CATCHWORDS

TRADE PRACTICES - consumer protection - importance of penalty for an offence against s65C(1) of the Trade Practices Act 1974 (Cth) - no issue of principle

Trade Practices Act 1974 (Cth) s65C(1)

Crimes Act 1912 (Cth) s19B

AUSTRALIA COMPETITION AND CONSUMER COMMISSION v

NORDIC LUST PTY LIMITED

SG 6 of 1996

CORAM:     BRANSON J

PLACE:     SYDNEY

DATE:      4 OCTOBER 1996

IN THE FEDERAL COURT OF AUSTRALIA    )

NEW SOUTH WALES DISTRICT REGISTRY    )    No. SG 6 of 1996

GENERAL DIVISION                           )

                BETWEEN:             AUSTRALIA COMPETITION

                                     AND CONSUMER COMMISSION

                                           Prosecutor

                AND:                 NORDIC LUST PTY LIMITED

                                     ACN 059 413 295

                                           Defendant

CORAM:     BRANSON J

PLACE:     SYDNEY

DATE:      4 OCTOBER 1996

                         MINUTES OF ORDER

THE COURT ORDERS THAT:

(1)  The defendant is fined the sum of $400.

(2)  The defendant is to pay the prosecution's costs, to be taxed if not agreed.

Note:      Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA    )

NEW SOUTH WALES DISTRICT REGISTRY    )    No. SG 6 of 1996

GENERAL DIVISION                           )

                BETWEEN:             AUSTRALIA COMPETITION

                                     AND CONSUMER COMMISSION

                                           Prosecutor

                AND:                 NORDIC LUST PTY LIMITED

                                     ACN 059 413 295

                                           Defendant

CORAM:     BRANSON J

PLACE:     SYDNEY

DATE:      4 OCTOBER 1996

                        EX TEMPORE JUDGMENT

HER HONOUR:   The defendant, Nordic Lust Pty Limited has been convicted of an offence against s65C(1) of the Trade Practices Act 1974 (Cth) in that it sold an exercise bike that was of a kind likely to be used by a consumer and in respect of which there was a prescribed consumer product safety standard when such bike did not comply with such standard. 

I have been invited by Mr Edwardson, who appeared today as counsel for the defendant but did not earlier appear for the defendant, to consider recalling the order recording the conviction and acting in reliance on s19B of the Crimes Act 1914 (Cth) by failing to proceed to a conviction in this matter.  Assuming that s19B is a section upon which I would be entitled to place reliance in this case, I am not satisfied that it is

appropriate for s19B here to be invoked.  In my view the offence is not of a trivial nature nor are the circumstances so extenuating that it would be appropriate to invoke s19B.  I therefore decline to recall the order recording the conviction.

However, there are, in my opinion, a significant number of matters in this case which suggest that the offence, while not trivial, is at the low end of the scale of offences of this kind.

The defendant trades from what the evidence suggests is a single, modest size, city store.  In many ways the defendant is to be seen as more comparable to a sole trader than to a major trading corporation.  This is not a case of a substantial or nationally operating corporation trading in a substantial way in the goods the subject of the charge.

The evidence in this matter discloses that, after the receipt by Mr Hunter, the manager of the defendant, of a warning from an officer of the then Trades Practice Commission that the exercise bike in question might not satisfy the requirements of the relevant safety standard (I note, not that it did not satisfy them), Mr Hunter caused the bike to be removed from open display in the store and had the price label removed from the bike.  The bike was placed in the rear of the store where it was out of view of an ordinary prospective customer.

The sale which formed the basis of the charge in this case was a sale to an officer of the Trade Practices Commission.  He visited the defendant's shop, and was not himself able to see the
bike in question until he asked for it by description and was taken by a sales assistant to the rear of the shop.  I note also that when he sought to purchase the bike the sales assistant advised him that there were concerns about safety aspects of the bike and indicated in a general way the nature of those concerns.  She received assurances from him that the bike would not be used in a place where children would have access to it.

I am satisfied that there was a limited likelihood of a sale of this bike, in the circumstances which prevailed, to a member of the public generally.  It is, as Mr Edwardson pointed out, plain that the Trades Practices Commission Officer went to the store anxious to achieve the purchase and that he put some effort into persuading the sales assistant to sell it to him.

On the other hand, weight must be given to the fact that, on the evidence, no system had been put in place by Mr Hunter, the manager of the store, to prevent the bike being sold - notwithstanding the receipt by him of a warning of its potential failure to comply with the product safety standard.  I note also that ultimately the sales assistant sought to induce the sale by dropping the price of the bike. 

Mr Kourakis, counsel for the prosecutor, has drawn to my attention the limited contrition shown on behalf of the defendant by Mr Hunter, the manager and representative of the defendant.  Whilst to some extent what Mr Kourakis says in this regard is true, I take into account that Mr Hunter, who represented the defendant, is not legally trained.  Moreover, I take into account
what I think might fairly be described as the uncomfortable relationship that developed between Mr Hunter and officers of the Trades Practices Commission.  The development of this relationship is not a matter for which, in my view, Mr Hunter is to held wholly responsible.

In all of the circumstances of this case, I regard it, as I mentioned earlier, as an offence at the low end of the scale of severity of offences of this kind.  The defendant has no previous convictions.  In my view the justice of the case here requires a modest fine.  The defendant will be fined the sum of $400.

The defendant is to pay the prosecution's costs, to be taxed if not agreed.

           I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment of the Honourable Justice Branson.

                Associate:

                Date:          

Counsel for the prosecutor:          Mr C.J. Kourakis

Solicitor for the prosecutor:        Commonwealth Director

                                     of Public Prosecutions

Counsel for the defendant:           Mr J.D. Edwardson

Solicitor for the defendant:         Antonio Tropeano

Hearing date:                        4 October 1996