Consumer Affairs v Reject Shop; Department of Fair Trading v Reject Shop [1999] NSWSC 62

New South Wales Supreme Court CITATION : Consumer Affairs v Reject Shop; Department of Fair Trading v Reject Shop [1999] NSWSC 62 CURRENT JURISDICTION : Common Law Division FILE NUMBER(S) : 12923/94; 12823/97 HEARING DATE(S) : 11 February 1999 JUDGMENT DATE : 16 February 1999

PARTIES : Commissioner for Consumer Affairs v The Reject Shop (Aust) Pty Limited Director General Department of Fair Trading v The Reject Shop (Aust) Pty Limited JUDGMENT OF : Grove J

COUNSEL : The Hon J. Shaw QC, AG/C. Lonergan (Prosecutor) C. Porter QC/M. Burley (Defendant) SOLICITORS : L. Pacey (Prosecutor) Diamond Peisah & Co (Defendant) CATCHWORDS : Fair Trading Act ; Summary Prosecution; Guilty Pleas; Mitigation ACTS CITED : Fair Trading Act 1987 Trade Practices Act 1974 DECISION : Fines Any Costs Ordered To Be Paid

1 HIS HONOUR : These two summons seek that the defendant be dealt with according to law for a total of eleven offences contrary to the Fair Trading Act 1987 (the Act). The Hon J.W Shaw QC, AG with Mr Lonergan appeared for the prosecutor; Mr C.A. Porter QC and M. Burley appeared for the defendant. Mr Porter tendered pleas of guilty to all offences on behalf of his client and by consent the matters were heard together. Thanks to the cooperation of counsel, the facts were presented by way of an agreed statement. Matters in mitigation were advanced by way of statement and testimony from Mr John Shuster a director of the defendant. Factual contest was virtually non existent but there was some controversy about the conclusions to be drawn and assessments made. 2 I sketch background facts and for convenience I will number the offences charged in summons 12923/94, 1-3 and the balance charged in the summons 12823/97, 4-11. Offence No 1 3 On 2 September 1994 an investigator in the employ of the prosecutor called at a store operated by the defendant at Roselands Shopping Centre where she saw exhibited for sale amongst other things wooden toy trucks consisting of carriages with a wooden screw driver. The inspector indicated that the product would be tested to determine compliance with requisite standards. The store manager stated that he would take the items off sale. Subsequent tests in a laboratory revealed the items presented an inhalation/ingestion hazard. Offence No 2 4 On the same visit on 2 September 1994 the investigator also took possession of products offered for sale described as wooden toy abacus bus and toy abacus cargo trucks. These items failed a tension test and were, similarly to the item mentioned in offence 1, assessed as presenting an inhalation/ingestion hazard. Offence No 3 5 On 22 September 1994 the investigator returned to the Roselands store and purchased four units of a toy product identified as "Magic Balloon Blowpipe". The attention of the store manager was drawn to the circumstance that the item was the subject of a banning order in force pursuant to s 31 of the Act. The manager agreed to withdraw the product from sale immediately and indicated that he would inform a director of the defendant. Offence No 4 6 On 7 November 1994 the manager of the major investigations unit on behalf of the prosecutor attended the defendant's store at Eastgardens where he purchased three units of a product known as a "Tummy Trimmer". He advised the store manager that the item was the subject of a banning order. The item consisted of home exercise equipment comprising two foot pedals connected to a bar handle by a spring or springs. Offence No 5 7 On 8 November 1994 an investigator attended the defendant's shop at Roselands and observed 26 units of the "Tummy Trimmer" product. This manager was informed of the banning order being in force and responded by indicating that the products would be taken from sale that day. 8 It can be noted that in respect of this and the preceding offence, a public recall notice was placed in various newspapers and the store manager in each of the stores operated by the defendant was instructed not to sell the item. Offence No 6 9 On 11 November 1994 an investigator attended the defendant's store at Erina and purchased items including a children's toy known as a "Super Jetfighter". Subsequent testing disclosed failure of an applicable projectile test in that after launch all 10 projectiles discharged by the toy ruptured the test aluminium foil. Offence No 7 10 On the same visit to Erina as is relevant to offence no 6, the investigator purchased a "Pull Along Play Train". A purchase of this item was subjected to testing and was subjected to "drop", "moving components" and "tension" tests all of which it failed. It was assessed to present an inhalation/ingestion hazard. 11 It can be noted that upon notification of these contraventions, the defendant removed these products from sale and public recall notices were placed in the Sydney Morning Herald, Lake Macquarie News, Border Daily Mail, Central Coast Express and La Fiamma newspapers. Offence No 8 12 On 26 November 1994 the manager of the major investigations unit attended the defendant's store at Westfield Shopping Centre Liverpool where he observed stacks of products described as "Santa Bags" displayed for sale. He purchased three of these units after which he spoke to the store manager and informed him that the products were the subject of a banning order in force under 31(1) of the Act. The goods lacked required perforation holes which provide an obvious safety factor in the event that the bags are misused by young children. The manager responded that he would remove the product from sale.