PALM COMPUTING, INC. v. ECHOLINK DESIGN LTD. AND ANOTHER

HCA 11787/1999
HCA 13420/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS 11787 & 13420 OF 1999

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____________________________________

REASONS FOR DECISION

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Nature of the Actions

1. These 2 actions were consolidated by an order dated 10 September 1999. The Plaintiff alleges herein that D1 and D2 infringed its copyright work. According to the Amended Statement of Claim, the Plaintiff's business is and was the design and marketing of the world famous "Palm Computing" handheld computer devices. The copyright work in question is set out in para. 3 and 4 of the Amended Statement of Claim. Para. 3 avers inter alia that,

"each and every version of the suite compilation of computer programs known as the Palm Operating System ("Palm OS") software and in each individual program in the Palm OS".

Particulars of the software programs are given under the said para. 3. Para. 4 of the Amended Statement of Claim pleads copyright in:-

"each and every version of the compilation of computer programs known as the Palm Operating System Software Developer's Kit ("Palm OS SDK") software and in each and every program in the Palm OS SDK".

Similarly, particulars of the software programs are given under the said para. 4.

2. The Defendants' software programs are called the "NEXUS/da Vinci" operating system software and "da Vinci OS Software Developer's Kit ("da Vinci SDK")". Para. 5 of the Amended Statement of Claim alleges that they infringed the Plaintiff's copyright work by copying individual programs in the Plaintiff's Palm OS and/or Palm OS SDK in their NEXUS/da Vinci operating system software and in the da Vinci OS SDK. Particulars of the said individual programs are given under para. 5. Alleged infringement acts also consist of the sale and supply by D1 to D2 of the said NEXUS/da Vinci software as well as in the manufacture and sale of computer hardware by D2 containing this software (and so on) but it is unnecessary for the purpose of this Reasons for Decision to set out each alleged infringement act.

Nature of the Applications

3. It is common ground that in order to determine whether there has been copying of the Plaintiff's copyright work by the Defendants, it is necessary for the source codes of the respective software programs to be compared by the parties' experts. It is also common ground that because source codes of software programs are in the nature of trade secrets, appropriate safeguards relating to confidentiality should be in place when the source codes of one party are disclosed to the other party.

4. The hearing on 28 and 29 September 2000 involved several summonses:-

(1) D2's summons dated 7 September 1999 for specific discovery and the supply of source codes;

(2) D2's summons dated 30 November 1999 for the supply of source codes under R.H.C. Ord 24 rr 10 and 11;

(3) D2's summons dated 29 February 2000 for further directions regarding the disclosure of source codes relating to the above-said 2 summonses;

(4) the Plaintiff's summons dated 8 March 2000 regarding the conditions for the inspection of the respective source codes and the release of articles and documents seized from D1 in the execution of the Anton Piller Order granted on 21 July 1999.

It is unclear whether para. 2 of the Plaintiff's summons (at (4) above) was also before me. I mention this because of correspondence sent to court regarding disputes as to whether the Plaintiff's source codes ought to be inspected by D1 as well. This will be dealt with below under the heading "Subsequent Events".

5. At the beginning of the hearing on 28 September 2000, the parties informed me that the only dispute was whether the Plaintiff is liable to disclose the whole of its source codes. The Plaintiff's expert has stated in his recent affirmation that some groups of the program files of the Plaintiff's software have not been copied. The source codes of these groups of program files are irrelevant to this action and need not be disclosed to the defence.

The Order Made

6. I concluded after hearing the parties that the whole of the Plaintiff's source codes ought to be disclosed, indicating that reasons would be given later. They are as follows.

7. As regards the precise form of the order (relating to matters like the time for production/inspection and the terms and conditions relating to confidentiality), the parties indicated this could be agreed among them.

Relevant Legal Principles

8. It is common ground that the applications are concerned with the production and/or inspection of documents, and not merely with their discovery. The relevant legal principles are undisputed and can be summarised as follows.

"... it is submitted ... that the effect of [Ord 24] r 13(1) is that the burden of satisfying the court that production and inspection is necessary is squarely upon the party applying, whereas under r 8 it is for the party who is objecting to any such order to satisfy the court that discovery by list or affidavit is not necessary. It appears to me that that approach and submission are correct, and it does not harm in most cases for the party against whom discovery is sought merely to list his documents. That discloses that he has them, or has power over them. But he can object to produce them on the grounds of privilege or, indeed, on any other ground ... When, however, one gets to the stage of production and the document is to be produced to the court or the other side, the position is different, and it should be (and the rules appear to me to state with complete clarity) that it is for the party seeking production to satisfy the court that such production is necessary for the purposes specified in r 13(1), namely for disposing fairly of the cause or matter or for saving costs" (emphasis supplied):

Dolling-Baker v. Merrett [1991] 2 All ER 890, 895f to j. The above principle was also stated in Ventouris v. Mountain [1991] 1 WLR 607.

9. The phrase "disposing fairly of the cause or matter" was further discussed in Wallace Smith Trust Co. v. Deloitte [1997] 1 WLR 257, 266D to F, where the English Court of Appeal quoted from Taylor v. Anderson [1995] 1 WLR 447, 462:-

"... Those words direct attention to the question whether inspection is necessary for the fair determination of the matter, whether by trial or otherwise. The purpose of the rule is to ensure that one party does not enjoy an unfair advantage or suffer from an unfair disadvantage in the litigation as the result of a document not being produced for inspection. It is ... of no importance that a party is curious about the contents of a document or would like to know the contents of it if he suffers no litigious disadvantage by not seeing it and would gain no litigious advantage by seeing it. That, in my judgment, is the test" (emphasis supplied).

10. The court is entitled to take into account whether the documents are confidential and, if so, whether the necessary information could be obtained by some other means: Science Research Council v. Nassé [1980] AC 1028, 1065-66 and the Wallace Smith case at p. 267C to F.

11. If a prima facie case is made out for disclosure, then the court will first inspect the documents: (1) to ensure that inspection is indeed necessary; (2) assuming it is, to see if the loss of confidentiality involved can be mitigated by: (a) blanking out parts of the documents, and/or (b) limiting disclosure to legal advisers only: the Wallace Smith case at p. 272E to F. There is no balancing exercise to be performed under Ord 24 r 13: see the Wallace Smith case at p. 273J.

12. The Plaintiff, however, disputes the validity of the argument that when the materiality of the documents is in issue, it is the case of the applying party that must be assumed to be true and not that of the respondent party. In fact, the Plaintiff contends that in such a case, it is incumbent upon the court to resolve the dispute.

13. With respect, I do not agree. First, it is usual that the evidence before the court at the time of the application is only contained in affidavit(s). In order to determine the issue of materiality when that is disputed in affidavit(s) would mean resolving a factual dispute and making a finding of fact. Normally this will not be viable unless the affidavit evidence is inherently implausible or contradicted by undisputed or indisputable evidence in a material way. Secondly, the Plaintiff's argument does not stand together with the observation in Format Communications Mfg. Ltd v. ITT Ltd [1983] FSR 473, 477:

"... I think Mr Prescott ... is right in his submission that, for the purpose of testing the materiality of discovery to the particular issue now referred to by the defendants, it is the case of the party seeking the discovery ... that must be assumed to be true and not that of the party against whom discovery is sought ... In this context he referred us to Bray on Discovery at p. 18".

The rationale behind this was set out in Bray on Discovery (1885), pp. 18-19:

"... otherwise a party might shut out his opponent from discovery essential to support his case by simply denying that case ... A party cannot avoid the discovery by saying that the matter of which discovery is sought does not relate to the question, when the very question in the action is whether or not it does so relate. Nor will the court for the purpose of determining the relevancy of the discovery to a particular case try that issue for the purpose of determining the relevancy of the discovery, for it is in order that that issue may be rightly determined that the discovery is required ... ".

I consider the same rationale is applicable to the production and inspection of documents.

Evidence Relevant to the Applications

14. Having dealt with the relevant legal principles, I turn to examine the evidence filed for the purpose of the hearing.

15. The Plaintiff's expert, Mr Belgard, said in his 4th affidavit:-

"I have never asserted ... that the 1st Defendant ... copied the whole of the Palm OS. In so far as the Palm device contains functionality that is different from, or is not included in, the da Vinci device, it was and is my belief that the Palm OS source code relating to that functionality was not copied by the 1st Defendant and thus did not need to be analyzed. In this situation, the portions of the Palm OS source code that relate to those functions are irrelevant to this action ... " (para. 4 thereof);

"I was previously asked to attempt to identify the portions of the Palm OS source code that might be relevant to this action by conducting an analysis of the lists of names of files in the NEXUS OS that were provided to me by the Plaintiff's solicitors after execution of the Order of Deputy Judge To of 21 July 1999 ... " (para. 6 thereof);

"Despite my inability to identify with certainty relevant Palm OS files from the NEXUS OS lists of file names, I am able to identify a number of Palm OS files that clearly and undoubtedly have no correspondence in the NEXUS OS ... [The files were then listed]" (para. 7 thereof).

16. Insofar as it is relevant to the dispute before me, the evidence filed by D1's expert is as follows. In the [2nd] affidavit of Bernard Galler dated 27 September 2000, he said:-

"... I am not prepared to accept Mr Belgard's advice as to the importance of the code that I am not allowed to inspect and compare. All of the source code in the computer (both operating system and application code) is relevant when an assessment is being made of the importance of any part of the code ... " (para. 5 thereof);

"It is obviously not enough to count lines of code, as the Plaintiff suggests, in assessing the importance of any code which was copied" (para. 6 thereof).

17. The evidence filed by D2's experts is in essence as follows. In the 3rd affirmation of Leung Ho Fung, Dr Fung said:-

"... I cannot say whether the Palm OS implementation files were copied and used/adopted in the da Vinci OS at all because I do not have access to either the Palm OS or da Vinci implementation files" (para. 5 thereof);

"I note that the hardware architecture of the Palm Pilot and da Vinci PDA are different. I believe in all cases this inevitably leads to different OSs being used" (para. 13 thereof);

"... in terms of number of lines/files, only a few percents of the Palm OK [sic] [OS] SDK are copied. This is far from Substantial" (para. 15(a) thereof);

"I am handicapped in my examination of the evidence put forward by the Plaintiff's expert and the 1st Defendant's experts because I do not have any assistance or information on the source code of the Palm OS and NEXUS OS" (para. 18 thereof);

"In order to assess whether the alleged copying is substantial, the whole source code ... must be analyzed. To assess the significance of the copying, it is inconclusive to examine only parts of the source codes because all the files are interrelated" (para. 19(I) thereof).

In an affidavit of Prof. Anderson, he said:-

"... I will be unable to provide such an expert opinion or advice unless I am provided complete access to the source code for all versions of the Palm OS for which the Plaintiff has claimed copyright infringement ... In addition, I will require the source code for all versions of the NEXUS OS ... " (para. 2 thereof);

"A large amount of context is required for a proper evaluation of code similarity where there are no verbatim similarities. The context needed cannot be easily characterized, but would include for example, related code that is dissimilar. Allowing the Plaintiff to disclose only selected portions of the code would prevent such an exercise" (para. 4 thereof).

18. The Plaintiff argues that the evidence of its expert should be preferred to that of the defence experts. This is because (so the Plaintiff argues) the evidence of the Plaintiff's expert is specific whereas that of the defence experts is only general. Further, the relevant part of the evidence of the Plaintiff's expert was given in response to that given by the defence experts. The defence experts have not disputed the correctness of the evidence of the Plaintiff's expert by way of reply.

19. There was no evidence in reply from D2's experts because D2's counsel decided not to seek any adjournment to file such evidence. Having so decided, D2 had to take the risk that the court may decide the application against it. Such absence of evidence was the result of a tactical move and may not be because D2's experts were unable to reply. Further, in relation to D1's expert, his affirmation was clearly made by way of reply to the evidence given by the Plaintiff's expert: see para. 2 of the [2nd] affidavit of Mr Galler dated 27 September 2000.

20. Before dealing with the details of the issue, I should observe that, as D1's counsel rightly pointed out, the source codes in question are the subject matter of the copyright work based on which this action is brought.

21. Bearing the above matters in mind, I conclude that the evidence of the defence experts is sufficient to establish the materiality of the whole of the Plaintiff's source codes to the issues for the fair disposal of this action and/or for saving costs.

22. The Plaintiff further submits that even if I should decide to order production/inspection of the whole of the Plaintiff's source codes, it is proper in the exercise of my discretion to defer making such an order regarding the disputed part of the Plaintiff's source codes to a later stage. This is because the defence experts, after examining the Plaintiff's undisputed source codes, may agree with the conclusion of the Plaintiff's expert that it is unnecessary to further examine the disputed source codes. An order should only be made as regards the disputed source codes if and when the defence experts conclude that further production/inspection is necessary.

23. I do not agree. The evidence filed by the defence experts has in effect stated inter alia that the source codes are interrelated. They also claimed that they cannot properly advise whether the Plaintiff's allegation of substantial copying is valid. As stated above, for the purpose of these applications, these claims are to be regarded as correct.

Subsequent Events

24. Subsequent to the hearing on 29 September 2000, parts of the parties' correspondence were sent/copied to the court. They show that there was a dispute between the Plaintiff and D1 as to whether the decision made at the end of the hearing on 29 September 2000 also covers D1's inspection of the Plaintiff's source codes; see:-

(1) the letter dated 18 October 2000 from D1's solicitors to the court;

(2) the letter of 18 October 2000 from the court to D1's solicitors (copied to the other parties);

(3) the letter dated 18 October 2000 from the Plaintiff's solicitors to D1's solicitors (copied to the court and D2);

(4) the letter dated 19 October 2000 from D1's solicitors to the Plaintiff's solicitors (copied to the court and D2); and finally

(5) the letter dated 23 October 2000 from the Plaintiff's solicitors to D1's solicitors (copied to the court and D2).

25. It appears that this dispute has finally been resolved. If it had not, I must say I fail to understand why it should arise at all when the parties were represented by experienced and reputable practitioners. Although no express order(s) were made (in view of counsels' indication that the precise order(s) could be agreed), the matter should have been beyond doubt because:-

(a) D1's counsel has put forth submissions in support of the application for the production/inspection of the Plaintiff's source codes;

(b) D1's counsel has asked for, and D1 was awarded, the costs of para. 2 of the Plaintiff's summons dated 8 March 2000 (which relates to the production/inspection of the Plaintiff's source codes).

If in fact the matters are still disputed, the parties may need to restore the hearing to address me further regarding this matter.

Costs

26. I made the following costs orders on 29 September 2000:-

(a) para. 1 of the Plaintiff's summons dated 8 March 2000 be paid by D1 to the Plaintiff in any event;

(b) para. 2 of the Plaintiff's summons dated 8 March 2000 be paid by the Plaintiff to D1 in any event;

(c) costs of para. 3 of D2's summons dated 7 September 2000 (in HCA 13420 of 1999) from 7 September 2000 to 4 January 2000 be in the cause of the action;

(d) costs of para. 3 of D2's summons dated 7 September 2000 (in HCA 13420 of 1999) from 5 January 2000 to date of decision be paid by the Plaintiff to D2 in any event;

(e) costs of para. 1(a) of D2's summons dated 30 November 1999 be paid by the Plaintiff to D2 in any event;

(f) there be no order as to costs for D2's summons dated 29 February 2000.

I certified the attendance by 2 counsel to be proper and indicated reasons for the costs order will be included in the Reasons for Decision.

27. Save as regards (c) and (f) above, I consider there is no valid reason to depart from the usual rule that costs should follow the event. The defence has in essence been successful (regarding (b) and (d) to (e) above) and should be entitled to the costs thereof. Likewise, the Plaintiff has in essence been successful regarding (a) and should be entitled to those costs.

28. As regards (c) above, the Plaintiff asked for the costs to be in the cause and D2's counsel fairly accepted that the costs up to 4 January 2000 be in the cause of the action. As regards (f) above, as it turned out, there was no need to deal with the summons at the hearing. The costs involved must have been minimal. It is appropriate to make no order as to costs regarding this.

29. I certified the attendance of 2 counsel to be proper because (1) the issues raised at the hearing are important to the defence and (2) the complexity justified such attendance.

HCA 11787/1999 &
HCA 13420/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS. 11787 & 13420 OF 1999

____________

___________________________________

REASONS FOR DECISION

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1. The following are the reasons for the decision of the Plaintiff's application for an order that unless D2 files and serves an affidavit in response to the Plaintiff's affidavit within 7 days, D2 be barred from doing so at the hearing of the Plaintiff's application for an interlocutory injunction against D2. At the end of the hearing on 17 March 2000, I ordered that unless by 4 p.m. on 7 April 2000 D2 files and serves an affidavit in response, D2 be barred from doing so at the said hearing.

2. The Plaintiff commenced this action against the 2 Defendants alleging that they infringed the Plaintiff's copyright in its computer software which is a computer operating system called "Palm OS" in short. Further to that, the Plaintiff applies for an interlocutory injunction against D2 enjoining it from doing so pending the trial of this action (D1 having given an undertaking to the Court earlier in similar terms as the order sought by the Plaintiff).

3. D1 is alleged to be a software developer and was commissioned by D2 to write an operating system software which is the subject matter of the alleged infringement. D2 is alleged to have used D1's software for D2's computer products.

4. In relation to the Plaintiff's application for an interlocutory injunction order, directions have been given on 4 January 2000 inter alia for D2 to file and serve an affidavit in opposition within 42 days of the supply of the source codes of the Plaintiff's programme. There is no dispute that the source codes have since been supplied. The Plaintiff considered that D2 had delayed in filing and serving its affidavit and hence took out the present application.

5. The reason given by Mr Lam for D2 for not filing and serving an affidavit up to now can be summarised as follows. Prior to the hearing on 4 January 2000 (when directions for filing evidence were given), D2 has been supplied with some of the source codes of the Plaintiff's software. At the hearing on 4 January 2000, complaints were made by D2's counsel that those source codes were not complete/relevant. The Plaintiff's solicitors then undertook to supply the source codes within 14 days from 4 January 2000.

6. Since D2's receipt of the new source codes, D2's expert has compared them, not to the source codes of D1's software, but to the set of source codes given to D2 by the Plaintiff prior to 4 January 2000. D2's expert took the view that the 2 sets of source codes were different. D2's solicitors then commenced a line of correspondence with the Plaintiff's solicitors complaining that they had not complied with their undertaking given on 4 January 2000.

7. I have looked at the line of correspondence and consider most part of it was totally unnecessary. As I understood from Mr Lam, D2's concern was caused by the difference in the 2 sets of source codes: the source codes supplied before 4 January 2000 were for version 3.0 of the Plaintiff's software whereas those supplied since 4 January 2000 were for version 2.0 of the Plaintiff's software. D2 claims that it was confused/"embarrassed" by the different source codes supplied by the Plaintiff.

8. Mr Yan for the Plaintiff complained that this is nothing more than an excuse and D2 is only trying to delay the matter. Mr Yan said that the Plaintiff's expert, Mr Belgard, had stated clearly in para. 81 of his affidavit that Mr Belgard considered there had been an infringement of version 2.0 of the Plaintiff's software. In answer, Mr Lam argued that it was not clear to D2 that this was the way in which the Plaintiff is advancing its case in this action.

9. With respect to Mr Lam, I do not agree. In the 4th paragraph of the letter dated 21 February 2000 of the Plaintiff's solicitors, the Plaintiff's solicitors stated:-

"The source code that we sent you on 17 January 2000 was extracted from the Palm OS, version 2.0 because it is Mr Belgard's belief (as stated at paragraph 81 of his affidavit) that it was version 2.0 that was copied by [D1] when it developed its Nexus/da Vinci operating system" (exhibit "KMF-7" to the 5th affirmation of Sanny Kwong).

If the matter had not been made clear earlier, I considered that it was abundantly clear from this paragraph that the Plaintiff would be relying on an alleged infringement of version 2.0 of the Plaintiff's software. Even if D2 could reasonably say it was still confused because of the supply of the version 3.0 source codes (since 4 January 2000), it should have simply written to the Plaintiff to enquire whether the Plaintiff's case is based on an infringement of version 2.0 or version 3.0 of its software. Time and expenses could have been saved because the line of correspondence and the (useless) comparison of the source codes for version 2.0 and version 3.0 could have been avoided.

10. For the above reasons, I was far from being satisfied that D2 had any valid reason for not filing and serving an affidavit in compliance with the directions of 4 January 2000. This is therefore a case appropriate for an unless order to be made.

11. The next issue is whether D2 should be given only 7 days to comply with the directions. Mr Lam argued that 42 days should be given to D2. I noticed that it took D2's expert about 4 weeks to compare the version 2.0 and version 3.0 source codes. I consider that D2 ought to be more vigilant and therefore 21 days' time should be adequate. Mr Yan did not object to such a time period. In view of the matters set out above, I made an unless order giving D2 until 4 p.m. on 7 April 2000 to comply with the directions.

12. After hearing the parties' submissions on costs, I ordered that the costs of the Plaintiff's application be paid by D2 in any event. This is because I considered that the Plaintiff had (at least substantially) been successful in its application and there was no reason to depart from the usual rule that events should follow the event.

HCA 11787/1999 &
HCA 13420/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS. 11787 & 13420 OF 1999

____________

___________________________________

REASONS FOR DECISION

___________________________________

1. The parties appeared before me on 4 January 2000 in relation to the following applications:-

(a) D2's summons against both the Plaintiff and D1 for inter alia specific discovery of the source codes of the Plaintiff's and D1's respective computer software program;

(b) D2's request for Further and Better Particulars of the Statement of Claim;

(c) D2's "time" summons for service of its Defence;

(d) Plaintiff's application for an interlocutory injunction order against D1 and D2 (where D1 had given an undertaking in place of the injunction sought).

2. D2's summons against D1 for specific discovery was dealt with at the beginning of the hearing on 4 January 2000 by way of a consent order. At the end of that hearing, the following orders were made as regards the Plaintiff and D2:-

(a) D2's summons against the Plaintiff for inter alia specific discovery be adjourned to a date to be fixed for argument;

(b) D2's summons against the Plaintiff requesting for Further and Better Particulars of the Statement of Claim be dismissed (but without prejudice to D2's right to take out such application after service of its defence);

(c) the costs of the hearing on 4 January 2000 be paid by D2 to the Plaintiff in any event.

I indicated that reasons would be given for the making of these orders. The following are the reasons.

3. As stated earlier, the specific discovery which D2 asked for was related to the source codes of the Plaintiff's computer software program. D2 said there are 2 reasons why these documents are needed:-

(a) to defend the Plaintiff's application for an interlocutory injunction order;

(b) to defend the main action, which alleges in essence that the Defendants infringed the Plaintiff's copyright in the said software program. It was further alleged that D1 did so by supplying a software program to D2 which substantially copied the Plaintiff's program whereas D2 did so by producing computer units using D1's software programs.

4. There is no need to deal with (a) above in great detail because an agreement was reached in relation thereto in the course of the hearing. In relation to (b) above, the Plaintiff objected to an order being made on 2 grounds:-

(a) although the Statement of Claim pleaded an infringement of the Plaintiff's software program, from the evidence filed by the Plaintiff, it is clear no such allegation was made regarding at least the part of its program which was related only to operating the Plaintiff's computer hardware. For this reason, source codes relating to this part is not "necessary" for disposing of this action or for saving costs (see Ord. 24 r. 13(1));

(b) in any event, there is a need for the court to consider the evidence filed herein before proper consideration can be given to the extent of the "confidentiality" provision relating to the documents to be discovered.

5. It appeared to me that subject to the 2 matters mentioned above, the Plaintiff did not object to D2's application for specific discovery. I therefore proposed to D2's counsel whether they were prepared to accept an order granting the specific discovery sought, but subject to the 2 matters referred to above. However, D2's counsel did not accept this proposal and insisted on an order for specific discovery without any condition attached (save only as to a condition of "confidentiality" which is in scope narrower than that contended for by the Plaintiff). In these circumstances, since the hearing on 4 January 2000 was primarily for giving directions, I considered it appropriate for the matter to be adjourned to another hearing with an adequate length of hearing being allocated, to enable the matters in contest to be fully ventilated by both sides.

6. I should note that the above 2 matters contended for by the Plaintiff were different from the points made in the Plaintiff's written Skeleton Argument. In addition, in relation to D2's request for Further and Better Particulars, the Plaintiff's stance as set out in the written Skeleton Argument was also different from that put forward at the hearing.

7. In the written Skeleton Argument, the Plaintiff argued that directions for discovery of documents had been agreed between the Plaintiff and D1. Since any source code to be disclosed by the Plaintiff to D1 will also be disclosed to D2, D2's application for discovery should be adjourned pending the Plaintiff's discovery vis-a-vis D1. If D2 cannot plead to the Plaintiff's claim without the source code, the Plaintiff is prepared to agree to extend the time for filing the defence until after discovery. Since the above would amount to a stay of the main action, D2's application for Further and Better Particulars should also be postponed.

8. This stance was however overtaken by the different argument advanced by the Plaintiff in relation to the application for specific discovery (as set out above). The Plaintiff's stance at the hearing was that objections would now be raised in relation to the 2 matters set out earlier.

9. Since there was such change of stance, I specifically asked Mr Arnold for the Plaintiff to address me orally as to what was the Plaintiff's latest stance regarding D2's application for Further and Better Particulars. He relied on Ord. 18 r. 12(5) and The Supreme Court Practice 1999, para. 18/12/57.

10. In short, he argued that there is nothing exceptional in this action to justify a request for Further and Better Particulars before the service of a defence. If I agreed with this argument, the logical conclusion would be to dismiss D2's application. I then invited D2's counsel to address me on this argument and submissions were made accordingly. After hearing submissions from both sides, I agreed with the Plaintiff's submissions and dismissed D2's application for Further and Better Particulars. D2's counsel then complained he was misled by the Plaintiff in relation to this application. With respect, I did not consider that any misunderstanding could have arisen, in view of:-

(a) the obvious difference in the arguments advanced by the Plaintiff in relation to both the application for specific discovery and application for Further and Better Particulars in the written submissions compared to the oral submissions (set out above);

(b) the specific reliance on Ord. 18 r. 12(5) and para. 18/12/57 of The Supreme Court Practice 1999.

In fairness to D2, I enquired with Mr Arnold whether I had misunderstood the basis of his argument to which he confirmed that I had not.

11. As regards the question of costs, the Plaintiff relied on a letter dated 23 December 1999 which in essence made a proposal to adjourn D2's applications for argument. Since the outcome of the hearing on 4 January 2000 was substantially the same as (if not more favourable than) the Plaintiff's proposal in the said letter, I agreed with the Plaintiff's submissions that the cost of that hearing should be paid to D2 by the Plaintiff in any event.