THE WALT DISNEY CO AND OTHERS v. D LAND TRAVEL LTD AND ANOTHER

HCA3864/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3864 OF 2001

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J U D G M E N T

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A. The disputes

1. This passing off action concerns the marks “DISNEY”, its counterpart in Chinese “廸士尼”, “DISNELAND” and its counterpart in Chinese “廸士尼樂園” (“collectively the DISNEY Marks”).

2. Walt Disney Co., Disney Enterprises and Walt Disney Asia Pacific (respectively the 1^st to 3^rd plaintiffs and collectively “the Disney Companies”) sue :

(1)	D Land (the 1st defendant) for its use of the name “廸士尼” in its Chinese name “廸士尼旅遊有限公司” and of the related use of the name “廸士” and the use of the name “D Land” in conjunction with the name “廸士尼”; and
(2)	Mr Mak Wai Yin (the 2nd defendant), formerly the majority shareholder and director of D Land, as a joint tortfeasor for D Land’s wrongful acts.

3. D Land and Mr Mak deny D Land’s liability for passing off.  They dispute that the Disney Companies had the requisite goodwill to found the passing off action, that D Land had made the misrepresentation complained of and that the Disney Companies had suffered damage as alleged.  Separately, Mr Mak denies personal liability as a joint tortfeasor.

B. Background

4. The background circumstances giving rise to these disputes are outlined below.

5. The Disney Group, well-established for decades, is one of the leading entertainment and multimedia enterprises in the world.

6. Walt Disney Co., a US listed company, is the holding company of the Group.

7. Disney Enterprises, another US company, is a wholly owned subsidiary of Walt Disney Co. holding a vast array of intellectual properties including numerous marks and copyrighted works associated with theme parks operations, travel services, live-action and animated movies and televisions shows, a radio network, consumer products businesses and internet sites run by the Group.  Those intellectual properties include well more than 200 trademark registrations for the DISNEY Marks worldwide including Hong Kong and the Mainland and the MICKEY MOUSE device mark registered in Hong Kong and the Mainland.

8. Walt Disney Asia Pacific, a Hong Kong company, is wholly owned by Disney Enterprises and one of its subsidiaries.  Its businesses in Hong Kong, the Mainland and Asia include the promotion of US Disney Vacation Destinations and sales of components of such vacations; the licensing, promotion and sales of consumer products; publishing of books and magazines; and entertainment-related computer software and other multi-media products.

9. D Land, with its Chinese name 廸士尼旅遊有限公司, was incorporated in Hong Kong on 22 November 1999.  At all material times, Mr Mak and his wife held D Land’s shares as to 60% and 40% until February 2007.[1]  They were also the two directors until their resignation in June 2001, when they were replaced by Harrison Holding Group Ltd and Morris Mak & Co. Ltd (“MMCL”)[2] respectively.

10. Since its incorporation, D Land has been carrying on the business as a travel agent, providing travel agency services, including air-ticketing, tour packaging and hotel reservation services.

11. On 17 January 2000, that is, about two months after its incorporation, D Land applied to the Trademarks Office in the Mainland to register “廸士尼旅遊” in Class 39 covering, inter alia, travel agency and tour arrangement.  The application was advertised in the Trademark Gazette in the Mainland on 14 March 2001, which came to the notice of the Disney Companies.  Their solicitors, B&M, then sent a cease and desist letter to D Land on 16 May 2001 but to no avail.[3]  They commenced the present action against D Land on 29 August 2001 and joined Mr Mak as a defendant on 20 June 2005.

C. Some procedural matters

12. I digress to mention several procedural matters.

13. First, both D Land and Mr Mak were legally represented from the outset.  But shortly before trial, they became unrepresented.  D Land then applied, unsuccessfully, for leave to be represented by a director.  Eventually, it did not appear at the trial.  Only Mr Mak did.

14. Second, shortly before trial, the Disney Companies filed and served a hearsay notice dated 8 November 2007 for the witness statements of Ms Belinda Lui, formerly a solicitor in the employ of B&M, and Ms Whitney Foard Small, formerly the Regional Director of Marketing and Sales for the Parks and Resorts Division of the Walt Disney Asia Pacific between 1996 and 2001.  Both Ms Lui and Ms Small were not able to attend court to give evidence because of work commitments.  Ms Lui had further made it clear that she would not come to court anyway.  Mr Mak opposed the hearsay notice and applied to call them for cross-examination pursuant to Order 38 rule 21(1)(a), Rules of the High Court.  Having considered the matter, I refused the application.  Their witness statements are admitted, subject to weight.

15. Third, the parties had filed witness statements purportedly from members of the public (3 for the Disney Companies and 10 for D Land and Mr Mak).[4]  They dealt with the question of misrepresentation and confusion.  At the end, none of them were called.  And no hearsay notice was filed.  Their witness statements thus do not form part of the evidence for the purpose of the trial.  But even if they were called, I do not think their evidence would have any significant bearing or made any difference to the outcome at all.

D. D Land’s liability for passing off

16. I now come to D Land’s liability for passing off.

D.1. The law

17. The essential elements of passing off are goodwill, misrepresentation and damage.  Lord Oliver described them in Reckitt & Colman Products Ltd v. Borden [1990] RPC 340, at p.406 thus :

“

The law of passing off can be summarized in one short general proposition – no man may pass off his goods as those of another.  More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed.  These are three in number.  First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying ‘get-up’ (whether it consists simply of a brand name or a trade description, or the individual features of labeling or packaging) under which his particular goods or services are offered to the public, such that the get-up is distinctive specifically of the plaintiff’s goods or services.  Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not international) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. … Thirdly, he must demonstrate that the suffers… damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.”

In light of D Land’s absence and the defence that it and Mr Mak had raised, the Disney Companies have to prove each of the three essential elements.  I will begin with goodwill.

D.2. Goodwill

18. The question is : whether as at 22 November 1999, the date when D Land was incorporated, the Disney Companies enjoyed sufficient goodwill and reputation in the DISNEY Marks in Hong Kong to bring this passing off action.

D.2.a. Evidence on goodwill

19. On this question, the Disney Companies called Mr Yan Chiu Fan, the Vice-President of the film distribution arm of Walt Disney Asia Pacific, Ms Marsha Reed, the Vice-President and Assistant Secretary of Disney Enterprise and relied on the witness statement of Ms Small.

20. Mr Yan said the Disney Companies have extensively sold, distributed, marketed, advertised and promoted it products and services under and by reference to “DISNEY”, “廸士尼” in Hong Kong for decades.  The Chinese name “廸士尼” had always been adopted in Hong Kong and Macau.  For the Mainland and Taiwan, different Chinese characters had initially been used as the counterpart for “DISNEY”—”迪斯尼” in the Mainland and “狄斯奈” in Taiwan.  Since 1995, the Disney Group consolidated use of its 3 versions of “DISNEY” in Chinese characters and only “廸士尼” has been used since then as the Chinese counterpart of “DISNEY” for consistency throughout the world.  Mr Yan further said that the products and services which have been sold, distributed and marketed under any by reference to “廸士尼” by the Disney Companies in Hong Kong include visual and audio entertainment products and their production and distribution; television program production and broadcasting; a wide range of consumer products; internet business and services; entertainment and travel services and theme parks.

21. Ms Reed corroborated Mr Yan’s evidence and provided further details on various aspects of the Disney Group’s business.  Of particular relevance to the present case are the theme parks and travel services run by the Disney Group.  The Disney Group operates a number of world famous theme parks in California and Florida in the USA, Tokyo in Japan and Paris in France.  Many of the Disney theme parks offer accommodation at a number of Disney hotels including Disney-themed hotels.  For example, the Walt Disney World Resort includes in addition to the park attractions and rides themselves : 13 resort hotels, a complex of villas and suites, dining and entertaining complex and other facilities.  The Disney Group also operates a cruise line.  More specifically, the website DisneyVacations.com is a marketing and sales channel for Disney Parks and Resorts vacation packages and tickets.  Through the website, the Disney Companies offer customers air-ticketing, car rental, tour packaging and accommodation reservation services in respect of various Disney resort, theme parks and cruises operated by them and/or their associated companies.

22. Ms Reed also touched upon the reputation in the DISNEY Marks.

23. She referred to a survey entitled “100 Leading Licensors” and published in a LICENSE! Magazine in April 2002 which ranked licensors worldwide basing on licensing sales figures in 2001.  The survey showed that the sales of the Disney consumer products business were at some US$13 billion.  Ms Reed referred to another report entitled the Best Global Brands 2002 prepared by JP Morgan Chase & Co. which named the DISNEY brand the top 7 out of the world’s most valuable brands valued at US$32.6 billion in 2001.  She concluded that “DISNEY” is the single biggest and most valuable asset of the Disney Group.

24. Ms Reed then gave a brief history of various Disneyland theme parks over the world.  She emphasized that enormous outlay, planning, investment and infrastructure goes into creating the Disneyland theme parks which are second to none.  Disney theme parks are extremely world renowned in the travel and entertainment industries with proven popularity as travel destinations for adults and children alike.  She concluded that “DISNEYLAND” is synonymous with Disney’s theme parks and related travel destination services.

25. Ms Small in her witness statement described how the Disneyland theme parks, Disney Cruise Line and travel related services were promoted and marketed in Hong Kong.  On the use of “廸士尼” for “DISNEY”, her evidence is similar to Mr Yan’s.  She added that in 1996, the use of “廸士尼” in relation to the leisure, travel and entertainment services, was already well established in the main Chinese speaking markets in the Asia Pacific region, including Hong Kong.

26. The evidence of Mr Yan, Ms Reed and Ms Small clearly established that at all material times, the Disney Companies enjoyed substantial goodwill and reputation in the DISNEY Marks in all the products and services including travel services that they offered to the public internationally and in Hong Kong.  The DISNEY Marks have indeed become distinctive of the Disney Companies’ products and services.

D.2.b. Mr Mak’s contentions

27. In his attempt to dispute the Disney Companies’ goodwill and reputation, Mr Mak took a number of points.

28. First, Mr Mak contended that at the material time, any goodwill that the Disney Companies had was limited to the entertainment business only.  Since they had never operated as travel agents, they did not have any goodwill in the travel agency business where D Land operated or the travel services industry generally.  While it is true that the Disney Companies have never operated as travel agents, Mr Mak’s contention is utterly wrong.  For as noted, there is a wealth of undisputable evidence proving that at all material times, the Disney Companies did engage in the travel service industry and have substantial goodwill and reputation therein.

29. Second, Mr Mak contended that any goodwill that the Disney Companies had was confined to the name “Walt Disney” and had not been extended to “廸士尼”.  This is plainly contradicted by evidence.

30. Third, Mr Mak said that back in November 1999, the Disney Companies had yet to register any of the DISNEY Marks.  Thus they did not have any monopoly in those Marks.  This, however, does not assist him a bit.  As I have repeatedly pointed out at the trial, this is not a trademark infringement action and passing off does not depend on any registration of the relevant trademark or trade name.  The absence of any registered trademark for any of the DISNEY Marks at the time is wholly irrelevant.  It does not even begin to show that the Disney Companies did not have any goodwill or reputation in any of the DISNEY Marks.

31. Fourth, Mr Mak said that shortly after D Land was incorporated, it had obtained trademark registration for “廸士尼旅遊” in Class 39 in the Mainland.  It is factually wrong.  D Land had only made the application.  And as noted, it was eventually refused in 2004.  In any event, even if D Land had obtained trademark registration for “廸士尼旅遊” in the Mainland, it does not mean that the Disney Companies did not have any goodwill and reputation in the DISNEY Marks in Hong Kong then.

32. Fifth, Mr Mak said D Land had its own goodwill in the travel agency business under the name “迪士假期”[5] because it had been trading under such name for more than 6 years since its incorporation in 1999.  However, even assuming that D Land was trading under the name “迪士假期”, there is simply no evidence to show that when it was incorporated in 1999 or indeed at any time thereafter, it had such goodwill as alleged.

33. Finally, Mr Mak argued that since the Disney Companies were recently subject to certain negative publicity, they did not have a good reputation.  He has mistakenly confused goodwill with good reputation.  The Disney Companies may well subject to negative publicity from time to time.  But that does not mean they did not have sufficient goodwill or reputation in their business.

34. None of the points taken by Mr Mak is meritorious.  I reject them all.

D.2.c. Conclusion

35. In my view, the evidence is overwhelming.  The Disney Companies did have sufficient and indeed very substantial goodwill and reputation in the DISNEY Marks at all material times to found this passing off action.  And I so find.

D.3. Misrepresentation

36. I next come to the second element of misrepresentation.

D.3.a. How D Land’s names came into being

37. It is useful to first examine how D Land’s name, both English and Chinese, came into being.

38. In summary, Mr Mak said that those names were derived from his two cats, “Daisy” and “^仔”.  For “^仔”, Mr Mak used the English transliteration “Land Chai”.  The initial words of “Daisy” and “Land Chai” are “D” and “Land”.  Hence D Land in its English name.  The Chinese transliteration of the name “Daisy” is “迪士”.  Put together with the first character of “^仔”, it read in Chinese “廸士尼”.  Hence “廸士尼” in D Land’s Chinese name.

39. Mr Mak’s story is most absurd.  It does not even bear a moment of closer scrutiny.

40. As noted, D Land’s names were a combination of the cats’ names “Daisy” and “^仔”.  On “Daisy”, Mr Mak said in paragraph 4 of his first witness statement that he named his cat “Daisy” because it looks like a bunch of daisy.  But “Daisy” is a male cat.  When asked under cross-examination why he had given what obviously is a girl’s name to a male cat, Mr Mak alleged that it was not him who called the cat “Daisy”.  Its previous owner did.

41. Mr Mak further said in his oral testimony that the English and Chinese names of D Land were decided at a board meeting of MMCL in July 1998.  But it could not have possibly been when, as evidenced by the receipt, Mr Mak bought the cat in December 1998.  Mr Mak then alleged that he brought the cat home a few months prior to July 1998 before buying it.  The receipt was issued later.  This was only to be contradicted by the cat’s vaccination card which showed that it was still in Australia as at 2 July 1998.  He made these all up as he went along.

42. On “^仔”, Mr Mak said in paragraph 4 of his 1^st witness statement that he called his cat “Land Chai”, without giving its Chinese name.  At trial, he confirmed that its name was “^仔”.  The character “^” was to justify the use of “Land” in D Land’s English name.  But the pronunciation of the Chinese character “^” is “Leng” and not “Land”.  They simply do not match.

43. Further, the use of the name “^仔” could not possibly explain the use of “尼” in D Land’s Chinese name “廸士尼”.  The character “^” bears no resemblance to “尼” in appearance or pronunciation at all.  Any allegation that “^” is the origin of “尼” in D Land’s Chinese name defies common sense.

44. Mr Mak’s evidence is also contradicted by his own document.  In the trademark opposition proceedings in the Mainland, Mr Mak signed and submitted on behalf of D Land to the Trademark Review Board a document entitled “質証意見書”.  There, in order to justify the use of the character “尼” in D Land’s Chinese name, he claimed that the Cantonese name of his cat was “尼仔”.

45. In my view, Mr Mak’s implausible and nonsensical story of how D Land’s English and Chinese names came into being is false.  Plainly, he made it up in order to explain away the obvious : D Land’s English and Chinese names were adopted deliberately in order to trade on the goodwill and reputation enjoyed by the Disney Companies in the DISNEY Marks.

D.3.b. How D Land used its names

46. I then consider the use of D Land’s English and Chinese names in the conduct of its business.

47. Plainly, given the Disney Companies’ substantial goodwill and reputation in the DISNEY Marks, the use by D Land of its English and Chinese names was calculated to deceive and mislead unsuspecting members of the public into the erroneous belief that D Land was in some way connected or associated with or licensed by the Disney Companies.  This is particularly so when “廸士尼” in D Land’s Chinese name is identical to the Chinese name used by the Disney Companies in Hong Kong for years and D Land is clearly suggestive of “DISNEYLAND”.

48. The manner in which D Land had used its English and Chinese names had further increased the likelihood of confusion.

49. D Land had a trade name called “迪士假期”.  Mr Mak said that D Land used that name prominently in signage and brochures.  But the fact is this.  In its staff’s name cards, signage, brochures, the name “迪士假期” was used in conjunction with the English name “D Land Travel Limited” but the legend “廸士尼旅遊有限公司全資附屬” was placed below those names.  This would obviously suggest to members of the public that a company named “D Land Travel Limited” and “迪士假期” is a wholly owned subsidiary of “廸士尼旅遊有限公司”, giving rise to the misrepresentation that that company is a wholly owned subsidiaries of the Disney Companies or their group.

50. Mr Mak said the names were so arranged in order to satisfy section 93 of the Companies Ordinance, Cap. 32 so that the public dealing with D Land would know that it was a limited company.  But if that were the intention, stating both the English and Chinese names of D Land would suffice.  The inclusion of the words “全資附屬”, which is the very basis upon which the misrepresentation that D Land was one of the subsidiaries of the Disney Companies or their group arose, would be wholly unnecessary.  Mr Mak then said the words “全資附屬” were included in order to express the meaning “operated by”, that is, “迪士假期” was operated by “廸士尼旅遊有限公司”.  This is singularly unconvincing.  Mr Mak, trained as an accountant and provided secretariat services via other companies of his, should know better : “全資附屬” (wholly owned subsidiary) simply does not mean “operated by”.

51. In some of D Land’s brochures, the use of “香港辦事處” and “迪士尼旅遊(香港辦事處)” were used.  That created the false impression that “D Land Travel Limited” and “迪士假期” is not only a wholly owned subsidiary of the Disney Companies but also their Hong Kong office.  This is particularly telling because D Land never had any office or branch office outside Hong Kong.  What is then the need to distinguish a Hong Kong branch office and one outside Hong Kong?  Mr Mak explained in his 3^rd supplemental witness statement filed in the course of trial that D Land used “香港辦事處” as its trade practice because companies cooperated with D Land in the Mainland displayed “迪士假期(中國辦事處)” and that the use of “迪士尼旅遊(香港辦事處)” was an error made by the staff.  This is a recent fabrication and I reject it.

D.3.c. The hyperlink

52. The false representation that D Land was a wholly owned subsidiary of the Disney Companies and that it was their Hong Kong office was further reinforced by the provision of the a hyperlink from D Land’s website to that part of the Disney Companies’ website relating to their vacation and travel services.  At the material times, that was the only hyperlink provided by D Land’s website to other parks and tourist attractions.  Public browsing D Land’s website would be easily misled into thinking that D Land was some way related to the Disney Companies.

53. Mr Mak said that the link was included upon the advice of the computer consultant who installed D Land’s computer system.  I do not accept it.  In my view, he made it up in order to explain away D Land’s wrongful act.

54. Mr Mak said that there were other links.  It was factually wrong.  At all material times, only one link existed, which was linked to the Disney Companies’ website.  It was only after D Land had received the cease and desist letter in May 2001 that the hyperlink to the Disney Companies’ website was severed and replaced by one to Universal Studio.

55. Mr Mak also said that it was the practice of travel agents to provide links to the Disney Companies’ website.  The short answer is : you may well provide links to their website but you cannot misrepresent to the public that you are their wholly owned subsidiary or local branch office or some way related to them.

D.3.d. Mr Mak’s other contentions

56. Mr Mak took a number of additional points.

57. First, he first argued that the field of activity of the Disney Companies is different from that of D Land.  This is misconceived.

58. It is well established that the absence of common field of activity is not a bar to a passing off action : Wadlow on The Law of Passing Off, 3^rd Edition, paragraph 5-81 at p.338.  Further, the proximity of the defendant’s field of activity to that of the plaintiff would be relevant as to whether the acts complained of in a particular case amounted to a misrepresentation : Lego System Aktieselskab & Another v. Lego M. Lemelstrich Ltd [1983] FSR 155, per Falconer J at p.187.  Here, the evidence clearly established that the Disney Companies operated in the travel services industry.  There was plainly a very close proximity to D Land’s field of activity, namely travel agency.  This is highly relevant.

59. Second, Mr Mak referred to the relative small scale of D Land’s operation and the principal type of tours it organized and contended that confusion is unlikely.  But as rightly submitted by Mr Yan, SC, for the Disney Companies, less sophisticated or cautious consumers may well be misled by D Land’s conduct into believing that it was associated or related to the Disney Companies.

60. Third, Mr Mak relied on the evidence of Ms Ada Chow Yuk Yin of the investigation agent employed by the Disney Companies.  She said when her agent went to D Land’s office for undercover investigation, D Land’s staff, Angus Liu, told him that of D Land was not related to the Disney Companies.  But she went on to say that what Liu said was in response to a direct question from the agent.  Mr Yan submitted that this is important because even if someone is seeking deliberately to trade off another’s goodwill by adopting names deceptively similar to the claimant, he may not dare, in answer to a direct question, to say that his company is in fact related to the claimant.  I agree.

61. Fourth, Mr Mak said that the Disney Companies had not received any actual complaint of confusion.  That may or may not be the case.  But that does not mean that what D Land had not caused the misrepresentation complained of.

62. Fifth, Mr Mak said he had done his best to remove any possible confusion by putting up a disclaimer at the signage that D Land is not related to the Disney Group after D Land had received the cease and desist letter in May 2001.  The fact that Mr Mak sought to put up the disclaimer only served to reinforce the Disney Companies’ case that there was likelihood of confusion.  Further, despite the disclaimer, D Land continued the wrongful acts complained of, with the exception of severing the hyperlink to the Disney Companies’ website.  The misrepresentation just continued.

63. Sixth, Mr Mak said D Land distributed the Disney Companies’ brochures at their invitation to promote their theme parks.  There is however no evidence to prove this point.  In any event, the Disney Companies are not complaining about distribution of their brochures by D Land at their office.

64. Finally, Mr Mak attacked the Disney Companies for not calling the public witnesses.  This is misconceived.  If anything, the same complaint can be said about his failure to call his own public witnesses.  In any event, the question of misrepresentation is a question of fact for me to decide.  And I have no difficulty in determining this question on the evidence before me.  The evidence of the public witnesses, even if called, will not change my conclusion at all.

D.3.e. Conclusion

65. The evidence on misrepresentation is overwhelming.  I find that D Land (a) had the fraudulent intention to deceive the public into believing and (b) had in fact misrepresented to the public that it was either a wholly owned subsidiary or a local branch office of the Disney Companies or some way related to them.

D.4. Damage

66. I now come to the third element of damage.

67. The evidence before me, which I accept, clearly shows that the DISNEY Marks are the single biggest and most value asset of the Disney Companies and that one very important aspect of their business is licensing the Marks.  D Land’s wrongful conduct has caused and if not stopped, would continue to cause substantial damage to them.

68. D Land’s wrongful conduct would no doubt dilute the exclusivity of the DISNEY Marks.

69. Further, it is Ms Small’s evidence, which I accept, that the Disney Companies have all along been very careful in choosing travel agents for the provision of travel related services.  They are scrupulously determined, based on size, reputation, guaranteed quantity/numbers of ticket sales.  They must be well-established, well known and reputable.  They must have significantly big contracts with airlines enabling large block bookings on airlines, particularly with the USA, have contracts for large block bookings with hotels, and have the capacity to put together travel packages which include flights, hotels and theme park entry.  In short, only top travel agents in the industry, which can satisfy the stringent requirements of the Disney Companies, are selected.  If D Land could free ride on the DISNEY Marks, the Disney Companies would be prevented from controlling its activity and the reputation in those Marks to which the goodwill is attached.

70. Mr Mak argued that because there is no common field of activity, the Disney Companies would not suffer damage.  This is a wholly unmeritorious argument, which I reject.

D5. Conclusion

71. The Disney Companies have proved all the three elements.  I accordingly find that D Land is liable for passing off.

E. Mr Mak’s personal liability

72. I now come to Mr Mak’s personal liability.

E.1. The law

73. The applicable principles are summarized in MCA Records Inc v. Charly Records Ltd [2002] FSR 26 where Chadwick LJ said :

“	First, a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the governance of the company - that is to say, by voting at board meetings.  That, I think, is what policy requires if a proper recognition is to be given to the identity of the company as a separate legal person.  Nor, as it seems to me, will it be right to hold a controlling shareholder liable as a joint tortfeasor if he does no more than exercise his power of control through the constitutional organs of the company - for example by voting at general meetings and by exercising the powers to appoint directors.  Aldous LJ suggested in Standard Chartered Bank v Pakistan National Shipping Corp (No. 2) [2000] 1 Lloyd’s Rep 218 at 235—in a passage to which I have referred—that there are good reasons to conclude that the carrying out of the duties of a director would never be sufficient to make a director liable.  For my part, I would hesitate to use the word ‘never’ in this field; but I would accept that, if all that a director is doing is carrying out the duties entrusted to him as such by the company under its constitution, the circumstances in which it would be right to hold him liable as a joint tortfeasor with the company would be rare indeed.  That is not to say, of course, that he might not be liable for his own separate tort, as Aldous LJ recognised at paragraphs 16 and 17 of his judgment in the Pakistan National Shipping case.
	Second, there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control through the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder.  In other words, if, in relation to the wrongful acts which are the subject of complaint, the liability of the individual as a joint tortfeasor with the company arises from his participation or involvement in ways which go beyond the exercise of constitutional control, then there is no reason why the individual should escape liability because he could have procured those same acts through the exercise of constitutional control.  As I have said, it seems to me that this is the point made by Aldous J (as he then was) in PLG Research Ltd v. Ardon International Ltd [1993] FSR 197.
	Third, the question whether the individual is liable with the company as a joint tortfeasor - at least in the field of intellectual property—is to be determined under principles identified in CBS Songs Ltd v. Amstrad Consumer Electronics plc [1988] 2 All ER 484, [1988] AC 1013 and Unilever plc v. Gillette (UK) Ltd [1989] RPC 583.  In particular, liability as a joint tortfeasor may arise where, in the words of Lord Templeman in CBS Songs v. Amstrad [1988] 2 All ER 484 at 496, [1988] AC 1013 at 1058 to which I have already referred, the individual ‘intends and procures and shares a common design that the infringement takes place’.
	Fourth, whether or not there is a separate tort of procuring an infringement of a statutory right, actionable at common law, an individual who does ‘intend, procure and share a common design’ that the infringement should take place may be liable as a joint tortfeasor.  As Mustill LJ pointed out in Unilever v. Gillette, procurement may lead to a common design and so give rise to liability under both heads.”

With these propositions in mind, I turn to consider Mr Mak’ personal involvement in D Land’s passing off.

E.2. Mr Mak’s involvement

74. Mr Mak was at all material times the majority shareholder and director of D Land.  The evidence clearly shows that he was the mastermind behind D Land.  He was the person who chose D Land’s English and Chinese names.  He was the person who managed and controlled D Land.  All these came from his own evidence.

75. In his affirmation (filed in June 2005 opposing the joinder application), Mr Mak said that since its incorporation, D Land had been under his management and control.  He also testified that when he and his wife were D Land’s directors, she played no part in its management because she was employed full time elsewhere.  Thus he was effectively the only person controlling and managing D Land at all material times.

76. In his first witness statement (filed in September 2003), Mr Mak said that it was he who “used the initial words of [his] cats to be the English and Chinese versions of the name of [D Land].”  (It was on that basis that the Disney Companies applied to join Mr Mak in June 2005.  In his affirmation filed in opposition, Mr Mak did not dispute that it was he who selected D Land’s names.)

77. It was Mr Mak who first responded to the cease and desist letter from B&M and spoke to and correspond with them thereafter.

78. It was Mr Mak who made and signed each every important document on behalf of D Land in these and some other proceedings concerning the DISNEY Marks which involved D Land before he was joined in June 2005.  He made the only witness statement filed on behalf of D Land in February 2003.  He made the only Statutory Declaration filed in opposition to one of Disney Enterprises’ trademark applications in Hong Kong dated 22 April 2004, declaring that all the matters depose to therein were to the best of his personal information knowledge and belief.

79. It was Mr Mak who made and signed the “質証意見書” filed in the trademark proceedings in the Mainland in August 2005.  There he reiterated that it was he who coined D Land’s names although he called one of his cats a different name.

80. But Mr Mak, having been joined as a defendant, now alleged that he had practically nothing to do with the management, control and naming of D Land.  Basically, he shifted all the blames to others, including regrettably his late mother.

81. Mr Mak said it was his mother who wanted to run a travel agency company and financed the operations of D Land and indeed some of his other companies, including MMCL.  He held the shares in D Land for her.  These are all bare and recent allegations.  Not a scintilla of evidence has been adduced in support.  They must be rejected.

82. Mr Mak further said it was his mother who coined the Chinese name of D Land.  He said the decision was made at the board meeting of MMCL (of which his mother was a shareholder) on 15 July 1998.  But the purported board minutes only said that her mother shall decide on the name of the new company.  It was not recorded that her mother decided the Chinese name of D Land there and then.  Mr Mak then said that the decision was actually made at a subsequent meeting in July 1998.  But as pointed out in paragraph 41 above, that could not have been possible.

83. This new allegation that it was his mother who coined the Chinese name of D Land is in stark contradiction of his own evidence in the 1^st witness statement that it was he who used the names of the cats for D Land’s names.  Mr Mak said he only used the names of the cats but he did not coin the names of D Land.  Plainly, when his evidence in the witness statement is properly read, he did mean that it was he who derived from his cats’ names D Land’s names.  This semantic game is useless.

84. Mr Mak then said he was not responsible for the management and daily operations of D Land.  All important decisions relating to D Land were made by his mother.  The staff was responsible for its daily operations.  Though a director, his role was limited to signing cheques when requested.  Again, this new allegation is flatly contradicted by his own evidence.

85. Finally, Mr Mak said it was a Mainland investor in D Land who had decided to file the application to register the mark “廸士尼旅遊” in the Mainland in 2000.  This is yet another bare allegation he raised in the course of his oral testimony.  It does not sit well with the fact that he signed and submitted the “質証意見書” in August 2005.  I have no doubt that he made it up as he went along.  In any event, he said he approved the decision to apply for registration.  He cannot now blame some fictitious investor.

E.3. Conclusion

86. In my view, the evidence on Mr Mak’s personal liability is again overwhelming.  He clearly intended, procured and shared a common design that D Land should commit the wrongful acts complained of by the Disney Companies.  He is plainly the mastermind of the entire scheme and steered D Land into committing the acts complained of.  He undoubtedly fully endorsed and supported those wrongful acts and intended that they should continue as long as possible.  As the majority shareholder and controlling director, he had the authority to stop them but did not, not even after the Disney Companies had complained.  He knew full well that D Land’s wrongful activities were continuing and played his own part in trying to ensure that they could.  Plainly, he is liable as a joint tortfeasor : see Kabushiki Kaisha Yakult Honsha & Others v. Yakudo Group Holdings Ltd & Another (No. 4) [2004] 2 HKLRD 587, at paragraph 137 at pp.631-632.

F. Orders

87. I will enter judgment for the Disney Companies against D Land and Mr Mak jointly and severally for passing off as per the order annexed to this judgment.

Annex

1.  The defendants, in the case of the 1^st defendant, whether acting by itself, its directors, officers, employees, servants, agents or any of them or otherwise howsoever, and in the case of the 2^nd defendant, by himself, his servants or agents or any of them or otherwise howsoever, be permanently restrained from doing or causing, enabling or assisting others to do, the following acts or any of them :

(a)	passing-off or attempting to pass-off their business as and for a business of or associated, licensed or endorsed by the plaintiffs;
(b)	registering any business or corporate or other name which incorporates the DISNEY and/or “廸士尼” names and marks or any name or mark which is identical with or confusingly similar to DISNEY and/or “廸士尼”;
(c)	using or carrying on business under any business or corporate or trading or other name which incorporates the DISNEY and/or “廸士尼” names and marks or any name or mark which is identical with or confusingly similar to DISNEY and/or “廸士尼”;
(d)	carrying on business by reference to, or use in the conduct of or in relation to any business, any name which incorporates the DISNEY and/or “廸士尼” names and marks or any name or mark which is identical with or confusingly similar to DISNEY and/or “廸士尼”;
(e)	passing-off its products or services as products or services provided by or with the licence, approval, authorisation or sponsorship of the plaintiffs, including but not limited to the following services : air-transport, moving luggage, travel agency, travel guide, arrangement of travel by yacht and tourism services and sightseeing arrangements, travel arrangements, ticket reservations, tour reservations and travel reservations.

2.  The defendants do each, within 7 days of the personal service of this Order upon them, take or cause to be taken all necessary steps to de-register the name “D Land Travel Limited (廸士尼旅遊有限公司)” which is registered with the Hong Kong Companies Registry (Company No. 695450) and Hong Kong Business Registration Office (B.R. No. 30522688) or to change that name to a name which does not incorporate the DISNEY and/or “廸士尼” names and marks, or any names or marks which are identical with or confusingly similar to DISNEY and/or “廸士尼”.

3.  The defendants do, within 7 days of the personal service of the Order upon them, remove and/or cause and/or procure to be removed from the 1^st defendant’s website at www.dlandtravel.com :

(a)	all references to the “廸士尼” name and mark;
(b)	the depiction of the cartoon character known as MICKEY MOUSE; and
(c)	the hyperlink entitled “Experiencing Disneyland”

in so far as any such references, depiction and/or hyperlink still remains displayed on the 1^st defendant’s said website.

4.  The defendants do, within 7 days of the personal service of the Order upon them, remove and/or cause and/or procure to be removed from their business cards, advertisements, brochures, promotional material, signage and any other materials or documents, all references to the DISNEY and/or “廸士尼”names and marks or any names or marks which are identical with or confusingly similar to DISNEY and/or “廸士尼”.

5.  The defendants, in the case of the 1^st defendant, whether acting by itself, its directors, officers, employees, servants, agents or any of them, or otherwise howsoever, and in the case of the 2^nd defendant, whether acting by himself, his servants or agents or any of them or otherwise howsoever be restrained from applying to register or causing, enabling or assisting others (other than the plaintiffs) to apply to any trade marks office or trade marks registry to register as a trade mark in respect of any class of goods or services the DISNEY and/or “廸士尼” names and marks or any names or marks which are identical with or confusingly similar to DISNEY and/or “廸士尼” in any country or territory anywhere in the world, including but not limited to the People’s Republic of China and Hong Kong.

6.  The defendants do, within 7 days of the personal service of this Order upon them, withdraw and/or cause to be withdrawn the 1^st defendant’s application to the Trademark Review and Adjudication Board of the People’s Republic of China to review the decision of the Trademark Office of the People’s Republic of China upholding the 2^nd plaintiff’s opposition to the 1^st defendant’s application (No. 1587617) to register the mark “廸士尼旅遊” and refusing the 1^st defendant’s said application, and do withdraw any applications to any trade marks office or trade marks registry to register as a trade mark in respect of any class of goods the DISNEY and/or “廸士尼” names and marks or any names or marks which are identical with or confusingly similar to DISNEY and/or “廸士尼” in any country or territory anywhere in the world, including but not limited to the People’s Republic of China and Hong Kong, and insofar as any such applications have matured or otherwise proceeded to registration, the defendants do, at the plaintiffs’ (or any of their) option :

(a)	assign such resulting registrations to the plaintiffs (or any of them); or
(b)	forthwith upon such applications maturing to registration, apply to the relevant trade marks office or trade marks registry for the cancellation and/or removal of such resulting registrations.

7.  The defendants do each, within 7 days after personal service of this Order upon them, deliver up or destroy on oath all articles and materials (including without limitation, dies, plates, templates, moulds, labels, stamps, stencils, decals, computer files stored in whatever form, catalogues, promotional leaflets, signage, stationery, business cards, brochures and packaging) in the possession, power, custody or control of the defendants or either of them the retention, use and/or sale of which or otherwise howsoever dealing in or with which by the defendants or either of them would offend against the foregoing injunctions or any of them.

8.  The 1^st and 2^nd defendant and each of them, in the case of the 1^st defendant, by a director, do within 21 days of the personal service of this Order upon them, make and file an affidavit/affirmation and serve a copy thereof on the plaintiffs’ solicitors confirming that they have complied with paragraphs 2, 3, 4, 6 and 7 hereof.

9.  The 1^st and 2^nd defendant and each of them, in the case of the 1^st defendant, by a director, do within 14 days of the personal service of this Order upon them, make and file an affidavit/affirmation and serve a copy thereof on the plaintiffs’ solicitors setting forth the following information and further exhibiting thereto the 1^st defendant’s audited accounts (or management accounts if audited accounts have not yet been prepared) for the accounting years since the incorporation of the 1^st defendant :

(a)	the total annual turnover of the 1st defendant in each year since its incorporation;
(b)	the profits derived by the 1st defendant from its business in each year since its incorporation; and
(c)	the costs incurred by the 1st defendant in achieving the turnover and profits referred to in sub-paragraphs (a) and (b) hereof.

10.  The plaintiffs be at liberty to elect between an inquiry as to damages and an account of profits in respect of the their claims of passing off against the defendants within 21 days after the 1^st and 2^nd defendants’ full compliance with paragraph 9 hereinabove, and upon such election there be an inquiry as to what damages the plaintiffs have suffered by reason of the 1^st and 2^nd defendants’ wrongful acts of passing off or an account of the profits made by the 1^st and 2^nd defendants through such acts.

11.  The defendants do jointly and severally pay all sums found due to the plaintiffs by the defendants upon taking the enquiry or account provided for in paragraph 10 hereinabove, together with such interest thereon at such rate and for such period as may be ordered by the Master conducting the enquiry or the account.

12.  The defendants do jointly and severally pay the plaintiffs’ costs of this action including all the costs reserved, to be taxed if not agreed.