LIP HING (YEUNG'S) MANUFACTORY LTD AND OTHERS v. HONGKONG LIXING YANGSHI MENCHUANG ACCESSORIES LTD

HCA 1363/2018

[2018] HKCFI 2464

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1363 OF 2018

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DECISION

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1.  This is the plaintiffs’ application by summons of 31 July 2018 for a judgment in default of Acknowledgment of Service and Defence against the defendant for:

(a)   an Injunction restraining the defendant from passing off or attempting to pass off any business, goods or service of the plaintiffs;

(b)   an Injunction restraining the defendant from using its registered company name;

(c)   an Order that the defendant do take all necessary steps within 14 days to change its company name to a name that does not include the words “Lip Hing (Yeung’s)”, “Lip Hing Yeung’s”, “Lip Hing Group”, “立興 (楊氏)” and/or “立興楊氏” and/or Chinese Pinyin characters of any of the aforesaid words; and

(d)   an Order for delivery up of infringing articles.

2.  According to the plaintiffs’ pleaded case, the plaintiffs are entities within a group of companies incorporated in Hong Kong carrying on the business of manufacturing and trading parts and accessories for doors and windows under the trade name of Lip Hing Yeung’s (立興 (楊氏) ) (“the Tradename”).  Mr Yeung Hing Tat and his wife Ms Tam Shin Ping first stated the business in the 1960’s.  After the death of Mr Yeung in 1979, the 1^stplaintiff was incorporated on 1 June 1979 to continue the business.  Between 2006 and 2016, the 2^nd to 9^thplaintiffs were incorporated in Hong Kong to share the operation and management of the business.  Over the years, they have carried out substantial advertising and marketing in Hong Kong and the Mainland to maintain and promote the Tradename.  Goodwill and reputation have been substantially developed.

3.  The defendant in contrast is a company incorporated in Hong Kong on 15 October 2014.  Its sole shareholder and director is a Meng Fanxiu whose stated address is in the Mainland.  Its name is Hongkong Lixing Yangshi Menchuang Accessories Limited (香港立興楊氏門窗配件有限公司).  The name is practically the same as the Tradename.  The area of business is also the same.

4.  Warning letters have been sent twice to the defendant and Meng Fanxiu. There has been no reply.

5.  The Writ herein was issued on 13 June 2018.  It is indorsed with a Statement of Claim bearing the same date.  No Acknowledgement of Service has been filed.  Nor any defence.

6.  I have considered Order 32, rule 5 of the Rules of the High Court.  The defendant and its shareholder/director have chosen to take no step in the defence of the action.  I have also considered the nature of the application before me.  A default judgment is more often than not sought in the absence of the defendant.  I find it expedient in the circumstances to proceed with the application despite the absence of the defendant.

7.  I have considered the submissions of Ms Pang who appears for the plaintiffs.  I have considered the appropriate approach when deciding whether a default judgment should be granted: Hong Kong Civil Procedure 2018 §19/7/11.  I have considered the authorities cited to me, which include Re Ping An Securities Ltd (2009) 12 HKCFAR 808, Wadlow on the Law of Passing Off (5^thed) at §10-25 (in support of the propositions that where a claim for passing off is made out, a permanent injunction is, in practice, normally granted as a matter of cause; and if an injunction is granted, it is normal to order delivery up or destruction upon oath of items the disposal ofwhich would infringe the injunction), and Kabushiki Kaisha Yakult Honsha vYakudo Group Holdings Ltd (No 4) [2004] 2 HKLRD 587 at §39 (as authority for the proposition that even if the defendant did not start trading under the infringing name, the court will require the name to be changed).  I have alsoconsidered the pleaded facts in the present case.  The name of the defendant is practically the same as the Tradename.  The field of business is the same.  In my view, a clear inference can be drawn that that was not the result of any unhappy coincidence, but that of a deliberate decision to pass off the Tradename.  In all the circumstances, I am satisfied that a default judgment in terms of the Summons is justified, and that the plaintiffs are entitled to the same on their Statement of Claim.  I so order.