In the mugs game, quality lies in the eye of the designer, a court ruled yesterday. Designer Alan Chan was entitled to reject the delivery of 1,080 mugs by manufacturer Smith & Smith, even though customers would not have spotted the differences in their colours, Recorder Robert Tang SC, said in the Court of First Instance. He awarded Mr Chan $138,180, comprising the refund of a $62,580 deposit and $75,600 as loss of resale profit, plus interest. Smith & Smith entered into a contract with Alan Chan Creations on October 25, 1994, to make the mugs for $15 each. Gregory Smith of the manufacturing company conceded that the colours were 'not rich enough' but said 'the customers would not know the difference'. Recorder Tang said he agreed, 'but that is not the point'. As designer mugs, meant to be sold in expensive stores, they were not saleable, he ruled.