Australian Competition and Consumer Commission v Matta

[1999] FCA 1491

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Matta [1999] FCA 1491

CRIMINAL LAW – “knowingly concerned in a contravention” of the Trade Practices Act 1974 – whether knowledge of relevant Australian Standards – whether knowledge of non-compliance at time of supply

Trade Practices Act 1974

Pereira v Director of Public Prosecutions (1988) 63 ALJR 1

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v SHEREF JOSHUA MATTA
QG 125 of 1998

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v SHEREF JOSHUA MATTA

QG 127 of 1998

DOWSETT J
29 OCTOBER 1999
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 125 OF 1998

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	SHEREF JOSHUA MATTA Respondent
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY		QG 127 OF 1998

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	SHEREF JOSHUA MATTA Respondent

JUDGE:	DOWSETT J
DATE OF ORDER:	29 OCTOBER 1999
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 125 OF 1998

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	SHEREF JOSHUA MATTA Respondent
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY		QG 127 OF 1998

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	SHEREF JOSHUA MATTA Respondent

JUDGE:	DOWSETT J
DATE:	29 OCTOBER 1999
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The respondent is charged with two breaches of par 79(1)(d) of the Trade Practices Act 1974 (Cth) (the “Act”) that he was directly knowingly concerned in a contravention of par 65C(1)(a) of the Act by Shercind Pty Ltd in that Shercind:

   ·being a corporation,

   ·did, in trade or commerce, supply goods which were of a kind likely to be used by a consumer,

   ·being goods of a kind for which there was a prescribed consumer product safety standard,

   ·which goods did not comply with that standard.

2. The offences were allegedly committed between 20 August 1997 and 7 March 1998.  In the case of application QG 125/98, the goods were a pair of sunglasses supplied to a company, Tortilla Holdings Pty Ltd, trading as Hound Dog.  Those sunglasses (ex 4) were purchased by the witness Dunlop from the Hound Dog store at Pacific Fair on 6 March 1998.  They did not comply with the provisions of AS 1067.1-1990 in that:

   ·The fields of view of the lenses were less than 30 mm in diameter; and

   ·The goods were not labelled appropriately in that they ought to have borne a label stating, “SPECIFIC PURPOSE SUNGLASSES - For protection against ultraviolet radiation in sunlight for specified environments”.

3. Application QG 127/98 alleges the supply by Shercind of a pair of spectacles subsequently sold to the witness Dunlop on the same day at the Hound Dog store at Robina.  They allegedly breached the provisions of AS 1067.1-1990 in that they were not labelled appropriately with the words “SPECIFIC PURPOSE SUNGLASSES – For protection against  ultraviolet radiation in sunlight for specified environments” and the additional words, “NOT SUITABLE FOR DRIVING” or, “THESE LENSES DISTORT COLOUR PERCEPTION AND ARE INAPPROPRIATE FOR DRIVING”.

4. None of the elements of the relevant offences prescribed by par 65C(1)(a) is in dispute.  However the respondent disputes that he was “directly knowingly concerned” in the contraventions.  The case has proceeded upon the basis that in order to prove its case, the prosecution must establish beyond all reasonable doubt that he knew:

   ·of the existence of the relevant standards, and

   ·that each pair of sunglasses did not comply with the standards in the ways specified.

5. Shercind’s breach was constituted by the supply of exs 4 and 6 to Hound Dog.  There is no evidence as to when, between 20 August 1997 and 7 March 1998, such supply may have occurred.  This means that the prosecution must prove that the respondent had the relevant knowledge at the commencement of that period.

6. The following passage from the decision of the High Court in Pereira v Director of Public Prosecutions (1988) 63 ALJR 1 at 3 (per Mason CJ, Deane, Dawson, Toohey and Gaudron JJ) is relevant for present purposes:

   Even where, as with the present charges, actual knowledge is either a specified element of the offence charged or a necessary element of the guilty mind required for the offence, it may be established as a matter of inference from the circumstances surrounding the commission of the alleged offence.  However, three matters should be noted.  First, in such cases the question remains one of actual knowledge … .  It is never the case that something less than knowledge may be treated as satisfying a requirement of actual knowledge.  Secondly, the question is that of the knowledge of the accused and not that which might be postulated of a hypothetical person in the position of the accused, although, of course, that may not be an irrelevant consideration.  Finally, where knowledge is inferred from the circumstances surrounding the commission of the alleged offence, knowledge must be the only rational inference available.  All that having been said, the fact remains that a combination of suspicious circumstances and failure to make enquiry may sustain an inference of knowledge of the actual or likely existence of the relevant matter.  In a case where a jury is invited to draw such an inference, a failure to make enquiry may sometimes, as a matter of lawyer’s shorthand, be referred to as wilful blindness.  Where that expression is used, care should be taken to ensure that a jury is not distracted by it from a consideration of the matter in issue as a matter of fact to be proved beyond reasonable doubt.

7. I should say something about the alleged deficiencies in the spectacles.  In application QG 125/98 it is firstly alleged that the spectacles (ex 4) did not comply with the requirement of cl 2.1.2 of the relevant standard in that the fields of view of the lenses were less than 30 mm in diameter.  That clause provides:

   Lenses shall have an unobstructed circular viewing area of minimum 30 mm diameter, centred on the datum centre … .  The field of view shall not be obscured by labels or decorations other than those intended to be removed before use.

8. It is common ground that the fields of view of the lenses in ex 4 had diameters of only 28 mm.  A discrepancy of 2 mm may not be apparent other than after relatively careful measurement.  It is also alleged that the spectacles (ex 4) breached the provisions of cl 4.2.4 of the same standard in that they ought to have been labelled as specified above.  Similarly, it is alleged in application QG 127/98 that the spectacles (ex 6) ought to have borne that same label plus the additional label specified above.  In order to ascertain the appropriate labelling for spectacles such as these, it is necessary to conduct a specialized optical assessment of them.  This can be conducted at only one laboratory in Australia, which is in the University of New South Wales. 

9. The respondent is presently aged twenty-five years.  He was awarded a Diploma in Optical Dispensing from the Sydney Institute of Technology in 1995, after a three-year course which also involved some practical experience.  During that period he worked with OPSM, a well-known spectacle-manufacturing organization.  His work involved filling prescriptions for spectacles written by a neighbouring optometrist.  Subsequently, he worked in Canberra for Canberra Optics and then for Look of Australia.  The latter employer transferred him to Brisbane where he managed their local store.  At some stage, he met Victor Farid who is an older man.  The respondent was, at some stage, engaged to his daughter.  Farid retailed sunglasses.  They decided to go into business together and established the business operated by Shercind under the trade name “Eyetastique”.  Both were directors of Shercind.  The respondent said that his only experience in manufacturing sunglasses prior to establishing the Shercind business was in filling optometrists’ prescriptions.  In those circumstances, the standards with which I am presently concerned do not apply.  It is now appropriate to consider the evidence led on behalf of the prosecution.  I will return to the respondent’s evidence at a later stage. 

10. Sally-Anne Jurkof, is a director of a company called Tortilla Holdings Pty Ltd, trading as Hound Dog.  It sells fashion items through a variety of stores, including one store at Pacific Fair and one at Robina.  She has responsibility for purchasing.  In 1996 she met Farid and the respondent who were seeking to sell their range of sunglasses to her.  The range is described as “CR 39”, which I understand to be a trade term describing the substance from which the lenses are made.  The spectacles were notable for their coloured lenses.  This was high fashion in Europe at that time but had not been seen in Australia, at least not by Ms Jurkof.  She recalled discussion with Farid and the respondent about compliance with Australian Standards.  She is confident that they told her that their spectacles complied with all such standards.  She could not remember the exact conversation but said that as a matter of course, she would have inquired about such compliance.  I am willing to accept that she did so, but it is unlikely that any of the parties to the conversation went into any great detail about the relevant standards.  Spectacles were subsequently supplied by Shercind and retailed by Hound Dog.  There is no dispute that exs 4 and 6 were so supplied, nor that such supply occurred between 20 August 1997 and 7 January 1998.  It is also accepted that they were supplied bearing labels which stated:

    CR 39 lenses are premium optical quality lenses with added features such as impact resistance and increased clarity.  These lenses also contain high quality UV filters ensuring 100% UV protection, therefore complying with all Australian standards.

11. On 19 November 1997 Shercind entered into an agreement with Eye Protection Pty Ltd (a New South Wales company) for the supply of the CR 39 range for retail.  Clause 4.3 of the agreement provides:

    The company (Shercind) warrants and represents that all Products supplied to the Distributor will be fit for the purpose for which they are intended namely, protective eye wear for use both outdoors in sunlight (sic) and will comply with all relevant Australian standards, including standards relating to Ultra Violet protection.

12. On 6 March 1998 the witness C M Dunlop purchased ex 4 from the Hound Dog store at Pacific Fair and ex 6 from the Hound Dog store at Robina.  She first spoke to the respondent on 5 May 1998, at which time he told her that Shercind had recently commissioned testing of the spectacles in the CR 39 range and that of the eight pairs of spectacles submitted for testing, six had failed the “general purpose test” and six had passed the “specific purpose test”.  These tests determined the relevant labelling requirements.  There was other discussion about the nature of the failures, but the details are not relevant for present purposes.  He told her that Hound Dog was his predominant distributor.  He said that there were about twenty outlets in Queensland selling the CR 39 range, including the Hound Dog outlets, and approximately 200 pairs of those sunglasses in the outlets.  There were probably about 300 pairs in stores in Sydney and another 200 pairs in Melbourne.  He told her that an administrator had been appointed to supervise the affairs of Shercind. 

13. Associate Professor S J Dain explained the nature of the testing involved in determining labelling requirements pursuant to the relevant Australian Standards.  Those requirements are, to some extent, dictated by what is called “luminous transmission” which is a measurement of the extent to which light passes through the relevant lens.  The less light which passes through the lenses, the less suitable are the spectacles for use when, for example, driving.  Some forms of colouring are also not acceptable because of their effects on perceptions of traffic lights.

14. Andrew William Johnson is a manager employed by R A Gagie & Company, Chartered Accountants.  He was appointed on 25 March 1998 to undertake the administration of Shercind.  On that day he met Farid and the respondent.  The latter told him that the company sold sunglasses to service stations and fashion outlets and also manufactured a range of sunglasses known as “CR 39”.  That range was considered to be a significant asset, particularly because of the distribution agreement with Eye Protection.  The method of manufacture was explained to Mr Johnson and subsequently demonstrated to him at the factory.  Shercind’s involvement in manufacture included colouring the lenses.  There were various styles and frame sizes in the range and also different lens colours.  The respondent told Mr Johnson that the CR 39 range was his creation and his responsibility, and that if he wasn’t manufacturing it, he was selling it.

15. At some stage Mr Johnson became aware that Eye Protection was alleging that the spectacles supplied to it pursuant to the distribution agreement did not comply with relevant standards.  In April he wrote to that company asking them to detail the breaches.  He then spoke with the respondent and Farid.  They considered each clause in the agreement with a view to ascertaining the cause of Eye Protection’s complaint.  When they considered cl 4.3, Mr Johnson asked the respondent whether sunglasses in the range complied with Australian Standards.  He replied that they did, and that the lenses were made from a material called CR 39 which is superior in quality to material used in other lenses on the market.  Mr Johnson had no discussion with him about labelling until the question of compliance with Australian Standards became an issue on or about 16 April 1998 when Mr Wilson from Eye Protection raised the matter.

16. On 23 April 1998 Mr Johnson received a letter from Wilson dated 22 April 1998.  It is ex 12.  The relevant parts are as follows:

    … In early April this year, a senior representative of Sunshades (importers and wholesalers of sunglasses) first told me about the need for sunglasses to comply with Standard 1067 Part 1.

    I should record that, when deciding whether to sign the distribution agreement, I relied on Victor Farid’s assurances to me that the CR 39 range of sunglasses (and all other ranges of sunglasses Eyetastic (sic) would supply to my company) would comply with all official standards.  That is why the distribution agreement makes compliance a necessary condition of supply of sunglasses (see cl 4.3), and why my company has the benefit on the indemnity in cl 4.4.

    After I heard about Standard 1067 Part 1, I asked Sheref Matta whether the ‘sunglasses’ Eyetastique had supplied to my company complied with the standards.  He told me what I believe to be a true story: that they did not comply and that, when he and Victor Farid had first discussed setting up the business of manufacturing and supplying the CR 39 range of sunglasses, he had told Victor about the need to comply with the standards including labelling, and that Victor had told him, based on his many years seniority in business experience, ‘not to worry about that’.

    When I told him about my conversation with Sunshades, Sheref couldn’t satisfy himself (or me) that Victor had taken any steps at all to see the ‘sunglasses’ my company was supplied were actually fit to be called ‘sunglasses’ (which have an element of protection for the eyes) rather than merely ‘fashion eyewear’ or ‘fashion accessories’ (which lack the necessary elements of eye protection and quality control).  Sheref also told me that he would mention our discussion to you so that you could be fully informed and take appropriate action.

17. The balance of the letter is somewhat repetitive and seems designed to justify Eye Protection’s decision to repudiate the distribution agreement.

18. On 24 April 1998 the respondent wrote to Mr Johnson tendering his resignation as an employee of Shercind.  The letter (ex 11) is in the following form:

    This letter is to inform R A Gagie and Mr Farid that Sheref Matta wishes to place his resignation from Shercind Pty Ltd as an employee due to the following reasons.

    As a registered optician Mr Matta advised Mr Farid the dangers and consequences of carrying a manufactured range of sunglasses would having (sic) the sunglasses tested and labelled in accordance with Australian standards.  These warnings where receptively (sic) ignored until recently when Mr Matta informed the administrator of the problem at hand.  (week starting 7.4.98)

    Mr Matta strongly suggested that until tests had completed it would be in the best interests of our customers to have a recall of all sunglasses and that customers be credited.  Mr Matta should also point out that until further advice is seeked manufacturing be stopped as it may be an illegal practice without the supervision of a qualified optician (check with health department). 

    It is extremely regretful that this situation has occurred but is felt that this resignation may be the only way this problem may be rectified.  I would also like to express the fact that the timing of the resignation may influence the future of the company there for it is most important that I emphasize the loyalty and obligatory action taken by Mr Matta to stand by the company as negotiations took place with future investors, but as communication has broken down the lack of confidence in the company as it stands leaves me no choice but to re-enforce this resignation.  Mr Matta would also like this information to be of public knowledge. 

    It should also be addressed that all outstanding moneys should be forwarded to PO Box 495 Campise NSW 2194.  Ie (holiday pay, expenses).

    Once again I would like to express my deepest sadness but as I still remain a director I will stand by my obligations and responsibilities. 

    Yours sincerely

    Sheref Matta

19. Mr Johnson discussed his proposed resignation with the respondent and was told that he was considering taking the CR 39 range and going to work for Eye Protection in New South Wales.  Mr Johnson explained that he had responsibilities to the creditors.  The respondent accepted this and said that he wanted to do the right thing.  He withdrew his resignation. 

20. On 26 April, Wilson wrote again to Mr Johnson, apparently in response to faxes which were sent following receipt of ex 12.  That letter is ex 13.  The relevant part is as follows:

    Contrary to your suggestion that I have chosen not to inform you of our concerns regarding standards compliance, I have already indicated my belief that Sheref would mention to you my discussion with him (which was the first notice I had that the CR 39 may not have complied with the relevant standards) so you could be fully informed.  At the time, Sheref told me you were already aware of the issue and as early as 8 April 1998 were taking steps to change labelling on the CR 39 range of products. …

21. Mr Johnson discussed exs 12 and 13 with the respondent at some time towards the end of April, although the former understood from the latter that he had already seen copies of those letters which had been sent to him by Wilson.  The respondent did not indicate disagreement with any part of these letters except that he conceded that he had not told Mr Johnson about any problem concerning labelling “as early as 8 April”.  Mr Johnson understood that the respondent and Wilson had been discussing the possibility that the former might go to work for Eye Protection.  In cross-examination he said that prior to 16 April (when he first became aware of possible labelling problems), the respondent had claimed that the sunglasses complied with relevant standards.  Mr Johnson had the impression that he was surprised by the results of the laboratory testing which disclosed non-compliance, but this evidence (ts 53, ll 20-22) is somewhat speculative.

1. The significance of exs 11, 12 and 13 is in relation to the state of the respondent’s knowledge of non-compliance in the period during which spectacles were supplied to Hound Dog.  As the prosecutor must show relevant knowledge as at 20 August 1997, much depends upon the alleged conversation between the respondent and Farid at the beginning of their joint operation which would have been before that date.  Exhibits 12 and 13 are admissible because, according to Mr Johnson, they were put to the respondent for comment, and with one exception, he said nothing which would suggest that the contents were untrue in so far as they related to matters within his knowledge.  That is, he did not deny telling Mr Wilson the things alleged in the letters, nor that they were true, with the exception of the assertion concerning Mr Johnson’s knowledge as at 8 April.  If he said those things to Wilson, it would be evidence of their truth. 

2. The respondent agreed that exs 11, 12 and 13 were generated whilst he and Wilson were negotiating concerning his possible employment by Eye Protection.  Even after Wilson raised the possibility that the CR 39 range did not comply with relevant standards, he “still doubted it because I wasn’t 100% sure …”.  In one conversation he assured Wilson that the range satisfied ultra violet standards, to which Wilson replied, “Well there’s other standards”.  According to the respondent, that was the first suggestion ever made to him of a requirement for compliance with standards other than ultra violet standards.  He said that he only became aware of any labelling requirements when Wilson told him of them. (ts 86 ll 22-3)  He said that in earlier conversations with Farid and Mr Johnson, any comment about standards related to the ultra violet issue.  He had no firm knowledge of relevant standards or of any non-compliance until Shercind received the results of the testing it had requested.  He was not aware of Australian Standard 1067 prior to joining Shercind and had often made spectacles with fields of view less than 30 mm in diameter in the course of filling optometrists’ prescriptions at OPSM.  As I have said, the standards do not apply to prescription sunglasses.  He said that his statement in the letter of resignation (that he had warned Farid of the dangers of non-compliance) was false, although he had warned Farid that there were prescribed standards as to levels of “protection”, referring to ultra violet standards.

3. He admitted being involved in the labelling of the sunglasses in the CR 39 range, including the addition of the label to which I have previously referred.  He said:

   When I prepared the labels I mentioned that the glasses were distortion-free, better clarity and UV absorbed.  That was my understanding of the standard. 

   (ts 81, ll 1-5)

4. He said that the label was intended only to relate to standards for ultra violet protection, which were the only standards of which he was aware.  It is important to note that he did not suggest at any time that the attachment of this label was itself in purported satisfaction of any standard.  The label merely asserted that the spectacles in question complied with certain standards. 

5. He agreed that there was no requirement for an optician to be involved in the manufacture of sunglasses.  Notwithstanding this, in ex 11 he suggested that the manufacture of sunglasses without the supervision of a qualified optician may be “an illegal practice”.    He said that this passage was inserted by Wilson without demur on his part.  He agreed that while working with OPSM, he probably learnt that there were Australian Standards relating to spectacles.  He was aware of stickers on other sunglasses referring to “eye protection factor”, which he understood to relate to ultra violet protection but not to any prescribed standard.  Shercind used such labels on their cheaper sunglasses.  He did not suggest that such labels were required by any standard.  He agreed that he had not told Mr Johnson that he disagreed with any aspect of ex 12, although he denied in evidence that he had told Mr Wilson that he had warned Farid about the need to comply with standards other than as to ultra violet protection.  The respondent agreed that he had discussed with Mr Johnson the allegation in ex 13 that he had told Mr Johnson about non-compliance as early as 8 April, agreeing that this was untrue.  He may also have discussed with Mr Johnson a subsequent reference in the letter to Mr Johnson’s retaining his father for certain advice.  The resignation letter was part of a ploy devised by him and Wilson to assist him to withdraw from Shercind’s employment, and Eye Protection to withdraw from the distribution agreement with that company.

6. I should refer to one passage in re-examination at p 96, ll 21-24, as follows:

   Mr Matta, can you just clear up for us; did you tell Mr Johnson that you agree or that you did not disagree with that last paragraph on page 1 of that letter.  In other words, did you ever adopt it as your own statement?  …  No, I didn’t.

7. I mention this passage only to show that I have not overlooked it.  I do not consider that the answer to such a leading question can be accorded any substantial weight.  I should look to other aspects of the witness’s evidence in assessing his true position in this regard.

8. I record my satisfaction beyond all reasonable doubt as to the following elements of the alleged offences:

   ·That Shercind Pty Ltd is a corporation;

   ·That between 20 August 1997 and 7 March 1998 it supplied exs 4 and 6 to Tortilla Holdings Pty Ltd trading as Hound Dog;

   ·That such supply was in trade or commence;

   ·That the said goods were of a kind likely to be used by a consumer;

   ·That there was a prescribed consumer product safety standard in respect of such goods at the time of supply, namely Australian Standard: Sunglasses and Fashion Spectacles, AS 1067.1-1990

   ·That ex 4 did not comply with that standard in that:

   ·The fields of view of the lenses were less than 30 mm in diameter contrary to cl 2.1.2 of the Standard, and

   ·It was not labelled with the words “SPECIFIC PURPOSE SUNGLASSES - For protection against ultraviolet radiation in sunlight for specified environments”; and

   ·That ex 6 did not comply with that standard in that:

   ·It was not labelled with the words “SPECIFIC PURPOSE SUNGLASSES For protection against ultraviolet radiation in sunlight for specified environments” and with the additional words “NOT SUITABLE FOR DRIVING” or “THESE LENSES DISTORT COLOUR PERCEPTION AND ARE INAPPROPRIATE FOR DRIVING”.

   ·That the respondent was directly and knowingly concerned in the supply by Shercind of exs 4 and 6 to Hound Dog.

9. I do not understand any of the above matters to be in dispute.  The only issue is whether the respondent was aware of the contraventions at the earliest alleged time of supply, namely 20 August 1997.

10. I see no reason to doubt the accuracy of the information supplied by the respondent to Wilson concerning his previous association with Farid.  I do not accept the respondent’s evidence to the contrary.  He conspired with Wilson to facilitate his own withdrawal from the affairs of Shercind so that he could work for Wilson, and to extricate Eye Protection from an agreement with Shercind.  If he was willing to advance a false story to Mr Johnson for his own benefit, there is no reason why he would not lie now in order to defend himself.  My impression of him as a witness was generally unfavourable.  I have little doubt that he regrets the position in which he finds himself.  It may be that he was over-borne by Farid in their dealings.  I cannot see how either he or Wilson could have seen any advantage in claiming that the respondent had warned Farid at a very early stage of the need to comply with standards, including labelling standards unless, in the respondent’s case, it was so, and in Wilson’s case, he believed it to be so.  I suppose that had the respondent not been aware that his state of mind might be relevant in proceedings such as these, he may have perceived some marginal value in demonstrating that he had tried to ensure compliance with relevant standards, but it is difficult to discern.  It is infinitely more probable that the respondent told Wilson the whole story, and that Wilson adopted such parts of it as suited his needs.

11. This evidence is so important that I must be satisfied as to its truth beyond all reasonable doubt, that is that the respondent told Wilson that he had warned Farid of the need to comply with labelling provisions at the beginning of their CR 39 operation and that Farid had told him not to worry about it.  I must also be satisfied that the conversation with Farid occurred.  I am so satisfied of both matters.  I can see no other reasonable explanation of Wilson’s having said so in the letter, nor of the respondent’s failing to assert to the contrary when speaking to Mr Johnson about the letter.  I also accept Ms Jurkof’s evidence that in 1996, she sought assurance from Farid and the respondent that the CR 39 range complied with relevant standards and that such assurance was given by both of them.  I reject the respondent’s denial of this event.  I generally accept Ms Jurkof and Mr Johnson’s evidence where it conflicts with the respondent’s because of my adverse view of the latter as a witness. 

12. Having accepted that the alleged conversation with Farid occurred, it is necessary to consider whether that conversation, in light of all the other evidence, justifies the inference that the respondent was then aware of the relevant breaches of the standards.  It is convenient to again set out the actual passage.  It is:

    After I heard about Standard 1067 Part 1, I asked Sheref Matta whether the ‘sunglasses’ Eyetastique had supplied to my company complied with the standards.  He told me what I believe to be a true story: that they did not comply and that, when he and Victor Farid had first discussed setting up the business of manufacturing and supplying the CR 39 range of sunglasses, he had told Victor about the need to comply with the standards including labelling, and that Victor had told him, based on his many years seniority in business experience, ‘not to worry about that’.

13. The conversation clearly concerned the CR 39 range, and labelling was mentioned.  In evidence the respondent offered no explanation as to his meaning, choosing to deny that the conversation occurred, which evidence I reject.  He said that he had warned as to the need to ensure compliance with standards concerning ultra violet protection.  He did not suggest that this involved labelling.  Indeed, his claim is that he was not aware of any labelling requirement until Wilson told him about it in 1998.  The conversation with Farid demonstrates that he then believed that labels of some sort were necessary, and because he chose to deny the conversation, he has offered no explanation as to the requirement for labelling which he had in mind.

14. As I have said, Shercind’s contribution to the manufacture of these spectacles was to colour the lenses.  Professor Dain said that such colouring, at least to some extent, contributed to the need for labelling.  An optician is trained in the manufacture of lenses for the correction of sight defects.  This is very much concerned with the passage of light through lenses.  It is likely that the respondent would have realized that colouring lenses could render them unsuitable for such purposes as driving.  He had experience in colouring lenses whilst employed by OPSM.

15. Prior to 20 August 1997, the respondent:

    ·Knew that some sort of labelling was required;

    ·Knew that Farid proposed to market the sunglasses without that labelling;

    ·Knew that the lenses were coloured; and

    ·Does not suggest that the label which was affixed to the spectacles was in compliance with any required standard.

16. He:

    ·Has not suggested that his concern for labelling was associated with ultra violet protection;

    ·Has not suggested that there were any other labelling requirements relevant to the CR 39 range apart from those which are presently relevant; and

    ·Has offered no explanation as to the labelling which he had in mind when he spoke to Farid.

17. Other relevant facts are that:

    ·The relevant labelling requirements are, at least in part, attributable to the colouring of the lenses carried out by Shercind;

    ·The respondent is a qualified optician; and

    ·The respondent developed the CR 39 range.

18. Had the respondent not given evidence, the position may have been otherwise, but the point is that he has chosen to give evidence and has claimed that he did not warn Farid about the need for labelling.  I have rejected his evidence on that score.  It may be that an inference of guilt can be drawn from that lie.  In any event, he has not sought to suggest that such reference to labelling was to any requirement other than those presently relevant.  I therefore am satisfied beyond all reasonable doubt that it was a reference to the labelling required by those requirements.  It is true that it would not have been possible to say with certainty that the specified labelling was necessary unless appropriate tests had been conducted.  There is no evidence of such testing until 1998.  Nonetheless, I infer that the respondent was aware of the likely problem.  He may have chosen to take no steps to ascertain the position, or he may have known with sufficient certainty that the results would be unfavourable.  In either case, his state of knowledge was sufficient to establish that he was knowingly concerned in Shercind’s contraventions.  I should say something about the second alleged deficiency in respect of ex 4, concerning field of view.  As far as I can see, there is no evidence that the respondent was aware of that deficiency at any relevant time.  That particular is not proven. 

19. I am satisfied beyond reasonable doubt of the respondent’s guilt with respect to the charge particularized in application QG 125/98 (excluding the particular concerning the diameter of the field of view).  I am also satisfied as to the guilt of the respondent with respect to the offence particularized in application QG 127/98.  I will hear submissions as to penalty and costs.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:             29 October 1999

Counsel for the Applicant:	Mr D Boddice
Solicitor for the Applicant:	Commonwealth Director of Public Prosecutions
Counsel for the Respondent:	Mr N Ferrett
Date of Hearing:	19 October 1999
Date of Judgment:	29 October 1999