[1] There are two appeals before us. One is by the defendant in the court below. It is against the decision of the learned judge entering judgment for the plaintiff and dismissing the defendant’s counterclaim. The other is by the plaintiff against the order of the judge dismissing its application to have the defendant’s principal officer committed to prison for contempt. The facts of this case are simple enough.

[2] The defendant is a well known sports goods retailer. It sells all sorts of sports apparel as well. There is a range of sports apparel under the name of ‘Le Coq Sportif’. The plaintiff is the owner of that trademark. It entered into three agreements with the defendant under the terms of which it gave to the defendant the right to manufacture and retail goods carrying the Le Coq Sportif mark. They are dated 16 December 1991 (‘the first licence agreement’), 4 July 1995 (‘the second licence agreement’) and 26 August 1996 (‘the third licence agreement’). But there was an important restriction imposed on the defendant. It could only market the goods in question within Malaysia and Singapore. Exporting the goods outside these two countries was strictly prohibited. Each of the three agreements contained a clause to that effect. Absent the plaintiff’s licence, it was unlawful for the defendant to do any of the things permitted by the respective licence agreements. At this point I would mention three matters. Although the first licence agreement was expressed to be effective for only a period of 12 months, that is to say, from 1 January 1992 to 31 December 1992, it appears to have been consistently renewed until the second licence agreement was entered into. Next, although the second licence agreement expired on 31 December 1995, the plaintiff permitted the defendant to continue as before until the third licence agreement had been executed. Last, under the terms of the respective agreements, in the event of a non-renewal of the licence by the plaintiff, the defendant had 6 months to dispose of the licensed goods that it had in its hands.

[3] Now, it is in evidence that during the currency of the first and second agreements problems arose between the parties. The plaintiff had found Le Coq Sportif goods manufactured in Malaysia in the Japanese market. If such goods were available in Japan, they must in all probability have come from [*188] the defendant. For, there were no other sources from which the goods could have come. Not unnaturally, the plaintiff was most concerned about this and about granting a fresh licence to the defendant whom it suspected of having violated a most important term of the existing agreement. After the third licence agreement had been entered into, the plaintiff decided to put the defendant to the test. In 1996, it engaged the services of one Isaac Leung through the firm of M/s Rouse & Co of Hong Kong to assist it to see if the defendant was in fact exporting Le Coq Sportif goods. Isaac Leung came to Kuala Lumpur on two occasions. He first came on 8 August 1996. He went to the defendant’s premises with the object of obtaining samples and quotations for Le Coq Sportif goods marketed by the defendant. But he was unable to obtain any. He next came on 30 December 1996, that is to say, on the eve of the expiry of the third licence agreement. On this occasion he was able to obtain samples. He also purchased about US$ 10,395 worth of Le Coq Sportif goods for which he paid US$ 5,000 straightaway. The subject goods were, at Isaac Leung’s request, shipped by the defendant to an address in Hong Kong. The defendant billed Isaac Leung’s company in Hong Kong. Thereafter, the plaintiff then issued writ against the defendant on 16 June 1997 claiming a breach of the third licence agreement. On the same day it obtained an ex parte Anton Pillar injunction. Three days later, that is to say, on 19 June 1997, the plaintiff faxed to the defendant a letter terminating the third licence agreement