LEADWELL CNC MACHINES MFG, CORP. v. GLOBAL CROWN INERNATIONAL LTD

HCA853/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.853 OF 2005

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DECISION ON STAY OF EXECUTION

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1. I dismiss the application with costs to the plaintiff, to be taxed if not agreed, unless I hear otherwise from Mr Szeto.

2. There are two points which the court would have to consider on application for stay of execution : one is the merits in the appeal; and two, of course, is whether the appeal will be rendered nugatory should the defendant succeed in the appeal and also, at the end of the day, the trial.

3. In respect of the merits of appeal, I think it is sometimes a nightmare for counsel for the defendant, when he has to convince the very judge who has granted judgment for the plaintiff against the defendant.  But then no one is infallible and that is why we need the Court of Appeal here.

4. The defence is that although the trademark herein was originally obtained by theft of Dr Paul Chang and he was convicted in Taiwan and is now serving his sentence there, yet the defendant said it was a bona fide purchaser without notice.  To my mind, the defendant is not bona fide, it is not without notice and it is not even a purchaser, for reasons given in my judgment in the Order 14 application on 23 November 2005.  Therefore, I do not see any merit in the appeal at all.

5. Be that as it may, as I have said, no one is infallible and, therefore, what will happen if the defendant could eventually succeed and persuade the Court of Appeal that there is a triable issue, and at the end of the day succeed at the trial?  Would the appeal be rendered nugatory?  To my mind, it would not be so.

6. The plaintiff is a worldwide company with very substantial business all over the world.  It is, in one sense, a world-famous company and a pride for the Taiwan people, and it has been in business for 25 years.  There is very little possibility that they will refuse to reassign back the trademark to the defendant should they lose the case.  In any event, it will not be rendered nugatory if the defendant succeed at the end of the day and the plaintiff in breach of its undertaking to the court, refuses to reassign back the trademark, the defendant can enforce the re-registration in these countries as stated in the schedule in p. 65 of the bundle before me today.  All these countries have reciprocal arrangements with Hong Kong, and therefore a successful judgment obtained by the defendant would enable them to enforce their rights in those countries.  If the plaintiff in Taiwan refuses to cooperate, then their cooperation is not necessary at all or that can be dispensed with.  The defendant can enforce the judgments in those countries and have the registration.  Albeit, of course, without the plaintiff’s cooperation, the defendant will have to spend a little bit more money in those countries to get it back, but all in all, it would amount to one thing, that is, the appeal would not be rendered nugatory.

7. On the other side of the scale, I would consider that the stay of execution will deprive the plaintiff of the fruit of the judgment and would severely interrupt their business.  The interruption of their business in those countries was caused by the theft of Dr Chang and that has already caused very serious damage to the plaintiff’s company.  They could not use their trademark in those countries after the unlawful assignment that has already incurred enormous amount of damages, and it is not beyond imagination that the inconvenience and the disruption that have caused to this world-famous company in Taiwan was “massive”.

8. On the other hand, the defendant is only a limited company with HK$100 capital.  The plaintiff could not be compensated by the judgment at the end of the day, even if the court could lift the corporate veil.

9. Mr Lee has already said in his affidavit that he has already exhausted all his savings in the establishment of the defendant’s company.  If that is the case, even if the court lift the corporate veil, what recourse the plaintiff would have at the end of the day against Mr Lee.  Without disrespect to him, he would not be in a position to pay those enormous amount of damages.

10. I understand this is an exceptional case, exceptional in the sense that the plaintiff is a foreign company in Taiwan with which, unfortunately, we have no reciprocal arrangement.  But this exceptional case itself has a lot of exceptions which I have said before : it is a world-famous, worldwide company with enormous amount of annual turnover with business all over the world.  If they have lost the case they would probably cooperate in the reassignment.

11. All in all, I do not believe the appeal will be rendered nugatory should, in the slight chance because of the good fortune of the defendant, succeed in the appeal.

12. For those reasons, I dismiss the application with costs to the plaintiff.