Judgment by the Taipei High Administrative Court against Ting Ku Li Construction Company, Ltd. for violation of the Fair Trade Law

Taiwan

Case:

Judgment by the Taipei High Administrative Court against Ting Ku Li Construction Company, Ltd. for violation of the Fair Trade Law

Key Words:

stand-alone; duplex; misleading advertising

Reference:

Taipei High Administrative Court (89) Su Tzu No. 130

Industry:

Real Estate Investment (6611)

Relevant Laws:

Articles 21 and 24 of the Fair Trade Law

Summary:

1. Advertisements for the "Yung-An Tsun-Ti" [Yung-An Villas] published by the nonparty participant in the case stated: (1)"A valuable plot of land, the only one with 6,000 pings in the center of Taoyuan City," and "a vast, 6000 ping area planned for stand-alone duplexes." The text of the advertisement further read, "Yung-An Tsun-Ti is located on Yung An Street in the fully developed Ching Hua area. This valuable 6000-ping plot . . ." The obvious thrust of the text is to indicate that the building is located on a site with an area of 6000 pings. (2) According to the definitions in the Taipei Enforcement Rules of the Urban Planning Law, the definition of "stand-alone dwelling" is "an independent structure which contains only one housing unit." "Connected dwellings" are defined as "structures containing three or more interconnected housing units, in which every unit is separated on the left and right from other units by walls, and has separate entrances and exits." These definitions show that in terms of architectural structure, "connected" means having common walls and "stand-alone" means having no common walls, that is, being a separate structure. (3) On the first floor, the "D" unit bought by the plaintiff shares walls with other buildings (that is, is connected to them), but from the second story up, it is independent. According to the construction payment schedule, separate payments are made when construction of the ceilings for levels one through four are respectively completed, so that these floors should all be deemed separate, rather than separate only from the second floor up.

2. Summary of the defense: (1) In the ad in question, aside from the presentations above, the model home shown also has an accompanying text which states: "'Yung-An Tsun-Ti' is located on Yung An Street in the fully developed Ching Hua area. This valuable 6000-ping plot . . ." From an overall, objective viewpoint, the statement is simply referring to the size and value of the building site and the fact that the 6000-ping site is planned for stand-alone duplexes. The statement serves the purpose of strengthening the advertising appeal. It does not say that the 6000-ping site will be coming into the permanent possession of the participant, or that the site will not be sold to other developers for the purpose of constructing stand-alone duplexes. It would be a genuinely strenuous interpretation of the law to say that the fact that half of the site is being sold to Wong Lin Construction makes this advertisement misleading. Such an interpretation one inappropriately expands the meaning of the original text. (2) The plaintiff quotes the Taipei Enforcement Rules of the Urban Planning Law and says that a "stand-alone dwelling" is an independent structure which contains only one housing unit; however, whether the term "stand-alone dwelling" in the clause quoted and the term "stand-alone" as used in the ad are one and the same is far from certain. The idea that "connected dwellings" have common walls and that "stand-alone" structures cannot is a purely personal interpretation that has no basis. Further, the pictures in the ad did not show any stand-alone structures in either drawings or actual photographs, so that one had no way of making a judgment about whether there were in fact any common walls. The plaintiff has deliberately ignored the objective facts stated above and has engaged in sophistry based purely on the wording of the ads, which is not an adequate basis for showing any intent to deceive in the advertisement.

3. Grounds for the judgment: Investigation showed that the content of the advertisement in question only described the value and size of the building site and the fact that the structures to be erected on the 6000-ping area would be independent duplexes. It did not list the total number of structures to be built nor did it say that all of them would be built by Ting Ku Li Construction. The advertisement also stated that "Kang Gu Li Construction is determined that it will build the highest quality garden villas in the elite city-center area," and that it would continue with the "Yung-An Tsun-Ti No. 2." The ad also included the phrases "architectural planning by Kang Gu Li" and "large, independent, duplex-style villas," so the reader could see that the latter would all be built by Kang Gu Li and that they would be villas, as opposed to high-rise apartment buildings or other structures. The ad contained no false or misleading presentations, and it is clear that who the developer would be during the second stage of development is a matter not connected with the plaintiff in this case. Secondly, the housing purchased by the plaintiff on the D1 site was referred to in the ad as a "stand-alone" structure, and it does have separate entrances and exits, with the entire structure being used independently. The only common wall it shares with the neighboring structure is in the first floor garage, whereas from the second story up it is an independent structure with all four walls free, as the attached photograph shows. Thus in both appearance and use it can be considered independent, and conforms to the average person's sense of what "stand-alone" means. The plaintiff maintains he did not know the first floor was a garage, but the upper left portion of a diagram in the purchase agreement supplied by the plaintiff is a "garage area floor plan," and the irregularly-shaped protruding portion in the upper-right part of that diagram is clearly different than the rectangular shape shown for the 1st, 2nd, and 3rd floors and the roof. The plaintiff further placed his personal seal on the diagram showing his acceptance; thus his claim that he didn't know about the garage is obviously not to be relied on. In addition, (1) with respect to the plaintiff's awareness of the housing unit he bought being independent from the second story up and the fact that the walkway leading from the front door through the garden was shared with the neighboring D unit, what is shown in the attached photographs is not at odds with the pictures shown in the Yung-An Tsun-Ti ads, and is not disputed by the plaintiff. There is also the simple drawing provided by the plaintiff himself. (2) The term "stand-alone" does not have any specific legal definition, and should be interpreted according to the current general concept of the term held by society. Further, the housing units in this case are located in Taoyuan City, which means that the definition of "independent dwelling" provided in the Urban Planning Implementation Rules for Taipei City is irrelevant to this case. Thus the stance of the plaintiff that false advertising is involved, with the intent to deceive clients, is without basis. Therefore, no error was found in the original disposition, which held that the participant's advertisement for the "Yung-An Tsun-Ti" development was not in violation of Articles 21 and 24 of the Fair Trade Law. That disposition was upheld and the court rejected the plaintiff's appeal, which was without grounds.

Appendix: Ting Ku Li Construction, Ltd.'S Uniform Invoice Number: 97339801

Summarized by Chia-Ching Lai;

Supervised by Rong-Ging Wang