Thompson, John Cranston v Magnamail Pty Ltd

[1977] FCA 50

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........ ........ ........ ..... ivP.GNA.';ATL PTY. L1 K T R D

........ ........ ........ ....... nei'cmdmi

Trade Prac t lccs Act 1974 - Section 45 - False

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Statemert - n?all order purchacc - r e f u n d of goods returned - mitigation of penalty.

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John Cranston Thornpson

V.

Magnamail P t y . L l m i t e d .

B. No. 74 cf 1976

Before St.John J.

Sydney, 10 August, 1977.

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Z'T. JOI'?? J.

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The fa lse statement r e l i e d upon by t h e p r o s r c u t i o n wa.5 t h e

s t a t emcn t t o t h e e f f e c t t h a t t h e r i . n g s were s i l v c r p l a t e .

A n a l y s l s r e v e a l e d t h a t n o sllver c o n t m t vas p r e s e n t a n d

! t h a t 111 fact t h e rir.gs werc made l x g t ? l y of t l n w i t h m z l l

q u a n t i t i c s of n l c k e l , lead and antimony.

The managing d i r e c t o r of the defendant company, Mr. Von

Mel len th ln , gave ev idencc t ha t he had first noticed t h e rjngs

being a d v e r t i s e d I n v a r i o u s Amciflcan j o u r n a l s , some of w h l c h

a d v c r n s e m e n t s w?re t ende red I n ev idence . He s a y s t h a t he

b e l i e v e d a t a l l timcs Chat thc s ta tc rnents made 3n those

advcrt isernents In American ?oul-nals and la ter rcpcated i n t h e

adve r t i s emen t s published on ‘uchalf of hls company werc t r u c .

However, 3.n February , 1975 , havlng ob ta lncd samples , hc wrote

t o a company i n South Afr lca known a5 C a m p u q n flcdia Pty.

I	Llmited and	asked. tllat	company	t o prepa re advc r l l s cmen t s	based
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upon t h e Am.?ricarl advcrtlscrnc,r!ts previously rcferred t o a n d

r e q u e s t i n g t h a t t h e r i n g s be s u b n i t t e d t o a jrwcller t o hc!

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'31c defendant company lmportcd apprcxm-lL "1.y 1 , 0 0 0 zlngs

f rnm the Un l t ed S t a t e s pay lnc j th.?rr-fcr 6 2 c e n t s per r Lng

e x c l u s i v e of f r e i g h t a n d o t h e r c h a r g e s . Thc! rincjs ;;ere

a d v e r t l c e d i n a magazlne ca l led "Ncw 1dr.a" whlch Z L khe

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r e l e v a n t t i m ? had a c l r cu la t ;o? m excess of 482,000.

The a d v e r t i s c ~ e n t c o n t a m e d a s t a t c r r en t t o t h c e f f c c t thlt

a re fund of t h e amount p a l d would he madc i f t h e pcrc11asc.i-

was n o t d c l l g h t e d a f t e r t e n days free t r l a l . M r . Von

M c l l e n t h i n s t a k e d t h a t r e f u n d s wcrc made, i f r c y c c s t e d ,

a f te r a l a p s e of 10 days. The ra te of c1Laims For refi;nd=. i n

respect of t h e r i n g s r e a c h e d a percentaqz whlch was dol15le

w?zat t h e company p o l i c y set as a reasonal~lc! ra te and

af te r approximately 500 r i n g s were sold. a d e c i s i o n was made

n o t to marke t any fu r the r r i ngs bccausc of the da~nage Chat

would be done t o the de fendan t company ' s r epu ta t ion v i th i t s

customers.

Counsel for the de fendan t company h a s a g a i n rellcd upon t?ie

o p p o r t u n i t y g i v e n t o ciaim 3 r e fund a s a f a c t o r i r , ~ n i t l g a t ~ o n .

H e h a s submitted a l s o t h a t t h e o f f e n c e i s onc brOUcJht &out by

c a r e l e s s n e s s a n d m s riot one of & l l b c r a t e dccr::lt:. ~ l t l ~ ~ ~ h

I am somewhat suspicious I do n o t t h l n l ; I hdvc suflTiclc?nC

material. on which I cou ld mal:f, a finding tha t t he dc fcndan t .

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It i s salcl on behalF of the dcfcndanC cc:-l_=my that no p r o f l t

was 1113dc on t h i s particular transact ion a n d that. I should takz

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t h a t clrcurnstance i n t o accounC I n mltlgation of the offence.

I n the circumstances of this case, whexc thf prochct \:&S

withdrawn from the rtlark.;et because of l ~ y e r r e s l s l a n c a , I do

not feel thz t the l ack of a p r o f i t is a significant f x t o r .

Mall-order custorncrs d3 not have the opportuni ty to l nsp -c t

! goods bcfore ordermg thcm. Th?' S makes it espec ia l ly

important that accuracy i n descr ipt ion i s achlzvcd.

I n the clrcunlstanccs I thlIk that the appropriate penalky

is $800.00.

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