Diagcor Bioscience Incorporated Ltd v. Chan Wai Hon Billy and Others
Read the full judgment text of HCA 2107/2012 on BabelCite. This High Court CFI judgment was delivered on 23 October 2014.
1. By a summons dated 30 January 2014 (“the summons”) the defendants applied for an order that the plaintiff do file and serve its answers to the defendants’ request for further and better particulars of the statement of claim and reply as per the request for further and better particulars annexed to the summons (“the requests”).
Cites 2 cases
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HCA 2107/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2107 OF 2012 ________________
________________ Before: Deputy High Court Judge Sakhrani in Chambers Date of Hearing: 23 October 2014 Date of Decision: 23 October 2014 Date of Reasons for Decision: 10 November 2014 __________________________________ REASONS FOR DECISION __________________________________ 1.By a summons dated 30 January 2014 (“the summons”) the defendants applied for an order that the plaintiff do file and serve its answers to the defendants’ request for further and better particulars of the statement of claim and reply as per the request for further and better particulars annexed to the summons (“the requests”). 2.By the order of Master Chow made on 18 June 2014, the summons was dismissed with costs to the plaintiff in any event to be taxed if not agreed. 3.By the defendants’ notice of appeal dated 2 July 2014, the defendants gave notice that they intended to appeal against the master’s order. The hearing of the appeal came before me on 23 October 2014. 4.After hearing arguments, I made an order that within 21 days from 23 October 2014 the plaintiff does file and serve its answers only to the further and better particulars requested under request 8.2 and request 21.1 of the requests. I also recorded an undertaking given by Mr Kwan, on behalf of the defendants, that his clients will not disclose the identities of the medical practitioners to be provided in the answers to request 8.2 to non‑parties to these proceedings. 5.I allowed the appeal and varied the master’s order to the extent of the order that I made. 6.I also heard arguments on costs and, for the reasons given at the time, I made an order that the master’s costs order should be set aside and that the plaintiff should pay the defendants only 20% of their costs of the summons and of the appeal. 7.I indicated at the time that reasons in writing would be given for allowing the appeal and varying the master’s order to the extent of the order that I made. This I now do. 8.The plaintiff is a biotechnology company incorporated and carrying on business in Hong Kong. It carries on business in the research and development of bio‑medical diagnostic products and providing molecular diagnostic laboratory services in Hong Kong. 9.The plaintiff’s case is that it researched and developed a non‑invasive and accurate laboratory test to identify the sex of a fetus by testing the fetal DNA found in the blood plasma of the pregnant mother (“the Maternal Y‑Test”). Its case is that it launched the Maternal Y‑Test in the market and it became a successful business. 10.The 1st to 5th defendants (“D1 to D5”) are the plaintiff’s former employees. 11.D1 held positions of Chief Operation Officer, Chief Executive Officer and President at various points of time until 16 May 2012. 12.D2 held managerial positions and was also an Information Technology Officer at various points of time until 16 July 2012. 13.D3 is the wife of the 7th defendant (“D7”). She was a registered medical laboratory technologist until she left the plaintiff on 27 July 2012. 14.D4 held positions including Corporate Manager at various points of time until 19 July 2012. 15.D5 held the position of Sales Executive until 5 September 2012. 16.The 6th defendant (“D6”) was a former employee of the plaintiff’s service provider providing information technology services to the plaintiff and was involved in the setting up of the Maternal Y‑Test. 17.D7 is the husband of D3. 18.The 8th to 11th defendants (“D8 to D11”) are companies incorporated in Hong Kong. D8 was incorporated on 5 July 2012 whereas D9 to D11 were incorporated on 13 August 2012. D9 and D10 are wholly owned by D8. D11 is wholly owned by Possible Legend Ltd, a BVI company. 19.D6 and D7 were directors of D8 to D11 at all material times. 20.According to the plaintiff, D1 to D5 all left the plaintiff’s employment within a short window of time to join with D6 and D7 to set up the corporate defendants namely, D8 to D11 to provide a test which is identical or strikingly similar to the Maternal Y‑Test. 21.The plaintiff’s case is that given the striking similarity between the two tests and the short window of time in which the defendants’ test was developed, the court will be asked to infer at trial that the defendants’ test must have been developed using the plaintiff’s confidential information and to infer that it must have been D1 to D4 and D6 who disclosed the confidential information to D7 to D11 and that D7 to D11 must have copied and used the confidential information to develop their test. 22.It is also alleged that D5 disclosed confidential information imparted to him during his employment with the plaintiff concerning the plaintiff’s clients to D8 to D11. As D5 had visited the plaintiff’s clients and that as their clients have sent fewer referrals to the plaintiff, the plaintiff will also ask the court to infer at trial that D5 had solicited those clients to send their referrals to D8 to D11. 23.By the statement of claim (“the SC”) the plaintiff’s claim against the various defendants on a number of causes of action:
24.By their amended defence the defendants deny all of the plaintiff’s claims. As Mr Cooney SC, with Mr Ng, for the plaintiff submitted, in gist the defendants’ defence is that the confidential information is not confidential at all, that the relevant defendants did not misappropriate the confidential information and that the relevant defendants independently created their own DNA test without copying the Maternal Y‑Test. 25.By letter dated 3 December 2013 from the plaintiff’s solicitors to the defendants’ solicitors, the plaintiff made the initial request for further and better particulars of the SC and the reply. By letter dated 10 January 2014 from the plaintiff’s solicitors to the defendants’ solicitors, answers were provided to the initial request. 26.The defendants were not satisfied with the answers to the initial request and issued the summons trimming down some of the requests made in the initial request. 27.O. 18; r 12(3) of the Rules of the High Court provides that the court may order a party to serve on the other party particulars of any claim or other matter stated in his pleading. 28.O. 18; r. 12(3B) provides that:
29.The onus is on the applicant to satisfy the court that the order is necessary either for disposing fairly of the cause or matter, or for saving costs (paragraph 18/12/66, Hong Kong Civil Procedure 2015). 30.As is stated at paragraph 18/12/66:
31.Mr Kwan, for the plaintiff, has helpfully provided, as Annexure 4 to his skeleton submissions, a table setting out the relevant paragraphs of the SC and the reply, the requests made and the answers provided, and a summary of the reasons for relevance and necessity of the requests and the inadequacy of the answers provided. 32.As regards the requests, I was satisfied that it was only in respect of request 8.2 and request 21.1 that the plaintiff should provide its answers as, in my view, the particulars sought thereunder are necessary for disposing fairly of the cause or matter. REQUEST 21.1 33.I shall deal with request 21.1 first which is in relation to the conspiracy claim against all the defendants. 34.Paragraph 85 of the SC pleads a conspiracy to injure the plaintiff by unlawful means as it pleads:
35.Paragraph 86 of the SC pleads:
36.It is clear that the conspiracy claim is a distinct cause of action. Paragraph 85 of the SC pleads an agreement between all the defendants. No particulars were given as to when that agreement was made. No particulars were given as to the facts and circumstances on which the tort of conspiracy is based including the existence of the alleged agreement between all the defendants. 37.By request 21.1, the defendants requested full particulars of the facts and circumstances on which the plaintiff’s alleged tort of conspiracy to injure is based, including the existence of the alleged agreement between the defendants. 38.The answer that was provided was:
39.That answer was, in my view, a cheeky and unhelpful response. In effect, it relies on the whole SC without answering the particulars. I should add that Mr Cooney was not responsible for that wholly inappropriate response. 40.In the course of his submissions when I asked him what the plaintiff’s case was as to when the agreement was made, Mr Cooney submitted that in respect of D6 to D11 the agreement was made in September 2012, relying on paragraph 49 of the SC. Mr Cooney also submitted that the agreement was also made on 6 and 10 October 2012, relying on paragraph 49(4) of the SC. 41.When I asked counsel to let me know which other paragraphs of the SC he was relying on to show when the alleged agreement was made, Mr Cooney submitted that he was also relying on paragraphs 44, 53 to 62 and paragraph 78(1) to (5) of the SC. 42.I am unable to accept that those paragraphs show when the alleged agreement was made. They do not show that the alleged agreement was made in September 2012 and also on 6 and 10 October 2012 as submitted. 43.Paragraph 44 of the SC pleads that around September 2012 D8 and/or D9 and/or D10 and/or D11 launched a prenatal test with a process which was identical to that created by the plaintiff and that those defendants could not have developed, procured, launched and/or marketed the process without the disclosure by D1 to D4 and D6 of the confidential information to D7 and/or D8 and/or D9 and/or D10 and/or D11. 44.Paragraph 49 of the SC pleads that D6 and/or D7 and/or D8 and/or D9 and/or D10 and/or D11 acted in concert by launching, providing and marketing the process highly similar to the Maternal Y‑Test to their own customers. 45.Paragraphs 53 to 62 of the SC plead the claim for unlawful interference of the plaintiff’s business by D3 and the claim for negligence and wilful default against D3. As can be seen from paragraphs 53 to 58, the plaintiff is relying on matters occurring as early as December 2011 and also in April 2012. 46.Paragraph 78(1) to (5) of the SC plead that D1 and D4 were in breach of their contract with the plaintiff by soliciting the named employees of the plaintiff to join D8 and/or D9 and/or D10 and/or D11. As pleaded at paragraph 78, as a result of the solicitation by D1 and D4 some of the named employees resigned in July and August 2012, which was before September 2012. 47.In my view, the plaintiff has failed to properly plead the claim for conspiracy to injure with sufficient particulars so that the defendants know what case they have to meet in respect of this cause of action. The agreement pleaded at paragraph 85 of the SC is an agreement between all the defendants. However, by paragraph 86 of the SC the plaintiff seems to suggest that the agreement was between D1 to D7, D8 and/or D9 and/or D10 and/or D11. That does not appear to be the same agreement pleaded at paragraph 85 involving all the defendants. Also, by the above paragraphs of the SC mentioned by counsel in his submissions, it is clear that those paragraphs do not support an agreement between all the defendants made in September 2012 and also on 6 and 10 October 2012, as those paragraphs plead matters occurring much earlier than September 2012. 48.Ma CJ said in Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663 at paragraph 23:
49.As I have said, the answer that was provided was wholly inappropriate. It cannot be right to ask the defendants to trawl through the whole of the SC and try to guess which paragraphs are relevant to the distinct claim for conspiracy to injure. It is for the plaintiff to plead his case clearly and unambiguously in an intelligible form. The plaintiff has failed to so plead its case on the claim for conspiracy to injure. The defendants are entitled to the particulars sought under request 21.1. I was satisfied that the order is necessary for disposing fairly of the cause or matter. REQUEST 8.2 50.I was also satisfied that the order for the particulars sought under request 8.2 is necessary for disposing fairly of the cause or matter. 51.By paragraph 49(3) of the SC the plaintiff alleged that since late September 2012 D5 paid visits to the clinics of a number of medical practitioners who had regularly referred patients to the plaintiff to undergo the Maternal Y‑Test and that D5 solicited these medical practitioners to refer their patients to D8 and/or D9 and/or D10 and/or D11 for their process instead of the Maternal Y‑Test. None of the medical practitioners were identified and I was satisfied that the order for the particulars requested under request 8.2 is necessary for disposing fairly of the cause or matter. 52.I, therefore, made the order for the particulars requested under request 21.1. and request 8.2. 53.Save for request 21.1 and request 8.2, I was not satisfied that an order for the particulars sought under all the other requests is necessary for disposing fairly of the cause or matter, or for saving costs. I, therefore, refused to make an order for the particulars sought under the other requests. 54.Mr Kwan grouped the other requests into the following categories:
Category (1) 55.As to category (1), these relate to requests 1.1 to 7.1, 9.1, 14.1, 15.1 and 22.1. 56.It seems to me that the plaintiff has pleaded the material facts on which it seeks to rely at trial to ask the court to draw the inferences that the defendants had been imparted with, had divulged and had knowledge of the confidential information. Whether or not the court will draw those inferences is a matter to be resolved at trial. As Mr Cooney submitted, at this stage the plaintiff has no further particulars to give. It seems to me that the defendants know what case they have to meet. The plaintiff has tied its hands with the material facts pleaded and it will not be allowed to depart from its pleaded case at trial without leave. 57.In respect of request 9.1 and request 22.1, Mr Kwan submitted, correctly in my view, that the plea in respect of the copyright claim at paragraph 50 of the SC was insufficient. It is pleaded at paragraph 50 that D8 and/or D9 and/or D10 and/or D11 are “in breach of the Plaintiff’s copyright in the Confidential Information”. No particulars are given as to what the copyright works are, who the authors are and how the plaintiff derived copyright in the works. However, request 9.1 and request 22.1 did not ask for these particulars. There was no proper request made for these particulars. Category (2) 58.As to category (2), these relate to requests 8.1, 15.2, 17.1, 20.1 and 27.1. Mr Kwan submitted that these requests were directed to the claim of solicitation and dissuasion by D5 of certain medical practitioners’ clients from the plaintiff and other defendants’ procurement of the same. Request 17.1 also sought particulars of the occasions whereby some of the defendants allegedly solicited the named employees to join the corporate defendants. 59.It seems to me that the plaintiff has also pleaded the material facts on which it seeks to rely at trial to ask the court to draw inferences that the defendants solicited the medical practitioners and the plaintiff’s employees. The defendants know what case they have to meet. Again, the plaintiff has tied its hands with the facts pleaded and it will not be allowed to depart from its pleaded case at trial without leave. Category (3) 60.As to category (3), this relates to requests 10.1 and 23.1 in respect of a Madam A, and requests 12.1, 25.1 and 26.1 in respect of a Madam B. 61.As pleaded at paragraph 7 of the SC, in addition to the Maternal Y‑Test, the plaintiff provided two other diagnostic tests namely, the Alpha‑Thalassemia Mutation Screening Test (“the Alpha‑Test”) and the Beta‑Thalassemia Mutation Screening Test (“the Beta‑Test”). The Alpha‑Test is for the detection of an illness known as Alpha‑Thalassemia in a fetus. The Beta‑Test is for the detection of a disease known as Beta‑Thalassemia in a fetus. 62.The plaintiff’s case is that D3 was in charge of performing and supervising the Alpha‑Test for Madam A who was referred to the plaintiff for the Alpha‑Test by a doctor. The plaintiff’s claim against D3 is for special damages arising from D3’s wilful default or alternatively, negligence in performing and supervising the Alpha‑Test for Madam A. It is alleged that D3 caused a wrong test report with wrong test results to be issued to Madam A’s doctor. As a result, the plaintiff paid compensation to Madam A and the plaintiff lost all referrals from the doctor involved. 63.By paragraph 56 of the SC the plaintiff alleged that D3 knew for a fact that Madam A is a carrier of the recessive gene for Alpha‑Thalassemia. Under particulars (1) at paragraph 56 it is pleaded that in the course of D3’s employment with the plaintiff, the plaintiff informed D3 that all samples that undergo the Alpha‑Test are taken from mothers who are known to be carriers of the recessive gene for Alpha‑Thalassemia. 64.Request 10.1 asked for particulars as to the occasions (ie when, where, how and what) whereby the alleged communication took place. The answer that had been given in respect of this request was that doctors who referred mothers to the plaintiff for the Alpha‑Test are required to provide the referral reason or relevant medical history of the mothers. In respect of the test request form for Madam A, it was stated thereon that both Madam A and the father were carriers of recessive genes for Alpha‑Thalassemia. The plaintiff’s case is that D3 would be informed of this when she was provided with the test request form and the other documents. 65.It seems to me that a sufficient answer was provided by the plaintiff. The defendants know what case they have to meet. 66.Request 23.1 asks for particulars in respect of paragraph 23(11) of the reply where it is pleaded that a reasonable person with the relevant laboratory experience would not have mis‑interpreted the product size of Madam A’s sample to be 1.80 kilo base pairs unless it was done deliberately or negligently. This request seeks particulars of the facts and circumstance relied upon in support of the alleged deliberate act on the part of D3. 67.I accept Mr Cooney’s submission that the plaintiff has pleaded the whole Alpha‑Test incident to explain that it is implausible for a Part 1 medical laboratory technologist to make a mistake of the kind that had been made by D3. The plaintiff’s case is that the grossness of D3’s conduct indicates a deliberate act. The plaintiff does not have any further facts to rely on other than what has been pleaded. It seems to me that the defendants know what case they have to meet. 68.The plaintiff also claims special damages against D3 arising from D3’s wilful default or alternatively, negligence in performing and supervising the Beta‑Test for Madam B. It is the plaintiff’s case that D3 caused a wrong test report with wrong test results to be issued to Madam B’s doctor. As a result, the plaintiff suffers a loss of business from, inter alia, the relevant doctor. 69.Request 12.1 asks for particulars of the allegation of knowledge on which the alleged wilful default on the part of D3 is based. As Mr Cooney submitted, the particulars have been pleaded at paragraphs 62 to 66 of the SC. It is alleged that D3 falsely stated in the Beta‑Test report sent to Madam B’s doctor that the fetus is a carrier of Beta‑Thalassemia. The plaintiff’s case is that D3’s conduct fell severely below the standard of care to be exercised by a competent accredited medical laboratory technologist. Its case is that it is not plausible that a competent accredited medical laboratory technologist would have made such a mistake thereby indicating that it was a deliberate act. 70.It seems to me that sufficient particulars have been given. The plaintiff does not have any further particulars to rely on. The defendants know what case they have to meet. Again, the plaintiff has tied its hands and will not be allowed to depart from its pleaded case at trial without leave. 71.Request 25.1 seeks particulars of facts and circumstances relied on by the plaintiff is support of the allegation that D3 had doubt and should conduct re‑testing Madam B’s sample. Request 26.1 seeks particulars of facts and circumstances relied on in support of the alleged deliberate act or wilful default on the part of D3 by choosing not to re‑test Madam B’s sample. 72.I accept Mr Cooney’s submission that the circumstances of doubt are set out at paragraph 28(4) to (7) of the reply. The plaintiff’s case is that it is implausible that a competent accredited medical laboratory technologist would not have recognized that doubt and acted upon it by re‑testing the sample thereby indicating a deliberate act. 73.I am also of the view that sufficient particulars have been given in respect of request 25.1. The plaintiff does not rely on any further particulars. The defendants know what case they have to meet. Category (4) 74.As to category (4), this relates to requests 11.1, 13.1 and 24.1. These requests are for particulars of damages suffered by the plaintiff. As part of the relief claimed in the SC, the plaintiff claims by prayer (4) an inquiry as to damages or an account of profits made by the defendants. It seems to me that if and when the court finds the defendants liable as claimed and makes an order for an inquiry as to damages, it will be necessary at that time for the plaintiff to give the necessary particulars of the claim for damages. In my view, it is not necessary to make any order in respect of these requests at this stage of the proceedings. Category (5) 75.As to category (5), these relate to requests 18.1 and 19.1. These requests are in relation to the plaintiff’s claim for procuring breach of contract. 76.It is pleaded at paragraph 80(4) of the SC that D7 is the husband of D3 and that the employment status of D2, D3 and D5 were communicated by D3 to D7. Request 18.1 asks for particulars of the occasions (ie when, where, how and what) whereby the alleged communication by D3 to D7 took place. 77.The plaintiff’s case is that at all material times D1, D4, D6 and D7 were aware that D2, D3 and D5 were employees of the plaintiff. This has been pleaded and particularised at paragraph 80 of the SC. D7 is the husband of D3. D3 was employed as a medical laboratory technologist in the plaintiff. The plaintiff will ask the court at trial to infer that D3 would tell D7 about D2, D3 and D5’s employment with the plaintiff. It seems to me that sufficient particulars have been given. The plaintiff does not rely on any further particulars. The defendants know what case they have to meet. 78.Save for request 8.2 and request 21.1 in respect of which I made the order, I was not satisfied that an order for the particulars sought under the other requests is necessary either for disposing fairly of the cause or matter, or for saving costs.
Mr Nicholas Cooney SC and Mr Felix Ng, instructed by Pang, Wan & Choi, for the plaintiff Mr Jonathan Kwan, instructed by Fairbairn Catley Low & Kong, for the 1st to 11th defendants | ||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCA 2107/2012