Ascot Four Pty Ltd (Formerly Zamel's Pty Ltd) appeal dismissed

The Full Court of the Federal Court has dismissed an appeal made by Ascot Four Pty Ltd*, the former owners of the Zamel's jewellery chain.

As a result of an investigation by the Australian Competition and Consumer Commission, the Commonwealth Director of Public Prosecutions laid 11 charges against the jewellery chain in December 2006.

On 21 August 2008, the Federal Court found that Ascot Four falsely represented that the purchase of 11 items advertised in the Zamel's Christmas 2005 catalogue would have resulted in a saving of the difference between the sale price and the strike through price in breach of section 75AZC(1)(g) of the Trade Practices Act 1974, which prohibits false or misleading representations being made in relation to the price of goods.

On 23 January 2009, the Federal Court ordered that a conviction be recorded on each of the 11 charges against Ascot Four and that it pay a penalty of $380,000. Further information on the charges is available in the ACCC media release MR318/06 dated 20 December 2006, available from www.accc.gov.au.

Ascot Four filed a notice of appeal on 11 September 2008. The appeal was heard before Chief Justice Black and Justices Ryan and Jagot.

On Tuesday, the Full Court unanimously dismissed the appeal and ordered Ascot Four to pay the ACCC's costs.

In referring to the decision of the primary judge, Justice Mansfield, the Full Court accepted that: "the strike through price would be understood by some potential purchasers as meaning something other than the mere ticketed or offer price. The representation as found was false because no consumer ever paid the strike through price (or anything close to it) before the sale period. Hence, consumers of the type assumed by the primary judge, when they read the sale catalogue, would have formed an erroneous belief about the price they would have had to pay."

ACCC Chairman, Mr Graeme Samuel, said today: "The Full Federal Court's judgment reinforces the ACCC's message to retailers who use two price advertising that the represented savings must be legitimate. The ACCC seeks truth in advertising and consumers have every right to expect it."

*During the relevant period of the conduct, around July 2005 to early 2006, the defendant was the proprietor of a jewellery retailer business trading under the name Zamel's. In March 2007, the business interests of Zamel's were sold to an unrelated entity, which continues to trade under the name Zamel's today. The court's judgment does not relate to the current operator of the Zamel's jewellery stores.