Clarke, Peter Geoffrey Webber v. New Concept Import Services Pty Ltd [1981] FCA 217

"...that on or about the 9th day of May 1980 in the State of Victoria, NEW CONCEPT IMPORT SERVICES PTY. LTD. being a corporation within the meaning of the Trade Practices Act 1974 did commit an offence against section 79 by contravening section 62(1)(b) of the said Act in that, in trade or commerce, it did supply goods that are of a kind likely to be used by a consumer such goods, namely, Hanna-Barbera plastic bubb-a-loons being novelties designed for blowing balloon like shapes from a solution containing acetone and polyvinyl acetate, being of a kind in respect of which there was in force a notice under section 62(2D) of the said Act declaring the goods to be unsafe goods."

"62.(2D) Where it appears to the Minister that goods of a particular kind will or may cause injury to persons using the goods or to any other persons, he may, by notice under his hand published in the Gazette, declare the goods to be unsafe goods." By notice gazetted on 14 June 1979, the Minister declared certain goods to be unsafe goods and specified the goods as :

"Novelties, such as 'Apollo Color Balloons', 'Bliwing Balloon', 'Blobo Bubb-a-Loons', 'Blo-it', 'Loony Balloony', 'Magic Moon Balloons', 'SSS Balloons' and 'Super Elastic Bubble Plastic' designed for blowing balloon-like shapes from a

solution containing acetone, polyvinyl acetate and/or benzene."

It has been proved that in May 1980 the defendant sold to Mr. Thomas Whittingslow for 8 cents each, 6,500 Hanna-Barbera plastic bubb-a-loons, each containing a thin blow pipe or cylinder approximately 3 inches long and a tube containing a solution. The pipe and the tube of solution were affixed to a card on which appeared the instructions that the user should open the tube, squeeze a ball of plastic solution on to the end of the pipe, blow through the pipe to inflate the plastic and pinch the end of the plastic to seal the balloon. On each kit appeared the warning,

"NOT A GUM. DO NOT CHEW. DO NOT USE NEAR FIRE. CONTAINS : POLY VINYL ACETATE, ACETONE ETHYL ACETATE PLASTIC FORTIFIERS WITH CERTIFIED COLOURS."

Evidence was given that the goods had been acquired by the defendant at 22 cents each for a promotion which was unsuccessful and that the remainder of the stock was sold to Mr. Whittingslow who conducted amusements at shows and like occasions. Mr. Whittingslow used these goods, as the defendant understood he would, as consolation or give-away prizes in a game called "Laughing Clowns", in which each contestant endeavoured to place

a ball in the mouth of a moving clown's head. I£ successful, the contestant received a prize of substance; if unsuccessful, children who were contestants received a small or token prize. Mr. Whittingslow had approximately ten types of such small prizes, one of which was the bubb-a-loons kit. Each contestant paid 60 cents to enter the game, and a notice was displayed to the effect that every child would receive a prize.

The first question is whether the solution in the tubes contained, "acetone, polyvinyl acetate and/or benzene". Each kit specifically described its contents as containing, "polyvinyl acetate, acetone, ethylacetate, plastic fortifiers". An admission was made to Mr. Clarke by Mr. Veale, who was authorised to speak on behalf of the defendant, that the kits indicated that the tubes contained polyvinyl acetate and acetone, ethylacetate and that they accordingly would appear to fall within the terms of the Minister's banning order. In addition, evidence was given by an analytical chemist, Mr. K. Maurer, that he had analysed the solution in the tubes of three kits, Exhibit J, given to him and that the solution in each kit in each tube contained polyvinyl acetate, acetone, and ethylacetate.

In his final address, Mr. T. Ginnane, counsel for the defendant, submitted that there was no proof that the kits analysed by Mr. Maurer were part of the goods sold by the defendant to Mr. Whittingslow. But there are in evidence, as Exhibit F, four kits which were produced by Mr. Clarke to Mr. Veale and admitted by Mr. Veale to have been examples of the goods sold by the defendant to Mr. Whittingslow in May of 1980. One of those kits contains a note or endorsement which, after a letter which appears in inverted commas, states ; "SAMPLE COLLECTED FROM INGRID BEZJAK OF WHITTINGSLOW NOMINEES P/L AT 9.40 am 3 MARCH 1981." That endorsement 1s followed by what appears to be the initials

of a Mr. Clarke and Mr. Thomas Whittingslow and a further set of figures in inverted commas, in this case, "TWG5S". As that kit

was produced by Mr. Clarke to Mr. Veale, together with a statement made by Mr. Whittingslow, it can hardly be doubted that the signatures Clarke and Whittingslow are those of Mr. Clarke, the officer of the Trade Practices Commission who gave evidence in these proceedings, and of Mr. Whittingslow, the purchaser of the goods from the defendant. In any event, the kits were admitted by Mr. Veale to have been examples of the goods sold. The three kits being Exhibit J, which were analysed by Mr. Maurer, appear to be identical with the kits in Exhibit F, even to the extent that each has endorsed upon it a note similar to that I have set out above and on which the signatures of a Mr. Clarke and a Mr. Whittingslow also appear, which signatures appear to be identical. These three kits, Exhibit J, were received in evidence without objection. Mr. Ginnane stated that he had no objection to the tender. The case must therefore be decided on the basis of the evidence before the court, not on the basis of evidence as it may have been if objection had been taken and if the objection had been upheld. If objection had been taken to the tender, it may have been proper for the Court to insist upon strict proof that the goods analysed by Mr. Maurer were goods sold by the defendant to Mr. Whittingslow. Or it may have been proper to require evidence to be called comparing the analysed kits and the written endorsements with the kits in Exhibit F. However, as objection was not taken to the tender, it is necessary that I should compare the kits in Exhibit J with the kits in Exhibit F to ascertain whether they are identical and whether therefore they were part of the goods sold by the defendant to Mr. Whittingslow or contained identical components. I may have regard to the written and printed endorsements on the kits. Hearsay evidence, if not objected to, may be relied upon. In this case, it is proper to have regard to what is written on the exhibit, for if objection had been taken, Mr. Clarke or Mr. Whittingslow, neither of whom had been released, could have been recalled to give further evidence.

As the goods in Exhibits F and J appear to be identical proprietary goods, as the goods in Exhibit J contain a hand-written endorsement similar to that appearing on one of the kits in Exhibit F, and as the hand-written endorsements state that the goods were collected from Ingrid Bezjak of Whittingslow Nominees Pty. Limited at 9.40 am on 3 March 1981 and contain signatures which appear to be the signatures of Mr. Clarke and Mr. Whittingslow, I am satisfied beyond reasonable doubt the kits that were analysed by Mr. Maurer were some of the kits sold by the defendant to Mr. Whittingslow. I am therefore satisfied beyond reasonable doubt that the solution in the goods sold by the defendant to Mr. Whittingslow in May 1980 contained polyvinyl acetate, acetone and ethylacetate.

Mr. Ginnane further submitted that the terms of the declaration gazetted on 14 June 1979 were so uncertain that the declaration was void or, if it did have a meaning, that it required the solution contain both acetone and benzene. The term "and/or" is not a recognised dictionary term. Nevertheless it is a term which is 1n popular use. It provides for the situation whereby the conjoined terms may be applied either cumulatively or in the alternative. It follows that whatever difficulties there may be with the terms of the declaration, the declaration does not

require that the solution must contain benzene. The term "and/or" appears before the word "benzene". The word "or" applies to the term "benzene". Nor is it, I think, a proper

interpretation of the declaration that the solution is to contain all three or alternatively only one of the three elements. The term "and/for" suggests that a combination of two elements is permissible.

I read the expression as requiring that the solution contain all three elements, acetone, polyvinyl acetate and benzene; or alternatively, that it contain acetone and either polyvinyl acetate or benzene. I think that this interpretation is clear and that it is not necessary to consider what might be the

consequence if the declaration were either uncertain or ambiguous in this regard. When the declaration is read 1n this sense, the subject goods, which contain both acetone and polyvinyl acetate, come within the description of the goods of which the declaration speaks.

The subject goods were novelties designed for blowing balloon-like shapes from a solution containing acetone, polyvinyl acetate and/or benzene. No witness said that the subject goods were of the same kind as the named novelties. Nevertheless, as no issue was raised by Mr. Ginnane respecting this, as Mr. Veale's record of interview contains an admission that the subject goods "...would appear to fall within the terms of the Minister's banning order, ..." and as one of the specific goods mentioned in the declaration is "bubb-a-loons", I conclude that it is beyond doubt that the goods satisfied the terms of the declaration.

It was further submitted by Mr. Ginnane that the transaction between the defendant and Mr. Whittingslow did not fall within the terms of s.62(1)(b) which provides

commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer if the goods are of a kind -

(b) in respect of which there is in force a notice under this section declaring the goods to be unsafe goods."

Mr. Ginnane submitted that the subject goods were not intended to be used and were not of a kind likely to be used by a consumer. He submitted that the reference to a "consumer" requires one to have regard to the terms of s.4B which provides that a person shall be taken to have acquired particular goods as a consumer 1f and only if the detailed provisions of the section are met.

I would not dispute that the use of the term "consumer" in s.62(1) requires one to have regard to and to give effect to the terms of s.4B. Mr. Ginnane, however, then sought to draw an inference that the terms of s.4B apply only to commercial transactions and not to circumstances such as those in which Mr. Whittingslow distributed the subject goods as prizes, which circumstance he said did not amount to a commercial transaction. Mr. Ginnane submitted; "...it 1s clear parliament did not intend to regulate gifts or give aways."

Mr. Ginnane sought to draw this inference first from the definition of the word "acquire" in s.4(1) which provides :

"4.(1) In this Act, unless the contrary intention appears -

(a) in relation to goods - - acquire by way of purchase, exchange or taking on lease, on hire or on hire-purchase;".

But this definition, in my view, is not a limiting definition but rather a definition which expands the ordinary meaning of the word to include matters such as leasing and hiring, which in the ordinary use of language may not constitute an acquisition.

The terms "acquire" and "supply" are defined in a similar manner, and 1t is clear from provisions such as those of s.65 that the term "supply" 1s intended to comprehend the supply of goods to a

person who is merely a passive recipient. Therefore, no inference can be drawn from the use in s.4B of the word

"acquired", which 1s indeed a common word of the English language with a very wide meaning.

Mr. Ginnane next sought to draw his inference from the reference in s.4B to a "price", a term of commerce. But the section makes provision for the calculation of a "price" in a case where the relevant transaction does not itself determine the "price". Of these provisions, the terms of paragraph 4B(2)(d) apply equally

as well to a gift as to a commercial transaction. Therefore, no implication can be drawn from the use of the word "price" limiting the ordinary meaning of the terms used in s.4B.

Mr. Ginnane next sought to draw an inference from the provisions of Part V which he said were intended to apply only to commercial transactions. As I have pointed out, s.65 deals specifically with the supply of unsolicited goods and s.54 deals with the offer of gifts, prizes or other free items. I see nothing in the provisions of Part V which justify the reading down of the terms of s.4B or, for that matter, which suggest that the type of business which was conducted by Mr. Whittingslow's company was

not intended to be comprehended by the provisions of Division 1 of Part V.

Mr. Ginnane next submitted that the subject goods had no value because it was unlawful to supply them in trade or commerce. He submitted that the provisions of s.4B therefore did not apply. As the goods were sold by the defendant to Mr. Whittingslow for 8 cents each, it seems difficult to conclude that in fact they had no value. But even if their value was nil, that would not preclude the operation of s.4B. Section 4B provides, inter alia, that :

(i) the price of the goods did not exceed the prescribed amount;". That is $15,000. Even if the price be deemed to be nil because the value of the goods was nil, this provision was satisfied, for the price nil did not exceed the prescribed amount.

It follows, in my opinion, that there was a supply by the defendant to Mr. Whittingslow of goods that were intended to be

used and which were of a kind likely to be used by a consumer. It was not suggested that the supply was not a supply in the course of trade or commerce and clearly it was. The supply was of goods in respect of which there was in force a notice under s.62 declaring the goods to be unsafe goods. There was, therefore, a breach of s.62(1).

I certify that this and the &.... preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Davies.