Vol. 298 No. 4
I move amendment No. 1:
In page 2, subsection (1), after line 17, to insert " `the Director' means the holder of the office of Director of Consumer Affairs established by section 9 of this Act;".
The purpose of this amendment is to make it easier to identify the provision establishing the office of director and to indicate that the Director of Consumer Affairs is the person in question where the term "director" is used in other parts of the Bill.
Will there be a corresponding amendment to section 9 which is referred to subsequently?
There is an element of tautology there in the sense that it is repeating something which, if this amendment is agreed, is being interposed in the definition section. However, I do not think there is any compulsion to amend section 9 because of that. It would be neater if it were but, in my view, it does not affect the validity of the definition.
I know it does not affect the validity of the definition but it is tautologous to have two definitions of the same man and the same office. Here again we are having a repetition of the sloppiness we had in the last Bill which resulted in the unprecedented sending back of a Bill to the Seanad because it had eight errors. We will have the same problem now because this definition is given twice. If we agree to this I suggest that the words in section 9, line 9, "and is referred to subsequently in this Act as the Director" should be deleted.
I am prepared to agree to the amendment of section 9.
On that basis I will agree to the amendment. Perhaps the Leas-Cheann Comhairle would have an amendment to that effect circulated: that the words in lines 9 and 10 from "and is referred to" to the end of the subsection be deleted.
That is agreeable.
That will be done.
I move amendment No. 2:
In page 2, subsection (1), to delete lines 25 to 28, and to substitute " `services' includes any services provided by a person in the practice of a profession but does not include anything done under a contract of service;".
The effect of this amendment is to avoid possible confusion in the definitions of "service" and "services" which are at present given separately.
The word "service" is no longer defined. It appears in the Bill but my problem is to find it. I have to sit here alone without anybody to refer me to anything. The Parliamentary Secretary has an enormous advantage because the people who drafted the Bill are beside him. I am sure the word "service" appears in the Bill because if it did not it would not appear in the definitions. What will you do if you delete the definition of "service"?
In view of the doubt raised by Deputy O'Malley it would probably be better to revert to the original definition and make any changes necessary in the definition at a later date. My amendment probably would not improve the situation. The exclusion of a particular paragraph would shorten the Bill but this might not necessarily be beneficial. Therefore, it probably would be better to leave the Bill as it stands and withdraw the amendment.
Amendment, by leave, withdrawn?
I have no objection, but this sort of carry-on is not very reassuring about the Bill or the proposed amendments. We have been at this Bill and the other one for 40 minutes now and certainly one is not too satisfied with what has been happening.
I move amendment No. 3:
In page 2, line 35, to delete "if but" and to substitute "if, but".
The purpose of this amendment is merely to make the sense clearer by the insertion of a comma.
Oh, all right.
I move amendment No. 4:
In page 3, subsection (2) (b), line 48, to delete "section 2" and to substitute "the said section 3 (1)".
The purpose of this amendment is to correct a mistake. The definition of trade description is contained in section 3 (1) of the Principal Act and not in section 2 thereof.
Mistakes are common and we try to rectify them as best we can.
I move amendment No. 5:
In page 4, after line 3, to add a subsection as follows:
"(3) In this section the word `false' and `misleading to a material degree' shall be construed to mean `likely to mislead members of the public to whom it is directed' ".
This relates to the definition of a false trade description which appears in the 1887 Act and extends it to mean that the reference will be to false in a material degree as if references to a material degree were false to a material degree and excluded references as misleading to a material degree. Something could be false in a material respect or false to a material degree or misleading to a material degree to some people and the point I am trying to make is that, even if it is misleading to some people, that should not be the basis of a false trade description for the purposes of this section or section 3 of the 1887 Act provided it is not false or misleading to a material or significant degree to those at whom the advertisement or description is aimed. For example, one can think of medical advertisements in no sense misleading to doctors or pharmacists to whom they are directed or aimed but which might well be misleading to the public at large who may not understand the advertisements or maybe even not be intended to understand them. One can envisage that would apply also to broader matters than just medical matters. It could apply to various matters where the trade description is not aimed at the community at large or at consumers generally but is aimed at a very specific, specialised or élite group of consumers who are not and could not be misled. But the public at large might well be misled and in those circumstances it would be unfair, if it were liable to mislead the public at large, to regard such a trade description as a false one with the various consequences that would flow from that and, for that reason, I would ask the Parliamentary Secretary to limit the application to this extent.
As the Act stands, I think the interpretation of misleading to a material degree means likely to be taken as such an indication as any of the matters specified in the definition of trade description under section 2 of the Principal Act that would be false to a material degree. The relevant words are likely to be taken for such an indication. The courts in interpreting this would apply the principle of the effect this would have on a reasonable man and, obviously, there might be individuals who would be incapable, for instance, of reading the writing on a particular advertisement and who, because they were illiterate, might be misled by something that appeared in a picture in the advertisement. The fact that some members of the community might be misled by a particular advertisement would not necessarily invalidate the advertisement and it is, therefore, necessary to have the general provision that it be misleading to the general public.
There would be a problem in putting the amendment in the form suggested by Deputy O'Malley as it would be very difficult indeed to prove precisely to which members of the public a particular advertisement was directed if it were published in a particular manner. There might be a wide range of people who might see it and be influenced by it. I believe it is better to allow the courts to decide whether or not a particular advertisement is misleading in a material respect rather than require the State, in order to have a successful prosecution, specify the class of persons to whom the advertisement was directed and prove that that particular class rather than the generality or the reasonable man would be misled by the terms of the advertisement. If the burden suggested by Deputy O'Malley were imposed on the State of having to go into the degree of knowledge of individuals in a particular class, possibly an advertisement about a medical preparation, which was blatantly false, might not be considered to be misleading because it might be argued that a sensible medical person would know from his previous training that it was so and he would not be misled. If the firm were to argue that it was medical people to whom the advertisement was directed, they might be able to evade prosecution even though there might be many other people who would act on the advertisement because it came to their knowledge as well as to the knowledge of members of the medical profession. I feel it is better to leave the section as it stands.
The Parliamentary Secretary spoke about the possibility that 1 per cent of the people in the country might not understand the advertisement because they are illiterate. This is not the kind of case I am talking about. I am thinking about the case where the advertisement or the trade description, as the case may be, is directed at a very small section of the community, perhaps a lot less than 1 per cent and where 99 per cent of the community might be misled. The trade description is not directed at them anyway so it does not matter there. They will not purchase the goods, presumably, either.
The court could meet the point made by Deputy O'Malley by interpreting the words "material degree". If an advertisement was clearly directed only at a certain sector of the community, the court might decide that it was not misleading to a material degree in so far as it might be seen by other parties. The materiality here would meet the point made by Deputy O'Malley.
Would the Parliamentary Secretary spell out for us what are the consequences of a false trade description in the 1887 Act as now amended by this section? Are they purely criminal or are they criminal and civil?
This legislation and the antecedent legislation is legislation in the criminal code. The consequences are purely in relation to criminal proceedings not civil.
Will proceedings under this section be taken by the Director of Consumer Affairs, the DPP, the AG or by the Minister?
Prosecutions are dealt with later in the Bill. It is envisaged that three categories of people can initiate prosecutions, namely, the Director of Consumer Affairs, the Minister and certain corporations and local authorities. In relation to the matter raised by Deputy O'Malley, I refer him to section 24 of the Bill which says:
A contract for the supply of any goods shall not be void or unenforceable by reason only of a contravention of any provision of the Acts or this Act.
That separates the criminal from the civil.
During Second Stage I made the point that one of the problems about this Bill, as I saw it then, was that while it tightened up to some extent the Merchandise Marks Acts 1887 to 1970 it does nothing for the individual consumer who may have been damaged by, for example, a false trade description under this section. He gets no personal redress for whatever loss he may have suffered by it.
This will be the subject of an amendment, which is just circulated, to allow for the award of civil damages by the court.
The Parliamentary Secretary has accepted my suggestion in relation to that. It is a pity that we get the amendment so late.
I agree. I apologise to the Deputy that the amendment has come so late.
We passed the Second Reading of this Bill last November. The Minister for Industry and Commerce some weeks ago, at a committee meeting, complained bitterly that I put in amendments to the Science and Technology Bill and gave him only five days' notice. Here is one now with no notice but it is such a good one and is exactly on the lines I asked for that I will not complain any further.
Some people are concerned about the provisions of this section which terminates certain defences. I suppose it does not matter a lot in a small case but it could matter a lot in a serious case that it shall not be a defence for a person charged with an offence. Should section 2 (1) refer to section 3 (1) of the Principal Act? In any event, it shall not be a defence for the person to prove that he acted without intent to defraud. If something is done by a genuine error, which is corrected at the earliest possible moment, nonetheless the person is guilty of an offence. I know this is a tendency, which is growing in our legislation and, perhaps to some extent, in matters of this kind it has to. In a serious charge it could create quite a difficulty for a defendant who is bona fide and who simply made an error which he corrected at the earliest possible moment.
The purpose of the section is to substitute the defences contained in section 22 of this Bill for the defences which existed in section 2 (1) and (2) of the original Merchandise Marks Act, 1887. In section 2 (1) a number of matters are itemised which may be offences. It is stated that:
These shall, subject to the provisions of this Act and unless he proved that he acted without intent to defraud be guilty of an offence under the Act.
Section 2 (2) states:
Every person who sells or exposes for or has in his possession for sale or any purpose of trade or manufacture any goods or things to which any forged trade mark or false trade description is applied or to which any trade mark or mark so nearly resembling a trade mark as to be calculated to deceive is falsely applied as the case may be, shall, unless he proves—
(a) that having taken all reasonable precautions against committing an offence against this Act, he had at the time of the commission of the alleged offence no reason to suspect the genuineness of the trade mark, mark or trade description; and
(b) that on demand made by or on behalf of the prosecutor, he gave all the information in his power with respect to the persons from whom he obtained such goods or things; or
(c) that otherwise he had acted innocently;
It is considered that in practice it may be relatively easy for people to prove within the terms of those defences that he acted innocently; in fact, in practice it probably would fall on the prosecution to prove the existence of a guilty intent. It is proposed to substitute for the defences which I have just outlined, which necessitate, if one may speak generally, an intent to defraud, the defences contained in section 22 (1) and these defences are to the effect that:
In any proceedings for an offence under section 2 of the Principal Act involving a false trade description or an offence under this Act it shall, subject to subsection (2) of this section, be a defence for the person charged to prove—
(a) that the commission of the offence was due to a mistake or the reliance on information supplied to him or to the act or default of another person, an accident or some other cause beyond his control; and
(b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any other person under his control.
The present Bill would lose its effectiveness if the original provisions were retained and careless application of false descriptions without intent to defraud were permitted. Accordingly, the provision has been removed and the defences in section 22 which require a more positive proof by the defendant that the offence was due to a mistake or the reliance on information supplied to him by another person and that he took all reasonable precautions. I am advised that the new form of defences are more appropriate to modern legislative and court practices and will be more effective.
Not for the defendant, presumably.
I move amendment No. 6:
In page 4, after line 52, to add a subsection as follows:
"(4) Notwithstanding any provisions of the Acts or of the three foregoing subsections of this section, this Act shall apply to sales of land by private treaty and to sales of vehicles otherwise than by ways of trade."
The Bill and the Acts seem to apply to sales in the course of trade and not, generally speaking, so far as one can see to private non-trading sales.
Exclusively to the former.
Yes, exclusively. There are two particular areas that are referred to here in which difficulties can be created where there are sales otherwise than in the course of trade, and they are in the sale of land privately or, as I described it in the amendment, by private treaty, and in the sale of vehicles, particularly motor vehicles, and in the main I would have in mind there, generally speaking, secondhand vehicles.
There is probably more litigation arising out of alleged misdescriptions of motor vehicles sold privately than there is probably in relation to any other single category of goods which are sold. Such protection as this Bill gives—and it is limited to the criminal side of things; it is not a civil Bill at all—should be extended to the private sale of motor vehicles, in particular, and to the private sale of land.
Unfortunately, I drafted these amendments in the middle of last November, that is, four-and-a-half months ago. All these matters were very much on the tip of my tongue at that time and I studied the matter in some detail. I did not know until this morning that this Bill was being ordered for today, and had to come in and take it without being able to go back and read all my notes, because I already had to deal with the Friendly Societies Bill. I would like to expand this somewhat more if I had the opportunity to do it. I presume the sale of land by an auctioneer at an auction is a sale in the course of trade, and that, therefore, the auctioneer would be liable to prosecution for a false trade description of that land, and I am assuming that land is, in fact included. The description of goods in section 1 covers ships, vehicles and aircraft, land, things attached to land and growing crops, and the description of land, as the Parliamentary Secretary will know, includes houses and all types of property, not just agricultural land. Therefore, if an auctioneer at a public auction gives a description of land in its widest generic sense which proves to be false and if he is going to be prosecuted for that, that is fair enough, but the person who, say, inserts his own advertisement or does his own selling orally should be liable to the same penalties as somebody who is carrying on trade. We come to the second half of the amendment, motor vehicles. If they are sold by a garage proprietor in the course of his trade and he gives a false trade description of some car he is selling, he is liable to prosecution, but if the owner of the car does the same thing or something even more serious and gives a more serious misdescription, he is not liable at all. I find it difficult to be satisfied in my mind as to why it should apply only to sales in the course of trade when you have, for example, in the secondhand car market extensive non-trade purchasing and sale often giving rise to difficulties and to litigation. Regarding the sale of land, I cannot give an exact figure but I estimate from my experience of it that about 90 per cent of land and houses are sold otherwise than by public auction or, perhaps, more than 90 per cent.
They would be sold mostly through auctioneers.
Is the Parliamentary Secretary suggesting that if it was sold by private treaty through an auctioneer——
The auctioneer would be responsible for the truth of the particulars and could be proceeded against.
Would the vendor in those circumstances be liable?
No, the auctioneer.
Only?
Yes.
Let us assume that approximately 50 per cent of property is sold by auctioneers. That is probably a reasonable guess.
I would say it is an underestimation of the facts. It does not matter for the purpose of argument.
For the purpose of argument I am assuming that 50 per cent of property is not sold by auctioneers. The Parliamentary Secretary would then appear to be applying two standards. He would make the auctioneer liable criminally for a false trade description but not make the private vendor liable. According to him, the auctioneer is liable where the vendor as likely as not gave a false description to the auctioneer who only passed it on. That vendor would not be liable and the auctioneer who had, possibly in good faith, passed it on would be.
I do not want to interrupt the Deputy but in relation to the point he made the auctioneer would have the defence which is contained in section 22 of the Bill. If he could prove that the commission of the offence was due to a mistake or a reliance on information supplied to him or to the active default of another person, if the private vendor gave the auctioneer wrong information, the defence contained in section 22 (1) would apply to the auctioneer so long as adequate or reasonable precautions are taken and due diligence is exercised to avoid commission of such offence by himself or any other person under his control. If he exercised all due diligence and having exercised all due diligence he still found he gave wrong information because he got the wrong information, and had taken all necessary measures to check it and it was still wrong, he would have a good defence.
The danger in Deputy O'Malley's amendment is that we are in this Bill extending the area of criminal law to certain statements made in the course of trade or business and we are extending it quite widely. We are spreading the net of criminal liability. The justification for this in jurisprudence would be that one party is selling in the course of trade or business and the other party is buying as a consumer and not in the course of trade or business so that there is unequal bargaining between the two, and, therefore, it is necessary for the criminal law to step in and protect the consumer who is in the weaker bargaining position as against the trader who is in the stronger bargaining position in relation to the possession of information and so forth. To bring criminal liability as far as Deputy O'Malley's amendment envisages and extend it to private sales of land between two individuals who are presumably in a perfectly equal situation would be bringing the criminal law right into the heart of civil law. If misrepresentations are made—they would be termed misrepresentations in the context of civil law—if there is a false trade description in the context of criminal law, if misdescriptions are given it is best if they are private proceedings and not in the course of trade or business, to allow them to be dealt with in the normal way, through civil law. I would not without reason favour this extension, though I agree that if one did have to select two areas where there might be necessity for some extra protection, land and vehicles would probably be a prime consideration. However, it would be better not to get into the area of private deals at all but to confine the Bill to dealing with sales made in the course of trade or business.
The Parliamentary Secretary said a minute ago that the vendor was selling in the course of his trade and that it was an unequal relationship because the consumer, as he put it, was not buying in the course of trade. I think they are the words he used.
More or less.
It seems that very frequently that may not be so. Surely every purchase from a trader is trade from the point of view of both the purchaser and the vendor. Many purchases from, say, a wholesaler by a retailer are purchases by a trader from a trader and the relationship would appear to be equal.
To clarify it, the Bill applies to sales in the course of trade or business and it is not necessarily confined solely, as my initial contribution might have given the House to believe, to purchases made by consumers, but the necessary criterion is that it be a sale in the course of trade or business and it does not matter who is buying.
Is the Parliamentary Secretary differentiating between a consumer and some other type of purchaser?
In effect, my illustration may not have been very apt in that the distinction is between a person who is selling in the course of trade or business and a person who is selling purely as a private individual on a once-off basis; he is selling something of his own, he is not selling on a continuing basis.
Is the Parliamentary Secretary not aware that in the sale of secondhand cars in particular there are frequent complaints that what was in effect a trade description that was given with the vehicle was false.
This would be a direct sale?
Yes. This could give rise to a lot of litigation and is it not appropriate that that area might be covered by such protection as this Bill would give?
It would be very difficult in practice to do that. If a person holding himself out in course of trade or business to sell a particular thing, is consistently making a misstatement, one has the opportunity of identifying him, because he is a known individual, and of getting evidence against him because he will continue to be in business making similar sales. If one cannot get sufficient information to catch him out in relation to the first sale the information can be obtained in relation to a subsequent sale.
The practical difficulties involved in policing what one individual says to another in a purely private capacity are enormous. If I were to sell another Deputy a motor car the deal could be conducted orally and words could be spoken about what the car could or could not do. The idea that the Director of Consumer Affairs would have the duty to investigate what I said to a Deputy about the car that I had agreed to sell on a particular day, would impose a very heavy burden of enforcement on the director and on the Minister for Industry and Commerce. The hardship imposed by the failure to make such a provision is not very great. If people want to buy secondhand cars in relation to which they can be sure there is enforcement of the truth of the statements, by virtue of this Bill they can go to somebody selling secondhand cars in the course of business rather than buy a car from an individual who is not doing so. If this were to be extended to land and to vehicles one would open the way to having it extended still further, to bicycles, or to a land rental situation. If one once enters the area where one is dealing with sales made by private individuals not in the course of trade or business the list could be extended indefinitely.
The 1887 Act was amended many times and was amended as recently as 1970. I have not all those amending Acts and unfortunately one cannot get a version of the original Act as it stands amended today without going through all of those amendments. I have not the time to do that, nor anybody to do it for me.
It would appear from 2 (1) (d) of the 1887 Act that the prohibition on false trade descriptions applied to every person. That is the beginning of subsection (1) to section 2—any person who (a), (b), (c), (d), applies any false trade description to goods. There was no concept of its having to be applied in the course of trade or in the course of a sale by somebody whose trade or profession it was to do it. Is this concept of trade being introduced now for the first time, or is it in one of the other amending Acts between 1887 and 1970?
I am advised that in the Merchandise Marks Act, 1887, it is confined to trade or business. The expression "goods" means anything which is the subject of trade, manufacture or merchandise. The Deputy's point may have validity. I cannot to my own satisfaction answer the Deputy's point so far as the applicability of the 1887 Act is concerned outside the area of trade, business or profession. It is clear from the terms of this Act that the provisions of this Act will be applied solely to trade, business or profession by virtue of the fourth and fifth lines of section 4.
The matter is of some importance because it may be that this concept of confining the Merchandise Marks Acts generally, of which this is one, to sales in the course of trade may be a new concept that was not there in 1887. If this is so it would seem strange that it was found possible in 1887 to extend it to all sales and purchases but in 1977 it is confined simply to sales which are made in the course of trade. It would seem to be a retrograde step.
I have the answer. The word "person" is defined as manufacturer, dealer or trader so that referring back to section 2(1) the word "person" is confined to manufacturer, dealer or trader.
With the greatest respect, the Parliamentary Secretary is wrong. Section (3) says:
The expressions "person", "manufacturer", "dealer" or "trader", and "proprietor" include any body of persons, corporate or unincorporate.
That does not define "person" as manufacturer, dealer or trader but it defines manufacturer, dealer or trader, as including any body or person, corporate or unincorporate.
That is correct. I must fall back then on the definition of "goods" which means anything that is the subject of trade, manufacture or merchandise. Presumably trading, manufacturing or merchandising would occur only in the course of trade or business.
The word "goods" refers to anything that is the subject of manufacture. For instance, a secondhand motor car would be the subject of manufacture since it was made at sometime. It should not be merely a question of the Parliamentary Secretary trying to find something in section 3 which would enable him to say that the 1887 Act applied only to trade. It is important that we would know the position exactly and that if that position applied to all sales from 1887 we should not now in 1977 be confining these Acts to a limited category of sales and to be excluding, for example, what I am trying to have included by way of this amendment.
I assure the Deputy that in practice the Merchandise Marks Acts have applied only in the area of trade or business. They have not been applied in the area of private sales. It is implicit in the understanding of the word "merchandise" and of the very essence of the words "trade description" that we are dealing with trade descriptions legislation. The word "trade" in that sense indicates that the legislation is confined to trade or business. I assure the House, too, that there is no confining of the application of the legislation to areas in which it applied previously under the terms of the Merchandise Marks Act, 1887. I regret that I cannot put forward a definition from the 1887 Act which would make it clear that this is the case but I assure the House that in practice this is the position.
If that is so why is it necessary to include in this Bill numerous specific statements to the effect that only in the course of any trade, business or profession is this question of false trade descriptions to apply? This statement appears in subsection (1) of section 4 and it appears further in subsections (2) and (3) of the same section.
Perhaps the discussion we have had answers the Deputy's point in the sense that there is not sufficient clarity in this regard. Certainly, the cursory reading of the section that has been possible here would not indicate clearly what has been the practical position since the enacting of the 1887 Act. Since this Bill is extending the scope of the concept of "trade description" from the narrow area of trade marks to which it applied in the merchandise marks legislation it is necessary to indicate more clearly than was the case previously that the term is confined to sales that take place in the course of trade or business.
It is possible also that in the context in which the Merchandise Marks Acts were drafted the distinction between private and public sales was not as specific as is the case now having regard to the nature of the economy at that time. In practice and with the evolution of enforcement of the legislation down through the years the provision has been confined to what we know now as trade or business. Perhaps it is for that reason that the distinction is being made. It is possible that in 1887 there was a much greater number of transactions on a private basis than is the case now.
Perhaps that is so but is this not the aspect of the matter that causes concern? Although for consumption purposes on the part of the public this legislation is referred to as consumer information legislation in effect it is merely another amendment to the Merchandise Marks Act, 1887 which has been amended many times. The difficulty is that it appears that this 1887 legislation was applied to private sales but that we are now excluding all such transactions from the legislation in this area. This is a regressive step. Consumer protection should be extended as a principle rather than to be remote or withdrawn or made narrower in its application.
Is the section agreed?
I cannot agree to this section. I have made an important point. It is not my wish unnecessarily to prolong this discussion but the Parliamentary Secretary should not come here without having available to him the provisions of the Merchandise Marks Acts. He should not come to the House on Committee Stage seeking to have the law amended unless he knows what the law is. He is floundering here because he does not know the position. Admittedly this area of the law is not one about which many of us know a great deal but anybody bringing a Bill before the House seeking amendment of existing legislation should know what that legislation is and if he does not know it he should have people available who are in a position to apprise him of the situation. Unfortunately that is not the position in the present case. The Parliamentary Secretary is not aware of the effect of section 3 of the 1887 Act. It would appear to me that that section included all sales since it contains nothing that would confine it specifically to trade sales. Section 4 here makes it very clear that from now on only trade sales will be covered. That is regressive in the sense that where we had everything covered before, we now only have a limited percentage of transactions covered. That is not moving in the right direction.
The whole point here is to recall what the Merchandise Marks Acts were about. They were about trade marks, a very confined area of the use of certain symbols to indicate a certain quality or a connection with a particular firm. One would use that sort of symbol only if one were selling things in the course of trade or business because the trade mark is, in effect, an abbreviation to indicate that a particular thing is part of a particular series. Therefore by implication, by the very essence of the sort of matter we are dealing with, a trade mark implies that it is confined to trade or business. A trade mark is a symbol with this purpose.
What we are doing in this Bill is extending very greatly the scope of what was originally envisaged in the merchandise marks legislation, namely, a statement in relation to goods which if false is criminally actionable. In the original legislation, that was confined to a very limited category of matters, namely, trade marks which of their very essence would be confined to trade. We are now extending the scope of this concept of a statement made in relation to a sale which if false is criminally actionable to a wide range of matters including fitness for purpose, and in effect any material information about the goods, not just the narrow use of a trade mark and the relationship of that trade mark to other types of goods being produced by the same manufacturer. In sum, my submission is that the very essence of the merchandise marks legislation was such that it would be confined to transactions in the course of trade or business.
The Parliamentary Secretary is apparently correct in saying that the Merchandise Marks Act of 1887 applied only to trade marks. If he looks for example, at section 3 (1) and sees the definition of trade description, he will find that it covers many things that are certainly not trade marks. That list has been considerably extended by section 2 (1) of this Bill and it includes things like "(k) as to the contents of books or films or as to their authors or producers". It has gone a long way from just trade marks. The things listed there from (a) to (e) in the definition of trade description are much wider. I do not want to delay the matter unduly but it is unsatisfactory that the Parliamentary Secretary is not able to tell us with any certainty, other than his belief which no doubt is bona fide but is still only his belief, that the 1887-1970 Acts applied only to trade. If it was so certain that they applied only to trade —they have been in operation for 90 years—why should it be necessary to bring in all the amendments contained here in section 4?
It is trade description : that is trade.
If that is so, why go to all the trouble in this Bill to define it as applying only to trade?
Because it is being extended very greatly and it is probably desirable to have——
I do not think "probably desirable" is sufficient grounds for us to legislate on.
Is section 4 agreed to?
No.
Would the Parliamentary Secretary tell us how a trade description would apply to goods which were not in existence at the time the advertisement containing the description was published?
This is designed to cover a situation where an advertising campaign might be launched in relation to a particular range of goods and it would be stated at the outset that company X will be making available to the public goods which have the following qualities; that advertisement might appear on 30th April and the goods, or some quantity of them, might be manufactured on 1st May and made available to the public on 6th May. Quite clearly, the public would understand the advertising to relate to these goods because the same brand name would be used and the advertisement would be in relation to a particular set of goods clearly identifiable and the mere action that advertisement appeared, and that a particular number happened to have been manufactured the day after the particular set of goods might not appear in the shops until a week after the advertisement appeared, should not invalidate a prosecution against the person who had put forward a misleading advertisement in relation to the goods. Otherwise it would be necessary to prove the individual manufacturing dates of individual items on a shelf and one might have been manufactured before the advertisement and another after the advertisement appeared and one could say the advertisement was misleading in respect of A but not in respect of B if one did not have a provision like this.
Does this section apply to advertisements of all goods or is it only those sold in the course of trade? I am thinking of an advertisement for a motor car, for instance.
It applies solely to sales in the course of trade or business.
It does not seem to say that, does it?
I do not think it is necessary it should. This is governed by section 4.
I move amendment No. 7:
In page 5, subsection (1) (b) (ii), line 21, after "nature" to insert ", effect or fitness for purpose".
This amendment extends the effect of the subsection so that a false or reckless statement made about the fitness for purpose of the service or accommodation or facility would be an offence in the same way as a statement about its nature. The change was recommended by the National Consumers' Advisory Council and it is desirable as it will cover situations where services or facilities clearly could not fulfil their purpose. The concept of fitness for purpose is already included in relation to goods in section 2 (1) (g). When one is introducing the concept of extending the protection of services one is entering a new area and it was not realised in the original draft that there could be a distinct concept of the fitness for purpose of a particular service in addition to its actual nature and people might be interested in whether a service, apart from being of a particular nature, went on to produce a further effect and for the purpose of definition and comprehensiveness this amendment is, therefore, necessary. It also brings the provision in relation to services in line with the provision in respect of goods.
I move amendment No. 8:
In page 5, subsection (1) (b) (ii), line 21, to delete "service" and to substitute "services".
The purpose of this amendment is to make the sense of the provision clearer.
This word relates back to the amendment withdrawn on the definition section.
Yes. As the Deputy will see if he compares section 6 (1) (b) (ii) with 6 (1) (b) (iii) and 6 (1) (b) (iv) the plural is used in (iii) and (iv), whereas the singular is used in (ii).
And in (v).
Yes. The purpose is to achieve uniformity.
Is it proposed to amend (v)?
I do not think it is necessary to amend (v) because this relates to the place in which the service, facility or accommodation is provided. Place of its essence is singular and, therefore, the service would be singular in so far as it is provided in a particular place. Service is plural if it is provided in a number of places but I do not think it is necessary to have the plural in (v).
What about a bus service or train service?
Section 6 (1) (b) (v) would be interpreted here in the sense that it would be applied to each of the cases in which the bus service was provided. If one were arguing it was a service provided in a particular place the bus service provided in that particular place would be singular but if one wished to deal with a number of of locations one would use that subsection a number of times in respect of each of those places.
I move amendment No. 9:
In page 5, subsection (2) (b), lines 41 to 43, to delete ", whether or not the person making it had reasons for believing that it might be false" and to substitute "unless the person making it had adequate reasons for believing that it was true".
Section 6 (2) (b) sets out to define the word "recklessly" used in subsection (1) (b). It may be argued against the existing draft that if a person making it had reason to believe that it might be false he would be making a false statement and not a reckless statement. The effect of the amendment is to ensure that any statement made, without positive reasons for believing it to be true, would be a reckless statement. In addition, the point has been made that proving knowledge by a person in section 6 (1) (a) could be too onerous a burden on the prosecution in which case the prosecution can fall back on the offence in section 6 (1) (b) in respect of which the definition now proposed in this amendment is clearer.
There will be the same difficulty of proving that he did not have adequate reasons for believing it was true.
It is more or less a shifting of the onus. The onus will now be on the defence to produce the reasons whereas if it is left "recklessly" the onus is on the prosecution to prove that he was reckless. He will have to come up with reasons.
"Adequate" was not in the original draft. The subsection stated:
Whether or not the person making it had reasons for believing that it might be false.
Now it states:
Unless the person making it had adequate reasons for believing that it was true.
Who decides how adequate is adequate?
The court. In fact the idea of adequacy is necessary because the situation created by the amendment is that the defendant will now have to produce the reasons on which he based his judgment. It will be for the court to decide if those reasons are adequate. The emphasis in the Bill, as it was originally drafted, was on the recklessness of the defendant and whether or not he had reasons was subsidiary to the understanding that it was reckless. When one shifts the emphasis on to the reasons, as we are proposing to do in the amendment, it is necessary to define those reasons as being adequate.
We are talking here about services in general. Deputy O'Malley spoke about bus services, when we were talking about a service being singular or plural. CIE produce a Dublin city bus guide which says that the 19A bus leaves Rialto at certain times. I do not believe that any day in the year the service claimed in the bus timetable is provided. I do not believe CIE could establish that the bus leaving the Rialto terminus leaves at the times mentioned in the bus time-table. Can it be claimed that they are in breach of section 6? I do not believe that CIE can now issue that type of timetable. Our experience up to now indicates that the person making the claim against that bus timetable would have adequate reasons for believing that CIE could not stand over the service. Does that mean that under subsection (2) of this section CIE cannot produce such a time-table because they would not be able to stand over the claim that they are able to stick to it?
I am advised that a bus service is not a service within the meaning of the Act and that a time-table is only a convenient indicator and is not a trade description within the meaning of the Act. CIE, therefore, would not be subject to prosecution in view of the purpose for which the timetable is made available. It is a guide rather than a promise. However, I believe it probably would be accepted, even if that were not the case, that CIE had adequate grounds for believing that the service stated in their timetable would be provided because they would have made all the arrangements to ensure that the bus would turn up in time, and any individual departure from the timetable would not be considered to take from the adequate grounds for believing their statements to be true. In any event I do not think, as I said at the outset, the timetable ties them down in every case to having the bus turning up at precisely 10.43 at a particular stop. The purpose of the timetable is not understood to have that binding connotation but merely to act as a guide in general to the consumer, and the purpose of the Bill would therefore not apply to CIE.
Is the Parliamentary Secretary saying that the Bill does not apply to CIE?
It does not apply to the timetable.
I understood that this Bill was to protect the public from misleading information. We are dealing here with a section which is headed "False or misleading statements as to services, etc", and the subsection we are dealing with says that for the purpose of this section a statement made regardless of whether it is true or false shall be deemed to be made recklessly unless the person making it had adequate reasons for believing it was true. Is the Parliamentary Secretary to the Minister for Industry and Commerce suggesting here that timetables are promises of service which are only a guide and not something to be taken seriously? That is exactly what the Parliamentary Secretary has just said, that if the timetable I get from CIE indicates that a bus will be leaving Store Street station at 8 o'clock I am not to depend upon that, that that is not covered under section 6, that the Minister is specifically leaving out CIE and that CIE can continue, if they so desire, to make false or misleading statements as to the service they are providing. It is only the private company, the people who tell you there are so many ounces of peas in a can whom we are getting after, not the State-sponsored boards. They can still supply a haphazard service and make misleading statements for which they will not be accountable.
We are dealing here with the timetable, which is issued as a guide as to the provision of services by CIE. I cannot quote from what it states in the timetable or any of the clauses which CIE may have inserted in the timetable to save themselves from being tied down to particular times in respect of buses. If we had a timetable here we possibly would see that CIE have stated there that they cannot guarantee necessarily that every bus will turn up at a particular time at every stop precisely as it appears on the timetable. In that sense they have, if you like, saved themselves and have not attempted to mislead the consumer in relation to the service they are providing.
However, it is certainly the case that CIE are not exempt from the legislation in so far as the essence of a transport service being provided is concerned. If they cease to provide a transport service altogether and yet are holding themselves out as doing so, or if they said they would provide a particular type of service with certain facilities in the bus and the bus turned up without having these facilities and on a continuing basis, and they had not excluded their liability in this situation by some clause indicating that they could not guarantee that the particular service would be provided in the manner specified in the statement, then the provisions of the Bill would apply. However, the essence of the matter is that the timetable must be read in the context of whatever accompanying statement CIE made about their liability to provide the particular services precisely as indicated.
It is interesting that the Parliamentary Secretary should go on to refer to some other type of service. Again in relation to the 19A Rialto bus, does that mean that if CIE advertise that there will be music upstairs on that bus, which is one of the things they do boast about and which has nothing to do with the timetable, and if the music is not played upstairs on that bus, they will be prosecuted under this section? That is a service which CIE claim to provide, and the Parliamentary Secretary has just said that if they claim they will do something and they do not carry it out and if they have no escape clause——
Obviously a practical view would be taken of these matters in the case of a criminal prosecution. If, for instance, anybody providing a particular service makes a mistake on one occasion or fails to live up to his promise on one occasion, that will not necessarily be the subject of a prosecution. It is only where there is a systematic breach of the law that prosecution will occur.
The concept of reckless statements constituting an offence is new and may disturb some people, particularly in the light of the amendment which has been made to the definition of what could be regarded as reckless. Before amendment 9 was made the word "false" was used: "whether or not the person making it had reason for believing that it might be false, and then "false" was defined in subsection (4) as being "false to a material degree". The degree of recklessness, if you like to put it that way, has been decreased somewhat perhaps by the amendment. It may be difficult for somebody to prove that he was not reckless within the meaning of the section.
Unfortunately, in this whole matter it is a question of changing the onus of proof all the time. It is very hard to forget that the people who are so anxious to change the onus of proof now, used nearly to go into orbit four years ago if there was the faintest suggestion in any Bill that such a heinous thing might be done. I am glad to see they have changed their view in that respect. However, this whole concept of change of onus of proof and making the defendant prove his own innocence is fairly widespread in this Bill, particularly in this section.
I know the topic we are dealing with is one where the average consumer is presumably at something of a disadvantage most of the time as against the person who might mislead him, but nonetheless the trader has rights too which should not be forgotten. We should be careful not to make it virtually impossible for traders in certain circumstances to sell certain products of theirs without running into very considerable difficulties. The Parliamentary Secretary is no doubt aware of the difficulties created in the USA under the concept of product liability where a lot of firms have gone out of business because of impositions placed on them by legislation. We may be tending to go in that direction. It is hard to know where to stop. You have to go a certain distance in order to protect the consumer but if you go too far at all you may put perfectly legitimate and law-abiding traders and manufacturers in an impossible position. One instance of where they could possibly get into this situation is this concept of recklessness in their statements. One almost takes for granted a certain exaggeration about the value or efficacy of a manufacturer's product and one learns and tends to diminish somewhat the encouragement one gets in an advertisement or a trade description of those goods.
I am not opposed to the section, but I am pointing out that there could be some problems and that some perfectly legitimate and law-abiding traders feel that there could be problems, particularly in regard to this concept of recklessness which is a step beyond the concept of falsity. One can be caught and prosecuted and, presumably, convicted criminally for recklessness in relation to a description of goods or services. It is right to draw attention to this because this is one of the sections that does not get very much attention.
This section applies in the first place to statements made voluntarily by the trader. He does not have to make the statements. Secondly, those statements must be either false or misleading in a material degree, and the court decides that. In so far as this section applies to services, the person making the statement must either know that the statement was a false statement which he made voluntarily and the falseness of which will have been determined by the court, or he must have made this voluntary statement recklessly. The section as it now stands defines "recklessly" as not having adequate grounds for believing that it was true. We must look at this section from the point of view of the consumer who is likely to be misled by this statement and we must bear in mind that the trader did not have to make the statement in the first place; and if he is a proper trader in any event, if he did make the statement he has and should have the means to satisfy himself that it was true. If he has not adequate grounds for being sure it is true and still goes ahead and makes the statement he is behaving recklessly and should be prosecuted if he causes consumers to lose money as a result.
Amendments Nos. 10 and 13 are related and therefore I suggest that they be debated together.
I move amendment No. 10:
In page 6, subsection (2) (a), line 14, before "within" to insert "at the same place".
The effect of this amendment is to ensure that it will not be possible to evade the requirement by pointing to a lower price in the previous three months at another branch of the same firm which might be the result of a different pricing policy in another area or town while the price at the premises showing a claimed reduction was not reduced. This change was suggested by the National Consumers' Advisory Council and it is sensible when one bears in mind that we have the growth nowadays of chain stores. It should not be enough to validate a claim that a reduction in a particular commodity has been made, that at some other branch of the same chain perhaps 100 miles away for 28 days the price was lower, although it was never any lower than it is now in the branch where the person in question is buying the goods.
Regarding amendment No. 13, a suggestion by the Dublin Chamber of Commerce would have substituted the words "on the premises where the indication is displayed" instead of "in every place in the State". As, however, the indication might be given not on the premises but in a newspaper advertisement, the amendment proposed has been worded so as to limit its application to notices on a sales premises. The effect of the amendment, therefore, is that a price notice in a shop will be taken as referring only to that shop unless it states otherwise, whereas a notice or advertisement elsewhere will be taken as referring to all branches unless it is stated otherwise. This is to clarify the situation in relation to a notice which is displayed in a particular shop and to limit more clearly its area of application.
I move amendment No. 11:
In page 6, subsection (2) (a), line 14, to delete "3" and substitute therefor "6".
This amendment proposes to change from three months to six months the previous period within which a markeddown price, as it were, can be shown. It has been suggested rather strongly to me that there are many items which are seasonal items which would not have been on sale within the previous three months because it was not the appropriate season for them but which would have been on sale within the previous six months. It seems reasonable, therefore, that in relation to items of that kind traders should be allowed to show them as being marked down. I presume that in practice nowadays this really relates only to sales because with the price of everything going up most of the time the question of marking down does not normally apply, particularly since seasonal items tend to be included in sales where firms are trying to move stock that may now have gone out of date in order to replace it by modern stock. It seems reasonable that they should be allowed an opportunity of showing what the price was within the previous six months which would, generally speaking, include the season concerned but which three months might be too short to include.
The difficulty in Deputy O'Malley's amendment is that it would impose a very great burden to go back and get information on the tendered prices over a period of six months. This has been the experience in Britain where they tried to operate on a six-months basis and the committee of the office of fair trading which went into the matter recommended that from a practical point of view it would be much more effective and sensible to confine this to a period of three months. In any event, the statement about reduced prices does not have to be made or if made it can be clarified as to the precise date on which it was sold at the higher price. For instance, in relation to seasonal goods they can say "this is lower than the last season's price". That would presumably meet the case.
Is that not a bit too cumbersome?
It is but the difficulty with the Deputy's amendment is that it would not just apply to seasonal goods. It would apply to all goods and if one were to extend the period of six months in relation to groceries, for instance, which are not seasonal, the problems of enforcement would be very great indeed. I see some merit in the argument so far as it applies to seasonal goods but then you would have the problem of defining seasonal goods.
Would the Parliamentary Secretary consider adding some phrase to the effect that in the case of seasonal goods it should be six months rather than three?
I will have that considered and we will discuss the matter again on Report Stage. I cannot satisfy myself here and now that it will be possible to adequately define seasonal goods but I am prepared to consider it and report back to the House on Report Stage.
I move amendment No. 12:
In page 6, subsection (2) (e), line 36, to delete "these" and to substitute "those".
It is purely to improve the sense, to subsitute "those" for "these" in page 6 subsection (2) (e), line 36.
I move amendment No. 13:
In page 6, subsection (2) (e), line 37, to delete "person; and", and to substitute "person:
Provided that, where such an indication is given at the place where the goods, services or accommodation are offered, the indication shall be treated, unless the contrary is expressed, as relating only to the goods, services or accommodation offered at that place; and".
On section 7 (2) (f), in relation to the number of items which one could purchase, it must be obvious that there would have to be a charge for installing goods. Does it not seem a bit harsh that an offence could be committed by not indicating the charge or the fact of the charge when the average person would take it for granted that there would be a charge? For example, in the purchase of carpets one assumes that there would be a charge for laying a carpet. If one purchases a kitchen sink or washhand basin one cannot expect that that will be installed for nothing because plumbing and a certain amount of skilled installation is required. There are electrical appliances of various kinds that would have to be installed by more than just putting a plug into a wall, where wiring is needed, where one would clearly anticipate that some charge would be made. In these circumstances is (2) (f) going a bit too far, if one does not specify what the charge will be in relation to the installation of a bath for instance? The supplier might have no idea how much it would cost to install a bath. It could cost very little if all the necessary plumbing and facilities were already there but if it is being installed in a house which never had a bath that would be a fairly costly installation.
What the Deputy has said is undoubtedly true in most cases, but the fact still remains that a person could be misled into thinking that a price attached in relation to a commodity was intended to cover the full costs of acquiring it. That person might be misled, if, having bought the commodity on the strength of the price quoted, he discovered that there were other goods or services which had to be purchased at further additional cost to enable him to make any use at all of the commodity he had bought on the strength of the original price quoted. Paragraph (f) is different from the others in that it requires that particular information be given in relation to the price as well as requiring that information be not false.
This is a good thing. It improves consumer information in an area such as this where people buying this sort of equipment would probably not make the same kind of purchase again and they could not necessarily be expected to know the precise additional services they would have to buy to get a gadget into a condition in which they could use it. It is material information which should be made available to people. If people are going to make an issue of their price by displaying it in this manner, they should also be required to make available the additional information either by giving the price for the additional services or by indicating the existence of further charges which the consumer could on further inquiry gain knowledge of before he entered into a contract on the basis of the original statement by the trader as to price.
The Parliamentary Secretary has not dealt with the precise type of example I gave. It would be impossible for a supplier of a bath to know the cost of installation without first surveying the job.
But the trader can meet the requirements by stipulating that the price quoted does not include the cost of installation. Therefore, he would not need to know at that stage what the installation would cost but he is putting the consumer on notice. At that stage the consumer would be able to make a rational decision on the basis of the best information available to the trader. That is reasonable.
The point I am making is that where it is obvious that there would be a fair amount of expense involved in installation or connection, it should hardly be necessary for a trader to specify that the price does not include the cost of installation.
I do not grasp fully the difficulty raised by the Deputy.
If, for example, one is selling baths in the course of his trade, under paragraph (f) of subsection (2) he would be obliged either to state the cost of installation, although this would be very difficult to estimate as the cost would vary from house to house, or he would have to place on every bath a legible statement to the effect that the price did not include the cost of installation. No ordinary consumer would be under the impression that the cost of installation was included in the price.
I understand that the subsection would not apply in cases such as those mentioned by the Deputy but only in cases in which a price was displayed in such a manner that one would assume in normal trading practice that it covered all ancillary costs. The subsection would not be invoked in respect of a case such as that mentioned by the Deputy because it would not be normal to expect that the price would include both the cost of the item and the cost of installation.
Where is that statement in the paragraph?
I do not think it is stated. Subsection (f) reads:
the absence of an indication of the existence of a charge for installing goods or of a price of the kind referred to in subsection (1) (d) shall unless it is indicated that the offer to supply goods or provide services does not include an offer to install the goods or supply ancillary equipment of the kind referred to in the said subsection (1) (d) be treated as an indication that the charge or price does not exist.
It is phrased negatively.
Doubly negatively.
Although I have received advice on this I am not happy that I have a complete answer to the point made by the Deputy. In these circumstances I would be prepared to look at it again to see whether it might be amended on Report Stage in order to make the situation clear.
I am grateful to the Parliamentary Secretary but, perhaps, the best amendment in this case would be to delete the provision. To say the least the drafting is laborious. It is not only a double but a treble negative.
