Administrative litigation against Chu Ting Construction Co. Ltd. for its untrue advertisements
Chinese Taipei
Case:
Administrative litigation against Chu Ting Construction Co. Ltd. for its untrue advertisements
Key Words:
false or untrue, misleading, advertisements
Reference:
Administrative Court (84) P'an Tzu No 3272
Industry:
Building Architecture/Construction Industry (4601)
Relevant Laws:
Article 21(1) and the first half of Article 41 of the Fair Trade Law
Summary:
1. "Tranquil Retreat for the Rich" was a residential complex jointly developed by the Plaintiff Chu Ting Construction Co. Ltd. (the "Plaintiff", who brought the administrative litigation against the Fair Trade Commission (the Defendant) and its disposition) and the landowners; the completed houses were shared by the parties and sold by them respectively. The promotional advertisements, the execution of contracts, the payment receiving, and the transfer of title were all under the charge of the Plaintiff. Moreover, an advertisement flyer given upon contract signing stated that the building was "invested and constructed by the Chu Ting"; also, the words "Chu Ting Construction" was conspicuously posted on the building. Under such circumstances, any discrepancy between the actual conditions of the building and the content of the advertisements would constitute a violation of Article 21(1) of the Fair Trade Law regardless of which party the complainant dealt with.
2. In the advertisement for the residential complex in question, the Plaintiff claimed that the complex would come with 12 facilities for the use of the whole community, including the security guard room, a crown artistic gate, a patio with avant-garde sculptures, a pavilion, a sculptured fountain, a children's playground, a healthful walking path, stone stools, a starlit diamond plaza, a rose garden, "Champs Elysees," and a four-season flower garden. A layout plan was also drawn on the advertisement. However, during the more-than-one-year period between the delivery of the building in August 1993 and the investigation conducted by the Defendant (the Commission), only a makeshift security guard pavilion and a gate were constructed at the entry and none of the rest facilities were under construction. The Plaintiff claimed that it had sent people to start the construction of the other public facilities after the completion of the structure, but then stopped the efforts because of the opposition from the residents in the complex. However, no supporting evidence was submitted to prove such statement and between the completion of the complex and June 1994 no attempt was made by the Plaintiff to perform the construction of the said facilities. The Plaintiff also defended that the Community Management Committee on 24 August 1994 had sent it a letter regarding the Committee's decision of alternative public facilities and request for construction accordingly. However, according to the Defendant's investigation, the above-mentioned decision was made at a meeting, for which a short notice was issued on 23 August 1994 after the Defendant started to look into this case. Only a few non-representative residents attended the meeting, which fact could be proven by the record of statements made by the participating residents in the committee meeting. Furthermore, the 9 signatures on the decision of the Community Management Committee and the letter of consent submitted by the Plaintiff did not match the 8 names listed in the roster of the Management Committee members, which was submitted by the Plaintiff in the re-appeal against the administrative order. Therefore, the validity of the decision and consent is in doubt. In addition, the fact of the Plaintiff's untrue or misleading advertisements in violation of the Fair Trade Law would not be changed by the residents' subsequent consent to have the original design of the complex altered; nor would it relinquish the Plaintiff's liability. The Plaintiff also failed to present a specification drawing to show that the relevant facilities in question had been approved by the authority in charge of building construction, which further proved that the Plaintiff's act was in violation of the provisions of Article 21(1) of the Fair Trade Law.
3. Among the 12 facilities listed in the said advertisement for the residential complex, "a security guard room" was classified as miscellaneous working item pursuant to the provisions of Article 7 of the Architecture Law, and thus shall not be constructed without a miscellaneous item permit applied for in accordance with the first half of Article 25(1) and Article 28(2) of the same Law. Furthermore, if the construction of a pavilion and a children's playground involved watchtowers, enclosed walls, inlays, overhead games, and digging and filling of earth and stone, the relevant laws stipulated that a miscellaneous item permit must be acquired before the actual construction took place. When a builder applies for a construction permit, he or she shall at the same time apply for a miscellaneous item permit if the project involves the construction of miscellaneous working items instead of making the application afterwards. The Plaintiff did not apply for a miscellaneous item permit for the public facilities in question, which prevented their construction from taking place and as a matter of fact, no actual efforts to initiate the construction were made by the Plaintiff. The above facts lead to the conclusion that the Plaintiff's advertisements were untrue and misleading.
4. Plaintiff argued that the advertisement for the residential complex was in nature an offer or an invitation to offer that constitute part of the contract, and that any inconsistency between such advertisements and the delivered objects was contract dispute rather than untrue advertisements; its trading counterparts were unlikely to be misled by the advertisements. This argument is not acceptable.
Summarized by Ts'ao, Jui-ch'ing
Supervised by Hsu, Chao-ying
Appendix:
Chu Ting Construction Ltd.'s Uniform Invoice Number.: 22765465