VICTORINOX v. GOOD TIME (HK) INDUSTRIAL LTD

HCA645/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 645 OF 2008

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R U L I N G

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1.  I am sorry that the matter has come to this.  Having read the papers before coming to court, it seemed to me that a relatively modest matter such as this has been allowed to expand out of all proportion.

2. The plaintiff is a very well-known Swiss company.  It has manufactured the Swiss Army Knife for over a hundred years now and the defendant is a Hong Kong company that deals in similar products.  The allegation is that persons employed on behalf of the plaintiff attended the defendant’s premises and were able to purchase three knives which were said to infringe the plaintiff’s Swiss Army Knife.

3.  A letter in standard form was then sent to the defendant asking it to “cease and desist” and also requiring all the other usual disclosure in line with the very well-established procedures in this sort of case.  The defendants then instructed their solicitors, who are very well versed in this sort of litigation, but regrettably, what then followed was some fairly heated correspondence between the parties’ respective solicitors.  I have been taken through all of that correspondence.  It is there to be read.  I am not going to go through it again in the course of this ruling. 

4.  What Mr Phillips-Wong, who appears for the plaintiff, says is that the plaintiff has had to come to court at the end of all this in order to get its judgment in default of defence and this includes not only all the usual orders that one sees in actions of this sort but also the costs of the action. 

5.  The defendant, represented by Mr Ludwig Ng, submits that now is not the time to make an order for costs but the that the costs should be reserved to await and to abide the enquiry as to damages.  Mr Phillips-Wong’s response to that is that this would not be the right course to take because what his clients are asking for are the costs of the action and it may well be, in common with very many of the more modest copyright and patent actions, that there will not be such an enquiry. It strikes me that Mr Phillips-Wong is right. 

6.  This  is undoubtedly a very modest claim.  The defendant in any event says that it had only dealt with three knives, and that would  really put it at the very modest end of the scale.  It maybe that the plaintiff says that it is not being entirely frank, but I put that out of my mind, and what it really comes to is that when one goes through the correspondence, as I have done and it has been referred to in some considerable detail in the course of the argument this morning, the parties simply were not able to come to terms, and that’s very regrettable.  This has been the result of some very keenly contested points in the course of the correspondence and which left the plaintiff with having to come to court to get the order that it seeks today.

7.  In the event, everything has been agreed which this took some time in coming but ultimately, everything has been agreed, save for this simple issue as to costs as to whether the plaintiff should have its costs today to be taxed, and I will come to the basis of taxation in a moment, or whether, as Mr Ludwig Ng submits, the costs should be reserved.  I do not think that that is right.  I think I am in a position now, having to deal with this in what I can describe as the usual way, which is that the plaintiff has had to come to court to get the orders that it requires and in such circumstances it ought to have its costs to be taxed, and I do not think it would be right to reserve the costs to an enquiry as to damages which may never take place.

8.  The next point that I need to deal with is whether the costs should be taxed on a party and party basis or, as Mr Phillips-Wong submits, on the much more draconian basis of the costs being taxed on an indemnity taxation either against the defendant itself, which would be the usual way of proceeding, or, if I thought it right, that the defendant itself was not really to blame for this but that it is all down to its solicitors, then I should direct that the solicitors should pay the order for costs.  I really do not think we have come to that position at all in this case.  I think this is one of these regrettable situations where there has been a bit of a disagreement between solicitors as to how the matter should proceed.  That is reflected in the correspondence.  One has to give reasonable leeway in these matters. It is regrettable that it has turned out in this way, but I do not think we have arrived at the situation where the basis of taxation should be on an indemnity.

9.  And so costs to the plaintiff to be taxed on a party and party basis.  That order will include, of course, the costs of today’s hearing.