Chaudhary, S.I v Chaudharys Oriental Carpet Palace & Durret

[1987] FCA 401

CATCHWORDS

Trade Practices - Prosecutlon - whether proved beyond

reasonable doubt admittedly wrong label attached to goods

constltuted representation of respondent - whether any

reasonable hypothesls consistent with innocence - whether

proved beyond reasonable doubt that specification of "current

value" in "certificate of origin" was a representation that

goods were of a particular quality within the meaning of

s.53(a) of the Trade Practices Act 1974 - Crimes Act 1914.

Trade Practices Act 1974 (Cth): ss..53(a), 79(1).

Crimes Act 1914 (Cth): s.5

VG Nos. 86,94,98,122,123, 124, 125, 126, 127, 128, 129, 130,

131, 132, 133, 134, 135, 136 of 1984

ALAN RAYMOND DUCRET	v.	CHAUDHARY'S ORIENTAL CARPET PALACE
PTY. LTD.

ALAN RAYMOND DUCRET	v. S. I. CHAUDHARY
Ryan 3.
27 July 1987
Melbourne

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IN THE FEDERAL COURT OF AUSTRALIA	)
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VICTORTA	DISTRICT REGISTRY	) VG Nos. 86,94,98,122,123,
) 124, 125, 126, 127, 128,

GENERAL DIVISIOJ	)	129, 130, 131, 132, 133,
)	134, 135, 136 of 1984

Between: ALAN RAYMOND DUCRFT

I (Prosecutor)

- And: CHAUDHARY'S ORIENTAL

i CARPET PALACE PTY. LTD.

(Defendant)

(VG Nos.94,98,122,123,

124,125.126.127,128,129

i and 130 of 1984)

Between: ALAN RAYMOND DUCRET

(Prosecutor)

-

And: S. I. CHAUDHARY

(Defendant)

(VG Nos. 86, 131, 132,	1 ,
, .
133, 134, 135, 136 of	, _ _ .
1984)

Judqe Makinq Order:	Ryan J.
Date of Order:	27 July 1987
Where Made:	Melbourne

MINUTE OF ORDER

THE COURT ORDERS THAT:

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1.	The summonses numbered VG	1 2 2 , 124 and 135	be
dismissed.

2 . The defendant, Chaudhary's Oriental Carpet Palace Pty.

Ltd., be convlcted of the charge contained i n the

summons numbered VG 126 and fined the sum of $250.00

3 . The prosecution pay the defendants' costs reserved by Keely J. on 9 December 1985 and three-quarters of the defendants' other costs.

m: Settlement and entry of orders is dealt with in Order

36 of the Federal Court Rules.

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I	IN THE FEDERAL COURT OF AUSTRALIA	)
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VICTORIA DISTRICT REGISTRY ) VG N05. 86,94 ,98 ,122 ,123,

I 124 , 1 2 5 , 1 2 6 , 1 2 7 , 1 2 8 ,

I GENERAL DIVISION 129 , 130 , 131, 132 , 133,

1 3 4 , 135, 136 of 1984

Between: ALAN RAYMOND DUCRET

(Prosecutor)

i m: CHAUDHARY'S ORIENTAL

CARPET PALACE PTY. LTD.

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!	(Defendant)
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(VG Nos.94,98,122,123,

124 ,125 .126.127,128,129

I and 130 of 1 9 8 4 )

Between: ALAN RAYMOND DUCRET

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(Prosecutor)

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I m: S. I. CHAUDHARY

(Defendant)

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I	(VG Nos. 86, 131, 132 ,
133, 134 , 135, 136 of
1 9 8 4 )

Coram: Ryan J.

Date: 27 J u l y 1 9 8 7

REASONS FOR JUDGMENT

On 1 7 Ju ly 1987' I ruled on a submission on behalf of

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the defendants that there was no case to answer on any of the

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summonses except VG 1 2 6 of 1984 which is related to an

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information against Chaudhdry's O r i r r l L d l CdrpeL Palace Pty.

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Ltd. ("the Company"). The statement of charge set out in

that summons is in the following terms:

"That on or about 23rd July 1983 at Melbourne in

the State of Victoria Chaudhary's Oriental Carpet

Palace Pty. Ltd. a corporation wlthin the meaning

of the Trade Practices Act 1974, of 1005 High

Street, Armadale in the said State did commit an offence against section 79(1) of the said Act in that in contravention of section 53(a) of the

said Act, it did in trade or commerce in

connection with the possible supply of an 'Afghan

Runner' rug to Alan Raymond Ducret falsely

represent in writing to the said Alan Raymond

Ducret that the said rug was of a particular

style which it was not, namely that it was a

'Shah Prayer Rug' . I'

"he following particulars were given of that charge:

"1. On or about 23rd July 1983 Alan Raymond

Ducret ('Ducret') purchased an 'Afghan

Runner' rug measuring approximately 150

cm. X 57 cm. ( 'the rug' ) from the

Defendant the a premises the of

Defendant.

2. Prior to the sale referred to in paragraph

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1 hereof the rug was offered for sale to

the members of the public with a label

attached to it upon which was written the

words 'Shah Prayer Rug'.

3. representation The referred in to

paragraph 2 hereof was read by Ducret

prior to him purchasing the rug.

4 . The said representation was false in that

the rug was not a 'Shah Prayer Rug' but

was a low quality Afghan rug.

5. By reason

of the matters aforesaid, the Defendant falsely represented to Ducret that the rug was of a particular style which it was not, namely that it was a

'Shah Prayer Rug', such representation

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being made in connection with the posslble

supply of the rug to Ducret."

The evidence disclosed that the prosecutor, Mr. Ducret,

attended at the Company's premises in response to some six

full page advertisements which the Company had inserted in

the "Aye" newspaper of that day. Like the advertisements

which had appeared on 30 April 1983, those of 23 July

appeared lmmediately after "an advertising feature" which

conslsted of editorial content and photographs. On p.18 of

the "Age" for 23 July appeared a "stylized price ticket",

similar to those in others of the Company's advertisements,

on which was printed "Usually $396, Sale Price $198, Now Only

$100'' with a cross through each of the first two prices.

Ranged around the price ticket were photographs of five

different rugs, one of which was labelled "Afghan Shah Prayer

Rug", and another of which had printed below and parallel to

its lower edge "Mghan Bokhara Runners".

When Mr. Ducret arrived at the Company's premises at	b ; _ .
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about 8.35 a.m. there was already a long queue of people L

stretching from the front door along High Street. After the

shop opened some rugs being described by Mr. Chaudhary as

"the $12.50 ones" were handed out to shoppers in the queue

for inspection. When Mr. Ducret galned admittance to the

shop at about 11 a.m., he found carpets ranged about in piles

many of which had been picked over by earlier shoppers. In

one of those piles he found a rug with a label attached to it

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by a plastic "swing" thread. The label was inscribed "Shah

Prayer Rug - made in Afghan". Tt also bore what Mr. Ducret

called "a price structure ... it was $398 crossed out, $198

crossed out and $100 left there as the selling prlce". Upon comparing the label with the advertisement on p.18 of the

"Age", Mr. Ducret found that the "price structure"

corresponded exactly with that in the advertisement, and the

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description of the rug on the label corresponded with the

words "Afghan Shah Prayer Rug" below one of the carpets

illustrated on that page of the advertisement.

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Mr. Ducret took that rug, and another which he had

decided to purchase, to a female sales assistant who was taking money from customers and writing receipts. She tore

the cardboard labels off the two rugs brought to her by Mr.

Ducret and wrote out a receipt, the relevant part of whlch

read "Shah Prayer Rug $100". Mr. Ducret then completed his

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purchase and took both rugs with him from	the shop.	.-
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It has been admitted on behalf of the Company that the L .

rug which Mr. Ducret acquired was not a "Shah Prayer Rug".

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It was probably an "Afghan Bokhara Runner", another of the

types of rug illustrated on p.18 of the "Age" of 23 July

1984. The rug purchased by Mr. Ducret was tendered in

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evidence and has still inserted in it the plastic "swing" j

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thread, but the label deposed Lo by Mr. llucret has not been l

produced. Presumably, it was destroyed shortly after it was

detached by the female sales assistant.

On behalf of the Company, it is submltted that the

Court cannot be satisfied beyond reasonable doubt that the admittedly wrong label was attached to Mr. Ducret‘s rug by a servant or agent of the Company. It was possible, so It was argued, that a member of the public found the label for a “Shah Prayer Rug“ lying loose in the Company‘s shop, and by

bending the lug at the end of the plastic “swing“ thread,

mistakenly attached the label to the rug later purchased by	I .:
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Mr. Ducret. It is significant that w h m the hypothesis that

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the label had been attached by mistake to his rug was raised

wlth Mr. Ducret in cross-examination, he conceded that a

mlstake may have been made, but would not acknowledge the

possibllity of its being made by somebody other than one of

the shop attendants. The relevant passage from Mr. Ducret‘s

evidence is as follows:

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‘“R FAJGENBAUM: But it is apparent to you that

it could have been a mistake? I am not

asking you to say there was but ---?---

MR DUCRET: You mean by someone in the shop

putting the tags on?

Yes? --- Sure.

And it is likely that it might have been a

l mistake because the prices structure for

the prayer rug was the same as that for

the runner, which you ultimately got?	---
That could well have been.

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Does Lhe ad not say that the price structure is

--- It does, yes. the same; that is, $396 to $198 to $loo?

It is also posslble, is it not, that somebody

mlght have picked up a loose tag on the

floor and put it back on the wrong rug?

--- It is possible, yes.

I mean the tags might have fallen off the rugs

and - - -3--- You mean one of the shop

attendants tidying things up and putting

it on the wrong rug?

Yes? --- I suppose that is possible."

Since there is no dlrect evidence as to how the wrong label

came to be attached to Mr. Ducret's rug, the court is

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required to draw an inference from the proved circumstances.

As the prosecution sustains the criminal onus of proof, those

circumstances must exclude any reasonable hypothesis

consistent with innocence; (see Chamberlain v. The Oueen

[No. 23 (1984) 153 CLR 521 at 536). Some guidance on what is

a reasonable hypothesis is provlded by the judgment of

Denning J. (as he then was) in Miller v. Minister of Pensions

C19477 2 All ER 372 at 373 where his Lordship observed:

"Proof beyond a reasonable doubt does not mean

proof beyond the shadow of a doubt. The law

would fail to protect the community if it

admitted fanciful possibilities to deflect the

course of justice. If the evidence is so strong

against aman as to leave only a remote

possibility in his favour, which can be dismissed

with the sentence 'of course it is possible but

not in the least probable', the case is proved

beyond reasonable doubt, but	nothmg short of
that will sufflce."

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In the present case the decence of mistake afforded by

s.B5(l)(a) o€ the Trade Practices Act 1974 ("The Act") has not been invoked, so the Inference that the label containing the words "Shah Prayer Rug - Made I n Afghan" was mistakenly

attached to Mr. Ducret's rug by a servant	or agent of the
Company is of no avall to the defendant.

I consider that the posslbility that a member of the

public aEfixed the mistaken label to Mr. Ducret's rug is so

remote as not to amount to a reasonable hypothesls in all the

circumstances. The hypothesis postulates, first, that a

member of the public found the "Shah Prayer Rug" label

detached from the rug to which it had correctly been

attached, and located Mr. Ducret's rug being another of all

the rugs in the store from which the label had also become

detached from the plastic "swing" thread. It next requires

that the same customer who, ex hvpothesi, did not wish to

purchase Mr. Ducret's rug, expended some time and manual

dexterity in manipulating the lug on the p1astic"swing"thread

in Mr. Ducret's rug through the hole in the "S ah Prayer Rug"

label. All of those three acts are required by the

hypothesis t o have been performed in circumstances where the

queue outside the shop must have imposed considerable

pressure on customers to complete their purchases and leave

the premises as quickly as practicable, and where the

unauthorized attachment o€ a label to a rug by a customer in

the way described would have been likely to excite suspicion,

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or, at least, the attention of the Company's rjtaf€.

Accordingly, the hypothesis advanced by Mr. ra~genbaum Q.C.,

does not leave me with a reasonable doubt that the

i	representation made by the attachment	of the "Shah Prayer
Rug" label to Mr. Ducret's rug was that	of the Company. The

Company must therefore be convicted of the charge contained

in summons VG 126 of 1984.

On 17 July 1987, I ruled that there was a case to

answer in respect of the charges against the Company

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contained in summonses numbered VG 122 and 124 of 1984 and the charge against Mr. Chaudhary in VG 135. All of those

charges arose out of the ascription in two separate

"certificates of origin" of a specific money amount as the

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"current value" of a "Princess Bokhara" rug made in Pakistan.

After my ruling, the defendants elected not to call evidence.

It is now necessary, therefore, for the Court in accordance

with principle laid down by the High Court in May v.

O'Sullivan (1955) 92 CLR 654 at 6 5 8 , to decide whether, on

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the whole of the evidence before it, it is satisfied beyond

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reasonable doubt that the defendants are guilty of those

charges.

I have indicated in my ruling of 17 July that the

evidence as it then stood permitted the finding that

representations contained in the "certificates of origin" in respect of the "Princess Bokhara" rug supplied to Mr. Jackson

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were made "In cormexion" with the supply of that rug, as that

phrase is used in 5.53 of the Act. Havmg again reviewed

that evidence, I am satisfied beyond reasonable doubt that

the necessary connexion has been established.

It was next submitted on behalf of the defendants that

the Court could not be satisfied beyond reasonable doubt that

the representatlon in each of the "certificates of origin"

that the "current value"	of the "Princess Bokhara" rug was
respectively $1,675 and	$1300 was anything more than the

designation of the maximum "usual price" of any other rug

from the Company's stock for which Mr. Jackson could at any

time exchange his rug as long as it was undamaged. I

expressed the view, in my earlier uling, that an interpretation of each certificate was open on the evidence by which the "current value" represented both the maximum

usual price of another carpet from the Company's stock for

which the subject carpet could be exchanged, and the t .

Company's assertion of the present worth of the subject

carpet i t s e l f . That interpretation, I am persuaded beyond

reasonable doubt, on reviewing the evidence, should be

adopted. I have been influenced in coming to that

conclusion, by, in particular, the inclusion of the reference

t o "current value" in the body of the certlficate as one of

"the following characteristics" which the carpet was

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guaranteed to have, and by Mr. Chaudhary's statement, when

interviewed by Mr. Ducret, that the "current value" speciried

on the certificate meant:

"Replacement value. Me inflate the discounted

sales price by about three times for insurance

purposes. The carpet 1s worth about three times

the amount we sell them for during sales. The

figure represents my belief as to the true value

of the carpets. "

Had some documents other than the "Certificate of origin"	t-.
been used by the Company when requested to certify the value

of a rug for insurance or other purposes the Company could

have adduced the evidence to that effect. Another indication

that the "current value" designated on the certificate was

intended to refer to something more than the possible,

future, exchange of the rug is the fact that on the second

certificate in respect of the "Princess Bokhara" rug, its

current- value was stated to be $1300 which did not

approximate to its "usual price" indicated to Mr. Jackson by

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Mr. Ali Khan	as being about $1600.	i -
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I	The final submission on behalf of the defendants was that, on the whole of the evidence, the Court could not be satisfied beyond reasonable doubt that each representation in
the respective "certificates of origin" was that the rug was
"of a particular quality" within the meaning of s.53(a) of
the Act. I accepted, in ruling on the submission of no case
to answer that "a particular quality" is used in s.53 in the

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wide sense of one of the virtues, attribules, properties or

speclal reatures of the goods or services of whlch it is

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predicated. A particular quality m that sense may dictate

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the value of the goods or services so inexorably that a

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they possess that quality. However, on all of the evidence

in the present case, I am not satisfied beyond reasonable

doubt that the speclfication of "current value" in either of

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the "certificates of origin" had that effect. The conclusion i l

is at least equally open that it represented an assessment,

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lnvolving some exercise of subjective judgment by the

Company, and the indlvidual maker of the certificate of the

value of the rug in the light, not of one particular quality,

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or a collection of particular qualities, but of its general

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quality when compared with other oriental rugs of similar

size. That assessment, by an inference which I consider to

be reasonably available, would also have been based in part

on extrinsic factors like the cost of acquiring such a rug

and landing it in Australia, and the prices being asked for

similar rugs by other retailers in this country.

Accordingly, the representation which embodied it went beyond

an objectively verifiable statement about one or more of the

attributes or special features intrinsic to the rug itself.

In that sense, I am not satisfied beyond reasonable doubt

that either representation of "current value" was one that

the rug was of a particular quality, as required by s.53(a).

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The summonses numbered VG 127, 124 and 135 of 1984 must

therefore be dismissed. I will hear counsel on penalty in VG

126, and on the question of costs.

I certify that this and the

preceding eleven (11) pages are

a true copy of the Reasons f o r

Judgment herein of the

Honourable Mr. Justice Ryan.

Dated: ~3.7- 7 2-7

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