KABUSHIKI KAISHA SANKYO SEIKI SEISAKUSHO v. LAFE HOLDINGS LTD AND OTHERS

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

Case No: 1989 No. 3277

Mr Peter Garland, instructed by Messrs. Wilkinson and Grist, for the Plaintiff.

Mr Cameron Maxwell-Lewis, instructed by Messrs Richards Butler, for the Defendants.

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JUDGMENT

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1. There were two summonses for hearing before me: A summons by the Defendant praying for the striking out of the Plaintiff's endorsement of claim and a summons by the Plaintiff for an injunction and other relief.

2. The Defendant's summons was, with leave, withdrawn, and I ordered that the Defendants pay the Plaintiff's costs in this regard.

3. Mr Garland asks that the Plaintiff's summon stand over to trial and the costs be reserved. Mr Maxwell-Lewis, on the other hand, argues that the appropriate action is to make no order as to the summons, save that the Defendants' costs be in the cause.

4. Mr Maxwell-Lewis argues that the Plaintiff's only alternative making an application to stand over the matter for trial was to abandon the summons altogether because defeat stared the Plaintiff in the face. He says that the summons was always misconceived.

5. He argues that the only purpose of the summons could he to protect the Plaintiff's rights pending trial in a situation in which an award of damages after trial would not be an adequate remedy. Inherent in that stand was an allegation that the Defendants wore doing, or were about to do, something that would infringe those rights. But, says Mr Maxwell-Lewis, this not the case.

6. The Plaintiff's summons seeks, broadly, an order restraining the Defendants from manufacturing, or dealing, with certain musical movement devices in respect of which the Plaintiff has patent rights and copyright It also seeks an affidavit relating to delivery up and dealings. Mr Maxwell-Lewle says it is clear from the unchallenged papers filled by the Defendants that the Defendants were not, before the issue of the summons, manufacturing, or dealing with, the devices, nor had they any intention of doing so. Further, it is clear from those papers that the Plaintiff already had, by way of statutory declaration, the information they were seeking by way of affidavit. Mr Maxwell-Lewis complain that the Plaintiff should have disclosed these facts in its papers in support of the inter partes summons.

7. In an affidavit in support of the summons, Miss Anna Choi, the Plaintiff's solicitor, exhibits a letter from the Plaintiff's solicitors to the First Defendant making certain demands, including demands that the Defendants cases dealing with the devices, for delivery up and information by way of statutory declarations. She recites the dates of other letters between the parties' solicitors, and then says that the Defendants made clear that they had nor made any commercial sales of the devices and had undertaken not deal with the devices until resolution of the matter. She says, however, that the Defendants did not give an undertaking or discovery covering the matters sought in the summons. Mr Maxwell-Lewis says this later statement is misleading, and, having dealt with the correspondence in outline, it should have been disclosed to enable the Court to judge whether Miss Choi's conclusion that the Defendants had not done what was required of them was correct.

8. Mr Garland tells me that he was consulted regarding the full disclosure of this correspondence, and he advised that it should not be disclosed because it was written in the course of negotiation to settle the matter and, therefore, not admissible. I accept, of course, that there is no magic in the words "without prejudice", and that communications entered into for settlement purposes may be privileged without the endorsement of this phrase. I accept that neither Miss Choi nor Mr Garland had any intention of concealing anything from the Court - this was, after all, an inter partes summons, not an ex parte application - but I do find it odd that it was thought right to draw conclusions from an interchange of correspondence, but not proper to point out precisely what the parties had said to each other in their own words.

9. I have now read the correspondence. Following the letter of demand of 20 February, 1989, the Defendants' solicitors replied by letter dated 22 February, 1989. This letter was not only a speedy response, but, in my view, disclosed a very responsible attitude to the matter. In my judgment, this letter, the subsequent action that it promised, and later clarifying letters, gave the Plaintiff, at least, the comfort that it needed to avoid having to take urgent proceedings for relief that could not wait for a trial of the matter. Indeed, Mr Maxwell-Lewis argues, the fact that the Plaintiff asks that the issues stand over for trial shows that the Plaintiff itself does not believe it will suffer any irreparable damage before trial.

10. I have been referred to Kodak Ltd. v Reed International [1986] Fleet Street Reports 477, which concerns, it seems to me, a similar situation to that facing me. Harman J. made no order on the motion, save Defendants' costs in the cause. This seems to be to be a sensible and just approach, and I adopt it here.

11. Accordingly, I make no order on the summons of 22 June 1989, save that the Defendants' costs be costs in the cause.