Manufacturer, shop charged over garment labelling

Press, 28 July 1989, Page 18

Manufacturer, shop charged over garment labelling

A Christchurch leatherware manufacturer and distributor, and a Merivale shop were prosecuted in the District Court yesterday under provisions of the Fair Trading Act, over labelling of leather jackets. The charges against them were that they made misleading representations over the labelling of leather jackets by removing "Made in Korea” labels. The jackets had a Marcol, Christchurch, New Zealand label, and a misleading representation was alleged to have been made to prospective purchasers that the garments were made locally. The defendants were Marcol Manufacturers, Ltd, and Kimberley Fashions, Ltd. They were prosecuted by the Commerce Commission (represented by Ms Susan Bathgate) for breaches in July last year of the Fair Trading Act. After a day’s defended hearing Judge Hobbs reserved his decision. He heard defence evidence, although he has to rule on a submission by defence counsel, Mr Geoffrey Langham, made at the completion of the prosecution case, that there

was no case for the defendants to answer. While hearing submissions at the completion of evidence in the case the Judge commented that he was satisfied there was no difference in the quality of the leather jackets made in South Korea, and Christchurch. In the event, the public had not suffered. Ms Bathgate, in her outline of the commission’s case, said the commission alleged the defendants offered for sale leather jackets which were made in South Korea. Marcol allegedly represented the jackets to have been made in New Zealand by removing the “made in Korea” label, and leaving a label, “Marcol, Christchurch, New Zealand.” Ms Bathgate said the question for the court was whether this was a misleading representation about the country-of-origin of the leather jackets; and if so, whether either defendant could rely on the reasonable reliance provisions of the act. Ms Bathgate said the charge related to the defendants allegedly misleading rather than falsely representing the

country-of-origin. But for the existence of the Marcol label no offence would have been committed, she said. Ms Bathgate said during the hearing of a witness’s evidence that it was accepted the labels showing country-of-origin were not mandatory. That was not the issue in the case. Graham Arnold Wood, a senior investigating officer of the Commerce Commission said that upon receiving complaints from the Customs officers he went to Marcol Manufacturing and spoke to its managing director, Mr John Collingwood. He agreed his firm sold the style of leather jacket concerned, and that they were made in South Korea. He said his firm removed the “made in Korea” labels during the final checking process. He said the manufacturers’ Federation had advised that it was not necessary to show the country-of-origin on the jackets. Mr Collingwood told the officer he was unaware that by removing the labels he might be in breach of the Fair Trading Act. Mr Wood said he also visited Kimberley Fashions, Ltd’s, shop in Merivale Mall and inspected jackets. He found the type he was looking for, and noted some with the cut-off remnants of a black label. He spoke to the manager, Mr John McLaughlan, who said the jackets were not imported but were made by Marcol, in New Zealand.

Mr McLaughlan said no labels had been removed at his shop. During cross-examina-tion Mr Wood was asked if there was a legal requirement in New Zealand to show the country-of-origin of the garments. He said there was not, but the question was the intent in removing the labels. He said he was aware that to obtain the beneficial duty rate for jackets from developing countries these had to be identified to the Customs Department with their country of manufacture. He was not familiar with the procedures relating to this. Opening the defence case Mr Langham said in relation to Kimberley Fashions that there was no misleading representation; and that if there was, such contravention was because of a reasonable mistake, as provided for in the act. Such contravention, if any, was because of the firm’s reasonable reliance on information supplied by Marcol Manufacturers, Ltd; and the firm took reasonable precautions and due diligence to avoid that contravention. Mr Langham submitted also in the case of Marcol Manufacturing, Ltd, that there was no representation, and if there was it was not misleading. If there was a contravention it was because of a reasonable mistake, from reliance on information supplied by another person. Thomas John McLaughlan, a director of Kimberley Fashions, said

leather goods made by Marcol were not purchased for his shop directly, but from a buyers’ group with headquarters in Auckland. He was aware Marcol manufactured the goods in New Zealand, and South Korea. He was not aware the model of leather jacket concerned in the case was made in South Korea. It was not significant to him where they were made. The jackets were purchased from samples delivered to his shop and they were placed in stock for sale in accordance with the samples. He said the Marcol label in the jackets did not mislead him into believing they were manufactured in New Zealand. John Cuthbert Collingwood, a director of Marcol Manufacturing, gave evidence of the company having manufacturing plants in Christchurch, and South Korea, both using New Zealand skins. The labels denoting the garments “made in Korea” were removed as part of the finishing process on the garments in New Zealand. Mr Collingwood said the . New Zealand labels were placed on locally made products as the country-of-origin was required by law in Australia, if any were supplied to that market. The labels, “made in Korea,” were only required by his company so that they would qualify for preferential duty, on importation. Otherwise, it would not normally require labels on overseasmanufactured goods.