CHEUNG CHI WAI t/a CHI FUNG ENGINEERING CO v. CHI FUNG ENGINEERING LTD AND OTHERS

DCCJ 1697/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1697 OF 2016

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DECISION

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Introduction

1.  In this action, the plaintiff’s claim is for passing off and trade mark infringement under section 18(3) of the Trade Marks Ordinance, Cap 559.

2.  There are four defendants.  The 1^st and 3^rd defendants are limited companies in Hong Kong.  The 2^nd defendant is the sole director and shareholder of the 3^rd defendant whereas the 4^th defendant is the sole director and shareholder of the 1^st defendant.

3.  As pleaded, the plaintiff claims against the 1^st and 3^rd defendants for passing off and infringing his registered mark.  The plaintiff further alleges that the 4^th defendant, being the sole director and shareholder of the 1^st defendant, is jointly liable for the 1^st defendant’s infringing acts.  There is a similar plea as regards the 2^nd and 3^rd defendants.

4.  Today’s hearing concerns the plaintiff and the 4^th defendant only.  On 2 December 2016, the plaintiff served the re-amended writ of summons on the 4^th defendant by insertion through the letterbox at an address in Tai Wai, Shatin.  No acknowledgment of service and defence was filed by the 4^th defendant within the prescribed time provided for under the Rules of the District Court. On 12 April 2017, the plaintiff took out an application to enter default judgment against the 4^th defendant under Order 13, rule 6 and Order 19, rule 7 of the RDC.

5.  This is the substantive hearing of the plaintiff’s summons.  The latest development is that two weeks before today, the 4^th defendant filed his defence with the court.  That is clearly out of time and the filing was done without any prior leave of the court.  Just yesterday, ie, on 30 August 2017, the 4^th defendant took out a summons seeking leave to (1) file the defence out of time, and (2) file an affirmation made by the 4^th defendant to oppose the plaintiff’s summons for default judgment.

6.  I have therefore before me this morning these two summonses.   

Jurisdiction

7.  There is however an issue in relation to the jurisdiction of this court which must logically be dealt with before disposing of the two summonses.  The plaintiff’s cause of action based on passing off is a common law tort and as such that claim will fall within section 32 of the District Court Ordinance, Cap 336.  Accordingly, I have jurisdiction to hear that claim so long as the claim does not exceed $1,000,000, which is the monetary limit set out in section 32.

8.  However, as far as the claim of trade mark infringement is concerned, I am of the view that the District Court does not have jurisdiction to hear and determine such a claim.  I take this view for the following reasons.

9.  First, the District Court is a court of limited civil and criminal jurisdiction.  Itonly has such jurisdiction and powers as are conferred upon it by the District Court Ordinance and other enactments of law in force: section 3(2) of the Ordinance.

10.  Practice Direction 27 provides general guidance on civil proceedings in the District Court and paragraph 4 imposes a requirement that all writs and originating summonses “should contain a plea that the relief sought do fall within the jurisdiction of the District Court, specifying which section(s) of sections 32 to 39 of the [Ordinance] do apply to the case”.

11.  Here, the plaintiff has not complied with this requirement in his amended statement of claim.  As such, it is not clear on the face of the pleading on which enactment the plaintiff is relying.  In any event, nowhere in the District Court Ordinance confers jurisdiction on the District Court to hear a case arising out of the Trade Marks Ordinance.

12.  Secondly, section 2 of the Trade Marks Ordinance defines the term “court” when used in that Ordinance as the Court of First Instance.  Nowhere in the Trade Marks Ordinance does it confer any power on the District Court to hear any infringement or other claims brought under that Ordinance.  It would therefore appear that notwithstanding that the Ordinance does not expressly say so, leaving aside the power and jurisdiction of the Registrar of Trade Marks, the Court of First Instance has exclusive jurisdiction as a first instance court to deal with trade mark cases.

13.  In this regard, I draw support from paragraph 225.630 of Halsbury’s Laws of Hong Kong (Vol 34) which states that the Court of First Instance and the Registrar have jurisdiction to deal with trade mark cases as provided for in the Ordinance.  It makes no reference to the District Court at all. 

14.  Also, Order 100 of the Rules of the High Court makes provisions for proceedings, appeals and applications under the Trade Marks Ordinance.  Yet, there is no equivalent order under the Rules of the District Court.

15.  Thirdly, a research into the case law would suggest that trade mark infringement cases are invariably dealt with by the Court of First Instance.  One exception which I have come across is the decision of Her Honour Judge Marlene Ng in Wu Shun Kwan v Lam Koon Wan DCCJ 5400/2004, 7 April 2005.  The judge proceeded to make a ruling on an Order 14 application and a striking out application in a claim for trade mark infringement.  The case had in fact been commenced in the High Court.  But by an order made by the High Court Master, it was transferred to the District Court.  When it came before the judge, it would appear from the decision that the issue of jurisdiction was not highlighted or discussed at all by the parties.

16.  I do not think therefore that this decision is authority that the District Court has jurisdiction over trade marks infringement cases.

17.  On the whole, it is clear that the District Court simply does not have jurisdiction over such cases.

Conclusion

18.  At the end of the hearing, both parties have accepted that this court has jurisdiction to hear the passing off claim but not the trade mark infringement claim.  In principle, they both agree that the whole action ought to be transferred to the Court of First Instance. However, given that the 1^st to 3^rd defendants are not present at today’s hearing, any application for transfer cannot be dealt with on this occasion.  Where the plaintiff takes out an application to that effect in due course, it can be listed before this court. 

19.  As regards the two summonses before me today, parties have agreed that they be dealt with as follows and I make an order according to their joint proposal:-

(1)   Leave be granted to the plaintiff to withdraw his summons;

(2)   The defendant’s summons be adjourned pending any transfer application, with liberty to restore;

(3)   The defendant do have costs of the plaintiff’s summons, including costs of today’s hearing, with certificate for counsel, summarily assessed in the agreed sum of $27,978, payable by the plaintiff within 28 days from today.

20.  I will also direct that the plaintiff do serve today’s order on the 1^st to 3^rd defendants as well as the 4^th defendant.