POON KA MAN JASON v. CHENG WAI TAO AND OTHERS

POON KA MAN JASON v. CHENG WAI TAO AND OTHERS

The court held that Fine Elite's application to register the Service Marks in Hong Kong, made and maintained after the Hero Elegant Agreement, constituted a breach that went to the substance of the agreement and amounted to repudiation; Ricky accepted that repudiation and discharged the contract. Fine Elite acted in bad faith and is barred from equitable relief. Smart Wave, not being bound by the Hero Elegant Agreement, succeeded in a derivative claim limited to damages for Ricky's operation of the Itacho restaurants, with damages to be assessed and specified costs orders issued.

Citation
POON KA MAN JASON v. CHENG WAI TAO AND OTHERS
Parties
Plaintiff (hca 1269/2008; Corporate Vehicle for Daisy and Jason): Fine Elite Group Limited; Defendant (hca 1269/2008) and 1st Defendant (hca 304/2011): Cheng Wai Tao; Plaintiff (hca 304/2011) (suing on Behalf of Himself and Other Smart Wave Shareholders): Poon Ka Man Jason; 2nd Defendant (hca 304/2011): Smart Wave Limited; 3rd Defendant: Joyful Gain Limited; 4th Defendant: Perfect Plan Limited; 5th Defendant: Regal Well Limited; 6th Defendant: Well Keen International Limited; 7th Defendant: Wise Master Development Limited; 8th Defendant: Charm Gold Limited; 9th Defendant: Pacific Giant Limited; 10th Defendant: Faithful Gain Limited; 11th Defendant: Ocean Profit Enterprises Limited; 12th Defendant: Bonway Limited; 13th Defendant: Star Wave Trading Limited; 14th Defendant: Sander Limited; 15th Defendant: Wise Faith Investments Limited; 16th Defendant: Gold Wisdom Trading Limited; 17th Defendant: Wise Hero International Limited; 18th Defendant: Profit Star Enterprises Limited; 19th Defendant: Lamway Limited; 20th Defendant: Ocean Pioneer Development Limited; 21st Defendant: Richtop Limited; 22nd Defendant: Forever Winner Limited; 23rd Defendant: Way Time Limited; 24th Defendant: Silver Wave Investments Limited; 25th Defendant: Well Force International Limited; 26th Defendant: Win Noble Limited; 27th Defendant: Dragon Perfect Limited; 28th Defendant: Wise Progress Holdings Limited; 29th Defendant: Win Elite International Limited; 30th Defendant: Wise Genius Investments Limited; 31st Defendant: Wise Team Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 May 2013
Case Number
HCA304/2011
Procedural Posture
Shareholders Dispute; Derivative Action; Trademark Opposition / Judgment (court of First Instance)
Outcome
HCA 1269/2008 (Fine Elite v Cheng Wai Tao) dismissed; HCA 304/2011 (derivative claim on behalf of Smart Wave) allowed in part for damages to be assessed against Ricky in respect of Itacho restaurants.
Legal Topics
Specific Performance, Repudiation and Acceptance, Implied Terms, Bad Faith in Trademark Registration, Derivative Action, Damages and Costs
Source Language
EN
Contract Law Company Law Equity and Fiduciary Duties Intellectual Property (trademark) Civil Procedure Specific Performance Repudiation and Acceptance Implied Terms +3 more

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Parties

Fine Elite Group Limited

Plaintiff (hca 1269/2008; Corporate Vehicle for Daisy and Jason)

Cheng Wai Tao

Defendant (hca 1269/2008) and 1st Defendant (hca 304/2011)

Poon Ka Man Jason

Plaintiff (hca 304/2011) (suing on Behalf of Himself and Other Smart Wave Shareholders)

Smart Wave Limited

2nd Defendant (hca 304/2011)

Joyful Gain Limited

3rd Defendant

Perfect Plan Limited

4th Defendant

Regal Well Limited

5th Defendant

Well Keen International Limited

6th Defendant

Wise Master Development Limited

7th Defendant

Charm Gold Limited

8th Defendant

Pacific Giant Limited

9th Defendant

Faithful Gain Limited

10th Defendant

Ocean Profit Enterprises Limited

11th Defendant

Bonway Limited

12th Defendant

Star Wave Trading Limited

13th Defendant

Sander Limited

14th Defendant

Wise Faith Investments Limited

15th Defendant

Gold Wisdom Trading Limited

16th Defendant

Wise Hero International Limited

17th Defendant

Profit Star Enterprises Limited

18th Defendant

Lamway Limited

19th Defendant

Ocean Pioneer Development Limited

20th Defendant

Richtop Limited

21st Defendant

Forever Winner Limited

22nd Defendant

Way Time Limited

23rd Defendant

Silver Wave Investments Limited

24th Defendant

Well Force International Limited

25th Defendant

Win Noble Limited

26th Defendant

Dragon Perfect Limited

27th Defendant

Wise Progress Holdings Limited

28th Defendant

Win Elite International Limited

29th Defendant

Wise Genius Investments Limited

30th Defendant

Wise Team Limited

31st Defendant

Procedural Posture

Shareholders Dispute; Derivative Action; Trademark Opposition / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether Fine Elite repudiated the Hero Elegant Agreement by applying to register the Service Marks in its name
  2. 2 Whether Ricky accepted Fine Elite's repudiatory breach thereby discharging the contract
  3. 3 Whether Fine Elite is entitled to specific performance or damages

Ratio Decidendi

The court held that Fine Elite's application to register the Service Marks in Hong Kong, made and maintained after the Hero Elegant Agreement, constituted a breach that went to the substance of the agreement and amounted to repudiation; Ricky accepted that repudiation and discharged the contract. Fine Elite acted in bad faith and is barred from equitable relief. Smart Wave, not being bound by the Hero Elegant Agreement, succeeded in a derivative claim limited to damages for Ricky's operation of the Itacho restaurants, with damages to be assessed and specified costs orders issued.

Court Disposition

HCA 1269/2008 (Fine Elite v Cheng Wai Tao) dismissed; HCA 304/2011 (derivative claim on behalf of Smart Wave) allowed in part for damages to be assessed against Ricky in respect of Itacho restaurants.

Orders

  • Dismissal of Fine Elite's claims in HCA 1269/2008 with costs to Ricky (including certificate for two counsel)
  • Allow Smart Wave's claim in HCA 304/2011 for damages against Ricky to be assessed