WONG TO YICK WOOD LOCK v. BENSUNVILLE LTD t/a NANYANG (SINGAPORE) MEDICINE CO

HCA 595/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 595 OF 2014

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AND

HCA 600/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 600 OF 2014

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D E C I S I O N

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THE APPLICATIONS

1.  There are two applications taken out by the plaintiff in two actions, viz. HCA595/2014 and HCA600/2014, both against the defendants for infringement of the plaintiff’s registered trade mark, for striking out item 34 in HCA595/2014 and item 38 in HCA600/2014 of the respective defendants’ lists of documents.  Since in the witness statement of Kou Wai Peng dated 19 October 2015 at paragraph 21, Madam Kou referred to the public survey without prior leave of the court, the plaintiff has also applied to strike this paragraph out from her witness statement.

2.  The defendants of the respective actions oppose these applications except that the defendants have no objection to having Madam Kou’s witness statement, paragraph 21 to be struck out.  The parties are legally represented.[1]

3.  Although they are different actions and no order has been made to consolidate them or order them to be tried together by the same judge, since the reasons in support of the applications and the reasons against the applications are the same, it is convenient to deal with them together here.

4.  In both actions, the defendants had conducted surveys on members of the public in relation to the defendants’ products and the plaintiff’s products.  Item 34 and item 38 are the survey reports in respect of the respective actions.

THE PLAINTIFF’S COMPLAINTS

5.  The plaintiff complains:

“9. By reason of the fact that items 34 and 38 disclosed by Ds are voluminous and the repetitive nature of these documents, only a specimen sample of each different type of questionnaire is included in Bundle B. Furthermore, it is the question in the questionnaires which is more important than the answer. P’s solicitors have counted the total number of questionnaires disclosed in both actions and they tally to 450 questionnaires of which 211 were alleged responses from people in the trade and 239 were alleged responses from members of the public.”[2]

6.  The plaintiff also complains that the surveys were conducted without the court’s leave and the evidence is therefore not admissible.  As such, those items and part of the witness statement of Madam Kou in respect of the respective actions should be struck out.

THE DEFENDANTS’ ARGUMENT

7.  The defendants do not dispute that the survey reports are inadmissible evidence at trial.  The defendants argue, however, this does remove the obligation from a party to put in discovery all relevant documents.  By way of example, privileged documents are not admissible, but must also be placed in discovery.[3]

8.  The defendants’ argument goes further that the survey reports, though not admissible, remain to be discoverable.  They propose to the plaintiffs that neither party should rely upon the survey reports.  The plaintiffs have rejected this proposal and insisted that the items and the part of the witness statement should be struck out.

DISCUSSION

9.  The plaintiff’s reasons for insistence of striking out are that the evidence is not discoverable and that to have such massive materials on the list of documents will increase the costs and time of the plaintiff in the preparation of the case.[4]

10.  The parties have substantial argument over the applicability of the UK authority of Interflora v Marks & Spencers [2013] FSR 21.  I consider that it is not necessary to spend time on this case once the defendants admit that the evidence is not admissible.

11.  The questions between the parties are whether this Court has the power to strike out the items in the list of documents, and if the Court has the power, whether the Court should do so.

12.  On the question of this Court’s power, it is necessary to refer to the Rules of the High Court. Order 1A, r.1 provides:

The underlying objectives of these rules are-

(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court;

(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d) to ensure fairness between the parties;

(e) to facilitate the settlement of disputes; and

(f) to ensure that the resources of the Court are distributedfairly.

13.  Order 1B, r.1 provides the power to achieve those objectives above:

(i) decide the order in which issues are to be tried;

(j) exclude an issue from consideration;

(l) take any other step or make any other order for the purpose of managing the case and furthering the underlying objectives set out in Order 1A.

14.  It is therefore obvious that this Court has the case management power to exclude the items on the list of documents if such documents adversely affect any of the underlying objectives.

15.  This morning, Mr. Clark argues that the defendants have the duty to disclose evidence, which is not admissible, but may be relevant because it may be relevant at some stage such as some of the witnesses may be called to give evidence at trial.  The defendants may then call upon the reports to show the truthfulness of the witnesses.

16.  The question then turns on whether the defendants in these cases can put documents which they consider inadmissible into their lists of documents under O.24, r.1 RHC, which provides that the defendants should discover documents relating to matters in question in the action.

17.  The defendants argue that though the survey reports are inadmissible, they are nevertheless relevant to matters in question in the action. They have given an example.

18.  The defendants accept that they are bound by O.24, r.1 on the general discovery of the documents and that only the documents that, in their opinion, are relevant to the issues in dispute should be disclosed.  The argument remains they consider that the survey reports, though not admissible, are or may be relevant to the issues in dispute.

19.  I am unable to accept this argument.  If the survey reports are not admissible, it really strains one’s imagination to hold that they are or may be relevant to the issues in dispute.  The example that the defendants have given relate to the giving of evidence at trial.  By then, the trial judge seizes jurisdiction of the matter.  Even if the trial judge wants to refer to the survey reports, that can be done under his/her inherent jurisdiction to do so.  I can only see that even if there were such reference, it would only be part of the survey reports that might be referred to, not the whole reports.

20.  In the HKCP 2016 at 24/5/1, it says that the list does not contain any documents save those relating to the matters  in question … and that the Court would assume that the documents in the list are all relevant and liable to production.

21.  I am afraid that the defendants are unable to convince me that the survey reports, though inadmissible, remains to be relevant to the issues in question.  For good case management, the Court should not allow this practice of putting in inadmissible evidence in the list with a view that they may be relevant in the course of the trial or within the power of the trial judge.  Otherwise, the list of documents is not monitored and it may contain a lot of irrelevant documents, which will waste costs and time for the other party and the court.

22.  The items in questions are to be struck out from their respective lists of documents.

23.  As the defendants have no objection to the striking out of paragraph 21 of Madam Kou’s witness statement, it is also struck out accordingly.

24.  As to the costs of these applications, there is no reason why the costs should not follow the events.  The conduct of the defendants in commissioning the survey without court’s leave and put them in the lists of documents is taken into account and indemnity basis for the assessment should be imposed.  The plaintiff’s bills for the two actions charging altogether over $200,000 for a hearing of one hour are obviously excessive on the face of them, even on an indemnity basis.  Taking into consideration the time for the plaintiff’s solicitors to go through the survey reports, which are in the form of questionnaires, the appropriate costs for the applications are assessed at $100,000 for both actions; that is to say, $50,000 for each action respectively.

25.  The Court shall now make an order in terms as follows:

a.     The plaintiff’s summonses for the respective actions are allowed;

b.     Costs of each of the respective actions are $50,000, totally $100,000 to be paid within 14 days from the date hereof.