Huang Hsiang Construction Corporation

Case:

Key Words:

pre-sold house, infrastructure, false advertisement

Reference:

Taipei High Administrative Court Decision (95) Su-Tzu No. 02338

Industry:

Buildings Construction (4581)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1. The defendant, Fair Trade Commission (Defendant) initiated an investigation upon complaint and found that the plaintiff, Huang Hsiang Construction Corporation (Plaintiff) advertised several infrastructures in the floor plan for the first floor which was designed to be the parking space for automobiles and motorcycles in the floor plan approved by 92 Chien-Tzu No. 186 Construction. Such infrastructures included an exercising room, recreation pavilion, children's playground, etc. The Defendant found that the Plaintiff made obvious false, untrue and misleading representations regarding the contents of its product, in violation of Article 21(1) of the Fair Trade Law. Therefore, the Defendant, upon Disposition Kung Ch'u Tzu No. 094141, ordered the Plaintiff to immediately cease said unlawful act after said Disposition was served and imposed an administrative fine of NT$6,150,000 in accordance with the fore part of Article 41 of the Fair Trade Law. The Plaintiff was dissatisfied with the decision and filed an appeal which was denied. The Plaintiff therefore filed this administrative action.
2. Pursuant to Article 21(1) of the Fair Trade Law and the fore part of Article 41 of the same law, "no enterprise shall make or use false or misleading representations or symbol as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, or place of processing on goods or in advertisements, or in any other way making known to the public;" and "the Fair Trade Commission may order any enterprise that violates any of the provisions of this Law to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, it may impose upon such enterprise an administrative penalty of not less than fifty thousand nor more than twenty-five million New Taiwan Dollars." Whether an advertisement of pre-sold houses is false, untrue or misleading shall depend upon the actual conditions when the advertiser uses the advertisement. In the event that an advertiser of a pre-sold house advertisement foresees or is able to know that the performance in the future will not match the contents of such advertisement, such advertisement shall be false, untrue or misleading. The Plaintiff, without being approved by the Public Work Department of Taipei City Government, promoted many unlawful infrastructures in its construction advertisement and caused the general consumer to wrongfully believe that the design of said infrastructures was legal and would be available upon completion. The consumer might further decide to trade with the Plaintiff. In light of the overall impression and effectiveness, the advertisement in question caused sufficient impact on the judgment and decision of the general public with regular knowledge and experience to trade. Furthermore, the advertisement also affected the economic benefits of other competitors and their trading counterparts respectably. Upon aforesaid circumstances, this Court also found that the Plaintiff made false, untrue and misleading advertisement regarding its product.
3. After considering the motive, purpose and anticipated improper profits of the unlawful acts of Plaintiff; the degree and duration of the unlawful acts' harm to market order; the benefits derived on account of the unlawful acts; the enterprise scale; the remorse shown for the acts and attitude of cooperation in the investigation; and other factors, the FTC concluded that the Defendant's acts of finding the Plaintiff's representation false, untrue and misleading in violation of Article 21(1) of the Fair Trade Law, reviewing the unlawful acts in accordance with Article 36 of the Enforcement Rules to the Fair Trade Law, and ordering the Plaintiff to immediately cease the unlawful act after the original Disposition was served and imposed an administrative fine of NT$6,150,000 in accordance with the fore part of Article 41 of the Fair Trade Law. The Appeal Court also made a correct ruling to uphold the original decision. It shall be groundless for the Plaintiff to employ the aforesaid statements to request for revocation of the original decision.

 Appendix:
Huang Hsing Construction Corporation's Uniform Invoice Number: 86379024