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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BETWEEN

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D E C I S I O N

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1.  In essence, the defendants failed to file statements within the time specified in Master Lung’s unless order, which was extended to 27 July 2012, because of the bad judgment, lack of due care and mistakes made by their solicitor. Whereas, on a personal front, the solicitor’s circumstances may deserve sympathy and understanding, it cannot be disputed that, on a professional front, he had acted irresponsibly and without due care.

2.  I have considered all the circumstances of the case, including the factors outlined in Order 2 rule 5.  Even if everything which the solicitor had said is to be believed, the defendants’ failure to comply with the unless order as extended was, as I have summarised, due to the solicitor’s bad judgment and lack of care.  The application for relief against sanction was late, again due to the solicitor’s mistake.  If relief is not granted, the defendants will effectively be barred from adducing any evidence at trial to support their defence of having used the marks complained of before the plaintiff had acquired goodwill or its trademark registration in Hong Kong.  Notwithstanding the delay, the setting down of the case for trial has not been delayed.  The trial dates will not be affected and the defendants’ statements have now been served, about 4 weeks after the deadline.

3.  Of course, orders of the court are made and meant to be complied with. However, as the Chief Justice emphasised in Wing Fai Construction Co Ltd (in liq) v Yip Kwong Robert [2012] 1 HKLRD 589, the primary aim in the exercise of the court’s powers is to secure the just resolution of disputes in accordance with the substantive rights of the parties.  Having balanced the prejudice that would be caused to the defendants if relief against the sanction of the unless order is not granted against any prejudice that may be, or has been, caused to the plaintiff by the defendants’ failure to exchange their statements at the same time as the plaintiff served theirs, I consider that the plaintiff’s prejudice can be compensated in costs, and that the administration of justice requires that relief be granted to the defendants. 

4.  I bear in mind that the defendants have not been shown in this case to have been in breach of any other order before September 2011, apart from the unless order of Master Lung, and that such an unless order had not been made because of the default of the defendants alone. 

5.  I am not impressed by the defendants’ solicitor’s minimal efforts made in the preparation of the statements, having left the task to the very last minute and only making allowance, on his own case, for a few days before the deadline, without making any real attempt to secure an extension of time which cannot, in any case, be taken for granted.  This amounts to an intention to ignore the order and its consequences.  But for the fact that the defendants have not flouted any other order of the court before September 2011, I would not have granted the relief against sanction.  The fact of the breach of the order of 21 September 2011 as extended will mean that the defendants will not be in any position to expect any further indulgence or tolerance of the court.

6.  I agree that to deal with the sanction application now, and to grant leave to the defendants to file their statements would be in the interests of more efficient case management between now and trial, and that it would avoid more costs and delay which would inevitably have to be incurred if the defendants should have to apply later to the trial judge for leave.

7.  In view of all these matters, I will grant leave to the defendants to file their statements and to rely on them at trial, on condition that the defendants pay the plaintiff their costs of and occasioned by the defendants’ failure to comply with the unless order as extended, including the costs of the summonses of 1 August and 4 October 2012 and the costs of the plaintiff’s appeal by way of Notice dated 17 August 2012, on an indemnity basis.  Such costs will be paid forthwith, to be taxed if not agreed.

(Submissions invited on wasted costs order)

8.  It will be recorded that the costs are to be personally borne by the defendants’ solicitor.