Australian Competition and Consumer Commission v C.I. & Co Pty Ltd [2010] FCA 1511

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v C.I. & Co Pty Ltd [2010] FCA 1511 Citation: Australian Competition and Consumer Commission v C.I. & Co Pty Ltd [2010] FCA 1511

Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v C.I. & CO PTY LTD (ACN 107 302 429), ANTONIO PISANO and ANNA ANGELA PISANO

File number(s): WAD 278 of 2010

Judge: NORTH J

Date of judgment: 23 December 2010

Date of hearing: 23 December 2010

Place: Perth

Division: GENERAL DIVISION

Category: No Catchwords

Number of paragraphs: 36

Counsel for the Applicant: Mr W Keane

Solicitor for the Applicant: Corrs Chambers Westgarth

Counsel for the Respondents: Mr J Sher

Solicitor for the Respondents: Brennan & Co

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 278 of 2010

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND: C.I. & CO PTY LTD (ACN 107 302 429)

First Respondent

ANTONIO PISANO

Second Respondent

ANNA ANGELA PISANO

Third Respondent

JUDGE: NORTH J DATE OF ORDER: 23 DECEMBER 2010 WHERE MADE: PERTH

THE COURT DECLARES THAT:

1. From April 2004 until 31 May 2008, the First Respondent has in trade or commerce, engaged in conduct that: (a) was misleading or deceptive, or was likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (Cth) (Act); (b) falsely represented that goods were of a particular standard or quality in contravention of section 53(a) of the Act; and (c) was liable to mislead the public as to the nature or characteristics of goods in contravention of section 55 of the Act; by: (a) applying labels bearing the prominent words "FREE RANGE" in large red text on a white background (Free Range Labels) to packages of 12 eggs (Cartons) and supplying Cartons labelled with Free Range Labels to customers including food retailers, cafes and restaurants in Western Australia (Customers); and (b) thereby expressly representing to Customers and to consumers and potential consumers of eggs, that the eggs contained in those Cartons labelled with Free Range Labels were free range eggs; when in fact, a substantial proportion of the Cartons labelled with the Free Range Labels did not contain free range eggs. 2. From 1 June 2008 until in or around April 2010, the Second Respondent, in trade or commerce, engaged in conduct that was liable to mislead the public as to the nature or characteristics of goods in contravention of section 55 of the Act, by: (a) applying Free Range Labels to Cartons and supplying them to Customers; and (b) thereby expressly representing to Customers and to consumers and potential consumers of eggs, that the eggs contained in those Cartons labelled with Free Range Labels were free range eggs; when in fact, a substantial proportion of the Cartons labelled with the Free Range Labels did not contain free range eggs. 3. From on or around 12 April 2010 until in or around June 2010, the Second Respondent, in trade or commerce, engaged in conduct that was liable to mislead the public as to the nature or characteristics of goods in contravention of section 55 of the Act, by applying labels bearing the prominent words "FRESH RANGE" in large red text on a white background (Fresh Range Labels) to Cartons and supplying them to Customers and thereby: (a) representing to Customers, consumers and potential consumers of eggs that the eggs contained in those Cartons were free range eggs; and (b) leading Customers, consumers and potential consumers of eggs to erroneously believe or form the mistaken impression that those Cartons were labelled "FREE RANGE" and contained free range eggs; when in fact a substantial proportion of the Cartons labelled with the Fresh Range Labels did not contain free range eggs. 4. From 1 June 2008 until in or around April 2010, the Third Respondent, in trade or commerce, engaged in conduct that was liable to mislead the public as to the nature or characteristics of goods in contravention of section 55 of the Act, by: (a) applying Free Range Labels to Cartons and supplying them to Customers; and (b) thereby expressly representing to Customers and to consumers and potential consumers of eggs, that the eggs contained in those Cartons labelled with Free Range Labels were free range eggs; when in fact, a substantial proportion of the Cartons labelled with the Free Range Labels did not contain free range eggs. 5. From on or around 12 April 2010 until in or around June 2010, the Third Respondent, in trade or commerce, engaged in conduct that was liable to mislead the public as to the nature or characteristics of goods in contravention of section 55 of the Act, by applying Fresh Range Labels to Cartons and supplying them to Customers and thereby: (a) representing to Customers, consumers and potential consumers of eggs that the eggs contained in those Cartons were free range eggs; and (b) leading Customers, consumers and potential consumers of eggs to erroneously believe or form the mistaken impression that those Cartons were labelled "FREE RANGE" and contained free range eggs; when in fact, a substantial proportion of the Cartons labelled with the Fresh Range Labels did not contain free range eggs. THE COURT DECLARES THAT: 6. The Second Respondent be restrained for a period of five years, whether by himself, his servants, agents or howsoever otherwise, in trade or commerce in Australia, from: (a) representing that eggs are free range; (b) labelling eggs in such a manner as would lead a consumer to believe or assume that the eggs are free range; or (c) aiding, abetting, counselling or procuring, or being directly or indirectly knowingly concerned in, or party to, any person or corporation: (i) representing that eggs are free range; or (ii) labelling eggs in such a manner as would lead a consumer to believe or assume that the eggs are free range; when, in fact, the eggs are not free range. 7. The Third Respondent be restrained for a period of five years, whether by herself, her servants, agents or howsoever otherwise, in trade or commerce in Australia, from: (a) representing that eggs are free range; (b) labelling eggs in such a manner as would lead a consumer to believe or assume that the eggs are free range; or (c) aiding, abetting, counselling or procuring, or being directly or indirectly knowingly concerned in, or party to, any person or corporation: (i) representing that eggs are free range; or (ii) labelling eggs in such a manner as would lead a consumer to believe or assume that the eggs are free range; when, in fact, the eggs are not free range. 8. Pursuant to section 86C of the Act, the Second and Third Respondents, at their own expense and within 28 days of the date of these orders, cause: (a) a letter to be sent to all Customers to whom the Second and Third Respondents supplied eggs from 1 June 2008 until the present, in terms of Annexure A to these orders, advising of the Court's judgment, including its findings and the remedy granted; and (b) to be published an advertisement, in terms of Annexure B to these orders, in the West Australian newspaper and use their best endeavours to ensure that such advertisement is: (i) within the first 10 pages of the newspaper; and (ii) is of a size not less than 12 cm wide by 20 cm long. 9. Pursuant to section 76E of the Act, the Second Respondent pay to the Commonwealth a pecuniary penalty of: (a) $30,000 in respect of the Second Respondent having engaged in conduct referred to in order 2 above in contravention of section 55 of the Act in the period 15 April 2010 to 30 April 2010; and (b) $20,000 in respect of the Second Respondent having engaged in conduct from 15 April 2010 referred to in order 3 above in contravention of section 55 of the Act; 10. The Respondents pay the Applicant's costs of and incidental to the proceedings, fixed at $15,000. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. Annexure A [insert retailer details] [insert date] Dear [insert retailer name] Following an investigation and legal action by the Australian Competition and Consumer Commission (ACCC) the Federal Court has declared that we have breached section 55 of the Trade Practices Act 1974 by labelling eggs as free range when they were not. Between 1 June 2008 and April 2010 we sold cartons of eggs which were labelled 'Free Range Eggs' when in fact the contents were cage laid eggs. From April 2010 until around June 2010 we sold cartons of eggs labelled 'Fresh Range – Omega 3' which created an impression the eggs contained in those cartons were free range when in fact those eggs were also cage laid eggs. We sold you eggs during one or both of those periods. In addition to issuing declarations, the Court also ordered: • injunctions restraining us from engaging in egg substitution in the future; • the publication of an information notice in The West Australian; • us to send this letter to you; • us to pay the ACCC's legal costs; and • the imposition of a civil pecuniary penalty on Antonio Pisano in the amount of $50,000. We apologise for misleading you by engaging in the conduct outlined above. If you require any further information, please contact us on [insert phone number]. Yours sincerely Antonio (Tony) and Anna Pisano C I & Co Annexure B BY ORDER OF THE FEDERAL COURT OF AUSTRALIA The Federal Court has declared that Antonio (Tony) Pisano and Anna Pisano, trading as C I and Company (C I & Co), misled the public as to the nature and characteristics of eggs they supplied to customers by labelling eggs as being free range when the eggs were not. The conduct involved: between 1 June 2008 and April 2010, labelling and marketing cartons of eggs prominently using the words 'Free Range Eggs' when in fact the contents were cage laid eggs; and from around April 2010 until around June 2010, labelling and marketing cartons of eggs prominently using the words 'Fresh Range - Omega 3' and creating the overall impression that the eggs were free range, when in fact the contents were cage laid eggs. Following legal action by the Australian Competition and Consumer Commission (ACCC) the Federal Court has declared that Antonio Pisano and Anna Pisano contravened section 55 of the Trade Practices Act 1974. In addition to the declarations, the Court issued injunctions restraining Antonio Pisano and Anna Pisano, from engaging in similar conduct in the future. They were also ordered: to publish this notice in The West Australian; send this notice to all retailers of C I & Co eggs; and pay ACCC costs. Antonio Pisano was also ordered to pay a pecuniary penalty in the amount of $50,000. If you require any further information, please contact C I & Co on [insert contact details]