IN THE SUPREME COURT OF TONGA

Tuaimei'uta

v

Prema

Supreme Court, Nuku'alofa 
Ford J 
C 873/99 

15 August 2000; 29 August 2000 

Misrepresentation — Nike jeans — reasonable examination would have shown they were not Nike 

In April 1999 the plaintiff, Mr Tuaimei'uta, bought 70 pairs of cheap jeans from the defendant's general merchandise store which had the name "Nike" embroidered on a label on the back pocket. He then transported 50 pairs of the jeans back to Australia with the intention of selling them at a profit but they were seized by Customs officers at Sydney airport. Customs warned the plaintiff that the consignment breached the Australian Commerce (Import) Regulations because the clothing was not marked with the country of manufacture and Nike International's Sydney solicitors threatened to sue the plaintiff for breach of trade mark because the garments were not genuine Nike products. To avoid these consequences, the plaintiff agreed to forfeit the goods. He sued the defendant for the costs of the jeans plus expenses. 

Held: 

1. The plaintiff did not satisfy the Court, to the required standard, that the jeans carried the logo and the Court was not prepared to accept that they did. 

2. The defendant made no representations to the plaintiff at any stage as to whether the jeans were genuine Nike products. 

3. The jeans did not carry the Nike logo and for that reason it should have been apparent to the plaintiff upon inspection that they were not the genuine product of the Nike International company. Other factors which should have alerted the plaintiff were the fact that the store was a general merchandise store and not a specialist store dealing in brand labels, and the obvious cheap price of the jeans. 

4. The claim was dismissed and the defendant was entitled to costs. 

Case considered: 
Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB 564; [1990] 1 All ER 737 (CA) 

Counsel for plaintiff: Mr Niu 
Counsel for defendant: Mr 'Etika 

This decision was appealed successfully to the Court of Appeal. The appeal judgment will be reported in the next volume of these reports. 

Judgment 

The plaintiff Mr Tuaimei'uta is a Tongan subject but he has lived for the last eleven years in Victoria, Australia. In April 1999, on a trip back to Tonga he bought 70 pairs of cheap jeans from the defendant's general merchandise store which had the name "Nike" embroidered on a label on the back pocket. He then transported 50 pairs of the jeans back to Australia with the intention of selling them at a profit but they were seized by Customs officers at Sydney airport. 

Customs warned the plaintiff that the consignment breached the Australian Commerce (Import) Regulations because the clothing was not marked with the country of manufacture and Nike International's Sydney solicitors threatened to sue the plaintiff for breach of trade mark because the garments were not genuine Nike products. To avoid these consequences, the plaintiff agreed to forfeit the goods. He now sues the defendant for the costs of the jeans plus expenses. 

The facts are relatively straightforward. Only the plaintiff and the defendant gave evidence. Both were reasonably reliable witnesses but, with one exception, I found the defendant's evidence more reliable and to the extent that there may have been inconsistencies in what they told the court, I prefer the evidence of the defendant. 

The one exception I refer to related to the evidence which the defendant gave about her original purchase of the jeans from a market in Thailand. She was asked early on in her cross-examination if she believed they were genuine nike products when she made the purchase. She answered "yes". However, I do not believe that statement. The defendant immediately afterwards realised that she had made a mistake and that accounted for noticeable periods of hesitancy in some of the answers she subsequently gave. The truth of the matter is that she either did not believe they were genuine or, at best, did not turn her mind to that particular issue. Her position was summed up in an answer she later gave to the court, namely, that she was only interested in the fact that the jeans carried the name "Nike". 

There was a dispute over whether the jeans carried the well-known Nike International logo which was described as a "tick" or "boomerang" shape. The plaintiff said they did. The defendant maintained that the logo was not on the jeans. 

The plaintiff was not cross-examined on his assertion but the issue was not raised by the defendant in her evidence in chief so no issue of unfairness arises. The defendant's statements on the matter were made under cross-examination. 

The pleadings on this aspect of the case are unclear. The statement of claim does not refer to a "logo" as such but to a label "with the word and mark of "Nike" which is a well known brand name of the products of an American company called Nike International Ltd." The statement of defence acknowledges that the jeans were "labelled Nike" and paragraph 15 refers to "garments with the logo "Nike" attached" but because a clear distinction between the word 'Nike' and the Nike logo was never made in the statement of claim, I find it more probable than not that the reference to "logo" in paragraph 15 of the statement of defence is, in the context, simply a generic references to the name 'Nike' on the label and not a specific reference to the 'tick' or "boomerang" shaped "logo" of Nike International. 

This is a civil case and the burden of proof, which is on the balance of probabilities, rests upon the plaintiff. The plaintiff had with him some type of garment (it was not produced) and he showed it to the court to display the logo in question. His evidence was that of the 70 pairs of jeans he purchased, he gave 20 to his brothers and cousins in Tonga to wear and only 50 pairs were taken back to Australia. It surely would have been possible for him to acquire and formally produce to the court a pair of the jeans he had left in Tonga to establish one way or the other whether they carried the Nike logo. He did not. He has not satisfied me, therefore, to the required standard, that the jeans carried the logo and I am not prepared to accept that they did. 

It was submitted on behalf of the plaintiff that the plaintiff had told the defendant when he purchased the jeans that he was taking them back to Australia to sell. The defendant denied that proposition and I do not accept it. At best, I accept what the plaintiff indicated early on in his evidence, namely that he may have said something to the staff when he first entered the store about taking them back to Australia but that was a passing remark made in the context of asking the staff if he could speak to the owner of the store about negotiating a discount on the purchase price if he purchased a significant quantity of jeans. The staff concerned were not involved in the sale transaction. 

I find as a fact that the defendant made no representations to the plaintiff at any stage as to whether the jeans were genuine Nike products. The defendant agreed to discount the plaintiff's first purchase of 30 jeans from $25 to $22 and she agreed to discount the second purchase a few days later of 40 jeans from $25 to $21 but she made no representations to the plaintiff, nor did she know he was going to take them back and try and sell them in Australia. The defendant knew other retailers were selling the same product in Tonga and that the same jeans were being worn around the streets of Nuku'alofa. 

The plaintiff says that the jeans were hanging up for sale in the shop and the Nike label was clearly displayed to the customers and that, in itself, amounted to a misrepresentation because the jeans were not the genuine product of Nike International but they had been purchased by the defendant from a market in Thailand. 

It is true that there can be a sale by description even though the buyer is buying something which he selects in a shop. 

"… there is a sale by description even though the buyer is buying something displayed before him on the counter: a thing is sold by description, though it is specific, so long as it is sold not merely as the specific thing but as a thing corresponding to a description e.g. woollen under garments, a hot-water bottle, a second-hand reaping machine, to select a few obvious illustrations." 
- Benjamin's, "Sale of Goods", 5th ed, 1997, paragraph 11-008. 

But for goods to be sold by description, the buyer must have entered into the contract of sale in reliance on the description of the goods given to him expressly or implicitly by or on behalf of the seller. 

"Sales of specific goods may also be by description provide that they are bought by the buyer in reliance at least in part, on the description that is either expressly given or which can be inferred from the circumstances and which identifies the goods. It follows that the only sales which are not by description are sales of specific goods that are either sold without any description, express or implied, or do not include a statement about them as an essential part of their identity." 
- "Laws of New Zealand, Sale of Goods" para 92. 

The defendant in the present case made no representations to the plaintiff about the jeans. The issue then becomes whether the existence of the word "Nike" on the label on the back pocket was sufficient in itself to amount to an express or implied description of the jeans as the genuine products of Nike International. 

The following passage from Sutton, "Sales & Consumer Law" 4th edition (1995) would indicate that words on a garment can, in appropriate circumstances, give rise to a sale by description: 

"8. 11 Where identification is possible without further description, such as in the case of a shirt displayed in its carton on a shop counter, and a customer purchases it by pointing to it and indicating that he or she will have it, there would seem to be identification without description. Nevertheless, it is submitted that it is a sale by description at least to the extent that the words of specification on the garment or carton delineate the goods and indicate the kind of clothing agreed to be bought. It is not a sale of specific goods sold as such, and the words go beyond mere matters of quality and form part of the identification of the goods." 

The proposition just stated, however, would not, in my view, apply in a case where upon reasonable examination by the buyer it should have been apparent that the word of specification on the garment which the buyer relied on would not support the description of the garment which the buyer was alleging. In Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB 564 at 572; [1990] 1 All ER 737 (CA), Nourse LJ in holding that a sale by description could arise even when the buyer had identified and selected the goods went on to say, "provided that their deviation from the description is not apparent on a reasonable examination." 

In the present case, I have found that the jeans did not carry the Nike logo and for that reason it should have been apparent to the plaintiff upon inspection that they were not the genuine product of the Nike International company. 

The fact that the store was a general merchandise store and not a specialist store dealing in brand labels, and the obvious cheap price of the jeans, are other factors which should have alerted the plaintiff and put him on inquiry but he did not ask the defendant any questions as to the geniuness of the products. 

My conclusion, therefore, is that this was a contract for sale of specific articles, namely jeans containing the word 'Nike' on the back pocket, without any super-added description express or implied by the vendor defendant. 

For these reasons, I find that the plaintiff has failed to make out his case. The claim is dismissed and the defendant is entitled to costs to be agreed or taxed by the court.