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Fresha Export Ltd v Fung Shing Development Co Ltd [2007] TOLawRp 36; [2007] Tonga LR 206 (17 September 2007)

[2007] Tonga LR 206

IN THE SUPREME COURT OF TONGA

Fresha Export Ltd

v

Fung Shing Development Co Ltd

Supreme Court, Nuku'alofa
Andrew J
CV 685/2007

14 September 2007; 17 September 2007

Civil procedure – application for contempt of court for non-compliance with court orders – not at non-compliance stage

The plaintiff filed an application to have the defendants, the Fung Shing Development Co. Ltd and a director, Raymond Yu, committed for contempt of court for non-compliance with certain court orders. The plaintiff had earlier issued proceedings against the defendant for "passing off" alleging that the defendant was importing and selling items of its Ocean Queen Mackerel A1 brand which were copies of the plaintiff's products. On the basis that there was prima facie evidence of passing off of the plaintiff's goods and in order to protect the plaintiff's position, the court made orders requiring the defendants to desist from selling or dealing with the Ocean Queen product and requiring all stocks and accounts for sales and profits to be delivered up pending trial. The plaintiff contended that there had been no compliance with the court orders and sought the orders for contempt of court. The defendants sought to vary the court orders on the basis that many of their records were destroyed in the riots of 16/11. They had also filed a statement of defence to the claim.

Held:

1. The power to order committal for civil contempt was a power to be exercised with great care. The court would only order such committal if satisfied that the terms of the order or undertaking were clear and unambiguous; that the defendant had proper notice of the terms and that a breach of the order or undertaking had been proved beyond reasonable doubt - see Gorce v Miller [2003] Tonga LR 316.

2. The court accepted that the defendants had moved to vary the orders and that there may be some practical difficulty in complying with orders in relation to prior 16/11 documentation. It did not think that in all the circumstances non-compliance had yet reached a stage which would justify a level of contempt deserving of an order for committal for civil contempt. The application was declined and costs were ordered to be costs in the cause.

Case considered:

Gorce v Miller [2003] Tonga LR 316

Counsel for plaintiff: Ms Bing
Counsel for defendant: Mr Kaufusi

Ruling

This is an application to have the defendants in this matter committed for contempt of Court for non-compliance with orders of this Court. That is, it is an application that Fung Shing Development Co. Ltd and Raymond Yu as Director of Fung Shing Development Co Ltd, be held in contempt of Court.

Briefly stated the Plaintiffs commenced proceedings against Fung Shing Development Company for what is commonly known as "passing off". That is, it is alleged that the defendant was importing and selling items of its Ocean Queen Mackerel A1 brand which were copies of the plaintiffs' products. The Plaintiffs made an ex parte application seeking orders that:

"The defendants and its servants, agents, associates, companies and related persons shall forthwith:

(i) Cease and desist from selling or dealing with passed-off canned mackerel purporting to be Ocean Queen A1 Mackerel in Tomato Sauce and Ocean Queen A1 Mackerel in Natural Oil (Ocean Queen A1 Mackerel brands"; and

(ii) Deliver up all stock of chinese copies of Ocean Queen A1 Mackeral brands to the custody of His Majesty's Customs Service pending resolution of these proceedings; and

(iii) Cease and desist from importing more chinese copies of Ocean Queen A1 Mackerel brands to Tonga; and

(iv) Deliver up Accounts and sales and profits in favour of the Plaintiffs between November 2005 until the present in respect of sales of the passed-off chinese copies of Ocean Queen A1 Mackerel brands; and

(v) Deliver up relevant business documents, including but not limited to, the Defendant's inventories, invoices, import entries (due for the Revenue Services Department) bank deposit slips, current stock records, sales invoices records, accounts and customs declarations are respect of importation and sales of the passed-off Ocean Queen A1 Mackerel brands; and

(vi) The plaintiff must within 7 days of the date of this order serve copies of the application for injunction the affidavit a support and the statement of claim on the defendant.

(vii) The defendant may apply to the Court to discharge or vary these orders, upon provision of 3 working days notice to the Plaintiff and service of such application and evidence upon the plaintiff."

On the basis that there was prima facie evidence of the passing-off of the Plaintiffs goods and in order to protect the Plaintiffs position, the above orders were granted.

The plaintiff says that they have suffered loss of sales and cancellation of orders and loss of reputation and good will which has caused them substituted damage.

The plaintiff says there has been no compliance with these orders and seeks the orders for contempt of Court.

The defendants did however in compliance with order (vii), seek to vary the orders on the basis that their financial records or many of them were destroyed in the riots of what is known as 16/11. That is especially so for the records from 2005 until the fire. They also sought further time as they needed to recruit further accounting staff. That order was ultimately refused; they had sought a further 30 days and that period had almost expired by the time of the application to vary.

Since these events the defendants have filed a defence to the claim. They admit that the Plaintiff holds the exclusive right to sell the Ocean Queen Mackerel A1 brands but denies, inter alia, the allegation of passing off.

The power to order committal for civil contempt is a power to be exercised with great care. The Court will only push for disobedience to an order for the Court ... if satisfied that the terms of the order or undertaking are clear and unambiguous; that the defendant has proper notice of the terms; and that a breach of the order or undertaking has been proved beyond reasonable doubt. Gorce v Miller [2003] Tonga LR 316.

The defendants did move to vary the orders. There may be some practical difficulty in complying with all orders in relation to documentation from 2005 until 16/11. Some documentation has been provided in relation to importation of goods. The allegations are denied. The defendants may not have any control over stock which had already reached various retailers. The Plaintiffs remedy will be in damages. I think the orders have gone towards protecting their position. I do not think that in all the circumstance that any non-compliance has yet reached a stage which would justify a level of contempt deserving of an order for committal for civil contempt. The plaintiff also sought orders that the defendants comply with the orders by the 17 September, that is several days after the application for contempt. I think the current application for contempt is premature in all of the circumstances.

Costs of this application to be costs in the cause.