Director of Consumer Affairs Victoria v Daiso Industries

Federal Court of Australia|2017-06-16|Before: Moshinsky J

By 4.00 pm on 23 June 2017, the parties file an agreed minute of orders, setting out the declarations of contravention to be made against the respondent.
If agreement cannot be reached as to the form of the orders in accordance with paragraph 1, by 4.00 pm on 28 June 2017, each party file and serve: (a) its proposed orders on liability; and (b) short submissions (of no more than five pages) in support of its proposed orders.
There be liberty to apply.
Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The applicant, the Director of Consumer Affairs Victoria (the Director) brings this proceeding against the respondent (Daiso), alleging contraventions of product safety and product information provisions of relevant legislation. It is contended that during the period November 2013 to about May 2016 Daiso contravened the relevant provisions in relation to five categories of products, namely: (a) projectile toys; (b) toys for children under three years of age; (c) sunglasses; (d) elastic luggage straps; and (e) cosmetics. 2 In relation to the first four categories of goods, the alleged contraventions concern s 106 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (the ACL) and s 106 of the Australian Consumer Law (Victoria), being the Australian Consumer Law text applied by the Australian Consumer Law and Fair Trading Act 2012 (Vic) (the ACL (Vic)). That provision relates to product safety standards. 3 In relation to the fifth category, namely cosmetics, the alleged contraventions concern s 136 of the ACL and s 136 of the ACL (Vic). That provision relates to product information standards. 4 The proceeding was commenced in August 2016. At a case management hearing on 9 December 2016, the parties were hopeful that it might be possible to resolve issues of liability, with the only disputed issue being the quantum of any penalties. On that basis, the matter was listed for hearing on the issue of relief on 15 June 2017. Subsequently, however, it transpired that the parties were unable to resolve all issues of liability. Accordingly, the matter was listed for trial on the issue of liability, utilising the day that had previously been set aside for the relief hearing. The hearing on the issue of liability took place yesterday. 5 The Court has jurisdiction to deal with the claims arising under the ACL: see s 138(1) of the Competition and Consumer Act and s 39B(1A)(c) of the Judiciary Act 1903 (Cth). Insofar as the Director brings claims under the ACL (Vic), it has been accepted that, in circumstances such as this, such claims are within the Court's accrued jurisdiction: see Walker v Sell (2016) 245 FCR 308 at [83]-[85] per Bromwich J; Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [1] per Mortimer J. 6 Although there was a need for a hearing on liability, the area of dispute between the parties is in fact quite limited. By its amended concise reply, Daiso admits liability with respect to the following categories of products: (a) projectile toys; (b) sunglasses; (c) elastic luggage straps; and (d) cosmetics. 7 The issue between the parties is confined to the category of toys for children under three years of age. Within this category, Daiso does not admit contraventions in respect of the following toys: (a) stomping elephant and stomping hippo; (b) crab and turtle squirting animals; (c) dice puzzle; (d) submarine toy; and (e) water toy duck. 8 I note for completeness that although the written submissions referred also to a stomping tiger, it was common ground at the hearing that the stomping tiger did not form part of the case and I did not need to deal with this. 9 The issue in dispute between the parties in relation to the toys identified above is a narrow one, namely whether they are "[t]oys for children up to and including 36 months of age, being objects manufactured, designed, labelled or marketed as playthings" within the meaning of the Schedule to the Consumer Protection Notice No. 14 of 2003 - Consumer Product Safety Standard: Toys for children up to and including 36 months of age (the Consumer Protection Notice). The Director contends that the toys fall within that phrase. Daiso contends that they do not. 10 It is common ground that, if the toys do fall within the phrase quoted above, they do not comply with the applicable product safety standard and Daiso will have contravened s 106 of the ACL and s 106 of the ACL (Vic). 11 Thus the issue to be determined is whether the toys identified above are "[t]oys for children up to and including 36 months of age, being objects manufactured, designed, labelled or marketed as playthings" within the meaning of the Consumer Protection Notice. 12 For the reasons that follow, I have concluded that each of the disputed toys falls within that phrase. It follows that Daiso has contravened s 106 of the ACL and s 106 of the ACL (Vic) in relation to those toys.

Concise statement and response 13 The proceeding was commenced by originating application. The Director's claim is set out in a concise statement. Paragraph 3 of the concise statement, which is admitted, alleges that: (a) the Director is a public official whose office is established by s 107 of the Australian Consumer Law and Fair Trading Act; (b) in that capacity, the Director is another person for the purposes of s 232 of the ACL; and (c) in that capacity, the Director is authorised by ss 109 and 110 of the Australian Consumer Law and Fair Trading Act and ss 228, 232, 246 and 247 of the ACL (Vic) to bring this proceeding. 14 It is convenient to note at this point that the proposition that the Director is "any other person" for the purposes of s 232 of the ACL was accepted by Marshall J in Director of Consumer Affairs Victoria v Dimmeys Stores Pty Ltd (2013) 213 FCR 559. 15 Paragraph 4 of the concise statement, which is also admitted, alleges that Daiso was at all material times: (a) from 1 October 2012, a company incorporated and registered in Victoria with the ACN 160 576 134, pursuant to the Corporations Act 2001 (Cth); (b) a corporation for the purposes of s 4 of the Competition and Consumer Act, by virtue of being a trading corporation formed within the limits of Australia; (c) carrying on business as retail department stores in Victoria, New South Wales and Queensland; and (d) carrying on business as a retail supplier of a variety of goods including consumer goods the subject of product safety laws, standards or ban orders. 16 Paragraph 5 of the concise statement alleges that during the period from about November 2013 to at least about May 2016, 27 Daiso department stores (being stores in Victoria, NSW and Queensland) displayed and offered for sale to customers one or more of the relevant types of consumer goods (as outlined below). This paragraph is partially admitted, in that Daiso admits operating the stores identified by the Director in the particulars within the alleged period. 17 Paragraph 6 of the concise statement alleges that in or about November 2013, March 2015 and July 2015, the Director or other consumer regulators in NSW and Queensland seized non-complying consumer goods from Daiso's department stores in Victoria, NSW and Queensland. A table in the concise statement sets out the alleged number of different consumer goods seized. 18 In its response to that paragraph, Daiso admits that each product alleged to have been seized (or purchased) was offered for sale at the relevant times and at the relevant store. 19 Further, in paragraph 6A of its amended concise response, Daiso states: 6A. It says further that: (a) through exchanges of correspondence in 2014 and from May to August 2015, the Director identified non-compliant products being offered for sale by the respondent, and all non-compliance concerns were addressed; (b) in respect of the items alleged to have been purchased on 12 August 2015: (i) there were English language ingredient stickers in existence at the time for Wet Head cotton buds (4984343347953), which staff had been directed to apply to the outside of packaging before displaying for sale; and (ii) on 7 August 2015, staff had been directed to remove from sale and dispose of crab and turtle squirting animals (498434870949) and the staff at the Dandenong store apparently had not yet complied; (c) in respect of the items alleged to have been purchased in April and May 2016: (i) there were English language ingredient stickers in existence at the time for Q10 Co-enzyme hand cream (4949176025720), which staff had been directed to apply to the outside of packaging before displaying for sale; (ii) there were English language ingredient stickers in existence at the time for Espouler Hand Cream (Cherry Blossom) (4940921828009) and Espouler Hand Cream (Lemon Grass) (4940921828016), which staff had been directed to apply to the outside of packaging before displaying for sale; (iii) Dice puzzle book (4549131281286) is no longer offered for sale by Daiso; and (iv) submarine toy (4947678007671) and water toy duck (4947678975727) are labelled as being suitable for children from 4 years old, and accordingly, the standard relating to toys for children up to 36 months of age is inapplicable; and (d) Daiso has ceased selling all toys for children up to and including 36 months of age. 20 In paragraph 7 of the concise statement, the Director alleges that during the period November 2013 to May 2016, Daiso sold and supplied each of the following types of consumer goods: (a) projectile toys; (b) toys for children under three years of age; (c) sunglasses; (d) luggage straps; and (e) cosmetics, through one or more of its different department stores in Victoria, NSW or Queensland. In response, Daiso admits selling each type of consumer good within the alleged period, but denies selling all types for the entire period alleged. 21 Paragraphs 8 to 20 of the concise statement are in the following terms: Consumer goods 8. The projectile toys, toys for children under 3 years of age, sunglasses, luggage straps and cosmetics are goods that are intended to be used, or are of a kind likely to be used, for personal, domestic, or household use or consumption. Non-compliance with safety and information standards 9. For the purposes of s 106 of the ACL and s 106 of the ACL (Vic), the relevant safety standards were the safety standards imposed by: (a) Consumer Product Safety Standard: Children's Projectile Toys, Consumer Protections Notice No. 16 of 2010 (Projectile Toys); (b) Consumer Product Safety Standard: Toys for children up to and including 36 months of age, Consumer Protection Notice No. 14 of 2013 (Toys for Children Under 3 years of Age); (c) Consumer Product Safety Standard: Sunglasses and fashion spectacles, Consumer Protection Notice No. 13 of 2003 (Sunglasses); (d) Trade Practices (Consumer Product Safety Standards) Regulations 1979 (11C), Statutory Rules 1979 No. 134 as amended (Elastic Luggage Straps); and (e) Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991, Statutory Rules 1979 No. 134 (Cosmetics). 10. Since about 2010 each of the relevant safety standards and related information and guidance material has been published and publicly available on the internet at www.productsafety.com.au. 11. The projectile toys that were supplied by Daiso and those that were seized from Daiso's Department Stores did not comply with the Consumer Product Safety Standard: Children's Projectile Toys, Consumer Protections Notice No. 16 of 2010 because: (a) Contrary to [4.18.1(b)] projectile toys failed to have the high speed propeller or rotor in the form of a ring in order to reduce the risk of injury; and (b) Contrary to [4.18.2] and [4.18.3] the Projectile Toys failed to have any warnings or labels drawing attention to the potential danger of misuse in aiming them at a person's eyes or face; or using projectiles other than those supplied or recommended by the manufacture[r]. 12. The toys for children under 3 years of age that were supplied by Daiso and those that were seized from Daiso's Department Stores did not comply with the Consumer Product Safety Standard: Toys for children up to and including 36 months of age, Consumer Protection Notice No. 14 of 2013 because when tested in accordance with the required testing provisions the toys either contained or liberated small parts which fitted entirely into the small part cylinder without compression and in all possible orientations. 13. The sunglasses that were supplied by Daiso and those that were seized from Daiso's Department Stores did not comply with the Consumer Product Safety Standard: Sunglasses and fashion spectacles, Consumer Protection Notice No. 13 of 2003 because contrary to paragraph [4.2.1] the sunglasses did not have the requisite prescribed indelible marking or removable labels attached. 14. The elastic luggage straps that were supplied by Daiso and those that were seized from Daiso's Department Stores did not comply with the Trade Practices (Consumer Product Safety Standards) Regulations 1979 (11C), Statutory Rules 1979 No. 134 as amended, because contrary to 11C(3) and (4) of the regulations the elastic luggage straps did not have permanently attached the requisite prescribed warning label. 15. The cosmetics that were supplied by Daiso and those that were seized from Daiso's Department Stores did not comply with the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 Statutory Rules 1979 No. 134 because contrary to the requirements of regulation 6(1) and (2) the cosmetics did not contain the requisite ingredients list in English. Health or Safety risk from supply of non-complying goods 16. The health or safety risk to members of the public from the supply of non-complying projectile toys is eye and face injuries. 17. The health or safety risk to members of the public from the supply of non-complying toys for children under 3 years of age is that they present a choking hazard on ingestion. 18. The health or safety risk to members of the public from the supply of non-complying sunglasses is eye injuries. 19. The health or safety risk to members of the public from the supply of non-complying elastic luggage straps is eye and facial injuries. 20. The health or safety risk to members of the public from the supply of non-complying cosmetics is skin allergies or irritations through the inability to make an informed choice. 22 These paragraphs are largely admitted in the amended concise response. Specifically, paragraphs 8, 9, 11 and 13-20 are admitted. In relation to paragraph 10, Daiso states that, save that it does not know the commencement date of the publication of the standards, it admits paragraph 10. In relation to paragraph 12, Daiso states that it: refers to and repeats paragraph 6A(c)(iv) of its amended concise response; and does not know, and therefore does not admit, paragraph 12 because the Director has not tested the goods in the presence of Daiso.

The hearing 23 At the hearing on liability, the Director relied on: (a) part of an affidavit of Charles Charalambous, an inspector at Consumer Affairs Victoria; and (b) a report of Associate Professor Jordy Kaufman, an Associate Professor at Swinburne University of Technology. 24 Associate Professor Kaufman was cross-examined. 25 The Director also tendered as physical exhibits the relevant toys. 26 Daiso relied on a report of Dr Frederick (Rick) Jarman, a consultant paediatrician at the Royal Children's Hospital. Dr Jarman was cross-examined.

The applicable provisions 27 Section 106 of the ACL relevantly provides as follows: 106 Supplying etc. consumer goods that do not comply with safety standards (1) A person must not, in trade or commerce, supply consumer goods of a particular kind if: (a) a safety standard for consumer goods of that kind is in force; and (b) those goods do not comply with the standard. Note: A pecuniary penalty may be imposed for a contravention of this subsection. (2) A person must not, in trade or commerce, offer for supply (other than for export) consumer goods the supply of which is prohibited by subsection (1). Note: A pecuniary penalty may be imposed for a contravention of this subsection. (3) A person must not, in or for the purposes of trade or commerce, manufacture, possess or have control of consumer goods the supply of which is prohibited by subsection (1). Note: A pecuniary penalty may be imposed for a contravention of this subsection. 28 Section 136 of the ACL relevantly provides: 136 Supplying etc. goods that do not comply with information standards (1) A person must not, in trade or commerce, supply goods of a particular kind if: (a) an information standard for goods of that kind is in force; and (b) the person has not complied with that standard. Note: A pecuniary penalty may be imposed for a contravention of this subsection. (2) A person must not, in trade or commerce, offer for supply goods the supply of which is prohibited by subsection (1). Note: A pecuniary penalty may be imposed for a contravention of this subsection. (3) A person must not, in or for the purposes of trade or commerce, manufacture, possess or have control of goods the supply of which is prohibited by subsection (1). Note: A pecuniary penalty may be imposed for a contravention of this subsection. 29 Sections 106 and 136 of the ACL (Vic) are in the same terms.

The Safety of Toys Standard 30 Pursuant to the Consumer Protection Notice, the standard applicable to the disputed toys is the "Australian New Zealand Standard AS/NZS ISO 8124.1:2002 Safety of Toys Part 1: Safety aspects relating to mechanical and physical properties (ISO 8124-1: 2000, MOD) as approved by Standards Australia on 30 April 2002" (the Safety of Toys Standard), as varied by the Consumer Protection Notice. This is a "safety standard for consumer goods" of a particular kind that was in force at the relevant time, as required by s 106(1)(a) of the ACL: see s 104 of the ACL and the discussion in Australian Competition and Consumer Commission v Online Dealz Pty Ltd [2016] FCA 732 at [100]-[104] per Markovic J. 31 The Schedule to the Consumer Protection Notice provides: Particulars of the goods to which this Notice refers: Toys for children up to and including 36 months of age*, being objects manufactured, designed, labelled or marketed as playthings, including, but not limited to: (a) rattles, toy dummies, teethers and squeeze toys; …. (c) pull and push toys; ….. (f) toys for use in a bath tub; … (l) games; (m) puzzles; … (o) toy cars, trucks and other vehicles; but NOT including [(a) to (n)] *NOTE: Guidance for establishing age grades within the scope of the consumer product safety standards prescribed in this notice can be found in Annex B of [the Safety of Toys Standard]. Guidance is also available in the publication issued by the United States Consumer Product Safety Commission (CPSC) Age Determination Guidelines. The most recent edition of this publication is available from the CPSC site on the Internet and can be downloaded free of charge. (www.cpsc.gov) 32 The modifications to the Safety of Toys Standard made by the Consumer Protection Notice reflect the terms of the Schedule. In particular, where the Safety of Toys Standard refers to "[t]oys intended for children …" the word "intended" is deleted. 33 As the passage from the Schedule to the Consumer Protection Notice quoted above indicates, in determining whether toys are for children up to and including 36 months of age, guidance is provided by: (a) Annex B to the Safety of Toys Standard (Annex B); and (b) the United States Consumer Product Safety Commission's Age Determination Guidelines (ADG). 34 There is an issue of construction between the parties. The Director submits that the words "being objects manufactured, designed, labelled or marketed as playthings" in the passage set out above are important in determining whether toys are for children up to and including 36 months of age. In other words, the question is, in effect, whether the toys were manufactured, designed, labelled or marketed for children up to and including 36 months of age. The Director relies on three cases in the Supreme Court of Victoria, namely Director of Consumer Affairs Victoria v Midas Trading (Aust) Pty Ltd (2009) 25 VR 1; Director of Consumer Affairs Victoria v DW International Trading Pty Ltd [2010] VSC 515; and Director of Consumer Affairs Victoria v H&C Trading Pty Ltd [2010] VSC 629. Although the provision considered in those cases was in different terms (see Midas at [5]), the Director submits that the effect of the provisions is substantially the same. 35 On the other hand, Daiso submits that the words "being objects manufactured, designed, labelled or marketed as playthings" relate only to the word "toys". It submits that this is the grammatical way to read the sentence. 36 I am inclined to think that the words "being objects manufactured, designed, labelled or marketed as playthings" relate to the whole phase "[t]oys for children up to and including 36 months" rather than just the word "toys". However, it does not follow that the enquiry is in substance whether the toys were manufactured, designed, labelled or marketed for children up to and including 36 months. The enquiry is whether the toys are "for" children of the stipulated age. The words are to be construed in light of their context and purpose. The context includes the asterisk that follows immediately after these words, indicating that guidance can be found in Annex B and the ADG, and the reference to the toys having been manufactured, designed, labelled or marketed as playthings. Importantly, the purpose of the Consumer Protection Notice, and the regulatory regime of which it forms part, is the safety of consumers, specifically children up to and including three years of age. 37 It needs to be borne in mind that both Annex B and the ADG were prepared for a purpose different from the present enquiry. Annex B and the ADG are guidelines for age-grading toys. They are appropriate, for example, for a manufacturer seeking to provide an age-grade recommendation for a particular toy. However, the present enquiry is somewhat different. It is concerned to identify whether a particular toy is "for" children up to and including 36 months, for the purpose of determining whether product safety standards applicable to toys for such children apply. The distinction may be illustrated in the following way. If a toy has small parts that would present a safety concern for children less than three years old, Annex B and the ADG would suggest that the toy be graded for older children. But plainly, as was accepted by Daiso in the course of oral submissions, it would not be appropriate to take this factor into account for the purpose of determining whether the toy is "for children up to and including 36 months of age" within the meaning of the Consumer Protection Notice. Otherwise, the purpose would potentially be defeated. 38 It is also important to bear in mind that the guidelines are just that: guidelines. While it is appropriate to have regard to them, it is open to depart from them in a particular case. It may be appropriate, for example, to have regard to expert evidence in addition to or instead of the guidelines.

The expert evidence 39 Before considering the specific toys in issue, I make some observations about the expert evidence. Both Associate Professor Kaufman and Dr Jarman gave helpful evidence based on their specialised knowledge and experience. To the extent that there was a difference between them as to the physical capabilities of children to use certain features of the disputed toys, I prefer the evidence of Dr Jarman. His qualifications indicate a greater degree of practical experience with childhood development capabilities. However, it should also be noted that Dr Jarman's opinions in relation to the disputed toys took into account safety issues which, it was common ground, are not relevant for the purposes of the present enquiry. Thus, while I generally accept Dr Jarman's evidence as to the ability of children up to 36 months of age to use the features of the disputed toys, and the interest that children of this age would have with respect to the disputed toys, allowance needs to be made for the fact that he took into account safety issues in considering whether the toys were suitable for children up to and including 36 months of age. 40 I should also note that I generally accept the evidence of Associate Professor Kaufman that, even if a child lacks the motor ability to use the toys as intended, it is possible to interact with the toys in other ways (see, eg, paragraph 3 on page 5 of his report, in relation to the stomping elephant).

Stomping elephant and stomping hippo 41 These two toys are quite similar in terms of their size, design and packaging. In each case, the toy has a string which can be pulled, as a result of which the elephant or hippo (as the case may be) 'stomps' forward, moving parts of its body. 42 (I note that Dr Jarman states in his report (and I accept) that: the animals are made of very flimsy plastic which is easily broken revealing small parts inside; and the tusks on the elephant and the small finger grip on the pull string are also a choking hazard because they could be easily removed.) 43 Dr Jarman stated (and I accept) that these are "fun toys" and "would be of interest" to children over 12 months of age. He said (and I accept): "Doing something to the toy to make it move would interest children over 12 months because of their understanding of cause and effect. Children over 18 months to 3 would certainly be interested in the toys in terms of pretend play." 44 Although Dr Jarman expressed the view (which I accept) that very few children under three would have the ability to grasp the small pull string finger grip and exert sufficient force to activate the toy, I accept the evidence of Associate Professor Kaufman (at page 5 of his report) that even if a child lacks the motor ability to grasp the toy in one hand while pulling the string with the other, it is possible to interact with the toy in other ways with less advanced fine motor control. For example, the elephant and the hippo can be pushed along a flat surface regardless of whether a child is capable of operating the toy by using the pull string. I accept Associate Professor Kaufman's evidence that, if the elephant or hippo is pushed in this way, the parts of the toy move, and that to control the toy in this way would be achievable by children younger than two years. 45 Further, the subject matter of the toy (an animal) and its overall look and feel make it likely that it would be purchased for children under three years of age. I note that the packaging includes, in very small print, the words "Not for children under 6 yrs". But this is so small that many people would not notice it. The packaging also has a red "6" in a circle, but it is far from clear that this indicates it is for children over six. Indeed, the nature of the toy makes it unlikely that anyone would consider buying it for a child who is six or older. During his oral evidence, Dr Jarman expressed the view (which I accept) that a parent or friend going into a shop and picking up one of the disputed toys (other than the dice puzzle), not looking too closely at the packaging, might well think that the toy is going to be of interest and suitable for a child under three (T 76-77). 46 Taking into account the above matters, I consider that the stomping elephant and stomping hippo are "[t]oys for children up to and including 36 months of age" within the meaning of the Schedule to the Consumer Protection Notice. 47 I make these additional observations. Any other conclusion would undermine the purpose of the product safety regime of which the Consumer Protection Notice forms part. In circumstances where the toys are likely to be bought for children under three, and children in this age range are likely to be interested in and play with these toys, it would undermine the purpose of the consumer safety regime if the product safety standards for toys for children under three years of age were not applicable.

Crab and turtle squirting animals 48 These are simple bath toys which squirt water once they are filled with water. The squirting action is effected by pressing a large button on the back (or top) of the toys. 49 (I note that Dr Jarman said in his report (and I accept) that the crab and turtle squirting animals are made of hard plastic and not easy to break, but have two concerns from a safety standpoint: first, the small plastic plug on the underside of the toys, which needs to be removed to fill the toy up with water and then replaced; and second, the push button on the top of the toys, which could be potentially broken off and swallowed by a younger child.) 50 Dr Jarman described these toys in terms that convey the interest that they would present for a child under three. He wrote in his report: "What young child doesn't like squirting their brother or sister with water in the bath. Pushing a sturdy button to make water squirt factors into the cause-effect play children over 12 months learn from and enjoy." 51 Although Dr Jarman said (and I accept) that a child under three could not remove the small plug on the underside of the toy (which is essential for filling the toy with water), he said (and I accept) that the toy "is really a bath toy for children under three (safety issues aside), with little sustained interest for older children". 52 Taking into account the expert evidence and my examination of the toys, I think it likely that a child under three could squirt water from these toys and thus play with them meaningfully, even if they could not refill the water. 53 Further, the subject matter of the toy (an animal) and its overall look and feel make it likely that it would be purchased for children under three years of age. The comments I made above regarding the packaging of the stomping elephant and stomping hippo apply equally to the crab and turtle squirting animals. The oral evidence of Dr Jarman referred to in that context above was also given in respect of the crab and turtle squirting animals. 54 Taking into account the above matters, I consider that the crab and turtle squirting animals are "[t]oys for children up to and including 36 months of age" within the meaning of the Schedule to the Consumer Protection Notice. 55 The additional observations I made above in relation to the elephant and hippo apply equally here.

Dice puzzle 56 This is a brightly coloured, plastic toy, where a cube is slotted together from six interlocking sides and alphabet letters are placed through appropriate slots to the inside of the toy. 57 (I note that Dr Jarman said in his report (and I accept) that the small letters are a choking hazard for young children, particularly those between 12 and 24 months.) 58 Dr Jarman said in his report that "[t]his is an ordinary toy very few children would be interested in for more than a few minutes". Although Dr Jarman said that the toy was clearly intended for children four years and older, on the basis of the evidence of Associate Professor Kaufman and the oral evidence of Dr Jarman, I conclude that a child under three could play with this toy as a 'shape sorter' even if he or she could not put the square-shaped pieces together as a cube. Further, a child under three may well be able to connect some of the square-shaped panels together side-by-side rather than as a cube. Thus a child under three could play meaningfully with the dice puzzle even if he or she could not construct the square panels into a cube. 59 Further, the overall look and feel of the toy (brightly coloured plastic pieces), particularly as shown in the photographs in the court book (eg CB 878 and 879), make it likely that it would be purchased for children under three years of age. I note that the round label for the dice puzzle includes the words "Not for Children Under 3 Years" and these words are more prominent than on the toys discussed above. Nevertheless, I think it would be very easy to miss this aspect of the label, particularly when one looks at the way the toy is presented for sale (eg CB 878 and 879). 60 Taking into account the above matters, I consider that the dice puzzle is a toy "for children up to and including 36 months of age" within the meaning of the Schedule to the Consumer Protection Notice. 61 The additional observations I made above in relation to the elephant and the hippo apply equally here.

Submarine toy 62 This is a brightly coloured, plastic bath toy. The paddle wheels of the submarine are activated by winding the orange winder underneath the toy. 63 (I note that Dr Jarman said in his report (and I accept) that the small fin at the back of the submarine and the small wheel at the front base of the submarine could potentially be pulled off and could be a choking hazard for a child under three, especially for a child between 12 and 24 months.) 64 Dr Jarman said in his report (and I accept) that to activate this toy by winding the winder requires considerable fine motor dexterity and strength and that very few children under six or even eight years of age could wind the winder and, while holding the winder so that it does not unravel, place the submarine in the water and let it go so that it heads off on its trajectory. However, he also said (and I accept) that a child under three is likely to be interested in this toy in the bath and "watching it scoot off" (but they would need their parent or older sibling to activate it for them). Further, the toy is capable of being used and enjoyed as a bath toy without activing the winder. To this extent, there is no doubt it would be of interest to and could be used by a child under three. 65 Further, the nature of the toy (a plastic bath toy) and its overall look and feel make it likely that it would be purchased for children under three years of age. I note that the packaging includes in very fine print "Age limit: 4 years old and above" but these words are so small that they are likely to be missed by many people. The packaging also states: "Not for children under 3 years". Although the typeface of these words is slightly larger, it is still very small and could well be missed. The oral evidence of Dr Jarman, referred to above in the context of the stomping elephant and stomping hippo, as to parents or friends going into a shop, was also given in relation to this toy. 66 Taking into account the above matters, I consider that the submarine toy is a toy "for children up to and including 36 months of age" within the meaning of the Schedule to the Consumer Protection Notice. 67 The additional observations I made above in relation to the elephant and hippo apply equally here.

Water toy duck 68 This is a bright yellow, plastic, floating bath toy, where pulling a string and releasing it causes the duck legs to kick, propelling the toy through the water. 69 (I note that Dr Jarman said in his report (and I accept) that: the thin plastic is easily broken and opened, exposing small inner parts which would be a choking hazard for children under three; even in an intact duck, the red beak is easily pulled off; the pull ring on the string that activates the toy is also easily pulled off; and both of these are potential choking hazards.) 70 Dr Jarman expressed the view (which I accept) that for a child to independently activate this mechanical toy correctly, they would need to be over four years of age. However, Dr Jarman also stated in his report (and I accept) that: a duck to float in the bath would normally be something bought for an infant or toddler (under two); most infants and toddlers in Australia would have a floating bath duck; and they may very well like to watch a duck kicking through the water (but they would be unable to activate the toy themselves). Dr Jarman stated (and I accept) that a child under three would be interested in this toy. 71 Further, the nature of the toy (a plastic bath toy) and its overall look and feel make it likely that it would be purchased for children under three years of age. I note that the packaging contains similar statements as the submarine toy. The comments I made above in relation to the submarine toy apply equally here. The oral evidence of Dr Jarman, referred to above in the context of the stomping elephant and stomping hippo, as to parents and friends going into a shop, was also given in relation to this toy. 72 Taking into account the above matters, I consider that the water toy duck is a toy "for children up to and including 36 months of age" within the meaning of the Schedule to the Consumer Protection Notice. 73 The additional observations I made above in relation to the elephant and hippo apply equally here.

Conclusion 74 For these reasons, I conclude that each of the disputed toys is within the phrase "[t]oys for children up to and including 36 months of age" in the Schedule to the Consumer Protection Notice. 75 As noted above, it was common ground that, if the toys fall within the phrase, they do not comply with the applicable product safety standard. It follows that Daiso contravened s 106 of the ACL and s 106 of the ACL (Vic) in relation to these toys. 76 I will hear the parties on the precise form of the declarations to be made. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky.

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Judgment (13 paragraphs)

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