wee CATCHWURDS Trade practices - consumer protection - prosecution - ralse representation as to composition of goods ~ women s skirts - wool tibre content lower than that stated on label - whether contravention due to reasonable reliance on intormation supplied by another person - whether defendant took reasonable precautions and cxercised due diligence to avoid contravention. Trade Practices Sct 1974 - ss. 53a), 85 Darwin Bakery Pry. Ltd. v. Sully (1981) Si P.L.R. 90 Barton v. Croney Trading Fty. Ltd. (1984) 54 A.L.R. S4l Yorke v. Lucas (1985) 612 A.L.R. 307 Korczynski v, Wes Lofts 'Aust.) Pty - Ltd, (1985) 62 A.L.R. 225 LOUISE ELIZABETH WILKINSON v. KATIES FASHIONS (AU5T.1 PIY, LT. Nos. VG56-59 of 1985. LOUISE ELIZABETH WILKINSON v. ARPEL AUSTRALIA PTY. LTD. Nos. VG60-63 of 1985 Jenkinson d. Melbourne 28 July, 1986 ey ne 7, TITY whe STs en gt cre roma eres? or , a es a) nT ror. - til Tn FEORPAL CU0RT uF AUSTRALIA VICTORTA DISTRICT REGISTRY GENERAG DIVES ron CORAM Jenkinson J. PLACE Melbourne DATE : 28 July, 1986 ? » Nos. VO56-59 ot 1985 BETWEEN: GuJ1SE ELIZABETH WILE TNSON Prosecutor AND: KATIES FASHIUNS AUST.» PTy. CTD. Defendant Nos. VG60-63 of 1985 BETWEEN: GoUISE ELIZABETH WILKINSON Prosecutor AND: ARPEL AUSTRALIA PTY. LTD. Derendant REASONS FOR JUDGMENT Trial of eight 1nformations for offences alleged to have been committed by contravention ot s.53(a) of the Trade Act 1974. All of the informations concern labels, attached to inner surfaces of women s skirts. un e@ach of the labels Practices the are omy ee erie oer i rn -_ sy - *- _ ee ae re woe speere a eee vee ay — str ry we ng eq arse oye Pe ree ee ee een bu . printed the names ot the several fibres (as, for example, wool and nylon) of which the skirt 1s composed, and opposite each name 1s printed a percentage, as "50%" or "20%" or as the case may be. Each label mis-states the proportions in which the fibres are combined to form the material of which the skirt was made. Each ot 4 pairs of the informations concerns a sale by retail of a single skirt so labelled. One of each pair 1s against Katies Fashions (Aust.) Pty. Ltd. and the other information 1s against Arpel Australia Pty. Ltd... That 1s because at relevant times the business name "Katies" was owned by those two companies and there was uncertainty as to which company was carrying on, under that business name, the retail business in the course of which the skirt was sold. That uncertainty was dispelled during the hearing and leave has been sought by the prosecutor, and will be granted, to withdraw tour of the intormations. On 14 March 1984 and on 7 June 1984 Arpel Australia Pty. Ltd. (which [ shall call "Arpei") was selling clothes by retail in a shop called "Katies" at 284 Bourke Street Melbourne. On each of those two days a lady selected and bought a skirt from those exposed in the shop for sale. To the inner side of each skirt, near the waist band, were attached, together, three small slips of material. On one were recorded numerals concerning the size of the figure tor which the skirt was designed, on another was printed the word "Katies", and onthe third were printed the following: "50% Wool 30% NYLON 20% other tibres oe DRY LEAN ONGY" On 8 June 1984 in another shop called "Katies" which Arpel conducted at 2383 Bourke Street Melbourne a similar selection and purchase was made, of a skirt from those exposed in the shop for sale. That skirt had attached to its inner side, near the waist band, three small slips of material. There were a slip on which "Katies" was printed anda siip on which was printed the fibre composition or the material. Those two slips were indistinguishable from the corresponding slips on the two skirts to which reference has bcen previously made. The third slip recorded information concerning size of the same kind as the information on the size slips attached to the other two skirts. On 31 March 1984 Katies Fashions (Aust.) Pty. Ltd. conducted a shop called "Katies" at Port Noarlunga in South Australia. on that day a man selected and purchased a skirt from those exposed for sale in the shop. Three small slips of material were attached to the inner surtace of the skirt, near the waist band. Two of the slips were aindistinguisbable trom two of the three slips on each of the skirts to which reference has been previously made. The third slip recorded information concerning size of the same kind as the information on the size slips attached to the other three skirts. In relation to each of thc tour sales the information laid against the company by which the shop was conducted and the oo wore en Tro premecner skirt sold 1s or an offence against s.79(1) ot the Trade Practices Act 1974: that on the date and at the place of sale the defendant, being a corporation within the meaning of that Act, did, in trade or commerce. 1n connection with the supply ot the skirt, ralsely represont that the skirt was of a particular composition, namely 50% wool, 30% nylon and 20% other fibres, contrary to s.53(a) of the Trade Practices Act 1974. In each casc the evidence established, beyond reasonable doubt, that substantially less than one halt of the material of which the skirt was made was wool. Section 53(a) of the Trade Practices Act, 1974 provides: "A corporation shall not, in trade or commerce, 1n connexion with the supply or possible supply or goods or services or in connexion with the promotion by any means of the supply or use of goods or services - (a) falsely represent that goods are of a particular standard, quality, grade, composition, style or model or have had a particular history or particular previous use; " The evidence showed that each of the skirts had been made in Australia out of material imported trom Italy as a_ single consignment. The evidence also showed that all the legal transactions, in pursuance of which the material had been bought, imported, and made up into skirts and the skirts vested in the two sellers of the four skirts, were undertaken by members of a group ot associated companies which were either controlled by Katies Pty. Ltd. or in which Katies Pty. Ltd. was entitled to 49 per centum of the shares. Towncraft (Distributors) Pty. Ltd. ("Towncraft"), a wholly owned subsidiary ot Bruck (Australia) eo en ee seems one oe eee seo ee pom a a in . Ltad., which Katies Pty. Ltd. controlled, placed a written order for purchase ot 4,000 metres of the material from C1 No Tex S.N.C. ot Florence, Italy. Katies Pty. Ltd. contracted with Skirtmaster Pty. Ltd., 1n which Katies Pty. Ltd. held 49 per centum of the shares, tor the manuracture ot 3,000 skirts out of the material ordered from C1 No Tex S.N.C.. Towncraft sold the materzal to Skirtmaster Pty. Ltd. after it had been imported into Australia and the latter company made out of 1t the 3,000 skirts. The written order tor purchase of the material from Ci No Tex 5.N.C. speciried the composition of the material thus: "20 wool, 55 poly, 25 acrylic". The evidence established, first, that a deviation by as much as two and one halr per centum above or below a specified percentage of wool ribre in clothing material was regarded in the clothing material trade in this country as acceptable and, second, that the wool fibre content of the material in the four skirts which are the subjects of the informations was 1n no case below 18 per centum. The evidence was that the wool content of three of the four skirts was just below 20 per centum and that the wool content of the skirt purchased on 14 March 1984 was 40 per centum. The latter, surprisingly high percentage was not explained in evidence : the falsity upon which each information was grounded was the deviation from the 50 per centum specified on the Iabel, not the deviation from the 20 per centum specified in the order placed by Lownmaster with Ci No Tex S.N.C.. It was the primary submission of Mr. Merkel 9.C., who appeared with Mr. Hargrave for both defendants, that 1n each case the defendant vendor of the skirt had made no false representation concerning the composition of the skirt, because the vendor had | | , > the Sore etree ry wets a Sq agg re rn tte ee oO ep iy mee — > T. known nothing or that composition except that the vendor believed that the content label had becn placed on the inner surtace of the skirt by the manufacturer or the skirt in order to comply with the requirements ot State laws which make 1t a criminal offence to sell or offer for sale such a chattel unless information as to the wool content 15 printed or stamped on, or woven into, or attached to the chattel. The defendant vendor knew of no reason why such a dabel should contain incorrect information, but had no knowledge by which 1t might have determined whether or not the statements on the label were correct, 1t was submitted. The factual basis of the submission 1s consistent with the evidence. Skirtmaster Pty. Ltd. delivered the 3,000 skirts it had made to Katies (Distributors) Pty. Ltd., a wholly owned subsidiary of Katies Pty. Ltd.. The labels had been attached to the skirts by the manufacturer before delivery to Katies (Distributors) Pty. Ltd.. Each of the four skirts the subjects of the unformations was later delivered by Katies (Distributors) Pty. Ltd. to the detendant by which that skirt was subscquently sold, as one of a batch taken from the 3,000 skirts. Each of the defendants was a wholly owned subsidiary of Katies Pty. Ltd.. Neither detendant had any contact or dealing with Skirtmaster Pty. Ltd. 2n relation to that defendant's acquisition of any of those batches. Each dealt with Katies (Distributors) Pty. Ltd... Neither defendant received, before the skirts had been sold by retail, any information concerning the proportions of the several fibres ot which the material consisted, except the information on the content labels. It was the responsibility ot Skirtmaster Pty. Ltd. to ascertain what those proportions were and to prepare and - - - --— ap - snes vp ee ee ee is ataead i allt al ilar teal srt eee \. ns attach a content label accordingly. That responsibility was invariably assumed by Skirtmaster Pty. Ltd. when 1t manufactured clothing for a member ot the group of companies controlled by Katres Pty. Ltd. and in my opinion tound legal expression as an implied term ot the contract with Katies Pty. Ltd. for manufacture of the 3,000 skirts. Mr. Merkel submitted that the defendant vendor ot the skirt, unlike the appellant in Darwin Bakery Pty. Ltd. v. Sully (1981) 51 F.L.R. 90 who placed in newspapers advertisements which were misleading, did not know anything of the information expressed in the content label except that 1t was information, as to the proportions in which several kinds of fibre had been combined in the making of the skirt material, which the defendant vendor thought, and had every reason to think, correct. The zunformation being incorrect, the false representation was not that of the defendant vendor, it was submitted, because that vendor had not intended that any particular information as to content should be exhibited on the skirt, and had certainly not intended that any but correct information should be exhibited. The defendant vendor did not know, it was submitted, that a 50 per centum wool content was claimed on the label, and therefore the vendor made no representation of such a content. The Darwin Bakery Case 18s authority for the proposition that knowledge of the falsity of a statcment one makes 1s not an element of a contravention of s.53, but not, it was submitted, authority for the proposition that knowledge of the content of a false statement 1s not an element of such a contravention. Although the defendants' otficers and servants knew that the woollen skirts they had for sale in their meaprem nee nen = mene me = in Te ' yo a Ry ye pr nn ete Sep re rar ce ee ee 7 TIE - 3. shops had attached to them a content label each. because that was required by law and was always done, the mind of none of those persons had conceived what was printed on such a label as intormation which a detendant had. or which a defendant was seeking to communicate by means ot the label, 1t was submitted. In those circumstances, 1t was submitted, neither defendant had by exposing the skirts for sale made any representation concerning the fibre content of the material of the skirts. Each defendant could be seen, as the retailer 1n Sarton v. Croner Trading Pty. Ltd. (1984) 54 A.L.R. 541 was seen by the Full Court in that case, at 554, to be merely a convenient medium" or "channel for communication" through which the manufacturer made a false representation concerning incorrectly labelled goods, it was submitted. And it mattered not, according to the submission, that 1t was not the manufacturer s name which was sewn on to the skirt beside the content label, but the retailer's, for Korczynski_ v. Wes Lofts 'Aust.) Pty. Ltd. (1985) 62 A.L.R. 225 provided authority for the proposition that 1t 1s not an element of an orfence defined by s.53(a) that the identity of the defendant as the maker of the false representation should have been disclosed to those to whom the representation was made. ff 1t be assumed that the proposition last stated is correct, yet that proposition is not 1n my opinion tunconsaistent with the view, which I hold, that by associating itself with a representation made by another, whose existence is not disclosed to those to whom the representation 1s made, a corporation may itself make that representation. The act which constitutes the making by a corporation of a representation may be merely the disclosure to those to whom the representation 15 made of the identity of that corporation in circumstances which indicate to consumers that the corporation is thereby placing itself in the position of maker or the representation. In this case 1t 15 the offering tor inspection and for sale in the shop of a skirt upon which are physically conjoined the "Katies" label and the content label which, as I find, constitutes the making by the defendant, in each case, of a representation that the wool fibre content of the skirt material is 50 per centum. ft is unnecessary to express - and I do not express - any opinion on the questions whether the defendant would have made any representation concerning fibre content 1f there had been no "Katies" label on the skirt and there had been attached to each skirt only the other two labels, or the other two labels and a third label on which were printed the words "Skirtmaster Pty. Ltd." or the words "Made By Skirtmaster Pty. Ltd." or the words "Made By Jaeger" (to take at random the name of a manufacturer which no member of the public could reasonably suppose to be the retailer by whom the shop was being conducted). Whatever the answer to any of those questions, it 1s in my opinion of decisive importance, in reaching the conclusion that the defendant in each case made a representation as to the wool fibre content, that the conjunction of the "Katies" label and the content and figure size labels proclaimed, inthe absence of anything else to indicate the identity of the maker of the skirt or ot the material, Katies' assumption ot responsibility tor the statements which the words and figures on those other two labels expressed. Neither defendant suggests that the "Katies" label was so conjozned without 1ts authority, or that its officers were unaware that a content label was conjoined to the "Katies" label. pes ene -—y aa Lou. To authorise that conjunction and to expose the skirts, 30 labelled, to the public ror inspection and sale 1s in my opinion to make the representation, by the person tor whom or which the word "Katies" 18 a trade name and who or which 1s conducting the shop where the skirts are exposed for retail sale, that the wool fibre content of the skirt material is 50 per centum, even it the otficers and servants of that person knew nothing of fibre content except that they had every reason to suppose the labels correct. The significance of the Katies label is not that its display effected a communication to the consumer of the identity or the person by which the statement of wool content was made, but that its display affords, in the circumstances, evidence of the defendant's intention that 1t, the defendant, make that statement of wool content to consumers, and evidence that 1t did make that statement. Because it 1s not an element of an offence defined by s.53(a) that the identity of the person charged with 1ts commission as the maker of the false representation should have been disclosed to those to whom the representation was made, there May be, in my opinion, a single event which constitutes a false representation made by each of two persons concurrently (to adapt a word used in Barton v. Croner Trading Pty. Ltd. (1984) 54 A.L.R. at 553), not as parties to the commission of one offence, but each as the only party to the commission of a scparate otfence. Each may be said, I think, to "represent" - to cause to be asserted as fact in the face of consumers - that the wool content of the skirt 1s 50 per centum thereof, the manufacturer of the skirt by affixing the content label to the skirt and projecting 1t into the course of trade in the reasonable expectation that 1t would be 'ac lane . sere pe eee, 7 odlunaaeat than seaaies Teena iar neta deetendaae ec talaadiiaiee ier ieee a TT tn oe ree ee ee ll. exposed tor inspection and retail purchase by consumers in this country and by the fulfilment of that expectation, the detendant vendor by exposing the skirt, with conjoined labels of the vendor's trade name and or the wool content affixed, for that inspection and purchase. Mr. Merkel sought to support his submission by retrerence to the observations of Mason A.C.J., Wilson, Deane and Dawson JJ., in Yorke v. Lucas (1985) 61 A.GL.R. 307, concerning the liability under s.52 of the Trade Practices Act 1974 of a corporation which transmits to a consumer false information supplied to it by another. A corporation to which reterence is made in those observations as "the Lucas company" had been held by the Federal Court of Australia liable in damages to the purchaser of a business for contravention of that section, by transmitting to the purchaser information supplied to it by the vendor, for which it was acting as agent to negotiate the purchase. The Lucas company had not appealed to the High Court, which was concerned with the question whether a director of the Lucas company had been involved in its contravention of 5.52. But the four justices to whom I have reterred said (61 A.L.R. at 309-310): "Tt should be observed at the outset that the facts as found by the trial judge raise the question whether the Lucas company itself was guilty of any contravention of s.52. It is, of course, established that contravention of that section does not require an intent to mislead or deceive and, even though a corporation acts honestly and reasonably, it may none the less engage in conduct that is misleading or deceptive or 1s likely to mislead or deceive: Hornsby Building information Centre Pty. Ltd. ve Sydney Building Information Centre Etd. (1978) 140 CLR 216 at 228; 18 ALR 639 at 647; Parkdale ooo 12. Custom Bu1rlt Furniture Pty. GCtd. v. Puxu Ptv. Ltd. (1982) 149 CLR 191 at 197; 42 ALR 1 at 5. That does not, however, mean that a corporation which purports to do no more' than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct 1r the information turns out to be false. If the circumstances are such as to make 1¢ apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it 18 worth, we very much doubt that' the corporation can properly be said to be itself engaging im conduct that 1s misleading or deceptive. Had the Lucas company appealed from the judgment against 1t, 1t may have been necessary to form a concluded view on that question. It has not, however, done so and 1t is possible to resolve this appeal against the judgment in favour of Lucas upon the assumption that the finding of a contravention of s.52 on the part of the Lucas company was correct. As will be seen, that is so, notwithstanding that the contravention was said to have taken place solely by reason of the conduct of Lucas." The passage just quoted was said to be consistent with the submission advanced by Mr. Merkel that the affixing of the "Katies" label could not justify the conclusion that the defendant had adopted as its own the statement which the content label makes about the wool content of the material. If it had appeared, whether by label or some other means, to anybody who should have examined the skirt in the shop, that a person other than "Katies" was the manufacturer or supplier of the material or the manufacturer or wholesale supplier of the skirt, the circumstances might have suggested - I need express no opinion - that "Katies" was not the source of the inrormation on the content labcl and that "Katies" did not profess to assert any belief in the truth of that information. But where, as in these cases, nothing appears to give any clue to the identity of any person, except the wor Pi > ATU rag ee in rrp sete eer Se co eee eee ot eee ~ 13. defendant vendor, connected with the making or the commercial origins of the skirt or the material, the conjunction of the "Katies" label and the content label must in my opinion be understood to signity an assumption by "Katies" of responsibility for the tactual assertions expressed on the content label. Section 85(1) of the Trade Practices Act 1974 provides: "Subject to sub-section (2), 1n a prosecution under this Part in relation to a contravention of a provision of Part V, it 1s a defence if the detendant establishes - (a) that the contravention in respect of which the proceeding was instituted was due to reasonable mistake; (b) that the contravention in respect of which the proceeding was instituted was due to reasonable reliance on intormation supplied by another person; or tc) that - (i) the contravention in respect of which the proceeding was instituted was due to the act or default of another person, to an accident or to some other cause beyond the defendant's control; and (ii) the defendant took reasonable precautions and exercised due diligence to avoid the contravention." Sub-section (2) conditions the right to rely on some of the exculpatory provisions of sub-section (1) upon compliance with certain requirements as to notice. Each defendant sought to establish by way ot defence that the contravention the subject of each intormation laid erst cnr cee ra * ld. against 1t was due to reasonable reliance on information supplied by Skirtmaster Pty. Ltd.. By attaching the content labels to the skirts the latter company had informed the retailers that the fibre content of the skirt material was as shown on those labels and the defendant retailers relied on that intormation when they set the skirts, so labelled, before the1r customers. It was submitted that the defendants' reliance on the information on the content labels was reasonable in the circumstances. The defendants had no information trom any other source as to the tibre content of the material, and a retailer of clothing not anfrequently lacked such information about articles ordered from clothing manufacturers, the evidence showed. Manufacturers invariably assumed the responsibility of attaching content labels to clothing, and I am persuaded that until after the sales of these four skirts the officers and servants of the defendants had not heard of error by an Australian clothing manufacturer, in the discharge of that responsibility, which resulted in mis-statement to the public of the fibre content of clothing material. In these cases 1t was error by the manutacturer which resulted in the mis-statement of the fibre content. There was uncontradicted evidence that Skirtmaster Pty. Gtd. had received no written statement as to what that content was. The practice of the servants of Skirtmaster Pty. Ltd. at the time when it contracted to make the skirts was to ascertain the fibre content of material by telephone enquiry of the supplier of the material, if that information had not been received ina document. The servant most likely to have made such an inquiry, if one were made, concerning this material was not called as a witness. She mp oe en S tomreeans =~ 15. was believed to be living in Argentina. The precise cause of the error was not shown by the evidence. Having never known of error in content labelling before the present instances, the directors of Skirtmaster Pty. Ltd. had prescribed no more elaborate system to prevent error of that kind than assigning to a particular servant of that company the functions of ascertaining the fibre content and of arranging for the preparation of the labels and the tixing of those labels to the skirts. It was that servant who would, 1f necessary, make a telephone enquiry of the person who had supplied the tabric. The directors of the defendant companies were not shown to have had at the relevant times any knowledge of the system Skirtmaster Pty. Ltd. employed. They did, however, believe that no error had occurred in content labelling by any of the manufacturers with whom their group of companies dealt. The managing director of Katies Pty. Ltd., anda director of each defendant company at relevant times, Joseph Brender, gave the following evidence: "You were aware, were you, of the somewhat informal system which your suppliers used to find out what the fabric content of the goods was?---To be honest with you, I was not. I see. Was 1t your state of mind, as chairman ot directors of Katies Fashions, that really somehow or other they got it right, but you were not sure how?---That 1s correct, yes. So you were not able to, as 1t were, assess this, to see whether 1t was working by good chance or by good design. All you knew was that it seemed to work?---That is correct." fn determining whether the reliance was reasonable which the defendants placed on the information Skirtmaster Pty. Utd. Pre regs tren come Ton ee pee te ee en et wre eee vel oom a oy we ogeree ee we, t 16. supplied on the content label sewn on to each skirt, the Court must bear in mind that the defendants were forbidden - and ought to have known that they were torbidden - by s.53(a) to talsely represent the fibre content of the materials of which their stock 1m trade was made. The question 1s what was reasonable in all the circumstances for a corporation laid under the statutory command expressed in s.53(a). Although the defendants' directors had for Many years been encouraged to rely on the manufacturers' content labels for information as to the fibre content of fabrics by the complete absence of report of error in information of that kind communicated by that means, general experience of human affairs must have stimulated 1n a reasonable mind giving attention to the discharge of the obligations laid on the defendants by s.53(a) an apprehension that an error might be made which would result in incorrect labelling by the manufacturer. An inexpensive means of reducing the risk that error would result in misrepresentation to consumers was available. If each defendant had observed a practice, first, ot obtaining, either from the person who supplied the fabric to the manufacturer or, 1f that were not possible, from the manufacturer, a written statement, of the fibre content of the material of clothing which that defendant proposed to offer for sale by retail, which was signed by a responsible officer or servant of the person making the statement, and second, of comparing the fibre content labels on samples of the clothing with the information in the written statements as each batch of clothing was delivered, the risk of misrepresentation of fibre content to consumers by error in lJlabelling would have been substantially reduced at little cost. The risk would not have been completely climinated by the observance of such a practice. — en — ar a oe .v . — 4a 17. But the tailure to take that means of reducing the risk was in my judgment unreasonable. In ali the circumstances I cannot regard the reliance which either defendant placed on the information supplied by the manufacturer by means of the labels as reasonable. For the same reasons I cannot find the detence specified in s.85(1)(c), upon which the defendants also relied, to have been made out : neither defendant took reasonable precautions or exercised due diligence to avoid the contraventions. A good deal of evidence was adduced of a discovery by Kevin John Perrott of incorrect wool content labelling on a "Katies" skirt, of his communications with Mr. Brender on the subject, and of the steps taken, in consequence of those communications, by Katies Pty. Ltd. and the companies it controlled to prevent mis-statement of the wool content of goods sold by those companies. These events occurred in 1983 and in 1984, before the commission of the contraventions which are the subjects of the informations. Mr. Perrott's discovery and the communications which passed between him and Mr. Brender and other representatives of what may perhaps be called the Katies group of companies resulted, not in a suspicion that accidental mistake on the part of those responsible for labelling manufactured goods had caused mis-statement of wool content to the public, but in a suspicion that fraud on the part of some foreign suppliers of imported fabrics had caused the importer to believe the wool content to be that for which he had contracted, whereas that content was in fact substantially less. Evidence was adduced and submissions advanced for and against a conclusion that the Katies group of companies had acted reasonably in response to the ver tv oie iettnenetctirerenate = ats ye ne et ep meres ene meee peeetee s Creeesy TOT OF rae : ay a J nn . a. ov ane a ated -—r ~ ats on are rae wee Soe pee ve ee et "we . qe oo we we Soe 18. information Mr. Perrott communicated to them. It 1s unnecessary to express an opinion about that response, since I have concluded that there was a lack of reasonableness in the course which each detendant took before it had any warning that fabric content might have been mis-stated, and the response was not directed to achieving correction ot mis-statement of the fabric content of skirts which were already in the retail shops - as these four skirts were - when the response was made. Pinally, 1t should be observed that, in indicating a system by the observance of which each defendant might have reduced substantially the risk of misrepresentation or fibre content by error in labelling, I made no attempt to suggest what might be the best system tor that purpose. I was concerned only to state conclusions that an inexpensive system of substantial utility could have been adopted and that the railure of each derendant to adopt such a system was unreasonable. Nor did I take unto account - as the system presently being operated by the Katies group of companies does take into account, and takes advantage of - the circumstances that each defendant is a member of a group of clothing trade companies and that those members of the group which offer clothing for sale by reta1l receive their stock in trade from another member of the group, Katies \Distributors) Pty. Ltd., to which 1t may be reasonable to assign the runctions of checking content labels on behalf of rctailers who are members of the group. The prosecutor has leave to withdraw each of the informations in the proceedings numbered VG56, VG58, VGS9 and VG61 a *ly 0 19. of 1985. Each of the other four informations, in the proceedings numbered VG5S7, VG60, VG62 and VG63 of 1985, I find proved. [ adjourn the further hearing of each ot the latter four informations to a date to be fixed, so that evidence and submissions concerning penalties may be received. a tue cory of the T < Jn of tie eee tS Associate Dated: 2% Ju lq '936 ~~ mgt a oe oy ~f " ~ ty VG56-59 of 1985 VG60-63 of 1985 Counsel tor the Prosecutor Solicitor for the Prosecutor Counsel for the Defendants Solicitors for the Defentants Dates of Hearing Mr. M.E.J. Black Q.C. Mr. R.R.S. Tracey Director of Public Prosecutions Mr. R. Merkel Q.C. Mr. K.W.S. Hargrave Messrs. Arnold Bloch, Leibler 24, 25, 26 and 27 March, 1986 — Me err ee ee