HARVARD ADDHAIR TECHNOLOGIES LTD. v. SAMSON PROFESSIONAL HAIR WEAVE CENTRE LTD. AND OTHERS

HCA4404/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4404 OF 1996

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J U D G M E N T

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Costs

1. The Plaintiff brought this action against the 2 Defendants for the following wrongful acts :

(a) breach of confidential information by both Defendants;

(b) breach of the terms of the employment contract by the 2nd Defendant;

(c) infringement of the Plaintiff's copyright by both Defendants; and

(d) conversion by both Defendants.

2. The trial of the action lasted for about 4 days in September 1999. In a written judgment handed down on 5 October 1999, I decided in the Plaintiff's favour on all its claim against the Defendants. In these circumstances, I do not see any reason for departing from the usual rule that costs should follow the event. The costs of this action are therefore to be paid by the Defendants to the Plaintiff, to be taxed if not agreed.

3. Mr Garland for the Plaintiff asks for a higher scale of costs. Instead of the usual party-and-party costs, he argues that the costs herein should be taxed on an indemnity basis. The whole basis of Mr Garland's argument on this point is in substance that the Defendants concocted a lie to deprive the Plaintiff of the summary judgment to which the Plaintiff was entitled. In this connection, he is relying on my earlier finding in the written judgment that the Defendants' evidence is not truthful.

4. I do not understand Mr Garland to be arguing that whenever a litigant who has lost the suit has been disbelieved by the court, indemnity costs would normally be awarded against him. There were (and no doubt will be) a lot of cases where the court has decided (or will decide) the outcome of an action based on rejecting one side's testimony or evidence as being untruthful. In fact, most cases involving factual disputes will necessitate a finding that one side's case is untruthful. I do not consider the law to be that whenever a court disbelieves a litigant's case, indemnity costs will automatically be awarded. On the other hand, there may be cases where the lies and the manner of conducting the case are so unworthy that indemnity costs are justified. The circumstances of each case will have to be considered.

5. Although the Defendants' conduct in this case in concocting a defence is certainly not something to be approved of, I do not find their conduct to be any worse than the litigants in other legal proceedings whose testimony or evidence has been disbelieved by the court. For this reason, I do not find it appropriate to award indemnity costs against the Defendants. The costs are thus taxable on a party-and-party basis if not agreed.

Disclosure/Delivery Up Orders

6. Mr Garland handed in a draft order for my approval. In particular, he asks for a disclosure order as per paragraphs 2 and 4 of the draft order and a delivery up order as per paragraph 3 thereof. The order asks for in paragraph 4 may assist the Plaintiff to decide whether to elect for an enquiry as to damages or an account of profit. The Defendants indicated at the hearing that they do not oppose this part of the application. Having considered the circumstances of the case, I consider it appropriate to make an order in terms of these paragraphs. There would therefore be an order in terms of the draft order dated 5 October 1999 subject to what I have said earlier.