STUDIO FITNESS GLOBAL LTD AND OTHERS v. M&M SPORTS AND ENTERTAINMENT LTD AND OTHERS

STUDIO FITNESS GLOBAL LTD AND OTHERS v. M&M SPORTS AND ENTERTAINMENT LTD AND OTHERS

Although plaintiffs demonstrated a prospect of success on the restraint clauses (satisfying the 'serious question' limb), the balance of convenience favored the defendants because granting injunctions would effectively dispose of the action given the imminent expiry of the clauses, the 2nd defendant was not using the Studio Fitness brand or marks and any alleged misuse (eg trade secrets) appeared compensable by damages, plaintiffs' undertaking in damages lacked evidence of means, and an injunction would cause disproportionate and possibly terminal harm to the 2nd defendant's business; accordingly the interlocutory injunction was refused and the summons dismissed (except as already dealt...

Citation
[2019] HKDC 515
Parties
1st Plaintiff: STUDIO FITNESS GLOBAL LIMITED; 2nd Plaintiff: STUDIO FITNESS LIMITED; 1st Defendant: M&M SPORTS AND ENTERTAINMENT LIMITED; 2nd Defendant: ELITE SPORTS LIMITED; 3rd Defendant: MICHAEL MELLY; 4th Defendant: MICHAEL MATTHIEU THOUVENOT
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
15 April 2019
Case Number
DCCJ5853/2018
Procedural Posture
Interlocutory Injunction Application in Civil Action / Interlocutory Application/decision
Outcome
Summons dismissed (except paragraphs 1 and 2 thereof)
Legal Topics
Post Termination Restraint, Balance of Convenience, Serious Question to Be Tried, Phoenix Company, Undertaking as to Damages
Source Language
EN
Contract Injunctions Franchise Law Restrictive Covenants Post Termination Restraint Balance of Convenience Serious Question to Be Tried Phoenix Company +1 more

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Parties

STUDIO FITNESS GLOBAL LIMITED

1st Plaintiff

STUDIO FITNESS LIMITED

2nd Plaintiff

M&M SPORTS AND ENTERTAINMENT LIMITED

1st Defendant

ELITE SPORTS LIMITED

2nd Defendant

MICHAEL MELLY

3rd Defendant

MICHAEL MATTHIEU THOUVENOT

4th Defendant

Procedural Posture

Interlocutory Injunction Application in Civil Action / Interlocutory Application/decision

Legal Issues

  1. 1 Whether there is a serious question to be tried on enforceability of post-termination restraint clauses
  2. 2 Whether balance of convenience favors granting an interlocutory injunction
  3. 3 Whether the transfer to 2nd defendant was a sham/phoenix scheme

Ratio Decidendi

Although plaintiffs demonstrated a prospect of success on the restraint clauses (satisfying the 'serious question' limb), the balance of convenience favored the defendants because granting injunctions would effectively dispose of the action given the imminent expiry of the clauses, the 2nd defendant was not using the Studio Fitness brand or marks and any alleged misuse (eg trade secrets) appeared compensable by damages, plaintiffs' undertaking in damages lacked evidence of means, and an injunction would cause disproportionate and possibly terminal harm to the 2nd defendant's business; accordingly the interlocutory injunction was refused and the summons dismissed (except as already dealt...

Court Disposition

Summons dismissed (except paragraphs 1 and 2 thereof)

Orders

  • Summons dated 7 January 2019 (except paragraphs 1 and 2 thereof) dismissed.
  • The costs of and occasioned by the Summons dated 7 January 2019 (except paragraphs 1 and 2 thereof) to the 2nd defendant to be taxed if not agreed with certificate for Counsel.