then revised the amended draft to demonstrate those areas in which there was agreement and disagreement.  Both parties have made submissions in writing justifying their respective positions.  I will deal only with those areas in which there is disagreement.  The references to the paragraph numbers are references to Tsit Wing’s revised draft judgment.

Para (1)(b), the scope of the trademark restriction:

5.This paragraph comprises specific restrictions restraining TWG from using marks described in the reasons as “Tsit Wing’s marks”. TWG seek to limit the extent of the restraint specifically to the marks as set out in the reasons for judgment.  Ms Tam SC for Tsit Wing seeks to broaden the scope of the restraint by the addition of the words: “the aforesaid signs and any signs which are confusingly similar to the Registered Marks”.

6.To avoid confusion it is necessary that the words; “or any of them” should be present.  I accept Mr Baldwin’s submission that the phrase set out in the earlier paragraph is too wide and was not a right relied upon by Tsit Wing in the Action.  Those words must be deleted.

Para (1)(c), the scope of the passing off restriction:

7.In this paragraph Ms Tam seeks to include a restriction against passing off.  Mr Baldwin argues that this provision does not reflect the nature of the deceptive representation which TWG has been found to have made by the Court.  In response, Ms Tam draws my attention to the following passage from Spectravest v Inc v Aperknit Ltd [1988] FSR 161 at 174-175:

“In intellectual property cases a plaintiff is concerned not only to stop exact repetition of the defendant’s current activity which can be described with particularity, but to prevent fresh invasions of his rights in ways which cannot be foreseen or described exactly. The ingenuity of those who infringe copyright and trade marks and engage in passing off is boundless, and plaintiffs cannot be adequately protected by orders which are cabined or confined. That is the reason for the standard forms of injunctions in such cases, with the inevitable references to ‘otherwise infringing’, ‘substantial part’, ‘to like effect’, ‘colourable imitation’, and ‘otherwise passing off’.”

That passage was cited with approval in Aktiebolaget Volvo & Anor v Heritage (Leicester) Ltd [2000] FSR 253 at 266 and by the Court of Appeal in Specsavers International Healthcare Ltd v Asada Stores Ltd (No 2) [2012] FSR 616 at §8.

8.Ms Tam accepts that the general nature of the injunction against passing off should be qualified by limiting the scope of the injunction to the relevant business, products and services provided by Tsit Wing.  Ms Tam also reminds me that while the wrongful and infringing acts of TWG related only to the operation of the IFC cafe, that is because TWG had given a voluntary undertaking to the Court of Appeal not to expand their business pending the trial of the present action. 

9.Mr Law admitted in evidence that TWG’s target in Hong Kong would be quite similar to their target in Singapore.  It is accordingly right that but for the voluntary undertaking TWG would not have confined itself to the operation of the IFC cafe.  The injunction should not in the circumstances be limited to covering existing acts. 

10.I accept Ms Tam’s submissions.  The form of order as set out by Tsit Wing in its revised document achieves the appropriate purpose and is accordingly approved.

Para (2), the commencement of the restraint:

11.TWG seek a period of six months stay before the injunction takes effect.  Mr Baldwin says that TWG has contacted its suppliers in Europe to redesign their packaging, tin cans, accessories and china for the Hong Kong market.  It is said that all the suppliers offices and production facilities are closed for the month of August for the European vacation.  However, there is no evidence to support these assertions and frankly I find it difficult to believe that entire operations shut down for a whole month, even in Europe. 

12.There is no evidence to suggest that these items must be made in Europe.  They may well be made in China or elsewhere in Asia.  China does not shut down for months in the summertime.  Furthermore there is no explanation why offending signs or marks it could not be covered, on a short-term basis, by appropriate adhesive labels.

13.TWG argue for 30 days to create new moulds using a new logo, 60 days for production, 45 days to ship to Singapore, and another 15 days to arrive in Hong Kong.  Again there is no evidence to support these assertions.  Goods such as these are not especially heavy or bulky and can be airfreighted.  There is no explanation as to why the goods need to go through Singapore and then to Hong Kong.

14.I accept Ms Tam’s submission that while the interest of TWG for a reasonably smooth transition must be recognised, that interest must be balanced against Tsit Wing’s right to the fruits of its judgment and protection against further harm.  Ms Tam says further that in view of the high risk strategy adopted by TWG for its entry into the Hong Kong market, with its knowledge that it might face these very proceedings, if TWG had no “plan B” in place, they have only themselves to blame.  That must be right. 

15.In fact the evidence is that, to an extent at least, TWG has a “plan B” because they already have trademarks for a logo containing the acronym “TW”, to which Mr Platts-Mills has said Tsit Wing has no objection.  Is clear that preparatory steps for the outcome that occurred were underway during the course of, if not before, the trial.

16.TWG seeks six months, Tsit Wing encounter with 28 days.  Looking at the matter broadly I am of the view that a period of two months should be sufficient for TWG to put their house in order.  In reaching this conclusion I have taken into account the fact that one month has already passed since the handing down of the reasons for the judgment.  Tsit Wing’s draft form of paragraph (2) is approved subject to the substitution of “60 days from 30 August 2013” for the expression “28 days”. 

Para (3), steps to be taken in the Hong Kong Trade Marks Registry:

17.TWG seek 21 days in which they should withdraw Hong Kong trade mark applications. Tsit Wing requires that step to be taken within 14 days and seek the right to take the steps themselves should TWG not comply.

18.Having regard to the month has passed since the handing down of reasons I fix the time at 14 days.  Having regard to the conduct of TWG in this litigation, is entirely reasonable that Tsit Wing should be authorised to act in TWG’s place should TWG not comply with the order. 

19.Paragraph (3)(b) of Tsit Wing’s draft order is accordingly approved.

Para (4), removal of TWG references in Hong Kong:

20.TWG accept that these steps must be taken but say that the time should be co-ordinated with the time fixed in paragraph (2) of the order.  That is sensible.  The time is fixed at 60 days from 30 August 2013.

21.Tsit Wing, in the revised draft, include an additional provision requiring the 2^nd Defendant to change its company and business name.  Mr Baldwin argues that the court made no finding in the judgement in respect of the company’s name or business name.  In the light of the findings that were made that is a facile argument which I reject.  There was a specific plea in the re-amended statement of claim for this change of name.  The provision will stay in the final orders.

22.A provision, paragraph (4)(e), is also included requiring the removal of Hong Kong references from the website at www.twg.com. The inclusion of this requirement is opposed by TWG. Mr Baldwin relies upon the following passage from 0-800 Flowers Trade Mark [2000] FSR 697 at 705 where Jacob J said:

“So I think that the mere fact that a website can be accessed anywhere in the world does not mean, for trademark purposes, that the law should regard them as being used everywhere in the world.”

23.It is necessary to look at the context in which statement was made, and the whole of the relevant passage.  Jacob J prefaces the passage cited by saying:

“Mr Hobbs submitted that any use of a trade mark on any website, wherever the owner of the site was, was potentially a trade mark infringement anywhere in the world because website use is an omnipresent cyberspace; that placing a trade mark on a website was ‘putting a tentacle’ into the computer user’s premises. I questioned this with an example: a fishmonger in Bootle who puts his wares and prices on his own website, for instant, for local delivery can hardly be said to be trying to sell the fish to the whole world or even the whole country. And if any web surfer in some other country happens upon that website he will simply say ‘this is not for me’ and move on. For trademark laws to intrude where a website owner is not intending to address the whole world but only a local clientele in which anyone seeing the site would so understand him would be absurd.”

There then follows the passage cited.  Following that passage, Jacob J goes on to say:

“It all depends upon circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site. In other fields of law, publication on a website may well amount to a universal publication, but I am not concerned with that.”

24.It is not the question of universal publication that is in issue when considering the proposed paragraph.  What is an issue is references on TWG’s website to the IFC café and to the availability in Hong Kong of infringing products.  By allowing the references to the IFC cafe or enabling the sale, distribution or supply of products bearing or under or by reference to the infringing names and marks to Hong Kong or to any customer ordering products from Hong Kong by way of the website will be to defeat the effect of the fruits of the judgment to which Tsit Wing are entitled.  By virtue of the rights which Tsit Wing has successfully enforced by these proceedings, TWG are not entitled to sell their goods in or to customers in Hong Kong in the present getup. 

25.The justification for the provision in the final orders is comprehensively set out by Jacob J on Euromarket Designs Inc v Peters and Crate & Barrel [2001] FSR 288 at §§21-24.  Paragraph (4)(e) goes no further than to protect the rights for which Tsit Wing has achieved protection in Hong Kong by these proceedings.

26.Tsit Wing’s revised draft order, paragraph (4), is accordingly approved.

Para (5), a delivery up order:

27.Mr Baldwin says that a delivery up order is not necessary because this is neither a counterfeiting case nor a copyright infringement claim and accordingly it is sufficient that the items are removed from the jurisdiction.  Ms Tam accepts the proposed amendments.  The time limit is fixed at 60 days.  TWG’s proposed amendments to paragraph (5), “out of” and “upon oath” are approved. 

28.The addition by way of exception proposed by Tsit Wing is appropriate for the protection of Tsit Wing. 

Para (6), the affidavits as to removal:

29.TWG having accepted that an oath is required, this paragraph is approved.

Para (7), discovery:

30.An order in the nature of a Norwich Pharmacal discovery order is sought by Tsit Wing.  This will, Ms Tam argues, enable Tsit Wing to make an informed decision between an account of profits and an enquiry as to damages. Tsit Wing will have the benefit of considering the written documents required to be exhibited.  The order is opposed as being unjustified and onerous, involving many documents.  It is also opposed because Mr Baldwin says that it seeks to discover the identities of other wrongdoers who are suppliers and who are overseas and not within the jurisdiction.

31.There is no evidence to support the submission that all of the defendants’ suppliers are overseas.  In any event, as Ms Tam points out, Norwich Pharmacal relief is not confined to discovery of identity of wrongdoers in Hong Kong and may be granted in aid of foreign proceedings: see Manufacturer’s Life Insurance Co of Canada v Harvest Hero International Ltd & Ors [2002] 1 HKLRD 828 at 836-837.  As Ms Tam says, Tsit Wing has adduced evidence before the court that they own the relevant trademarks in many different jurisdictions around the world.  They are entitled to properly enforce their rights against the suppliers of infringing products in other jurisdictions.

32.It is conceded by TWG that discovery is necessary for Tsit Wing to make an informed decision whether to pursue an account of profits or an inquiry as to damages.  If Tsit Wing is not satisfied with the extent of the discovery they may seek further discovery by summons.  On the question of whether or not further discovery is onerous that can then be examined in the light of appropriate affidavits for and against the application.

33.Paragraph 7 is approved, the time is fixed at 35 days.

Para (8), a declaration as to infringement and passing off:

34.Mr Baldwin says that the usual practice is to grant a declaration of infringement only if no injunction is granted.  I accept Ms Tam’s submission that the authority cited, Kerly 20-065 does not support the assertion made.  A declaration is appropriate having regard to the findings made upon trial.  The paragraph is approved.

Para (9), election between accounts and inquiry:

35.The only amendment sought is the inclusion of a reference to paragraph (7) discovery.  Having regard to the conclusion reached in §33 above, this amendment is approved.

Para (11), specific discovery:

36.Discovery in the nature of the Norwich Pharmacal procedure is ordered under paragraph (7).  This paragraph seeks specific discovery directed at the election open to Tsit Wing to pursue either an account of profits or an inquiry into damages.  In the absence of an order in these terms simple discovery will not provide a sufficient breakdown of the category of costs to enable Tsit Wing to make an “informed” decision. 

37.It is right that a plaintiff is not entitled to know exactly the amount of damages or profits to which he is entitled, but in the absence of an order in the terms sought an extensive and expensive accounting exercise will be required on the part of Tsit Wing.  I have no doubt at all that modern computer systems will make it simple for TWG to supply the appropriate breakdowns.

38.Paragraph 11 as drafted by the revised TWG draft is approved, with the time limit fixed at 60 days from 30 August 2013.

Para 12,  release from the implied undertaking:

39.This paragraph, as drafted, entitles Tsit Wing to use all documents disclosed exchanged or filed in the proceedings in any manner that may be required for their protection.  TWG seek to limit the release from the implied undertaking to affidavits/affirmations, and the use of the documents to Hong Kong.

40.There is no basis to limit the release to affidavits/affirmations.  In many instances it will be the actual documents themselves which will be important in the enforcement of their rights, not the affidavit/affirmations.  There is no basis to limit the use of the documents to Hong Kong for the reasons set out in §31 above.

41.Tsit Wing’s draft revised paragraph (12) is approved.

Indemnity Costs:

42.Tsit Wing seeks an order for indemnity costs. Indemnity costs are opposed by TWG.  The parties are agreed that the leading authority on indemnity costs is Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2007) 7 HKCFAR 114 at 124. 

43.Ms Tam relies particularly upon Choy Yee Chun v Bond Start Development Ltd [1997] HKLRD 1327 at 1338 where it was held that the attributes of the parties and the character of the proceedings are not irrelevant to the exercise of the discretion to award indemnity costs.  The court further said that the grounds for making such an order must be connected with the case and might extend to any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading the litigation, but no further.  In that case the court held that the defendant had acted with an ulterior motive which was characterised as oppressive and vexatious conduct.  A bogus claim of adverse possession had been pursued with an ulterior motive of putting pressure on a landlord to pay excessive compensation.

44.Ms Tam cited a number of cases illustrating examples where the attributes of the parties and the character of the proceedings were relevant to an order for indemnity costs.  The cases are:

(a) Yau Wah Hing & Anor v Yuen Kay Ming, Unreported, CACV 46 of 2012, 7 March 2013.  The court found that the defendant had given untruthful evidence which unnecessarily increase the time spent on trial and that the defence was unmeritorious.

(b) Elitt Engineering Consultants Ltd v SNE Engineering Co Ltd, Unreported, HCA 603/2012 & HCA 1312/2012, 17 December 2012.  In the context of the duty of full and frank disclosure in ex parte applications indemnity costs were awarded when appropriate disclosure had not been made.

(c) Real Gold Mining Ltd v Securities and Futures Commission, Unreported HCAL 69/2011 8 September 2011.  Indemnity costs were ordered, again in ex parte applications where there had not been full disclosure.

(d) Menno Leendert Vos v Global Fair Industrial Ltd & Ors Unreported HCMP 397/2012, 28 May 2012.  The Court of Appeal refused leave to appeal an indemnity costs order where trial judge had found a serious breach of fiduciary duty and dishonest assistance.  The defendant had put forward frivolous and vexatious arguments which were factually incorrect and had given false evidence, trying every trick to mislead the court.

(e) Chow Sau Hei v Ho Keung Yuen, Smart Creator International Ltd Unreported,HCMP 716/2006, 7 August 2013.  The court found that the petitioner had given evidence and run arguments which they knew to be untrue.

45.Mr Baldwin is right to point out to me that in Choy Yee Chun, Menno Leendert Vos and Yau Wah Hing the defendants were found not only to have lied, but lied in support of an meritorious defences which were frivolous and vexatious.  It is correct too that Elitt Engineering and Real Gold Mining were both cases involving ex parte applications was he attend on duty of full and frank disclosure.  All the cases are simply examples of circumstances where the attributes of the parties, pre-action events, and the character of the proceedings were found to be relevant in fixing orders for indemnity costs. 

46.I accept Mr Baldwin’s submission that indemnity costs are reserved for cases outside the norm.  The question is whether or not the factors relied upon by Ms Tam take this case outside the norm.

The defence:

47.Ms Tam points first to the following features of the defence:

(a) there was no confusing similarity between the marks, and TWG believed there was none;

(b) no likelihood of confusion existed and none had come to light: all they were doing was to open a classy teashop, which is for a sector of the market at the opposite end of Tsit Wing’s products;

(c) Tsit Wing had ceased using the circular TWG Mark after only a short span; the other TWG marks were only used as a corporate designation, therefore Tsit Wing owned no goodwill at all in respect of the TWG marks it held in relation to coffee and tea;

(d) TWG had informed Tsit Wing of its planned to open the shop in IFC Hong Kong in March 2001, and no objection was raised;

(e) TWG had devised its name and marks without notice of Tsit Wing’s marks which they now extended to Hong Kong, not knowing of any possible conflict until sometime near March 2011.

48.The argument in sub-paragraph (e) was abandoned on the eighth day of the trial following cross-examination of Mr Law.  By that time that defence was, as Ms Tam put it, damaged beyond repair. 

49.Ms Tam says that the court found against TWG on each of points (a)-(d) upon or with the help of documentary evidence which was withheld from Tsit Wing through to Court of Appeal proceedings and beyond, and on which TWG’s main witness, Mr Law, was unable to explain or was severely discredited.  It is correct that the court found against TWG on each of those matters.  In support of the submission Ms Tam referred to a number of matters.

Discovery withheld in order to support the defence:

50.It was necessary for Tsit Wing, despite numerous requests, to make an application for specific discovery of citations of Tsit Wing’s earlier trade marks against TWG’s trade mark applications and the grounds of opposition filed by TWG in overseas opposition proceedings based on the ground of confusing similarity between the marks.  Only after a contested application were these documents disclosed.

51.Mr Baldwin argues that these documents were irrelevant to the issue of the likelihood of confusion because the registries apply a different test from that which the court should apply.  Deputy Judge Lok found the documents to be relevant and ordered their disclosure.  It is right that a different test is applied by the registries, but that does not render the documents are relevant.  They were highly relevant to TWG’s state of mind in advancing the particular defence.  In the registries TWG were saying the marks were confusingly similar.  In these proceedings TWG were saying the marks were not confusingly similar.  That is all that need to be said to demonstrate that the documents were highly relevant and demonstrated the embarrassing position in which Mr Law found himself .

52.It must not ever be open to a defendant to run one argument in one court, and a completely contrary argument in another court.  To do so is an abuse of process.  I am satisfied that Tsit Wing are entitled to rely upon this factor in the argument for indemnity costs.

53.I accept Mr Baldwin’s explanation of the “Clara Chan attachment”, and place no weight on this factor.

Misleading the Court and the Court of Appeal:

54.Ms Tam argues that the suppression of the relevant information that was before international trademark registries enabled TWG to make assertions on oath, and submissions on the basis of those assertions, which were misleading or untrue.  She points out that in the Court of Appeal, TWG disclosed successful applications in three selected jurisdictions as examples of “many jurisdictions worldwide” where the marks were regarded as not similar and not likely to give confusion.

55.That selection must have been deliberate, concealed the true picture, and was in the circumstances an abuse of process.  In cross-examination Mr Law admitted that if he had disclosed the citation objections and the position being adopted by TWG in other jurisdictions, he could not have presented to the court the argument that the respective marks have been recognised as distinguishable.  At that stage the parties were engaged in interlocutory proceedings which, although not ex parte, are dealt with without a full examination of the evidence.  Those circumstances must require an extensive obligation of proper disclosure.

56.Mr Baldwin complains that there are no primary findings of fact for the court to draw the irresistible inference that there was a sinister plan to hide the true picture from the court at the interlocutory stage.  Mr Law’s concession in evidence is a sufficient basis to say that there was a deliberate plan to hide the true picture from the court at that stage.  That inference is overwhelming.

57.I am satisfied that the conduct of TWG in this respect is a factor upon which Ms Tam may rely in an argument for indemnity costs.

The “own name” defence:

58.The “own name” defence was a central plank of the argument to be mounted by TWG.  It was the matter upon which Mr Baldwin first opened in his opening skeleton, and upon which most of the skeleton covered.  It was an argument that could only be made if the citation objections had not been disclosed.  Once they were disclosed it became hopeless because the honest belief that is required for the defence simply was not there. Notwithstanding that, the argument was persisted in until the eighth day of the trial.  Ms Tam was entitled to say that it was withdrawn to avoid the embarrassment of calling the Singaporean trademark lawyer as a witness.

59.It is an argument which should never have been mounted, having regard to the circumstances, and Tsit Wing was required to respond to it.

60.I am satisfied that the mounting and late abandonment of the “own name” defence is a factor upon which Ms Tam can rely in the argument for indemnity costs.

Oppressive conduct, wastage of costs:

61.Ms Tam argues that the conduct of the defence was not only hostile in the normal litigious sense but was oppressive in the light of the tight timetable that the parties had been put under by a speedy trial order initiated by TWG on grounds that they were later to overturn.  She contends that requests for further and better particulars and challenge to the first and second plaintiffs’ locus standi to sue were oppressive.  It should be noted that Tsit Wing itself responded with an extensive application for further and better particulars. 

62.It is, I think, sufficient if I say that, looking at the matter broadly, I cannot say that the requirements for clarification of the principal pleadings went beyond normal requirements or were oppressive.

63.The question of the joinder of the second and third plaintiffs falls within a different category.  Mr Baldwin was entitled to say that this is no mere legal technicality, but when a request was made to TWG to consent to the joinder of the second and third plaintiffs, TWG refused consent.  After a number of rounds of correspondence the required summons was taken out and consent was only then forthcoming.  While it may be said that the summons should have been filed earlier, consent should have been indicated earlier.  This appears to have been a deliberate delaying tactic.

64.Ms Tam complains about the manner in which TWG has handled satellite trademark proceedings by way of opposition or revocation for non-use.  With respect to Ms Tam, I do not see how the conduct of separate satellite litigation in which different tests are applied can impact upon the costs in this litigation, other than to the extent to which I have already set out.

65.The failure to consent promptly to Tsit Wing’s request the joinder of plaintiffs tends to indicate an attitude of hostility that goes beyond the norm, but the other factors relied upon do not take the matter further.

Delaying conduct after an application for a speedy trial:

66.Ms Tam says that after achieving an order for a speedy trial TWG delayed the matter with oppressive conduct.  She argues that TWG persisted in challenging Tsit Wing’s trademarks in every respect made unreasonable requests for detailed information particularly in respect of goodwill.  She says that after a number of rounds of correspondence TWG took out summonses to press matters only to withdraw after costs were wasted in preparing to resist the applications.

67.As I see it, a large part of the difficulties that arose in this respect came from the conditions imposed by Tsit Wing on the inspection of documents.  TWG insisted on full and unrestricted inspection and production of copies of Tsit Wing’s full customer list of over 10,000 names. It was proposed that solicitors should inspect the list first to protect confidentiality.  Ultimately restricted inspection was ordered after hearing, with costs against TWG.  The conditions sought to be imposed were to protect confidentiality.  That is a usual matter in litigation of this nature.  The inference arises that the demands made by TWG we deliberately designed to place burdens in the way of Tsit Wing in their preparation for trial. 

68.There were nine sets of interlocutory proceedings with 12 costs orders.  Only one of those costs orders went against Tsit Wing, three costs orders were in favour of Tsit Wing, and  seven costs orders were in the cause.  I do not accept Ms Tam’s submission that the interlocutory orders show a pattern of oppressive or obstructive conduct. 

69.During the course of the interlocutory proceedings TWG pressed Tsit Wing to admit that they had given TWG an implied cross undertaking in damages against TWG’s voluntary undertaking to the Court of Appeal to confine their operation to the IFC cafe.  Tsit Wing declined to make the admission.  This ultimately resulted in an application for an order in this respect by TWG.  The order was refused.  A request to the Court of Appeal for an expedited hearing to determine the issue was refused.

70.It is no answer to say that the application was dismissed by the deputy judge on a jurisdictional basis and not on the merits. It was an application which was simply unnecessary in the circumstances.  I accept Ms Tam’s submission that in the circumstances it was oppressive for TWG to pursue this matter at the eve of the trial.

71.Ms Tam relies upon the fact that 18 of the TWG’s 31 witnesses were not called.  I accept Mr Baldwin’s explanation for those witnesses not being called.  This is not a relevant factor in indemnity costs.

72.It became quite plain during the course of the trial that not only had TWG not informed Tsit Wing of their intention to come to Hong Kong, they had gone out of their way to avoid giving that information. The emails were carefully constructed to lull Tsit Wing into a state of relaxation concerning TWG’s real intentions.  A carrot was offered to distract Tsit Wing from the real issue, and at the same time a world wide co-existence agreement was being sought.

73.TWG embarked, with full knowledge, upon a course of action by coming to Hong Kong which could have one of only two results. First, Tsit Wing, faced with the prospect of horrendously expensive litigation to protect their rights could have crumbled and negotiated a coexistence agreement.  That is what TWG hoped would happen.  Second, Tsit Wing might embark upon that litigation to protect their rights.  TWG banked on the notion that the cost of litigation rendered this option unlikely.

74.TWG took a commercial risk, with all the knowledge they had of the rights held by Tsit Wing, and the clear knowledge that Tsit Wing were not prepared to enter into a coexistence agreement worldwide, let alone Hong Kong.  They challenged an old established firm with an impeccable business record.  They did so in a deceitful manner by hiding from both Tsit Wing and the courts information which would have made it plain that their case bordered upon hopeless.

75.When a person comes to court taking a commercial risk such as TWG has, they must pay the commercial price.  Weighing all of the foregoing matters I am satisfied that the attributes of the parties, the pre-action events, and the character of the proceedings is such that this is an appropriate case for indemnity costs, including indemnity costs in respect of all costs in the cause and any reserved costs.  I so order.

Costs relating to s 18(4) and TW Coffee Concept:

76.Mr Baldwin argues that a week before trial Tsit Wing abandoned a claim under s 18(4) TMO and were unsuccessful in their reliance upon a trademark for “TW Coffee Concept”.  Consequently, he says, TWG should not have to pay costs in respect of those matters.

77.I accept Ms Tam submission but the abandonment of the s 18(4) claim, and the failure to obtain a result on the TW Coffee Concept claim did not impact in any way upon the extent of the evidence or the length of the trial.  I accept the submission that in this respect the situation is in the same category as that in LA Gear Inc v Hi-Tech Sports plc [1992] FSR 121 at 131-132.

78.I decline to adjust the costs in this respect.

A certificate for three counsel:

79.It is clear that a certificate for three counsel is exceptional: see Fu Kor Kuen Patrick & Anor v HKSAR [2012] HKCU 1754.  It will only justified in the most difficult cases, which are distinguished by their complexity: see Secretary for Justice v Ocean Technology Ltd & Ors [2008] HKCU 404.

80.Mr Baldwin says that there are no exceptional factors in this case nor can it be described as the most difficult of cases, distinguished by its complexity or length.

81.Ms Tam points out that until trial the case had been handled by local senior and junior counsel, and that the orders made for costs in the various interlocutory applications usually contained a certificate for two counsel.  At the case management conference on 3 September 2012 there was no indication that there would be any difficulties with counsels diaries or that overseas counsel might be engaged.

82.At the end of January 2013, with consent already obtained from the Bar for the admission of Mr Baldwin, Tsit Wing were notified of his engagement.  The engagement was apparently because Mr Andrew Liao SC was now not available.  Consequently, Mr Platts-Mills was engaged with little more than three months before trial.  The documents were voluminous, totalling 39 box files.  The submission is made that in the circumstances it was reasonable for Tsit Wing to keep its team intact both for continuity, and so that the team who had been involved in the matter from the start could render collective assistance to the new incoming leader.

83.Ms Tam also points to the fact that TWG engaged other counsel with no prior involvement in the matter to act in respect of the late application to impose an undertaking in damages on Tsit Wing.  This had the effect of freeing trial counsel to concentrate on preparation for the trial.

84.I am satisfied that this is such an exceptional case that a certificate for three counsel is justified.  I so order.

Ms Winnie Tam SC and Mr Phillips B F Wong, instructed by Deacons, for the plaintiffs

Mr John Baldwin QC, and Mr Colin Shipp, instructed by Clifford Chance, for the defendants