New Team International Ltd v. Yau Yim and Others

HCA 1161/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1161 OF 2015

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JUDGMENT

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1.I will give a short judgment now. I have before me an application, made by way of summons, dated 26 May 2015, seeking various interlocutory injunctions in relation to allegations of breach of confidentiality and breach of copyright.

2.The breach of confidentiality relates to an allegation concerning the alleged taking of client information from the computer systems of the plaintiff whilst the 1^st defendant was in their employment, and thereafter using it for the purposes of promoting a new business which the 1^st defendant is engaged with, and which is carried on by the other three defendants. 

3.The breach of copyright claim relates to the alleged copying of promotional leaflets and there is in the evidence, and particularly affirmation of Deborah Anne Sims, copies of the plaintiff’s leaflets and copies of the leaflets, which are said to be infringing.

4.The writ in this matter was issued on 26 May, presumably at the same time as the summons.  There is no issue of service, but Mr Chan, on behalf of the defendants, says that he requires more time in order to adduce evidence in defence of the allegations that are made. 

5.In the light of that, Mr Chong, on behalf of the plaintiffs, has asked for an interim order in the terms of the draft order which is attached to his skeleton argument. 

6.Mr Chong is prepared to proceed on the basis that this is an ex parte application on notice, given that, inevitably, in such circumstances, it will have to proceed without the benefit of full argument, and without the benefit of evidence heard from the defendants.  I am prepared to proceed on that basis.

7.The evidence demonstrates that the 1^st defendant was employed with the plaintiff until some time in December 2014.  The terms of her employment contract, which appears to be signed by her, include a confidentiality clause at clause 10, in the following terms:

“In the course of your employment with the company, you will receive and have access to information which is strictly confidential to the company, the managing director and its clients. You agree and undertake to maintain in strict confidence any and all information concerning the company, its business or its client’s affairs acquired during your employment with the company, as well as confidential information of any other third parties to which you may have access.

During and after your employment with the company (except in the proper performance of your duties with the company, as permitted by the company, or as required by law), you will not use for your own account or divulge or disclose to any person, firm, or company, any trade secrets, intellectual property, or any other confidential information of or relating to the company, which you may receive or obtain as a result of, or in connection with your employment by the company.  For the purposes of this agreement, confidential information shall include, but shall not be limited to all non‑public information concerning the business, products, procedures, know‑how, technology, accounts, finances, business and marketing plans, contracts, suppliers and business affairs of the company, including your contract and all client information and data held in whatever form.  The company reserves the right to take legal action for any such breach of confidentiality.  You will, at all times, use your best endeavours to maintain the confidentiality of, and to prevent the publication or disclosure of any and all information referred to in this clause, both during and after your employment ends.”

8.Given that this is an ex parte, on notice application, and that, inevitably, therefore, I am deciding it without the benefit of evidence from the defendant, in my view it is best that I say as little as possible about the merits of the dispute, because the merits of the dispute will inevitably have to be decided based upon the full evidence which will be before the court on the next occasion. 

9.Notwithstanding that, I am satisfied that there is a serious issue to be tried, in that there is at least a prima facie demonstration contained within the evidence that there has been both the use of client information and that there has been copying of the leaflet of the plaintiff, by the defendants.

10.As a result, and particularly having regard to the notes in the white book, note 29/1/38 at page 662, which deals with express negative covenants, and indicates that the balance of convenience test is not applied in the case of applications to restrain breaches of express negative covenants, I am satisfied that it is appropriate in those circumstances to grant an interim order pending the resolution of the summons which will have to be resolved following directions for the giving of evidence. 

Mr Patrick Chong, instructed by Chong & Yen, for the plaintiff

Mr CY Chan of CT Chan & Co, for the 1^st and 3^rd defendants