H&M HENNES & MAURITZ GBC AB v. ROADGET BUSINESS PTE LTD AND OTHERS

HCIP 45/2022

[2024] HKCFI 2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 45 OF 2022

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DECISION ON COSTS

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1.  This is the 1^st Defendant’s application to vary the costs order nisi made by me on 21 February 2024.

2.  The costs order was made in respect of an application for summary judgment against the Defendants.  The background of this case and my reasons for granting summary judgment against the 1^st Defendant and unconditional leave to defend to the 2^nd and 3^rd Defendants have been fully set out in my written judgment handed down on 21 February 2024 (“the Judgment”), and I do not want to repeat the same here.  For the purpose of this Decision on Costs, I will adopt the same abbreviations that were used in the Judgment.

3.  In the Judgment, I made a costs order nisi that:

(i)    the 1^st Defendant do pay to the Plaintiff the costs of this action including the costs of this application; and

(ii)   the costs of this application vis-a-via the Plaintiff and the 2^nd and 3^rd Defendants be costs in the cause.

4.  The 1^st Defendant now applies to vary such order to the effect that there should be no order as to costs of this action including the costs of the summary judgment application vis-à-vis the Plaintiff and the 1^st Defendant.

5.  Ms Ma, counsel for the 1^st Defendant, has put forward three grounds to support the application:

(i)    The 1^st Defendant had achieved partial yet significant success in this action, as the Plaintiff cannot obtain declaration to the effect that the liability of the Other Defendants to comply with the injunctive relief to be granted in the Related Case be transferred to the 1^st Defendant under the TBPCO.

(ii)   The allegations relating to the injunctive relief issue were unreasonably made which caused significant increase in the length and costs of the proceedings.

(iii)  The Plaintiff’s improper lodgement of the Plaintiff’s Supplemental Submissions (“the Supplement Submissions”) out of time and beyond the scope after the hearing had unreasonably led to additional costs being incurred.  It warrants deprivation of at least part of its costs.

6.  In my judgment, the Plaintiff should, as a matter of general principle, get the costs of the summary judgment application and the action against the 1^st Defendant.  Though the Plaintiff has not achieved a “total win”, the Plaintiff has been able to obtain an important declaration to the effect that the liability to pay monetary damages under the Related Case be transferred to the 1^st Defendant, a matter which has been contested by the 1^st Defendant throughout the proceedings.

7.  There is dispute between the parties about the importance of the declaration relating to the possible transfer of the liability to comply with the injunctive relief.  However, whether such issue is important is beside the point.  So far as the liability for costs is concerned, whether there should be discount for the argument of unsuccessful issues should depend on whether additional time and costs had been incurred in dealing with such issues.  In the present case, one cannot ignore the fact that the parties had spent time to argue on the injunctive relief issue which was eventually ruled by the court against the Plaintiff.   Some discount should therefore be made.  In my view, the time and costs spent on the argument on such issue are rather limited and so no significant discount should be made in this respect.

8.  For the complaint relating to the lodgement of the Supplemental Submissions out of time and that the contents exceeded the scope of the Supplemental Submissions ordered to be submitted to the court, I also agree that some discount should be made.  At the end of the oral substantive hearing, I had some doubt about the thoroughness of the legal research conducted by the parties.  I therefore allowed the parties to file further submissions on any further legal authorities on the point.  It is clear that the Supplemental Submissions had exceeded the scope laid down by the court.  The Plaintiff was making use of such occasion to make further unnecessary submissions in support of the application, which in turn necessitated a further reply from the Defendants.

9.  For the above reasons, taking a broad-brush approach and that the 1^st Defendant should get the costs in respect of the unsuccessful issues and the further reply submissions, I only allow the Plaintiff to get 70% of the costs of the summary judgement application.  For the costs of the action, I take the view that the Plaintiff should entitle to all the costs.  Effort and costs relating to arguments on the injunctive relief were mainly incurred in the summary judgment application, and I do not see how the inclusion of such claim would add any significant costs to the action itself.  

10.  Hence, I only vary the costs order vis-à-vis the Plaintiff and the 1^st Defendant as follows: save that the 1^st Defendant do pay 70% of the costs of the summary judgment application to the Plaintiff, the costs of the action be to the Plaintiff vis-à-vis the Plaintiff and the 1^st Defendant.

11.  For the avoidance of the doubt, the costs order nisi vis-à-vis the Plaintiff and the 2^nd and 3^rd Defendants do stand.  I also make a costs order nisi that there be no order as to costs of this application to vary the order nisi, which shall be made absolute 14 days after the date of the handing down of this Decision on Costs.