Eva, Geoffrey John v Mazda Motors (Sales) Pty Ltd

[1977] FCA 17

IN THE FEDERAL CGURT Nos. VG 1 - 7 of 1977

BF AUSTWIA	\
GENERAL DIVISION

In the matter of -

THE TRADE PRACTICES ACT 1974 -

Between. -

GEOFFREY JOHN EVA

Informant

And -

MAZDA MOTORS (SALES) PT". LI?!ITZ

Defendent

SMITHERS, 2 .

This Court doth Order -

in proceedings VG 1 of 1977 (B No. 377

of 1975) thet the defendant is ccnvicterl

of committing a contraventlon cf S. 53

(c) of the Trade Practices Act 197/+

in that in trade or commerce in

connection with the promotior, 37

advertising of the supply of gooas tc wit Mazda cars it did represent that some of such goods had accessories They

did not have, the representation being

made in an advertisement published iii

"The Age1' newspaper dated 15th February

1975, and the defendant is ordered to

pay the sum of $2,500 as the Pme

which is hereby imposed in respEct of

such contravention and to pay The

informant's costs of these proceedings

as taxed by the Registrar;

in proceedings VG 2 of 1977 (B No. 578

of 1975) that the defendant is ccnvicted

of c0mmittir.g a contraventlon of S. 53

I (c) of the Trade Practices Act 197k in

that in trade or comnerce in conncctiac

with the pronotion by advcrtlslnZ .-,f

the supply of goods to wit Mazda czrs

it did represent that some of PUC;~

goods had accessories they did noT k v e .

the representation being made in an

4

advertisement published in "The Age"

newspaper dated 21st February 1975,

and the defendant i s ordered to pay

the sum of $1,500 a s t h e f i n e whlch

is hereby imposed i n r e s p e c t of such

contravention and t o pay the informant 's

cos t s of these proceedings as taxed

by the Reg i s t r a r ;

( i i i ) i n proceedings VG 3 of 1977 ( B No. 379

of 1975) that the defendant is convicted

l,	of committing a contravention of S. 53
(c) of the Trade Practices Act 1974
i n t h a t i n t r a d e o r comnerce i n

U	connection w i t h the promotion by
advertising of the supply of goods t o
.I	w i t Mazda ca r s it d id r ep resen t t ha t
some of such goods had accessories they
did not have, the representat ion belng
made i n an advertisement published ln
"The Age" newspaper dated 5th March
1975, and the defendant i s ordered to
pay the sum of $2,000 as t h e f i n e
which i s hereby imposed i n respect of
such contravention and t o pay the
informant's costs of these proceedings
as taxed by the Regis t ra r ;

( i v ) i n p roceed ings VG 4 of 1977 (B No. 380

of 1975) t ha t the defendant i s convicted

of committing a contraventlon of S. 53

(c) of the Trade Practices Act 1974 I n

that i n t r a d e o r commerce in connect ion

with the promotion by aaver t i s lng of

the supply of goods t o w i t Mazda ca r s

it did r ep resen t t ha t some of such

goods had accessor ies they did not have,

the representat ion being made i n m

advertisement published In "The Age"

newspaper dated 15th March 1975, and

the defendant i s ordered t o pay the sum

of $4,000 a s t h e f i n e which i s

hereby imposed i n respec t of such

contravention an(- to pay the informant's

cos t s of these prJceedings as taxed by

the Reg i s t r a r ;

in proceedings VG 5 of 1977 ( B No. 331

of 1975) that the defendant is convicted

of comrnittlng a contravention of S. 53

( c ) of the Trade Prac t lces Act 1974 I n

that i n t r a d e o r commerce I n connection

with the promotion by adver t i s ing of <?e

supply of goods t o w i t Mazda cars d id

represent that some of such goods had

accessorfes they d id not have, the

representat ion being made i n an

1

advertisement published in "The Age"

newspaper dated 20th March 1975, ana

the defendant 1 s ordered to pay +he

sum of $4,000 a s t he f i ne whxh is

Lsreby lmposed i n r e s p e c t of such

contravention and t o pay the informant 's

cos t s of these proceedings as taxed by

the Reg i s t r a r ;

( v i 1 i n proceedings VG 6 of l977 ( B No. 382

of 1975) that the defendant is convicted

of committing a contraventlon 3f S. 53

( c ) of t h e Trade Practices Act 197& i n

that i n t r a d e o r commerce In connection

with the promotion by advert is ing of the

supply of goods t o w i t Mazda car's it

d id represent tha t some of such goods

had accessories they did not hal,/e, the

representat lon bemg made i n an

advertisement published in "The Age"

newspaper dated 1 s t Apri l 1975, and The

defendant i s ordered to pay sum of

$4,000 a s t h e f i n e which is hereby

imposed i n r e s p e c t of such contraventlon

and t o pay the mforrnant 's costs o f these

proceedings as taxed	by	the Reg i s t r a r ;
and

( v i i ) i n p r o c e e d i n g s VG 7 o f 1977 (B No. 383

of 1975) that the defendant is convic<ed.

of committing a contravention of S. 53

( c ) of the Trade Practices Act 1974 i n

t h a t i n t r a d e o r commerce in connect ion

with the promotion by adver t i s ing of the

I

supply of goods t o w i t Mazda cars It d ld

r ep resen t t ha t some of such goods had

accessor ies they d ld not have, the

representat ion being made i n an

advertisement published in "The Age"

newspaper dated 2nd Apr i l 1975, and the

defendant i s ordered to pay the SUT of

$2,000 a s t h e f i n e which i s hereby

imposed i n r e s p e c t of such contravention

and t o pay the informant 's costs of

these proceedings as taxed	by	the
Regis t ra r .

l

I Date : 22nd Apri l 1977.

- DATE :

Mazda Motors (Sa1es)Pty. Limited i s cmvic ted

on seven charges brought upon mformat lons in rcsgcc t o r

seven contraventions of the provj s ions o f S . 53 ( c ) of tile

Tradc Practlces Act 1974.

The maximum penal ty 111 respec t of each charge 1:;

$50,000.

n

L .

The r e l e v a n t o f f l c c s , - lot being equ~pp+d vlti:

adequate kcowledp of t h e l r @.m, we?'t> s?.t lsfiec! In the rd.1,:;t

p l ace to au tho r i se pub l i ca t lon of t he r e l evan t series of

advertisemenzs without verlflcation of t ? e stai-nrncnts t iLkre ln

as put before them by t h e l r a d v e r t i s l n g agenc-{, w r e l y on t h e

assumption t h a t such stateam-1 ts were t r u e , and t k n , vhen

t h e r e a f t e r It was revealed that t h i s an;lmptlol? FX wrnn;; they

fa i led to take adequate remedial actLon.

Mazda Motors (Sales) Pty. Lirnlted (hcreinafte,. c;.lled

Mazda) i s a company which was r e g i s t e r e d i n t h e S t a t e oi' Vlctor1.i

i n 1967. It has car r ied on business from t h a t t x n e as a vendor OF

Mmda motor vehicles. It i s a successfu l con;p,c L i t o r and t r a d c r .

The range of vehicles re levmt t o the present

proceedlxs are seven sedans knom res?ec t lvr ly as thi Fhzd3

RX-4, Mazd3 W;-3, "Izda M-2, Mazda 929, Mazdz 1600, Ilazda l300 and Mazda 808.

7

I.

Such a device reduccs t ' . ~ io rce requll'cr! t? be

appl ied by a ca r d r lve r t o ach ieve e pdr t i cu la r rc.zulT in h e

operat ion of the f o o t brake.	It cont r lbu tes to	: z d c t y xi
reduces d r inng f a t lgue .

It a p p e a r s t h a t a l l t h e Mazds models other. that?

PIazda l300 and h z d a EO3 a r e f i t Led with t h l s dsv~ce.

L: .

6.

It i s said with respect t o t h e ad-rer t isemmts

of 21st February and 20th March -that read Cnirly they should

be understood as saying no more w i t h respect to servo-asslsted

brakes than tha t the 1600 model i s ecluipprd therewith. I a n

unable t o accep t t h i s . Tn my op:r.lcn I t 1:; c l e a r t h z t t h e

, reader i s belng informed that whatclrcr Fazcia sedan c-r he

may have i n mind it i s equipped with	A	servo-assls ted disc
brakes.

It may be seen therefore , That thz sdvertls-ments

of 15th February and 15th March t c l l t h e re?.der t ha t t he 80s

model i s equipped wlth cervo-assis ted breke:;, t h a t t;le

advertisements of 5th March and 2nd A p r i l t e l l t h e 1-et:dcr tht

the 1300 model i s s o equipped, that the advert lsmentc of 21st

February, 20th March and 1st A p r i l t e l l t h e r e a d e r t h a t all

Mazda models a r e s o equipped.

Thus each sdvert lscnent con tamed a represt-ntatlon I.’?at

goods t o 1300 model o r both had which It r e fe r r ed , namely the 809 model c r t h e

an accessqry which they dld not have.

The representa t ion was nade i n trade and connerce In cmmectlon

with the promotion by nelvspaper advzr t i s ing of the s q q d y of

Mazda cars .

7 .

prosecution i n r e l a t i o n t o a contravenLlon of S . 53 ( c )

It i s a dr;fence i f the defer ldant cs t ibl lshes .-

(a ) tha t the cont raver l t ion i r?spec t of {chich

the proceeding WIZ i n s t l t d t e d was due t o a

mistake, to re l lance on ~r!I"orrllation s7lpplied

by another person, to t h c z c t 3r dc?.mlt of

another p"rson, t o an accldent o r to some o t k r

cause beyond h l s c o n t r o l ; end

t h a t he t o o k reesonable pi-:cautlolls dnd

exerclsed due d l l lgencs to avoid thc contl-a\,ntion.

On behalf of the defendant It is e a i a t h a t L:.) C:qr

as there was any contravention it wac due t o a mls tnke,

t h a t it was due t o re l iance upon mformation suFplied by

another person, namely Gen-ral Advertising or Its servants ,

and t h a t It was due t o t h ? clct 01- deIaul t o f a n o t h e r 115r.3011,

namely the adver t i s ing company o r i t s servants .

And It i s s a i d thzt the defendant too'< rcasodlble

precaut ions and exerclsed due d l l i p n c e t o avold the

contravention.

8 .

It was necessary to fonnula te a Itphllosophytt o r thcrno f o r the

campelgn. The phlllosophy adoptpd ?nL~-~l ;e:i the port-ayal 01

ali Mazda sedans as vehicles hav71ng m comnlon as s tandard

equipment mmy s p e c l f l e d a t t r d c t l v e f c p t m e s .

It appears that the conlpny dld not s111>21y to

Mr. Wllllams a l i s t of such f e a t u r e s b u t l e f t it t o h l s agency

to iden t i fy su l t ab le €ea tu res f ro r ! b r o c h r - c s concemmg tllc

var ious models which had been supplied. t o h is agency

previously as the var ious mode1.s had c m ~ on tl7.e m x k c t .

In the case of Model R08 t h a t x c u r r e d a b o u t 1971 and of

Model 1300 about 1970.

It i s c l e a r t h a t Mr. Wllllalns r-p.l.ded It :IS p a r t

o f t l l2 duty o f h i s agcncy to put befare =he c1iei-i'; for . iis

approval an acivertlse!xeat contxrllnG tr-ut-11. He ~:,lci t i ~ ? . t

i n t h e k i n d o f re la t ionship betweer. h?nl:;?i 1' and thc :mr-qy:,.erir

of Mazda he tended t o become involved W I t l ! the con:]~zn.y >c

t ha t he knew the i r co rpora t e aims and cc;lld do ?,n :;cmmt?

and ef lect lve Job. But hc d l d not re&;?-? t h e :.xL?racl; of

the advertisements as t o t a l l y h x f u n c t l o n as " o b i r ~ ! ~ I ) ~ If

t h a t were t o t z l l y t h e f u n c t i o n of the agcncy we I:CJU?.~ LO t

supply proofb'l. He cas asked -

ttWIlerever t he genes i s l i cz , t h e f a c t rr-malns tha;; you

t o o k these advcrtlsements In r ;he i r i i ca l l ayout folm hacl:

t o Dlazda Motors and to ld then +ha t t hey wore the oil~cli'tlsiI~!l-JIL~

i n f u r t h e r a n c e	of	the	campaign	a	d	dskc-d f o r t h e l r q?p'r.ovnl?
--- Yes.

You then rFce ivcd tha t approval eqress ly f r o n I I Z Z C ~ L ~.:!J~ox

(Sales) Pty. Ltd.? --- Yes.

And you would not have pursued, as p a r t of yodr funct ionme

the ac tua l pub1icat;on of those advcr h semcnt 7 M?. thou; tll~r:

express approval of Mazds MGtor:: (Ss l e s ) Pty. L t d . to cio ss''

--- Cer ta in ly no t . I t

you think you recelve a proof?" fra:llr.ly answerrd "To L1iLC.k

it f o r cor rec tness" .

Mr. Chapmm was a busy m a n . He ha? l i t t l e

memory o f the checking o f r a y proof:. m ( ? 1s vague a s t o

Mazda's procedure in r e l a t l o n t o the checklrig oi Frsors .

Mr. Smlth concedes t h a t he saw the pvqsfs , but It i s 3 P o l r

inference from h l s evldencn t h a t he did r o t chcck t h m €01.

accuracy j n r e l a t lon t o t h e technical d e t a i l s . He d l d I:;?.

know a t t h a t t m e , and r e lxhe r d id TL-. Cilapscn, ~11cLhr1- t l . ?

808 and 1300 did o r d id n o t have servo-hssu ted brakes.

I t

But i n approving the a6vertiscmenTs i1l.s-y werc

au thor ia ing publ lca t ion :.udcI y and prmlr l rn t ly m d O T I ' ~ L

period of months, of statemcnts i n po=. i t ive fop- , tc a ~ d l i l t u d e

of po ten t la l cus toners tha t i lode ls X 3 2nd 1 j G O w,71-5. ec;u~~.yed

with servo-assisted brakes. It 1s c l c a r t h a t a p ~ - ~ ~ i;om

considerat lons al l is lng out of the T r a d u Pmctlcc:; Ac-t,

ordinary prudence required that every ztaten:cnt aLoct t l ~ o

a l leged common fea tu res o f all th? Ihzda nodcls should ;,c

ca re fu l ly ve r i f l ed .

.

duty to be accura te , there :-L; ?t le:): I-, e sk1ar;d rczpcm? 15j 1:t-y

on t h e p a r t o f t h e ageccy aid the co:i .c~ly on the mztter o f

zccuracy. The subnission o f rough co?y and proofc was a

procedurc designed t o enahle the comperly t o p ~ z y ii;s p & r t

i n t h i s s h a r e d r e s p o n s i b i l i t y . B u t It i s rr,y vlew tli&,t ]lot

only was the respons ib l l i ty shared h u t khat tk com;kLrly hcre

the u l t ima te r a spocs lb l l l t y . The s1:tements t o be w d e t o the public. wcre t o k c mede as staternenis of t h com!ml?j:, not of the acency, end the pEblic was t o be r.sked t? accept kern as t rue s ta tements f o r whlcL the co~~q?-ny took xspwsl121 l.~?y.

I do not regard it BS reasonable o r d i l l g e n t for the cony,3-~-~y

t o have assuncd without any t e s t o r v e r l f i c a t l o n thtit thc

copy produced by the age'1-y v m ~ corrcc t .

.

16.

The defendant 1s therefore convic-~ed I n respc-Lt

o f each infornat lon.

'I 7' .

may be corrmitted i s such t h a t p e n a l t l c s which rxy be

oppres s ive in r e l a t lon to some defmPsnts would he seen tc be

t r i v i a l i n r e l a t i o n t o o t h e r s . The penal ty m m y palrtLcul5r

case must be s u f f l c l e n t t o re I lec t thc Erz-J i ty 01 %he

offence, and t o ref lect Par l iament 'F, un:qunvocal Incr .nt lc?r l tha t

i t s w i l l i s to be obcyed.

The gravdn'en o f the defendar l t ' s fau l t i i l t h l s cczc'

i s that through nef;ligence w d pre-occup?tion with otber

mat terr 2nd en tkus l?sn for I t s product. It cxerc.1 sed nc

scru t iny o f tine accuracy of the s ta t t .mmrs l t autfiorlsed rgr

publ ica t ion to the public and thereby fal led to rkspond t o -tile

dut,g,resting upon it by reascn of i t s c:m ~ e p u t a t l o n 2nd -.he

extent of i t s busmess as an im2ortz11i uni t m the motor

vehic le t rade ,not to mis lead the sec t lon of the publ ic

2 c ~ t e r e s t e d i n p u r c h x l n g a motor vchlc ic , a rd lIl?.t I t ?-rr::~.nec!

i n e t t e n t i v e and complacent even 3.Pter ~t krlEw t h a i It.:

assumption that the unverified sta tell c ; a t s ~t l;ind au t!lal'.Lzc;:d wa'c

t r u e was inva l ld .

18.

-4nd t h e r e c a n b e l i t t l e dcui, t. t ha t po ten t i a l

purchasers of 8C)e and 1300 m3dels m y w1.l ~ C L ~ - C been

mater ia l ly inf luenced by a b e l l e f t h z t t h e c w s had .%ry/o-

'assisted brakes. Although they nay 113t have h:.d any ; r ' c ' r ~ s e

ldea of the nature of x c h q u i p n e n i the gcacral no t ion tha t

mechanlcolly assisted brake: cord;rJ.LnltI-, tr, sa re ty 2nd

p e r f o r x x e i s wldcly k l d .

It must a l s o be remembered tkt a motoi- vehicle

i s normally an infrecyent but necescai-y, lmportmt ard

expenslve inve tmeni m the budget o f ar: 3verage zan, : I ! . tm l

t o which most persons give rmch tho3,;tlt m assessing thr

v l r t u e s of var ious makes and I n r e z p ~ c i : oJ whch Lhey probably

do rcad an? r e l y on the adv::rtlsements.

.

the in f luence o f the lncorret- t repruscr ta t lon. Secorldi):, tile

degree thzl : the represmtat lon deparLh irom t ? t r u t h , t h . ~ ~ ~ d l y , ~

the degree o f v i l f u l n e s s o r carelcssncsr In the lhdcmc 01 the

incorrect representat ion, fourthly t r lc extent r h l t tl-e

representa t ion was dlsseminated, f l f t r l iy 7d1ct!1~ r any ;nci I.~I!~I,

I e f f o r t s have been mad? t o c o r r e c t any f a l s e i.rtpre;.,sions !Ltlch

may have been created. Finally, th? objectives of t he l-.c,t.

cf Hartcell	v.	S:?AI-:~,	Ccrporatl:)n o f Cu.7 trn! L,? P'i'q.	Lta. -	.
5 A.L.H. b93.

. . .

1\10 e f f o r t s were mcde by the de fendmt to co r rec t

any false i r rpressioas created by the i1'r'C)neous pch1lc::;tr: 0x1s.

Although there a r e seven chcrges, II; h f?ir

recognise that they a l l a r i se out of the or:&~lxli apprL)vr.l G f

the rough copy. It would be undu ly punl t lve t.0 l o o k ~ e p r . ~ : c l y

a t each ~aT' t lcu1ar charge agamst the r,cximu~~: pmity cf

$50.000 which Parl lament nas set in re la t ior . t o this kirtd 3f

offence. Nevertheless, it Irould be ::rang t o t r e a t t h x a l l

as one offence, because the v e r y decls ion whlch 1.3s mac??

n e v l t a b l y r e s u i t e d ~n the conmirslsn o f reI;edLcd o f f t rxcc .

. W

c .-

21.

it enJoins should a c t w i l y be -the :.l,cAnd?rds yre-b,a:.ling

i n t r ade and corrlerce. I ts purpocc. i:. n o t thz t such contrav?n%:.onr

a s mey cccur :;hould be	pwlished but that contraventions	shall
n o t occur.

Accordlngly, subJect t o thc observ2 t lon abo-m

concerning the risk of :m agpropr ia te ? (na l ty hemg Gpyxss lve

i n a par t icu lar case ,it s x m s c l e m k h a t pen;?li;iec, impseci by

the Court ought t o be sucn as to r c f l ec t . t hc rkgree of

culpF<bili ty involved and t o have pi de t e r r en t quz l l t y . I-LI

current circumstances the decllne ~n money values i s re levant .

I cwsider the contravcnt1ocs by t h c defclldx7.t t o

be s e n o u s . They were t h e r c s u l t of carclcssness , bur

contraventions due to cs re lessness a re not per rn lss lb lc m 6 must

be punished. O f course such con:.l..l-ventlons z r e n o t i n L;%e

same order of cu lpab i l i t y as those ir;volvlrlL a x t e l l t m n t o

deceive. Taklng into consl?erat,lon t h e oljsr-rvaticlrx ?Love

I cons ider pena l t i es to t3 l l ing $20,000 t o be zpproprsat.e, t h i s

sun being apphcable as to $4,000 In r e spec t of the f i i . . t two

charges and a s t o $16,000 1:1	resp:?ct or^ the rcmxnlng	i L v ~
charges.

Accordlrrgly I lmgose penal t i e s CS follows -

2%.

On summons and. informatlon VG 3 of 1977

(B No. 379	of 1975)	$2,020
On summons	and information VG 4 of 1977
(B No. 380	of 1975)	$4,090

On summons and information VG 5 of 1977

( B No. 381 of 1975) $4,003

On summons and information VG 6 of 1977

( B No. 382 of 19751, and $4,000

On summons and information VG 7 of 1977

( B No. 383 of 1975) $‘,OCiO

The Court orders accordingly and i n each c r se

w i t h cos t s .