Director of Consumer Affairs Victoria v H&C Trading Pty Ltd
[2010] VSC 629
•23 December 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 4229 of 2010
| DIRECTOR OF CONSUMER AFFAIRS VICTORIA | Plaintiff |
| v | |
| H&C TRADING PTY LTD (ACN 117 113 265) | First Defendant |
| And | |
| DAMON HONG CHIANG TAN | Second Defendant |
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JUDGE: | Daly, AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17 November 2010 | |
DATE OF JUDGMENT: | 23 December 2010 | |
CASE MAY BE CITED AS: | Director of Consumer Affairs Victoria v H&C Trading Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 629 | |
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TRADE PRACTICES ― Consumer Protection ― unsafe toys ― consideration of terms of appropriate relief ― Fair Trading Act (Vic) 1999 ss 33, 40, 44, 129A, 149A, 151A, 153, 158 ― extraterritorial application of Fair Trading Act
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Bhojani with Ms Linsey Walker | Mr P Hiland |
| For the First Defendant | No appearance | |
| For the Second Defendant | In person |
HER HONOUR:
Introduction
H&C Trading Pty Ltd was registered on 14 November 2005. Its principal place of business is at 22 Ebden Street, Moorabbin (“Moorabbin premises”). Mr Tan has been a director of H&C Trading since its inception. Since November 2005, H&C Trading has been carrying on a business of importing and wholesaling various goods, including children’s toys.
On 19 October 2009, a number of Consumer Affairs Victoria (“Consumer Affairs”) inspectors executed a search warrant at the Moorabbin premises. Various quantities of toys were seized by the inspectors pursuant to the terms of the warrant. The Director of Consumer Affairs (“Director”) alleges that these toys breach Victoria’s product safety laws in various respects. These toys fall into two categories: the first category are toys which may be capable of ejecting projectiles at a speed and force which would cause a risk of eye injuries (“toy guns”) and the second category includes toys which are attractive to children under three years of age but allegedly do not comply with the regulations governing toys used by children under three (“pre-school toys”).
The toy guns seized include the following:
(a)“Magnum”-style toy gun;
(b)“Police Jungle Storm” children’s toy gun set;
(c)“Police Super Power” children’s toy gun set;
(d)“Military Series” children’s toy gun set; and
(e)“Super Police” children’s toy gun set.
The pre-school toys seized include the following:
(a)a “children’s toy bath set”; and
(b)a “Musical Fun time Keyboard”.
On 11 February 2010, the Director issued and served upon both H&C Trading and its director Mr Tan notices under s 106I(1)(a) and (b) of the Fair Trading Act 1999 (“Act”) to provide specified information and documents to the Director. The Director also served upon Mr Tan a notice under s 106I(1)(c) of the Act which required Mr Tan to attend before Mr Anthony McMahon as the Director’s delegate on 4 March 2010 for examination under oath or affirmation.
On 4 March 2010, Mr Tan delivered to Mr Hiland, the solicitor for the Director, a bundle of documents in response to the notices, primarily tax invoices and other documentation which identified sales of the toy guns and pre-school toys to retailers in the course of H&C Trading’s wholesaling business, and attended to give evidence under oath before Mr McMahon.
The Director issued this proceeding on 4 August 2010. The matter came on before Habersberger J on 11 August 2010. On that date, orders were made by consent which provided that H&C Trading publish product safety warnings and recall notices with respect to the toy guns and the pre-school toys in major metropolitan newspapers in Victoria, Queensland and Tasmania, and that H&C Trading pay a full refund to persons returning those goods and securely store those goods.
On 11 October 2010, Mr Tan sent to the solicitor for the Director by email documents which appear to confirm that the required advertisements had been arranged in accordance with the orders of 11 August 2010. Mr Tan also provided a copy of a letter confirming that he had obtained membership of the Australian Compliance Institute.
Relief sought by the Director
The Director seeks, in summary, the following relief against H&C Trading and Mr Tan:
(a)declarations in respect of the alleged breaches of the product safety provisions of the Act;
(b)orders pursuant to section 149A or 158 of the Act providing for the publication of product warnings, product recall notices, and the provision of refunds to customers;
(c)a “cease trading” injunction pursuant to 151A of the Act restraining the defendants supplying goods which are the subject of product safety orders until H&C Trading has implemented a compliance program acceptable to the Director;
(d)orders pursuant to sections 129A and 149A(3)(f) of the Act permitting the Director to destroy and dispose of the seized goods, and any additional goods returned to H&C Trading at the defendants’ cost; and
(e)the defendants pay the Director’s costs of the proceeding, including reserved costs.
Relevant Legislation
Section 33 of the Act provides:
33.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.
Section 44 of the Act provides:
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.
Section 145 of the Act provides:
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.
Section 149A of the Act provides:
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.
Section 151A of the Act provides:
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.
Section 153 of the Act provides:
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.
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
In this proceeding, the Director alleges that H&C Trading has breached a number of product safety laws by offering for sale and supplying the toy guns and the children’s toys.
In a recent proceeding in which allegations were made by the Director against another toy importing and wholesaling business, Director of Consumer Affairs v DW International Trading Pty Ltd v Dong,[1] Dixon J comprehensively reviewed the product safety statutory and regulatory framework applicable to proceedings of this nature. An extract of his judgment is gratefully reproduced (with appropriate adaptations) in paragraphs 19 to 30 below.
[1][2010] VSC 515.
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.
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.
The permanent ban order relevant to this case is 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.
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 (“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.
The Fair Trading (Safety Standard) (Children’s Toys) Regulations 2004 (“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:
. . .
(d) squeeze toys;
. . .
(g) pounding toys;
. . .
(i) toys for use in a bathtub; and
. . .
(k) musical chime toys.
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” (“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)”, (“Age Determination Guidelines”).
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 which, when subject to reasonably foreseeable abuse, fit entirely into the small parts cylinder when tested in accordance with the “small parts test”.
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.
Guideline B.4.2 of Annex B to the ISO Standard identifies toys appropriate for children under three years of age, including squeeze toys, bathtub toys, pounding toys and animal figures. Guideline B.4.2 also identifies the following class of toys as generally having characteristics appropriate for children under three years of age:
(a)Action toys – simple action toys for the identification of sounds or pictures and surprise-action toys; and
(b)Early learning toys – toys that require simple physical motions such as turning wheels or knobs, pulling and letting go.
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.
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.
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.
Evidence
In this proceeding, the questions for the Court to determine are as follows:
(a)whether the toy guns are prohibited from sale in Victoria by reason of the Projectile Toy Ban Order; and
(b)whether, despite their packaging being labelled such as to indicate the toys are not suitable for children under three, the pre-school toys satisfy the definition of “toy” contained in Regulation 4 of the Regulations and, if so, whether they comply with clause 4 of the ISO Standard.
The Director relied upon the following affidavits:
(a)an affidavit sworn by Inspector Tony Chrysostomou, sworn 4 August 2010;
(b)an affidavit sworn by Inspector Charles Charalambous, sworn 6 August 2010; and
(c)affidavits sworn by Mr Peter Hiland on 6 August 2010, 19 October 2010, and 9 November 2010.
Samples of each of the toy guns and the pre-school toys were tendered in evidence.
Inspector Chrysostomou gave the following evidence:
(a)he is employed as a Product Safety Officer in the Compliance and Enforcement Branch of Consumer Affairs;
(b)his primary role is to investigate and take action upon complaints regarding unsafe and dangerous products;
(c)on or about 12 October 2009, a Consumer Affairs staff member purchased a plastic toy “magnum” type children’s toy gun from a shop in Lakes Entrance;
(d)he observed Inspector Charalambous test the toy gun to assess whether it might be a toy which was prohibited by the terms of the Projectile Toy Ban Order;
(e)he observed Inspector Chrysostomou insert a two inch steel nail into the chamber of the toy gun, which travelled a number of metres after Inspector Chrysostomou pulled the trigger;
(f)along with Inspector McCulloch, he attended the Moorabbin premises on 15 October 2009. The Moorabbin premises contained a showroom of gifts, homewares and toys, including the “magnum” style toy gun. Most of the goods had a price tag;
(g)on 16 October 2009, he obtained a search warrant under section 122 of the Act with respect to the Moorabbin premises;
(h)he attended at the Moorabbin premises on 19 October 2009 to execute the search warrant, accompanied by Inspectors Charalambous, McCulloch and Walker. He spoke with a Mr Taing Tan, who telephoned Mr Damon Tan;
(i)during the course of the execution of the search warrant he observed, in addition to the plastic “magnum” style toy guns, the following projectile toys on display and apparently offered for sale:
(i)“Police Jungle Storm” children’s toy gun set;
(ii)“Police Super Power” children’s toy gun set;
(iii)“Military Series” children’s toy gun set; and
(iv)“Super Police” children’s toy gun set.
(j)he observed Inspector Chrysostomou open the packaging of each of these items, remove the toy guns, place a nail in the chamber of those toy guns and pull the trigger. He observed that on each occasion the nail was expelled from the barrel with enough force to drive the nail a distance of over a metre;
(k)he also observed the following toys on display in the showroom which he believed from his experience may pose choking hazards to children under three years of age:
(i)“Children’s Toy Bath Set” with animal characters that make a squeaking sound from a noisemaker or squeaker when squeezed; and
(ii)“Musical Fun Time Keyboard”;
(l)the inspectors counted the stock of the above items stored in the Moorabbin premises;
(m)during the course of the inspection, Mr Damon Tan entered the Moorabbin premises. Inspector Chrysostomou and Mr Tan had a conversation about the management and ownership of H&C Trading. Mr Tan confirmed that he had arranged for H&C Trading to import all of the toys, save for the “Children’s Toy Bath Set” which was given to him by a friend to sell on his friend’s behalf. In response to some questions about the numbers of goods imported and sold and the numbers remaining in stock, Mr Tan consulted some computer and paper records in his office and used these to compile a handwritten document which Mr Tan provided to him. The entire stock of goods of each of the items were seized from the Moorabbin premises and placed in secure storage; and
(n)on or about 18 December 2009, he observed Inspector Charalambous perform a series of tests on a sample of the seized goods to assess their compliance with the safety standards prescribed by the Regulations and the Projectile Toy Ban Order (save for the “Musical Fun Time Keyboard”). The following table summarises the results of the testing of his observations of the sample goods:
Table 1:Observations of testing observed by Inspector Chrysostomou
| Toy Gun Set | Projectile | No. of | Observations |
| “Military Series” | Pencil | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
| “Police Jungle Storm” | Pencil | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
| Magnum “Qiangkou” | Nail | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. On first occasion, nail bounced off wall behind test foil and re-penetrated foil. |
| “Police Super Power” | Pen insert (nib and ink tube) | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
| “Super Police Heroic World Force” | Nail | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
Inspector Charalambous deposed as follows:
(a) he is employed in the Compliance and Enforcement Branch of Consumer Affairs as a Senior Product Safety Officer and has been a Product Safety Officer since 2002;
(b) his role is primarily to investigate complaints regarding the safety performance, package and labelling of consumer products. His investigation of those complaints generally requires him to examine and assess test subject products in accordance with the technical requirements of the Ban Orders and safety standards imposed under Part 3 of the Act and draw conclusions as to those products’ safety performance, packaging and labelling;
(c) he provides an overview of the statutory framework in respect of product safety, with particular reference to the safety requirements for children’s toys and the testing methods used for determining whether products comply with those safety standards;
(d) he gave evidence regarding the previous product safety concerns regarding the defendants. In particular, on 31 July 2006, he attended the Moorabbin premises, together with Inspector McCulloch, and observed certain products being offered for sale to the public. He was part of a team that executed a search warrant which resulted in three kinds of toys being seized. He conducted tests on samples of those toys and determined that each of those toys did not comply with the requirements of the Regulations (in relation to toys suitable for children under the age of three);
(e) on 31 October 2006, both the first and second defendants (along with a former director of H&C Trading, Mr Tiang Meng Tan) offered and the Director accepted an undertaking under section 146 of the Act as a means of addressing the admitted non compliance with section 33 of the Act. In that undertaking, each of the first and second defendants undertook to the Director that they would:
(i) cease supplying or offering to supply at any time in the future products which are subject to prescribed safety standards; and
(ii) cease supplying or offering to supply at any time in the future products which do not comply with mandatory product safety standards and product ban orders, as listed on the Consumer Affairs website;
(f)he gave evidence regarding the testing of the “Magnum” style toy gun at Consumer Affairs’ offices (see paragraph 35(d) above);
(g)he attended the execution of the search warrant at the Moorabbin premises on 19 October 2009 and tested certain toys (the toy guns) on site. He observed Inspector Chrysostomou speaking with Mr Damon Tan and he took a number of photographs of the Moorabbin premises and the goods seized in accordance with the search warrant; and
(h)he gave evidence and exhibited a document which showed what information was made available to the public regarding banned and regulated products on the Consumer Affairs website.
Inspector Charalambous’ affidavit also provided extensive detail regarding his testing of the seized goods and the observations that he made regarding the seized goods.
Inspector Charalambous’ observations regarding the age grading of the pre-school toys are summarised in the following table:
Table 2: Observations relating to the age grading of the ‘Fun Time Keyboard’ and ‘Children’s Toy’ bath set with squeezable figures.
| Subject good | Manufacture and design | Labelled | Marketed |
| “Fun Time Keyboard” | Toy musical organ that plays musical notes/sounds when the keys are pressed and featuring brightly coloured push buttons in the shape of stars, musical notes, cartoon-style animal figures and cartoon-style farmer figure that, when pressed, play different melodies, songs or make animal noises. Simply operated by pressing the keys and push buttons. | Labelled on the front of the packaging with the wording: “Ages 3 and Up” Carrying, on the back of the packaging, the following warning and symbol: “! WARNING: Choking Hazard-Small parts. Not for children under 3 years.” and carrying the following symbol: | Brightly coloured packaging with lettering in cartoon-style font and featuring cartoon figures. |
| “Children’s Toy” bath set with squeezable figures | Bath toy featuring a miniature bath, with three brightly coloured squeezable animal or cartoon figures that squeak when squeezed. | Labelled on the front and back of the packaging with the warnings: “Not suitable for children under 3 years” and “! WARNING: Choking Hazard-Small parts. Not for children under 3 years.” and carrying the following symbol: | Brightly coloured packaging with lettering in cartoon-style font and featuring cartoon child and animal characters. |
On the basis of Inspector Charalambous’ examination of the pre-school toys, he formed the view that those toys, in relation to:
(a) Manufacture and design:
(i) match the physical ability of a child under 3 years of age to manipulate and play with the specific features of each of the toys;
(ii) match the mental ability of a child under 3 years of age to understand how to use the toy; and
(iii) meet the play needs and interests of a child under 3 years of age.
(b) Marketing:
(i) the brightly-coloured packaging;
(ii) the artwork that would appeal to young children; and
(iii) the cartoon or fantasy characters –
would appeal to children under the age of 3 years.
(c) Labelling:
Insector Charalambous formed the view that the pre-school toys are inappropriately labelled.
On the basis of his examination of the ‘Fun Time Keyboard’ and ‘Children’s Toy’ bath set, he formed the view that they are objects manufactured and designed or marketed as a plaything for a child or children up to 3 years of age.
Inspector Charalambous deposed that on 18 December 2009, he further examined the ‘Fun Time Keyboard’ toy and observed that there was no screw or other fixing device requiring the use of a tool to secure the battery compartment lid. He was able to open it with a single prying action applied to the tab using a paperclip. He was unable to open the battery compartment using two or more independent finger movements. However, the compartment opened when the toy was dropped as part of the testing regime described below in table 3.
Inspector Charalambous performed the drop test and the small parts test on the ‘Fun Time Keyboard’ in accordance with the technical requirements set out in the AS/NZ Toy Standard. His observations during the performance of the tests are set out in the table below:
Table 3:Observations during performance of the drop test and small parts test on the “Fun Time Keyboard”
| Toy | Height of drop | No. of drops | Drop test observations | Small parts test observations |
| “Fun Time Key-board” | 930 mm | 1 | Multiple fragments were liberated from the body of the toy on its bottom right corner. Battery compartment came open on impact and batteries fell out of the toy. | All fragments liberated from the toy as a result of the drop test fitted entirely into the small parts cylinder. |
On or about 18 December 2009, in the presence of Consumer Affairs Inspector Lisa Tickell, Inspector Charalambous performed the tension test and small parts test on a sample of the ‘Children’s Toy’ bath set with squeezable toy characters, namely the small orange-coloured duck, in accordance with the technical requirements set out in the AS/NZ Toy Standard. The observations during the testing are summarised in the table below:
Table 4:Observations during performance of the tension test and the small parts test on the “Fun Time Keyboard”
| Toy | Tension applied: | Tension test observations: | Small parts test observations: |
| Small orange-coloured duck from “Children’s Toy” toy bath with squeezable toy characters | 7.4 N/m | Sound maker / ‘squeaker’ liberated from toy. | Liberated sound maker / ‘squeaker’ fit entirely within the small parts cylinder. |
Inspector Charalambous deposed that on or about 18 December 2009, he tested a sample of each of the toy guns for compliance with the requirements of the Projectile Toy Ban Order and made the following observations:
Table 5:Observations during the testing of the toy gun sets
| Toy Gun Set | Projectile | No. of | Observations |
| “Military Series” | Pencil | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
| “Police Jungle Storm” | Pencil | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
| Magnum “Qiangkou” | Nail | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. On first occasion, nail bounced off wall behind test foil and re-penetrated foil. |
| “Police Super Power” | Pen insert (nib and ink tube) | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
| “Super Police Heroic World Force” | Nail | 2 | Gun fired improvised projectile. Projectile ruptured foil on both occasions. |
In his affidavit sworn 6 August 2010, Mr Hiland, the solicitor for the Director, gave evidence as follows:
(a)the details of the first and second defendant, as disclosed by ASIC records;
(b)the service of notices under section 106I(1)(a) and (b) and 106I(1)(c) of the Act;
(d)the delivery to him of a bundle of documents by Mr Tan;
(e)the examination of Mr Tan by Mr McMahon on 4 March 2010.
In the course of the examination on 4 March 2010, Mr Tan made the following admissions:
(a)he was responsible for managing the business of H&C Trading and responsible for all purchasing of products, marketing and accounting;
(b)the business had a turnover of approximately $400,000 per annum;
(c)he purchased the toy guns and pre-school toys from mainland China. As well as customers in Victoria, H&C Trading also had customers in Cairns and Tasmania;
(d)H&C Trading was started by his uncle who is no longer a director;
(e)he has done no training in relation to product safety compliance, although he was aware of product safety laws;
(f)he used a 35 mm film canister to measure small objects for children’s toys but undertook no other product safety testing;
(g)he, along with his uncle, entered into an enforceable undertaking to the Director in 2006 in relation to the sale of certain products;
(h)since the execution of the search warrant, he has not imported any more projectile toys, and has only imported battery-operated toys where that batteries are secured by a screw and a cover; and
(i)he had not engaged an expert to assist him in developing a product safety compliance program.
In his affidavit sworn 19 October 2010, Mr Hiland gave evidence that:
(a)on or about 11 August 2010, he served on each of the defendants a sealed copy of the orders made by Habersberger J on 11 August 2010;
(b)on 5 October 2010, he wrote to each of the defendants noting that he had not received any affidavits on behalf of either of the defendants and requested advice as to whether either of the defendants proposed to file and serve any such affidavits;
(c)on or about 11 October 2010, he had a telephone conversation with Mr Tan who told him that he had received the letter of 5 October 2010, that he could not afford to have to engage a solicitor to assist the defendants in this proceeding, and that he was not going to file any affidavits but he had some documents which he would scan and send to Mr Hiland; and
(d)he received an email from Mr Tan attaching 17 scanned images of the documents which appeared to be copies of emails regarding the placement of advertisements pursuant to the orders of Habersberger J made on 11 August 2010;
In his affidavit sworn on 9 November 2010, he gave evidence that prior to the directions hearing listed for 19 October 2010, he had a conversation with Mr Tan. Mr Tan confirmed that he did not have and would not be engaging a solicitor.
The defendants’ position
The defendants did not lead any evidence. Mr Tan appeared at the trial of the proceeding. He did not require an interpreter, despite English not being his first language. He appeared to appreciate the potential consequences of the orders sought by the Director, remarking at one stage “it does not look very good for me”. He stated that he wanted to comply with the law but did not know how to do so. He handed up a bundle of documents which appeared to be certificates from testing companies in the United Kingdom and China for various toys between 2007 and 2010 which confirmed that the tested products complied with European Union product safety standards.[2] It was not possible to determine whether these certificates related to the toy guns and the pre-school toys.
[2]Counsel for the Director informed the court that the European Union product safety standards for toys are less stringent than Victorian product safety laws.
Did the toys breach the product safety requirements of the Act?
The evidence in support of the Director’s contention that the toy guns failed to comply with the terms of the Projectile Toy Ban Orders is compelling. Furthermore, in relation to the pre-school toys, it is apparent that they are toys that fall within the terms of Regulation 4 of the Regulations, and that these toys fail to comply with the regulations regarding the small parts test and the battery test. I note that each of these toys are labelled in such a manner as to indicate that they are not suitable for children under the age of three. However, I am satisfied by the evidence of Inspector Charalambous and by common experience that toys such as these are primarily used by and marketed towards parents of babies and toddlers, and, indeed, would be unlikely to appeal to many children over the age of three. I note that it is clear from the authorities that such labelling is not enough in and of itself to take the pre-school toys out of coverage by Regulation 4 of the Regulations.[3]
[3]See Director of Consumer Affairs Victoria v DW International Trading Pty Ltd &Bo Hui Dong (2010) VSC 515, [58], [72].
Remedies
The results of the testing of the toy guns and the pre-school toys demonstrates that the toys are a serious risk to public safety. I note that the reconciliation prepared by the solicitors for the Director utilising the records produced by Mr Tan and the records of the Consumer Affairs stock count at the Moorabbin premises show that a substantial number of the toys have been sold to retailers, and therefore there would be a substantial number of toys remaining in circulation in retail stores or in the possession of consumers.
Table 6:Reconciliation of seized goods with H&C Trading records
Description of good | No. Imported | No. Sold | No. Seized |
| “Magnum” type children’s toy guns (“PJH-2” – barcodes 38 to 40; and “PJH-3” – T19 to T21) | 1,920 | 1,816 | 104 |
| “Police Jungle Storm” children’s toy gun sets (“PJH-2” – barcodes 10 to 14; and “PJH-3” – T10 to T14) | 720 | 501 | 219 |
| “Police Super Power” children’s toy gun sets (“PJH-2” – barcodes 138 to 140; and “PJH-3” – T22 to T23) | 360 | 223 | 137 |
| “Military Series” children’s toy gun sets (“PJH-2” – barcodes 120 to 122; and “PJH-3” – T24 to T25) | 1,080 | 429 | 651 |
| “Super Police” children’s toy gun sets (“PJH-2” – barcodes 105 to 109; and “PJH-3” – T26 to T27) | 216 | 94 | 122 |
| “Musical Fun Time Keyboards” (“PJH-2” – barcodes 93 to 95; and “PJH-3” – T27 to T29) | 144 | 120 | 24 |
| SUB-TOTAL: | 4,440 | 3,183 | 1,257 |
| “Children’s toy” bath set (Chrysostomou [34] and [35] and Exhibits “TC-2” and “TC-3”) | ? | ? | 28 |
| TOTAL: | 4,440 | 3,183 | 1,285 |
There is no evidence as to the number of goods which have been returned to H&C Trading following the publication of the recall notices in accordance with the orders made on 11 August 2010, although during the course of the hearing, Mr Tan indicated that some goods had been returned, and were stored in the Moorabbin premises awaiting collection by Consumer Affairs’ officers.
Given these findings, it is appropriate to make declarations in the terms sought by the Director. The courts have consistently held that it was appropriate to grant declaratory relief in relation to contraventions of the Trade Practices Act1974 (Cth) and the Act.[4]
[4]See Director of Consumer Affairs Victoria v Midas Trading Australia Pty Ltd (2009) VSC 141, Cousins v Merringtons Pty Ltd & Anor (No. 2) (2008) VSC 340.
Further, the evidence demonstrates that the Court’s jurisdiction to make an order pursuant to section 151A of the Act (“cease trading order”) is enlivened. H&C Trading has engaged in conduct which has breached section 33 of the Act. This conduct, being the supply of unsafe toys on a commercial scale, gives rise to an imminent danger that members of the public, particularly children, may suffer substantial damage.
The real issue for consideration in this case is whether it appears that, if the cease trading order is not granted, it is likely that H&C Trading will continue to import and offer for sale toys which fail to comply with Victorian product safety standards.
In Midas Trading, Habersberger J referred to the findings of Goldberg J in ACCC v Dermalogica Pty Ltd,[5] which set out a helpful non-exhaustive list of factors relevant to the determination of appropriate restraints upon businesses in consumer protection proceedings. In Midas Trading, Habersberger J identified (a proceeding involving similar circumstances to the current proceeding) that the following factors may be relevant in determining whether to make a cease trading order and the scope and duration of any such order:
[5](2005) 215 ALR 482 at [60, [61] and [64].
(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 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.
In both Midas Trading and DW International, Habersberger and Dixon JJ considered it appropriate to make cease trading orders with respect to those classes of goods which are subject to a product safety standard rather than in relation to all goods and services, or in respect of a narrower class of goods, such as toys. Orders in similar terms are sought by the Director in this proceeding.
Taking each factor in turn, while noting that there is not sufficient relevant evidence in relation to every one of these factors, I note the following:
(a)The objectives of the Act:
Section 1 of the Act provides that the purposes of the Act are, relevantly:
(aa) to protect consumers; . . .
(c)to provide for the safety of goods and services . . .
The objectives of the Act weigh in favour of making a case trading order.
(b)the nature and extent of the contravening conduct: this was not an isolated incident. A number of unsafe products were imported and onsold as part of a systematic business operation. H&C Trading has previously given undertakings in which it has acknowledged that it has breached section 33 of the Act by supplying goods in contravention of the Regulations (in respect of toys for children less than three years of age). This factor weighs in favour of making a cease trading order;
(c)the amount of loss or damage caused: there was no evidence as to loss and damage suffered by consumers. However, I note that that up to 3,000 toys are still circulating within the community. Accordingly, the potential damage to consumers, in particular, children, weighs in favour of making a cease trading order.
(d)any profit made from the contravening conduct: there is no evidence as to the profits earned from selling the toys;
(e)the circumstances in which the conduct took place: see sub-paragraph (b) above;
(f)the degree of deliberateness or carelessness involved: Mr Tan has a vague and incomplete knowledge of product safety standards. The toys were deliberately imported on a commercial scale, although Mr Tan does not appear to be deliberately flouting the law. It is possible that Mr Tan honestly, but mistakenly, thought that obtaining certificates of compliance in respect of European safety standards would give him sufficient comfort regarding compliance with Victorian product safety laws. This weighs in favour of making a cease trading order;
(g)the size of the defendant: H&C Trading is a small business. This fact would, in some respects, weight in favour of making a cease trading order, on the basis that it is possible that the business would not have the resources to develop and maintain a successful compliance program. On the other hand, making a cease trading order may well have the result of putting H&C Trading out of business;
(h)whether the contravening conduct was brought about by senior management of the defendant or at a lower level: Mr Tan is the only person involved in the management of the company. Therefore, no blame can be levelled at an employee or agent of H&C Trading;
(i)whether the defendant has a culture conducive to compliance with the Act: The number of products offered for sale by H&C Trading and the repetition of contravening conduct by H&C Trading, along with Mr Tan’s limited knowledge of product safety regulations, does not inspire confidence that further contraventions would not take place in the future;
(j)any previous contraventions of the Act: There were acknowledged contraventions of the Act in 2006;
(k)whether the defendant co-operated with the investigation, including the defendant’s approach to defending the proceeding: Mr Tan has been co-operative at each and every stage of the Consumer Affairs investigation and has not actively defended this proceeding. He appears to have fully complied with the orders made regarding the publication of recall notices (at considerable expense to H&C Trading) and has demonstrated a willingness to comply with the law in the future;
(l)the Directors’ submissions: The Director submitted that the evidence establishes that the Court is entitled to exercise the jurisdiction conferred upon it by section 151A of the Act, in that:
(i)the court can be satisfied that H&C Trading has contravened the product safety provisions of the Act;
(ii)the court can be satisfied that if an injunction is not granted, it is likely that H&C Trading will continue to import and offer for sale products which fail to comply with the product safety provisions of the Act; and
(iii)there is an imminent danger of substantial damage to another person.
In summary, the Director submitted that the defendants’ conduct justifies a conclusion that Mr Tan does not have the requisite knowledge and expertise to comply with Victorian product safety laws, and the defendants will not comply unless compelled to do so.
The factors outlined above generally weigh in favour of making a cease trading order. In DW International, Dixon J granted a cease trading injunction on the basis that the second defendant, Mr Dong, the director of the first defendant, had 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”, and that he had “no confidence that the defendants would not in the future be motivated by commercial considerations to the detriment of their legal obligations.”[6]
[6]DW International [81], [85].
In this case, the conduct of the defendants gives the court some greater, if not complete, assurance regarding the future conduct of H&C Trading’s business operations. First, it appears from the evidence of Inspectors Charalambous and Chrysostomou, along with the documents provided by H&C Trading in response to the notices [7] that H&C Trading has (unlike DW International) a reasonably adequate record keeping system, such that it cannot be said to be a “fly by night” operation. Secondly, Mr Tan has co-operated with Consumer Affairs since the commencement of the investigation, and when examined on oath, freely provided information and admissions.
[7]To be completed
During the course of the examination (during which Mr Tan was under oath), Mr Tan was asked:
“Since the Consumer Affairs Victoria officers attended at H&C Trading Pty Ltd’s business premises in Moorabbin in October 2009, has the company introduced any procedures to ensure that in future its – or the products it offers or supplies don’t contravene any product safety laws?”
Mr Tan responded as follows:
“Yes, from now on there’s a – what I bringing will be normal projectiles and those with – those with kid’s stuff, there must be a screw at the back of the – like battery operated stuff, you know.”
The response above does not make sense unless “normal projectiles” is to be read as “no more projectiles”.
Discussion then ensued between Mr Tan and Mr McMahon as to whether Mr Tan could rely upon Consumer Affairs publications to determine what toys could and could not be supplied. A similar discussion occurred between Mr Tan and counsel for the Director in the heating before me.
It is noteworthy that H&C Trading has fully complied with the interlocutory orders made on 11 August 2010. The defendants have spent over $100,000 in publishing recall notices, and has informed the Court and the Director that H&C Trading hold substantial stocks of returned goods at the Moorabbin premises available for collection.
In his address to the Court, Mr Tan expressed a keen desire to do whatever is required to satisfy the Director and the Court that he genuinely wishes to comply with Victorian product safety laws, and to continue trading.
Counsel for the Director expressed some scepticism regarding the defendant’s intentions and capacity to put in place a compliance regime which is rigorous enough to ensure full compliance with product safety laws. This scepticism is understandable given that four years ago Mr Tan, along with his now deceased uncle, executed enforceable undertakings to the Director that H&C Trading would not supply goods that failed to comply with Victoria’s product safety laws. Therefore, even though Mr Tan was well aware of the existence of product safety laws, he still caused H&C Trading to import goods which failed to comply with the law. Given Mr Tan’s lack of knowledge and training in these matters, the only acceptable solution is for H&C Trading to engage external experts to determine whether its goods are compliant, noting that the cost of doing so is a necessary cost of engaging in business of this type in Victoria.
I agree, notwithstanding Mr Tan’s eagerness to demonstrate to the Director and the Court his willingness to comply with Victorian product safety laws, that it is apparent that Mr Tan does not have the necessary expertise to ensure H&C Trading’s compliance. This lack of knowledge became apparent during the course of his examination by Mr McCarthy, when Mr Tan explained that he tested the toy guns by checking whether the projectile dart fitted within a 35 mm canister (that is, he applied the “small parts test”, but not the “foil test”).
Accordingly, because it is unlikely that H&C Trading (or any other company controlled by Mr Tan) will be able to develop an adequate compliance program without external assistance, I will make the cease trading orders sought by the Director, with the following modification: provided that Mr Tan provides a written undertaking to the Court not to import and/or offer for sale any projectile toys in the next 45 days, the cease trading orders will be stayed for a period of 45 days, in order to enable Mr Tan to provide evidence satisfactory to the Director and the Court that he has put in place a compliance regime which is substantially in accordance with the regime set out in Annexure C in the Director’s proposed minute of orders. Given the month which has elapsed since the hearing of the proceeding, that means Mr Tan will have ample time to demonstrate that he and H&C Trading can trade within the requirements of the law. Further, Mr Tan must also undertake that in this period he will allow Consumer Affairs access to the Moorabbin premises (or any other premises from which he or H&C Trading carry out business operations) to enable Consumer Affairs officers to inspect any goods or books and records, without the need for Consumer Affairs to obtain a search warrant.
The Director seeks further publication of notices regarding the terms of these orders. Given that recall notices have already been published in accordance with the terms of the orders made on 11 August 2010, the purpose of further publication is primarily to deter other businesses from breaching Victoria’s product safety laws. I will seek further submissions as to whether the notices need to be of the scale and nature of those sought by the Director, given the cost involved and the fact that recall notices have already been published in accordance with the orders of 11 August 2010. It may be helpful for the Director and the Court to identify and quantify the goods returned to H&C Trading in response to the recall notices prior to finalising the content, scope and reach of any further public notification process.
Finally, the Director seeks orders which have extraterritorial application in paragraphs 8, 10, 12 and 13 of the Originating Motion.
Section 6 of the Act provides that the Court has power to make such orders. Further, section 2 of the Australia Act 1986 (C’th) declared and enacted that the legislative power of the Parliament of the State of Victoria includes “full power to make laws for the peace, order and good government” of the State of Victoria “that have extra-territorial operation”.
The High Court, in Port MacDonnell Professional Fishermen’s Association Inc v South Australia,[8] held that:
“a relevant connexion between the persons or circumstances on which the legislation operates and the State … should be liberally applied, and that legislation should be held valid if there is any real connexion – even a remote or general connexion – between the subject matter of the legislation and the State.”
[8](1989) 168 CLR 340 at 372.
I agree with the submissions made by counsel for the Director in respect of the Court’s capacity to make orders with extra-territorial effect. It is clearly competent for the Victorian Parliament, through the Act, to apply the norms of conduct for which the Act provides to all persons engaged in conduct, in trade or commerce, where the business is registered in Victoria, or has its principal place of business in Victoria, or where relevant officers of the business reside in Victoria, even where the subject matter of that business’ dealings (or the conduct in which the business or person engages) has operation, application, or occurs outside Victoria.
The evidence before the Court establishes that the First Defendant has its registered office in Clayton in Victoria and principal place of business at Moorabbin in Victoria. The Second Defendant resides at Glen Waverley in Victoria. The First Defendant has also supplied products interstate to customers in Queensland and Tasmania.
Accordingly, in the circumstance of this case, it is appropriate for the Court to make orders having extra-territorial reach.
Therefore, subject to the submissions of the parties in relation to paragraphs 8 and 9 of the orders, I propose to make the following orders:
A.DECLARATORY ORDERS
The Court Declares pursuant to section 36 of the Supreme Court Act 1986 or section 158(2)(h) of the Fair Trading Act 1999 (Vic) (“the Act”) that:
The following products:
(a)“Magnum” style toy gun;
(b)“Police Jungle Storm” children’s toy gun set;
(c)“Police Super Power” children’s toy gun set;
(d)“Military Series” children’s toy gun set; and
(e)“Super Police” children’s toy gun sets –
supplied by H & C Trading Pty Ltd 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 projectile toy or toy gun, when tested in accordance with Appendix DD of the ban order caused more than 2 out of 10 test foils to rupture, thereby presenting a risk of causing serious eye injuries.
H & C Trading Pty Ltd, by supplying, as a wholesaler, the following products:
(a)“Magnum” style toy gun;
(b)“Police Jungle Storm” children’s toy gun set;
(c)“Police Super Power” children’s toy gun set;
(d)“Military Series” children’s toy gun set; and
(e)“Super Police” children’s toy gun sets –
which do not comply with a permanent ban order published on 28 November 2002 in Victorian Government Gazette No. G48, has contravened section 33 of the Act.
The following products:
(a)pre-school plastic toy known as “Children’s Toy Bath Set”; and
(b)pre-school plastic toy known as “Musical Fun Time Keyboard” –
supplied by H & C Trading Pty Ltd do not comply with Fair Trading (Safety Standards) (Children’s Toys) Regulations 2004 S.R. 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.
H & C Trading Pty Ltd, by supplying, as a wholesaler, the following products:
(a)pre-school plastic toy known as “Children’s Toy Bath Set”; and
(b)pre-school plastic toy known as “Musical Fun Time Keyboard” –
which did not comply with Fair Trading (Safety Standards) (Children’s Toys) Regulations 2004 S. R. No. 111/2004, has contravened section 33 of the Act.
The pre-school plastic toy known as “Children’s Toy bath set” supplied by H & C Trading Pty Ltd does not comply with Fair Trading (Safety Standards) (Children’s Toys) Regulations 2004 S. R. 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 2 independent movements applied simultaneously to the battery compartment.
H & C Trading Pty Ltd, by supplying, as a wholesaler, pre-school plastic toys known as “Children’s Toy bath set” which did not comply with Fair Trading (Safety Standards) (Children’s Toys) Regulations 2004 S. R. No. 111/2004, has contravened section 33 of the Act.
Damon Hong Chiang Tan, a director of H & C Trading Pty Ltd, has by:
(a)ordering, purchasing, or otherwise acquiring:
(i) “Magnum” style toy gun;
(ii) “Police Jungle Storm” children’s toy gun set;
(iii) “Police Super Power” children’s toy gun set;
(iv) “Military Series” children’s toy gun set;
(v) “Super Police” children’s toy gun sets;
(vi) pre-school plastic toy known as “Children’s Toy Bath Set”; and
(vii) pre-school plastic toy known as “Musical Fun Time Keyboard” –
for supply by H & C Trading Pty Ltd;
(b)authorising or approving the supply of those goods in Australia by H & C Trading Pty Ltd;
(c)refusing or refraining (other than inadvertently) from ensuring that the goods:
(i) “Magnum” style toy gun;
(ii) “Police Jungle Storm” children’s toy gun set;
(iii) “Police Super Power” children’s toy gun set;
(iv) “Military Series” children’s toy gun set;
(v) “Super Police” children’s toy gun sets;
(vi) pre-school plastic toy known as “Children’s Toy Bath Set”; and
(vii) pre-school plastic toy known as “Musical Fun Time Keyboard” –
supplied by H & C Trading Pty Ltd complied with the product safety provisions in Part 3 of the Act –
been directly or indirectly, knowingly concerned in or party to, or otherwise involved in, the contraventions of sections 33 and 44 of the Act by H & C Trading Pty Ltd.
B.PUBLIC WARNING, PRODUCT RECALL AND REFUNDS TO CUSTOMERS
An order pursuant to sections 149A or 158 of the Act that:
H & C Trading Pty Ltd and Damon Hong Chiang Tan, having contravened, or been involved in a contravention of, the Act, cause to be published within [to be determined] days of the date of this Order:
(a)within pages 2 to 40 inclusive of the Herald Sun newspaper in Victoria;
(b)within pages 2 to 15 inclusive of The Age newspaper in Victoria;
(c)within the Early General News section of the Cairns Post newspaper in Queensland;
(d)within the Early General News section of the Mercury newspaper in Tasmania; and
(e)within the Early General News section of the Launceston Examiner newspaper in Tasmania –
(i) a Public Notice in the form of Annexure “A” to this Order. [to be determined]
H & C Trading Pty Ltd, having contravened a provision in Part 3 of the Act as referred to in this Order, cause to be prominently and conspicuously displayed for a period of 6 months from the date of the Order:
(a)at or near each point of sale (or checkout); and
(b)at or near each customer exit –
(i) in each of its existing or new premises from which it carries on business, solely or jointly, of supplying goods to retailers or as retailers to other purchasers, a Public Notice in the form of Annexure “A” to the Order.
H & C Trading Pty Ltd pay a full refund to all persons returning the goods referred to in the Public Notice.
H & C Trading Pty Ltd:
(a)notify on a weekly basis for 12 weeks, after publication of the Public 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 convenient after the 12 week period referred to in paragraph 11(a) above has expired.
C.CEASE TRADING INJUNCTION
Pursuant to section 151A of the Act, the Court orders that H & C Trading Pty Ltd, by its servants or agents or otherwise howsoever, be restrained from carrying on a business of supplying to wholesalers or 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 30 June 2010, being the goods of the kind or class listed in Annexure “B” to this Order, until H & C Trading Pty Ltd has implemented a Compliance Program in accordance with Annexure “C” of this Order designed to ensure that H & C Trading Pty Ltd will not supply goods that do not comply with a Safety Standard or contravene an interim, fixed-term, or permanent ban order.
Pursuant to sections 149 and 151A of the Act, the Court orders that Damon Hong Chiang Tan be restrained from being, in any way, directly or indirectly knowingly concerned in or party to, or otherwise involved in, H & C Trading Pty Ltd or any other person carrying on a business of supplying goods of the kind or class listed in Annexure “B” until H & C Trading Pty Ltd or other person has implemented a Compliance Program in accordance with Annexure “C” of this order designed to ensure that H & C Trading Pty Ltd or the other person, as the case may be, will not supply goods that do not comply with a Safety Standard or contravene an interim, permanent or fixed term ban order.
Subject to Mr Tan providing, by 12 noon on 24 December 2010, the Director and the court a signed, written undertaking in the following terms:
“I, Damon Hong Chiang Tan, undertake to the court that I will not import and/or offer for sale any projectile toys or cause H&C Trading or any other business to import and/or offer for sale any projectile toys.”
paragraphs 12 and 13 of these orders be stayed until 4pm on 7 February 2011.
D.ORDER THAT DEFENDANTS PAY FOR DESTRUCTION AND DISPOSAL OF GOODS
The Court orders pursuant to sections 129A and 149A(3)(f) of the Act that:
The Plaintiff be permitted to:
(a)destroy and dispose of the goods identified and listed in Annexure “C” which were seized by the Plaintiff on 19 October 2009, under Part 10 of the Act; and
(b)destroy and dispose of goods of the kind identified and listed in Annexure “C”, otherwise returned to H & C Trading Pty Ltd.
(a) The Defendants pay to the Plaintiff the costs of and any costs incidental to the destruction and disposal of the goods.
(b)Such payment is to be made by the Defendants to the Plaintiff within 7 days of a request by the Plaintiff to quantifying the costs of, and any costs incidental to, the destruction of the goods.
E.COSTS
The Defendants pay the Plaintiff’s costs, including reserved costs.
F.GENERAL
There be liberty to apply.
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