XCHRX CHOON NANG ELECTRICAL APPLIANCE & OTHERS v. NG TAT HING trading as MAN HING INDUSTRIAL COMPANY

1995 No. A6352

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The plaintiff is taking proceedings against the defendant for an injunction and other relief on the basis of alleged infringements of design and copyright. The plaintiff has applied for an interlocutory injunction, and the defendant is opposing this.

2. In an affirmation by the defendant filed in opposition, he recites a number of customers' orders received since September 1994, giving the date, the quantity and the destination. He has marked orders coming from the same customer. The defendant says, in paragraphs 15 and 16 - "The pattern that can be observed from the above is that many of my customers do repeat their orders in recurrent nature. Copies of the relevant order and shipping documents relating to the above orders have been put in an envelope which is now produced and shown to me marked 'NTH-15'. Since the aforesaid documents contain highly confidential information regarding Man Hing's customers and pricing, I crave that those documents be kept confidential to this Honourable Court and not to be disclosed to the plaintiff." In paragraph 24, he says that the product concerned is now being offered to new customers at US$4 per unit. In paragraph 29, in relation to the matter of the balance of convenience, the defendant refers to a particular order mentioned in paragraph 15. He says that it is the major order to be fulfilled this year, and that an injunction would have "the most drastic effect."

3. The plaintiff's solicitors wrote to the defendant's solicitors seeking inspection of NTH-15. The defendant's solicitors refused this. The plaintiff's solicitors said they wished to inspect the documents to "assess [the defendant's] case" and to "verify the contents of [the defendant's] affirmation". The plaintiff's solicitors said they were "prepared to give you an undertaking not to release any information to our clients beyond what is stated" in the defendant's affirmation. The defendant's solicitors were prepared to allow only an inspection with the identities and addresses of the customers and the prices covered up.

4. The plaintiff now seeks an order for inspection "upon the undertaking of the plaintiff's solicitors that they will not disclose to the plaintiff, the identities of the defendant's customers and prices offered, noted from the inspection of NTH-15".

5. In usual circumstances, a party is entitled to inspect a document referred to by the other party in its affidavits, but the Court will refuse an order for inspection where there is good cause. The documents with which I am concerned are certainly relevant; indeed, the defendant relies upon them. The only solid basis for refusing an order is the defendant's concern that, if the plaintiff sees these documents, the defendant's trade secrets will be revealed and the plaintiff could damage the defendant's relations with its customers. These are legitimate concerns, but it seems to me that they are adequately covered by the undertaking given by the plaintiff's solicitors, re-enforced by a personal undertaking given to me in court by Mr Wong, as an officer of this court.

6. If I were of this mind, Mr Cheung suggests that the undertaking is not adequate because it does not undertake not to use the information gleaned from the documents for some other purpose, such as writing to the defendant's customers. I do not think there is any danger of that. I made it clear in court, if Mr Wong was not already so aware, that, when inspection is ordered for a particular purpose - as here, to enable the plaintiff's solicitors to check the defendant's allegations, use for quite another purpose would be totally wrong.

7. Mr Cheung also says that the undertaking does not cover disclosure of the documents to people other than the plaintiff. Again, disclosure of the contents of the documents to others would not be the purpose for which disclosure is ordered, and would not be legitimate. Mr Cheung agrees that disclosure of the contents of the documents to counsel for the plaintiff for the purpose of these proceedings would be permissible.

8. It was agreed on all sides that the prices mentioned in the documents need not be disclosed, although it appears from paragraph 24 of the defendant's own affirmation that he is not shy about letting some of these be known.

9. Mr Cheung also points out that the plaintiff's summons does not ask that the plaintiff's solicitors be permitted to take copies of the documents. Mr Wong says that he does want to take copies for the purposes of instructing counsel. He undertakes to destroy the copies once this purpose is served.

10. I conclude that, taking into account the undertaking by the plaintiff's solicitors and Mr Wong, there is no good reason why inspection should not be allowed. Accordingly, I order that the plaintiff's solicitors be entitled to inspect the documents contained in NTH-15, and to take copies of them. This order is made on the basis that the purpose of the inspection is to assist the plaintiff's solicitors to verify the contents of the defendant's affirmation and upon the undertakings by the plaintiff's solicitors and Mr Wong personally that neither the documents nor their contents will be revealed to the plaintiff beyond that already revealed in the defendant's affirmation. The defendant's solicitors may, if they so wish, conceal the information in the documents relating to the prices of the defendant's products. For the avoidance of doubt, I say that the documents or their contents should not be used for any purpose beyond that stated above, that the documents or their contents should not be revealed to any other person, other than counsel instructed by the plaintiff for the purpose of these proceedings, and that any copies taken are to be treated as the originals.

11. As to costs, it seems to me that the plaintiff has succeeded substantially, and that costs should follow the event. Accordingly, I make an order nisi that the defendant pay the plaintiff's costs of this application in any event.