IN THE COURT OF APPEAL OF TONGA
Court of Appeal, Nuku'alofa

CA 26/2000

Tuaimei'uta

v

Prema

Ward CJ, Tompkins, Spender JJ 
23 July 2001; 27 July 2001 

Misrepresentation and fraud – independent evidence to decide – appeal allowed 
Practice and procedure – application to call fresh evidence – knew at time of trial – application refused 

The respondent operated a retail store in Nuku'alofa in which she sold a variety of goods including clothing and, in April 1999, she displayed some jeans which bore a label marked "Nike". The appellant bought 70 pairs of these jeans and then took 50 pairs of the jeans back to Australia with the intention of selling them at a profit. However, on arrival in Australia, the goods were seized by the Customs Service on the grounds that they were not genuine Nike products and were not marked with the country of manufacture. In an attempt to prove they were genuine, the appellant telephoned the respondent and asked her to verify their authenticity. She declined and the authorised agent for Nike in Australia eventually had the garments destroyed. He sued the defendant for the costs of the jeans plus expenses. At the trial, there was a dispute over how the jeans were labelled. The respondent maintained that they were marked with a label only bearing the word Nike whilst the appellant insisted they were also marked with the well known symbol or logo of Nike, referred to in the correspondence as their Swoosh mark. The resolution of that issue was clearly likely to be critical to the question of whether or not the respondent had held out these jeans to be genuine and the burden was on the appellant to prove that the label was as he claimed. However, he produced no garment in evidence and sought the leave of the Court of Appeal to adduce further evidence about the label on the jeans.

Held: 

1. The application to call fresh evidence was refused. The appellant was unable to show that the evidence in question could not have been obtained with reasonable diligence for use at the trial 

2. In relation to the substantive ground of appeal the Judge's conclusion that there had been no misrepresentation had been based on his finding that there had been no Nike logo on the jeans sold to the appellant. However, the independent evidence which the judge appeared to have overlooked all supported the appellant's case. 

3. The appeal was allowed and judgment was given to the appellant. 

4. Damages of $1,621 were awarded with interest at 10% from 20 August 1999 and costs. 

Case considered: 
Ladd v Marshall [1954] 1 WLR 1489 

Rules considered: 
Court of Appeal Rules 
Rules of the Supreme Court (UK) 

Counsel for appellant: Mr Niu
Counsel for respondent: Mr 'Etika

Judgment

[1] The appellant was the plaintiff in a claim for damages for misrepresentation of goods sold. The respondent operates a retail store in Nuku'alofa in which she sells a variety of goods including clothing and, in April 1999, she displayed some jeans which bore a label marked "Nike". 

[2] The appellant purchased a total of 70 pairs and took 50 of those to Australia to resell at what he hoped would be a profit. However, on arrival in Australia, the goods were seized by the Customs Service on the grounds that they were not genuine Nike products and were not marked with the country of manufacture. In an attempt to prove they were genuine, the appellant telephoned the respondent and asked her to verify their authenticity. She declined and the authorised agent for Nike in Australia eventually had the garments destroyed. 

[3] At the trial, there was a dispute over how the jeans were labelled. The respondent maintained that they were marked with a label only bearing the word Nike whilst the appellant insisted they were also marked with the well known symbol or logo of Nike, referred to in the correspondence as their Swoosh mark. The resolution of that issue was clearly likely to be critical to the question of whether or not the respondent had held out these jeans to be genuine and the burden was on the appellant to prove that the label was as he claimed. However, he produced no garment in evidence and now seeks the leave of this Court to adduce further evidence about the label on the jeans. 

[4] The Court of Appeal Rules (Order 8 rule 1(3)) allow this Court only to receive further evidence on "special grounds" but there is no further guidance as to what would amount to such grounds. 

[5] Order 59 rule 10(2) of the English Rules of the Supreme Court has a similar provision but the courts in England are reluctant to allow fresh evidence after the conclusion of a trial of the facts and will only do so in very limited circumstances. In the case of Ladd v Marshall [1954] 1 WLR 1489 at 1491 Denning LJ re-stated the law as it then stood in relation to the reception of new evidence: 

"To justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible." 

[6] Mr Niu, for the appellant, cannot suggest that the evidence he seeks to introduce satisfies the first condition as it was clearly known to him at the time of the trial. He bases his application on the fact that the wording of the statement of defence and the manner in which the trial was conducted misled him into believing, until after he had closed his case, that there was no dispute about the appellant's claim that the jeans bore both the Nike name and symbol. 

[7] We have some sympathy for that position. Paragraph 3 of the statement of claim refers to garments being displayed "with labels attached to them 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 defendant thereby represented that the garments so labelled in her store were genuine products of the company." 

[8] The defence denied the whole of that paragraph "save that the defendant displayed various garments at her store with "Nike" labels attached." Later in the defence when denying the allegation of misrepresentation, it is pleaded in paragraph 15: 

"The defendant is not an agent for "Nike International Limited" and has never at any time represented or endeavoured to do so to anyone including the plaintiff that by selling garments with the logo "Nike" attached to it made her an authorized agent of the said company." (Our italics) 

[9] In his judgment, the learned judge referred to the appellant's assertion that the label included the logo and the respondent's denial of that fact. He points out that the plaintiff was not cross-examined on his assertion and that the defendant did not raise the issue in her evidence in chief. It only surfaced during her cross-examination. 

[10] However counsel's duty is to prove his client's case. If there is any ambiguity about his opponent's admissions he is wise to ascertain the position before closing his case. If, later, a dispute unexpectedly arises about a matter he had assumed was admitted, he should seek leave to re open his case. It does not satisfy the requirements of the first condition in Ladd v Marshall now to say that he did nothing to prove such a vital part of his case and seek to fill that gap before this Court by adducing evidence of which he knew at the time of the trial.

[11] The application to call fresh evidence is refused. 

[12] The grounds of appeal still relate to the same issue of the labelling of the garments. 

[13] At the trial, the learned judge considered that the evidence of the respondent was generally more reliable than that of the appellant and concluded that she had made no direct representation to the appellant about the provenance of the jeans. 

[14] He described the issue as being 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 representation that the jeans were genuine products of Nike International. He correctly stated that the contents of a label can give rise to a sale by description even without further representation and he clearly regarded the determination of the issue over the symbol as central to the determination of the case. It was not in dispute that, in the respondent's store, the jeans were displayed in such a way that the label (in whichever form it took) on the back pocket was clearly visible to customers. 

[15] He referred to the appellant's evidence that he had given twenty pairs of the jeans to relatives in Tonga. Having pointed out the burden that rested on the plaintiff, the judge continued: 

"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." 

[16] Clearly, in the absence of that evidence, he decided the question of the presence of the logo on the oral evidence of the parties alone but, as Mr Niu points out, there was other evidence before the court that the jeans did bear the logo but to which the judge made no reference. 

[17] There was no transcript before us and so this Court relied on the judge's notes of the evidence. They confirm there was no challenge to the appellant's evidence that the jeans bore both name and logo. In his note of the respondent's evidence in chief, the judge records: 

"These were just ordinary jeans with writing on them at the back of the jeans." 

Mr Niu, in his note, recorded the passage as: 

"The jeans had writing and logo — red and silver on back pocket "Nike"." 

[18] Whether that is accurate or not, it is clear that, when she was cross-examined by Mr Niu, the respondent firmly denied the logo was on the jeans — "only big writing NIKE". As we have said, it was on that evidence, having preferred the version of the respondent, that the judge found there was no Nike symbol. 

[19] However, in the documents produced during the trial was the Australian Customs Service Notice of Seizure which describes the goods as: 

"Fifty (50) pairs of jeans bearing designs, labels and/or markings that appear to infringe the Nike trade mark" 

[20] More significantly, Nike's solicitors sent a letter to the appellant in which they referred to the "seizure of 50 pairs of jeans bearing our client's "NIKE" and "SWOOSH Device" trade marks, or a trade mark which is substantially identical with or deceptively similar thereto…" 

[21] The learned judge stated that the goods had been seized because they did not bear the country of manufacture. He made no reference to the more significant fact that seizure was also because the jeans appeared to infringe the Nike trade mark although he did refer to the solicitor’s threat to sue "because the garments were not genuine Nike products". 

[22] When an issue depends on the conflicting accounts of two witnesses, any evidence from an independent source can be helpful in deciding the conflict. The independent evidence in this case all went to support the appellant's account but was not dealt with in the judgment. 

[23] A similar omission occurred in his finding that the respondent did not make any representation beyond displaying the goods with the Nike label. In fact, the first of the respondent's two invoices for the jeans describes them as "Nike jeans". 

[24] On the basis of the parties' testimony alone, he concluded: 

"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 [the evidence had been that they were offered to the public at $25 a pair] should have alerted the plaintiff and put him on inquiry…" (Our emphasis) 

[25] Counsel confirm that there was no evidence before the trial court of the price of genuine Nike jeans or that they are sold only from specialist stores or whether there are any such stores in Tonga. We consider the deciding fact in the case was the judge's conclusion about the absence of the Nike logo and the words we have placed in italics support that view that it was the principal or only reason for his conclusion that there had been no misrepresentation. 

[26] An appellate court will only rarely interfere with a trial judge's finding of fact. He saw and heard the parties in the witness box and is better able to assess their credibility and accuracy. In this case, as we have stated, he based his conclusion on their direct evidence alone. Had that been the only evidence we would not have interfered but the independent evidence which the judge appears to have overlooked all supports the appellant's case. 

[27] In the result, we do not consider it safe to allow the judgment to stand. The appeal is allowed and judgment is given to the appellant. 

[28] The appellant claimed $2,201.22 but he gave evidence of a loss of only $2,050.00. Of that $1,500.00 was stated to be the value of the jeans and was the total sum paid. However, his case is that only 50 pairs were seized and destroyed. That would reduce the sum by $429 leaving a total of $1,621 damages with interest at 10% p.a. from 20 August 1999, and costs. 

[29] He must also have the costs of this appeal to be taxed if not agreed.