J.C. Thompson v Riley Mckay Pty Ltd [1980] FCA 119

cn ante aiantenalaan mat taeda sees taehdemedtetna lot caneshddnesaneanedniannanamnenemememmensnettitmimemetenadmeiaemtamanetaetedinantemneteetnetnntnemamadaaeeemtte anata aan. ol

Judge making Oréer: Feely J. Date of Order: 28 August 1920

l. The defcondant 18 convicted of committing & cortrav-rtion of $.53(c) cf the Trade Prectices Act 1°74-1976 in that en or

abeut 2 October 1976 in the Stat2 of Naw South Wales, in

trade or commerce in connection with the promotior by

wewepewieewnee ne = : we mee ae ee ee cow ene mes wee eee en Ne ee ee

advertising of the supply of goods described as a "Golden Replics of 499-Pay Clock", it represented that the sri goods had uses they Wid not have in thst the s214 aecis

3. Liberty is reserved to each party to eprly cn seven 4>ys!

BEIWEEN: ~ JCHE CRANSTCN THOMPSON tTnforment

• and - PILEY McPAY PTY LIMTTFD DOcfendart REASONS FOF JUNGYFMT 28 August 19°90 KFELY J.

These are two cherges alleging contraventions by the defendant of s.53(2) and s.53(c) rescectively cf tha Trace Prectices Act 1974-76 (the Act) i.f. before the amenerents

effected by the Trace Practices Amenoment ct 1977, The *eferdécirt

pleaded not guilty to the two charges which, by congent, were

"A corperation sbell not, in rrzd2 or commerce, in comnexicr vits the sunmoty or vossible surely cf gcois ... or in connexicn with tha presotion hy anv means of th- turcly cr usc of aceds or scorvicos --

ro eer enen eR eR A TY SET RE tn we epee ee - woe mee

sPRUPL Sita Nat emcee es Neh tn te et te eee et re tes oe a

(a} falsely represent that goods ... are of 3 particuler standard, auality or grade, or that goods ere of a particuler style or mo%¢l;

(c) represent that goods or services have spo shio, approvel, perfermance cheracteris ' accessorits, "uses or benefits the Jo not have;

corporetion and that its actiors, the subject of the two charges,

occurred ""... ain trade or cotmerce, in conrectier wrth

romotion by e@vertising of the supply of gooJs" as ellsqecd ip the p Y 9 rly g

two informeticns. It is converient to desl sentrately with

On 28 September 1977 John Crznsten Toorrson (tho informant)

"eee ON OF about 29 Seotember 1976 in the State of New fouth Weles ... im contravention of Tecticr 53(a) oF (th> %ct) 4id ir trade or cenmmerce in connexion with the cromoticn by 24verticina of tho supply of acowe Anscribed =s @ plant etand represent th=t the said aoods wero of 3 ouality in that in sn ecvertiserort in 'T € bearina dat2 2 Cctoter 1978 it dis state 'Girart Wrought Iron Perisian Cart ftand'."

The cvidence snowed that the @eferndant bad scvertices

RRRFED re peRRr ee TENE TAMER ERNE er aren earn en eee

Giant Wrought Iron Parisizen Cart Ctand (the plant stene) inp the manner charaed. Mr Gleeson €.C., who arreared with "Mr Stitt for the defendart, arqued thit the eviderce if rot establish that the represent¢tion (i.e. that the plant stend was 2 "wrought ircn"

stcnd) was 3 representation that the gqceods were "of 3 articulcr E Pp

ees Quality" within the meaning cf s.52(a) af cheraed ip the

Bugh Muir, a' professor of physical met=llurgy end bead of the Schocl of Netaellurgy at the University cf Now South tales, gave evidence thet an oxemination cf = rlant stand, te whick the advertisement referred, showed that it was manufectured "of sheet steel, steel] wire, and plastic" with a stoael ber forming the axle. As to the two wheels his evidence established that hoth the perimetcr end the decorative scrolls within vere meade entirely of

In my opinion the advertisement the subject of those proceejings, by the combinction of the words "wrought iron" 39 tne pictorial cepresentaticon cf the scroll work withir tke two wheels, represented thet at least the wrhocls of the plant stend, includirg 'the scroll work, Were wrought iron. "Mc Gleesen FiA not, of course, argue that the plastic wheels enqd scroll work wert wrought iron but he submitted that the represerntrtian thet theo plent stand was "wrought iron" was not @ representrtion that the

RIP ret emer mmm ns a em eet enmity er Seen oe ree mame camer er

a Ta coalllaratenesteieecnmmeatentenenmensmenntenntadtiammmataeaiaananeananen

In Federated Municinsl era Shire Cauncil Eretcvees! Urnier

of Australie v. Melbourne Corroraticen (19)9) 26 C.L.P. T99% at

"It ag net necessary - or, as T think, d-sirckis - that we should, in enswering the specific avestion asked of us, corrit ourselves to 2 final, exhaustive definition cf 2 pocular phrase such as that in

guestion. Tt 15 not necessery for uve, nm ordicr te Getermire whether thie Jispute (A distute fretyeen Sstrect cleaners, etreet lighters, &c., an?" there employer, the mMmunicipelity) is ean inéustri-]

disctutc, to 4ofire fully 'in@ustriel Cisovt-' - to enumerete even @]] the characteristics, the fril econnetatior of an industricl disrute; any more than

it is nocessary for us te define whet is 3 écg whan we determine thet 2 cartair cnimel ig # 7eq. To mv mind, a areat deal of tine is wested ant herm Jone by tha premature efforts of Courts to fefine exhaustively cxpressions of commer speech. ""e haynr

to censider hers, rot technicel lanogura-, Eut the langueg2 cf common srercn, with all its indeterrinete connotations and denotaticns."

I de ,not intend to attempt toa define "wrought iron". However, T have come to the ccnclusior thrt to represent thet items are "wrought iron" 1s to rerresent that they inrclu3e Gecorative screll work of solidity and rigidity. Furthor, thet

such a representétion is a representation that the goors a "of

perticular guality", notwithstanding Professor Muir's evidcorce

n cross examination that the expression "wrought iron" ts ccmmonlyv used now in relation to products currently menufectured aut of cast iron, or of steel oc of cist aluminium alloy. JT also accent his evidence that "wrought iron" furniture is now trndina to he madc of cast ézluminium which me@kes "a solid, chunky profuct";

although it i1¢ Jighter than similar furnitur> made cvt of cest

1ron Or made out oF steel it "would vossess rigitity ... not quite

I accept the c¢cvidence of Professor Muir rs to the plent stand advertise? by the deferdant that:

"The sections -re ell very liakt and as a reeult the object lacks structural stability ané rigitity. Tt undergoes eacessiv2e clestic deflection uracr ler, If one were to lo#d it with bhesevv rot elents ut would also becote unctrble Encausc tho fact that the Structure is so ligrt merns that the centre of gravity of the loadet cart woul? be very hist, =n

• thet it would be easily tipeed with cot plants or

on it woulc be inclined to topple it." In my opinion the representation by the Jefenéant thet ot least the wheels, including the scroll work, of the plant stand were of a particuler au2lity, namely, wrought iron, wes e false

Mr Gleeson also araucd that the irformetion hat ceen 121d out of time. In order te consider this cubtissior it is necessary

to examine the evieence of another witness in sor> detail.

Peter Stewart Blanton gave evicence that he wes the circuletion maneger cf Austrelian Consolidated Presse Timite? ot the materiel titre, a rosttion vbhich involv2d work in connection with the distrikuticn of the maqezine TV Tites, which was distributed by Australien Consolidated Press Limited after beinsz

printed by its cubsidscry company, Corpress Printing Linited. The

IRR Ee Teen rs ree RETR TR ee = Ame ney eee eee Se -- wo eee eee me

neater Pettey ap sine ieee ee ee fe re mm et ee a oe

TV limes the subject cf the preeent informatior Face the covert date Cetober 2-@, 1976 (the materiel TV Times). These dates rel=tcd to the proegrerme infermetion (from Ssaturcsy to Fri?3y)

contained tn the magazine 2nd h2d "rothing to Co with the fate cn

TV Times wes >t the matericl tire published throaughonr Australis, there being @ifferent "editiors" cf yt fer thn different "States. Further, in New Sovth Welec therc werc three editions, ramely, the fCyéney edition, the Inland edition an? en eCiticn referree te in evidence as the coastal edition - which was distribut. ' in placcs op both the north coest end the south coast. Almost all of the copies c£ the Sydney edition were dictribute? in the Sydney matrenoltitan area, c.g. te retai] news etends, book vendors and street sellers, 2]though sore copies "went up to the Meuntains ~- Gerenting on what the demand for it wes in vericus areas", The week)y circulaticr of the Sydney o7itien in 197% was

Therc were various "on sale" cCetes for some of thr Gifferent ecitions of the material TV Times and there w3e ro on Sale Jate for cithzr of the New South Wales Courtry "Fiticns. Australian Consolidated Press Limited communicated with novezyertes by a mentnly newsl:tter called ""tawsacents Vere" shich listed on the back pzge the on sale dates for various sublicetionrs includirs

IV Tircs. The cn scale Gate For the Sytrey edition cf the moterial

TV Times was Wednesday, 29 Septomber 1976 art? the copicse cf thet

edition would have been dclivered te mest if net s]] revsaserts cr

the previous 'ay, Tuestay, 28 September 1°76, The on sele Arte

for the ecditicns ter Victeriz, South Austrelia ard Vestern

Australia was Nenday, 27 fCept-rber 1976 2en3 the en erie fate fer

It 2S unnec'csery, for th> purpores of the rr cart ar etter, to ferm or exercises ny vitzy 2S Fa which «nF _ - those sltcrnetives as to be arareer Sarce 2t »culs appear tc be corron groure trat the relevert qourr-] . was, in sch czeec, sola in cubstantial curr ttisee tc the prblic. eee ThE ret of rerrcsertire bring ' complete, ef the letcst, wher the wearticules ree) of the jovrral was offercd for sale an? ecla, theo feet that the ctdvertis-~cnt cmav subsecuertly rove been rerc by theusenie of rcoegers Jie pat inriclve 2 new cnc indesandent act of rerresertirg ¢n cithor - the first cr on ocrck cecesion that a orrtacular a recdcr héeppered to reed it."

7" And Fisher J. sait: _ - - te (at p.284) "J... ain reerect of prommtian ky ~ eadvertisinag an particutsr, T do rot sre the _ necessity or justifrestien Fer recuirina crecef that the repres2ntaticn came te the notice cf 7 srecified representcc. 4 merch*nt promotes by arrangirg fer cr advertisoment to be iunserterc in - newenecer or ~ journsl. 2 sees so on = number of resumetiane, net necessarily all justified, 1¢ that = number of Newspsperes will be curchase?, that sors of the i purchasers wiJ1 read his edvortisenent, and th3t, mn . conseaucnes cf reacina, some cf tre readcre moy ct seme stage be inrduced to bvy his gecte." - - ™ a

(at ¢.285) "... to represent doce rot always reovirt & representcs, *nd especially co ir the context of " promction,

There 16, Fowever, authority for the orcrositicn that a fergon ray represent tory

an operative timepiece when regard wes haa te the law price eek

($f.95), the fect that it wes describe? ae = "deccr=tor 1tem" ir

the prominence given to the worts "plays music and revolves".

also relie? ugon ths "conteyt of a ruffing féycrtiscment thet ie obviously replete with exaggeration"™ and cubmitted that the ue-r of the words "counterbelances which ectusally revolve", tender to suggest that 1t was ret an operative timepiece - on the grorvre

that it woul? be unrccessery to mention thet Frot ie Gh veers =

Tt mey be that a careful rerd|er of the civorticcrent, rho

studjed the precise wording anetyticelly, woul? rat hove helices

ot fi) iat i] 12)te) uo i) ve} pedfe} % D nm vu + us n ct be> '3 a

Uowever, I adopt with respect, ef beina caually ecrriicshis to this '

c3se, the statemont of fmithers J. in bis dvegerert

ve. Pionerr Homes Pty Ltt (1999) 29 AT LP, 597 at plane

"The question is, therefor-, whet wou'4 @ riseenehle= terjer of the class to shack the sdvortisemcnt was directed reascerzbly urderctarné from the advertieo- rert. eee The kind of reaAcr conrcterrn>2 is ite likely toc be a man or womar of indifferent educrtion, ... 7nd unzaccustome? to anrlysing business eccurents."

In the same case (ct p.€09) Franki 3. (with whose reesors fer

judgment Nerthrop J. agreed) reperted what he had gaia:

+. in relation to s £2 of the Yet in Menen- ete) System cf Avetrelir Pty L+d v Uchilliets's "irre Pry Lte (187°) Br ALR 22° at 2443 5 TRC S773 (197°) ATPE 40-149 at 18.512: 'Proaaly soesking it is fair te sey thet the 'relevart persone ar-> these rot particujerly intelligent or weld inforr-d, but pertars cf sorevhet loss then evereae intelliceres and bacrgrourd knowledgo, clthough the teet is met the effect an a perser who is quite unusnelly stupid."

In the preeent matter I infer that the fersors to whor thc advertisement was directed incluce those described by Frenki J. in that passage.

In my opinicon the defen*ant by its Favertise 7 nt represented that the 1tem was an operative timerie-e, The centext

includes a stat=rent that it 12 2 ""fascanzting replica of the

traditien2] anniversary cleck rerresented in every Cetatil" and times in the edvertiscront ane orter form) in that context is such that - in the eksence of @ clear statement thet the item did not tell the tite - the sdvertis-ment

represented thet the item was a timepiece. Acco*7inaly, tre

I turn now to the gucstion of ceralty, in resrect of which

(1) A notice, dated 2 September 1977, under ¢.155 of tho Act te the dicfendant ard the defronéant's revoly dated 22 September 1977 whach included certein ccpy letters. At Mr Gleocesen's suggesticn these documents were received subject te his objecticn that they were not relevart to pen3lty. Having now ¢cxaminet tho decuments, I uphold that objection. The letters tc the doefencant from WN. Bouser, V. Marinborne and MM. Brown refer to allea-i

gefects in the gocts which are unrelated to the defendart's

representation that the item advertised wes a timepicce. TH

letter to the defendent from Mrs G. N. Cummina cempiaine? 'hat th

utem received "does not conform to your advorticstent". "aC Curming also wrote to the Censumer Affairs Furetu, ueenelan-, cempleining that the item ""wrs merely 8 rrainted clock face". However, that letter is deted 27 "arch 1976 whorers tho forrer

letter - te the defendant - apparently was written sere ain, yerrs

previously, berny ceted 22 February 19€7. The only other letter

_ peer career ft erm rn Semen meee RR RN A A IR IRIN em a er, at =e R=

to the defendent - From the Consumer Affairs Purezu, Cuc\erstand - w2s dated © April 1976. Tt was not a forma] cotrlaint by th- Burecu; it was a lctter seeking certain infermaticn cre onclesing copies of the two letters fron Mrs C. BM. Cumming.

(2) Certain questions asked of the @efendant in « Metice-r, dated

30 March 1377, under s.155 of the Act together with th:

defentzent's answers. The enswers stated that betac.a 19 Fobrusry 1976 and 22 April 1°76 the dofengant wis suoplied witr 4,229 of the "Golden Feplice of 400-day clock" at a cost of $1.7? CIF ner unit. During the célendar year 1976 tho CefenFent sola "*,346 of the rcplicas. At Mr Cleeson's sSuagestion these dcocurents vere received sukject to 'his objection that the figures as to salet werc irrelcvant in that they releted to sales over the fill yerr of 1976 and did not relete to this particular edavertiserent. T uphold that objection. The figures as to th> number of replicric supplied to the Gefeneant were tencered "in respret to the procits mece and the number cf items ..." and were net objected to ky "re Gleecon who fointed out, hovever, that the cmourtse "do not take account of customs duty or sales tex". In my view inform?ticn ir this form cannot operate to increase the amount of the fine thougqht to be approgrirate by reeson of other relavent

considerations. (3) Two aedvertiscrents by the deferdsnt woubliched in the "iow

Idea" in Junz 1976 which were identicel to the advertis-rent the

subject of tne inforrzition Precautions and exercised Cue diligence te avoid tks contrevention.

The maximum penelty under the Trade Practices Act, 1974-1976 is m=ny times greater than th7t usualiv found in leajslcotion krosdly designed to previse consumer protection e.g. in the United Riraton Tre o7 Bascrirtiors Sct, 19€8 (as at 1978) nd tho Yew fouth wales Consumer Sroetretien Yet, 1969-1973."

In dealing with an sappecl ageinst a judarert ircosing a pecuniary renalty for ccntravention of the resale arrce

maintcnance crevisions of the Act, @ Full Court in Pye Trfuctrics

Sales Pty Ita v. T.P.c. (1979) ATPR 40-124 at 1°,324% sod:

"The organization 2nd Mr. Kick in particulser sore well were of the provasicns of the Precc Practice

GE RTE GO Ee ENR Oe neni mn Ne ee ee , cre - ose oss

naac inanaaadanesa nde, eheemands oneadmamne aaansadeleaheenaiaaeaeemhammammnntetineel kenmemenetee eateatineatedaie a - - -

Act. It wes seid in Trade Prectices Cormiscion v. Stih] Chein Saws (uc*.) Pty. Lte. (1Ce7e) .7Ton 40-0°) =t pf. 17,€%6 2s to the principles cerliccshle

'The penelty sheuld censtitute s reel runichrent Proportionste to the dcliberation with whicr the Gefendent centrevence the previsicns of the t-t. Tt should be sufficicertly bhiah to hsvc 3 Jeterrent cuiluty and it should bo kerb in tind that the Act operrztes im 2 commercial envirertent where @Ceterrorce of thee: minte4 to contrevcne its provisions is net likely to ba echicve V renalticts which tre not reclistic. Tr should reflect the will of Perliament that the comrercis] stendoras laid down in tke #ekt must he cbservecd, but not be se high as to bs Oprressive.'

cf. alse Tredeo Prrctices TCermicsior v. i 74rd Bty Ltd. (1°79) STEP 46-195 art Trec 107 a

In my view that passage is equally epplicable ta ie) '2

copies of the material 3ssue of the "New I4ea" conteining the

"yh 9 nm ° rh wy oa) ~2 o a3 G oO ur " Sydncy erd more tron 27,900 for the rest how South wrles - cr

taking into -ccount 91] of the tatters to which I have scferrec, T

impose a fine of $6,°09 1m matter G. No. 7R Of 1977,

liberty in both netters for either party to cprly vpon seve

I certify that this and the nu dan precedins yr 'gaea