Taiwan High Court criminal judgment finding Huang He-nan's stating and circulation of false information sufficient to injure the business reputations of others in violation of the Fair Trade Law

Taiwan

Case:

Taiwan High Court criminal judgment finding Huang He-nan's stating and circulation of false information sufficient to injure the business reputations of others in violation of the Fair Trade Law

Key Words:

Chun Hun International Beauty Co., Ltd., manicuring and weight loss, defamation, business reputation

Reference:

Taiwan High Court Criminal Judgment (89) Shang Yi Tzu No. 754

Industry:

Haircut and Beauty industry (9620)

Relevant Laws:

Articles 22, 37 and 38 of the Fair Trade Law

Summary: 1. Background

When responding to questions from the media at the "Best Leading Lady Swimsuit Testimonial Press Conference" at the Howard Plaza Hotel in the afternoon of June 30 1999, Huang He-nan, the Chairman of Chun Hun International Beauty Co., Ltd. ("Chun Hun") and a director of Chun Hun's affiliate, The Best Leading Lady Int'l Beauty Co., Ltd. ("Leading Lady"), made the following statements on behalf of Leading Lady:

I was given this information from internal sources. They underwent liposuction treatment in a secret room in Chuang Ya-ch'ing's home. We have no direct proof because that person is afraid to step forward . . . I have no direct proof right now. Tung Yu-t'ing underwent the treatment once and it's an old trick of Pao Ts'ui-ying. We obtained the information from internal sources. I hope that through this press conference, interviews will be conducted directly by reporters . . . The liposuction Pao Ts'ui-ying underwent this time was so intense she was out cold for two days.

Huang He-nan made those statements at the press conference with the knowledge that there was insufficient evidence to prove that Tung Yu-t'ing and Pao Ts'ui-ying, spokespersons for a weight loss advertisement published by Matinform (Taiwan) Ltd. ("Matinform"), underwent liposuction treatment. He knew that print media reporters covering the conference would unwittingly include his statements in their news releases and that those news releases would be circulated to the general public via major newspapers and magazines. He committed the act intentionally and for competitive purposes.

2. Judgment and Grounds

(1) In the afternoon of 30 June 1999, Leading Lady held the "Best Leading Lady Swimsuit Testimonial Press Conference" on the second basement floor of the Howard Plaza Hotel where it distributed to reporters news releases that it had produced. Photocopies of a press conference agenda and news release, and a uniform invoice issued by the hotel are on record as evidence. At the press conference, Huang He-nan stated that Tung Yu-t'ing and Pao Ts'ui-ying underwent liposuction treatment in a secret room in the home of Chuang Ya-ch'ing (Matinform's responsible person). The contents of the statements are sufficient to injure Tung Yu-t'ing and Pao Ts'ui-ying's reputations and Matinform's business reputation.

(2) Huang He-nan argued that his conclusion that the advertisement, stating Pao Ts'ui-ying lost 13.5 kilograms was false, was made on the following grounds: There was collusion between Matinform and Chang Ch'un T'ung Plastic Surgery (set up by Chuang Ya-ch'ing's spouse Su Chih-hsiung); Liu Sheng-hsin, Ts'ai Chen-yun, Chang Hsiu-chuen, and Chiang Mei-chih had reported that Tung Yu-t'ing and Pao Ts'ui-ying underwent liposuction treatment; and [the results of] the inquiries he made with several academics and experts. He further argued that his conclusion was not made with ill intent. But the testimony given by witnesses Su Chih-hsiung, Ts'ai Chen-yun, Wang Chien-fang, and Ch'en You-chi showed that they did not state whether or not Tung Yu-t'ing and Pao Ts'ui-ying underwent liposuction. Thus, it is unlikely for Huang He-nan to conclude that Tung Yu-t'ing and Pao Ts'ui-ying had undergone liposuction in a secret room in Chuang Ya-ch'ing's home.

(3) According to Article 310(3) of the Criminal Code, "A person who can prove the truth of the defamatory fact shall not be punished for the offence of defamation." With respect to the wording "can prove" in the Article, although the person does not have to offer evidence capable of proving directly the defamatory fact, yet he must present objective facts sufficient to prove the genuineness of the defamatory fact. Huang He-nan's statements that a secret room in the home of Chuang Ya-ch'ing was the location where Tung Yu-t'ing and Pao Ts'ui-ying underwent liposuction treatment etc. made unambiguously at the press conference, were groundless. Huang He-nan's statements, as a result, cannot be treated as an objective proof of the truth of his statements. So the impunity clause of Article 310-3 does not apply.

According to Article 311(1)(iii) of the Criminal Code, "A person who, with good intent, makes a fair comment on a fact subject to public criticism, shall not be punished." But the conditions for impunity are that the statement is made objectively and with good intent, that the matter involved is one rightly subject to public criticism, and that it is a fair comment. Huang He-nan possessed no evidence to prove that Pao Ts'ui-ying underwent liposuction treatment. He knew that her weight loss results could have been achieved at the enterprises operated by him. Huang He-nan's statement that Tung Yu-t'ing and Pao Ts'ui-ying underwent liposuction treatment in a secret room in the home of Chuang Ya-ch'ing was obviously a false statement made with ill intent. It would be difficult to deem Huang He-nan's statements a fair comment made with good intent.

(4) With respect to the Criminal Code, statutory overlap occurs when the constituent elements of a plurality of statutory provisions can be applied (due to statutory complexity), and one of the statutory provisions is selected and applied in accordance with legal principles.

According to Article 22 of the Fair Trade Law, enterprises shall not state or circulate false statements sufficient to damage the business reputation of another person for the purposes of competition; violators shall be punished in accordance with Articles 37(1) and 38 of the Fair Trade Law.

The act in question also meets the requirements of libel under Article 310(1) or Article 310(2) of the Criminal Code. Since the constituent elements of a plurality of statutory provisions can be applied to the same crime due to statutory complexity, the principles of law require selecting one of the provisions to apply, the act should therefore be tried and decided under the Fair Trade Law.

Huang He-nan and Leading Lady violated Article 22 of the Fair Trade Law and should be punished in accordance with Article 37(1) of that law. He used reporters and Leading Lady employees to unwittingly circulate false statements to the public via written reports, thus becoming an indirect principal offender. His single act infringed on the legal rights of Tung Yu-t'ing, Pao Ts'ui-ying, Chuang Ya-ch'ing, and Matinform. His act violated four statutes, constituting an imaginative joinder of offenses. The most severe of the prescribed punishments should be imposed. Leading Lady violated Articles 22 and 37(1) of the Fair Trade Law and a fine shall be imposed in accordance with Article 38 of the Fair Trade Law.

Appendix: The Best Leading Lady Int'l Beauty Co., Ltd.'s Uniform Invoice Number: 84892048

Chun Hun International Beauty Co., Ltd.'s Uniform Invoice Number: 84285613

Matinform (Taiwan) Ltd.'s Uniform Invoice. Number: 89967052

Summarized by Chia-Ching Lai;

Supervised by Rong-Ging Wang