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

HCA 2210/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2210 OF 2011

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BETWEEN

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DECISION

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1.  This is an application by the Defendants for leave to appeal against the Order of Yam J dated 20 January 2012 granting, inter alia, an interlocutory injunction in favour of the Plaintiffs. Yam J had retired from the bench on 3 February 2012 and so this application comes before me today.

2.  In view of the urgent nature of the appeal, the Defendants have made a request to the Registrar of Civil Appeal for an expedited hearing.  The request has been granted by Tang VP and the appeal hearing has been fixed on 16 February 2012 with one day reserved.

3.  Despite that the Defendants have obtained a date for expedited hearing, the Defendants still have to obtain the leave of this Court to appeal against the interlocutory order made by Yam J.

4.  In order to obtain the leave to appeal, the Defendants have to show that they have a reasonable prospect of success.  A reasonable prospect of success means a prospect which is more that “fanciful” without having to be “probable” (see: SMSE v KL [2009] 4 HKLRD 125, at §17 per Le Pichon JA).

5.  In determining whether to grant the leave to appeal, I am being put in a difficult position.  Firstly, I was not the judge hearing the application itself.  Secondly, I do not have the full reasons given by Yam J for his decision.

6.  Since I was not the presiding judge, I do not propose to conduct a rehearing of the application and to address each and every argument put forward by the parties.  It is simply a waste of court time.  In determining whether to grant the leave to appeal, I just take a broad view of the merits of the case.

7.  The guiding principles for an application for interlocutory injunction are: (i) whether there is a serious question to be tried; and (ii) whether the balance of convenience lies in favour of the granting of an interlocutory injunction.

8.  Regarding the question of serious question to be tried, I am of the view that it is very difficult for the court to form a provisional view about the merits of the Plaintiffs’ claims on passing off and trade mark infringement.  As I see it, the following issues have to be properly determined at the trial:

(i) whether the parties, in particular the Defendants, have established sufficient reputation and goodwill in respect of their businesses in Hong Kong;

(ii) whether the Plaintiffs did use the TWG circular logo in marketing their products;

(iii) whether the Plaintiffs, being the holding companies, own the goodwill which entitles them to maintain the present claims against the Defendants;

(iv) whether there was deception or misrepresentation for the purpose of the passing off claim;

(v) whether there is likelihood of confusion for the purpose of the trade mark infringement claim; and

(vi) whether the Defendants are entitled to rely on the “own name” defence under s 19(3) of the Trade Marks Ordinance, Cap. 559.

9.  For the purpose of the present application, the Plaintiffs should not have great difficulty in establishing that there is a serious question to be tried.

10.  As I see it, the merits of the appeal depend very much on whether Yam J had correctly applied the balance of convenience test.  Without the full reasons, it is very difficult for me to assess the merits in this regard.  However, the Defendants have provided affidavit evidence on the following matters:

(i) the Defendants have commenced business using the name “TWG TEA” since 2008;

(ii) the Defendants are able to establish some goodwill with the use of the name “TWG TEA” in some overseas markets and the Defendants’ products are being served in the first and business class in the flights of Singapore Airline; and

(iii) the Defendants have already put in substantial investment in developing the market in Hong Kong, including committing to a lease at the IFC which is regarded as a prestigious shopping mall in Hong Kong.

11.  Based on such evidence, I think that it is quite justified for the Defendants to say that the granting of an interlocutory injunction would have a serious impact on their business.  The inconvenience suffered by the Defendants may not just be the delay in the commencement of their business in Hong Kong, and any interim injunction may affect the Defendants’ business development and cause a stigma to be attached to the Defendants’ business and reputation.  It is also not an exaggeration to say that the effect of the interim injunction on the Defendants would be final, and the Defendants may have to leave the Hong Kong market completely.

12.  These are arguments that deserve serious consideration.  Without the full reasons given by Yam J, I do not know how the learned judge had approached these issues.  I bear in mind the dicta of Lord Diplock in Hadmor Productions Ltd v Hamilton [1983] 1 AC 191 at 220, pointing out that interlocutory injunction is a discretionary relief and the appellant court should not interfere with the exercise of the discretion by the judge in the lower court simply because the members of the appellate court would have exercised the discretion differently.  Nevertheless, for the purpose of the present application, there is some force in the Defendants’ argument that the court should preserve the status quo rather than to grant an interim injunction.  Hence, I accept that the Defendants’ prospect of success in the appeal is more than “fanciful”.

13.  Based on the aforesaid, I give leave to the Defendants to appeal against the Order of Yam J.