LEUNG YEE AND ANOTHER v. NG YIU MING AND ANOTHER

HCA 7462/1998
HCMP 1730/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7462 of 1998

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J U D G M E N T

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1. The parties appeared before Mr. Recorder K. Kwok S.C. on the 11th June 1999 and had agreed on terms upon undertakings and cross-undertakings by the respective parties. A copy of the said order is set out in the annexure to this judgment. The undertakings relevant to the present summons are as follows:-

" AND UPON the undertakings by Leung Yee and Ng Yuk Kin that should they use and/or apply the Trade Mark registered in the Trade Mark Registry registered under Trade Mark No. 00140 of 1999 in Class 5 on the 24th day of January 1999 as varied pursuant to the Order herein ("the said Trade Mark") that they shall specify and/or cause to be specified the words "Ng Yuk Kin" or "吳玉娟監製" or "大家姐監製" in conjunction with the said use or application of the said Trade Mark."

" AND UPON the undertakings by Leung Yee and Ng Yuk Kin that they will add or cause to be added the words "Ng Yuk Kin" or "吳玉娟" or "大家姐" within one month from the date of this Order to including but not limited to all signs, advertising materials and publications, pamphlets bearing the words "Hoi Tin Tong" or "海天堂" with the restriction that the words "吳玉娟" or "大家姐" to be of roughly the same size (de minimis rule applying) within one month from the date of this Order and if due to insufficient space the aforesaid restriction shall not apply to the signs bearing the words "Hoi Tin Tong" or "海天堂" inside the shops. The style, materials, constructions and design of the aforesaid words shall be in accordance with the design and descriptions as per Schedule attached hereto (de minimis rule applying) ("the Further Undertaking")."

2. The terms of the settlement relevant to the present proceedings are as follows:-

"1. That it be recorded that subject to Leung Yee and Ng Yuk Tin having fully complied with or discharged the Further Undertaking and upon Leung Yee and Ng Yuk Kin executing the sold note and instrument of transfer in relation to all their shares and interest in or of Regent Lake Investment Limited ("Regent Lake"), Ng Yiu Ming and Chiu Fung Yi shall simultaneously pay the sum of HK$6,500,000.00 to Messrs. Paul Kwong & Co. solicitors for Leung Yee and Ng Yuk Kin and Leung Yee and Ng Yuk Kin agree to render full assistance to perfect the said transfer."

"7. Subject to the aforesaid undertaking in relation to the said Trade Mark, the parties do have liberty to use the said Trade Mark."

3. Ng Yuk Kin and Leung Yee, the 1st and 2nd Plaintiffs in HCA 7462/98 (hereinafter called the Plaintiffs) now apply for the following orders:-

"1. A declaration that the 1st and 2nd Plaintiffs in HCA7462/1998 and the Respondent in HCMP 1730/1999 have duly complied with all the terms of the Order given herein dated 11th June 1999 ("the said Order");

2. That the 1st and 2nd Defendants in HCA7462/1998 and the Applicant in HCMP 1730/1999 do comply with the said Order by paying the said 1st and 2nd Plaintiffs and the Respondent the sum of HK$6,500,000.00, together with interest thereon calculated at the judgment rate, for the period from 10th July 1999 till payment;

3. The costs of and occasioned by this application be to the said 1st and 2nd Plaintiffs and the Respondent."

4. The complaint by the 1st & 2nd Defendants in HCA7462/98 is that the Plaintiffs had not complied with their undertaking in that they had not within one month of the order i.e. one month from 11 June 1999 added or cause to be added the words "Ng Yuk Kin" or "吳玉娟" or "大家姐" to all signs, advertising materials & publications, pamphlets bearing the words "Hoi Tin Tong" or "海天堂" with the restriction that the words "吳玉娟" or "大家姐" to be roughly of the same size (de minimis rule applying) and if due to insufficient space the aforesaid restriction shall not apply to the signs bearing the words "Hoi Tin Tong" or "海天堂" inside the shops. The style, materials, constructions and design of the aforesaid words shall be in accordance with the design, descriptions as per schedule attached hereto (de minimis rule applying).

5. The particulars of the breach complained by the Defendants in HCA7462/98 are as follows:-

1) The canvas canopies

The Plaintiffs had not included the words "吳玉娟" or "大家姐" to the canvas canopies at all.

2) The external signboards

Instead of adding the characters "吳玉娟" or "大家姐" to the external signboards, in accordance with the schedule annexed to the order, the Plaintiffs had now replaced the characters "海天堂" with the registered trade mark.

3) The signs located at the entrance to the shops

The complaint is that the characters "大家姐" or "吳玉娟" are not of roughly the same size as the characters "海天堂".

Explanations of the Plaintiffs

6. In respect of the external canvas canopies, the Plaintiffs said that those canopies are now folded or rolled up and they have no intention to unfold any of the canopies. Whatever was placed on the canopies could not be visible.

7. As to the external signboards the Plaintiffs said that they had removed the three characters "海天堂" and had replaced them with the trade mark. Since there was no restriction that the size of the characters "大家姐" should be roughly of the same size as "海天堂" in their undertaking as to the use of the trade mark, they are not in breach of their undertaking.

8. The explanation by the Plaintiffs concerning the signs located at the entrance to their shops is that the characters "大家姐" or "吳玉娟" had been added vertically and that those characters are larger conspicuous.

Are the Plaintiffs in breach of their undertaking

1) Canvas Canopies

9. Since the canvas canopies are now rolled up, the characters "海天堂" are not visible, they cannot be regarded as signs or advertising materials. If they continued to be rolled up, in my judgment they are just rolled up canopies and not signs or advertising materials. Hence the Plaintiffs are not in breach of their "Further undertaking".

2. The Hanging Signboards

10. The Plaintiffs have now removed the 3 characters "海天堂" from the existing hanging signboards and replaced them each with a registered trade mark embossing the characters "大家姐監製". Those characters "大家姐監製" obviously are not roughly of the same size as the characters "海天堂".

11. According to the Plaintiffs they are at liberty to use the trade mark provided they shall specify the characters "大家姐監製" or "吳玉娟監製" in accordance with the 1st undertaking by them. In that undertaking it did not specify that those characters have to be roughly of the same size to that of "海天堂". Further in the Consent Order paragraph 7 they are at liberty to use the said trade mark and that is what they have done and is therefore not in breach of their further undertaking.

12. The Further undertaking is in respect of signs and advertising materials. The Plaintiffs should add the characters "吳玉娟" or "大家姐" to be roughly of the same size as the characters "海天堂". According to the photographs exhibited to the affirmation of Leung Yee filed on 23 October 1999 the Plaintiffs have removed the characters "海天堂" from the hanging signboards and instead they have replaced those three characters with the registered trade mark with the specific characters "大家姐監製" while the other characters meaning freshly prepared tortoise-jelly remained.

13. This is not purely a display of their registered trade mark. Those signboards, are signs and advertising materials promoting the sale of their freshly prepared tortoise jelly. In the premises the Plaintiffs are bound by their further undertaking in that the style and design should be in accordance with the design and description as per schedule attached to the Consent Order.

14. Since the Plaintiffs have seen fit not to comply with their further undertaking in respect of the signboards and advertising materials within one month of the order the Plaintiffs are in breach of their further undertaking in respect of the hanging signboards.

3) Signboards located at the entrance to the shops

15. Again from the photographs exhibited to the affirmation of Leung Yee it is obvious the characters "大家姐監製" added to those signs are not roughly of the same size as the characters "海天堂". The Plaintiffs submitted that there was not sufficient space to add those characters to be roughly of the same size as the characters "海天堂". When the Plaintiffs gave their further undertaking they must be aware whether they could comply with what they had undertaken to do. They are the only people to know whether the further undertaking can be accomplished. If they feel they could not then they should not give that further undertaking. It is not impossible for them to comply with that undertaking if they remove them and replace with new sign boards or re-allocate those characters. If they have seen fit to remove the three "海天堂" characters on the hanging signboards and replace them with the registered trade mark, I cannot see why they cannot implement their further undertaking by having new signboards after all those signs are not irreplaceable. It is only a lame excuse. They have a whole month to re-negotiate or explain to the Defendants why the further undertaking could not be accomplished. Instead of trying to amicably put their dispute to an end by explaining their difficulties, if any, the Plaintiffs have through their solicitors written acrimonious letters which had virtually aborted any chance of further negotiations. In respect of the signs at the entrance of the Plaintiffs shops they are in clear breach of their further undertaking.

16. For those reasons the Plaintiffs are in breach of the 1st paragraph of the Consent Order in that they had not "fully complied with or discharged the further undertaking". In the premises they are not entitled to the said sum of HK$6,500,000.00. The summons is therefore dismissed with order nisi that costs be to the Defendants in HCA 7462/98.

ANNEXURE

ORDER

BEFORE MR. RECORDER K. KWOK S.C. IN COURT

UPON hearing Counsel for the parties hereto.

AND UPON the undertakings by Leung Yee and Ng Yuk Kin that should they use and/or apply the Trade Mark registered in the Trade Mark Registry registered under Trade Mark No.00140 of 1999 in Class 5 on the 24th day of January 1999 as varied pursuant to the Order herein ("the said Trade Mark") that they shall specify and/or cause to be specified the words "Ng Yuk Kin" or "吳玉娟監製" or "大家姐監製" in conjunction with the said use or application of the said Trade Mark.

AND UPON the undertakings by Ng Yiu Ming and Chiu Fung Yi that should they use and/or apply the said Trade Mark they shall specify and/or cause to be specified the words "Ng Yiu Ming" or "吳耀明監製" in conjunction with the said use or application of the said Trade Mark.

AND UPON the cross undertakings by the respective parties hereto to use and exhaust all existing packing and/or advertising material bearing or having the said Trade Mark or "Hoi Tin Tong" or "海天堂" now being used by them in their respective shops selling or offering to sell tortoise jellies and Chinese herbal teas within 1 year (save and except earthern wares bearing the said Trade Mark within 2 years).

AND UPON the undertakings by Leung Yee and Ng Yuk Kin that they will add or cause to be added the words "Ng Yuk Kin" or "吳玉娟" or "大家姐" within one month from the date of this Order to including but not limited to all signs, advertising materials and publications, pamphlets bearing the words "Hoi Tin Tong" or "海天堂" with the restriction that the words "吳玉娟" or "大家姐" to be of roughly the same size (de minimis rule applying) within one month from the date of this Order and if due to insufficient space the aforesaid restriction shall not apply to the signs bearing the words "Hoi Tin Tong" or "海天堂" inside the shops. The style, materials, constructions and design of the aforesaid words shall be in accordance with the design and descriptions as per Schedule attached hereto (de minimis rule applying) ("the Further Undertaking").

The parties hereto make a joint application for an order by consent that in full and final settlement of the proceedings herein:-

1. That it be recorded that subject to Leung Yee and Ng Yuk Kin having fully complied with or discharged the Further Undertaking and upon Leung Yee and Ng Yuk Kin executing the sold note and instrument of transfer in relation to all their shares and interest in or of Regent Lake Investment Limited ("Regent Lake"), Ng Yiu Ming and Chiu Fung Yi shall simultaneously pay the sum of HK$6,500,000.00 to Messrs. Paul Kwong & Co. solicitors for Leung Yee and Ng Yuk Kin and Leung Yee and Ng Yuk Kin agree to render full assistance to perfect the said transfer.

2. That it be further recorded that the parties hereto do agree to waive and abandon any claim if any that anyone of them may have against each other in respect of any partnership businesses under the name of "Hoi Tin Tong" or "海天堂" which existed or ought to have existed amongst the 4 or any 2 of them had been terminated as on 1st August 19998 up to and inclusive of the date of the Order and Ng Yiu Ming and Chiu Fung Yi further agree to indemnify Leung Yee and Ng Yuk Kin for any liability incurred by their relationship to such partnership businesses.

3. That it be further recorded that the parties hereto do waive and abandon any claim if any that anyone of them may have against each other in relation to Regent Lake and for avoidance of doubt the parties hereby agree that Leung Yee and/or Ng Yuk Kin be released from any guarantee given by them for Regent Lake and that Ng Yiu Ming and Chiu Fung Yi agree to indemnify them for any liability incurred relating to such guarantee(s).

4. That each party do pay their own costs or expenses incurred arising from or in connection with carrying out or discharging their respective undertaking given above save and except that the stamp duty involved in the transfer of all the shares of Leung Yee and Ng Yuk Kin in Regent Lake shall be borne and paid by Ng Yiu Ming and Chiu Fung Yi.

5. That each party do pay their own costs respectively arising from or in connection with the proceedings herein and shall waive all previous costs orders made in their favour prior to the date of the order made herein.

6. That the Registrar of Trade Mark be directed to vary the Trade Mark Register in respect of Trade Mark No.00140 of 1999 registered in Class 5 in the name of Leung Yee of Unite B, 9th Floor, Splendid Centre, 100 Larch Street, Taikok Tsui, Kowloon by adding the names of Ng Yuk Kin of the same address and Ng Yiu Ming and Chiu Fung Yi both of 54 Bowring Street, Ground Floor, Jordan, Kowloon as registered proprietors thereof.

7. Subject to the aforesaid undertaking in relation to the said Trade Mark, the parties do have liberty to use the said Trade Mark.

8. That it be further recorded the parties agree that with effect from 1st August 1998 (except as otherwise specified below):

(a) neither Leung Yee nor Ng Yuk Kin has/have any interest or share in any of the following shops:-

Shop 1, Ground Floor, Double Set Commercial Centre, Nos.37A-37B Jordan Road, Kowloon

Shop No.3B, Ground Floor, Lucky Plaza, Nos.1-15 Wang Pok Street, Shatin, New Territories

Shop E, Ground Floor, No.43 Nga Tsin Wai Road & 28 Hau Wong Road, Kowloon

Shop No.40-1, Ground Floor, Tai Po Plaza, Tai Po, New Territories

Ground Floor, No.13 Fu Hing Street, Sheung Shui, New Territories

Ground Floor & Cockloft, No.94 Hop Yick Road, Yuen Long, New Territories

Ground Floor, Block 6, Man Shing Building, No.27 Tso Kung Square, Tsuen Wan, New Territories

Shop A8, Ground Floor, Smiling Plaza, Nos.162-188 Un Chau Street, Shamshuipo, Kowloon

Ground Floor, No.40 Hennessy Road, Wanchai, Hong Kong

Shop 2B, Wu Nam Street, Aberdeen, Hong Kong

Ground Floor, 12 Fu Yan Street, Kwun Tong, Kowloon

83B Percival Street, Causeway Bay, Hong Kong

Ground Floor, 50 Stanley Street, Hong Kong

Ground Floor, 47-51 Shan Tung Street, Mongkok, Kowloon

(b) neither Ng Yiu Ming or Chiu Fung Yi has/have any interest or share in any of the following shops:-

126 Fuk Wing Street, Ground Floor, Sham Shui Po, Kowloon (1/7/98)

35C, Dundas Street, Ground Floor, Mongkok, Kowloon

9. That there be liberty to apply generally.

Date the 11th day of June 1999.

Schedule

1 有權由「吳玉娟」代替「大家姐」

2 位置可以左右對換

3 以上各款任擇