DYNAMIC WAY INTERNATIONAL LTD. AND ANOTHER v. HO KUI CHEE AND OTHERS

CACV 19/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 19 OF 2000

(ON APPEAL FROM HCA 16149/1999)

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J U D G M E N T

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Hon Rogers JA :

Introduction

1. This is an appeal from a decision of Deputy Judge To which he made on 4 January of this year. It arises in an action brought by the plaintiff against four defendants.

2. The claim arises out of a previous joint venture which was said to have been embodied by the 2nd plaintiff. The business concerned the erection of roller shutters. Briefly, the claim by the plaintiffs against the defendants is that they are taking the plaintiffs' business and there is a claim for confidential information. The allegation is that the defendants are in co-operation.

3. The parties fell out in June of last year. They agreed that they would part on 1 July. The plaintiffs say that in August, they became aware that the 4th defendant, in particular, was supplying customers of theirs with transparent roller shutters. It then took until 12 October for the writ to be issued.

4. On 26 November, the plaintiffs issued the inter partes summons for an interlocutory injunction seeking to restrain the defendants from disclosing or using confidential information. As has been discussed in this court, it is difficult to see that much of what is alleged to be confidential information could be confidential. Nevertheless, the second category of that confidential information is said to be the 1st plaintiff's customers, names and addresses contact persons, location of the shops using EUROLOOK shutter and specifications of the shutters installed.

5. In support of that application for an interlocutory injunction, there was filed an affirmation of Mr Yip Man Hing. In paragraph 33 of that affirmation, Mr Yip gives a list of entities who, he says, were the 1st plaintiff's customers which had previously ordered EUROLOOK shutters from the 1st plaintiff and from whom the 3rd and/or 4th defendants have solicited sales for "Clearlink" shutters.

6. I would mention, at this stage, that Clearlink appears to be another make of shutter; both the plaintiff's EUROLOOK and the defendant's Clearlink shutters being purchased from abroad.

7. In paragraph 34, Mr Yip gives a list of what he says were four further customers of the 1st plaintiff. In paragraph 35, he gives a list of nine further customers which he also says were the 1st plaintiff's customers which had been wrongly approached and told that the defendant represented EUROLOOK.

8. We then come to paragraph 36 which is the nub of this application. That reads as follows :-

"36. All the customers referred to in paragraphs 33 to 35 above are customers of the 1st Plaintiff demonstrated by the fact that most of these customers have since the latter part of 1994 been the regular customers of the 1st Plaintiff. There are now produced and shown to me marked 'YMH-20' a sealed envelope containing the list of the purchase orders placed by these customers of the 1st Plaintiff. I respectfully ask that the list of purchase orders be kept confidential as this information is trade secret pertinent to the Plaintiffs' business."

9. The 4th defendant, through its solicitors, served a notice under Order 24 rule 10 requiring inspection of that exhibit. The plaintiff refused and hence, the application which was made before Deputy Judge To to inspect the contents of the sealed envelope. That was resisted by the plaintiff on the basis that although that list might be relevant to the 1st and 3rd defendants, because the 4th defendant did not dispute the fact that the customers were the plaintiffs' customers, the matter was not relevant. In aid of that, the plaintiffs relied upon Order 24 rule 13(1) and said that it was not necessary for disposal of the action and the matters in issue between the parties that the 4th defendant should see the documents.

10. In my view, the matter is quite clear. The documents have been put in evidence. It is perfectly true that, from the time it was filed until I opened the sealed envelope, nobody had looked at that sealed envelope. I have considered the documents. They do not support the fact that all the named parties were customers of the 1st plaintiff and indeed, only one of the customers listed in paragraph 35 is referred to and one of the customers in paragraph 33 is not referred to. Be that as it may, I have not been able to detect any matter in that list which could be said to be so confidential that it could not be revealed. It simply lists out those premises where the plaintiff has installed shutters and the sizes of those shutters. It can hardly be said that the information other than the exact dimensions of the shutters could be highly confidential given the fact that the identity of the customers is revealed and even then the sizes of the shutters are open for anybody to look at.

11. Nevertheless, the plaintiff has chosen to, and decided that it is necessary to, put that in evidence and to rely on it. In those circumstances, I can see no possible justification for denying access to this by at least solicitors and counsel of all parties. Except in very unusual circumstances, a party should not be faced with having to deal with evidence which it is not permitted to see. The matter has been dealt with in a number of authorities, in particular, WEA Records Ltd and others v. Visions Channel 4 Ltd and others [1984] FSR 404 which was followed in a decision at first instance in Hong Kong Interlego A.G. v. Tyco Industries Inc. [1985] HKLR at p.115.

12. In my view, given the nature of interlocutory injunction proceedings, parties should not be permitted and cannot be permitted to put in confidential exhibits and deny the opposing party any opportunity whatever of looking at the documents.

13. Miss Chan, who appeared on behalf of the plaintiffs, put the best light on the plaintiffs' case as could be done. It was put to her that there were two alternatives which were open to the plaintiff. The first was to apply to have paragraph 36 which contained reference to exhibit "YMH-20" struck out of the affidavit. The alternative was to seek confidential safeguards. Neither has been applied for. Having looked at the exhibit, I do not see any grounds for ordering any safeguards as to confidentiality.

14. Having said that, in my view, this appeal should be allowed. The 4th defendant should be allowed to see the exhibits. The matter of further conduct of this case was discussed with the parties. I will content myself in this judgment with saying that this case having reached discovery stage and discovery, as I understand it from the court file, should have been completed by now and the summons for directions having been completed, I see absolutely no reason why this case should not be heard very promptly. The sooner it is heard and the issues between the parties are decided on a final basis, the better.

Hon Godfrey VP :

15. I agree.

16. We are concerned here with a document referred to in an affirmation, that is to say, the list of purchase orders mentioned in paragraph 36. Although, prima facie, the party against whom it was sought to be used had a right to inspect this document and take copies of it, the court will not order production of the document for inspection unless the court is of the opinion that such an order is necessary either "for disposing fairly of the cause or matter or of saving costs"; see Order 24 rule 13 of the Rules of the High Court.

17. Here, the reference in paragraph 36 to this document is a clear indication that the deponent does consider it necessary, for the purpose of fairly disposing of the matter, that this list of purchase orders be brought to the attention of the court. It seems to me to follow that it must be necessary for the purpose of disposing fairly of the matter that its contents are disclosed to the other side. That being so, I see no answer to this application. The judge was wrong to refuse the order for which he was asked.

18. We will accordingly allow the appeal, with costs here and below, and order the document to be produced for inspection.