SANRIO CO., LTD. v. MIRACLE PRODUCTION CO. (a firm)

HCA 8116/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 8116 OF 1995

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REASONS FOR DECISION

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1. In 1995, the Applicant Sanrio Company Ltd commenced proceedings in this Court against Miracle Production Company (Miracle) for infringement of the Applicant's copyright in certain cartoon characters by producing stamps bearing counterfeited cartoon characters.

2. At all material times, the 1st Respondent Mr Yiu Wai Chong John and the 2nd Respondent Mr Chiu Chi Man Andy were two of the three partners of Miracle. On 6 October 1995, on an application by the Applicant which application was not opposed to, Rogers J granted an injunction order restraining Miracle from infringing or authorising the infringement of the Applicant's copyright in the cartoon characters.

3. At the hearing, Miracle was represented by the 1st Respondent only.

4. It is not disputed that in July and August of 1998, Miracle and another company which the Applicant claimed to be related to Miracle by virtue of its third partner, one Mark Universal Ltd engaged in activities constituting a violation of the injunction order granted by Rogers J on 6 October 1995.

5. According to the private investigators, Miracle offered to produce and supply stamps bearing the counterfeited cartoon characters which were indeed infringement of the Applicant's copyright.

6. In addition to a staff member of Miracle, a Ms Chik, the 1st Respondent was also actively involved in the acts of violation.

7. The 1st Respondent does not dispute that he was involved in those acts of violation in July and August of 1998. However, he claims not to have been served with the order of Rogers J dated 6 October 1995 and that he was at all material times unaware of the true nature and effect of the order that had been made.

8. As for the 2nd Respondent Mr Chiu Chi Man Andy, in addition to saying that he had not been served with the order of Rogers J, he also says he did not know anything about the making of the injunction order and the content thereof. He also disputes having taken any part in the acts of violation of the order of Rogers J. He sets out those matters in a brief affirmation in Chinese in opposition to the application by the Applicant against him.

9. In the light of the dispute, the Court is put in an unenviable position of having to hear evidence from two solicitors, Ms Irene Ng and Ms Frances Hau and a litigation clerk, who at the material time were in the employment of the Applicant's solicitor, Messrs Victor Chu & Co.

10. Mr Ho Man Ching, the litigation clerk says he had a clear recollection of the service of the injunction order on both Respondents. His memory was assisted by a report that he made shortly after the service was effected. He is adamant that he had served on both Respondents a copy of the order of Rogers J on 24 October 1995 and 26 October 1995. Indeed as I had said, shortly after such service, he had complied a report on the service which report forms part of the case file kept by Messrs Victor Chu & Co., the Applicant's solicitor.

11. Ms Ng, the solicitor who was then in the employment of Messrs Victor Chu & Co. and was in charge of this case, confirms the presence of the 1st Respondent at the hearing before Rogers J. She also confirms that she had explained to the 1st Respondent the meaning and effect of the order made by Rogers J immediately after the hearing. Ms Hau also says she had done the same to both Respondents over the telephone shortly after the hearing.

12. The Applicant's witnesses also produce contemporaneous records supporting their evidence. I have considered their evidence. I have no doubt whatsoever that Ms Ng, Ms Hau and Mr Ho are truthful and reliable witnesses who have tried their best to give an account of what had happened in relation to the case in question. I have no doubt that their evidence can be safely relied on. Insofar as the Respondents claim not to have been served with the order of Rogers J and that they were not aware of his order at all, their evidence is rejected. I do not find them by the manner in which they gave evidence that they are truthful witnesses.

13. I have no doubt that the 1st Respondent was indeed at the all material times aware of the order of the court and that he had violated such order knowingly.

14. A case against the 1st Respondent for contempt of court had been, in my view, clearly established to the required standard. I therefore find him to be in contempt of court by violating the order of Rogers J dated 6 October 1995.

15. As for the case against the 2nd Respondent, I have in my judgment found that the 2nd Respondent insofar as he denies having received a copy of the order is concerned, is not a truthful witness. I have also rejected the assertion that he had no knowledge about the content of the order of Rogers J that had been served on him. That does not necessarily mean that the allegation of contempt has been established to the required standard. I have to decide whether the Applicant has satisfied this Court to the required standard, namely beyond a reasonable doubt that the 2nd Respondent is indeed guilty of any act of violation against the order of Rogers J.

16. The Applicant had filed detailed and lengthy affirmations pertaining to the dealings with Miracle at the material time in support of the contempt application. But in none of those affirmations is there any allegation that the 2nd Respondent was personally involved in the dealings with any of the agents and/or the investigators acting on behalf of the Applicant.

17. In connection with the supply of the stamps with the counterfeited cartoon characters, the private investigators and agents in their affidavits pointed out that it was either Ms Chik, the assistant of the 1st Respondent or a Kenneth Lam or the 1st Respondent who would be acting for Miracle.

18. In the affidavits filed by the Applicant, the only allegation against the 2nd Respondent is that his name Andy Chiu, appeared on a faxed document featuring various cartoon characters which the Applicant conceded are in fact unrelated to the Applicant. His name appears in that document as the sender of the document to a Ms Ho and according to the private investigator, this faxed document was received after she telephoned Miracle requesting for the supply the cartoon characters stamps.

19. Although this document bears the name of the 2nd Respondent as the sender, there is no evidence that he actually sent this document. As I had said earlier, in any event the faxed document only dealt cartoon characters unrelated to the Applicant. The 2nd Respondent himself says in the course of his evidence that although he was responsible for the selling of stamps, he only dealt with company's stamps and he denies dealing with any of the stamps with the counterfeited cartoon characters.

20. I may be taking a lenient view on the matter but to find someone guilty of contempt of court is a very serious matter. The law recognises it, and the law requires a very high standard of proof before a person can be found guilty of contempt of court, namely a criminal standard of proof beyond reasonable doubt.

21. I have considered the evidence and the submissions by counsel for both the Applicant and the Respondents. On the evidence, I cannot conscientiously say that I have been satisfied to the required standard that the 2nd Respondent was guilty of any act of violation which constituted a contempt of the order of the court.

22. In the circumstances, I must give the 2nd Respondent the benefit of the doubt and dismiss the application against him.

23. Having disposed of the matter on liability, I shall now hear counsel on the question of the appropriate penalty to be imposed on the 1st Respondent.