358 a TRADE PRACTICES - Consumer Protection - Presecutions - Offences admitted - False representation that qoods have nad a particular history - Tmported aoads packaged in bags stating that they were mad? in Australia - Whether false representation made with intent to deceive or inadvertently - Factors relevant to renalk. Trade Practices Act 33.S2'a:, 79 EDWINA ALICE BAFTON V GARY LAI FTY LIMITED 3.267, G.208, 9.269, G.c70, 3.271 OF 1384 aT) WILCOX J 24 OCTOBER 1984 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW_SQUTH WALES DISTPICT PESTSTFY GENERAL _DBIVISTON No. G.lé7 of No. 9.268 of No. 9.269 of No. G.270 of No. 7.271 of re) at Peer cou. Ww area ap ars EETWEEN : EDWINA ALICE BAPTON Frosecutor AND: SARY LAL ETY LIMITED Defendant ORDEFS CORAM: WILCOX J DATE: 24 OCTOBER 1384 FLACE. SYDNEY L. The dofendank 1.3 convicted of olmmitring five rmmetraventions of 3.°7' a) cf the Trade Fractizes the charges referred to in the proceedings Nos. 0.26 iva O.n 2. The defendant 12 ordered t= pay cespect of the contravention rererred tc 3. The defendant is ordered 2 pay respect of the contraventicn rererred fo 2oaf 13784, 6.269 of 1994, G.270 of 19°94 and O.771 4. The defendant 15 ordered to wav a fine of $1.°96 in respect of the contravention referred to in No. 3.269 of 1384, 5. The defendant is ordered to pay a fine of $1,000 in respect of the contravention referred to in No. G.270 of 1284. %. The defendant 135 ordered to pav a fine of $1,000 in respect of the contravention referred to in No. 6.271 of 1994. 7, Each of the said fines 1s to be paid tc the District Reqistrar of this Court within twenty-one (21) davs of this dav. 8, The defendant 15 t2 wav the costs of the prosecutor with cesvect to each of the eraceedings Nos. G.267 of 1984, 0.268 of 13°94, 5.769 of 1284. G.270 of 1784 and G.271 of i984. 7. Direct that the exhibits be handed out at the expiration of twenty-one (21: davs unless a Notice of Appeal has been filed in the meantime. TU_THE FEDEFAG COUET wR SUETFALIA ' WEW_SOUTH WALES OIETPICT FESISTRT ' {e, ot, 87 op Lae ' fo. 0,268 af L4td GENEPAL DIVISION ' 1s, G.08s of L344 Te, G,l79 cf bate Ho, 4.071 cf Led PETWEE!: ELWINA ALICE PAeTON EProreacxutar "ND: OaPr CAC FY LIMTTED Defendant CENZONE PoP TPGMENT ORAM. ATLA. T DATE. id4 OCTOBER Lies ELITE: STONE Five iotermaticon. have peen Lard ov Edwina Si.ie Barren. an @ttieer of the Trade Fractices Usmmitsicn. avitnst "aes Car Fes Cimirted illeqing centravenricns +r ur 2Sleqar oer the Teawe Fractices Act La74d, [mn each case it is allayed that tne defendant did. in trade of commerce. in connection with tho rroamotion of the suoply cf baidina item: falsely represent thar the qoods have aA particuLar history, namely that they verte made in fustraliva. The otfences are ali admitria. Eacn information aritves oun of the one set -£ facr= and thes all mav bo cantidered together. Garv Lai Ftv Limited carries on business in Melbourne as a manufacturer and jiistributor of items of manchester. In 1379 1t vceqistered the trade mark "Foval Vanity" in connection «1th, inter al1a,. fextrie zheans and atner textile articles. Under the name "Foval Vanity" rne asfindanr has reamitarl: sold ta retailers beddina 3efts 'comprising sheet 7 and sillew cases: which 12 dved, erinted. cut and sewn in Ansteralia from wmecerted undved cloth. The eackaqding in 'whicn rhe d4tendant veld fhese cheer -eh. oope the -sords: 'Behold! The workmanship ind artiritry of rhe FOTAL VANITY Freducc, OGestaned in factralia to snhance every Womanz Dro Taretully Teicerad Fabric erinted . skiif ily made in Australia, for serevirze & Langa. life". 'yp In early L237 the company came under tne ctontrel of Me LT Nirllramt. whe 13 men a dipeccar, Cn Tuav L497 Me Williams: atronied che wremises Of aA Fotki ts merchanr ac Monrabbin. larctiny and Ture. Fre Gimitad. and vas cheocn be tte DC dartle- a ramele nf Bodding certs packaded under che 'Hamp vnire House' beand name, Mr firtliams vl rked Malrint Gamiriad in ivdnes. fe caw rhe manchester buver and showed fom 1. cer ost rheets, hich hai bean ca-earkaqed in "Povil Vanat-" ececkating. The buver ware fim an order ani Me (lilliams then sraereqd 79) bedding sects rrom fe Hactlev., Mr Harrler eoinerai mah tt My Williams rhat tho yoecd- euld have te be ve-packaded br Mr vialitams az 'Hamertniea Rete! FAS a Cvace Bra- Leand name. In satistacticn af the atder Me Hartlev despatched °S> bedding set? packaged a3 "Hamochire Houcte" - which sets had been fully manufactured in Hend Korda - and 1247 bedding sets packaded under anether Grace Bras brand name "Nit: mM scene" - which sets had been manufactured in Auztralia from imported cloth. The "Hampshire House' packaqe? etated that rhe santeants vere made in Honda Fong. eon receipt of the s6t3 can 14 August L982 thev were re-packaded br staff af the defendant, including Mr Williams. in "Feval "anityv" bags bearing rhe instription set out above. In relatisan £9 the 392 "Hampshire House" sets fhe packaging Kherefare falzely ass ct ed that rhe nN Yr vets were designed in Australia and that they were "printed and skilruli- made in Australia". tm 12 amd 22 Auqust the bedding -ets were deseat hed to Tacicur Haltens creres virhin the vines metecsapnlitan wea. They Wee Dur on datsplay for sale ra fhe publi: chorels theeeatter. x fay dass Later, on 25 Anach. Mee OF Mache lt. ouchaged at Waiton=s Dee Any stare four beeaddint cet+. being iif trent Sombinatioens of items. Each 3¢" sas packaved in the 'Fovaet "anity" cackatwe bearing the insctrictity tr mit above, Mr: Nicholls was influenced by thir in3cristion. In her affidar el sridence, the accuracy of which vas rect challended, -he explained: 2. Iwas Looking for 3scme sheers 3t a reasonable orice. Io saw some cheets oan display labelled "Focal Yanirz". I looked at the packaqing in *"hich the "Poval Vanity" cheers were eackamed ana I noted that the packayind bore sords which A 4. included "Desianed in Anstralia.. . and "Carefully selected fabrics printed and skilfulivy made in Austrailia. for service and longer life". TI cencluded from this that the sheet: were made in Australia, I preter te buv Australian made aneds when the pri-72# 1s reascnable and the qaality 1s zatisfactors cecause I am Sustralian and my anvalii censison 1s raid of the by the Australian fFaxpavers. I therefore prefer t2 suprecre® Ssustralran industry "shen price and qayality permit me fo da 30, ' Yn the dav after purchase Mes Nicholls opened twa packaqes. Zhe fount on the pillowcases cf both sets sewn-in labels ckatind that the goods were made in Hong Fonda, fhe contacted the Trad Fracztiras Tommi-sicn. Mies Eartan went to flattens Bankstown ctcere and purchaced a further bedding set Zimilariy packatved., the cantents of whitr bore 'made in Honda Font" sewn-in lakels. Inforematitn 7,267 +f 1484 ratlates to the Banketcwn purchase, information 3.769-3.,271 inclusive relate cto Mee Nicholls purchases at Dee Why. Tk is avreed, in respect of all five purchases, that the tead> vere in tact made in Honda Fond but -eid in packagdinr stating rhat the had Eten made in Austvalia. Shortiv after Fhe Banketown purchase Miss Barton rontacted Mr [illiams. fe oxpressed caoneectnm ind he fack steams, Fa have Fhe Waltong tt saerectiv7? qrer-skickers applied fo the ees, trock comaining in 1] The price paid bv Waltons to the defendant for tha 2°23 ce-packaged "Hampshire House" sheet 3ets was 414.97 fer each sindle bed set 'of which there were 119 sets) and £139.32 for sach double bed set icf which there were 247 sens), making a fotal rshclesale value of 364,298.26. The crice ~harded by Walton? ta consumers for fhe 257 re-packaqed "Hampshire House" sheet zet= was 319.35 for aach tingle bed set and 227.35 for each double bed u set. makinry a total retail -,alue of $2,398,205, The derendant has no prior convictions for offences under the Trade Fractices der, There has Eeen an 1resue before me as te whether Mr Williams tad anv deliberate intention fo aecetve. Mise Barten qavce evulines - tne accunacs of which az conceded - that in i Falephone ran ersaftion with her vb the fime of Fhe farce toamelaint Me Williams said: "To enaw Fhat the qvood: were wmecetzd. altt such I lid not know that they had made in Hone Yina sew inte them". He repeated this ctatement in a questionnaire vhi_h ne completed at the rennest of the 'Tommiss1ton on 2 Nevember 1982, In response to a question whether he vas aware. vhen ne dave instructions for the ce-packagina of the sheets, shether the sets wot ere tmeorted he replied: a "I was aware that they were imported, I was not aware that the merchandise nad sew in labels attached to them. and I was nat aware that the packaqing had "Made in Sustralia" on 1t as well. but I am cortainly most well aware of 1t now. and can assure vou that 1£ will not happen aqain." ~ ta ui tH a jo) However, in an interview with affirers of the Commi on 16 December 138? Mr Williams cetreated from that posrtian statina: "T was aware that some mav have been imeorted, More correctly I was aware chat the cloth would be imecrted but the manufacturing iunks Actual sheet sets - Towis net avare where that --as dane! In his evitence before me Mr [lilllams said that after Miss Barton had centacted him and he hud seaken to Mr Hartley he "TAS aware "that ve had tame meorted che=rs an cur consianment". He would not concede that he had knewn 77.13 before rhe complaint. He went on ro sav fhac before the comelaint the olace of manufacnure had no importance £9 him. There ig no doubt that 1 Me Williame had burned his mind &> the wiestioan ne would have realisrl. st easil~ ascertained, the plazre sf manufacture. "Nat oniv did the sheets, which ne personally helreed ft: ce-pack, hava -ewn-in iabels chowing that they were made in Heng Fond but the "Hampshire House' rackates in which they -veare delivered rt his compiny expres¢ly 30 shated. His carly tratements co offiecies cf the Commizsion seem to concede actual knowleda crf rine clace of manutacture at the fime of re-prickaging. However, giving Fa the 7. defendant the benefit of some doubt on the queation., T am not prepared to find that Mr Williams consciously adverted te the matter and deliberatelv cet out to deceive. I Chink that 1b us mor2 likely that he was concerned mainly with qaiality ana price and that he re-packed the qoods in the tompany 3 stanaard bags without considering the accuracy in relation to those soade of the wording on the baas and that the false packaging «as the product of car?2lessness rather than an intention tc deceive, The submission was put, on behalf of the defendant. th although there are five informatians befor? the "ourt. in respe of each -f which the offence is admitted, the correct approach would be to treat the whole mat cr wb % AS a sinqdle incident. Each the five informations relates to sone of tne beddind sets the tubiect cf the rransacktion between che dafendant and. firstl-, Hartley and Turner Fer Limited ind, secondly, Halton: Limited. The Submisrtien 27 eit that [I thould reqard tne maktcr ac being Sintl. i cerzLraht in respect of the packaging it 7€ val ud vb + tu rh "Hamothircs douse" bedding, Te wt cencaded rnak., upon this apprsacn. tr Ls proper ta leek at tne roral dittributicn af bedding 24ts, 190 752 sets. rather than to onfins attcnricin ta the five sets in relation fo which informatitin=e nave been laid. IT think that this is a proper approach ana T penpose to ctanside the aopropriate penalty for the totality of the matter and then fo divide thar sum by five in order ro fix a penalty in respect of each specific affence. ac ct of & e a. In Eva_v_Mazda Motors /Sales) Pty Limited +1377) ATPP 40-020 Smithers J summarized the matters relevant in that case - a contravention of s.¢? - for consideratian caving, at ow 17,2702: 'First, the importance of the vuntrue statements in relation to anv transaction which mav possibly proceed under the influence of the incorrect representation. Secondlv. the deqree that the representatian departs from the truth, thirdly. the dearee ef wilfulness or carelessness in the making of the incorrect representation. fourthl- the oxtent that the representation was disseminated, fifthly. whether anv and what efforts have been made to carrect anv false impressions which mav have been created. Finally. the sbiectives of the Act," Although this scassave must not be taken, and was not intended to be taken, as eeavytdiny a List for universal application tt dees wroviie assistanee ar ta the matters relevant ta be considered in che present case. In relation ta the first matter, I Fhink thak the importance ot the untrue statement in resreck of anv tranzaction would have -arted with the purchaser, or potential purchaser. Na dovabt. many thorpers would Ee indifferent cco the stated place of manufacture of manchester items. They mav Le concerned exclusively with the wialit' of the article. tt2 suitability for their desired purpose and the price charded. In relation to such a person the false statement would have no "ffect. Hewever, this would not be true of all. Mrs MNichclls nas stated that her preference ic to pur Australian made toods when the vrice 15 reasonable and the auality 13 satisfactory and she has explained her reasons for this preference. No doubt. there are other members of the community who would share her view that, other thinas being equal, one should prefer Australian made oroducts. It would be surprising if this was not so; durina recent vears there has been a maior effort bv -rarious commercial and government bodies to encourage such a preference and there 15 widespread community concern about unemployment and the run-down of the Australian manufacturing industrv. The choice of vording for the defendant s packaging 1s, I think, indicative that the defendant itself perceived a marketing advantage in emphaslaint that the woeds were beth desianed and manufactured in Australia. In relation to this first aspect. therefore, IT conclude that although the -untrue rerresentation vould not have affected each potential purchaser it was a representation lik2ly ta affect some potential purchagers. and thereby to increase the sales appeal of fhe product, ind fhat che defendant intended the representation fo have chat affect. The celevant representakion. in respect of the 25 ire) bedding secs, war a total leparture from the treath. The toads were neither destanci nor manufactured in Austealia. I nave already expressed the 'view thar the false representaticn was more probably the product of carelessness fon eather than a deliberate intention to deceive. The degree of 0 carelessness «was high. Mr Williams was himself involved in the ee-packatding of the sets from their previous "Hampshire House" 10. packets, upon which 1t was clearlv stated that the cools were made in Hona Kona, into the "Poval Vanitv" packayes., in which the false statement was made. Mr Williams must nave been aware that the "Roval Vanitv" packaging had been desianed <o as to emrehasise the place of manufacture of the qoods. He would have realized, had he thought about 1t for a moment. that the aood= which were about to be distributed in that packaging did net comply vith the inscription on the packets themselves. Althoudh inadvertent misrepresentation 1s less blameworthyv than deliberate misrepresentation, in a matter so fundamental as the makina of representations on packages in which the asods are to pe displaved for sale, even inadvertent misrepresentation 15 a mather tf serious concern. The vohilasophvy behind 3.53 nf Ehe b Trade Frackices Ach 1s that ther Q ctsponsip1lit' ta ensure ory fy wa fisvn - ith the wsacoly af anads at a fm) ow Ley b ce] Ss v uh 1D ay at rm) i a w is a wb FE] ied fon wD i5 t a} ne fel The representation was disseminated only to a limited audience. persons who inspected the aoods in a Waltons store. There is no evidence of anv media advertising of the yood:z. The prosecutor cencedes that Mr Williams di:plavyed a hich deqree of concern when the complaint was first reported to ui him and that thereafter he took prompt and effective action to overcome the problem. Stickers were claced over those bedding ll. sets which were still on displav for sale in a Waltons store. Mr Williams' positive and prompt response 1s a slanificant factor in mitiaation of penalty. The maximum penalty fixed by Parliament for a contravention of Fart V of the Act, im the case of a corporation 1s $50,000: see s.74. The amount of the maximum indicates the serious nature of such an offence. However, for a muamber of reasons - the non-deliberate nature of the breach. the fact 7T relatively Limited dissemination of the false representation. the fact that the false representation did not affect the aualitv or utility of the 1toods, the prompt remedial action bv Mr Walliams and the lack of anv prior conviction - this case falls well short of beina one suitable to attract a penalt~ near to the maximum. The penalty should reflect that the offence 15 a serious one and 1£ should be a penalty which will tend to deter the defendant and others in trade or commerce from contravenina the Part. Tt ouahet net tc be crushing or orpresive. Having reaard to ali of these t matter3 1f 15 appropriate to fix a total penalty in relation fa iD all the informations in che 3um <t s5.000. There should bea penaltv in respect -f each of the five int-rmatisns in the sum 3f 21,000. The defendant mist pav tne costs if the nrasecutor I certify that this and che Her lic ) preceding pages are a true copv of the Reasons for Judaement herein of his Honour Mr Justice Wilecx. / ssociate / (CAL WK pare ul tof &Y 3583 CATCHWORDS TRADE PRACTICES - Consumer Protection - Prosecutions - Offences admitted - False representation that qoods have had a particular historv - [mported qtoods packaged in baqs stating that they were made in Australia - Whether false representation made with intent to deceive or inadvertently - Factors relevant to penalt-. Trade Practices Act s3.52?(a), 79 EDWINA ALICE BAFTON V¥ GARY LAI PTY LIMITED 5.267, 0.068. 5.263, G.270, G.271 OF 1384 WILCOX J 24 OCTOBER 1984 SYDNEY IN_THE FEDERAL COURT OF AUSTRALIA NEW_SOU TOT REGISTRY SENERAL_DBIVISTON No. No. No. No. No. »267 of 1584 -°68 of 1324 -269 of 1924 2270 of 1984 271 of 1584 aaa BETWEEN : EDWINA ALICE BARTON Prosecutor AND: GARY_LAL PTY LIMITED Def endant ORDERS COPAM WILCOX J DATE 24 GCTOBER 1394 FLACE: SYDNEY l. The defendant 13 convicted of clmmittinag five tinmkraventions of 3.57: 3a) of the Trade Fracrires Act 1974, being the charges referred to in the proceedings Nos. 3.367 of 1784, ~ :. The defendant is 5,269 of 1984, G,.269 of 1994, G.270 of 1994 and 3.271 of 1924. ardered ta pay a fine of $1.900 in respect of the contravention referred to in Ne. G.267 of 1984. 3. The defendant ts ordered to pay a fine of 31.900 in respect of the contravention referred to in No. ©.268 of 13934. LU_THE FEDERAL COURT oF ANETPALIA = > = NEW SOUTH WALES OLSTPICT FEGIOTRY +, 13.457 Of LIP To, GO, 288 of 1394 GENEPAL DIVISTON Mo. 3,262 of 1734 lo, 9,379 of Laed Te, G27) 76 1294 EETWEEN : SCWINA ALICE BAPTON - Frosecutor "ND: GARY _LAL FRY LIMITED Defendant PERSONS COR TUTGMENT OREM: WILCOS T OTE: 24 SCTARER L194 ELE: STONES Five auntcrmatitne have ceen Laid ov Edvina slice Barten, an orticear ot the Trade Fractices "cmmitaiin. wrrinie Tarvy Car Fev Cimitedt allevinea centravenrians or 3.07 a4: <f the Terie Fractices Act 1974, [n each case 1f is alleqded that the defendant did. in trade or commerce. in connectien with rhe eromotion of the suoply or bedding item3 falsely represent that the qaoods have a oarticular history. namely that they -ere made in Australia. The otfeanctes rare all admitrod. Eacn iantormation arises oat of the one 3zer vr facks and they all mav be contidered fragether. 4. The defendant is ordered to pav a fine of $1.900 in respect of the contravention referred to in No. 6.269 of 1384. 5. The defendant is ordered to pav a fine of 31,000 in respect of the contravention referred to in No. G.270 of 1984. 6. The defendant is ordered to pav a fine of $1,600 in respect of the contravention referred to in No. 3.271 of 1984. 7, Each of the said fines 183 to be paid to the District Reqistrar of this Court within twenty-one (21) davs of this dav. B. The defendant is to pav the costs of the prosecutor with respect to each of the proceedinas Nos. G.267 of 1984, G.2€8 of 1384, 56.769 of 1984, 3.270 of 1384 and G.271 of 1984. 3. Direct that the exhibits be handed out at the expiration of twenty-one (21) davs unless a Notice of Appeal has been filed in the meantime. se we nee ee ele meen emee! 5 Garv Lai Pty Limited carries on business in Melbourne as a manufacturer and distributor of items of manchester. [In 1379 it reqistered the trade mark "Foval Vanity" in connection with, inter alla. textile sheets and otner textile articles. Under the name "Roval Vanity" the defendant has reqularly sold to retailers bedding sets «comprising ~heets and prllow cases) which ire dred, printed. cut and sewn in Australia from imosrted undved cloth. The rackaqing in which the detendant sold these sheer -arsz bore the words: "Behold! The workmanship ind artistry of the POYAL VANITY Froduct. Destanea in Augstralta toa enhance every Womans COrcam. Carefully selected fabrics: eeinted V skilfully made in Austealia, for services & longer life". In early 1397 the compan: came under the control of Me CT UWillramt. whe ws mee a direcror, In fu. 1397 Me Williams vakeonied whe ecemises of aomoxtcls merchant at Mcerabbin. Hartlerv and Tarnee Fre Cimttad. and was sheom br Me CC Harrle~ a camel ot bedding certs packaqed under rhe 'Hamprnire House" brand name. Me Williams visrked Waltons Gimirad in Svinev. He caw the manchester buver and showed him iw ref at sheets, ich had bren re-packaged in "Rovil Vanit-" eickagina. The buver aave tim in erder and Mr Williams then ardered 1499 bedding sets from tle Hartley, Mr Hartley eoinctsd cut fc Mr Williams that rho grede would have to be re-packaqed by Me Wilitams as 'Hampshire House" "ras a race Bros brand name. I[n satisfacticen of the aedear Mr nee Hartley despatched ?523 bedding sets pickaqed as "Hampshire Houge" - which sets had been fully manufactured in Hong Kona - and 1247 bedding sets packaged under another Grace Bros brand name "Nite Scene" - which sets had been manufactured in Australia from imported cloth. The "Hampshire House" packages ztated that the contents were made in Hong Fonda. Upon receipt of the sets on Ls Auqust 1983 thev were re-packaaed bv staff of the defendant, inc Ludina Mr Williams, in "Roval Vanity" baas bearing the inscription set out above. In relation to the 353 "Hamposhire House" sets the packaqina therefore falselv asserted that the sets were designed tin Australia ind that they were "printed and skilfully made in Australia", On lo and 22 Auqyst the beddind -2ts were desoat hed fo raciogus Waltons crores within the gedine metroapelitan area. Ther weo2 pun on displav for sale to rhe oublic choretl: theceatter, 3 tew davs Later, on 25 Auanse. Mes tT Michal. eurchazed ar Waltons Dee Whv store four beddiny tet+. being -itfferenr combinations of items. Each 36 was packadved in the 'Povar Vanity" packaqe bearing the inaerirtiin wer suit above. Mrs Nicholls was influenced bv this inscription. In her affidavit avidence, the accuracy of which waa net challendwed. he explained: "2. I was Looking for some sheers at a reasonable price. [ saw some sheets on display labelled "Foval Vanity". I looked at the packaqdina in which rhe "Poral Vanity" sheets were packaged and I noted that the packaging bore word3 which Saree eee = vee +. included "Gesianed in Australia..." and "Carefullv selected fabrics printed and 3kilfullvy made in Australia. for service and longer life". TI concluded from this that the sheets were made in Australia. 3. I peefer to buv Australian made cqoods when the price is reasonable and the quality 15 satisfactor~ because [ am Australian and mv invalid cension is pvaid by the Australian taxpavers. I therefore prefer to support Australian industry - when price and quality permit me to do 30." fn the dav after purchase Mr3 Nicholls onened two of the packages. She found on the pillowcases of both sets 3ewn-in labels stating that the qoods were made in Hong Kona, She contacted the Trade Practices Commizsion. Miss Barton went to Waltons Bankstown crere and surchased a further bedding set. Zimilarly packayed. the content> of whit bore "made in Honda Font" sewn-in lakel3. Information 3.7247 if 1384 relates to the Banksrown purchase. informatisn 3.269-3..071 inclusive relate to Mrz Nicholls ourchases at Dee Why. [tf i w eed, in resnect of ail five purchases. that the teads vere in fact made in Honda Fond but -914 in packaging stating that they had been made in Australia. Shortlv after the Bankstown purchase Mi33 Barton contacted Mr Williams. He oxpressed concern ind he took stenos ff have corrective over-s3hickers applied to the ttock remaining in the Waltan " shares, reeny 5. The price paid bv Waltons to the defendant for the lw mn Aw ve-packaqed "Hampshire House" sheet sets was $14.97 for each 3inale bed set 'of which there were 119 sets) and $13.92 for each double bed set 'of which there were 247 ser3), makina a total wholesale value of $6.288.26. The price charaed by Waltons to consumers for the 353 re-packaqed "Hamoshire House" sheet sets was $19.95 for aach sinale bed set and 327.95 for each double bed set, making a total retail value of 293.986.25. The defendant has no prior convictions for offences under the Trade_Practices Act. There has been an 133ue befare me as to whether Mr Walliams had anv deliberate intention fe ieceive. Miss Barron qave2 evyulonee - tne rccuracy of which wal conceded - that in a ralephone con' ersation with her vat the time of wne fiece Tomelaint Mr Williams said: 'IT Knew fFhat the docd- were imecened. althoah I did not know that they had made in Hona Fona sewn inks them". He repeated this statement in a questionnaire which he completed at the request of the Commission on 2? November 1992. In response to a question whether he -vas aware. when he qave instructions for the re-packaaqinag of the sheets. whether the sets were tmported he replied: ~2 an od "T was aware that thev were imported. I was not aware that the merchandise had sew in labels attached to them. and I was not aware that the packaqging had "Made in Australia" on it as well. but I am certainly most well aware of it now. and can assure vou that it will not happen again." However. in an interview with officers of the Commission on 16 December 1383 Mr Williams retreated from that position statind: "T was aware that gzome mav have been imported, More correctly I was aware that the cloth would be imported but the manufacturing into actual sheet vets - I was nok aware where that -vas done". In his evidence before me Mr Williams said that after Miss Barton had contacted him and he had ceoken to Mr Hartlev he was aware "that we had some imported che--3 in cur comcignmment". He would not ctonced? that he had known * _.3 before the compolaink. He went on to sav that befere the ccomelaintc rhe clace of manufacture had no tmportance £9 him. There 18 no doubt that 1f Mr Williams had turned his Mind £9 the wanestion he would have reai1rzi. ie easil' ascertained, the place of manufacture. Nat only did the sheets, which he personally helped tc re-eack. hav2 zewn-in labels showing that they were made in Hona Fong tut the "Hampshir? House" rackades in which they were deliver2d to his company expressly 39 sfated. His early statements "os officces ct fhe Commizston seem ta concede actual knowleada: cf the place of manufacture at the time of re-packaging. Hoverer, civina to the Se cree. 7. defendant the benefit of some doubt on the question. I am not prepared to find that Mr Williams consciously adverted to the matter and deliberately set out to deceive. I think that it 1s " more Likelv that he was concerned mainly with auality and price and that he re-eacked the qoods in the company 3 standard baqs without considering the accuracy in relation to thoze qoods of the wording on the baas and that the false packavina was the product of carelessness rather than an intention to deceive. The submission was put, on behalf of the defendant, that althouqh there are five informations befor? the Court. in respect of each of which the offence is admitted. the correct approach would be fo treat the whole matter as a single incident. Each of the five informations relates to one of tne beddint sets the tubiectk cf the rransaction between the isiendant and. firstly, Hartley and Turner Pty Limited and. secondiv, Waltons Limited. The suomiition 17 ent that I should reaard the matter as being a sin tl? 2 -ere3idqaht in vrespeck of the packagqina it "£2 sets of 'Hamozhiece House" bedding. Tt is ccneeded rnat. upon this approach. if 15 proper to look at the cotal dizrribution of bedding sets, ie 753 sets. rather than to .onfine attentron tea the five sets in relation to which informarions nave been Laid. T think that this is a proper approach and TI prrpose to consider fhe appropriate penalty for the totalitv of the matter ind then fo divide thar sum by five in order to fix a penalty in respect of each specific offence. 8. In Eva_v Mazda Motors 'Sales) Pty Limited (1977) ATPR 40-020 Smithers J summarized the matters relevant in that case - a contravention of s.52 - for consideration saving, at op 17.292: "First, the importance of the untrue statements in relation to anv transaction which mav possiblv proceed under the influence of the incorrect representation. Secondlv, the dearee that the representation departs from the truth. thirdly, the deqree - of wilfulness or carelessness in the making of the incorrect representation, fourthivy the extent that the representation was disseminated, fifthly, whether anv and what efforts have been made to correct anv false impressions which mav have been created. Finallv,. the sbiectives of the Act." Although this oassage must not te taken. and was not intended to be taken. as providing a List for universal application 1¢ does provide assistance a: tn the matters relevant fo be considered in the present caze. In relation ta the first macter, IT think that the importance of the untrue statement in respect if anv transaction would have varied with the purchaser. or potential purchaser. No doubt, many shoppers would be indifferent tc the stated place of manufacture of manchester 1tems. Thev mav te concerned exclusively with the waality of the article. its suitubility for their desired purpose and the price charqed. In relation to such a person the false statement would have no effect, Hewever. this would not be true of all. Mes Nicholls has stated that her preference ic to buv Australian made aqoods when the price 13 reasonable and the quality is satisfactory and 3he has explained 9. , her reasons for this preference. No doubt. there are other elk members of the community who would share her view that. other thinas being eaual. one should prefer Australian made products. It would be surprising if this was not 30: during recent vears there has been a maior effort bv various commercial and government bodies to encourage such a preference and there ts widespread community concern about unemployment and the run-down of the Australian manufacturing industrv. The choice of wordina for the defendant s packaging is, I think. indicative that the defendant itself perceived a marketing advantage in emphasisina that the qaoods were both desianed and manufactured in Australia. In relation to this first aspect, therefore, I conclude that although the untrue representation would not have affected each potential ourchaser 1t was a representatisn likely to affect 30me potential purchasers, and thereby to increase the sales_appeal of rhe product. ind that the defendant intended the representation fo have that affect. The relevant representation. in respect of the 352 bedding -4c3, was a total departure from the truth. The toods were neither desianed nor manufactured in Australia. I have already expressed the view that the false representation was more probablv the product of carelessness eather than a deliberate intention to deceive. The dearee of carelessness was high. Me Williams wa3 himself involved in the ce-packading of the sets from their previous "Hampshire House" 10. packets, upon which it was clearlv stated that the ts0ds were made in Hong Kona. into the "Koval Vanity" packazes, in which the false statement was made. Mr Williams must have been aware that the "Roval Vanitv" packaging had been desianed so as to emphasise the place of manufacture of the qoods. He would have cealised, had he thoudht about it for a moment. that the qoods which were about to be distributed in that packaqina did not comply vith the inscription on the packets themselves. Althoudh inadvertent misrepresentation is less blameworthv than deliberate misrepresentation, in a matter so fundamental as the makina of representations on packaqges in which the aoods are to be displaved for sale. even inadvertent misrepresentation 13 a matter 7£ serious concern. The philesoohv behind s.53 ef the Prackices Act 12 that there 13 a r2zponsibility to ensure chat representations made in connectizn -ith the surely of toods are in fact correct. The representation was disseminated only to 1 limited audience. persons who inspected the qoods in a Waltons store. There 1s no evidence of anv media advertising of the aoods. The prosecutor concedes that Mr Williams displaved a hich dearee of concern when the complaint was first reported to him and that thereafter he took prompt and effective action to overcome the problem. Stickers were placed over those bedding 11. sets which were still on displav for sale in a Waltons store. Mr Williams' positive and prompt response is a sianificant factor in mitiaation of penaltv. The maximum penalty fixed by Parliament for a contravention of Part V of the Act, in the case of a corporation is $50,000: see 3.79. The amount of the maximum indicates the serious nature of such an offence. However. for a number of reasons - the non-deliberate nature of the breach, the fact of relatively limited dissemination of the false representation, the fact that the false representation did not affect the quality or utility of the qoods, the promot remedial action bv Mr Williams and the lack of anv prior conviction - this case falls well short of being one suitable to attract a penalt~ near to the maximum. The penalty should reflect that the offence 1s a serious one and it should be a penalty which will tend te deter the defendant and others in trade or commerce from contravening tne Part. [t oucht net to be crushing or oppresive. Having reaard to all of these matters 1t is appropriate ro fix a total penaltv in relation ta all the informations in the sum of 89.000. There should be a penalty in respect of each of the five informations in the sum of 21,000. The defendant must pay the costs of the prosecutor. I certify that this and the *«" lic ) preceding pages are a true copy of the Reasons for Judgement herein of his Honour Mr Justice Wilcox. Associate 77 Melle rate ul (of SY a es