Dunedin company and executives fined $28,000 for misleading advertising
Published30 May 1996
(Note: This case was subsequently appealed to the High Court. The findings were altered and the level of fines against Mr Keith Weatherall and Weatherall Jewellers were reduced.)
Issued 30 May 1996
Dunedin company and executives
fined $28,000 for misleading advertising
A Dunedin company, Weatherall Jewellers Ltd, and two of its senior staff have been fined a total of $28,000 in the Dunedin District Court today after being found guilty of five charges under the Fair Trading Act.
The Commerce Commission prosecuted Weatherall Jewellers, its Governing Director, Keith Weatherall, and its General Manager, Brent Weatherall, after the company ran a misleading month-long advertising campaign last year.
Commission Chairman Dr Alan Bollard said the campaign advertised a sale starting with 10 percent discounts, which increased by two percent each trading day until they reached a maximum of 50 percent. The discounts were promoted as "off all stock" and "remember this applies to all stock".
However, some stock displayed in the shop was not available at the discounted price, and during the sale other stock was no longer available at the discounted price.
Dr Bollard said the Court's decision reinforced an important aspect of the Fair Trading Act.
"It is not enough for Weatherall Jewellers to try to correct its misleading advertising after people had come into the shop," he said.
"A misleading representation cannot be cured at the point of sale. Trying to fix misleading advertising, or any other kind of misleading claim, after people have come in to do business, is not a defence under the Fair Trading Act."
Judge T.H. Everitt said: "I find that is exactly what Mr Weatherall intended to do; he intended to entice shoppers and his customers into his store on the false premise that all stock displayed in the store would be subject to the discount but knowingly and intentionally reserving the right to himself and his son Brent to remove stock that was in the shop at any time, or to place notices on certain items of stock saying that it was not for sale."
Weatherall Jewellers was fined $20,000, Keith Weatherall was fined $5,000 and Brent Weatherall was fined $3,000. Each defendant was also ordered to pay $100 solicitors fees and $95 court costs.