Plaintiff v First Defendant

Supreme Court of Victoria|2010-11-15|Before: DIXON J

TRADE PRACTICES - Consumer Protection - Sale by retailer of children's toys in contravention of Fair Trading (Safety Standards) (Children's Toys) Regulations 2004 and of toys in contravention of permanent ban orders - Declarations, cease trading injunction, corrective advertising, and destruction orders sought - Consideration of terms of an appropriate relief - Fair Trading Act 1999, ss.33, 40, 44, 129A, 149A, 151A, 153, 158.

Mr P. Hiland, Solicitor to the Director of Consumer Affairs Victoria

1 This is an application by the plaintiff, the Director of Consumer Affairs Victoria ("the Director"), for certain orders under the Fair Trading Act 1999 ("the Act").

2 The second defendant, who is the director of the first defendant, appeared in person assisted by an interpreter.

3 The defendants were not opposing the relief being sought in the proceeding and were prepared to consent to the orders being sought. However, they were not legally represented and Mr Dong clearly has very limited English. An affidavit of Peter Hiland sworn 21 June 2010 informed the Court of dealings, correspondence and meetings between officers of Consumer Affairs Victoria and the second defendant (as director of the first defendant).

4 The laws being considered are public laws and in considering requests for orders to be made by consent the Court does not use a rubber stamp. It is required to satisfy itself about a number of matters and to consider the exercise of its discretion in granting the relief sought, irrespective of the apparent consent of the defendants, particularly to ensure the proposed orders are within power and appropriate in the circumstances of the case. That, in a nutshell, is the issue for consideration.

5 The Director seeks extensive relief. Pursuant to s.36 of the Supreme Court Act 1986 or s.158(2)(h) of the Act, declarations are sought.

6 First, declarations are sought that certain of the toys, described below, supplied by the first defendant as a retailer are non-compliant with Fair Trading (Safety Standards) (Children's Toys) Regulations 2004 SR No.111/2004 ("the Regulations") in that through foreseeable use and abuse they are capable of breaking into small parts when dropped, thereby causing a choking hazard. A declaration is also sought that the first defendant, by supplying the said toys, contravened s.33 of the Act.

7 Second, declarations are sought that a particular toy known as "Elephant Beautiful Melody" is non-compliant with the Regulations in that the batteries required to operate the toy, when installed, are accessible without the use of a tool or with less than two independent movements applied simultaneously to the battery compartment and that the first defendant has contravened s.33 of the Act by supplying, as a retailer, the Elephant Beautiful Melody toy.

8 Third, declarations are sought that other toys, being wind-up cow and horse-shaped motion toys, are non-compliant with the Regulations in that through foreseeable use and abuse they are capable of breaking into small parts when subjected to a tension load of 70N + 2N, thereby causing a choking hazard and that the first defendant, by supplying as a retailer such toys, contravened s.33 of the Act.

9 Fourth, declarations are sought that other toys, being gun type toys, do not comply with a permanent ban order published on 28 November 2002 in Victorian Government Gazette No.G48, in that the projectile, discharged from the toy when tested in accordance with Appendix DD of that ban order, caused more than 2 out of 10 test foils to rupture. This is a measure of a risk of causing serious eye injuries. Further, that the supply by the first defendant as a retailer of the various gun toys contravenes s.44 of the Act.

10 Fifth, declarations are sought that the toy "Yo-Yo water ball" does not comply with a permanent ban order published on 30 May 2003 in Victorian Government Gazette No.S104, in that the ball or shape contains a novelty and is connected by a stretchable or elasticised cord capable of extending at least 500 mm in length with a small loop at one end to insert a finger, and that the first defendant contravened s.44 of the Act by supplying, as a retailer, the Yo-Yo water balls.

11 Sixth, declarations are also sought in respect of the second defendant, that he has, by purchasing or otherwise acquiring the toys for supply by the first defendant and by refusing or refraining (other than inadvertently) from ensuring that the goods supplied by the first defendant complied with the product safety provisions in Part 3 of the Act, been directly or indirectly knowingly concerned in and party to, or otherwise involved in, the first defendant's contraventions of ss.33 and 44 of the Act.

12 The Director also seeks orders pursuant to ss.149A, 153 or 158 of the Act in relation to public warning, product recall and refunds to customers. By these orders, the Director seeks the publication of two advertisements approximately one month apart in each of the Herald Sun newspaper and The Age newspaper. The advertisements are to be of a nominated size, in full colour and in a minimum type size. The specific content for the notices is specified. The Director also seeks that copies of a Public Warning and Product Recall Notice in the form specified be prominently and conspicuously displayed for a period of six months from the date of the order. Further, the Director seeks orders that the defendants:

(a) pay a full refund to all persons returning the goods identified in the Public Warning and Product Recall Notice;

(b) notify the Director of the details of all goods returned; and

13 A cease trading injunction pursuant to s.151A of the Act is also sought to restrain the defendants from carrying on a business of supplying to retailers, or as retailers to other purchasers, goods of a kind or class for which there exists a Safety Standard, an interim, permanent or fixed term ban order in operation as at 1 February 2010 (being the goods of the kind or class listed in an annexure and for which there continues to exist such Safety Standard or such interim, permanent or fixed term ban order). The like restraint is sought against the second defendant from being in any way directly or indirectly knowingly concerned in or party to, or otherwise involved in, the carrying on of a business of supplying goods of the kind or class specified.

14 The Cease trading orders sought are not conditioned to operate for a specified or limited time. Orders are also sought, pursuant to ss.149A, 151A(3) and 158(1) of the Act, for compliance review and reporting. If the defendants observe the orders for compliance, review and reporting, they can avoid the cease trading orders and may trade in goods for which there is a safety standard.

15 Finally, orders are sought, pursuant to ss.129A and 149A(3)(f), permitting the Director to destroy and dispose of goods at the defendants' expense.

Offence to supply goods or services which do not comply with safety standards

(1) A person must not, in trade or commerce, supply goods that are intended to be used, or are of a kind ordinarily used for personal, household or domestic purposes if -

(a) the goods are of a kind in respect of which there is a prescribed safety standard; and

(b) the goods do not comply with that standard.

Penalty: 240 penalty units, in the case of a natural person.

600 penalty units, in the case of a body corporate.

(2) A person must not, in trade or commerce, supply services that are intended to be used or are of a kind ordinarily used for personal, household or domestic purposes if -

(a) the services are of a kind in respect of which there is a prescribed safety standard; and

(b) the services do not comply with that standard.

Penalty: 240 penalty units, in the case of a natural person.

600 penalty units, in the case of a body corporate.

Section 34 of the Act provides that regulations may prescribe a safety standard.

44. Offence to contravene permanent ban order or fixed term ban order

A person must not supply goods or services in contravention of a permanent ban order or a fixed term ban order.

Penalty: 240 penalty units, in the case of a natural person.

600 penalty units, in the case of a body corporate.

145. Interpretation

A reference in this Division to a person involved in a contravention of this Act means a reference to a person who -

(a) has aided, abetted, counselled or procured the contravention;

(b) has induced, whether by threats or promises or otherwise, the contravention;

(c) has been in any way, directly or indirectly, knowingly concerned in or party to, the contravention;

(d) has conspired with others to effect the contravention.

149A Injunctions to do an act or thing

(1) The Supreme Court or the County Court, on the application of the Minister, the Director or any other person, may grant an injunction requiring a person to do any act or thing if the Court is satisfied that the person is engaging in or has been engaging in conduct that constitutes -

(a) a contravention of any provision of this Act; or

(b) attempting or conspiring to contravene such a provision; or

(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or

(d) inducing or attempting to induce a person, whether by threats, promises or otherwise, to contravene such a provision; or

(e) being in any way directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision.

(2) The power of the Court under this section to grant an injunction requiring a person to do an act or thing may be exercised -

(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and

(b) whether or not the person has previously refused or failed to do that act or thing; and

(c) whether or not there is an imminent danger of substantial damage to any person if the first person refuses or fails to do that act or thing.

(3) Without limiting subsection (1), an injunction under this section may require a person -

(a) to institute a training program for the person's employees in relation to compliance with this Act;

(b) to refund money to purchasers;

(c) to transfer property to purchasers;

(d) to disclose information about the person's business activities or business associates;

(e) to honour any promise made in the course of misleading or deceptive conduct or in a false representation;

(f) to destroy or dispose of goods used for the purpose of a contravention of this Act.

151A. Cease trading injunctions

(1) The Minister or the Director may apply to the Supreme Court for the grant of an injunction restraining a person from carrying on a business of supplying goods or services (whether or not as part of, or incidental to, the carrying on of another business) if the person is or has been engaging in conduct that constitutes -

(a) a contravention of any provision of this Act; or

(b) attempting or conspiring to contravene such a provision; or

(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or

(d) inducing or attempting to induce a person, whether by threats, promises or otherwise, to contravene such a provision; or

(e) being in any way directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision.

(2) The Supreme Court may grant the injunction sought -

(a) if -

(i) the Court is satisfied that the person is engaging in or has been engaging in conduct of that kind; and

(ii) it appears to the Court that, in the event that the injunction is not granted, it is likely that the person will engage in conduct of that kind and there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind;

or

(b) if the Court determines it to be appropriate, by consent of all the parties to the proceedings, whether or not the person has engaged in, or is likely to engage in conduct of that kind.

(3) An injunction under this section may be granted -

(a) for a specified period; and

(b) on specified terms and conditions.

153. Power of the courts to require corrective advertising

If, on the application of the Minister or Director, a court is satisfied that there has been a contravention of any provision of Part 2, 3, 4, 5 or 6, the court may make either or both of the following orders -

(a) an order requiring any person involved in the contravention to disclose any information which is in the person's possession or to which the person has access, which is information or of a class of information specified in the order -

(i) to the public or any person or class of persons specified in the order; and

(ii) in the manner specified in the order;

(b) an order requiring any person involved in the contravention to publish an advertisement in the terms specified or determined in accordance with the order -

(i) at the expense of the person; and

(ii) in the manner and at the times specified in the order.

22 Section 36 of the Supreme Court Act provides:

A proceeding is not open to objection on the ground that a merely declaratory judgment is sought, and the Court may make binding declarations of right without granting consequential relief.

The Relevant Product Safety Statutory and Regulatory Framework

23 Part 3, Division 1 of the Act is concerned with safety standards. It is an offence under s.33 of the Act to supply goods of a kind in respect of which there is a prescribed safety standard and where those goods do not comply with that standard. Section 40 of the Act empowers the Minister to make a permanent ban order or a fixed-term ban order prohibiting or restricting the supply of goods or services of a particular kind. It is an offence under s.44 of the Act to supply goods or services in contravention of a permanent ban order or a fixed-term ban order.

24 Section 40 of the Act empowers the Minister to make a permanent ban order prohibiting or restricting the supply of goods or services of a particular kind. Under s.41, a permanent ban order must be published in the Government Gazette and takes effect on the date on which it is published.

25 The permanent ban orders relevant to this case are the "Projectile Toy Ban Order" published in the Victorian Government Gazette G48, 28 November 2002, at pages 3111 to 3115, effective from 28 November 2002 and the "Liquid and/or Novelty Filled Balls or Shapes Ban Order" published in the Victorian Government Gazette S93, 20 May 2003, as amended by S104, 30 May 2003, effective from 30 May 2003. These Gazettes were in evidence.

26 The projectile toy ban order applies to, and prohibits, the supply in Victoria of projectile toys (as defined) which do not comply with clauses 7.15.3(a) and/or 7.15.3(b) of Australian Standard AS1647.2 - 1992, Children's Toys/Safety Requirements Part 2: Constructional Requirements. Clause 7.15.3(a) effectively provides that the toy, when tested as specified, does not cause more than 2 out of 10 test foils to rupture ("foil test"). Clause 7.15.3(b) effectively provides that the discharge mechanism of the toy shall be so designed that it will not discharge any other type of readily available projectile (for example, a stone, a pencil, or nail) which would present a potential eye injury hazard (the "improvised projectile test"). The purpose of the ban order is to prohibit the supply of projectile toys that are designed to shoot projectiles with enough force to cause serious eye injuries.

27 The liquid and/or novelty filled balls or shapes ban order applies to, and prohibits, the supply in Victoria of all liquid and/or novelty filled balls or shapes (with or without nodules) that are connected by a stretchable or elasticised cord that is capable of extending to at least 500 mm in length with or without a small loop at one end to put a finger through. The ban order applies to any toy or novelty product that falls within the description. The purpose of the ban order is to prevent the risk of strangulation from such products.

28 The Fair Trading (Safety Standard) (Children's Toys) Regulations 2004 ("the Regulations") made pursuant to ss.34 and 165(1)(a) of the Act, prescribe safety standards for toys for children under three years of age. Regulation 4 contains relevant definitions. It says that "toy":

(a) means an object or a number of objects manufactured and designed, labelled or marketed as a plaything for a child or children up to three years of age; and

(b) includes, but is not limited to, the objects listed in Schedule 1 if those objects are manufactured and designed, labelled or marketed as a plaything for a child or children up to three years of age.

Schedule 1 to the Regulations relevantly includes the following:

(f) pull and push toys;

...

(k) musical chime toys;

...

(r) toy cars, trucks and other vehicles.

29 Regulation 5(2) of the Regulations states that for the purposes of s.34(1) of the Act, the prescribed safety standard for toys from 1 July 2005 is AS/NZS ISO 8124.1:2002 as amended in accordance with Schedule 4. This is defined in regulation 4 as meaning: "the Australian/New Zealand Standard AS/NZS ISO 8124.1:2002, Safety of Toys, Part 1: Safety aspects related to mechanical and physical properties (ISO 8124.1:2000, MOD), as published by Standards Australia International Ltd and Standards New Zealand on 16 May 2002" ("the ISO Standard"). One relevant amendment contained in Schedule 4 to the Regulations was to include, in Annex B to the ISO Standard, item B.1, a reference to "the publication issued by the United States Consumer Product Safety Commission (CPSC) 'Age Determination Guidelines: Relating Children's Ages to Toy Characteristics and Play Behaviour' (September 2002)", ("the Age Determination Guidelines").

30 Clause 4 of the ISO Standard sets out safety requirements for toys. Relevantly, sub-clause 4.4 requires that toys for children up to and including 36 months must not have removable components or must not shatter or break into components, when subject to reasonably foreseeable abuse tests, which fit entirely into the small parts cylinder when tested in accordance with the "small parts test".

31 The ISO Standard identifies potential choking and aspiration hazards associated with small parts as being a primary consideration when assessing whether toys are appropriate for children under three years of age. Annex B to the ISO Standard sets out criteria for establishing age grading for children's toys. Guideline B.2 states that when establishing age grading for a toy, the following criteria should be considered:

(a) The toy should match the physical ability of a child to manipulate and play with the specific features of the toy.

(b) The toy should match the mental ability of a child to understand how to use the toy (that is, to understand instructions, sequences of operations, objective of the toy).

(c) The toy should meet play needs and interests at different levels of development.

32 Guideline B.4.2 of Annex B to the ISO Standard identifies toys appropriate for children under three years of age, including push and pull toys, pounding toys, jack-in-the-boxes, animal figures, cars, trucks and other vehicles. Guideline B.4.2 also identifies the following class of toys as generally having characteristics appropriate for children under three years of age:

(a) Toy vehicles - cars, trucks, boats and trains of simple chunky shape, decorated in primary colours without extensive detail or representations of a particular make or model of vehicle and that require simple actions such as rolling, dumping, pushing and releasing;

(b) Action toys - simple action toys for the identification of sounds or pictures and surprise-action toys; and

(c) Early learning toys - toys that require simple physical motions such as turning wheels or knobs, pulling and letting go.

Further guidance can be gained from reading the Age Determination Guidelines.

33 The "tension test", set out at clause 5.24.6 of the Safety Standard applies to any toy with a projection, part or assembly that a child can grasp with at least the thumb and forefinger or the teeth.

34 Annexure A to the Safety Standard is headed "Battery-operated toys". It sets out (at A.2) specific requirements for battery-operated toys (which are toys having at least one function dependent on electricity and powered by batteries). These requirements are intended to address risks of injury associated with battery overheating, leakage, explosion and fire, and choking on or swallowing batteries. Paragraph A.2.3 of Annexure A requires, for toys intended for children under 36 months, that batteries are inaccessible without using a tool or at least two independent movements applied simultaneously to the battery compartment.

35 The circumstances in which a toy was manufactured and designed, or labelled or marketed and whether a toy is governed by the Regulations are factual questions to be decided by the Court.

36 The Act was first introduced in Victoria in 1985 pursuant to an agreement between all States to extend the application of laws prohibiting a wide range of deceptive or misleading practices. It was based on relevant provisions of the Trade Practices Act 1974 (Cth). The Act represented a significant consolidation of the earlier consumer protection Acts: the Fair Trading Act 1985, the Consumer Affairs Act 1972 and the Ministry of Consumer Affairs Act 1973, and was modelled on the relevant provisions of the Trade Practices Act.

37 Part 3 of the Act is generally modelled on Division 1A of Part V of the Trade Practices Act 1974. Guidance may properly be drawn from the substantial case law on parallel provisions of the Trade Practices Act when interpreting the provisions of the Act.[1] The public interest underpins these provisions.[2]

38 The Act's consumer protection measures were strengthened by the Fair Trading (Amendment) Act in 2003. It gave additional powers of enforcement to the Director of Consumer Affairs. The Explanatory Memorandum relevantly states:

Section 151A allows the Minister or the Director to apply to the Supreme Court for a cease trading injunction in relation to a supplier who has contravened, attempted to contravene, conspired to contravene, aided, abetted, counselled or procured a person to contravene, or induced or attempted to induce a person to contravene the Act, or who was knowingly concerned in the contravention of the act; and empowers the Supreme Court to grant the injunction against a person engaging in that conduct where, unless it does so, there is imminent danger of substantial damage to consumers.

39 The new section, 151A, introduced to provide for a protective injunction is, like s.80 of the Trade Practices Act, aimed at achieving compliance with commercial regulatory legislation.[3] As the courts have consistently recognised, such provisions are governed by different principles[4] from those aimed at the protection of private proprietary rights. The authorities dealing with s.80 of the Trade Practices Act and like provisions acknowledge the prescription of statutory norms of conduct to protect the public interest.[5]

40 It is appropriate then to carefully consider the proper balance to be struck between the public interest involved in a negotiated resolution and the public interest in the proper exercise of powers by a court in a commercial regulatory framework. The proper approach of the Court where orders of this nature are sought by consent has been discussed in a number of cases.[6] I keep in mind the following propositions.

41 In exercising the power to make the orders sought, the Court is not merely giving effect to the wishes of the parties, it is exercising a public function and must have regard to the public interest in doing so. The Court has a responsibility to be satisfied that what is proposed is not contrary to the public interest and is, at least, consistent with it. It is not the Court's duty to determine whether this is the best possible settlement that could have been obtained. In relation to proposed consent orders and undertakings, the Court will not simply substitute its own view of the orders or undertakings which it would have made if those proffered fall within the range of an appropriate disposition of the case. There are practical issues to be considered in the formulation of undertakings or consent injunctions. Undertakings and injunctive orders must be formulated with precision to aid obedience to them.

42 The Director seeks declarations. I propose to only grant declarations where I am satisfied that the declarations sought are justified or supported. The fact that the parties consent to the making of the declarations or provide assurances by way of admission or agreed statement that asserted facts are true, is not enough.[7] I will make declarations on the basis of the facts as I find them.[8]

43 The courts have consistently rejected arguments about the lack of utility of declaratory relief in cases involving the public interest. In ACCC Eurong Beach Resort Ltd,[9] Kiefel J had to deal with the issue of whether there is any utility in granting a bare declaration of past contraventions of the Trade Practices Act 1974 (Cth). Her Honour noted a submission made by the ACCC and continued:

This submission finds support in the decision of a Full Court in Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc [1993] FCA 83; (1993) 41 FCR 89. Sheppard J (at p.94) considered it appropriate to make declarations that the appellant had engaged in misleading and deceptive conduct as it gave formal effect to the court's conclusion and the litigation involved the public interest. The latter was especially influential to his Honour's decision. Hill J put the matter in even stronger terms, (at p.110): 'There can be little doubt that a declaration might be obtained by a regulatory authority that particular conduct is in breach of a statutory provision, whether or not injunctive relief is appropriate: cf Australian Softwood Forests Pty Ltd v Attorney-General (NSW) (Ex rel Corporate Affairs Commission) [1981] HCA 49; (1981) 148 CLR 121 at 125. It has never been suggested that no power exists to grant such declaratory relief merely because the consequence of a declaration is to declare the existence of a wrong. The declaration that an offence has been committed is the concomitant of the non-existence of a right. Semantically, it may be said to be the declaration of a negative right. It is appropriate, in my view, to refer to it as a declaration of right.' The statement of principle in that case should be followed in cases involving the public interest. Clearly, this litigation is in that class. It follows that declarations would not lack utility.

44 See also ACCC v Advanced Medical Institute Pty Ltd (No 3),[10] ACCC v IMB Group Pty Ltd,[11] ACCC v Chen;[12] ACCC v The Construction, Forestry, Mining and Energy Union,[13] ACCC v Kokos International Pty Ltd (No.2),[14] Alinta Asset Management Pty Ltd v Essential Services Commission,[15] and Cousins v Merringtons Pty Ltd and Anor (No.2).[16] Further, in analogous cases, Cousins v SJS Imports Pty Ltd and Others[17] and Director of Consumer Affairs Victoria v Midas Trading (Australia) Pty Ltd,[18] Dodds-Streeton J and Habersberger J (respectively) granted declaratory relief similar to the declaratory relief sought in this case by the Director.

45 The Director submits, and I agree, that there are no relevant discretionary grounds for refusing to make declarations. The declarations sought are directed to the determination of a legal controversy and not to answering abstract or hypothetical questions. The Director has a "real interest" in seeking the relief. The relief is not "purely hypothetical" or hypothetical in any relevant sense. The defendants are "proper contradictors". The Director has not delayed in bringing the proceedings.

46 Section 149A of the Act empowers the Court to make orders that may bring the outcome of the proceedings to the attention of both consumers and traders. Such orders broaden the scope of protection afforded by the legislative scheme. There are at least three important educative roles served by publicly identifying the way in which the particular contravener behaved and has had to change its conduct. Publicity orders inform of past conduct. Other consumers may be unaware of the risks created by purchasing the particular toys and a publicity order may be effective in warning of such risks, particularly where other means of contacting other consumers of the offending items is impractical. Other traders may import the same toys. Publicity orders may put the public on inquiry about the lawfulness of future conduct by the contravener or other traders. In that way publicity orders may assist in developing an environment of self-regulated compliance in a particular industry or area of commercial activity. Publicity orders may assist in enforcing injunctive orders and preventing repetition of the contravening conduct.[19] At a broader level, traders, mindful of commercial reputation, may be deterred from like conduct upon becoming aware of the outcome in a particular enforcement case. More generally, such orders may put the public on inquiry about safety issues with respect to children's toys and in this way contribute to achieving the purposes of the regulatory scheme.

47 Punitive advertising orders cannot be made under s.149A. Such orders are not made for the benefit of the regulator, to announce a "win". They differ from publication or other orders for corrective purposes.[20]

48 In Midas Trading,[21] Habersberger J recently considered and applied, in circumstances not too far removed from those found in this case, the relevant legislative provisions in Part 3 and Part 11 of the Act which arise for consideration in this case.

49 His Honour concluded that s.151A of the Act is, in an appropriate case, "wide enough to support a complete prohibition on a person from engaging in a particular field of commercial activity".[22] In the context of a case where there are breaches of safety standards and ban orders, but a complete cease trading injunction is not yet warranted, his Honour considered that the "appropriate nexus between the contravening conduct and the scope of the injunction is best expressed by restraining the defendant from carrying on a business of supplying ... goods that are subject to product safety regulation". However, this does not extend to goods subject to an Information Standard.[23] Breach of an Information Standard is regarded as conduct of a different kind to breaches of a Safety Standard or a Ban Order.

50 The Court may by reference to s.151A(2)(a)) make a cease trading injunction where three requirements are present:

(a) the Court is satisfied that the person is, or has been, engaging in conduct of the kind set out in any of s.151A(1)(a) to (e); and

(b) it appears to the Court that if the injunction is not granted, it is likely that the person will engage in conduct of that kind; and

51 It may also grant the injunction where, if it determines it to be appropriate, all parties consent, whether or not the person has engaged in or is likely to engage in relevant conduct.[24]

52 The rationale for making a cease trading order when the enjoined conduct would in any event be a breach of the Act was stated in Trade Practices Commission v Mobil Oil Australia Limited.[25] Toohey J said:

... even though there was no evidence to indicate the offender's intention to continue the offending conduct, it might be appropriate to mark the court's disapproval by an injunction as well as a monetary penalty.

53 In ICI,[26] French J (as his Honour then was) referred to an injunction:

... which is intended not to restrain an apprehended repetition of contravening conduct but to deter an offender from repeating the offence. That deterrence is effected by attaching to the repetition of the contravention the range of sanctions available for contempt of court.

54 In Midas Trading,[27] Habersberger J, having noted this rationale, continued:

The next matter to note is the factors which have been said to be relevant to the determination of appropriate orders in a proceeding such as this. In Dermalogica,[28] Goldberg J set out a helpful, non-exhaustive list. The same task has been undertaken in earlier cases.[29] In my opinion, the following factors are relevant in the particular circumstances of this case:

(a) The objectives of the Act;

(b) The nature and extent of the contravening conduct;

(c) The amount of loss or damage caused;

(d) Any profit made from the contravening conduct;

(e) The circumstances in which the conduct took place;

(f) The degree of deliberateness or carelessness involved;

(g) The size of the defendant;

(h) Whether the contravening conduct was brought about by senior management of the defendant or at a lower level;

(i) Whether the defendant has a culture conducive to compliance with the Act;

(j) Any previous contraventions of the Act;

(k) Whether the defendant co-operated with the investigation, including the defendant's approach to defending the proceeding; and

(l) The Director's submissions.

A similar list of relevant factors could be applied in this case although there is no evidence on some factors which might be thought relevant.

55 Another matter to be noted is that the drafting of injunctions to restrain a repetition of conduct found in contravention of the law requires a practical and sensible evaluative judgment. It is also an important practical exercise.[30]

56 As French J noted in ACCC v Real Estate Institute (WA) Inc:[31]

Once an undertaking is accepted by the Court or a consent order made, their breach is enforceable by proceedings for contempt. The undertakings and orders must therefore be formulated with precision so that they are capable of being readily obeyed. Undertakings or orders which are likely to involve vague evaluative judgments or significant debates on their interpretation are not likely to be given the Court's sanction. Similarly, undertakings or orders which are likely to require the Court to be concerned with the ongoing supervision of the conduct of the parties to them will also raise serious questions as to their appropriateness.

57 I have preferred, in this case, having regard to Mr Dong's limited command of English, his lack of legal representation, and an apparent willingness to be very agreeable, to regard the proceeding as not being opposed rather than by consent.

58 I mention one further matter. In Midas Trading,[32] Habersberger J expressed, in argument, the view that the phrase "manufactured and designed, labelled or marketed", where it appears in Reg.4 of the Regulations, had to be read as manufactured and designed or labelled or marketed and his Honour noted this construction was accepted by counsel. With respect, I too consider that the regulation should be so read. I do not consider the following to be excluded from the definition of a toy:

(a) an object manufactured or designed as a plaything for a child or children up to three years of age which is labelled or marketed as something else; or

(b) an object that is not manufactured or designed as a plaything but which is labelled or marketed as a plaything for a child or children up to three years of age.

To use the vernacular, a trader cannot label or market out of liability in respect of a plaything manufactured or designed as such, and a trader can label or market into liability a plaything not manufactured or designed as such.

59 Evidence was given by affidavit and four affidavits were read:

60 I received, as exhibits, samples of the offending toys, which were:

(a) Box labelled with the description "Cartoon steel piece", "8 Sounds Qins", containing a toy xylophone;

(b) Box labelled "Hand Knocks Musical Instrument", containing a toy xylophone and two toy mallets;

(d) Box labelled "Cappi Hand Knocks Xylophone" containing a toy xylophone and two toy mallets;

(e) Box labelled "Animal Guitar" "My Music World" containing a toy guitar;

(f) Box labelled "Music Duck" containing a plastic duck toy and three toy duck eggs;

(g) Box labelled "Elephant Beautiful Melody" containing a toy elephant;

(h) Cellophane bag containing a plastic cow and a plastic horse.

(i) Packaged toy set labelled "Police Gun" bearing the number 8809A, but missing the gun and three plastic darts;

(j) Packaged toy set labelled "Ben 10 Alien Force", bearing the number SB60; and

(k) Packaged toy set labelled "Police Military Force", a plastic toy handguns set.

There was one further toy of which no sample was produced. It was called "Yo-Yo Water Balls". However, I saw photographs, and a detailed description, of this item in affidavits.

62 DW International Trading Pty Ltd ("DW International") was registered on 23 April 2007 and is an Australian proprietary company limited by shares. At all relevant times it had its registered office at 49 First Avenue, Kew, Victoria and its principal place of business at 2-4 Capella Crescent, Moorabbin, Victoria ("the Moorabbin premises"). Since 23 April 2007, Mr Dong, whose address is also 49 First Avenue, Kew, Victoria, has been a director and shareholder of DW International. From at least September 2009, DW International has been carrying on business importing, wholesaling, and supplying various goods, including children's toys, sporting equipment, fashion accessories, clothing, footwear, kitchenware, glassware, home wares, and decorator items from the Moorabbin premises.

63 Mr Dong was responsible for buying the goods offered for sale by DW International at the Moorabbin premises. Mr Dong was also the person responsible, on behalf of DW International, for ensuring that goods supplied by DW International complied with relevant Victorian product safety laws. As at September 2009, Mr Dong had "a little bit" of an understanding of the requirements of Victoria's product safety laws.

64 On 1 September 2009, Consumer Affairs Victoria Inspectors Charles Charalambous and Ian McCulloch, attended DW International's Moorabbin premises and examined various goods for compliance with relevant prescribed product safety standards and ban orders. They formed the belief that a number of products displayed for sale by DW International contravened product safety laws and issued a Notice to Mr Dong under s.121(3) of the Act prohibiting the removal of the goods itemised in the Notice from DW International's Moorabbin premises. They also observed on display, and examined, other goods in respect of which they had concerns about compliance with Victorian Children's Toy Regulations. A sample of six different "suspect goods" (toys) were purchased by Mr Charalambous from Mr Dong for testing.

65 Mr Charalambous later examined and tested each of the sample toys he had purchased; five of the six different types of toy failed the relevant product safety tests. In respect of each of those five different toys, small parts, that is, parts which fit entirely within a prescribed small parts cylinder, broke away from the toy when the toy was dropped from the specified height of 930 mm ("drop test") on four occasions. For the sixth toy, no small parts broke away from the toy when tested. Mr Charalambous formed the belief that five of the six different suspect toys being supplied by DW International did not meet the safety requirements required by Victoria's Children's Toy Regulations.

66 On 4 September 2009, Consumer Affairs Victoria Inspectors Charalambous, McCulloch, Chrysostomou, and Dequile executed a search warrant at the Moorabbin premises of DW International. Various quantities of 12 different types of goods were seized.

'Music Duck' plastic, battery operated children's toy

'Elephant Beautiful Melody' plastic, battery operated children's toy

A sample of each of the 12 different types of seized goods was examined and tested by Consumer Affairs Victoria, specifically by Mr Charalambous and Ms Tickell on 3 and 4 December 2009.

67 I set out the results of the examination and testing of the seized toys.

68 Examination of each of the four different types of toy xylophones and the toy guitar (collectively, "the toy musical instruments"); the "Music Duck" toy; and "Elephant Beautiful Melody" toy (collectively, "the battery operated toys"); and the cow and horse wind-up toys (collectively, "the farm animal wind-up toys") reveals that their manufacture and design:

(a) match the physical ability of a child under three years of age to manipulate and play with the specific features of each of the toys;

(b) match the mental ability of a child under three years of age to understand how to use the toys; and

Further, the marketing of the toy musical instruments, the battery operated toys, and the farm animal wind-up toys, by reason of the brightly coloured packaging, the artwork that would appeal to young children, and the pre-school or fantasy characters appeals to children under the age of three years.

69 I find that the toy musical instruments, the battery operated toys, and the farm animal wind-up toys are, in fact, all objects that are either "manufactured and designed" or "marketed" or both "manufactured and designed" and "marketed" as a plaything for a child or children up to three years of age for the purposes of Regulation 4 of the Victorian Children's Toys Regulations.

70 In respect of some of these toys, namely the "Qins Cartoon Steel Piece" toy xylophone, the "Steel 8-Tone Cartoon Marimba" toy xylophone, and the "Cappi" toy xylophone, promotional statements on the packaging are inconsistent with the warning labelling or statements on the packaging "that the product is not for children under 3 years". These statements were "The wonderful music joyfully grows along with the baby!", "The interesting to listen to music accompanies your baby to grow joyfully!", and "The babies like having objects of the sound, it feels very helpful to beat and take exercises to baby's limbs".

71 The labelling on the packaging for the toy musical instruments, the battery operated toys, and the farm animal wind up toys all contain, warning labelling at varying sizes and prominence, including one or more of the following:

"!WARNING: Choking Hazard - Small parts. Not for children under 3 years";
"Ages 3+";
"Warning! Babies and young children do not have a developed sense of what is safe and what is potentially dangerous. Therefore it is important that their play is supervised at all times by a responsible adult";
the symbol ;
"Not suitable for children under 3 years";
"ATTENTION: READ AND KEEP FOR FUTURE REFERENCE: The toy is suitable for children over 36 months. To safeguard baby eliminate parts used to fasten the contents to the package".

72 However, such labelling of the toys is not enough in and of itself to take the toys out of coverage by Regulation 4 of the Victorian Children's Toys Regulations. As I state above, a trader cannot label out of liability.

73 The toy musical instruments and the battery operated toys failed the "drop test" and "small parts test". The farm animal wind up toys failed the "tension test". The "Ben 10 Alien Force" toy gun set failed both the "foil test" and the "improvised projectile test", whereas the "Police Gun" and "Police Military Force" toy gun sets did not fail the "foil test", but did fail the "improvised projectile test". The yo-yo water balls failed the requirement for such items by having a connected cord capable of extending by stretching to over 500 mm. The "Elephant Beautiful Melody" toy also failed the requirement that the battery compartment of such toys be secured and require the use of a tool or two independent movements applied simultaneously to gain access to the battery compartment.

74 Mr Dong relied solely on his suppliers' assurances that the relevant goods had been exported to "other western countries". As all 12 types of goods had warnings printed on them, Mr Dong believed it was "OK" to import and supply the products in Australia. He admitted to the Consumer Affairs Victoria Inspectors on 1 September 2009 that he had "a little bit" of an understanding of Victoria's product safety laws. He admitted in his letter to the plaintiff of 9 March 2010 that he had no "idea about Australia's own standards and regulations regarding safety of toys". At 9 March 2010, some six months after goods were seized, Mr Dong stated he did not "really know where to find these safety standards and regulations".

75 Mr Dong's offer to co-operate with Consumer Affairs Victoria in destroying the relevant goods and minimising the "negative impacts" on consumers does not provide any assurance or evidence by which either the Director or the Court can have any basis for confidence that the future supply of goods (whether of the kind seized in this instance or otherwise of a kind subject to product safety laws) by DW International or other business run by Mr Dong would comply with relevant product safety laws.

76 There were no satisfactory business records located to assess the extent of goods imported, sales, stock, profits and like matters. Mr Dong stated that the imported goods were "sample toys", but provided no evidence of the time of importing or quantity of each of the 12 types of goods imported by Mr Dong or DW International. No evidence was found or has been provided by the defendants as to sales by DW International in Australia. Apart from any inference from Mr Dong's assertion in March 2010 that he (and presumably DW International) cannot afford to obtain legal services, neither defendant provided details of its or his financial affairs.

77 The defendants have been engaging in the relevant conduct and I will make appropriate declarations to that effect, in the form set out in paragraphs 1 to 11 of Appendix 1 of this judgment.

78 Next, the Director seeks orders for public warning, product recall and refunds to customers. The size of the proposed advertisements and the frequency of their placement have been negotiated between the parties. In respect of those aspects of the order I am satisfied that what has been consented to is appropriate. I am also satisfied such orders should be made in this case and in addition I will make orders for return to the Director, and destruction and disposal at the expense of the defendants, of the goods seized and any returns by reason of the orders made. I will make orders in the form set out in paragraphs 12 to 15, 18 and 19 of Appendix 1 of this judgment.

79 Finally I turn to the claim for orders for a cease trading injunction and a compliance program. I consider the evidence establishes the requirements of s.151A(2)(b) for a cease trading injunction.

80 Mr Bhojani contended that a fair consideration of the evidence in this matter regarding the defendants' conduct justifies a conclusion that the defendants will not do anything regarding product safety compliance, unless compelled to do so. It appears that the second defendant, by simply asserting that he believes that he deserves a "second chance", but proffering nothing tangible to support a view that his or his company's conduct would be any different, may not even understand the seriousness of his conduct or these proceedings.

81 I accept this submission in the sense that it follows from the second defendant's lack of awareness of the governing legislation and regulations, and his lack of education and fluency in English. I do not consider that the evidence justifies any finding of wilful or intentional refusal to adhere to product safety compliance regulation, not that such a finding is needed for the relief I will grant. Rather, it can be recorded that the defendants have acknowledged the fact of their contraventions. The sense in which Mr Bhojani submits that compulsion is needed to secure observance of the commercial regulatory legislative regime follows, because the defendants have not demonstrated to the Court an adequate or proper understanding of the processes and procedures they need to adopt to comply with the law in the future. The object of this specific proceeding, and more generally of the commercial regulatory legislative regime on which it is based, is protection of the public.

82 The nature of an import business of this type is not conducive to expectations of future compliance. The reliance on representations from, and the packaging developed by, the foreign manufacturers is not uncommon as a proffered excuse. There was no evidence before me of any understanding of the relevant Australian and Victorian laws, or of any effort by manufacturers to comply with applicable laws. The inference open from the labelling of the exhibits, which I referred to above at [71] would not support any expectation of compliance on the part of the manufacturers.

83 I also consider this is an appropriate case for a cease trading injunction, as I am satisfied that all three pre-conditions set out in s.151A(2)(a) of the Act have been met.

84 First, the defendants have been acting in contravention of the Act.

85 Second, I am satisfied that if no injunction was granted it is likely that the defendants would again engage "in conduct of that kind". I have no confidence that the defendants would not in future be motivated by commercial considerations to the detriment of their legal obligations. A statement in a letter that the defendants "deserve a second chance", without more, falls well short of engendering such confidence. As I stated above, the Court has no basis for confidence that the future supply of goods (whether of the kind seized in this instance or otherwise of a kind subject to product safety laws) by DW International, or other business run by Mr Dong, would comply with relevant product safety laws. There is clearly an unacceptable risk that public safety may be compromised by the pursuit of private profit.

86 Third, I have no doubt that there is "an imminent danger of substantial damage" to people, in particular young children, if the defendant continues to engage "in conduct of that kind".

87 A complete cease trading injunction was not sought. Rather the Director sought to confine the restraint to supplying goods that are subject to product safety regulation. In so doing, the Director was confining the requested relief in accordance with the analysis undertaken by Habersberger J in Midas Trading.[33] In the context of a case where there are breaches of safety standards and ban orders, but a complete cease trading injunction is not yet warranted, his Honour considered that the "appropriate nexus between the contravening conduct and the scope of the injunction is best expressed by restraining the defendant from carrying on a business of supplying ... goods that are subject to product safety regulation". With respect, I agree with his Honour's reasoning.

88 It is clear in this case that the defendants deal in a range of imported goods and that a total trading ban would be unnecessarily wide. I was concerned that the list of goods which are subject to product safety regulation is also wide and includes goods with which the defendants do not presently deal. Some of the listed goods are goods which the defendants may be thought unlikely to ever import or sell. There was no evidence about the source of the goods which are presently subject to product safety regulation; they may all be available in China for import to this country. The second defendant made no submission about this matter.

89 I received counsel's assurance that over the lunch adjournment, at my request, the solicitors for the Director, with the Mandarin Chinese interpreter Ms Sixian Wen translating, took Mr Dong through the whole of the proposed order being sought by the Director. I later questioned Mr Dong about what it was he thought he was consenting to and was generally, though not completely, satisfied that he understood the major operative parts of what is a complex order, even for a trader who is a native English speaker.

90 It is not uncommon for a time limit to be imposed upon a restraint. It will usually be appropriate to define the temporal limitation of the restraint. Here, the Director seeks a form of restraint that is relieved where the defendants have implemented a compliance program which is subject to review, at least in the case of the first defendant. Having regard to the frequent use of Phoenix companies to avoid the consequences of regulatory restraint, I consider it appropriate that the second defendant should be subject to absolute restraint unless operating through the first defendant in which case future trading is regulated by the compliance and review program. Liberty to apply is reserved and might be utilised if it became appropriate to permit the second defendant to trade in goods of the kind or class listed in Annexure "B" to the order by use of a different trading entity.

91 The proposed compliance order would involve the participation of an independent expert. The process will necessitate the maintenance of appropriate books and records by the defendants, physical inspections of goods and personal interviews with employees. Plainly, this process will involve expense for the defendants but that is a necessary consequence of ensuring proper public protection in implementing the purposes of the legislative scheme. The risk of harm to consumers through unregulated trade in goods subject to product safety regulation is well established and there is no basis to diminish, or thwart, the effectiveness of such regulation by reference to the commercial considerations which affect private operators.

92 For these reasons I consider it appropriate that the cease trading injunction is extended to all goods which are subject to product safety regulation and that it not be limited as to time, but rather that trading in such goods be permitted upon proof of satisfaction of an appropriate compliance program. In any event, liberty to apply is reserved to deal with presently unforseen circumstances. I will make the orders sought in paragraphs 16 and 17 of Appendix 1 of this judgment.

93 Finally, the Director seeks an order for costs. I am instructed that during the course of negotiations between the parties it would be agreed that the costs being sought by the Director should not exceed $5,000.

94 In the result, I will make orders in the form set out in Appendix 1.

1. Pursuant to s.36 of the Supreme Court Act 1986 or s.158(2)(h) of the Fair Trading Act 1999 (Vic) ("the Act"), the following products supplied by DW International Trading Pty Ltd do not comply with Fair Trading (Safety Standards) (Children's Toys) Regulations 2004 SR No.111/2004, in that through foreseeable use and abuse of such products they are capable of breaking into small parts when dropped, thereby causing a choking hazard:

(a) pre-school wood, plastic and metal acoustic toy known, and referred to in this order, as "Qins Cartoon Steel Piece - 8 Sounds" toy xylophone;

(b) pre-school wood, plastic and metal acoustic toy known, and referred to in this order, as "Hand Knocks - Goodcow" toy xylophone;

(c) pre-school wood, plastic and metal acoustic toy known, and referred to in this order, as "Steel 8 - Tone Marimba" toy xylophone;

(d) pre-school wood, plastic and metal acoustic toy known, and referred to in this order, as "Cappi Hand Knocks - 8 Notes" toy xylophone;

(e) pre-school plastic acoustic toy known, and referred to in this order, as "Animal Guitar" toy guitar;

(f) pre-school plastic battery operated duck and plastic duck toy eggs known, and referred to in this order, as "Music Duck" (bearing number 979);

(g) pre-school plastic battery operated toy known, and referred to in this order, as "Elephant Beautiful Melody"; and

(h) pre-school plastic wind-up cow and horse shaped motion toys known, and referred to in this order, as "Animal Toys" (bearing numbers 265 & 266).

2. DW International Trading Pty Ltd has contravened s.33 of the Act by supplying, as a retailer, the following non-compliant products:

(a) "Qins Cartoon Steel Piece - 8 Sounds" toy xylophone;

3. The "Elephant - Beautiful Melody" toy, supplied by DW International Trading Pty Ltd does not comply with Fair Trading (Safety Standards) (Children's Toys) Regulations 2004 SR No. 111/2004, in that the batteries required to operate the toy, when installed, are accessible without the use of a tool or with less than two independent movements applied simultaneously to the battery compartment.

4. DW International Trading Pty Ltd by supplying, as a retailer, the "Elephant - Beautiful Melody" toy has contravened s.33 of the Act.

5. The "Animal Toys" toy, supplied by DW International Trading Pty Ltd, does not comply with Fair Trading (Safety Standards) (Children's Toys) Regulations 2004 SR No. 111/2004, in that through foreseeable use and abuse of such products they are capable of breaking into small parts when subjected to a tension load of 70N ± 2N, thereby causing a choking hazard.

6. DW International Trading Pty Ltd by supplying, as a retailer, the "Animal Toys" toy has contravened s.33 of the Act.

7. The following products ("the projectile toys"):

(a) plastic toy hand gun, dart, and related police toy set known as "Police Gun Rongye Toys" (bearing number 8809A);

(b) plastic toy, dart, and action figure set known as "Ben 10 Alien Force" (bearing number SB60); and

(i) supplied by DW International Trading Pty Ltd do not comply with a permanent ban order, published on 28 November 2002 in Victorian Government Gazette No.G48, in that each of the three projectile toys has a discharge mechanism which allows another type of projectile, such as a pencil or nail, to be discharged, and the projectile discharged from the "Ben 10 Alien Force" toy, when tested in accordance with Appendix DD of that ban order, caused more than 2 out of 10 test foils to rupture, thus presenting a risk of causing serious eye injuries.

8. DW International Trading Pty Ltd has contravened s.44 of the Act by supplying, as a retailer, the following non-compliant products:

9. The product known as "Yo-Yo Water Ball", supplied by DW International Trading Pty Ltd, does not comply with a permanent ban order published on 30 May 2003 in Victorian Government Gazette No.S104, in that the product comprises a ball or shape which contains a novelty and is connected by a stretchable or elasticised cord that is capable of extending at least 500 mm in length, thus presenting as or causing a choking hazard.

10. DW International Trading Pty Ltd by supplying, as a retailer, the "Yo-Yo Water Ball" product has contravened section 44 of the Act.

11. Bo Hui Dong, a director of DW International Trading Pty Ltd, has been directly or indirectly knowingly concerned in and party to, or otherwise involved in, DW International Trading Pty Ltd's contraventions of ss.33 and 44 of the Act by:

(a) purchasing or otherwise acquiring for supply by DW International Trading Pty Ltd; and

(b) refusing or refraining (other than inadvertently) from ensuring that DW International Trading Pty Ltd complied with the product safety provisions in Part 3 of the Act in supplying the following goods:

(i) "Qins Cartoon Steel Piece - 8 Sounds" toy xylophone;

12. Pursuant to s.149A, s.153, or s.158 of the Act, DW International Trading Pty Ltd and Bo Hui Dong cause to be published within 14 days of the date of this order, within pages 2-40 inclusive of the Herald Sun newspaper, a Public Warning and Product Recall Notice in the form of Annexure "A" to this order. Each such Notice must:

(a) be a minimum size of 20 cm x 8 columns across (A4);

(b) use a minimum type size of 12 point Times New Roman or equivalent; and

13. DW International Trading Pty Ltd and Bo Hui Dong cause to be prominently and conspicuously displayed at or near each point of sale (or checkout) and customer exit in each of its or his existing, and any new, premises from which it or he carries on the business (solely or jointly) of supplying goods to retailers or as retailers to other purchasers, a Public Warning and Product Recall Notice in the form of Annexure "A" to the order, for a period of 6 months from the date of the order. Each such Notice must:

(a) be a minimum size of 29.7 cm in width by 42 cm in height (A3 size paper);

(b) use a minimum type size of 12 point Times New Roman or equivalent; and

14. DW International Trading Pty Ltd and Bo Hui Dong pay a full refund to all persons returning the goods identified in the Public Warning and Product Recall Notice.

15. DW International Trading Pty Ltd and Bo Hui Dong:

(a) notify on a weekly basis for 12 weeks, after publication of the Public Warning and Product Recall Notice, an Officer designated by the Director of Consumer Affairs Victoria of the details of all goods returned to the company; and

(b) securely store all such returned goods for collection (destruction and disposal) by the Officer designated by the Director of Consumer Affairs Victoria, as soon as is convenient after the 12 week period, referred to in paragraph 15(a) above, has expired.

16. Pursuant to s.151A of the Act, DW International Trading Pty Ltd, by its servants or agents or otherwise, and Bo Hui Dong are restrained from carrying on a business of supplying to retailers, or as retailers to other purchasers, goods of a kind or class listed in Annexure "B", unless:

(a) DW International Trading Pty Ltd, prior to commencing to supply goods of the kind or class listed in Annexure "B", implements a compliance program, in accordance with Annexure "D" of this order, designed to ensure that it will not supply goods that:

(i) contravene any permanent or fixed term ban order made pursuant to s.40 of the Fair Trading Act 1999; and

(ii) contravene any interim ban order made pursuant to s.35 of the Fair Trading Act 1999; and

(iii) do not comply with any prescribed safety standard -

in operation as at the date of this order, and for which there continues to exist a Safety Standard or such Interim, Permanent, or Fixed Term Ban Order under the Fair Trading Act 1999 or other law of Victoria ("the Compliance Program"); and

(b) DW International Trading Pty Ltd complies with the requirements set out in paragraph 19 below to review the effectiveness of the Compliance Program.

17. Pursuant to ss.149 and 151A of the Act, Bo Hui Dong is restrained from being in any way directly or indirectly knowingly concerned in or party to, or otherwise involved in, carrying on a business by DW International Trading Pty Ltd or any other person of supplying goods of the kind or class listed in Annexure "B" unless DW International Trading Pty Ltd or such other person has in place a Compliance Program designed to ensure that DW International Trading Pty Ltd or such other person will not supply goods that:

(a) contravene any permanent or fixed term ban order made pursuant to s.40 of the Fair Trading Act 1999; and

(b) contravene any interim ban order made pursuant to s.35 of the Fair Trading Act 1999; and

(a) DW International Trading Pty Ltd must retain, as its own expense, a member of the Australasian Compliance Institute or a firm of solicitors, with expertise in consumer protection or trade practices law, to conduct three reviews of DW International Trading Pty Ltd's compliance with its Compliance Program ("the reviews") and to provide the Director of Consumer Affairs Victoria or her nominee with a report of each such review as set out below.

(b) DW International Trading Pty Ltd must make it an express term of the retainer, referred to in paragraph 17(a), that the member of the Australasian Compliance Institute or a firm of solicitors, with expertise in consumer protection or trade practices law engaged to conduct the reviews shall, prior to the preparation of each report of such reviews and for the purposes of the preparation of each report, conduct:

(i) inspections of DW International Trading Pty Ltd's books and records which record its purchase and supply, as defined in the Act, of all goods;

(iii) personal interviews with each of DW International Trading Pty Ltd's store managers and buyers -

in or at each of its existing or new premises from which DW International Trading Pty Ltd carries on a business, solely or jointly, of supplying goods to retailers, or as retailers to other purchasers;

(c) The person or persons engaged by DW International Trading Pty Ltd pursuant to paragraph 17(a) must, in each report, specifically detail in writing all:

(i) inspections of DW International Trading Pty Ltd's books and records which record its purchase and supply, as defined in the Act, of all goods;

(ii) physical inspections and the outcome of such inspections, of goods located; and

(iii) personal interviews and the outcomes of such interviews, with each of DW International Trading Pty Ltd's store managers and buyers -

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