NEW HORIZONS EDUCATION CORPORATION AND ANOTHER v. BEST ALLIANCE WORLDWIDE LTD AND ANOTHER

HCA2218/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2218 OF 2008

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BETWEEN

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J U D G M E N T

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1.  In this action the plaintiffs claim against the defendants an injunction to restrain them from using Registered Trademarks, signage and all materials relating to the name of the plaintiffs’ business and damages for having breached the terms of a sub-franchise agreement following its termination. In short it is a breach of copyright action and a passing off action based upon the alleged activities of the defendants in seeking to use the plaintiffs’ name and status to lend authority, veracity and status to their own business.

The parties

2.  The first named plaintiff, an American corporation, is the registered owner of Trademark 300028944, a distinctive form of logo in which the words “New Horizons” in bold type appear above the words “Computer Learning Centers” in smaller type, and beneath a diagram of the upper segment of a globe with lines of longitude and latitude.

3.  It is also the registered owner of Trademark 300955143 which follows the same form of logo and diagram with the world “English Learning Centers” in small type, instead of “Computer Learning Centers”.  Both registered trademarks have their own classes of specification.

4.  New Horizons Computer Learning Centers, Inc. is a subsidiary of the 1^st plaintiff. New Horizons Computer Learning Centers, Inc. had granted a franchise in March 2000 to International Training and Education Limited (“ITEL”) for the People’s Republic of China and Hong Kong to operate the franchise business there, licensing ITEL to use the Registered Marks and the name and logo of “New Horizons” and “New Horizons Computer Learning Centers.”

5.  The 2^nd plaintiff is also a subsidiary of the 1^st plaintiff and acquired all the rights and interests of New Horizons Computer Learning Centers, Inc.  These included the right to offer and grant licences for the use of trademarks such as “New Horizons” and “New Horizons Computer Learning Centers” and of the Registered Marks, to franchises in the People’s Republic of China including Hong Kong.

6.  Accordingly the 2^nd plaintiff became the franchisor by virtue of its relationship with the 1^st plaintiff.  It therefore stood in the shoes of the 1^st plaintiff to ITEL.  In other words it became the franchisor of ITEL under the Master Franchise.

International Training and Education

7.  ITEL is a Cayman Islands company.  Philip Kwok was the chairman of ITEL at the end of 2007 at the latest.  Edward Tsui was also involved in ITEL.  ITEL was used as a vehicle for the receipt of the Master Franchise granted by New Horizons Computer Learning Centers, Inc. and for the granting of the sub-franchise to the 1^st defendant.

The defendants

8.  The 1^st defendant, a BVI company, carries on business in Hong Kong.  Its main place of business is at 201, Harbour Centre, 25 Harbour Road, Wanchai.  Mr Kwok and Mr Tsui are the principal shareholders of the 1^st defendant.

9.  The 2^nd defendant with Mr Kwok and Mr Tsui as directors was brought into being to operate the learning centre under the sub‑franchise granted by ITEL.

10.  It is a subsidiary of the 1^st defendant.  Either the 1^st or the 2^nd defendant registered the domain name “newhorizons.edu.hk” under the business name of “New Horizons Learning Center.”

The Master Franchise Agreement

11.  Dated 31 March 2000 this agreement between New Horizons Computer Learning Centers and ITEL was assigned by the latter to the NH China Limited, the BVI company, which carried on business at the same address as ITEL.

12.  On 5 December 2007 by e-mail and overnight courier, the 2^nd plaintiff, as successor in interest to the franchisor, gave notice of termination of the Master Franchise on the ground that the Master Franchisee (by assignment) was in monetary default of a payment that was to be made on or before 28 November 2007.

13.  The 2^nd page of that notice set out, in accordance with the Agreement, the obligations upon the franchisee to remove, change or otherwise alter everything which identified the business NH China Limited with the Franchisor’s business (the 2^nd plaintiff).

14.  It left open, for the time being, the question of whether to terminate the sub-franchise agreement.

The sub-franchise agreement

15.  Dated 5 June 2007, but effective from 1 August 2006, this sub‑franchise agreement was between ITEL and Best Alliance Worldwide Limited (the BVI company) the 1^st defendant, and included a Mr Philip Kwok and Mr Edward Tsui, two of the holders of equity in Best Alliance. One of the terms of the agreement required the sub‑franchisee, Best Alliance, to acquire NH Hong Kong Services Ltd (the 2^nd defendant).

16.  The initial term of the agreement was for 10 years unless terminated in accordance with the provisions of the agreement. Clause 5.02 of paragraph V of the agreement (TERM) is of paramount importance:

“Franchisor or its designee, is an intended third party beneficiary of this Agreement (the SFA). If subfranchisor fails to enforce this Agreement against subfranchisee, Franchisor or its designee has the right to do so directly. If the MFA between Franchisor and Franchisee is terminated then at the Franchisor’s sole option either (i) this Agreement (the SFA) shall also terminate or (ii) Subfranchisee shall attorn to Franchisor and pay royalties to Franchisor in all respects as if Franchisor was the subfranchisor named in the Sub-franchise Agreement …”

17.  This is conclusive of the contractual relationship between the Franchisor and the Sub-Franchisee.  There is also no arguable contention that the plaintiffs do not have “locus standi”.  The agreements dispose of any such notion.

The later Notices of Termination

18.  On 19 December 2007 the 2^nd plaintiff gave Notice of Termination of the Master Franchise Agreement and the Sub-Franchise Agreement to Best Alliance, the 1^st defendant.

19.  Mr Philip Kwok had already made it clear that he did not want the MFA to continue to run.  He explained in evidence that it was costing him and the shareholders too much money.  However he decided to try and preserve the Sub-Franchise Agreement if he could raise adequate funding and commercial involvement from outside Hong Kong.

20.  Accordingly the Notice of 19 December 2007 stated that although the effective date of termination was to be 31 January 2008, the Franchisor was still open to agreeing a direct franchise agreement with the sub-franchisee so as to allow it to continue to operate a franchise in Hong Kong.

21.  Unhappily for the defendants Mr Kwok’s efforts came to nothing and the e-mails which passed between January and April 2008 set out the state of affairs.

22.  On 29 January, Darius Shey, the Vice President of International New Horizons Worldwide Inc., encapsulated the position in his e-mail to Philip Kwok.  A new deadline of 14 March 2008 was being sought by the defendants in the light of possible investment in New Horizons Hong Kong business by some large investor already involved in the training and education business.  Providing outstanding sums due for the last four months of 2007 were paid by 18 February a new deadline would be agreed.

23.  On 14 March, the new deadline, Philip Kwok asked for an extension to the end of March as ITEL and Best Alliance were “in the final stage of drawing up a MOU with a global training and education group to be their strategic partner in S.E. Asia and China.  This will have significant impact on the business relationship between BAW and New Horizons Corporate.”

24.  Darius Shey’s reply was to ask for a discussion later in the week in order better to “understand some details of this proposed partnership.”  One week later Darius Shey was putting a Mr Tim Kleczka in the picture following the telephone discussion with Philip Kwok which he had sought.  It was apparent that Mr Kwok had indicated that if no progress in the talks was made he would be likely to give up the Hong Kong franchise.  The reason given clearly alerted Darius Shey to a possible state of affairs with a potential problem.  It appeared that Philip Kwok, who confirmed Darius Shey’s recollection of the conversation, took the view that the nature of the Hong Kong franchise business included a lot of business skills, finance and other types of training which was not part of the New Horizons (I.T.) franchise.  As a consequence giving up the I.T. line would not be a problem since it was not central to the defendants’ strategy.

25.  Darius Shey surmised that the defendants may have been under-reporting in terms of royalties etc. due to the plaintiff, since their reported loss of $100K each month was inconsistent with their claim that the business had been turned around in the last one to two years.

26.  The situation was determined by Philip Kwok’s e-mail to Darius Shey of 31 March 2008 in which he confirmed that “Best Alliance has decided not to be a franchisee of New Horizons” and requested that he (Shey) make a trip of Hong Kong to work out with Edward Tsui and himself “an orderly transition”, whatever that may have meant.

27.  On 15 April the plaintiffs sent to the 1^st defendant the final Notice of Termination of the Sub-franchise Agreement, effective from 1 April 2008, being the day after the extension granted expired, i.e. 31 March 2008, the date of Philip Kwok’s last e-mail saying that the sub-franchise was not wanted.

28.  The Notice accordingly contained the obligations upon the sub-franchisee under Article XI of the Agreement to remove the business from any identification with the Franchisor which included changing any signs or other material, abandoning the use of any service marks and any other name or means which associated the business with that of the franchise.  The words and meanings are unequivocal.

The arbitration clause

29.  This is contained in Article XIV of the Master Franchise Agreement. Any arbitration or other proceedings to enforce any liability or obligation, arising from the Agreement or otherwise, must be brought within either one year following discovery of facts giving rise to the alleged liability or obligation or within two years of the date of the first act or omission giving rise to it.

30.  The Sub-franchise Agreement, which is subject to the terms of the Master Franchise Agreement, relates only to a dispute between the sub‑franchisor and subfranchisee which is to be resolved by arbitration.

31.  The plaintiffs proceeded by way of Writ of Summons issued on 6 November 2008 within the one year of the Notice of Termination.  It was in fact the only practical method of proceeding given the nature of the remedies sought.  Although NH China Limited reserved its right to arbitration under the Master Franchise, it has not taken the necessary step within the two year limitation period and so any question of arbitration falls by the wayside.  Mr Philip Kwok seemed to acknowledge this.  Mr Tsui seemed however to think that there might be arbitration proceedings in China although he never checked on this and appeared to close his eyes to the matter generally.  I will deal with his hopes or expectations later.

The business in Hong Kong after termination

32.  Some time after the Notice of Termination Mr Kwok and Mr Tsui were in contact with Craig Chandler.  The record of e-mails is not disputed by the defendants, through Mr Kwok and Mr Tsui.  They had confirmed to Chandler that “all traces of New Horizons materials, logos and imagery would be removed by 31 May 2008” including those at the physical location and the website.  It is pertinent at this stage to say that that was not done—it was a somewhat misleading, to say the least, assurance.

33.  However the defendants said that they intended to keep the business name of New Horizons Learning Center and trade under it, contending that New Horizons was a generic name.  The defendants had been able to use that title only by virtue of the sub-franchise granted.  With the sub-franchise terminated they were saying that they intended to continue what, on any view, was an important ingredient in the title of the plaintiff’s business.  Unsurprisingly Craig Chandler sought to disabuse them of any notion that they were entitled so to do.  He reminded them of the sub-franchisee’s obligations upon termination.  They are quite unambiguous:

“Sub-franchisee shall … not operate or do business under the Assumed Name or any other name or in any manner that might tend to give the general public the impression that the sub‑franchisee is in any way associated, or affiliated with the sub‑franchisor any/or franchisor.

…

If the sub-franchisee engages in any business thereafter, it shall use trade names, service marks or trademarks (if any) which are significantly different from those under which the sub-franchisee had done business.”

34.  As if this was not clear, Craig Chandler spelt it out—“You are not authorised to continue using the name of ‘New Horizons Learning Center’, ‘New Horizons’ or any similar derivation of it.”  He then said “Let me know if you require any other transitional guidance” which was an echo of Philip Kwok’s last e-mail of 31 March 2008—“Please make a trip to Hong Kong to work out [with us] an orderly transition.”  I am satisfied that it did not justify a trip from Singapore to Hong Kong to make clear what was required of the defendants.

35.  Craig Chandler followed up his e-mail of 1 May with another on 6 June making it clear that although some changes had been made to the website there was still significant offending material on it which had to be removed.  He itemised it.

36.  Mr Tsui’s reply of 10 June showed an uncooperative stance or at least a lack of understanding of the obligations under the agreement:

“We have deleted the links. We will have a new company logo very shortly once our logo trademark has been properly registered …

… We will maintain the name as New Horizons Learning Centers as all our CEF courses and the school licences were registered with the HK Education Bureau under such name. We cannot change our name as long as we are still running these government funded courses.”

37.  I make it clear that I do not accept Mr Tsui’s evidence on this matter as will be apparent from a consideration of the steps he actually took. He had not even tried to do so at the time that he wrote this and it was some time before he actually took the appropriate steps.

38.  He went on to say that a public announcement would be made to the effect that his organization did not maintain any relationship with the plaintiffs. That was published in the South China Morning Post and Ming Pao on 23 July 2008.  Before that happened a more significant event occurred.

The covert inspection on 23 June 2008

39.  The plaintiff arranged for one of their employees, Scott McDaniel to come to Hong Kong to obtain evidence of the appearance of the defendants’ premises and business.  This was on 23 June 2008.  He came armed with a camera to the defendants’ Harbour Centre premises in Wanchai probably during the lunch-break when Mr Edward Tsui was present.  Mr Tsui agrees that Mr McDaniel identified himself to him by producing his card which clearly showed that he was employed by the plaintiffs.  Mr McDaniel may well have strayed into the back office of the defendants but Mr Tsui took exception to his presence generally.  He was of the view that this was a kind of subterfuge, as indeed it was, but it was legitimate.  Mr McDaniel took several photos and also took possession of some printed material.  The whole purpose of the exercise was to enable the plaintiffs to determine to what extent the defendants had complied with their obligations, spelt out in clear terms in e-mail contact.  The police were called and he was forced to handover the photographs and the flyers.  Eventually he was released.  However he went on to the Jordan premises and took some photographs from outside the premises. These are at pages 492 to 495.  It is unfortunate that the plaintiffs’ solicitors did not take and serve a statement by Mr McDaniel on the defendants (or their solicitors—at some stage earlier the defendants were so represented).  But for what transpired later this could have proved a serious lapse in preparation of important evidence.

40.  The defendants dispute that these are genuine photographs of the Jordan premises taken at the alleged time i.e. 23 June 2008.  They were in the trial bundle and the defendants had not objected to them although at trial they clearly challenged them.

41.  Because Mr Tsui was appearing in person as director of the defendant, although assisted by Mr Lam King Lun as a McKenzie friend, I decided that every effort should be made to bring Mr McDaniel to Hong Kong to prove the photographs.  Accordingly time was taken to see if this could be achieved.  In fact Mr McDaniel was in Singapore and was due the next day to leave for South Africa on business for the plaintiffs.  It was therefore impossible to secure his attendance in the immediate future.

42.  Further inquiries however resulted in Mr Marsella being able to produce a memorandum from Darius Shey to Mr Marsella.  It is an account of what Mr McDaniel told Darius Shey following his release from detention at the defendant’s premises by the police.

43.  This is in effect second-hand hearsay and therefore not the best evidence.  That is not now available because of Mr McDaniel’s absence.  It is at pages 549-5 and 6 of the bundle.

44.  However it is clear that much of it is corroborated by Mr Tsui’s own complaining e-mail of 23 June 2008 the same day.  Mr Tsui was in threatening and indignant mood but he recorded that photographs had been taken and “flyers” taken away together with some other materials which he described as “our business intelligent information”.  He said “we had removed all NH IP materials from our website immediately and stopped using your IP materials in selling our products and services.  Our new website was released on 1^st June 2008.  We are currently waiting for the government approval on our new company logo.”

45.  Mr McDaniel went on to take photographs of the Jordan premises of the defendants as I have said.  These clearly show the use of the plaintiffs’ logo or trademark and name of business—“New Horizons Learning Centers” above a claim made for the business : “Your Total Training Solutions Provider.”  Mr Kwok clearly identified these photographs (the clearest are at pages 494 and 495) as being of the Jordan premises from the reference to ABRS being a “strategic partner”, and the identification of the 6^th floor level.  Mr Tsui suggested that these photographs had been taken earlier, before the termination of the franchise and felt encouraged in that contention by the fact that the plaintiffs conceded that the photograph at page 496 was not of significance being an earlier photograph of more panoramic dimensions possibly taken for advertising purposes.

46.  Given Mr Tsui’s somewhat hysterical response to Mr McDaniel’s presence and his confirmation of a significant part of Darius Shey’s memorandum of what McDaniel told him, together with the photographs of the Jordan premises, I am satisfied that the defendants were, in June, still displaying all the trappings of the sub-franchise business despite their protestation to the contrary.  In fact the documentation relating to the defendants’ activities show a desire to hold onto the plaintiffs’ trademark and name for as long as they could.

47.  The photographs of 7 August 2008 show the new logo “NH” being used in conjunction with the title of the business “New Horizons Learning Centers” at the Harbour Centre premises in Wanchai, and on 19 August more photographs showed continuing use of the New Horizons Trademark and the title New Horizons Learning Centers.  Yet on 23 July, 2008, one month after Mr McDaniel’s visit to the Wanchai premises, the defendants caused a notice to be inserted in the South China Morning Post and Ming Pao which purported to announce a complete severance with the plaintiffs’ business.  Yet the notice said :

“We, New Horizons Learning Centers have separated from New Horizons Franchising Group Inc. and are currently running the business independently… We do not maintain any business relationship with New Horizons Computer Learning Centers and its parents and affiliates including New Horizons Worldwide Inc., and New Horizons Education Corporation.” (My emphasis)

48.  This advertisement did not meet the obligations under the sub -franchise agreement which had additionally been spelt out in correspondence following the termination of the agreement.  It was an assertion that the defendants would be carrying on business under the same distinctive name with but a minor amendment—the word “computer” was left out.

49.  Mr Tsui expounded at length on the problems he had or would have if the business name were to be changed to the extent of abandoning New Horizons Learning Center.  CEF courses in the name of the business could not be changed without creating difficulties for the students, their funding, and their certification following completion of the course.  Yet it was not until 5 February 2009 that Mr Kwok wrote to the Education Bureau informing it of the separation from New Horizons Computer Learning Center, and the Writ served upon them for trademark infringement and breach of the sub-franchise agreement.  The Writ had been issued on 6 November 2008 and served shortly thereafter.  In fact the Defence had been served on 16 January 2009 so the defendants had not been galvanised into action even by the service of the Writ.  Mr Tsui put forward a number of explanations for not taking steps promptly to change the name of the business, none of which was reasonable.

50.  On 27 February 2009, almost one year after the termination of the agreement the Corporate Divisional Sales Manager of New Horizons Learning Centers e-mailed a potential client sending him a location map of the business at Jordan.  That map contained the original logo/trademark of New Horizons Learning Center.

51.  Not until 20 March 2009 was the defendants’ registration of a new trademark granted.  This differed from the plaintiffs’ trademark logo, at first sight, but a second look denoted a less than subtle variation on it.  A globe with a planetary ring holds the bold letter “NH” but what cancels out the limited originality of the trademark is that its owner is “NH Hong Kong Services Limited trading as New Horizons Learning Centers”.  The defendants were clearly reluctant to divest themselves of a name so closely linked with that of the plaintiffs.

52.  At this stage it is worthy of note to refer to Mr Kwok’s evidence about the relationship between the plaintiffs and the sub‑franchisee, the questions come from me :

“A. I don’t see how our relationship with NH Corporation, it really help us, and where did we get the goodwill? ... in reality we have not benefited.”

Q. Would there be any purpose to the business in seeking to continue to use the name and the trademark of New Horizons in connection with that business?

A. No... the letters from me to Darius is that we don’t want to have any relationship...

Q. So if they were used by the business after the sub-franchise had ended, there would be no justification in your mind for it. Is that right?

A. Yes.

Q. So once the sub-franchise had been terminated there would be no justification for using the New Horizons Learning Center logo, trademark, materials.

A. Yes.”

53.  He then went on to say that once the possibility of an Indian operator coming in to give a chance for the franchise agreement to work had gone, “there’s no reason to keep on the relationship even using their name”.

54.  Mr Philip Kwok was disarmingly frank in this respect.  His investment and that of others in the franchise was not producing a return.  As a businessman he saw no future in it once outside investment was no longer feasible.  It was apparent that he regarded the business being conducted under the title bestowed by the franchisor as having changed from computer learning—there was significant competition in Hong Kong in this field—to other forms of learning systems but he, and Mr Tsui in particular, felt that the other fields of education could be developed by the defendants using all the trademark, business name and goodwill associated with the New Horizons name.

55.  There is no doubt that a degree of deception was practised by the defendants through Mr Tsui’s actions.  I absolve Mr Kwok of direct involvement in this.

56.  In August 2008 solicitors acting for the defendants, Arculli  Fong & Ng, had written to the plaintiffs’ solicitors Vivien Chan & Co. stating :

“As indicated previously, we are advised by our client that it has complied with its post termination obligations … and it does not use the Assumed Name, Trademarks or Service Marks as these terms are defined in the Sub-franchise Agreement, in the operation of their business.”

57.  This was patently untrue.  Furthermore the letter made no mention whatsoever of Mr Tsui’s professed difficulties in changing the name of the business whilst CEF courses were continuing.

58.  The domain name “NewHorizons.Edu.HK” had been registered by New Horizons Learning Center in November 2003 with an expiry date of 29 November 2009.  Not only was it not de-registered but it was extended until 29 November 2010 and then until 29 November 2011 by New Horizons Learning Center from its 6^th Floor premises at Jordan.

59.  The annual return of NH Hong Kong Services Limited made on 7 June 2009 still gave the business name as New Horizons Learning Centers.  The application to register the Trademark “NH” was made on 18 June 2009 by NH Hong Kong Services Limited trading as New Horizons Learning Centers with the trading name as the address for service.

60.  On 15 September 2007 the plaintiffs through their New Horizon Education Corporation based in California had registered with the Hong Kong Trade Marks Registry of the Hong Kong Government the name “New Horizons English Learning Centers” with the existing Trademark (upper segment of a globe with the words “New Horizons” immediately underneath and “English Learning” Centers below those).  The defendants well knew that the registered names included “Computer” and “English” and that the crucial words were “New Horizons… Learning Centers.”

61.  Any attempt by the defendants to use that form to describe their business after the termination of the business was a breach of copyright and passing off.  They were unarguably, in my view, seeking to use the former business title to lend status, appeal and credibility to their business.  In fact it also had the element of potential confusion and deception for those clients or customers of the defendants who thought they were being offered a service by a world-wide organization of repute.

62.  “New Horizons” is not a generic term enabling the defendants to adopt it for their business.  No evidence of other businesses using the words was adduced by the defendants.  I am prepared to accept that there may be some form of business, even more than one, which uses the two words in an entirely different business context e.g. an hotel, or restaurants.  The use of New Horizons in relation to educational courses would not be protected by a “generic” defence.  It would be, as I have found in this case, blatant passing-off.

63.  If the continuous use of the New Horizons domain was explained as necessary to enable students to trace the new business of the defendants, that is a facile explanation.  The students would still be misled, and perhaps even more confused, into thinking that the new business was merely an adjunct of the former New Horizons Learning Centers.

64.  It is not necessary to review all the documents and the chronology of the defendants’ actions, or inaction in 2009 and 2010 and the persisting use of the domain address.  Mr Tsui’s evidence in the form of excuses is an extension of the prevarication manifest, following the notice of termination.  It may well be that the defendants were able to buy or use other educational courses which were different from those originally provided for by the sub-franchise agreement, in continuing to use the copyright of the plaintiffs in a number of respects. They were simply masquerading under a name or names which they were not entitled to use.  Therefore they were benefiting from the plaintiff s’ goodwill and reputation.

65.  There will therefore be judgment for the plaintiffs in respect of the orders and injunctions they seek and I order an inquiry into damages by a Master. The order I make is as follows :

(1) An injunction to restrain each of the 1^st defendant and the 2^nd defendant, whether by itself, its officers, employees, servants, agents, or associated companies or any of them or otherwise howsoever from doing the following acts or any of them (including via the internet), that is to say :

(a) passing-off, attempting to pass-off, causing, enabling or assisting others to pass-off their learning center business, not being the business of the 2^nd plaintiff or its franchisee, as the business of or as connected or associated with the 2^nd plaintiff whether by the use of the mark “New Horizons”, “New Horizons Learning Centers”, the Trade Mark Reg. No. 30028944 and the Trade Mark Reg. No. 300955143 (collectively “the Registered Marks”) and/or any other marks confusing similar thereto and/or the Registered Marks;

(b) passing-off, attempting to pass-off, causing, enabling or assisting others to pass-off their learning center business, not being the business of the 2^nd plaintiff or its franchisee, as the business of or as connected or associated with the 2^nd plaintiff whether by the use of the business name which in whole or in part consists of “New Horizons”, “New Horizons Learning Centers” or otherwise;

(c) infringing the Registered Marks of the 1^st plaintiff, or any of them by using the marks “New Horizons”, “New Horizons Learning Centers”, the Registered Marks and/or marks confusingly similar thereto and/or the Marks in the course of its business;

(d) enabling, assisting, causing, procuring, counseling, instigating, inciting, aiding, abetting or authorizing others to commit any of the aforesaid infringing acts or participating in any of the aforesaid infringing acts.

(2) An order for the 1^st defendant and the 2^nd defendant to

(a) forthwith take step to change the business name of the 2^nd defendant to remove any reference to “New Horizons”, “New Horizons Learning Centers”, the Registered Marks and/or marks similar thereto and/or the Marks;

(b) forthwith stop using and/or displaying “New Horizons”, “New Horizons Learning Centers”, the Registered Marks and/or marks confusingly similar thereto and/or the Marks in the Wanchai Centre, the Jordan Centre or any other learning centres of the 1^st defendant and/or the 2^nd defendant and in the website http://www.newhorizons.edu.hk;

(c) forthwith remove all signs, printed matter or advertising erected or used by the 1^st defendant and/or the 2^nd defendant bearing “New Horizons”, “New Horizons Learning Centers”, the Registered Marks and/or marks confusingly similar thereto and/or the Marks and/or words indicating that 1^st defendant and/or the 2^nd defendant is associated or affiliated with the 2^nd plaintiff;

(d) forthwith remove reference to “New Horizons”, “New Horizons Learning Centers”, the Registered Marks and/or marks confusingly similar thereto and/or the Marks in the contents of the website http://www.newhorizons.edu.hk.

(e) forthwith assign or cause and/or procure to be assigned the registration of the domain name of www.newhorizons.edu.hk to the 1^st plaintiff at the 2^nd defendant’s own costs and expense; and

(f) alternatively, forthwith terminate registration of the domain name of www.newhorizons.edu.hk.

(3) An order for delivery up or for forfeiture, destruction, disposal or other dealing of all articles, papers, materials and items in possession, custody, power or control of the 1^st defendant and/or the 2^nd defendant, the continued retention, use or dealing in or with which by the 1^st defendant and/or the 2^nd defendant would offend against the foregoing injunctions or either of them.

(4) An enquiry as to damages, or at the option of the 1^st plaintiff and the 2^nd plaintiff an account of profits in respect of the acts of passing-off and/or trademark infringement and as against the 1^st defendant only, damages to be assessed for breach of the Sub-franchise Agreement.

(5) An order for payment of all sums found due to the 1^st plaintiff and the 2^nd plaintiff upon taking such enquiry or account together with such interest thereon at such rate and for such period as this Honourable Court shall deem just pursuant to section 48 of the High Court Ordinance or under its equitable jurisdiction.

(6) An order for discovery upon oath by any one of the directors of the 1^st defendant and any one of the directors of the 2^nd defendant of all matters relating to the foregoing.

(7) Costs to be paid by the defendants to the plaintiffs on a party and party basis to be taxed if not agreed.