DIAGCOR BIOSCIENCE INCORPORATED LTD v. CHAN WAI HON BILLY AND OTHERS

HCA 2107/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2107 OF 2012

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DECISION
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1. On 12 August 2015, I handed down a decision in relation to an application for specific discovery and split trial.

The Decision

2. I made an order nisi that costs of the plaintiff’s summons be in the cause.  In paragraph 86 of my decision, I noted that it was not a straightforward application for discovery.  The plaintiff has won on most classes, but the terms of discovery and undertakings have been modified as a result of the hearing.

3. This is the plaintiff’s application to vary the costs order nisi so that the defendants shall pay 80% of the plaintiff’s costs with certificate for two counsel to be summarily assessed.  The bases of the plaintiff’s application, according to Mr Felix Ng, counsel for the plaintiff, are that:

(a) the plaintiff was the successful party in the summons;

(b) the application for variation of the costs order nisi is consistent with the approach adopted by Deputy Judge Sakhrani in his decision dated 10 November 2014 ordering the plaintiff to bear only 20% of the defendants’ costs after the defendants succeeded in seeking two out of more than 30 items in the request for further and better particulars;

(c) the defendants’ conduct in relation to the summons was unreasonable in refusing to give specific discovery and undertaking as to confidentiality;

(d) the defendants had also misleadingly asserted on affirmation about the non‑existence of their validation data for which specific discovery was sought by the plaintiff.

4. In an interlocutory application costs to follow the event remains an option under Order 62, rule 3(2A).  In deciding on the appropriate costs order to make, the court can take into account all the circumstances, in particular the conduct of the parties.

5. On ground (a), the arguments on the discovery summons were not confined only to classes of documents to be disclosed, but also the mode of discovery of trade secrets.  There was much discussion between the Bench and counsel at the hearing, resulting in the terms of the order as they now stand.

6. The plaintiffs won on classes 1 to 6, but the scope of classes 4 to 6 has been modified.  They lost on classes 7 to 8 which, in my view, were unnecessary and excessive discovery.  In respect of class 9, there was limited discovery ordered.

7. The plaintiff lost on the unless order it sought to impose under the summons, a most unreasonable term to impose on the defendants, and was appropriately abandoned by Mr McCoy at the hearing.

8. The plaintiff also won on the issue of a split trial, which did not take up much time for argument.  In fact, had the issue been in relation to the unless order and the split trial, the hearing would not have taken more time than a usual three‑minute application.  So most of the arguments were centred on the scope of discovery and terms of making disclosure.

9. I maintain my view that the application was not a straightforward one.  It involved issues of fact and issues of law.  As I understand it at the time of the hearing there did not appear to be any leading guidance on discovery of these trade secrets.  It was not a summons that could have been disposed of without a hearing.  I do not seek to depart from my views in paragraph 86 of the decision.

10. On ground (b) it is, in my view, a fruitless exercise to compare what another court did in terms of results of a costs order over an application of a different nature.  Costs are in the discretion of the court.  With respect, Deputy Judge Sakhrani had to deal with an application for further and better particulars, and considerations before him were different to those before me. His decision laid down no general rule that even if a party were to win a small number of items out of a great number claimed, he should get what percentage of costs.  I say no more about having to compare his decision with mine.

11. On ground (c), I have been taken by counsel today to the correspondence before the summons.  Back in 2013 there had been extensive correspondence over what should be done in terms of discovery and also the terms of giving undertaking as to confidentiality, etc.  It was quite clear that the parties were amenable to mediation.  It was also clear that the plaintiff was willing to reciprocate with an undertaking as to confidentiality.

12. Unfortunately, no agreement could be reached, and the parties have had to come before me.  It certainly would have saved a lot of costs if agreement could be reached, but as I say, this matter which ended up in court was not straightforward.

13. The defendants’ opposition to discovery of class 2 was, as I found, due to misconception of their case, but I do not think the blame could entirely be placed on the defendants, as the plaintiff could have made the request clearer as Mr McCoy had done at the hearing.

14. I have today considered the final outcome of my decision to see what the material differences were in the proposals made by the plaintiff in correspondence and the final outcome.

15. The plaintiff had consistently proposed reciprocated undertaking as to confidentiality, and they have offered, by various consent summonses and letters, for the defendants to suggest what the classes of documents which they claim confidentiality are.  That was a reasonable approach.

16. I have to consider the overall outcome in the light of the parties’ correspondence.  I am of the view that whilst a hearing could not be avoided, the plaintiff was successful in a part of the summons.

17. Taking all circumstances into account, I am of the view that the costs order should be varied so that the plaintiff should get 50% of the costs of the summons.

18. In terms of certificate for two counsel, I was indebted to Mr McCoy for his able arguments at the hearing.  Given the points of fact and law involved in the application, I am of the view that there should be certificates for two counsel.

(Submissions on costs)

19. Costs are summarily assessed and allowed at $200,000.

(Further submissions on costs)

20. Following the order I have made on costs, it will be 50% of today’s costs to the plaintiff.  I assess that at $15,000, so the total will be $215,000.

HCA 2107/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2107 OF 2012

____________

____________

_____________

DECISION
_____________

1.  This is the plaintiff’s application for:

A. Specific discovery of documents;

B. An undertaking from the defendants as to confidentiality before the plaintiff would give them discovery; the plaintiff is willing to reciprocate;

C. An order for split trial on liability and quantum.

BACKGROUND

2.  The plaintiff is a biotechnology company.  It researched for some years and developed an effective test that can identify the sex of a fetus by testing the fetal DNA found in the blood plasma of the pregnant mother (“P’s Test”).   Launching of P’s Test proved to be a lucrative business.

3.  D1-D5 were former employees of the plaintiff who had acquired confidential information from the plaintiff.  D6 had previously provided computer service to the plaintiff and in the course of it acquired confidential information from the plaintiff.  D7 is the husband of D3.

4.  D1-D5 left the plaintiff’s employment within a short window of time to join D6-D7.  They set up companies in Hong Kong, ie D8-D11, to provide a test (“Ds’ Test”) that was and is strikingly similar to the P’s Test.

5.  The plaintiff sues the defendants for breach of confidence and infringement of copyright in misusing confidential information in relation to P’s Test (against D1-D4);  breach of confidence by misusing confidential information in relation to clients’ details (against D5); breach of contract by soliciting the plaintiff’s employees to join D8 to D11 (against D1 to D4); procurement of breach of contract (against D1, D4, D6 and D7); and conspiracy to cause economic injury to the plaintiff (against all defendants). There is another cause of action in negligence against D2 which is irrelevant for present purposes.

6.  The defendants deny the allegations, contending, among others, that the plaintiff’s information was not confidential at all; that they had independently developed the Ds’ Test using materials in the public domain.

APPLICATION A – SPECIFIC DISCOVERY

A1. Grounds of application and grounds in opposition

7.  The classes of documents sought and the defendants’ stance are below. 

Table 1

Class	Nature of documents	Ds’ Stance
§(1)(i)	Literature used	Agreed; already disclosed
§(1)(ii)	Identity of markers	Agreed but proposed controlled measures using “sealed envelope”
§(1))(iii)	Identity of DNA Segment	Opposed
§(1)(iv)	Sequences of primers/probes used in the test	Same as for class (1)(ii)
§(1)(v)	Sequence of primer/probes used in the development	Partially agreed; documents produced with redaction
§(2)	Validation Data	Agreed to produce at hearing
§(3)	Blood Sample Record	Agreed to produce at hearing
§(4)	Operation protocols	Agreed to produce at hearing; agreed period up to 6.10.2012
§(5)	Test Reports	Opposed
§(6)	Purchase orders for different versions of probes and primers	Same as for class 1(v)
		Opposed
§(7)	Purchase orders for computers & equipment used in setting up and performing the Ds’ Test	Opposed
§(8)	Programme Setting and Calibration Settings	Opposed
§(9)	Employment contracts	Parties agreed at hearing that Ds disclose only those parts with names of defendants, dates of contract and job titles

8.  The principal grounds of objection are on relevance and that the shaded documents in Table 1 contain trade secrets.  The mode of discovery is also of concern to both parties.

A2.  Legal principles on specific discovery

9.  The general legal principles have been recently stated in Nokia Corp v TCT Mobile Ltd [2014] 2 HKLRD 43, §15. The burden is on the applicant to show that the document or class of documents (a) exists; (b) is in the respondent’s possession, custody or power; (c) is relevant to a matter in question in the action.  The court will not make an order unless discovery is necessary either for disposing fairly of the cause or matter or for saving costs.

10.  Discovery must not be too wide or imprecise: Fuji Photo Film Co Ltd v Carr's Paper Ltd [1989] RPC 713, 715, lines 20-35. Fishing is not allowed.

11.  For the purpose of testing the materiality of discovery, it is the case of the party seeking discovery that must be assumed to be true and not that of the party against whom discovery is sought: Format Communications Manufacturing Ltd v ITT (UK)  Ltd [1983] FSR 473 at 477,Slade LJ.

12.  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: Palm Computing Inc v Echolink Design Ltd HCA 11797/1999 and HCA 13420/1999, 27 October 2000, at §§12 to 13, Chung J, adopting Bray on Discovery (1885), pp 18‑19.

13.  Parties may be competitors in a highly competitive market. Where confidential information or trade secrets are involved, the court has to balance the rights of the parties and the due administration of justice.  On the one hand, each party is entitled to discovery of all documents that the other party may place before the court for adjudication.  On the other, each party is entitled to be protected against infringement of its confidential information or trade secrets.  If the defendant is in fact infringing, it should not be permitted to shelter behind a plea of secrecy. If, however, he is not infringing, he is entitled to have the secrets associated with its process maintained intact.  (Warner-Lambert v Glaxo Laboratories Ltd [1975] RPC 354at 356, lines 7-14)

14.  In Roussel Uclafv Imperial Chemical Industries plc [1990] RPC 45, the English Court of Appeal adopted the principles in Warner-Lambert Co v Glaxo atpage 49, lines 36-50:

“Each case has to be decided on its own facts and the broad principle must be that the court has the task of deciding how justice can be achieved taking in to account the rights and needs of the parties. The object to be achieved is that the applicant should have as full degree of disclosure as will be consistent with adequate protection of the secret. In so doing, the court will be careful not to expose a party to any unnecessary risk of its trade secrets leaking to or being used by competitors. What is necessary or unnecessary will depend on the nature of the secret, the position of the parties and the extent of the disclosure ordered. However, it would be exceptional to prevent a party from access to information which would play a substantial part in the case as such would mean that the party would be unable to hear a substantial part of the case, would be unable to understand the reasons for the advice given to him and, in some cases, the reasons for the judgment. Thus what disclosure is necessary entails not only practical matters arising in the conduct of a case but also the general position that a party should know the case he has to meet, should hear matters given in evidence and understand the reasons for the judgment.” (page 49, lines 36-50, per Aldous J; page 54, lines 39-40, per Nourse LJ)

15.  The starting point is that there should be full disclosure to the parties to the litigation of all those materials which are going to be considered and which may be put before the court.  The onus is on the party seeking to restrict disclosure to justify it and to show why, in all the circumstances, notwithstanding onerous undertakings as to confidentiality and the like, nevertheless documents should not be shown to the litigant on the other side.  Dyson Ltd v Hoover Limited Limited (No.3) [2002] RPC 42, at pp 848-849, §§34-35.

16.  The Warner-Lambert case, Roussel Uclaf case and Dyson case all involve intellectual property rights.  They show that trade secret is no bar to discovery.  The court may direct disclosure to selected individuals upon terms aimed at securing that there will not be either use or further disclosure of the information in ways which might prejudice the party making disclosure.

17.  Statements in a party’s affidavit of documents are conclusive on the question whether he has or has had any documents than those disclosed, unless the affidavit is shown to be insufficient by:

(a) admissions in pleadings;

(b) contents of the list of documents or affidavit itself;

(c) documents referred to in (b);

(d) any other source that constitutes an admission of the existence of a discoverable document not so far discovered; or

(e) an apparent exclusion of documents from discovery by a party under a misconception of the case.

Hong Kong Civil Procedure 2015, Vol 1, para 24/7/1; Lee Sai Nam v Li Shu Chung & ors, HCA 1711/2009, 10 January 2014, at §§55‑57, Deputy Judge M Ng.

A3.  The parties’ respective Tests

18.  Fetal DNA (ie DNA of the baby) is found in the mother’s plasma in small quantities.  By screening for the existence of the Y-chromosomal fetal DNA (found only in male) in the maternal blood plasma, it is possible to determine whether the fetus is a male or female.  The process involves the use of markers, primers and probes and target DNA. 

19.  A “marker” is a gene in a strand of DNA of a specified chromosome.  A “primer” is a short complementary sequence which is bound specifically to the starting and ending sections of the target DNA segment in the PCR amplification process.  A primer has a length of about 20 bases.  A “probe” is a primer with fluorescent added to it for the ease of display of the resulting signals.

20.  A test designer has to select and pin-point a number of Y-chromosomal genes or sequence segments (ie “markers”) that are located in various segments spread across the Y-chromosome. 

21.  He chooses a DNA segment (“the target DNA segment”) within each of the chosen markers for amplification under the PCR.  He then creates a pair of corresponding primers, which will be annealed to the designated starting point (or ending point) of each of the target DNA segment.  The base sequence of a primer has to be complementary with that of the specific starting/ending point of the target DNA segment such that the primer is attached to the target DNA segment to carry out replication.  The target DNA segments can be reversely identified by looking at the base sequences of primers and probers.

22.  The PCR (a common molecular biology laboratory technique known as the real-time polymerase chain reaction) is a necessary step for a non-invasive pre-natal gender test to amplify the target DNA segment.  If Y-chromosomal DNA exists in the maternal plasma, the target DNA segments of the chosen markers will be amplified to show a positive result.  This means the fetus is a boy. If the target DNA segments are not amplified after the PCR, then the fetus is a girl.  PCR is used in both the P’s Test and Ds’ Test (§43.3 of the amended defence). 

23.  Each segment of DNA has different characteristics, with millions of combination.  It took years of research for Mr Tam (director of the plaintiff) to be able to identify the target DNA segments on the Y-chromosome which are chosen for amplification under the PCR. The target DNA segments constitute the most valuable piece of information that the defendants have allegedly misappropriated. 

24.  The P’s Test had gone through, validation, which required extensive research, trial and error and test runs, before it could be launched in the market.  

25.  The plaintiff says that the following is confidential information of the P’s Test (§5, SoC):

(a) The identity of the 15 Y-chromosome and 1 X-chromosome markers, the primer and probe sequences of those markers and the protocols used in the P’s Test;

(b) The primers and probes validation data obtained, and the primer and probe sequences of markers used, in the development and modification of the P’s Test;

(c) The experimental protocols for the P’s Test.

26.  In the design of primers and probes, the selection criteria are input into a computer program.  The computer program will suggest possible primers against the whole DNA sequence of a particular Y-chromosomal gene or sequence according to those criteria. The test-designer then selects and modifies the suggested primers and conduct test runs with his own expertise.  The selection process is repeated for each and every marker. 

27.  Even the defendants admit that, since the selection criteria for primers differ among researchers, the sequences of the suggested primers or probes generated from the computer program and those ultimately selected for testing are highly unlikely to be identical or similar between different providers for different pre-natal DNA tests.

28.  The defendants began its development of the Ds’ Test in around June/July 2012, and they went into full operation in about 2 months’ time.  To the plaintiff, the defendants could not have developed the Ds’ Test within such short time unless they had stolen the plaintiff’s confidential information or used it as a springboard to develop a test highly similar to the P’s Test.  The plaintiff has obtained one test report using the Ds’ Test dated 6 October 2012.

29.  The defendants criticize the plaintiff for assuming there to be a general practice and that it was the defendants’ practice.  They admit that they required the PCR technique, markers, primers and probes to operate the Ds’ Test.  The defendants had developed and validated their test 5 years later than the plaintiff.  The development time for the Ds’ Test was shortened through the use of advanced technology, literature in the public domain, computer program called “Primer Express” which helped to sort out the primers and probes, ready-to-use reagents in the market, easily available samples for test runs and a “shot-gun approach” of ordering newly designed primers and probes sequences to pick and choose from.  The defendants say that the plaintiff is fishing for materials simply on the ground that the defendants took less time than the plaintiff in developing a competitive test.

30.  The plaintiff complains that the defendants have not disclosed anything in their list of documents dated 4 October 2013 which could support their positive defence.  Moreover, the defendants have given little description of how they developed the Ds’ Test.  They have referred to web pages of service providers which share the “core technology” of detecting the fetal Y DNA, without defining the meaning of “core technology” or stating whether they had used it in the Ds’ Test.

31.  In my view, it is for the trial judge to decide on which party has correctly described the process involved in which test.  For present purposes, it is the case of the plaintiff that must be assumed to be true and not that of the defendants’: Format Communications Manufacturing Ltd v ITT (UK) Ltd (paragraph 11 above).  Moreover, the defendants do not dispute the expertise of Mr Tam, who has stated what it needs to prove or disprove the issues within his area of expertise.

32.  It is clear that at the trial, the court has to compare the parties’ Tests.  The plaintiff can rely on an inference to be drawn from the primary fact that its device is highly similar to the defendants’: Proctor Industries Ltd v Norris Brothers Ltd[1964] RPC 179.

A4.  Analyses of each class of documents

Class (1)(i) – Scientific papers and literature used or relied upon by the defendants and their records of development and research in the alleged independent development of Ds’ Test

33.  The court needs to look at this class of documents to decide if the defendants developed their own test or copied from the plaintiff’s.  The defendants do not object to production and do not claim confidentiality as the documents were in the public domain.  In fact, they have produced this class of documents already.

Class 1(ii) – The identity of Y chromosomal gene “markers” (ie the name and/or accession number of the gene “markers”) used in Ds’ Test

Class (1)(iii) – The identity of the target DNA segments (within the Y chromosomal gene “markers”) selected for amplification in Ds’ Test

Class (1)(iv) – The base sequences of the primers/probes targeting the target DNA segment of the Y chromosomal gene “markers” used in Ds’ Test

Class (1)(v) – The sequences of the primers/probes used in the development period of Ds’ Test

34.  In their answer to request for further and better particulars, the defendants claimed to have used 30 Y-chromosome markers in the Ds’ Test.  However, their affirmation in opposition says 15, strikingly the same number as the plaintiff’s.  In that answer, the defendants had accepted that they would provide discovery of their markers but they now claim that the request for discovery was not necessary or relevant.

35.  The defendants deny adopting the same set of markers as the plaintiff’s.  They say that practically speaking D1-D5 could not memorize the markers, target DNA segments, primers and probes by heart when they left the plaintiff’s employment. 

36.  The defendants have produced all documents for 27 markers that they have chosen save that the identities of the 17 actually used by them (falling within class 1(iv)) plus 2 reserves have been redacted.  They also produced some documents re the primers and probes.

37.  At the hearing, the defendants accept that classes (1)(ii), (iv) and (v) are relevant but not class (1)(iii), ie the target DNA segments.  The only relevance of the target DNA segments is that they affect the accuracy and reliability of the pre-natal test.  They are also concerned that there are software programs which can backward generate the respective DNA sequences from the physical location numbers. 

38.  The plaintiff says that the markers are long DNA strands encompassing many potential target DNA segments.  Even if the defendants provide the identity of the markers that they allegedly used in the Ds’ Test, one would not be able to tell the target DNA segments that the defendants have used in the Ds’ Test.   

39.  Having regard to the plaintiff’s description of the development of the P’s Test in paragraphs 18-27 above, it cannot be said that the court should not compare the plaintiff and the defendant’s respective choice of target DNA segments to decide if there was copying.  Class (1)(iii) is clearly relevant.

40.  The discovery of class (1)(ii) to (v) is most crucial to establish or wipe out the defence of independent development.

41.  The defendants propose a staged approach in discovery, by first filing the markers in a sealed envelop with the court.  They explain that if there is no overlap in the markers’ identity on both sides, it will rule out the possibility of copying and render discovery of the other items redundant.  If there is overlap, the defendants are willing to disclose classes (1)(iv) and (v) – but only to relevant experts for comparison purposes.  

42.  On the other hand the plaintiff suggests that the starting point for comparison is the primers and probes.  Strangely, it attacks the defendants’ suggested approach on the basis that markers disclosed in the envelop may not be those actually used in the defendants’ development stage or the Ds’ Test.  With respect to Mr McCoy SC, this attack may be made during cross-examination and could not be used as a basis for insisting on disclosure. 

43.  Likewise, this is not the proper time to decide the starting point for comparison.  Suffice to say that all of classes 1(ii) to (v) appear to be relevant to the issues of whether the defendants copied the P’s Test or developed their own test.  They should be disclosed together.

44.  I reject the staged approach as impractical because:

(a) The court is unable to know, without either the parties or expert’s assistance, if the markers, primers and probes, or target DNA segments of each party overlap. 

(b) The expert may need the input of lawyers;

(c) The discovery process will be lengthened, thereby delaying the trial.

Class (2) – all validation data and records in the form of log book(s) or in other forms concerning the alleged independent research and development process of the Ds’ Test, that is –

(i) For the testing of efficiency and sensitivity of all the primers and/or probes used for the Ds’ Test;

(ii) For the optimization of all the procedures and conditions in the pre-natal test;

(iii) For the validation of the accuracy for the results in the Ds’ Test.

45.  The defendants averred that it took them about 3 months to carry out the data validation process(es) (answer (9) to the request for further and better particulars under §32 of the defence).  

46.  And yet in their affirmation in opposition, the defendants said that they did not go through the validation process “as what the plaintiff had described in paragraphs 65-74 of TWOJ2 to counter-check the accuracy of their test before launching.  Therefore class (2) as described therein is not in possession custody or power of the Defendants.” They also questioned the relevance of the measures adopted by the defendants to test the accuracy of the Ds’ Test.

47.  I agree with Mr McCoy SC that it is unclear whether the defendants are saying that they did not do any validation at all or whether they had other methods of validation.  Having heard Mr McCoy SC’s explanation of the validation process, Mr Kwan, counsel for the defendants, concedes (rightly, in my view) that this class of documents is relevant to the issue of whether the defendants had independently developed the Ds’ Test. 

48.  Although a party’s statement on affidavit that it does not have a particular class of documents is conclusive, this is a situation of an apparent exclusion of documents from discovery by a party under a misconception of the case.  (See the principle in paragraph 17 above.)  I therefore order discovery of this class of documents.

Class (3) – all records in writing, electronic form or otherwise;

(i) Which records the time at which blood samples had been collected for the performance of the Ds’ Test

(ii) Which records the source(s) of those blood samples collected on or before 6 October 2012 for the performance of the Ds’ Test

49.  Development and validation of the Ds’ Test would have required blood samples.  The plaintiff says that this class is relevant to show (a) whether or not the validation did take place; and (b) from the sources of those blood samples (usually referral doctors), whether the defendants had solicited the plaintiff’s clients.

50.  The defendants disagrees that this class is relevant to the issue of copying.  The referral doctors supplying samples to the defendants might overlap with the plaintiff’s as they are normally gynaecologists in Hong Kong.  The plaintiff has no exclusive right over the business contact of these medical practitioners and it is speculative for the plaintiff to suggest that the blood samples were indicative of solicitation of the plaintiff’s clients.

51.  I accept the reasons given by the plaintiff. When the blood samples were collected could be tied to the issue of independent development of Ds’ Test.  The names of referral doctors can also lead to the Peruvian Guano type of inquiry to see if the defendants have solicited for the plaintiff’s clients.  I order discovery of this class of documents.

Class (4) – all operational protocols for the performance of the Ds’ Test

(i) DNA extraction from maternal blood samples;

(ii) Real-time PCR to amplify the target Y-chromosomal DNA segments of the Y-chromosomal gene “markers; and

(iii) Data analysis of the real-time PCR data

52.  The operation protocols, which Mr McCoy SC describes as “recipe book”, set out precisely what procedural steps (both qualitative and quantitative) are needed to perform a particular pre-natal test.  It is expected that there are operation protocols for the Ds’ Test as well. If the Ds’ Test had resulted from independent development, one would expect each party’s operation protocols to be different.

53.  At the hearing, Mr Kwan agrees that this class of documents is relevant.  The plaintiff agrees that the period for discovery is up to 6 October 2012.  I therefore order discovery of this class of documents accordingly.

Class (5) – all test reports (and the test report forms pursuant to which the tests are concluded) compiled by the defendants up to 6 October 2012 for the Ds’ Test and the first 100 reports of the Ds’ Test

54.  The test reports sought are those given by the defendants to their clients, of the type exhibited as TWOJ-11.  They will allegedly reveal the identity of the doctors referring pregnant mothers to the defendants for testing and the information provided by the doctors.  The referral doctors may have been clients of the plaintiff.

55.  The defendants say that the plaintiff is speculative and fishing when it assumed that the defendant had conducted 100 test reports.  Similarly, the overlap in doctors’ identity on both sides does not justify disclosure of this class.  It was not clear how this class of documents can be relevant to the issue of copying. 

56.  I reject the defendants’ arguments.  This class of documents may not be relevant to copying but clearly to soliciting of the plaintiff’s clients.  They may also reveal the first launch date of the Ds’ Test.  The request for 100 reports is an attempt to limit the volume of discovery within a stated period.

57.  I change the wording of this class to better reflect the intention of the request: the first 100 reports of the type similar to Exhibit TWOG-11 (and the test report forms pursuant to which the tests are concluded) compiled by the defendants up to 6 October 2012 using the Ds’ Test.  Personal data which is not relevant to the issues before the court should be redacted (eg to substitute the names of the pregnant mothers with initials).

Class (6) – all purchase orders and documents showing the defendants’ purchase of different versions of primers and probes from their supplier(s) up to 6 October 2012

58.  Having regard to the necessity for class (1)(iv) and (v), class (6) is also relevant to the issues of copying/independent development.  As agreed by the parties, I limit the discovery period to the date ending on 6 October 2012.  I delete from this class the words “and documents” as being too vague. 

Class (7) – all purchase orders and purchase documents for the computers, machinery and equipment used in the setting up and performance of the Ds’ Test

59.  The plaintiff says that this class of documents goes to show whether the defendants had set up the Ds’ Test and the similarity of settings between the P’s Test and Ds’ test.  Further, the documents will reveal the identity of the suppliers.  The authorized representatives of these suppliers will be able to provide important evidence at trial to see whether the Ds’ Test was copied from the P’s Test.

60.  I am unable to see the relevance of this class. Similarity of the parties’ computers, machinery and equipment could not mean that copying has occurred.  The plaintiff may have conflated this class with the following one.  I decline to order discovery of this class.  In any case, the use of the words “and purchase documents” is too vague.  The period of discovery, if ordered, should be limited to 6 October 2012.

Class 8 – all records and documents (physical, electronic or otherwise) of the program setting and calibration setting input/imported into the computers, machinery and equipment used in the Ds’ Test

61.  The plaintiff says that the setting on the computer programs and PCR machinery for the P’s Test is unique.  This is because the setting has to be in accordance with the operation protocols.  The purchase records of the defendants’ hardware and software is also indicative of the timing at which they developed and launched the Ds’ Test.  Comparison of the plaintiff and defendants’ setting of the computer programs will tell whether the Ds’ Test was copied from the P’s Test.

62.  There is no allegation that the defendants have stolen the hardware or software of the plaintiff.  I refer to the P’s Test described in paragraphs 18-27 above.  It was the design of P’s Test and the operation protocols that form the subject of copying, not the computer program as a tool. It is not clear what value the computer programs of the defendants could add to the markers, primers and probes, target DNA segments and operation protocols which the defendants shall have to produce.

63.  Even if this class of documents is relevant, it is not necessary for the fair disposal of the cause or for saving costs.  The description “all records and documents” is too vague anyway.  I decline to order discovery.

Class (9) – employment contracts/contracted documents entered into by each of D1-D5 with D8 to D11

64.  The parties have agreed to limit the scope of discovery to those parts of the employment contracts showing the commencement date of employment and job duties of each of D1-D5 with D8-D11.

65.  In summary, there should be discovery of classes 1(ii)-(v), 2, 3, 4-6 (as modified) and 9 (as modified). 

A5.  Mode of discovery

66.  In relation to the plaintiff’s documents, it is said that the documents to be discovered are records of research and development, validation data, operation protocols and a test report (§99, Tam-2^nd). The defendants accept that these are confidential in nature, but without prejudice to their contention at the trial that they are not confidential information. 

67.  I agree with Mr Kwan, though, that target DNA segments have not been pleaded as a class of confidential information (§5 SoC, §§7 and 9(3) of the plaintiff’s supporting affidavit, and items 27 and 28 to Schedule 2 to the present summons). 

68.  Likewise, the plaintiff accepts that the shaded items in Table 1 above contain confidential information of the defendants.

69.  The parties are each willing to give an undertaking as to confidentiality subject to the mode of discovery and the wording of the undertaking.

70.  There is no hard and fast rule as to how the disclosure should be made.  By way of examples which were distilled from the authorities,the mode of discovery can take the form of:

(a) Inspection of the works of an alleged infringer by an independent solicitor.  The solicitor shall prepare a report to the judge and the lawyers for the parties, stating his view of whether or not there was infringement, but would not disclose the confidential information.

(b) Inspection by experts who may be allowed to take samples of the infringer’s product and report to the court;

(c) Disclosure/inspection of the process by the alleged infringer’s counsel, patent agent, solicitor and a named expert.

(d) Disclosure of the plaintiff’s confidential information to the author of the alleged infringing work who was an expert likely to give evidence for the defendant.

Warner-Lambert case (page 356, line 34 to page 358, line 8); Atari Incorporatedv Philips Electronics & Associated Industries Ltd [1988] FSR 416 at 420.

71.  Although discovery was limited to a class of persons initially, the court may, at an appropriate stage, order the class of persons to be expanded.  In Roussel Uclafv Imperial Chemical Industries plc, the disclosure was first made by the defendants to the independent advisers of the plaintiff.  The stage was reached in which those advisers intended to rely, at the trial, on a series of experiments they devised but were unable to obtain the input of the plaintiff. The court allowed the plaintiff’s nominee working under the head of the patent department to have access to the confidential information, subject to undertakings as to confidentiality and as to damages. 

72.  The defendants suggest giving discovery to an expert.  This sounds simple.  After all, the confidential information involves scientific material and objective standards.  An expert will be able to decide if certain scientific literature is in the public domain, compare and contrast the markers, primers and probes and target DNA segments of both sides.  His opinion may dispose of the core issues on copyright. 

73.  This procedure would obviously avoid confidential information of each party from being disclosed to the other unless the expert has first identified at least some recognisable similarity between the two sets of designs.  But I repeat paragraph 44 above.  The court is asked to rely on the expert to make a judgment about the issue of infringement without the court being seized of the material or having the benefit of the parties’ observations on it. If the expert does identify similarities which call for explanation, it is difficult to see how the court could conduct a further hearing about disclosure without giving both parties the opportunity of commenting on his conclusion. In those circumstances difficult questions would inevitably arise as to whether and on what basis each party should see the designs and the hearing could rapidly develop into a mini trial of the case on infringement, during which the disclosure objected to would have to take place: BSW Ltd v Balltec Ltd[2006] EWHC 822 (Ch), (Transcript).

74.  I am unable to accept the defendants’ suggested approach.  Nor am I satisfied that a case is made out for denying a party from having access to the confidential information of the other. 

75.  Despite that, a “confidentiality club” should be formed to protect the confidential nature of the disclosure.  Only specified persons shall have access to the confidential information: Dyson v Hoover. These will comprise nominated barristers (not pupils) and qualified solicitors (not trainees or non-legally-qualified persons) and the parties’ respective representative. 

76.  On the plaintiff’s side, those in the confidentiality club will be Mr Tam of the plaintiff, Mr McCoy SC and Mr Felix Ng (barristers), Mr Frank Wan and Ms Michelle Hui (qualified solicitors).

77.  On the defendants’ side, these will be all of D1-D7 with D6 representing D8-D11, Mr Jonathan Kwan (barrister) and a qualified solicitor to be named.

APPLICATION B – UNDERTAKING TO MAINTAIN CONFIDENTIALITY

78.  The court may require 2 types of undertakings:

(a) Undertaking as to confidentiality, ie not to divulge the confidential information to anybody except authorized persons (such as named legal advisers) or use the confidential information except for the purpose of this action.  The undertaking shall be given by the person granted access to the confidential information and the party on whose behalf he has access, to the party giving discovery and the court.  Breach of the undertaking may result in committal for contempt aside from other remedies. 

(b) Undertaking as to damages in case of unlawful disclosure by the party granted access to the confidential information.

Roussel Uclafv Imperial Chemical Industries plc, page 51, lines 45-50.

79.  I direct that both types of undertaking as set out in Annex A be given in writing, with suitable adaptations in accordance with the giver.  For every change of member, a new undertaking has to be given.

80.  The plaintiff initially sought an order that unless the defendants gave an undertaking of confidentiality in specified terms, they were deemed to have admitted and would be debarred from challenging the following paragraphs of the statement of claim (“the unless order”):

(a) Paragraph 5 - what the plaintiff classified as confidential information;

(b) Paragraph 6 - that the plaintiff has recorded that confidential information in written form and is the owner of the copyright;

(c)     Paragraphs 42-52 – allegation of breach of confidence or copyright of D1-D4, causing loss to the plaintiff.  

81.  The defendants object to the unless order.  Mr McCoy SC concedes that the unless order is not necessary.  I find that concession to be correct.  This is because if the defendants are not willing to give the undertaking, the proper “penalty” may be denial of access to confidential documents. The plaintiff still has to prove its case. Treating the defendants as admitting part of the claim is a disproportionate penalty.

APPLICATION C - SPLIT TRIAL

82.  In general, quantum and liability should not be tried separately unless it is just and convenient to do so: Hong Kong Civil Procedure 2015, Vol 1, para 33/4/9.  In Auto-Treasure Ltd v Noble Diamond Ltd [1992] 1 HKC 117, CA (followed in Worldtrade Entertainment Limited v Starway Technology Ltd, HCA 450/2000, 19 May 2000, Deputy Judge S Kwan (as she then was), it was held that for a copyright action, the Hong Kong Court should follow the practice of the Chancery Division in England and Wales in that the trial judge would determine all issues of liability and, if liability is proved, direct an inquiry as to damages or an account of profits to be taken in chambers.  Discovery relating to the inquiry or account would not be ordered until the defendant’s liability has been established and the plaintiff has elected whether to claim damages or an account of profits.

83.  The cases of Telford Development Ltd v Shui On Construction Co Ltd [1990] 2 HKC 110 and ChanJak Jung (t/a Forward & Co) v Baltrans Ltd and others [1997] 1 HKC 89 relied on by Mr Kwan concern general principles.  They are quite unlike the Auto-Treasure case that applies to copyright actions and is binding on this court.

84.  In the present case, the question of liability and quantum are distinct issues.  Disclosure of the documents may destroy or enhance the defendants’ defence on independent development.  At this stage, there is no point in pressing the parties to make disclosure relating to the issue of quantum, which is bound to reveal more confidential information.  It is just and convenient to order a split trial.

CONCLUSION

85.  I order as follows:

(1) By 21 September 2015, the defendants shall file and serve an affidavit stating whether any of classes 1(ii)-(v), 2, 3, 4-6 (as modified) and 9 (as modified) is or have at any time been in their possession, custody and power; and if the same having at any time been, but not now in their possession, custody or power, stating when they parted with it and what has become of it;

(2) There be disclosure of classes 1(ii)-(v), 2, 3, 4-6 (as modified) and 9 (as modified) for the plaintiff’s inspection within 24 hours of the filing of the affidavit in paragraph (1);

(3) A confidentiality club shall be formed, comprising Mr Tam, Mr McCoy SC, Mr Felix Ng, Mr Frank Wan and Ms Michelle Hui on the part of the plaintiff; and D1-D7 with D6 representing D8-D11, Mr Jonathan Kwan and a qualified solicitor to be named on the part of the defendants;

(4) Each member of the confidentiality club shall give an undertaking as per Annex A with suitable adaptations before he/she may be given the confidential documents in discovery;

(5) The items set out in Schedule 2 to the summons (to be set out in the sealed order) shall be treated as confidential information of the plaintiff for the purpose of this order;

(6) Classes 1(ii)-(v), 2, 3, 4-6 (as modified) but not class 9 (as modified) shall be treated as confidential information of the defendants for the purpose of this order;

(7) Paragraph 4 of the summons dated 14 October 2014 seeking an unless order is dismissed;

(8) There be a split trial on liability and quantum.

86.  As to costs, this is not a straightforward application for discovery.  The plaintiff has won on most classes but the terms of discovery and undertakings have been modified as a result of the hearing.  I am of the view that, on a nisi basis, costs should be in the cause.

87.  I thank counsel for their assistance.

Annex A – undertaking to be given by a member of the confidentiality club

[I name of Defendant] of HCA 2107/2012 (“the Action”), hereby [jointly and severally] undertake to the Court and to [the Plaintiff] that each of us shall preserve the confidentiality of all the records, documents and materials relating to the Plaintiff’s confidential information as set out in [Schedule 2 attached hereto], In addition:-

1.   [I/We] shall not by ourselves or our servants, agents or employees or subsidiaries or howsoever otherwise directly or indirectly make use of any of the records, documents and materials relating to [the Plaintiff’s] confidential information as set out in [Schedule 2 attached hereto] other than for the purpose of [defending] the Action only; and

2.   In the event of any breach of the undertaking mentioned herein, [I/we] shall jointly and severally indemnify [the Plaintiff] fully for all its loss, damages and legal costs and to account for such profits derived therefrom to [the Plaintiff] where applicable; and

3.   This undertaking shall continue to be in effect after the conclusion of the Action and unless otherwise ordered by the Court.

4.   This undertaking shall continue to be in effect notwithstanding that any of the records, documents and materials relating to the Plaintiff’s confidential information as set out in Schedule 2 discovered by the Plaintiff may be referred to or read out in Court.

Dated the      day of      2015.

______________________________	______________________________
[Name of person]	[Name of the plaintiff or defendants]
______________________________	______________________________
[Name of counsel for the Plaintiff or defendants]	[Name of solicitor for the plaintiff or defendants]
______________________________

HCA 2107/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2107 OF 2012

________________

________________

__________________________________

REASONS FOR DECISION

__________________________________

1.  By a summons dated 30 January 2014 (“the summons”) the defendants applied for an order that the plaintiff do file and serve its answers to the defendants’ request for further and better particulars of the statement of claim and reply as per the request for further and better particulars annexed to the summons (“the requests”).

2.  By the order of Master Chow made on 18 June 2014, the summons was dismissed with costs to the plaintiff in any event to be taxed if not agreed.

3.  By the defendants’ notice of appeal dated 2 July 2014, the defendants gave notice that they intended to appeal against the master’s order.  The hearing of the appeal came before me on 23 October 2014.

4.  After hearing arguments, I made an order that within 21 days from 23 October 2014 the plaintiff does file and serve its answers only to the further and better particulars requested under request 8.2 and request 21.1 of the requests.  I also recorded an undertaking given by Mr Kwan, on behalf of the defendants, that his clients will not disclose the identities of the medical practitioners to be provided in the answers to request 8.2 to non‑parties to these proceedings.

5.  I allowed the appeal and varied the master’s order to the extent of the order that I made. 

6.  I also heard arguments on costs and, for the reasons given at the time, I made an order that the master’s costs order should be set aside and that the plaintiff should pay the defendants only 20% of their costs of the summons and of the appeal.

7.  I indicated at the time that reasons in writing would be given for allowing the appeal and varying the master’s order to the extent of the order that I made.  This I now do. 

8.  The plaintiff is a biotechnology company incorporated and carrying on business in Hong Kong.  It carries on business in the research and development of bio‑medical diagnostic products and providing molecular diagnostic laboratory services in Hong Kong. 

9.  The plaintiff’s case is that it researched and developed a non‑invasive and accurate laboratory test to identify the sex of a fetus by testing the fetal DNA found in the blood plasma of the pregnant mother (“the Maternal Y‑Test”). Its case is that it launched the Maternal Y‑Test in the market and it became a successful business.

10.  The 1^st to 5^th defendants (“D1 to D5”) are the plaintiff’s former employees.

11.  D1 held positions of Chief Operation Officer, Chief Executive Officer and President at various points of time until 16 May 2012.

12.  D2 held managerial positions and was also an Information Technology Officer at various points of time until 16 July 2012. 

13.  D3 is the wife of the 7^th defendant (“D7”).  She was a registered medical laboratory technologist until she left the plaintiff on 27 July 2012. 

14.  D4 held positions including Corporate Manager at various points of time until 19 July 2012.

15.  D5 held the position of Sales Executive until 5 September 2012.

16.  The 6^th defendant (“D6”) was a former employee of the plaintiff’s service provider providing information technology services to the plaintiff and was involved in the setting up of the Maternal Y‑Test.

17.  D7 is the husband of D3.  

18.  The 8^th to 11^th defendants (“D8 to D11”) are companies incorporated in Hong Kong.  D8 was incorporated on 5 July 2012 whereas D9 to D11 were incorporated on 13 August 2012.  D9 and D10 are wholly owned by D8.  D11 is wholly owned by Possible Legend Ltd, a BVI company.

19.  D6 and D7 were directors of D8 to D11 at all material times.

20.  According to the plaintiff, D1 to D5 all left the plaintiff’s employment within a short window of time to join with D6 and D7 to set up the corporate defendants namely, D8 to D11 to provide a test which is identical or strikingly similar to the Maternal Y‑Test.

21.  The plaintiff’s case is that given the striking similarity between the two tests and the short window of time in which the defendants’ test was developed, the court will be asked to infer at trial that the defendants’ test must have been developed using the plaintiff’s confidential information and to infer that it must have been D1 to D4 and D6 who disclosed the confidential information to D7 to D11 and that D7 to D11 must have copied and used the confidential information to develop their test. 

22.  It is also alleged that D5 disclosed confidential information imparted to him during his employment with the plaintiff concerning the plaintiff’s clients to D8 to D11.  As D5 had visited the plaintiff’s clients and that as their clients have sent fewer referrals to the plaintiff, the plaintiff will also ask the court to infer at trial that D5 had solicited those clients to send their referrals to D8 to D11.

23.  By the statement of claim (“the SC”) the plaintiff’s claim against the various defendants on a number of causes of action:

(1) breach of confidence by misusing confidential information in relation to the Maternal Y‑Test (against D1 to D4);

(2) infringement of copyright (against D1 to D4);

(3) unlawful interference with the plaintiff’s business (against D3);

(4) negligence and wilful default (against D3);

(5) breach of confidence by misusing confidential information in relation to clients’ details (against D5);

(6) breach of contract by soliciting the plaintiff’s employees to join D8 to D11 (against D1 to D4);

(7) procuring D2, D3 and D5 to act in breach of contract (against D1, D4, D6 and D7); and

(8) conspiracy to injure the business of the plaintiff (against all the defendants).

24.  By their amended defence the defendants deny all of the plaintiff’s claims.  As Mr Cooney SC, with Mr Ng, for the plaintiff submitted, in gist the defendants’ defence is that the confidential information is not confidential at all, that the relevant defendants did not misappropriate the confidential information and that the relevant defendants independently created their own DNA test without copying the Maternal Y‑Test. 

25.  By letter dated 3 December 2013 from the plaintiff’s solicitors to the defendants’ solicitors, the plaintiff made the initial request for further and better particulars of the SC and the reply.  By letter dated 10 January 2014 from the plaintiff’s solicitors to the defendants’ solicitors, answers were provided to the initial request. 

26.  The defendants were not satisfied with the answers to the initial request and issued the summons trimming down some of the requests made in the initial request.

27.  O. 18; r 12(3) of the Rules of the High Court provides that the court may order a party to serve on the other party particulars of any claim or other matter stated in his pleading. 

28.  O. 18; r. 12(3B) provides that:

“No order shall be made under paragraph (3) unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs”

29.  The onus is on the applicant to satisfy the court that the order is necessary either for disposing fairly of the cause or matter, or for saving costs (paragraph 18/12/66, Hong Kong Civil Procedure 2015).

30.  As is stated at paragraph 18/12/66:

“It is not enough for the applicant merely to show that the particulars requested are ‘relevant’; for ‘relevance’ is not the test proscribed - it must be shown that granting an order for those particulars is ‘necessary’ for one or more of the purposes stated and set out in para.(3B), which provides for an exhaustive and conclusive definition of what can be (and only those can be) considered by the Court to be ‘necessary’ (namely, only for disposing fairly of the cause or matter, or for saving costs). This passage was cited with approval in Well Joint Trading Ltd v Chiu Chung Chiu (unrep., HCA No. 1768/2011; 2009 July 2012).”

31.  Mr Kwan, for the plaintiff, has helpfully provided, as Annexure 4 to his skeleton submissions, a table setting out the relevant paragraphs of the SC and the reply, the requests made and the answers provided, and a summary of the reasons for relevance and necessity of the requests and the inadequacy of the answers provided.

32.  As regards the requests, I was satisfied that it was only in respect of request 8.2 and request 21.1 that the plaintiff should provide its answers as, in my view, the particulars sought thereunder are necessary for disposing fairly of the cause or matter.

REQUEST 21.1

33.  I shall deal with request 21.1 first which is in relation to the conspiracy claim against all the defendants. 

34.  Paragraph 85 of the SC pleads a conspiracy to injure the plaintiff by unlawful means as it pleads:

“Further and/or alternatively, all the above-named Defendants acted pursuant to an agreement between them inter se in the commission of the wrongful acts as pleaded above, with a predominant purpose of causing injury to the business of the Plaintiff, particular of their arrangement are:-

Particulars

(1) To injure the Plaintiff’s business by the false reports compiled by [D3’s] wilful default in compiling the false reports of the Alpha-Test and Beta-Test Incidents,

(2) To misappropriate the Confidential Information defined in the above by [D1, D4 and D6] without the authorization and consent by the Plaintiff;

(3) To misappropriate the Plaintiff’s clientele contact information and sources of referral by [D5] without the authorization and consent by the Plaintiff;

(4) To appoint [D6 and D7] as the directors of [D8 to D11] for the purpose of soliciting the employees to take up employment with [D8 and/or D9 and/or D10 and/or D11], with a view to circumvent such prohibition as provided in the employment contract of [D1 to D5];

(5) To disclose and/or divulge the Confidential Information to [D8 and/or D9 and/or D10 and/or D11] for providing, launching and marketing their process highly similar to the Maternal Y-Test;

(6) To solicit the employees, namely, Ms. Constance Lo, Ms. Priscilla Lo, Mr. Justin Wong, Ms. Trista Ng, and Ms. Clara Chan of the Plaintiff to join [D8 and/or D9 and/or D10 and/or D11] for the purpose of performing their process highly similar to the Maternal Y-Test for [D8 and/or D9 and/or D10 and/or D11]; and

(7) To instruct [D5] to dissuade medical practitioners from making further referrals to the Plaintiff for the Maternal Y-Test as well as soliciting these sources of referrals to give referrals to [D8 and/or D9 and/or D10 and/or D11].

35.  Paragraph 86 of the SC pleads:

“By reasons of the conspiracy to injure the business of the Plaintiff by [D1 to D7, D8 and/or D9 and/or D10 and/or D11], the Plaintiff suffers and continues to do so.”

36.  It is clear that the conspiracy claim is a distinct cause of action. Paragraph 85 of the SC pleads an agreement between all the defendants.  No particulars were given as to when that agreement was made.  No particulars were given as to the facts and circumstances on which the tort of conspiracy is based including the existence of the alleged agreement between all the defendants.

37.  By request 21.1, the defendants requested full particulars of the facts and circumstances on which the plaintiff’s alleged tort of conspiracy to injure is based, including the existence of the alleged agreement between the defendants.

38.  The answer that was provided was:

“Please refer to paragraphs 1 to 86 of the Statement of Claim”

39.  That answer was, in my view, a cheeky and unhelpful response.  In effect, it relies on the whole SC without answering the particulars.  I should add that Mr Cooney was not responsible for that wholly inappropriate response.

40.  In the course of his submissions when I asked him what the plaintiff’s case was as to when the agreement was made, Mr Cooney submitted that in respect of D6 to D11 the agreement was made in September 2012, relying on paragraph 49 of the SC.  Mr Cooney also submitted that the agreement was also made on 6 and 10 October 2012, relying on paragraph 49(4) of the SC. 

41.  When I asked counsel to let me know which other paragraphs of the SC he was relying on to show when the alleged agreement was made, Mr Cooney submitted that he was also relying on paragraphs 44, 53 to 62 and paragraph 78(1) to (5) of the SC.

42.  I am unable to accept that those paragraphs show when the alleged agreement was made.  They do not show that the alleged agreement was made in September 2012 and also on 6 and 10 October 2012 as submitted.

43.  Paragraph 44 of the SC pleads that around September 2012 D8 and/or D9 and/or D10 and/or D11 launched a prenatal test with a process which was identical to that created by the plaintiff and that those defendants could not have developed, procured, launched and/or marketed the process without the disclosure by D1 to D4 and D6 of the confidential information to D7 and/or D8 and/or D9 and/or D10 and/or D11.

44.  Paragraph 49 of the SC pleads that D6 and/or D7 and/or D8 and/or D9 and/or D10 and/or D11 acted in concert by launching, providing and marketing the process highly similar to the Maternal Y‑Test to their own customers. 

45.  Paragraphs 53 to 62 of the SC plead the claim for unlawful interference of the plaintiff’s business by D3 and the claim for negligence and wilful default against D3.  As can be seen from paragraphs 53 to 58, the plaintiff is relying on matters occurring as early as December 2011 and also in April 2012.

46.  Paragraph 78(1) to (5) of the SC plead that D1 and D4 were in breach of their contract with the plaintiff by soliciting the named employees of the plaintiff to join D8 and/or D9 and/or D10 and/or D11.  As pleaded at paragraph 78, as a result of the solicitation by D1 and D4 some of the named employees resigned in July and August 2012, which was before September 2012.

47.  In my view, the plaintiff has failed to properly plead the claim for conspiracy to injure with sufficient particulars so that the defendants know what case they have to meet in respect of this cause of action.  The agreement pleaded at paragraph 85 of the SC is an agreement between all the defendants. However, by paragraph 86 of the SC the plaintiff seems to suggest that the agreement was between D1 to D7, D8 and/or D9 and/or D10 and/or D11.  That does not appear to be the same agreement pleaded at paragraph 85 involving all the defendants.  Also, by the above paragraphs of the SC mentioned by counsel in his submissions, it is clear that those paragraphs do not support an agreement between all the defendants made in September 2012 and also on 6 and 10 October 2012, as those paragraphs plead matters occurring much earlier than September 2012. 

48.  Ma CJ said in Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663 at paragraph 23:

“The purpose of pleadings, in clearly and unambiguously setting out the true extent and nature of a dispute not just for the benefit of the parties but also for the Court in managing and trying cases, remains important under our system of civil justice. The retention of the old rules as to pleading as well as the introduction of new provisions over four years ago under the Civil Justice Reform, reinforce this”.

49.  As I have said, the answer that was provided was wholly inappropriate.  It cannot be right to ask the defendants to trawl through the whole of the SC and try to guess which paragraphs are relevant to the distinct claim for conspiracy to injure.  It is for the plaintiff to plead his case clearly and unambiguously in an intelligible form.  The plaintiff has failed to so plead its case on the claim for conspiracy to injure.  The defendants are entitled to the particulars sought under request 21.1.  I was satisfied that the order is necessary for disposing fairly of the cause or matter.

REQUEST 8.2

50.  I was also satisfied that the order for the particulars sought under request 8.2 is necessary for disposing fairly of the cause or matter.

51.  By paragraph 49(3) of the SC the plaintiff alleged that since late September 2012 D5 paid visits to the clinics of a number of medical practitioners who had regularly referred patients to the plaintiff to undergo the Maternal Y‑Test and that D5 solicited these medical practitioners to refer their patients to D8 and/or D9 and/or D10 and/or D11 for their process instead of the Maternal Y‑Test.  None of the medical practitioners were identified and I was satisfied that the order for the particulars requested under request 8.2 is necessary for disposing fairly of the cause or matter. 

52.  I, therefore, made the order for the particulars requested under request 21.1. and request 8.2.

53.  Save for request 21.1 and request 8.2, I was not satisfied that an order for the particulars sought under all the other requests is necessary for disposing fairly of the cause or matter, or for saving costs.  I, therefore, refused to make an order for the particulars sought under the other requests.

54.  Mr Kwan grouped the other requests into the following categories:

(1) particulars in relation to the occasions(ie when, where, how and what) where the defendants had been allegedly imparted with and/or divulged and/or had knowledge of the alleged confidential information;

(2) particulars in relation to the alleged solicitation of medical practitioners/clientele referral or employees;

(3) particulars in relation to the knowledge and/or negligence/wilful default of D3 in relation to Madam A and Madam B;

(4) particulars in relation to special damages; and

(5) particulars in relation to procurement.

Category (1)

55.  As to category (1), these relate to requests 1.1 to 7.1, 9.1, 14.1, 15.1 and 22.1.

56.  It seems to me that the plaintiff has pleaded the material facts on which it seeks to rely at trial to ask the court to draw the inferences that the defendants had been imparted with, had divulged and had knowledge of the confidential information.  Whether or not the court will draw those inferences is a matter to be resolved at trial.  As Mr Cooney submitted, at this stage the plaintiff has no further particulars to give.  It seems to me that the defendants know what case they have to meet.  The plaintiff has tied its hands with the material facts pleaded and it will not be allowed to depart from its pleaded case at trial without leave.

57.  In respect of request 9.1 and request 22.1, Mr Kwan submitted, correctly in my view, that the plea in respect of the copyright claim at paragraph 50 of the SC was insufficient.  It is pleaded at paragraph 50 that D8 and/or D9 and/or D10 and/or D11 are “in breach of the Plaintiff’s copyright in the Confidential Information”.  No particulars are given as to what the copyright works are, who the authors are and how the plaintiff derived copyright in the works.  However, request 9.1 and request 22.1 did not ask for these particulars.  There was no proper request made for these particulars.

Category (2)

58.  As to category (2), these relate to requests 8.1, 15.2, 17.1, 20.1 and 27.1.  Mr Kwan submitted that these requests were directed to the claim of solicitation and dissuasion by D5 of certain medical practitioners’ clients from the plaintiff and other defendants’ procurement of the same.  Request 17.1 also sought particulars of the occasions whereby some of the defendants allegedly solicited the named employees to join the corporate defendants.

59.  It seems to me that the plaintiff has also pleaded the material facts on which it seeks to rely at trial to ask the court to draw inferences that the defendants solicited the medical practitioners and the plaintiff’s employees.  The defendants know what case they have to meet.  Again, the plaintiff has tied its hands with the facts pleaded and it will not be allowed to depart from its pleaded case at trial without leave.

Category (3)

60.  As to category (3), this relates to requests 10.1 and 23.1 in respect of a Madam A, and requests 12.1, 25.1 and 26.1 in respect of a Madam B. 

61.  As pleaded at paragraph 7 of the SC, in addition to the Maternal Y‑Test, the plaintiff provided two other diagnostic tests namely, the Alpha‑Thalassemia Mutation Screening Test (“the Alpha‑Test”) and the Beta‑Thalassemia Mutation Screening Test (“the Beta‑Test”).  The Alpha‑Test is for the detection of an illness known as Alpha‑Thalassemia in a fetus.  The Beta‑Test is for the detection of a disease known as Beta‑Thalassemia in a fetus. 

62.  The plaintiff’s case is that D3 was in charge of performing and supervising the Alpha‑Test for Madam A who was referred to the plaintiff for the Alpha‑Test by a doctor.  The plaintiff’s claim against D3 is for special damages arising from D3’s wilful default or alternatively, negligence in performing and supervising the Alpha‑Test for Madam A.  It is alleged that D3 caused a wrong test report with wrong test results to be issued to Madam A’s doctor.  As a result, the plaintiff paid compensation to Madam A and the plaintiff lost all referrals from the doctor involved. 

63.  By paragraph 56 of the SC the plaintiff alleged that D3 knew for a fact that Madam A is a carrier of the recessive gene for Alpha‑Thalassemia. Under particulars (1) at paragraph 56 it is pleaded that in the course of D3’s employment with the plaintiff, the plaintiff informed D3 that all samples that undergo the Alpha‑Test are taken from mothers who are known to be carriers of the recessive gene for Alpha‑Thalassemia. 

64.  Request 10.1 asked for particulars as to the occasions (ie when, where, how and what) whereby the alleged communication took place.  The answer that had been given in respect of this request was that doctors who referred mothers to the plaintiff for the Alpha‑Test are required to provide the referral reason or relevant medical history of the mothers.  In respect of the test request form for Madam A, it was stated thereon that both Madam A and the father were carriers of recessive genes for Alpha‑Thalassemia. The plaintiff’s case is that D3 would be informed of this when she was provided with the test request form and the other documents.

65.  It seems to me that a sufficient answer was provided by the plaintiff.  The defendants know what case they have to meet.

66.  Request 23.1 asks for particulars in respect of paragraph 23(11) of the reply where it is pleaded that a reasonable person with the relevant laboratory experience would not have mis‑interpreted the product size of Madam A’s sample to be 1.80 kilo base pairs unless it was done deliberately or negligently.  This request seeks particulars of the facts and circumstance relied upon in support of the alleged deliberate act on the part of D3. 

67.  I accept Mr Cooney’s submission that the plaintiff has pleaded the whole Alpha‑Test incident to explain that it is implausible for a Part 1 medical laboratory technologist to make a mistake of the kind that had been made by D3.  The plaintiff’s case is that the grossness of D3’s conduct indicates a deliberate act.  The plaintiff does not have any further facts to rely on other than what has been pleaded.  It seems to me that the defendants know what case they have to meet. 

68.  The plaintiff also claims special damages against D3 arising from D3’s wilful default or alternatively, negligence in performing and supervising the Beta‑Test for Madam B.  It is the plaintiff’s case that D3 caused a wrong test report with wrong test results to be issued to Madam B’s doctor.  As a result, the plaintiff suffers a loss of business from, inter alia, the relevant doctor.

69.  Request 12.1 asks for particulars of the allegation of knowledge on which the alleged wilful default on the part of D3 is based.  As Mr Cooney submitted, the particulars have been pleaded at paragraphs 62 to 66 of the SC.  It is alleged that D3 falsely stated in the Beta‑Test report sent to Madam B’s doctor that the fetus is a carrier of Beta‑Thalassemia. The plaintiff’s case is that D3’s conduct fell severely below the standard of care to be exercised by a competent accredited medical laboratory technologist. Its case is that it is not plausible that a competent accredited medical laboratory technologist would have made such a mistake thereby indicating that it was a deliberate act. 

70.  It seems to me that sufficient particulars have been given.  The plaintiff does not have any further particulars to rely on.  The defendants know what case they have to meet.  Again, the plaintiff has tied its hands and will not be allowed to depart from its pleaded case at trial without leave.

71.  Request 25.1 seeks particulars of facts and circumstances relied on by the plaintiff is support of the allegation that D3 had doubt and should conduct re‑testing Madam B’s sample.  Request 26.1 seeks particulars of facts and circumstances relied on in support of the alleged deliberate act or wilful default on the part of D3 by choosing not to re‑test Madam B’s sample.

72.  I accept Mr Cooney’s submission that the circumstances of doubt are set out at paragraph 28(4) to (7) of the reply.  The plaintiff’s case is that it is implausible that a competent accredited medical laboratory technologist would not have recognized that doubt and acted upon it by re‑testing the sample thereby indicating a deliberate act.

73.  I am also of the view that sufficient particulars have been given in respect of request 25.1.  The plaintiff does not rely on any further particulars.  The defendants know what case they have to meet.

Category (4)

74.  As to category (4), this relates to requests 11.1, 13.1 and 24.1. These requests are for particulars of damages suffered by the plaintiff.  As part of the relief claimed in the SC, the plaintiff claims by prayer (4) an inquiry as to damages or an account of profits made by the defendants.  It seems to me that if and when the court finds the defendants liable as claimed and makes an order for an inquiry as to damages, it will be necessary at that time for the plaintiff to give the necessary particulars of the claim for damages.  In my view, it is not necessary to make any order in respect of these requests at this stage of the proceedings. 

Category (5)

75.  As to category (5), these relate to requests 18.1 and 19.1.  These requests are in relation to the plaintiff’s claim for procuring breach of contract.

76.  It is pleaded at paragraph 80(4) of the SC that D7 is the husband of D3 and that the employment status of D2, D3 and D5 were communicated by D3 to D7.  Request 18.1 asks for particulars of the occasions (ie when, where, how and what) whereby the alleged communication by D3 to D7 took place.  

77.  The plaintiff’s case is that at all material times D1, D4, D6 and D7 were aware that D2, D3 and D5 were employees of the plaintiff.  This has been pleaded and particularised at paragraph 80 of the SC.  D7 is the husband of D3.  D3 was employed as a medical laboratory technologist in the plaintiff.  The plaintiff will ask the court at trial to infer that D3 would tell D7 about D2, D3 and D5’s employment with the plaintiff.  It seems to me that sufficient particulars have been given.  The plaintiff does not rely on any further particulars.  The defendants know what case they have to meet.

78.  Save for request 8.2 and request 21.1 in respect of which I made the order, I was not satisfied that an order for the particulars sought under the other requests is necessary either for disposing fairly of the cause or matter, or for saving costs.

Mr Nicholas Cooney SC and Mr Felix Ng, instructed by Pang, Wan & Choi, for the plaintiff

Mr Jonathan Kwan, instructed by Fairbairn Catley Low & Kong, for the 1^st to 11^th defendants