KUNG CHEONG KAI v. KUNG CHEONG KI AND OTHERS

HCA 704/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 704 OF 2013

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D E C I S I O N

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1.  This is the first return date of an inter parte application made by the plaintiff. The plaintiff is seeking for interlocutory injunction to restrain the defendants to sell certain bean products in competition with the plaintiff.

2.  It is the plaintiff’s case that the defendants have been selling bean products in another shop since March this year, and the plaintiff is seeking an injunction to restrain the defendants from continuing to sell bean products in the shop which are in direct competition with the plaintiff’s products.  The inter parte summons was taken out on 26 April 2013.  Up to now, the defendants have not filed any affidavit in opposition. 

3.  Mr Lam, counsel for the plaintiff, asks the court to grant an interlocutory injunction today.  The reason being that the defendants were given time to prepare for the summons and so no further indulgence should be given to the defendants to file evidence in opposition.

4.  I disagree.  I am of the view that the present application should be adjourned for argument.  I can find a hearing date as early as 24 May 2013 which is about 3 weeks from now.  I take the view that the defendants should be given an adequate opportunity to prepare their case to oppose the application for the interlocutory injunction.

5.  The court has also taken note of the fact that the granting of the injunction at this stage would have a drastic effect on the defendants.  Although the plaintiff is only asking the defendants not to sell 7 of the 11 products in the shop, the effect of the injunction would be that the defendants would not be able to operate a proper business at the new shop, and as a result the injunction would cause crashing and irreparable damage on the defendants’ reputation if the court were to grant the injunction today.  In short, there is a grave risk that the defendants may have to close down the shop altogether and it would not be able for the defendants to start a new business again.  In such case, taking into account the drastic effect of the injunction on the defendants, I do not see fit to grant an injunction today. 

6.  On the other hand, the damages to the plaintiff are contained.  Obviously, the defendants would have to keep records for the sale of their products.  In the event that the plaintiff succeeds in the action, the defendants would have no difficulty in providing an account to the plaintiff for the business that has been operated by them.

7.  There may perhaps be some dilution of goodwill on the part of the plaintiff.  But balancing it with the drastic effect of the injunction on the defendants, I take the view that a proper opportunity should be given to the defendants to file evidence to oppose the application. 

8.  In any event, the application will be heard in 3 weeks’ time.  As the defendants have already operated the shop since March, I take the view that the delay in the hearing of this application is acceptable.  Balancing it with the effect of the injunction on the defendants, I take the view that the court should adjourn the case for argument without granting an interim injunction today.