CATCHWORDS Trade Practices - Prosecution - whether proved beyond reasonable doubt admittedly wrong label attached to goods constituted representation of respondent - whether any reasonable hypothesis consistent with innocence - whether proved beyond reasonable doubt that specification of "current value" in "certificate of origin" was a representation that goods were of a particular quality within the meaning of s.53(a) of the Trade Practices Act 1974 - Crimes Act 1914. Trade Practices Act 1974 (Cth): ss..53(a), 79(1). Crimes Act 1914 (Cth): s.5 VG Nos. 86,94,98,122,123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136 of 1984 ALAN RAYMOND DUCRET v. CHAUDHARY'S ORIENTAL CARPET PALACE: Pry. LTD. ALAN RAYMOND DUCRET v. S. I. CHAUDHARY Ryan J. 27 July 1987 Melbourne oo er et nn oe Se eg ee eee IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VG Nos. 86,94,98,122,123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136 of 1984 : ALAN RAYMOND DUCRET And: (Prosecutor) CHAUDHARY' S_ ORTENTAL Between: And: CARPET PALACE PTY. LTD. (Defendant) (VG Nos.94,98,122,123, 124,125.126.127,128,129 and 130 of 1984) ALAN RAYMOND DUCRET (Prosecutor) S. I. CHAUDHARY {Defendant ) (VG Nos. 86, 131, 132, 133, 134, 135, 136 of 1984) Judge Making Order: Ryan J. Date of Order: 27 July 1987 Where Made: Melbourne MINUTE OF ORDER THE COURT ORDERS THAT: NOTE: The summonses numbered VG 122, 124 and 135 be dismissed. The defendant, Chaudhary's Oriental Carpet Palace Pty. Ltd., be convicted of the charge contained in the summons numbered VG 126 and fined the sum of $250.00 The prosecution pay the defendants' costs reserved by Keely J. on 9 December 1985 and three-quarters of the defendants' other costs. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. —r wee Soe re ae wee — IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG Nos. 86,94,98,122,123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136 of 1984 GENERAL DIVISION Between: ALAN RAYMOND DUCRET (Prosecutor ) And: CHAUDHARY'S ORIENTAL CARPET PALACE PTY. LTD. (Defendant) (VG Nos.94,98,122,123, 124,125.126.127,128,129 and 130 of 1984) Between: ALAN RAYMOND DUCRET (Prosecutor) And: S. I. CHAUDHARY (Defendant) (VG Nos. 86, 131, 132, 133, 134, 135, 136 of 1984) Coram: Ryan J. Date: 27 July 1987 REASONS FOR JUDGMENT On 17 July 1987 I ruled on a submission on behalf of the defendants that there was no case to answer on any of the summonses except VG 126 of 1984 which is related to an A ne i er eee, et ew eee epee ee . er > eee ' 4 aa bats wi, ' ' net ea": anformation against Chaudhary's Orienlal Carpel Palace Pty. Ltd. ("the Company"). The statement of charge set out in that summons is in the following terms: "That on or about 23rd July 1983 at Melbourne in the State of Victoria Chaudhary's Oriental Carpet Palace Pty. Ltd. a corporation within the meaning of the Trade Practices Act 1974, of 1005 High Street, Armadale in the said State did commit an offence against section 79(1) of the said Act in that in contravention of section 53(a) of the said Act, it did in trade or commerce in connection with the possible supply of an 'Afghan Runner' rug to Alan Raymond Ducret falsely represent in writing to the said Alan Raymond Ducret that the said rug was of a particular style which it was not, namely that it was a 'Shah Prayer Rug'. "" The following particulars were given of that charge: "L. On or about 23rd July 1983 Alan Raymond Ducret ('Ducret') purchased an 'Afghan Runner' rug measuring approximately 150 cm. xX 57 cm. ('the rug') from the Defendant at the premises of the Defendant. 2. Prior to the sale referred to in paragraph - L hereof the rug was offered for sale to the members of the public with a label attached to it upon which was written the words 'Shah Prayer Rug'. 3. The representation referred to in paragraph 2 hereof was read by Ducret prior to him purchasing the rug. 4. The said representation was false in that the rug was not a 'Shah Prayer Rug' but was a low quality Afghan rug. 5. By reason of the matters aforesaid, the Defendant falsely represented to Ducret that the rug was of a particular style which it was not, namely that it was a 'Shah Prayer Rug', such representation ees pe rere =e : , — eee being made in connection with the possible supply of the rug to Ducret." The evidence disclosed that the prosecutor, Mr. Ducret, attended at the Company's premises in response to some six full page advertisements which the Company had inserted in the "Age" newspaper of that day. Like the advertisements which had appeared on 30 April 1983, those of 23 July appeared immediately after "an advertising feature" which consisted of editorial content and photographs. On p.18 of the "Age" for 23 July appeared a "stylized price ticket", similar to those in others of the Company's advertisements, on which was printed "Usually $396, Sale Price $198, Now Only $100" with a cross through each of the first two prices. Ranged around the price ticket were photographs of five different rugs, one of which was labelled "Afghan Shah Prayer Rug", and another of which had printed below and parallel to its lower edge "Afghan Bokhara Runners". When Mr. Ducret arrived at the Company's premises at about 8.35 a.m. there was already a long queue of people stretching from the front door along High Street. After the shop opened some rugs being described by Mr. Chaudhary as "the $12.50 ones" were handed out to shoppers in the queue for inspection. When Mr. Ducret gained admittance to the shop at about 11 a.m., he found carpets ranged about in piles many of which had been picked over by earlier shoppers. In one of those piles he found a rug with a label attached to it Siaelinemniane ens coerce ' by a plastic "swing" thread. The label was inscribed "Shah Prayer Rug — made in Afghan". Tt also bore what Mr. Ducret called "a price structure ... it was $398 crossed out, $198 crossed out and $100 left there as the selling price". Upon comparing the label with the advertisement on p.18 of the "Age", Mr. Ducret found that the "price structure" corresponded exactly with that in the advertisement, and the description of the rug on the label corresponded with the words "Afghan Shah Prayer Rug" below one of the carpets illustrated on that page of the advertisement. Mr. Ducret took that rug, and another which he had decided to purchase, to a female sales assistant who was taking money from customers and writing receipts. She tore the cardboard labels off the two rugs brought to her by Mr. Ducret and wrote out a receipt, the relevant part of which read "Shah Prayer Rug $100". Mr. Ducret then completed his purchase and took both rugs with him from the shop. It has been admitted on behalf of the Company that the rug which Mr. Ducret acquired was not a "Shah Prayer Rug". It was probably an "Afghan Bokhara Runner", another of the types of rug illustrated on p.18 of the "Age" of 23 July 1984. The rug purchased by Mr. Ducret was tendered in evidence and has still inserted init the plastic "swing" Te pete ee ae eer i +e a ose thread, put the label deposed produced. detached by the female sales assistant. On behalf of the Company, it is submitted that the Court cannot be satisfied beyond reasonable doubt that the admittedly wrong label was attached to Mr. Ducret's rug by a servant or agent of the Company. It was possible, so 1t was argued, that a member of the public found the label for a "Shah Prayer Rug" lying loose in the Company's shop, and by bending the lug at the end of the plastic "swing" thread, mistakenly attached the label to the rug later purchased by Mr. Ducret. It is significant that when the hypothesis that the label had been attached by mistake to his rug was raised with Mr. Ducret in cross-examination, he conceded that a mistake may have been made, but would not acknowledge the possibility of its being made by somebody other than one of the shop attendants. The relevant passage from Mr. evidence is as follows: Ducret's "MR FAJGENBAUM: But it is apparent to you that it could have been a mistake? Tam not asking you to say there was but ~--?~-- MR DUCRET: You mean by someone in the shop putting the tags on? Yes? --~ Sure. And it is likely that it might have been a mistake because the prices structure for the prayer rug was the same as that for the runner, which you ultimately got? That could well have been. Lo by Mr. Ducret has not been Presumably, it was destroyed shortly after it was ae we ee ey ; vt awe eae aos ¥ let — oe - -- Does Lhe ad not say that the price structure the same; that is, $396 to $198 to --- It does, yes. is $100? It is also possible, is it not, that somebody might have picked up a loose tag on the floor and put it back on the wrong rug? ~-- It is possible, yes. I mean the tags might have fallen off the rugs and ---?--- You mean one of the _ shop attendants tidying things up and putting it on the wrong rug? Yes? --- I suppose that is possible." Since there is no direct evidence as to how the wrong label came to be attached to Mr. Ducret's rug, the court is required to draw an inference from the proved circumstances. As the prosecution sustains the criminal onus of proof, those circumstances must exclude any reasonable hypothesis consistent with innocence; (see Chamberlain v. The Queen CNo. 2] (1984) 153 CLR 521 at 536). Some guidance on what is a reasonable hypothesis is provided by the judgment of Denning J. (as he then was) in Miller v. Minister of Pensions £1947] 2 All ER 372 at 373 where his Lordship observed: "Proof beyond a reasonable doubt does proof beyond the shadow of a doubt. The law would fail to protect the community if it admitted fanciful possibilities to deflect the course of justice. If the evidence is so strong against a man as to leave only a remote possibility in his favour, which can be dismissed with the sentence 'of course it is possible but not in the least probable', the case is proved beyond reasonable doubt, but nothing short of that will suffice." not mean -— ¢ —— weet owe i scopes ae ee ee, awe FO . et eee a ee 7 . 2 In the present case the defence of mistake afforded by 5s.85(1)(a) of the Trade Practices Act 1974 ("The Act") has not been invoked, so the inference that the label containing the words "Shah Prayer Rug - Made in Afghan" was mistakenly attached to Mr. Ducret's rug by a servant or agent of the Company is of no avail to the defendant. I consider that the possibility that a member of the public affixed the mistaken label to Mr. Ducret's rug is so remote as not to amount to a reasonable hypothesis in all the circumstances. The hypothesis postulates, first, that a member of the public found the "Shah Prayer Rug" label detached from the rug to which it had correctly been attached, and located Mr. Ducret's rug being another of all the rugs in the store from which the label had also become detached from the plastic "swing" thread. It next requires that the same customer who, ex hypothesi, did not wish to purchase Mr. Ducret's rug, expended some time and manual dexterity in manipulating the lug on the plastic "swing" thread in Mr. Ducret's rug through the hole in the "Shah Prayer Rug" label. All of those three acts are required by the hypothesis to have been performed in circumstances where the gueue outside the shop must have imposed considerable pressure on customers to complete their purchases and leave the premises as quickly as practicable, and where the unauthorized attachment of a label to a rug by a customer in the way described would have been likely to excite suspicion, qe eee . a z — aaa or, at least, the attention of the Company's staf€. Accordingly, the hypothesis advanced by Mr. Fajgenbaum Q.C., does not leave me with a reasonable doubt that the representation made by the attachment of the "Shah Prayer Rug" label to Mr. Ducret's rug was that of the Company. The Company must therefore be convicted of the charge contained in summons VG 126 of 1984. On 17 July 1987, I ruled that there was a case to answer in respect of the charges against the Company contained in summonses numbered VG 122 and 124 of 1984 and the charge against Mr. Chaudhary in VG 135. All of those charges arose out of the ascription in two separate "certificates of origin" of a specific money amount as' the "current value" of a "Princess Bokhara" rug made in Pakistan. After my ruling, the defendants elected not to call evidence. It is now necessary, therefore, for the Court in accordance with principle laid down by the High Court in May _v. Q'Sullivan (1955) 92 CLR 654 at 658, to decide whether, on the whole of the evidence before it, it is satisfied beyond reasonable doubt that the defendants are guilty of those charges. IT have indicated in my ruling of 17 July that the evidence as it then stood permitted the finding that representations contained in the "certificates of origin" in respect of the "Princess Bokhara" rug supplied to Mr. Jackson eens ~ fy hoe net oe were made "1m comnexion" with the supply of that rug, as that phrase is used in s.53 of the Act. Having again reviewed that evidence, I am satisfied beyond reasonable doubt that the necessary connexion has been established. It was next submitted on behalf of the defendants that the Court could not be satisfied beyond reasonable doubt that the representation in each of the "certificates of origin" that the "current value" of the "Princess Bokhara" rug was respectively $1,675 and $1300 was anything more than the designation of the maximum "usual price" of any other rug from the Company's stock for which Mr. Jackson could at any time exchange his rug as long as it was undamaged. I expressed the view, in my earlier ruling, that an interpretation of each certificate was open on the evidence by which the "current value" represented both the maximum usual price of another carpet from the Company's stock for which the subject carpet could "be exchanged, and the Company's assertion of the present worth of the subject carpet itself. That interpretation, I am persuaded beyond yeasonable doubt, on reviewing the evidence, should be adopted. I have been influenced in coming to that conclusion, by, in particular, the inclusion of the reference to "current value" in the body of the certificate as one of "the following characteristics" which the carpet was oo 10. guaranteed to have, and by Mr. Chaudhary''s statement when interviewed by Mr. Ducret, that the "current value" specified on the certificate meant: "Replacement value. We inflate the discounted sales price by about three times for insurance purposes. The carpet 1s worth about three times the amount we sell them for during sales. The figure represents my belief as to the true value of the carpets." Had some documents other than the "certificate of origin" been used by the Company when requested to certify the value of a rug for insurance or other purposes the Company could have adduced the evidence to that effect. Another indication that the "current value" designated on the certificate was auntended to refer to something more than the possible, future, exchange of the rug is the fact that on the' second certificate 1n respect of the "Princess Bokhara" rug, its current - value was stated to be $1300 which did not approximate to its "usual price" indicated to Mr. Jackson by Mr. Ali Khan as being about $1600. The final submission on behalf of the defendants was that, on the whole of the evidence, the Court could not be satisfied beyond reasonable doubt that each representation in the respective "certificates of origin" was that the rug was "of a particular quality" within the meaning of s.53(a) of the Act. I accepted, in ruling on the submission of no case to answer that "a particular quality" is used in 5.53 in the wooo roams os =e ll. wide sense of one of the virtues, attribuLes, properties or special features of the goods or services of which it is predicated. A particular quality 1n that sense may dictate the value of the goods or services so inexorably that a representation that they have a specified value entails that they possess that quality. However, on all of the evidence in the present case, I am not satisfied beyond reasonable doubt that the specification of "current value" in either of the "certificates of origin" had that effect. The conclusion is at least equally open that it represented an assessment, involving some exercise of subjective judgment by the Company, and the individual maker of the certificate of the value of the rug in the light, not of one particular quality, or a collection of particular qualities, but of its general quality when compared with other oriental rugs of similar size. That assessment, by an inference which I consider to be reasonably available, would also have been based in part on extrinsic factors like the cost of acquiring such a rug and landing it in Australia, and the prices being asked for similar rugs by other retailers in this country. Accordingly, the representation which embodied it went beyond an objectively verifiable statement about one or more of the attributes or special features intrinsic to the rug itself. In that sense, I am not satisfied beyond reasonable doubt that either representation of "current value" was one that the rug was of a particular quality, as required by s.53(a). — pewemnee Sep = pe ES OF w 4 wea ee ge ee 12. The summonses numbered VG 12?, 124 and 135 of 1984 must therefore be dismissed. I will hear counsel on penalty in VG 126, and on the question of costs. I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Ryan. Dated: 27- F 27 PF 7 wt econ SE Associate aoe a nee aeent aT