WONG TO YICK WOOD LOCK OINTMENT LTD v. BKIP LTD

HCMP 912/2021

[2023] HKCFI 693

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 912 OF 2021

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DECISION ON COSTS

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1.  This is the paper application in respect of the costs of this action in which the Applicant, by way of Originating Summons dated 30 June 2021 (“the OS”),sought Norwich Pharmacal relief against the Respondent[1].

Background

2.  The present proceedings arise out of an action for trademark infringement and passing off (HCIP 8/2021) brought by the Applicant against various infringers including Nippon Taisun (HK) Limited (“Nippon Taisun”) for the use of the mark “黃道盟” (“the Infringing Mark”) in the infringing goods.

3.  In a related High Court Action HCMP 48/2018, by the judgment dated 27 May 2019 (“the Invalidation Judgment”), Wilson Chan J declared the registration of the Infringing Mark, of which Nippon Taisun was the owner, invalid and held that the said mark to be an instrument of deception.

4.  The Respondent was the trademark agent for Nippon Taisun and had assisted the latter in the registration of the Infringing Mark.

5.  Thereafter, by the judgment dated 11 May 2021 (“the Infringement Judgment”), the court entered final judgment against Nippon Taisun for passing off and trademark infringement in respect of its dealing with the Infringing Mark.

6.  By letter dated 4 June 2021, the Applicant’s solicitors served on Nippon Taisun’s solicitors, Benny Kong & Tsai (“BKT”), sealed copy of the Infringement Judgment and the order of the court both dated 11 May 2021.

7.  Since Nippon Taisun is a company incorporated in the Republic of Vanuatuand information pertaining to the identity and contact details of Nippon Taisun’s directors is not publicly available, the Applicant’s solicitors could not effect proper service of the Infringement Judgment and the order on Nippon Taisun.  Under such circumstances, it would be difficult for the Applicant to enforce the Infringement Judgment against Nippon Taisun, including proceeding with the assessment of damages.

8.  Since the entity put forward as the “Agent” and the “Address for Service” of the invalidated Infringing Mark in the online register of the Trademark Registry was the Respondent (albeit under its former name), the Applicant claims that the Respondent must have communications with and therefore knowledge of the directors or the authorised persons of Nippon Taisun.

9.  By letter dated 7 June 2021 (“the Pre-Action Letter”), the Applicant’s solicitors requested that the Respondent to provide information and documents including, inter alia, names, contact details and addresses of the director(s) of Nippon Taisun (collectively “the Requested Information & Documents”) within 7 days.  The Applicant also gave an undertaking to reimburse the Respondent all reasonable costs in compliance with the disclosure request.

10.  As no reply had been received by the Applicant’s solicitors, the Applicant commenced the present proceedings on 30 June 2021.

11.  On 13 July 2021, the Respondent filed the Acknowledgement of Service indicating its intention to contest the proceedings and proposed, inter alia, that the OS be adjourned for substantive argument.

12.  By the Order dated 19 July 2021, this court vacated the call-over hearing and gave directions for filing of evidence and adjourned the OS for substantive argument.

13.  On 12 August 2021, the Respondent proposed to dispose the OS by consent.  Eventually, the Respondent agreed to all the orders sought in the OS save and except the costs of the action.  I am therefore required to determine the issue of costs between the parties.

Legal principles

14.  There is no serious dispute between the parties on the legal principles in considering the issue of costs for Norwich Pharmacal applications:

(i)    Whilst the usual rule is that the costs of the person against whom a Norwich Pharmacal order is made will be paid by the person seeking the order, the court is given a discretion having regard to all the circumstances to depart from the usual rule and order the respondent to bear his own costs or even to pay some or all of the applicant’s costs.  In this connection, there may be a gradation in relation to the order made as to costs.[2]

(ii)   Exceptions to the general rule include (a) reasonableness of a respondent’s conduct or response; (b) whether the person against whom the disclosure is sought is implicated in the wrongdoing, whether that be criminal wrongdoing, tortious or other wrongdoing or has sought to obstruct justice; (c) reasonableness in opposing the application. These examples are not exhaustive.[3]

(iii)  As set out in Totalise PLC v The Motley Fool Limited[4], there may be cases where the circumstances require a different order but it would not include cases where (a) the party required to make the disclosure had a genuine doubt that the person seeking the disclosure was entitled to it; (b) the party was under an appropriate legal obligation not to reveal the information, or where the legal position was not clear, or the party had a reasonable doubt as to the obligations; or (c) the party could be subject to proceedings if disclosure was voluntary; or (d) the party would or might suffer damage by voluntarily giving the disclosure; or (e) the disclosure would or might infringe a legitimate interest of another.

Discussions

15.  Mr Tse, counsel for the Applicant, submits that the present case warrants a departure from the general rule that the applicant should bear the costs of the respondent in a Norwich Pharmacal application.  First, the Respondent’s failure to respond to the Pre-Action Letter is unreasonable.  Second, the Respondent’s delay (1.5 months after the commencement of the action) in agreeing to provide the Requested Information & Documents at the very last minute is also unjustified, since this is not a case where there could be any doubts as to the propriety of the Applicant’s Norwich Pharmacal application against the Respondent.  Third, none of the scenarios set out in Totalise PLC v The Motley Fool Limited[5] (see §14(3) above) applies in the present case.  Here, there is no genuine doubt as to the Applicant’s entitlement to the Norwich Pharmacal relief sought, and there is not a shred of evidence that BKIP owes a legal obligation not to reveal the Requested Information & Documents, or that it could be subject to proceedings or would suffer damage or infringe a legitimate interest of another if such disclosure was made voluntary.

16.  On the other hand, the Respondent submits that the present case falls within the scenarios set out in Totalise PLC[6]. The Respondent did not have any legal duty to any third party seeking information without a court order.  It was entitled to keep its documents private and confidential.  The Respondent, being an innocent and non-party to the Applicant’s intended lawsuit, owes no obligation to the Applicant to take the slightest risk in view of its concern and to save the Applicant from having to obtain an order of the court.  It is for the applying party to satisfy the court that the order should be made, not for the disclosing party to take a view that could be wrong.

17.  In reply, Mr Tse submits that the Respondent’s contentions are unmeritorious because, as it turns out, a court order is unnecessary in view of the Respondent’s belated confession that it has no knowledge of and is notin a position to provide the Requested Information & Documents.  It also turns out that the documents disclosed are neither confidential nor commercially sensitive.  Given that the Respondent effectively has nothing to disclose, there is no reason why it could not have informed the Applicant the same upon receipt of the Pre-Action Letter.

18.  In my judgment, the most appropriate costs order is one of no order as to costs.  First, it is the general rule that the Applicant should bear the costs of the Respondent for such kind of application, as the latter is a non-party to the dispute between the Applicant and Nippon Taisun and there is no reason why it should not be reimbursed of the costs incurred by it for being dragged into the present application. Further, the Respondent should be allowed sufficient time to consider its response to the Applicant’s disclosure request.  Yet the manner as to how the Respondent has handled the present application is not satisfactory at all.  It made no reply to the Pre-Action Letter, and it took a long time for it to consider its response to the request.  Further, it does not require the court to make an order for disclosure as the Respondent effectively has nothing to disclose.  I agree with Mr Tse that there is no reason why it could not have informed the Applicant the same upon receipt of the Pre-Action Letter.

19.  The Applicant should pay for the Respondent’s costs in considering the disclosure request, whilst at the same time the Respondent should bear the unnecessary costs incurred by the Applicant in engaging in the prolonged proceedings.  The two factors cancel out each other and so I make a no-order-as-to-costs order for the OS and the present paper application.