HKSAR v. Sunan Industries Ltd and Another

HCMA 939/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 939 OF 2007

(ON APPEAL FROM TMS 2730 to 2734 OF 2006 (CONSOLIDATED))

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BETWEEN

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Before : Deputy High Court Judge Line in Court

Date of Hearing : 29 January 2008

Date of Judgment : 6 February 2008

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J U D G M E N T

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1.This is an appeal by way of case stated against an order made by a magistrate, Mr Peter Hui, dismissing informations under the Trade Descriptions Ordinance Cap 362 preferred against the two respondents upon his finding that there was no case to answer in respect of any of them.

2.There was no dispute concerning the facts of the appellant’s case.  The respondents had involved themselves in causing 1200 shirts to be manufactured in China, and imported into Hong Kong, bearing the label in the collar ‘Daniel Hechter, Paris’.

3.The resolution of one question determines the result of this appeal.  Both sides agree that the question is this: could, may or might a properly directed juror find on the evidence that the label, ‘Daniel Hechter, Paris’, was anything likely to be taken as an indication of the place of manufacture of the shirt to which it was attached.

4.It is also common ground that a properly directed juror in the case would be directed:

(a)	that in considering the question posed they must consider what indication a Hong Kong shopper for such goods would take; and
(b)	that if it is reasonably possible that some Hong Kong shoppers might take the label as an indication of the place of manufacture that would be sufficient to establish the prosecution’s case, even though many more Hong Kong shoppers might in fact take the opposite view.

5.The evidence relevant to the question extended no further than the fact that the shirts bore the labels.  There was no direct evidence indicating the price at which a shirt was to be sold, or in what sort of shop.  There was no suggestion that these shirts were fakes in the sense that they were not genuine Daniel Hechter shirts.

6.The magistrate saw samples of the shirts and I have seen them.  They are of good quality.  No one disputes that.  They are not the sort of articles that would be sold very cheaply from stalls in markets.  They are the sort of shirt that would attract the descriptions, mainstream, fairly conservative, smart casual.  The appellant submitted convincingly that they would not be out of place in a relatively smart shop in Hong Kong at a price of 600 dollars or so.

7.The question engages what a modern day juror would think about what the modern day shopper would make of the label.

8.The magistrate was of the view that no properly directed jury could find that the label indicated a place of manufacture.

9.I agree with him.  Times have changed.  The representation implicit in such labels these days tells the shopper that the design and the quality control of the garment is associated with a particular place in question.  A properly directed juror could never be sure that a Hong Kong shopper was likely to take such a label as an indication of the place of manufacture.

10.My view attributes no specialist knowledge to the ordinary shopper, because I judge that plain general knowledge amongst those minded to buy a Daniel Hechter shirt, particularly in Hong Kong, is such that the label would not likely be taken to indicate Parisian or French manufacture.

11.I do not forget that the Trade Descriptions Ordinance must be given a fair and liberal interpretation, promoting its objectives, which include providing a safeguard to members of the public who are consumers and purchasers of goods, and to Hong Kong’s international reputation as an international trading and shopping centre.

12.However, I judge that the word Paris beneath a designer’s name on a shirt label is likely to be taken as an indication as to where the design and quality control emanates, and not where the shirt was manufactured.  It describes the place where Daniel Hechter is situated.

13.Thus, for instance, the labels of Donna Karan, New York, or Dunhill, London, tell the prospective purchaser that their clothing will be up to the standards associated with those names.  The prospective purchaser of their garments would thereby expect them to meet their standards in design and quality, but would be indifferent as to the location of the factory that actually made the garment.  This view merely acknowledges that the general public are not ignorant of the fact that fashion houses in London, Paris, New York and the like cause their garments to be manufactured in China.  Globalisation of trade and manufacture is not a secret.  Country of origin is no longer the powerful indicator of quality that it once was.  If the appellant is right then they would have an ordinary shopper contemplating those capital cities as being the sites of enormous manufacturing endeavour, for they claim that the label may be taken as an indication that it is Paris, and not France, that is the place of manufacture.  Of course it is possible that a few Hong Kong shoppers might take the view that the label did indicate Parisian manufacture, but in my judgment that is not reasonably possible.  What Hong Kong shopper is ignorant of the factory outlet or the reduced price overrun in respect of genuine garments that are associated by their labels with Europe and the USA?  Who among them would reasonably think that such garments had been manufactured on those continents and shipped here for such sales?

14.Mr Turnbull rightly points out that the Hong Kong shopper will include the tourist.  Tourists minded to buy Daniel Hechter shirts in Hong Kong are not in my judgment likely to regard Paris as being the home of the factory as opposed to the fashion house from a perusal of the shirt label, even if they came across the shirt in an expensive shop here.  He made the point that cheap package tours may attract those of a more limited intellect and general knowledge such that they may likely take the label as indicating the place of manufacture.  I have grave doubts whether that is likely, but believe the point to be met by the consideration that such a person, in the unlikely event of his being in the market for a shirt like this, would be so indifferent as to the place of manufacture that he would not take the word Paris as an indication of it.

15.In contemplating what indication Hong Kong shoppers would take from the label, I perceive there to be a difference between what may be a fleeting, first impression and something that can be said to be ‘taken as’ an indication of a fact.  Construing the term I hope in a common sense way involves the shopper giving the matter a moment’s thought.  A moment’s thought would reveal that the word Paris in this context was likely to be taken by the shopper as no more than an indication of the location of the fashion house and that it was unlikely to be taken as the place of manufacture.

16.On the decisive point I agree with the magistrate that no Hong Kong juror could now sensibly contemplate that the Hong Kong shopper may be likely to take the word ‘Paris’ on this label as an indication of the place of manufacture.

17.Accordingly the appeal is dismissed.  Without contention, the respondents shall have their costs to be taxed if not agreed.

Mr R G Turnbull, Senior Assistant Director of Public Prosecutions & Mr Hayson Tse, Senior Government Counsel of the Department of Justice, for the Appellant

Mr Eric Kowk, S.C. and Mr C Y Li, instructed by Simon Siu, Wong, Lam & Chan, for the 1^st & 2^nd Respondents