JUICY COUTURE, INC. v. BELLA INTERNATIONAL LTD t/a JUICY GIRL AND OTHERS

HCA 1764/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1764 OF 2008

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D E C I S I O N

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1.  This is an application by the plaintiff for joinder of a new defendant.

2.  The trial of this action has been fixed to commence on 19 November 2013 with 13 days reserved.

3.  The plaintiff claims against the 1st to 3rd defendants for infringement of trademark and passing off.  The defence of the 2nd and 3rd defendants is that they were the first in time to use the mark in question in Hong Kong and they did so in early to mid-1998.  They claim that it was a co-incidence that both they and the plaintiff had coined and used the same mark in question. 

4.  The proposed 4th defendant is Golden Stable International Limited (“Golden Stable”).  There is common ground that the 1st defendant and Golden Stable are the corporate vehicles through which the 2nd and 3rd defendants carry out this particular business activity that involves the use of the mark in question.  They put this business under an umbrella called the Bella Fashion Group.

5.  The plaintiff says that the 1st to 3rd defendants and Golden Stable are joint tortfeasors.  The 2nd and 3rd defendants are the masterminds of the 1st defendant and the Golden Stable and are jointly and severally responsible for the acts of Golden Stable. 

6.  The role of Golden Stable in the business activity had been disclosed by the defendants back in 2010.  I would however add that on 6 February 2013, the 3rd defendant has given evidence in some US proceedings that Golden Stable was used for manufacturing and procurement of the products in question whilst the 1st defendant was used to conduct the wholesale and retail sale. 

7.  Nevertheless, despite the disclosure of Golden Stable in 2010 as one of the vehicles used by the 2nd and 3rd defendants in the questioned business activity, this application to join Golden Stable was only made in February 2013.  The defendants naturally complained that this application has come too late.  They oppose the application on the ground that Golden Stable may not be ready to have the case against it tried on 19 November this year.  

8.  Counsel for the defendants submitted that there are the processes of pleadings, discovery and exchange of witness statements for Golden Stable to go through and it should not be deprived of the procedural right and reasonable time to go through these processes.  Counsel emphasised that the discovery exercise between the plaintiff and Golden Stable may be substantial and there is a real risk that Golden Stable may not be ready for the trial by 19 November 2013.

9.  The defendants suggest that the plaintiff should issue a separate action against Golden Stable and that action should take its own course rather than being merged with the present one now.  If the preparation of that action should be completed and that action be ready for trial say by August this year when the PTR of this action will take place, than the 2 matters can be consolidated and tried together in November.

10.  These arguments may carry weight in other cases.  The situation in this case is however peculiar so that I do not think these arguments are applicable.  Since Golden Stable is just a vehicle of the 2nd and 3rd defendants and had been used in the manufacture and procurement of the products in question, then one does not expect that its defence would be very different from that of the 1st to 3rd defendants.  I therefore do not anticipate that Golden Stable would raise any complicated issues of law or fact that have not been adverted to by the 1st to 3rd defendants. 

11.  Regarding discovery, since Golden Stable is just a vehicle of the 2nd and 3rd defendants and has been under their control, all documents relevant to this action and were in the possession, custody, or power of Golden Stable should have been in the possession, custody, or power of the 2nd and 3rd defendants as well and hence should have been disclosed by the 2nd and 3rd defendants in their already concluded discovery.  This should be true and correct unless Golden Stable would unexpectedly raise new issues thereby making some new documents relevant and liable to be disclosed.

12.  The same should likewise apply to the plaintiff.  Given that it was known to the plaintiff back in 2010 that Golden Stable was a vehicle of the 2nd and 3rd defendants, any application by the plaintiff for specific discovery of documents, save those which may be necessitated by recently made available evidence from the defendants, should have been made against the 2nd and 3rd defendants long ago unless Golden Stable should raise new issues now. 

13.  I would go further and say that if Golden Stable should have any new and complicated issues of law or fact to raise in its defence, I expect that they should have been adumbrated by the existing defendants or their solicitors.  But none has been intimated despite an affirmation in opposition to this application having been made and filed by the defendants’ solicitors.

14.  Hence, I do not expect any new issue to be raised by Golden Stable that will necessitate elaborate discovery by it or substantial specific discovery application to be made by the plaintiff against it solely because of its joinder.

15.  Having said that, I would for the sake of prudence provide in the order of joinder that Golden Stable be at liberty to apply to sever the claim against it if it should transpire that Golden Stable would not be in a position to reasonably complete its preparation for the trial of the claim against it by mid-October 2013.

16.  With this proviso, I allow the application for joinder of Golden Stable as prayed in para 1 of the plaintiff’s summons for joinder.

17.  For para 2 of the summons regarding the filing and service of the Re-Re-Amended Statement of Claim, I make an order in terms of it subject to reducing the period to 3 days from today.

18.  I also order that the costs of this application and costs of and occasioned by the amendments be to the defendants as prayed for in para 3 of the summons except that the costs of the arguments should be differently provided. 

19.  The defendants have lost the arguments and in the usual case should be ordered to pay such costs regardless of the incidence of the costs of the application.  But this application is opposed solely because of the delay on the part of the plaintiff in making this application.  If this application was made prior to say the summer of 2012, I do not think there would have been any opposition by the defendants.  I therefore propose to make no order as to costs for the arguments because of the delay on the part of the plaintiff in bringing this application. 

20.  Leading counsel for the plaintiff tried to argue against my view.  She suggested that the defendants, who have lost the arguments, should pay for the costs of the arguments, and there has not been any delay on the part of the plaintiff because it is only right for the plaintiff to make this application now by reason of further revelations by the defendants of the role of the Golden Stable in September 2012.  

21.  I disagree with that view.  I think the amended defence filed on 17 April 2010 has already in its paras 16 and 17 given sufficient particulars of the role of Golden Stable for it to be joined.  Since the application was made so late and generated the arguments in opposition although the arguments did not carry the day, I think the court in exhibiting its displeasure to such delay is entitled to and should make no order as to costs on the arguments.