Conviction for breach of Fair Trading Act

Press, 29 July 1989, Page 6

Conviction for breach of Fair Trading Act

A Christchurch leatherware manufacturer and distributor was convicted in the District Court yesterday for a breach of the relatively new Fair Trading Act, over the labelling of leather jackets. In a reserved decision yesterday, Judge Hobbs found a number of mitigating circumstances. No complaints had > been received from the public about the jackets, and they had not suffered through any misrepresentation. He fined the company, Marcol Marketing, Ltd, $5OO. A similar charge against a Merivale shop, Kimberley Fashions, Ltd, was dismissed. The two companies, represented by Mr Geoffrey Langham, had defended similar charges, brought under the Act by the Commerce Commission, that they made misleading representations about the place of origin of leather jackets, in July last year. The case was heard on Thursday. Evidence and submissions in relation to the charges were leather jackets imported by Mar-

col from Korea, with made in Korea labels on them, had the labels removed when later offered for sale to the public. The jackets carried a “Marcol, Christchurch, New Zealand” label, and a “Swingtag” label with the Marcol name and address. The commission, represented by Ms Susan Bathgate, had contended the company, and Kimberley’s shop, made a misleading representation to prospective purchasers that the jackets were made locally and not in Korea. Evidence was that there was no requirement in New Zealand for the garments to show the country of origin. The Marcol company had manufacturing plants in Christchurch and Korea, processing New Zealand skins into garments. The company required the garments sent from Korea to have the made in Korea labels attached, so that it would qualify for preferential duty on them. The labels were then removed during the finishing process on the garments in New Zealand.

The charge related to the defendant’s misleading, rather than falsely representing the country of origin. The Judge held that the combined effect of the removal of the made in Korea labels and displaying the Marcol, Christchurch, labels was misleading. He held the charge proved against Marcol, but dismissed that against Kimberley Fashions. He said in relation to the latter defendant that its manager believed the jackets were made in New Zealand. That belief was mistaken, but the mistake was reasonably held. Fixing the penalty the Judge took into account mitigating factors, including that the complaint had come from customs officers and not members of the public. The quality of the jackets appeared identical, whether they came from Marcol’s Christchurch or its Korean factory. There had been, at most, a degree of thoughtlessness or carelessness in relation to the labels, and he noted that the company had now made appropriate changes.