. CATCHWORDS Trade Practices - consumer protection - supply of goods represented as new when they were not ~ factors relevant to determination of penalty - goods worth nearly as much to purchasers as 1f new ~ defendant advised by solicitor that activity in breach of Act - improper attitude of defendant to breaches of Act Trade Practices Act 1974, ss. 53(b), 79. WINSTON FRANKLIN JOSEPH RODRIGUES v. A.B.E. COPIERS PTY. LTD, A.C.T. No. G6, G7, G 8, G 9, G 18 of 1983 STEPHEN GARTH BEDE BROWN v. A.B.E. COPIERS PTY. LTD. A.C.T. No. G 23 of 1983 Nos. A.C.T. G 6 of 1983 G 7 of 1983 G 8 of 1983 G 93 of 1983 G 18 of 1983 G 23 of 1983 Morling J. 10 November 1983 Canberra wR ae ERR RE OR RE Ae ee ee Fe eee ee fem Te ee rer ene hee Pe ee Tee ate ae owe om RON RCT ee eee ay IN THE FEDERAL*COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION wes ww BETWEEN: AND: TRADE PRACTICES ACT 1974 SECTIONS 79 AND 53(b) WINSTON FRANKLIN JOSEPH RODRIGUES Prosecutor A.B.E', COPIERS PTY. LIMITED Defendant A.C.T. No. G6 of 1983 No. G 7 of 1983 No. G 8 of 1983 No. G9 of 1983 No. G18 of 1983 A.C.T. No. G23 of 1983 JUDGE MAKING ORDER DATE OF ORDER WHERE MADE BETWEEN: AND: ORDER Morling J. 10 November, Canberra STEPHEN GARTH BEDE BROWN Prosecutor A.B.E. COPIERS PTY. LIMITED Defendant THE COURT ORDERS THAT: L. A penalty of $5,000 be imposed upon the defendant in respect of each of the offences referred to in proceedings G 6, G7, G18, G 23 of 1982. The defendant to pay four-fifths of the prosecutor's costs in proceedings G 6, G7, G 8, G9, G18, G 23, The costs Of all proceedings to be taxed as one set of costs. 22°) eee ee evi) ws NREL 2 Ree ak sok: ETE gg ERE Nyman et IN THE FEDERAL -+COURT OF AUSTRALIA AUSTRALIAN CAPLTAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION TRADE PRACTICES ACT 1974 SECTIONS 79 AND 53(b) WINSTON FRANKLIN JOSEPH RODRIGUES Presecutor A.B.E. COPIERS PTY. LIMITED Defendant BETWEEN: A.c.T. No. G 6 of 1983 ) No. G7 of 1983 ) No. G 8 of 1983 ) No. G9 of 1983 ) AND: No. G18 of 1983 ) BETWEEN: A.C.T. No. G23 of 1983 AND: MORLING J. 10 November, 1983 STEPHEN GARTH BEDE BROWN Prosecutor A.B.E. COPIERS PTY. LIMITED Defendant fame esse re to iar) te ~" YOIMPORE REASONS FOR JUUGHENT Qn 19 Auaust 1983 I published my ressons for convict— ng the defendant on four charges arising ont of contraventians of section S3¢b) of the Trade Fragtices Ace 1974, The fact. out af which the charges arose are referred to am my earlier reasons and J mead mat raogeat then. fbou wi sufFicreny, ta say bast an my apinionm they disclose that toe dafendant's tusiness has been camiucted im oa most unsatisfactory and commercially wh Liprooser wanner. In heort, the evidence discleses that tite defendant repeatedly represented to purcnasers of photocopying machines that they were mew whereas they were mat tnen new, Ih 15 fair ta say bLhat the use which had been made of whe machines prior to them beang sold was mot very extensive if regard 1s had to the capacity of the machines over tneir erpected working lives. However, this does not ecuse the affences. If the anly evidence nad baen that the machines tad been used as demonstration models im the deferndant's snowrdgom L would mot have been disposed to have treated the offences as heing very serious, bub that 1s nat bhe only evidence. There 15 evidence which 1 sccept thst Mr Cronin, 3 senior employee of the defendant, ervoressed his concern that the campany was, in effect, misrepresenting its machines to purchssers. There SAW ORNRE tal ole Mn RE rat RNS eet VON an ee ed Ea eel ee ord BP ente etal Losvanye ne Btn mi ee 4 mena sido Ne te is ' @ u iu§ tans. wane cod ot ree 3. 1s other esidence, which 1 also accent. that on at least one oecasion the meter om 3 machine must have been turned back sa 35 to give a Tals? reading of the mumber of copies which it had produced. I reoard tois comluct as commercially deploratle and deserving of severe censure. Had 1 been of the belief thst the machines, the sube- ject of the charges upeanm whien T have convicted the defendant, were worth much lees than the praces paid for them by the purchasers, Lo would have fired much higher penalties than I propose to impose. However, I sm satisfied that because of the mature of the m3chines and the guarantees under which they were sold, they were worth mesarly as much to the purchasers a6 if they had been meu. There 1s evidence whien I aecent that the relevant machines performed moa less satisfactortly than brand new Machines. In fact, one of the machines ~- the one delivered to the Tepartment of Veterans Affairs - was replaced by the conpany at no expense ta the purchaser. AS to the otner three mochines there has beer no comptanmt about tnear efficiency nor nas any request been made thst they should be replaced or that pact of the purchase price should be refunded, These matters do mot excuse the offences but an my opinion they are relevant on the question of penalty. Toam ormokt unmandful of Mr Sully's submission that the AEM NY ae oe ean tnt Arana perce nee mu gain cau arnt oe WANA sat eet on! ett) Sater ome ae Lue ane Banat vt "pau s Nate ogy gra hee ans AT i SMES 4A. m1 en found to have engaged an camduct which fall: Y defendant nas b far short of an accentable standard of commercial moralily. £ aleo take anlo aceaunt thst the basis of the defendant's terndec to the Commonwealth was tnak it would supply mew machines and Lhat by net doing sa it has obtained an unfair advantage. Fut C sam net persuaded thab ab tne time the defoandsant made 1ts tender iat intended to sugply other than mew machines, itis ta be remembered thav 1 gumplieJd many machines ta the Common- yealtn oand J tnank 21 1s to be presumed in ine defendant *s favour that the macnines obner cham the anes the subject af the eharges were, in fact, mew machine Mr James submitted on behalf of the defendant thal wt had already suffered cansiderable Fainanei3l loss beacause it had failed tao g8in significant government business as 3 result of th or) wh rn] prosecutions. Thais wes a mabural consequence of the defendant's own conduct and it has nobody to blame but itself for tone adverse consequences of 1ts own actions, It ais faar to say that there was little incentive La Lhe company's omployeas ta ack in bros manner whicin gave2z rise ba the prosecutions. So far as can be judged from the evidence bLhey gained mo or only 3a marginal financial advantage from selling and representing 39 mew, machines which were in facl nok mew. But the defend3snt must accept responsibility for the manner am which 175 employees conducted its business snd the fact is that the business was conducted in a most unsatisfact- OPy Manner. The senior management of the company was slerted wore ano i7 Ps 5 "oct "Tay Ree - eee pa EI STE ta the unsstlisfsctory siate of uffairs by Mr Cronin as early a. fiarch 1982. He had become so cancermed about the matter that he had consulted nis solicitor. His solicitor gave him written anivice, which 218 in evidence. This advice was shawn to the defendant's New South Wales manager and to ats national marbet- ing manager, Lonesd nob set aut all the terms of the advice but tt stated ain clear terms that Mr Cronin was under instruct- rons from tne defendant - "to continue to do business with the Commonwealth om that basis, 1.@. one which invelves furiner treaches of coaniract amd possibly fraudulenl aets.* The advice continued: * The consequances fare you, sfroutd the Comnmon- waalth became aware af the circumstances arm! initiate action, would pilsinly have severe comsequances for the canpany and also yourself a5 agent or servant of the company. We need mat particularise details ef those conseaguences Yet three af the four affences accurred after these gentlemen were acquainted with the situstironm. Either bLhey boot no stens to rectify the wnsslisfaclory position an the daPendant's Canberra siles affsarme oe any sters that btiey did Lake proved quite inadequate. There 15 evidence that an the day before 1 delivered my reasons om 19 August, Mr Finnie, the southern reguianal manager of the defendant, addressed a meeting of about 90 - wee Mey Metis Canaan ne Pete EM Tn RRA wre ween 8 me te Ep ete le ene i AM UR zm we a Spe ee et mt om ee ey A ee Ge machine purchasing officers from variou. Commenwealth deparbl—- ments and statutory autmorities. Some of the st3tements made ta the meeting by this gentieman vere, to say the lesst, extraordinary. He said that the defendanie's procedures were ma different from the mormal practices ain the andustry and "the praviszrons of the Trado Preebiees Ach snoulid moat have besn applisd to ALE", He referred to ih Dg fact that the gudgqment Was to be handed down the following day and regaled fis audience with an e*pression cf his opin ons 3s to the lilely Penalbies whicn the court would umpose. He said, "If any fanal penalty was below $10,000, ABE would regurd itself the winner" and mentioned further and larger penaltr.:s which the defendant would regard as "3 draw", or "3 win" for ihe Commonwealth. 3 ' Bearing an mind that the deferntiant had denied all the chatges im respect of which the decisicans ware to be handed clown the mext day, the statements made by Mr Finnie were sa gnecautious, not to ssy bissrre, as to be 3lmose bevand belier. To say the least, they were ain exceucrating bad taste, However, 1 propose to dismiss from my wind the statements he made as to the monetary ponadties winch th> court might impuce. NeverLheless, the statements ne made to the meeting leave me with an uneasy feeling thal ho did not regard the defendant's breaches of the Act 35 being very serious. Nr Sully submitted that the evidence disclosed that the company still did not tare the offences seriously. He relied upon the bead ee neath Re "RET RPG SAREE BETTS RG RI ceed Sate con eo Tb CREP baa ate IGT a FDR °° fact tnosat the - defendant's Canberra mansger 3t the time the offences accurred had not been demoted but merely shifted to another position. The termination of Mr Cronin's agency with the defendant was als50 relied upon as showing am amproper attitude on the part of the defendsnt to the charges. I feel bound to say that Io am disturbed by the evidence 3s to the termination of Mr Cronin's agency agresnent and it raises an my mind a suspicion thst he was unfairly treated. However, the evidence does mot permit me to form a concluded vrew on this matter and accordingly I do mot take ab ante account aim fixing the penalty. Taking all the circumstances into account, J ampose a penalty of $5000 in respect of each of the offences GG, G7, G12 and G23 of 1922, that is to say, total penalties of $20,000. Hearing in mind that the defendant was successful on tua of the charges brought agsimst ait, I thank the appropriate order for casts 18 tiat the defendant showld pay four-fifths of the prosecutor's costs. The casts should be taxed as one set af costs. arene seerarannemet I certify that this end tha S ix (6) preesd it ot es are a true copy of the wt Reasors - Slee Mr. dusvsce iorlinug. —— VA S h aAszoclabler Dated: /2 N2VEMEECH MFF3