Chiarapurk Jack and Others v Haw Par Brothers International Ltd and another and another appeal

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 02 August 1993
• Neutral Citation: [1993] SGCA 55
• Citation: [1993] SGCA 55
• Defendant Counsel: Michael Burton QC and Koh Juay Kherng (Lee & Lee)
• Published date: 19 September 2003
• Plaintiff Counsel: Michael Fysh QC and Tan Tee Jim (Allen & Gledhill)
• Date: 02 August 1993
• Docket Number: Civil Appeals Nos 9 and 57
• Court: Court of Appeal (Singapore)
• Subject Matter: Civil Procedure,Particulars,Defendants' right to know the information they are being attacked for using,Interlocutory injunction,Parties of good repute,Passing off,Nature of information an essential element of the cause of action and need for certainty,Similar get-up,Need to specify the activity restrained,Damages,Interlocutory applications,Damages adequate remedy in the circumstances,Restraining misuse of allegedly confidential information,Pleadings,Costs,Tort,Costs usually ordered to be in the cause,Particulars must be given to support allegations,Products of comparable quality,Form of injunction to restrain passing off,Injunctions,Loss quantifiable,Particulars of information must be given by party seeking injunction,Allegations of breach of confidence in statement of claim

Cur Adv Vult

We have before us two appeals which arise out of interlocutory matters in an action by the respondents against the appellants. Civil Appeal No 57 of 1991 involves an order continuing interlocutory injunctions while Civil Appeal No 9 of 1991 concerns an application by the appellants for further and better particulars of a cause of action in the statement of claim in the main action.

The joint venture

The dispute between the parties arises out of a joint venture agreement signed on 22 October 1971 between the first respondent Haw Par Brothers International Ltd (`Haw Par`) and Chia Holdings (HK) Ltd, a company incorporated in Hong Kong. The joint venture agreement was subsequently varied by a document entitled `heads of agreement` and dated 29 November 1976. The joint venture agreement and the `heads of agreement` will hereinafter be referred to collectively as `the JVA`. The duration of the JVA was to be 20 years.

The purpose of the JVA was stated to be the improvement of the manufacture, marketing, distribution and sale of products made under Haw Par`s worldwide Tiger Brand trade mark by tapping the expertise of the first appellant Jack Chiarapurk (`Jack Chia`), who was acknowledged as an expert in pharmaceuticals and their sale and distribution, and the resources of the companies under his control. The JVA`s scope was limited territorially to Malaysia, Singapore, Brunei, Hong Kong, Macau, Thailand, Taiwan, Cambodia, Laos, Vietnam, Philippines, Indonesia, Burma, Japan, Korea, the Pacific Islands and the Middle East (`the JV territories`). The JVA provided for the incorporation of Haw Par Eng Aun Tong Pte Ltd (`HPE`) in Singapore and Haw Par Tiger Balm International Pte Ltd (`HPT`) in Hong Kong (`the JV companies`) and the grant of licences to the two companies by Haw Par for the manufacture of Tiger Brand products as the mode by which the purpose of the joint venture was to be attained. The shareholding in each of the JV companies was divided equally between Haw Par and Chia Holdings (HK) Ltd. Under the JVA, the promotion of the Tiger Brand products would be carried out by the JV companies or companies selected by them and the profits of the JV companies, after deductions for dividends and royalties payable to Haw Par, would be shared between the joint venture partners. Further, Jack Chia would serve as chief executive officer of the JV companies and head Haw Par`s pharmaceutical division. It is important to note that the JVA was not exclusive in character: Haw Par continued to manufacture and sell Tiger Brand products in other parts of the world not covered by the JVA and Jack Chia and his group of companies continued the manufacture of various other pharmaceutical products. By a series of supplemental agreements in 1976, 1985 and 1986, Haw Par transferred its interest in HPE to the second respondent and Chia Holdings (HK) Ltd transferred its interest in HPE and HPT to the second and the third appellants respectively. However, the transferees all agreed to be bound by the JVA.

Events of 1988-1990

The joint venture was successful between 1972 and 1988, and talks began between the two sides in October 1988 with a view to renewing the JVA before it expired at the end of 1991. It became evident however that Haw Par wished to have the majority control of the JV companies and Jack Chia was not willing to cede the same. By letters dated 7 November 1989, the second respondent gave notice to Jack Chia and to the second and third appellants that the JVA would not be renewed.

In February 1990, Haw Par heard rumours from the market that Jack Chia and his companies were manufacturing a new balm product. This was confirmed by Jack Chia`s representative at a meeting in early March with Haw Par`s new managing director. On 5 March 1990, one of the appellants issued a price list to distributors for a new balm called the Golden Lion Shield balm (`the GLS balm`) which lies at the heart of the dispute between the parties. The new balm was publicly advertised on 1 May 1990. By a letter dated 15 May 1990, written by the respondents` solicitors to Jack Chia and copied to the second and third appellants, the respondents complained that the manufacture and distribution of the GLS balm infringed the JVA and was an attempt to pass off the GLS balm as a balm manufactured under the Tiger Brand trademark as `Tiger Balm`. The appellants replied on 29 May admitting the manufacture and distribution of the GLS balm but denying any infringement or passing off. By a letter dated 13 June, the respondents refuted the appellants` assertions.

Civil Appeal No 57 of 1991

On 19 June 1990, the respondents began these proceedings, claiming damages and injunctions based on breach of contract, breach of fiduciary duty, breach of confidence and passing off, and by an ex parte application on 22 June 1990, obtained the injunctions which are under appeal in Civil Appeal No 57 of 1991. The injunctions were subsequently varied to exclude specified products manufactured by the appellants and their associated companies. The injunctions against Jack Chia provided that:

(1) [Jack Chia] by himself, his servants or agents or otherwise be restrained, and an injunction is hereby granted restraining him until further order from doing or from causing, procuring or permitting the 2nd, 3rd, 4th, 5th or 6th [appellants] to do any of the following acts:

(i) manufacturing, packaging, exporting, distributing, offering for sale, selling, supplying, disposing, promoting by advertisement or otherwise or dealing in any way in the Golden Lion Shield Balm Products;

(ii) passing off or attempting to pass off or causing, enabling or assisting others to pass off Golden Lion Shield Balm Products as or as connected with the Tiger Balm Products;

(iii) acting in breach of fiduciary duty or the fiduciary or contractual obligations pursuant to [the JVA] competing with, or causing or allowing or participating in the manufacture, sale or distribution of products competing with those manufactured, sold or distributed by the [JV companies] and in particular the manufacture, sale or distribution of the Golden Lion Shield Balm Products; and

(iv) making unlawful use of confidential or other information acquired by or entrusted to [Jack Chia] as the Managing Director and Chief Executive of the [JV companies] relating to the business and production of Tiger Balm Products.

The injunctions against the other appellants were in similar terms.

We pause for a moment to state our disapproval of the step taken by the respondents to obtain the injunctions at an ex parte hearing without any notification to the appellants. The solicitors for both sides were in correspondence at the time and there was clearly disagreement on the issue of whether the manufacture and distribution of the GLS balm was in any way wrongful. In Castle Fitness Consultancy Pte Ltd v Manz, Coomaraswamy J expressed the view that the practice in Singapore should follow that in England as set out in Pickwick International Inc (GB) Ltd v Multiple Sound Distributors Ltd , and in a Practice Direction of the Queen`s Bench Division dated 30 March 1983. The learned judge said at p 143:

In my humble view, the opponent should be given notice of the ex parte application and invited to attend. Alternatively, in appropriate and justifiable instances, adequate reason for not giving such notice should be given to the court on affidavit. In some cases, eg Marevas, an applicant`s purpose can be defeated by his opponent having advance knowledge of an ex parte application for an injunction. Possible defeat of an applicant`s purpose if the adversary had knowledge of the intended application will be an appropriate and justifiable instance where notice need not be given.

We are in agreement with the view of the learned judge. The present case was not one in which there was any reason for not informing the appellants of the application for the injunctions, nor did the respondents give any reason for not doing so.

The appellants, by summonses in chambers dated 28 June 1990 and 31 October 1990, applied to discharge the injunctions. The application was dismissed by Chao Hick Tin J on 1 March 1991 with the costs of the application in the cause. The appellants now appeal against the dismissal of the application and the respondents by their notice seek to have the order for costs varied to one that gives them the costs of the hearing below or in any event.

Civil Appeal No 9 of 1991

Civil Appeal No 9 of 1991 arises out of the claim for breach of confidence in the main action which is pleaded as follows:

(12) Further or in the further alternative, in and about the development, manufacture, distribution and marketing of the said Golden Lion Shield Balm products the [appellants] have made use and/or caused, procured or permitted each other to make use of confidential information the property of the [respondents], alternatively have made use of information entrusted in confidence to the [appellants] pursuant to the JVA and/or for the purpose of carrying out their obligations thereunder and/or their obligations towards the [JV companies].

Particulars of confidential information

(1) The manufacturing process of the Tiger Balm products;

(2) The [JV companies`] pricing, discount and bonus goods structure.

By summons-in-chambers entered No 4603 of 1990, the following particulars of that pleading were sought:

Under paragraph 12(1):

Of : The manufacturing process of the Tiger Balm products;

Request:

(1) (a) define `Tiger Balm products`;

(b) identify with necessary particularity and by stages the manufacturing process of each Tiger Balm product in issue;

(c) identify the author or authors of each said process and when each of the same was devised;

(d) (i) identify how the process was imparted to the [appellants] or obtained from the [respondents] by the [appellants];...