HIRO GROUP AKTIENGSELLSCHAFT AND OTHERS v. THE BALLANTYNE SPORTSWEAR CO LTD. AND OTHERS

1987, No. A6685

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. In High Court Action 5327/87 the 1st Defendant herein ("Ballantyne") is the Plaintiff and in that action it seeks, inter alia, an injunction restraining the 3rd Plaintiff herein ("European") from passing-off in Hong Kong a goods as being those of Ballantyne. This present action was brought as a consequence because in an affidavit in support of its claim in H. C. A. 5327/87 Mr. M.R. Higgins deposed that Ballantyne proposed to introduce for sale in Hong Kong a range of leather goods which would be marketed under the name "Ballantyne", It is the Plaintiffs case that they have been using the name Ballantyne for many years in relation to the sale of leather goods and they in turn seek to restrain the Defendants from carrying out their intentions.

2. On the 20th of November I granted the 2nd Defendants application to amend its Acknowledgement of Service to exclude the 3rd Defendant. I also heard the Plaintiffs application for an injunction against the Defendants and I made no order on that application, there being no evidence to support it.

3. The Plaintiffs then issued a further application, inter party, seeking further orders restraining the Defendants from manufacturing or in any way dealing with leather goods under the trade name Ballantyne. The 2nd Defendant also issued an application in turn seeking orders that this action be stayed as being vexatious and an abuse of the process of the Court in view of the existence of H. C. A. 5327/87 in which the Plaintiffs here could, if they so wished, become Plaintiffs in that action by way of counterclaim.

4. It is the case for Ballantyne that it commenced proceedings first and that the whole issue between the parties can and should be dealt with in that one action.Mr. Andrew Liao, counsel for Ballantyne referred to Section 16(2) of the Supreme Court Ordinance which requires the Court in exercising its jurisdiction to avoid "all multiplicity of legal proceedings". Here, he says, this present action is unnecessary and should be stayed. Ballantyne is the real Plaintiff and was first in with an action. That advantage should not be taken from it. (Thomson v. The South Eastern Railway Co. Ltd. 1882 IX, Q.B. 320. Evans v. Keane [1908] 2 L.R. 628). The Plaintiffs here should be given leave to defend and to counterclaim in H. C. A. 5327/87. Order 15, Rule 2 gives the Court wide powers in respect of such a counterclaim. The 1st and 2nd Plaintiffs here although not at present party to H. C. A. 5327/87 can apply to be joined as defendants and can counterclaim not only against Ballantyne but also against the 2nd Defendant, Ballantyne's Hong Kong agent. (Montgomery v. Foy, Morgan & Co. 1895.2 Q. B. 321. Tetra Molectric Ltd. v. Japan Imports Ltd. [1976] R.P.C. 541.)

5. It was the case for European that it had an application for an injunction to prevent the threatened sale of leather goods marked Ballantyne which it claimed would constitute passing-off of its own goods. It wanted that application heard as soon as possible and was entitled to proceed and not be forced to join in the lst Defendant action. European's counsel, Mr. Garland, conceded that eventually the actions may well be joined but that should not be before his clients application had been heard. He also submitted that H. C. A. 5327/87 was in a state of disarray. Further and better particulars of the claim had been ordered to be filed by a master on or before the 9th of December. That had not been done and a summons had begin issued to strikeout the action. The European cannot seek interlocutory relief as a counterclaiming defendants until it had filed a defence. It could not do so until it had the necessary particulars.

6. These allegations were denied by Mr. Liao who submitted that European could make its interlocutory application and that could be heard together with Ballantynes.

7. I am in agreement with Mr. Garland that while clearly these two actions relate to the same matters and there seems to be no real dispute that they will eventually be consolidated, European should be allowed to proceed its application in this action and the 2nd Defendants application for a stay of proceedings is refused. The costs of that application will be costs in the cause.

8. By consent I also give the following further directions : on the 1st Defendant's undertaking to amend its summons to set aside service of the writ herein and to file an affidavit in support, the Defendants to have 14 days thereafter to file further evidence, the Plaintiffs to file any affidavit in reply within 7 days thereafter. The hearing of the Plaintiffs summons for an injunction to be set down not before the 10th of January 1988 (Estimated time 5 days). The 1st Defendants summons to set aside service to be heard immediately before that application and before the same Judge. One Plaintiff's summons for an interlocutory injunction is adjourned accordingly to a date to be fixed by the Clerk of Court. Costs reserved. There will be general liberty to apply.