XCHRX SCANO (H.K.) LTD. v. CHEONG KIM CHOY

1998 No. A18301

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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D E C I S I O N

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1. This is an application made ex parte for an interlocutory injunction with notice to the Defendant.

2. What is quite alarming is that the Defendant left the Plaintiff more than 5 months ago and apparently his movements or intended movements in setting up a company called "CVL-HK" were known to the Plaintiff at or soon after his date of departure, but the Plaintiff has done nothing until now to initiate proceedings.

3. There was correspondence between solicitors for the Plaintiff and CVL-SA which was exchanged in June 1998 and indeed on 26th June 1998, an injunction was threatened against the Defendant himself by the Plaintiff unless an undertaking was provided by him in a week's time. So the battle lines were drawn some 4 or 5 months ago, but the Plaintiff has done nothing to substantiate its threats for an injunction and the Defendant has, even according to the Plaintiff's evidence, been actively operating CVL-HK within this period.

4. No reason has been given on the evidence why the Plaintiff had delayed initiating these proceedings for this substantial period, whether it be 3 or 5 months.

5. Yet, the Plaintiff has now sought an interlocutory injunction on an ex parte application albeit on notice to the Defendant. There is no reason whatsoever why the Defendant should have to be rushed off his feet, so to speak, to meet as important an application such as this on an ex parte basis. For that reason alone, I will dismiss the application.

6. Mr. Shipp for the Defendant has also submitted that the draft order is based on a restrictive covenant which is unenforceable because it is unlimited in geographical scope. He has referred me to the Court of Appeal's decision in Kao Li & Yip v. John Richard Edwards [1994] 1 HKLR 232. Whilst I find that is an attractive submission, I do not think it is appropriate for me at this stage to comment on the validity or otherwise of this argument, as it would be a matter for the judge hearing the inter partes interlocutory injunction if the Plaintiff proceeds to that stage. Accordingly, the order I will make on this application is to dismiss the application with costs. I will now hear the parties as to the basis of such costs.

[Costs arguments]

7. As for costs, as I have said, it is not right for a litigant to sit on his rights for 3 to 5 months and then try to rush the Defendant off his feet in an ex parte application giving scanty notice to him. It is alarming that the Plaintiff has not even tried to put forward a reason for so doing. It is astonishing in my view for Ms. Chan to say that it was reasonable for the Plaintiff to take 3 months to consider whether to sue, and yet fair to the Defendant who had only 1 1/2 working days to respond to an application for an injunction. I do not wish to deal with the merits of the case proper but in my view, this ex parte application does amount to an abuse of the process of the court. Accordingly, I order that the Plaintiff do pay the Defendant's costs to be taxed and paid forthwith on an indemnity basis.