Following action by the Australian Competition and Consumer Commission, the Federal Court has declared that Hercules Iron Pty Ltd and its director, Mr Tom Hatz were guilty of contempt by failing to comply with court orders prohibiting supply of bunk beds that did not meet the mandatory product safety standard.
In February 2008 Justice Gordon of the Federal Court made final orders against Hercules Iron including restraining the company from supplying bunk beds that did not comply with the mandatory Trade Practices Act Product Safety Standard.
The ACCC's contempt proceeding followed the ACCC's identification of a number of 'Asteroid' and 'Comet' bunk beds supplied by the company after the February 2008 court orders.
In addition to declaring that Hercules Iron and Mr Hatz were both guilty of contempt of her earlier orders, Justice Gordon imposed a fine of $10,000 on each of the company and Mr Hatz. Justice Gordon also ordered the parties to pay the ACCC's legal costs of the matter on an indemnity basis.
Australian children have died or been seriously injured through poor design of bunk beds. Mandatory standards are in place to minimise risk and non compliance with them is a serious matter. The ACCC actively enforces mandatory product safety standards and companies are well advised to ensure that they have proper processes in place to ensure compliance.
In handing down her reasons for judgment, Justice Gordon observed the conduct of Hercules Iron and Mr Hatz was not a technical violation of the law "but a violation directly and substantially impacting on health and safety issues."
ACCC Chairman, Mr Graeme Samuel, said the need for litigation could have been avoided if the company had done the correct thing in the first place by undertaking proper product recall action and getting its compliance processes in order.
"The company and Mr Hatz were given every opportunity to get it right – this has been and will continue to be an expensive lesson for the company and Mr Hatz.
"I should also sound a more general note of warning. That is, the ACCC does not close the file once orders have been made by the court."
Mr Samuel said the ACCC will take active steps to ensure court orders are complied with.
"Where the ACCC is concerned there has been a breach of court orders it will have no hesitation in swiftly bringing the matter back before the court for enforcement or contempt proceedings.
"The ACCC regards breaches of court orders very seriously and will be especially vigilant where the breach of orders involves the supply of products that may cause serious injury or even death to consumers," Mr Samuel said.
Details of the product recall are available on the ACCC's recalls website, www.recalls.gov.au.
