TSIT WING (HONG KONG) CO LTD AND OTHERS v. TWG TEA COMPANY PTE LTD AND ANOTHER

CACV 191/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 191 OF 2013

(ON APPEAL FROM HCA NO. 2210 OF 2011)

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REASONS FOR DECISION

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Hon Lam VP (giving the Reasons for Decision of the Court):

1.  There are two applications before us:

(a) An application by the defendants for modifying paragraph 1 (c) of the injunction in the judgment of Deputy High Court Judge Saunders;

(b) An application by the defendants for extension of time to file their Notice of Motion seeking leave to appeal to the Court of Final Appeal.

2.  The plaintiffs opposed both applications.  After hearing counsel, we dismissed both applications.  Here are our reasons.

3.  On the application in respect of paragraph 1(c) of the injunction, it was not the subject of any ground of appeal in the Notice of Appeal, and as such was not a matter canvassed at the substantive hearing of the appeal.  In the Notice of Appeal, relief was dealt with at paragraphs 46 to 49 and none of them attacked paragraph 1(c).  At the hearing, neither leading counsel nor junior counsel addressed us on paragraph 1(c).  Thus, it was not a matter considered in our judgment of 3 December 2014.

4.  The question of relief had been specifically argued before the judge.  Though points were taken on other aspects of the injunction, leading counsel for the defendants did not raise the point which is now sought to be raised by Mr Clark (who appeared in this hearing on behalf of the defendants for the first time).

5.  As submitted by Ms Tam SC (appearing with Mr Wong for the plaintiffs), the wording of an injunction in a passing off claim has to strike a balance between protection of the interest of a plaintiff and the legitimate right of a defendant.  The relevant principles on how an injunction should be worded were discussed in the recent case of Pan Chung Pat Wo Tong (HK) Ltd v Law Yan Wai CACV 239 of 2013, 17 December 2014.  It is a balance to be struck in the circumstances of a case.  There is a large element of discretion in such respect.  In this instance, the discretion has been exercised by the judge, and there had not been any specific appeal against that aspect of the order.

6.  We are of the view that it is now too late for the defendants to raise this point.   The modification we ordered in respect of paragraph 1(b) cannot be a launching pad for the defendants to run a belated appeal against paragraph 1(c).  There is no merit in the application.  We shall dismiss that application with costs.

7.  On the application for extension of time, it is well established that an extension should only be granted when very good grounds are shown.  In Full Wisdom Holdings Ltd v Traffic Stream Infrastructure Co Ltd CACV 266 of 2003, 27 July 2004, Ma CJHC (as he then was) observed that in the context that a would-be appellant has already had twice his “day in Court”, the court will be inclined to give an extension only where exceptional or at least very good grounds are shown.   The same approach was adopted in Bowlstar (HK) Ltd v Ho Kwai Po CACV 156 of 2006, 10 July 2007 and Elijah Saatori v Raffles Medical Group CACV 109 of 2008, 11 March 2009.  The relevant factors are: (a) length of the delay; (b) reason for delay; (c) merits of the proposed appeal; and (d) prejudice to the other party.

8.  By reason of (c), the court will not be able to entertain an application for extension of time until it has sight of a draft Notice of Motion setting out the proposed grounds of appeal.  Thus, when this court found that the papers lodged in support of the application by the summons of 30 December 2014 did not set out the proposed grounds of appeal, notification was given on 5 January 2015 to the parties as to the need for a draft Notice of Motion.

9.  Though the summons was taken out during the currency of the appeal period, it seeks to postpone the filing of application for leave to appeal to the Court of Final Appeal to 3 February 2015.  The delay cannot be said to be insignificant.

10.  Various reasons were given for the delay.  One of the reasons was about the finalization of the order.  Two points can be made in that regard.  First, as stated in the notification of 5 January, bearing in mind the outstanding issue which needed to be resolved in terms of the wording of the order (which, as we have seen above, was due to the defendants’ own attempt to argue on the wording of paragraph 1(c)), this cannot provide a good reason why substantive grounds of appeal could not have been prepared.  Second, again as discussed above, the defendants’ attempt on re-opening of paragraph 1(c) is wholly unmeritorious and there is no justification for allowing that to be a good excuse for extending time for appeal.

11.  The other reasons for extension of time were the engagement of overseas counsel and the intervention of holidays.  In our view, none of these are good reasons for extension of time.  The defendants had used London counsel at the trial.  They chose to use local counsel (including senior counsel) in the appeal.  Our judgment was handed down on 3 December 2014, and there was sufficient time between then and the Christmas holidays for counsel to work on the case.  There should be sufficient expertise in the defence team of counsel to render proper advice on the merits of an intended appeal and to formulate decent grounds of appeal for the time being.

12.  In the draft Notice of Motion now placed before us, four questions were formulated as questions of great general or public importance.  We shall not set out those questions in this judgment.  But we will refer to them by the numbering in the draft Notice.

13.  Question (1) relates to the adage that in assessing the distinctive and dominant features in a composite mark, in general, the words speak louder than devices.  Reading our judgment fairly as a whole, in particular at paragraphs 76 to 90, it is crystal clear that we do not regard the adage as an immutable principle of law to be applied irrespective of the facts of the case.  We only considered the matter from that angle “in the context of the Defendants’ business at the tea salon at the IFC Mall”, see paragraph 90.  We do not consider this to give rise to a question of great general or public importance.

14.  It is factually incorrect to assert, as is done in Question (2) in the draft, that we had made the comparisons between the plaintiffs’ marks and the defendants’ signs on the basis of only one element and disregarded all other elements. Paragraphs 86 to 90 of our judgment made this clear.  The point is not reasonably arguable.

15.  Ms Tam is correct in pointing out that Question (3) (about the difference in the causal element stemming from the difference in wordings between section 18(3) of our Trade Marks Ordinance and section 10(2)(b) of the English Trade Marks Act 1994) was contrary to the position taken by Mr Liao SC at the hearing of the substantive appeal before us.  In any event, we agree with Ms Tam that the point is wholly devoid of merit.

16.  Question (4), as it is now put, is again contrary to the stance of Mr Liao in the substantive appeal.  It was Mr Liao who drew the attention of this court to the fact that the plaintiffs’ marks were registered as a “series mark” and the significance of that stemming from s 51(3) of the Trade Marks Ordinance.  Further, as we said in paragraph 48 of our judgment, Kitchen LJ was of the same view as ours.  Notwithstanding the authorities cited, including Pico Food GmbH v OHIM unreported, 9 April 2014, we do not think this gives rise to an arguable proposition to the contrary.               

17.  Thus, as far as the intended grounds set out in the draft before us are concerned, we do not think we would be minded to grant leave.  In other words, the late application does not strike us as one with a reasonable prospect of success.

18.  As regards the prejudice to the plaintiffs, we were told that the defendants are still using the signs contrary to the terms of the injunction.  Though the defendants indicated that they would change the same and would not seek any stay of execution in respect of the injunction, we agree with Ms Tam that the plaintiffs are entitled to have finality over the matter without delay bearing in mind that a speedy trial had been directed.

19.  On the whole, we do not think it is appropriate to grant an extension of time in the present case and we dismiss the defendants’ summons of 30 December 2014 with costs.

20.  Ms Tam sought certificate for 2 counsel in respect of costs of this hearing.  Mr Clark opposed the same.  Having considered the nature of the applications and the complexity, we shall give the certificate.