XCHRX MONTRES ROLEX S.A. AND ANOTHER v. BROADWAY WATCH, JEWELLERY & GOLDSMITH CO. LTD AND ANOTHER

1995, No. A10782

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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D E C I S I O N

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1. This is an application for the continuation of an injunction which was first of all granted ex parte on the 23rd of October and continued on the 27th of October and an application to discharge that by the 1st Defendant. The 2nd Defendant does not seek to discharge the injunction or to contest its continuance.

2. Briefly, the case involves the sale of what could be described as very high quality fake Rolex watches. There were two watches that were sold to an investigator for a sum of $41,000 and little more need be said about them other than that clearly these are not the type of article which can be found in a night market but are sophisticated imitations, designed presumably to deceive even fairly discerning customers.

3. Mr. Cheung on behalf of the 1st Defendant, which is a company running a shop which employed the 2nd Defendant, seeks first of all to set aside the Anton Piller order which was granted. He took me with some care through the affidavit of Mr. Tsang who is of course the director of the investigating company. He pointed out that there was very little there to implicate the 1st Defendant and that is of course true. However, the investigator who ended purchasing the two watches which I have referred to already contacted the 2nd Defendant and came in contact with him at the 1st Defendant's shop. Moreover, many of the discussions between the investigator and the 2nd Defendant took place in the 1st Defendant's shop. Whether or not any director of the 1st Defendant was present is not clear but it seems that even if the 2nd Defendant were acting without the knowledge of any of the directors of the 1st Defendant in supplying the watches, the 2nd Defendant did material acts at the 1st Defendant's premises, whilst, presumably on duty at the 1st Defendant's premises to sell watches. Specifically, he had discussions about the supply of fake watches.

4. In those circumstances, looking at the matter as at the time of the grant of the ex parte injunction, I would not at present be disposed to discharge that order. It is true that there is very little direct evidence against the 1st Defendant but in view of the nature of this case, the particular nature and price of the fakes involved (which may have been too expensive for the 2nd Defendant to deal in on his own) and the difficulties there are in tracking down this particular type of infringement, I consider that one cannot say that the exercise of the discretion to grant the Anton Piller order against the 1st Defendant was wrong. There was, in my view, sufficient evidence and it does not fall to me to decide whether or not I would have myself granted this injunction but to decide whether the judge was wrong in view of the submission which was made today. Whilst I say this, however, I do not intend finally to bar the 1st Defendant from taking the point at trial if it might succeed in doing so in the light of all the evidence which is available then, but as it stands as of today I do not propose to discharge the Anton Piller order.

5. I then turn to the question of the interlocutory injunction. As I have already outlined there is clear evidence that there has been dealing by the 2nd Defendant, who is and was an employee of the 1st Defendant, in fake watches. The explanation provided by the 2nd Defendant, suffice it to say, is at present inadequate. I consider it is correct to say, in view of the evidence which has been put forward, that the 2nd Defendant carried out at least some of his activities in relation to the supply of the watches at the premises, namely contacting and talking to potential customers, even if the actual supply took place at the restaurant around the corner. Therefore, there should be some form of injunction continuing against the 1st Defendant. There is, in my view, a clearly arguable case that the 1st Defendant is vicariously responsible for the acts of the 2nd Defendant and in those circumstances, I consider it would be wrong at this stage to leave the 1st Defendant's premises in a position whereby they could be used by the 2nd Defendant for carrying on material parts of such an illicit trade.

6. In those circumstances, I propose to grant an injunction in the following terms:

An injunction against the defendants whether acting by themselves, their directors, officers, servants or agents or any of them or otherwise howsoever from selling or otherwise parting with possession, power, custody or control of (other than to the plaintiffs or their solicitors), or otherwise howsoever dealing in or with, any watches of the type exhibited as exhibits "TYC3" or "TYC4" or guarantee certificates of the type exhibited "TYC5" to the affirmation of Tsang Yau Choo affirmed on 19th October 1995, or any watches bearing the word "Rolex" not wholly manufactured by the Plaintiffs, and from permitting the 1st Defendant's premises at G/F, Hong Kong Mansion, Yee Woo Street, Causeway Bay, Hong Kong to be used for the sale or other dealing in or with any such watches and causing, assisting, enabling, directing, procuring, instigating or permitting any others to do any of the foregoing acts.

7. I was not addressed on any other parts of the orders sought in the summons and therefore subject to any further argument put to me I propose to make orders in terms of the remainder of the summons. I will hear the parties as to costs.