England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER COUNTY COURT
HIS HONOUR JUDGE HOLMAN

		Royal Courts of Justice Strand, London, WC2A 2LL
		03/02/2009

Lady Justice Arden :

1. Modern regulatory legislation often empowers the court to make an order regulating a person's activities and rendering any disobedience a contempt of court. The Fair Trading Act 1973 and the Stop Now Orders (EC Directive) Regulations 2001 (SI 2001 No 1422) (now replaced by the Enterprise Act 2002) fell into that category. These enactments contain provisions designed to protect consumers against the supply and delivery of defective goods and services. I shall call this harmful activity the "misselling" of goods and services. The court in this case made an order against the appellant, Mr Vance Miller, against the misselling of kitchen units, and later found breaches by Mr Miller and imposed penalties. Questions now arise as to the scope of the order, as to the correctness of the findings as to breaches and as to the penalties which the judge imposed.

Background

2. Mr Miller, who at the time of the committal application was and now remains responsible for the activities of an unincorporated business supplying kitchens known as Discount Kitchens Direct ("DKD"), appeals against the order dated 29 May 2008 of HHJ Holman, sitting in the Manchester County Court. This order was made on the application of the respondent, The Office of Fair Trading ("OFT"), for the committal to prison of Mr Miller for disobeying the judge's earlier order of 19 April 2002 ("the 2002 order"). The 2002 order was made in part under the Stop Now Orders (EC Directive) Regulations 2001 ("the Stop Now regulations"), which incorporates various provisions of the 1973 Act, and in part under the 1973 Act alone. The relevant parts of the 2002 order and the enabling legislation are set out below. The 2002 order was also made against other persons with whom we are not concerned. The OFT was established by the Enterprise Act 2002. Before the commencement of that Act, the relevant functions were vested in the Director General of Fair Trading, appointed pursuant to s 1 of the 1973 Act and referred to below as the Director.
3. As to penalties, the judge ordered that Mr Miller be committed for contempt for six months but this sentence was suspended until 29 May 2010 and was not to be enforced if Mr Miller complied with the 2002 order. The judge further imposed a fine on Mr Miller in the sum of £90,000, to be paid by 31 July 2008, and ordered Mr Miller to pay a contribution towards the OFT's costs in the sum of £30,000 by 31 August 2008.
4. On this appeal, Mr Miller raises three groups of issues:

i) As to the scope of the 2002 order: whether either conduct of DKD in which Mr Miller does not personally participate, or conduct falling short of a course of conduct, falls within paragraph 1 of the 2002 order;

ii) As to the judge's finding of a course of conduct: whether, to the extent that a course of conduct was required, the judge was entitled to find that there had been a course of conduct; and

iii) As to the penalties: whether the penalties imposed for breach were excessive.

5. Mr Miller requires the permission of the court to appeal against the judge's order for the payment of the fine of £90,000 and the order for costs: Government of Sierra Leone v Davenport [2002] EWCA Civ 95; Barnet LBC v Hurst [2003] 1 WLR 722 at [25] to [27].

The structure of the 2002 order

6. The relevant parts of the 2002 order are in paragraphs 1 and 2 of that order. These paragraphs deal with like matter, but have been formulated as two separate paragraphs because the enabling provisions are different. Thus, paragraph 1 (prohibiting the sale of goods not conforming to the contractual description or not being of satisfactory quality) was made under both the Stop Now regulations and s 39 of the 1973 Act but paragraph 2 (prohibiting late delivery of goods) could only be made at that time under s 39 of the 1973 Act and thus was made only under that Act. So far as relevant, paragraphs 1 and 2 of the 2002 order provided as follows:-

"1. That pursuant to paragraph 11 and paragraph 13 of Schedule 2 of the [Stop Now regulations] and section 39 of the [1973 Act] [Mr Miller and the third fourth and sixth defendants shall]:

Refrain from consenting to or conniving at the conduct outlined at paragraph 4 of the Particulars of Claim namely the failure to fulfil obligations imposed by the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 and in particular:

(a) The failure to ensure that goods supplied to consumers comply with the description given to such goods by the supplier contrary to section 13 of the Sale of Goods Act 1979.

(b) The failure to supply goods which are of satisfactory quality in accordance with the requirements of section 14 of the Sale of Goods Act 1979.

1.2 Refrain from engaging in any similar conduct in the course of any business which may at any time be carried out by any of them.

…

2. That pursuant to section 39 of the 1973 Act [Mr Miller and the third fourth and sixth defendants] shall:

2.1 Refrain from consenting to or conniving at the course of conduct outlined at paragraphs 5 and 7 of the Particulars of Claim in particular:

(a) The failure to deliver goods in accordance with consumer contracts contrary to the requirements of section 27 of the Sale of Goods Act 1979.

(b) The failure to deliver goods within a reasonable time contrary to the requirements of section 29(3) of the Sale of Goods Act 1979.

(c) The failure to satisfy outstanding county court judgments.

2.2 Refrain from carrying on any similar course of conduct in the course of any business which may at any time be carried out by any of them.

…"

7. It is necessary to explain the framework within which the order was made. That framework consists of (1) the enabling provisions which the court relied on to make the 2002 order; (2) the specified paragraphs of the particulars of claim, and (3) the provisions of the legislation about the sale of goods and services referred to in the prohibitions in paragraphs 1and 2 of the 2002 order. I will deal with the enabling provisions in this part of the judgment. I will deal with (2) and (3) when I come to explain the background.

The enabling provisions

8. The enabling provisions need to be explained in detail as part of the attack on the judge's order was based on the extent to which limitations are to be read into the order in the light of the enabling provisions.
9. As I have already explained, the enabling provisions for paragraphs 1 and 2 are different. I start with paragraph 2 because that was made under the earlier legislation. Under s 34 of the 1973 Act (now repealed and replaced by the Enterprise Act 2002), the Director of the OFT had power to stop the selling of goods in a manner detrimental to consumers by seeking an assurance from a seller who in the course of his business:

"persisted in a course of conduct which-

(a) is detrimental to the interests of consumers in the United Kingdom, whether those interests are economic interests or interests in respect of health, safety or other matters, and

(b) in accordance with the following provisions of this section is to be regarded as unfair to consumers… "

10. Thus s 34 was only engaged if the defendant had engaged in a course of conduct. If the defendant persisted in the course of conduct, the powers of the court under s 37 came into operation and these powers are important because they were incorporated by reference into the 2001 regulations:

"37. — (1) Where in any proceedings before a relevant Court under section 35 of this Act—

(a) the Court finds that the person against whom the proceedings are brought (in this section referred to as "the respondent") has in the course of a business carried on by him persisted in such a course of conduct as is mentioned in section 34(1) of this Act, and

(b) the respondent does not give an undertaking to the Court under subsection (3) of this section which is accepted by the Court, and

(c) it appears to the Court that, unless an order is made against the respondent under this section, he is likely to continue that course of conduct or to carry on a similar course of conduct,

the Court may make an order against the respondent under this section.

(2) An order of the Court under this section shall (with such degree of particularity as appears to the Court to be sufficient for the purposes of the order) indicate the nature of the course of conduct to which the finding of the Court under subsection (1)(a) of this section relates, and shall direct the respondent—

(a) to refrain from continuing that course of conduct, and

(b) to refrain from carrying on any similar course of conduct in the course of his business."

11. If the seller was a body corporate, the Director of the OFT could seek an assurance from a director or other person with a controlling interest who was a party to the detrimental conduct. S 38(4) made provision for such an undertaking:

"The assurance referred to in subsection (3) of this section is a satisfactory written assurance given by the accessory that he will refrain—

(a) from continuing to consent to or connive at the course of conduct in question;

(b) from carrying on any similar course of conduct in the course of any business which may at any time be carried on by him; and

(c) from consenting to or conniving at the carrying on of any such course of conduct by any other body corporate in relation to which, at any time when that course of conduct is carried on, he fulfils the relevant conditions."

12. In certain circumstances, the court could also make an order against such a person in terms of s 38(4) particularly where there had been non-compliance with an assurance given to the Director of the OFT. S 39(2) of the 1973 Act imposed the following requirements as to such orders:

"An order of the Court under this section shall (with such degree of particularity as appears to the Court to be sufficient for the purposes of the order) indicate the nature of the course of conduct to which the finding of the Court under subsection (1)(a) of this section relates, and shall direct the accessory, in relation to the course of conduct so indicated, to refrain from acting in any of the ways mentioned in paragraphs (a) to (c) of subsection (4) of section 38 of this Act."

13. Again, there had to be a course of conduct, and in addition it will be noted that where the seller was a body corporate the Director of the OFT could not simply start proceedings for an injunction against the directors. He had first to seek an assurance from them.
14. As from June 2001, the provisions of the 1973 Act were superseded by the Stop Now regulations (also now repealed and replaced by the Enterprise Act 2002) in relation (only) to "Community infringements", defined as:

"any act contrary to the Directives as transposed into the internal legal order of a member state and which harms the collective interests of consumers included in the Directives".

15. "The Directives" include certain EC directives on consumer sales.
16. Accordingly, the requirement that the defendant should have "persisted in a course of conduct" to be found in s 34 of the 1973 Act was, for the purpose of the Stop Now regulations, replaced by a requirement that the OFT should demonstrate that the seller had engaged, or was likely to engage, in conduct constituting a Community infringement. These provisions make no express reference to a course of conduct.
17. Schedule 1 to the Stop Now regulations provides for the court to make orders ("stop now orders") under s 37 of the 1973 Act where the defendant:

"has engaged in conduct which constitutes a Community infringement or is likely to do so".

18. These orders will require the cessation of an infringement, or enjoin its commission. As with the 1973 Act there is a procedure for obtaining orders against directors of a body corporate, but this time the Director of the OFT is not required first to seek an assurance. He needed only to consult to achieve a cessation of an infringement and proceedings could be taken two weeks thereafter. The power of the court to make orders incorporated s 37 of the 1973 Act:

"6. The relevant court may make an order under section 37 of the Act where it finds that the respondent has engaged in conduct which constitutes a Community infringement or is likely to do so."

19. Paragraph 1 of the 2001 order stated that it is made pursuant to paragraphs 11 and 13 of schedule 2 to the Stop Now regulations. These paragraphs incorporate ss 38 and 39 of the 1973 Act by reference and provide as follows:

"11. Sections 38 and 39 of the Act shall apply in relation to any person consenting to or conniving at a Community infringement who at a material time fulfilled the relevant conditions in relation to a body corporate which has engaged in conduct which constitutes a Community infringement or is likely to do so ("an accessory") as they apply to the conduct there mentioned and to consent to or connivance at it.

12. …

13. An order made by virtue of paragraph 11 above shall direct the accessory to refrain from consenting to or conniving at the Community infringement, or engaging in conduct which constitutes the infringement in the course of any business which may at any time be carried on by him, and from consenting to or conniving at the engaging in any such conduct by any other body corporate in relation to which, when the conduct is engaged in, he fulfils the relevant conditions."

20. It will be noted that paragraph 11 provides for the application of ss 38 and 39 of the 1973 Act in relation to consenting or conniving at Community infringements, not in relation to a course of conduct consisting of consenting or conniving at Community infringements. Failure to comply with a stop now order will amount to a contempt of court punishable by an unlimited fine or imprisonment up to two years ( see Contempt of Court Act 1981, s 14).
21. There was no appeal from the 2002 order. I make this point simply as a matter of fact because I accept that the absence of such an appeal would not prevent argument on a subsequent committal application if there was a defect in the order. That point is important because, while Mr Miller and others had previously conducted the kitchens business through bodies corporate, those companies had ceased to trade immediately prior to the 2002 order. In addition, as stated at the outset of this judgment, at the time of the committal application, and now, the kitchens business was and is carried out through an unincorporated entity. There are a number of consequences which flow from this.
22. First, the OFT has now to rely paragraphs 1.2 and 2.2 of the 2002 order rather than paragraphs 1.1 and 2.1.
23. Secondly, there was before the judge a factual issue raised as to whether Mr Miller was behind this unincorporated entity. The judge refers to this issue in his judgment when he found there had been breaches of the 2002 order and subsequently in his separate judgment given on the same day when he imposed sanctions. The essence of the matter was that Mr Miller's witness statement suggested that he was the sole proprietor of the business and the management consultants' report had referred to him as such. In his oral evidence, however, Mr Miller referred to a team of himself and others and a joint effort between them all. The judge rejected this account and found that Mr Miller was the sole trader. There is no appeal on this issue and I need say little more about it. It was a factual issue, and it did not go to the question of the effect on the court's power to make the 2002 order or the fact that at the time of the order Mr Miller was no longer trading through the bodies corporate through which he had been trading previously.
24. Thirdly, there is a question as to the jurisdiction of the court to make the 2002 order and the effect of any defect in jurisdiction on the 2002 order. During the course of the hearing of this appeal, the question of the court's power to make the 2002 order and the effect of any want of power was expressly raised. However, Mr Mark Turner QC, for Mr Miller, made it clear in his oral submissions to this court that he took no point on the validity of the 2002 order. In those circumstances, we are not concerned to consider such questions as whether or not the court had jurisdiction to make the 2002 order. Any such objection has been unequivocally waived. That does not, however, mean that the court should not interpret the order, where possible and appropriate in accordance with the principles of interpretation, so as to fall within the enabling powers.
25. The relevant provisions are now to be found in the Enterprise Act 2002 but we have not considered any questions arising from their repeal.

Factual background

26. On 13 November 2001, the Director of the OFT began proceedings against Mr Miller and others in the Manchester County Court for stop now orders alternatively orders under the 1973 Act. The 2002 order was made in April 2002 and in September 2002 that order was endorsed with a penal notice. The county court had jurisdiction by virtue of s 41 of the 1973 Act.
27. The 2002 order refers to the particulars of claim in the proceedings. Paragraph 1 of the 2002 order refers to paragraph 4 of the particulars of claim. This alleges breaches of sections 13 and 14 of the Sale of Goods Act 1979 ("the 1979 Act") and section 13 of the Supply of Goods and Services Act 1982 ("the 1982 Act"). Paragraph 2 of the 2002 order refers to paragraphs 5 and 7 of the particulars of claim, which refer (so far as material) to breaches of sections 27 and 29(3) of the 1979 Act. Ss 13 and 14 of the 1979 Act provide for the implication of a term that goods will comply with their description and a term that the goods are of a satisfactory quality. Ss 27 and 29(3) of the 1979 Act provide respectively (so far as material) that it is the duty of the seller to deliver goods in accordance with the contract and (where no time is fixed) within a reasonable time. The 1982 Act confers further rights, particularly on consumers, and provides for the implication of terms into contracts for services. It is not necessary to set out these provisions in detail.
28. Committal proceedings were begun in March 2003. Following a hearing at which Mr Miller was unrepresented, the judge found that the allegations were proved. He sentenced Mr Miller to a custodial sentence of nine months. On 9 July 2003, the judge heard an application from Mr Miller to purge his contempt. The application was successful on Mr Miller signing an undertaking to the court to engage the services of a reputable management consultant to advise on how to comply with the 2002 order, to act promptly on the advice of these management consultants and to supply the OFT with their advice. Mr Miller supplied their advice to the OFT in October 2003.
29. In May 2007, the OFT issued further proceedings for committal, specifying further breaches of both paragraphs 1 and 2 of the 2002 order.
30. The hearing of this application took place before the judge in May 2008. There was voluminous evidence in support, including evidence from nine individual complainants. These persons had all bought kitchen units from Mr Miller's company. The units when delivered were defective or made by suppliers other than those agreed. In other cases the measurements were wrong.

Material parts of the judgments of the judge on liability

31. The judge made findings as to breaches of the 2002 order. In effect he accepted the evidence of the nine complainants. It is sufficient to set out his findings about the first two complainants:

"9. In June 2004 [the first complainant] ordered a kitchen and equipment from DKD. On delivery it did not have the promised pre-drilled the holes. The units do not correspond with the sample he had been shown. There were 15 defects (either damage or items missing). Five wall units and their end panels were the wrong size. An oven housing was supplied, instead of a base unit. There were delays both in the original delivery and in delivery of replacements. He was unable to obtain any satisfactory response, but he decided not to sue, preferring to dispose of the units and buy a kitchen elsewhere.

10. Also in June 2004 [the second complainant] ordered a kitchen and equipment from DKD. He had responded to an advertisement stating that the kitchens were solid wood and the chipboard was not used. He was shown a sample by the sales representative. The units did not conform to the sample. They did not fit into the designed kitchen. The appliances were manufactured by CDA rather than Necht. He encountered great difficulty in getting satisfactory response from DKD and the independent fitter he engaged had to undertake a lot of work to address the faults."

32. Mr Turner argued before the judge on behalf of Mr Miller that, in order for there to be a breach of paragraph 1 of the 2002 order, a course of conduct had to be shown. The judge dealt with this submission in a passage which is criticised on this appeal and which I will therefore set out in full. In short, he held that he was inclined to the view that this submission was correct, but that, if it was required, it was satisfied:

"33. … Mr Turner contended that the requisite course of conduct had not been established to the criminal standard. He referred to part of the Stop Now Orders Guidance. This reads: "The Stop Now regulations are not a means of pursuing individual redress. They apply only to an infringement, which 'harms the collective interests of consumers included in the Directives'. It follows that the breach must affect, or have the potential to affect, consumers generally or a group of consumers. This must be established by the evidence. The evidence must demonstrate how a particular infringement has, or may in the future have, an adverse effect on consumers. It may include an assessment of the importance of the practice or provision in question or of the prevalence and likely impact of the infringement. Some isolated breaches may not be harmful to the collective interest of consumers. However, examples of individual consumer harm may be used as evidence, and there is no obligation to establish a specific number of individual consumer complaints or incidents of infringement."

34. He did not challenge the approach of recorder Christopher Purchas QC in Director General of Fair Trading v Ashby to which Mr Chaisty had referred, but it was a question of context, and he described as "amazing" the omission by the Claimant to adduce any sort of evidence to demonstrate the relative culpability of the Defendant's organisation. The nine complainants were, he suggested, atypical. The Defendant's evidence was that 400 kitchens were produced each week. How this compared with other operators in the industry was unclear, but on any view it was a very high number. The purpose of the legislation should not be forgotten.

35. Recorder Purchas QC said this: "A course of conduct requires there to be a common number of connected acts or omissions which occur pursuant to a common purpose or objective. One or more isolated and unconnected incidents is not sufficient, but a sequence of events may establish a course of conduct even when they result in a single complaint

36. Mr Chaisty split his submissions into two parts. First, the Claimant is not required to establish a course of conduct in relation to paragraphs 1.1 and 1.2 of the Order. It only comes into play under paragraph 2.1 and 2.2. Secondly, in any event a course of conduct has plainly been established.

37. It is appropriate to look at the underlying principles. It is not a defence to say that there was no direct intention to disobey the order – see Stancomb v Trowbridge UDC. This approach has been confirmed in subsequent cases both in the Court of Appeal and the House of Lords. Rimer J observed in Miller v Scorey: "The question of whether or not contempt in the nature of a breach of undertaking to the court has been committed involves an essentially objective test requiring the determination of whether or not the alleged contemnor has acted in a manner constituting a breach of his undertaking. If he has, then a contempt will ordinarily be established, regardless of whether or not he acted contumaciously or with the direct intention of breaking his promise, although I accept that whether any, and if so what, punishment or other consequences ought to be imposed on him will, or may be, materially dependent on considerations of this sort.

38. Although I express no final opinion, I am inclined to the view that it is necessary to demonstrate a course of conduct even under paragraphs 1.1 and 1.2. The avowed purpose of the legislation is to protect the collective interests of consumers, and, while I do not say that it is impossible, it is difficult to think of situations where the Claimant might consider it appropriate to act on the basis of a single incident, particularly given that litigation is clearly the last resort. The whole tenor of the Guidance is directed towards what might be termed "repeat offenders". However, looking at the totality of the evidence, I am abundantly satisfied beyond reasonable doubt that a course of conduct has been established and it matters not that the Claimant has not provided comparable information about competitors. I am concerned with this Defendant and this Order. Even in the light of the number of kitchens produced each year, the evidence from the nine complainants cannot sensibly be regarded as isolated and unconnected incidents. They establish a consistent patter of failure to comply with contractual obligations."

33. On this basis the judge found that all the alleged contempts had been proved to the criminal standard, and proceeded to hear arguments in mitigation of sentence. In his sentencing remarks, he referred to the issue raised by Mr Miller as to his role in DKD and held that this was an aggravating feature. He held that "the convoluted tale" which Mr Miller had told about the involvement of others was "simply incredible. The overwhelming inference is that you were resorting to the long established device of hiding behind others in order to deflect attention from yourself. "
34. The judge continued:

"By no stretch of the imagination can the breaches be described as casual or accidental. They may not have been intentional, but they were most certainly reckless, as Mr Chaisty's probing cross-examination served to establish."

35. He continued:

"As I said in 2003, sentencing for contempt has two purposes: punishment for breaching the order is one because court orders are not to be flouted. The second, equally important, is securing compliance in the future. In that latter context there are other matters, which I must take into account. First, the last complaint, on which evidence was produced, occurred over two years ago. I bear in mind that it took time for the OFT to establish your involvement in Discount Kitchens Direct and in Kitchens, and I entirely accept that you cannot take advantage of this delay. However it remains a fact that the last proven breach occurred in early 2006. The committal application was launched in May 2007. The delay to trial cannot be laid at your door. If the OFT believed that the breaches were continuing, it could have sought to amend the application and to place evidence before the court to that effect. It has not done so. You are therefore entitled to be sentenced on the basis that there has been no proven breach for over two years. That is an important consideration.

Secondly, although statistics do need to be approached with some caution, there is evidence of a significant and continuing reduction in complaints to the authorities since the summer of 2007. Thirdly, I pay some regard to the recent report from the management consultants, although I have to bear in mind that the author did not give evidence.

Fourthly I noted your apology in evidence to the complainants and also the spontaneous concessions you made at certain points.

There is evidence that you are making efforts to comply with your obligations, but many of those efforts appear misguided. Your Rule Book is but one example: it is shambolic, as is the idea of getting drivers to video deliveries. You are an energetic entrepreneur and have rightly been described by your counsel as unorthodox. The problem you face is that an unorthodox approach may work perfectly well in a small organisation, but it courts disaster in a company which has the avowed intention of being the largest independent kitchen retailer in the world. Whether you like it or not, we live in a highly regulated environment so far as consumer protection is concerned. You need to devote less time to expanding your operations, and more to getting the basics right. It is you who has the contractual obligations under the Sale of Goods Act, and it matters not a jot that you are operating at the lower end of the market. Your customers are still entitled to the benefit of fair dealing and it is your responsibility to ensure that they do.

I am wholly unpersuaded that the appropriate course is to impose no penalty or to postpone sentence for six months or any other period or to seek further undertakings from you. These solutions do not properly reflect the seriousness of this case.

The aggravating features which I have mentioned make a custodial sentence appropriate, but the counter balancing considerations in the context of securing compliance with the Order enable me to suspend it. Looking at the gravity of the situation overall, this is in my view an unusual case where it is appropriate also, in the context of the element of punishment, to impose a financial penalty.

I reject as implausible your professional lack of knowledge of the profitability of the operations. I propose to work on the figure which, before back-tracking, you initially gave in cross-examination of an annual profit of £200,000. I treat each complainant as a single breach, although strictly each case involved several breaches. On each of the nine complaints, I impose a fine of £10,000 making a total of £90,000. This is to be paid by 31 July 2008.

In addition you must pay a contribution towards the OFT's costs of £30,000 to be paid by 31 August 2008.

Having regard to the financial penalty and costs liability which I have imposed, the sentence of imprisonment I pass is lower than would otherwise have been the case. It is 6 months concurrent on each breach, suspended in each case for 2 years. The burden is now entirely on you to comply with the Order. If further breaches are established within this period, then the court will be entitled to deal with you not only for those breaches, but also to activate this sentence."

Discussion

Issue (1): As to the scope of the 2002 order

36. A number of points about the scope of the order are raised on this appeal.
37. Mr Turner's first submission is that the judge should not have found that Mr Miller had committed any breach of the 2002 order because it applies only to breaches committed by a defendant personally. Mr Miller had no personal involvement in any of the nine cases and, on Mr Turner's submission, these were the sole basis for the judge's findings of breach.
38. Mr Turner is right to point out that the 2002 order fails to make it clear that a person may be found to commit a contempt of court through an employee or agent. The modern form of freezing injunction, for instance, includes a separate paragraph to make this clear:

"A respondent is an individual who is ordered not to do something must not do it himself or in any other way. He must not do it the others acting on his behalf or on his instructions or with his encouragement.

A respondent which is not an individual which is ordered not to do something must not do it itself or by its directors, officers, partners, employees or agents or in any other way."

39. It would have been preferable to include a similar note in the 2002 order so that Mr Miller had express warning on the point, though he would surely have taken this for granted given that the orders were against him with respect to the conduct of a business which had to have employees and agents. That said, Mr Turner's argument that the absence of some such wording exempts Mr Miller must be rejected. The 2002 order required Mr Miller to refrain from "engaging in" conduct of the kind outlined in paragraphs 4, 5 and 7 of the particulars of claim. Mr Miller engaged in that conduct by being a proprietor of DKD and an active force in its business. (This is not a definitive description of acts which may amount to "engaging"). The persons who were responsible for the nine cases were his employees or agents and there is no suggestion that they were not acting within the scope of their authority. For these reasons, the omission of wording, such as that given above or by a provision that the order prohibited conduct committed by the defendant "whether by himself, his servants, his agents or otherwise howsoever", is not critical in this case.
40. Logically the next argument to consider is the OFT's argument in the respondent's notice that the judge was wrong to express the view that there had to be a course of conduct under paragraph 1 of the 2002 order. Mr Chaisty submits that nothing in paragraph 1 requires a course of conduct to be shown under paragraph 1 of the 2002 order, as well as paragraph 2 for which the OFT conceded that a course of conduct was required. Mr Turner's submission is that the judge was correct in his view that a course of conduct was required and that accordingly the OFT's respondent's notice should be rejected. In support of this submission, Mr Turner refers to the enabling legislation set out above and in addition to the Stop Now Orders Guidance issued by the OFT (OFT382) at paragraph 3.6, set out in paragraph 33 of the judge's judgment (above).
41. In addition, Mr Turner submits that the order should be interpreted so as to prohibit only acts which were Community infringements, and that a Community infringement requires a course of conduct. In support of this submission he relies on OFT v MB Designs (Scotland) Ltd [2005] SLT 69, considered below.
42. The question whether paragraph 1 of the 2002 order requires a course of conduct is one of some difficulty. That paragraph is made pursuant to the 2001 regulations which incorporates s 37 of the 1973 Act. That section, viewed on its own, provides some support for Mr Chaisty's argument since that section can apparently apply to "similar conduct", without that conduct necessarily having to be a Community infringement. However, according to the explanatory note to the 2001 regulations, those regulations were designed to implement the injunctions directive (Directive 98/27/EC). This directive provides for harmonising measures in relation to proceedings for Community infringements. On well-established principle, the 2001 regulations must be interpreted, so far as possible, in conformity with the injunctions directive. The injunctions directive does not pre-empt the member states' power to make additional orders: article 7 specifically states that the directive does not prevent member states from adopting or maintaining in force provisions designed to grant qualified entities and any other person concerned more extensive rights to bring action at national level.
43. On the other hand, that article is only an option for member states and it is necessary to ask whether the United Kingdom has exercised that option. The relevant provisions of the 2001 regulations are paragraphs 11 and 13 of schedule 2 because the 2002 order is stated to be made pursuant to those paragraphs. Those paragraphs are set out above. In my judgment they are limited to Community infringements. Nothing in the explanatory notes (if they are relevant) indicates that the court should have power to make wider orders. The question is not whether the European Community has limited the operation of the 1973 Act but of the Parliamentary intention with respect to implementation of the injunctions directive. In my judgment, the proper construction is that Parliament intended to go no further than implement the injunctions directive, and paragraph 1 of the 2002 order must be interpreted in accordance with its enabling powers. In short, I would accept Mr Turner's submission that a Community infringement has to be shown in order to establish a breach of paragraph 1 of the 2002 order.
44. That takes me to the meaning of "Community infringement". This was considered in an authority not cited to the judge, namely OFT v MB Designs (Scotland) Ltd [2005] SLT 69, a decision of Lord Drummond-Young, sitting in the Outer House of the Court of Session, on an application under the Enterprise Act 2002. In a thoughtful judgment, Lord Drummond-Young considered that the provisions of the Enterprise Act 2002, which now represent the United Kingdom's implementation of the injunctions directive, should be interpreted in conformity with that directive. He concluded that the notion of "collective interests of consumers" (see [14] above and the definition of "Community infringement") indicated that there must be harm to a section of the public (see [14]). He held that harm to the interests of consumers could be inferred from the accumulation of individual instances (see [15]). I respectfully agree with these conclusions. However, I would not for my part agree with Lord Drummond-Young's conclusion in the passage relied on by Mr Turner that "[m]ore than one instance of a defective supply is required before there can be a breach" of an order pursuant to the provisions of the Enterprise Act 2002 now providing for stop orders ([18]). It must depend on the facts. A Community infringement is committed when harm is caused to the collective interests of consumers. It is possible that a single supply might be enough, as where a supplier puts on to the market a large consignment of a beverage stated to be a healthy drink for a baby that is wholly unsuitable for this purpose. For this reason, I do not consider that the expression "Community infringement" requires a course of conduct.
45. Next, Mr Turner submits that the order in this case was insufficiently specific to satisfy the law as explained by Lord Drummond-Young. Mr Chaisty informed the court that, although the 2002 order was one of the first made under the 2001 regulations, the form of paragraph 1 of the 2002 order is now the same as the standard form under the equivalent provisions in the Enterprise Act 2002. He accepts that it could be more specific, as suggested by Lord Drummond-Young, but, on his submission, a defendant is adequately safeguarded by the prosecutorial discretion and the discretion of the judge in sentencing.
46. In my judgment, the 2002 order should have made it clear that it applied only to Community infringements, and it is not satisfactory to leave the matter to the prosecutorial discretion or the discretion of the sentencing judge. As to what the order should say, we have been referred to the observations of Lord Drummond-Young in OFT v MB Designs (Scotland) Ltd as to the requirements of Scots law. He holds that, while normally an interdict has to be so precise and clear that the person interdicted is left in no doubt what he is forbidden to do, nonetheless the same degree of precision is not necessary in a case of this kind. Accordingly it was not necessary in MB Designs for the order to specify the precise nature of the defects covered by it, or that the order should be directed to specific acts on the part of the respondents. As I see it, in England and Wales the order similarly need not apply only to specific acts and some degree of generality is acceptable, though, in respectful disagreement with Lord Drummond-Young, who thought that a considerable degree of generality was acceptable ([52]), I would be reluctant to say more than that "some" degree of generality is permitted. The court should see that what is prohibited is as clearly described as the circumstances permit, taking into account the need to give fair warning to the defendant of the acts that might constitute a breach.
47. The opening wording of s 39(4) of the 1973 Act supports this conclusion. Although, as Mr Chaisty points out, that sub-section refers to a "course of conduct", which is not required for the purposes of the 2002 regulations, there would be no reason for not ensuring that the order otherwise qualifies under that sub-section, so that it has:

"such degree of particularity as appears to the Court to be sufficient for the purposes of the order"

48. The solution adopted by Lord Drummond-Young was to prohibit acts of a particular description with the addition of the words "such as to harm the collective interests of consumers". The aim is to ensure that a breach only occurs if there is damage to the collective interests of consumers, but on their face these words give little guidance to the defendant. I agree with Lord Drummond-Young's approach in relation to the Enterprise Act 2002, as to the principle here and thus in my judgment the 2002 order ought also to have made it clear by appropriate wording that the 2002 order was not breached unless there was harm to the collective interests of consumers. However, the form of words approved by Lord Drummond-Young, as I see it, gives little guidance to the defendant. Consideration should be given to devising more helpful wording. The appropriate form of wording would be a matter for the parties and the court on a specific application, bearing in mind the points I have made above, but it would be sensible for the OFT and other bodies authorised to seek orders of this kind to consider whether a common form of wording could be formulated. It is not appropriate for us to formulate it as we are only dealing with the repealed legislation and have not heard full argument on the appropriate form of order in the present case.
49. Mr Chaisty made a further submission that the commission of any act expressly prohibited by the 2002 order constitutes a breach of that order even if it does not amount to a Community infringement. On his submission, the question of whether there had been a Community infringement (any such infringement must have been by the companies then trading) was determined once and for all when the 2002 order was made. I do not accept this submission. In the ordinary case, an order prohibiting conduct of a specific kind must be understood and obeyed. In accordance with its terms. However, as I have already observed, paragraph 1 of the order in this case was made pursuant to paragraphs 11 and 13 of schedule 2 to the 2001 regulations. In my judgment, those paragraphs only enable the court to make orders prohibiting Community infringements or prohibiting being an accessory to Community infringements, and the 2002 order should therefore be construed as prohibiting only conduct of that kind.
50. Mr Chaisty submits, however, that, in any event, the nine cases relied on by the OFT constituted Community infringements because there were repeated breaches and the complaints made by members of the public were simply not addressed. Mr Turner rejects this suggestion and observes that there was no challenge to the evidence as to the number of kitchens sold by DKD each week. Mr Turner submits that the evidence did not establish that the levels of complaint received from the public were culpably higher in respect of the appellant compared with other manufacturers and suppliers of comparable size. On his submission, the context is important and the court should have been astute to measure the level of complaints against the size of the undertaking. In the period of four years when the nine cases had occurred, Mr Miller had sold about 80,000 kitchens.
51. In my judgment, the findings of fact made by the judges on the nine cases show that there were serial episodes of significantly defective supplies of goods. These episodes were not just harmful to the customers concerned, but, by virtue of the risk of repetition, these episodes were also harmful to the collective interests of consumers generally. The judge found that they were not isolated or unconnected incidents. In his judgment they established a consistent pattern of failure to comply with contractual obligations. I do not consider that it is necessary for the court to investigate the level of complaints received by competitors in the industry nor does the limited number of breaches of contract that were proved, when set against the volume of sales, mean that there was no Community infringement.
52. Accordingly, in my judgment, the judge was wrong to say that a course of conduct was required under paragraph 1 of the 2002 order as well as paragraph 2. What was required before a finding of a breach of paragraph 1 of the order was made was evidence of a "Community infringement". That could in appropriate circumstances be a single act, or several separate acts. They need not be connected in the same way that a course of conduct consists of a series of connected acts, but if they are connected that will be evidence from which the court can conclude that there is damage to the collective interests of consumers. Likewise it was not necessary for there to be "systemic culpability", as Mr Turner puts it.
53. However, although the judge inclined to the view that there had to be a course of conduct, he must have taken the view that that did not have to be a course of conduct because he sentenced Mr Miller on the basis of nine separate contempts.

Issue (2): As to the judge's finding of a course of conduct

54. This issue affects paragraph 2 of the 2002 order only. Mr Turner submits that there was no evidence that the nine cases formed part of a course of conduct. The judge relied on the Director-General of Fair Trading v Ashby (decision of Mr C. Purchas QC sitting in the Central London County Court, 1 September 1999). He therefore ought to have made a specific finding as to the nature of the systemic culpability that he identified. On the contrary, the judge went on to sentence Mr Miller for the nine contempts, and those contempts alone.
55. Mr Turner relies on the size of the undertaking. The nine cases were in effect a drop in the ocean in DKD's case given its turnover of 20,000 kitchens a year, whereas the business in Ashby was a smaller enterprise.
56. Mr Turner notes that earlier in his judgment the judge had referred to a reduction in the level of complaints and submits that the judge made an error in not making the connection between this evidence and the question whether a course of conduct was shown.
57. Mr Chaisty does not challenge the meaning which the judge gave to course of conduct, and we have therefore not been concerned to consider further the judgment in Ashby. Mr Chaisty submits that the judge was entitled to find that there was a course of conduct.
58. In my judgment, it is clear from the last two sentences of paragraph 38 of the judge's judgment that the judge considered that the requirements for a course of conduct were satisfied. In addition, in my judgment he was entitled to reach that conclusion on the evidence in the nine cases. DKD had had advice from management consultants but its internal rulebook remained as the judge put it in his sentencing remarks "shambolic". Accordingly I would dismiss the appeal on this ground.

Issue (3): As to the penalties

59. Mr Turner submits that a custodial sentence was wrong in principle and manifestly excessive. Indeed he submits that the correct starting point would have been that there should be no loss or threat of loss of liberty. There was no evidence of breaches for a period of two years prior to the committal proceedings. The evidence showed that Mr Miller had kept down the level of complaints. There was no reliable evidence about the level of complaints in the rest of the industry. The nine cases were atypical. Mr Miller was not personally responsible. DKD is a substantial entity. Mr Miller had offered to give further undertakings to the court below. He was not personally at fault. There had been some improvement in the management of the business. He had introduced a system for the filming of deliveries. His plan was imperfectly carried out but this was evidence of his good intentions. He had not passed off responsibility on the others.
60. Mr Chaisty submits that the judge was ideally placed to consider the appropriate punishment. He indeed had been the judge who made the order on the first contempt application. He submits that there is no justification for submitting that the sentence was manifestly excessive. A suspended sentence was appropriate because matters were within Mr Miller's control. If there was a breach of the conditions of suspension, the judge would not be obliged to make the sentence operative: see the decision of this court in re W(B) an infant [1969] 2 Ch 50 at 56, 57 and 58. The costs order was only a contribution to the costs of the OFT. No basis is suggested for attacking the level of the fine. Mr Miller emphasised that he operated the largest independent kitchen retailer in the UK. He was not forthcoming in evidence about his financial circumstances. He did not provide any credible information as to the profitability of DKD. No further evidence has been produced on appeal. Further than that, the OFT correctly played no part in the sentencing exercises. Part of the delay in the bringing the committal proceedings to trial was due to issues as the ownership raised by Mr Miller and in part it was due to the actions of the Oldham Trading Standards officer. (DKD operates from premises in Oldham).
61. I have set out the sentencing remarks of the judge almost verbatim because in my judgment they dealt fully with all matters relevant to sentence. It is difficult to think of any material matter that the judge did not mention. He dealt with the point that the breaches had occurred more than two years ago. He made the point firmly that orders of the court are not to be flouted. He dealt with the point that Mr Miller was an entrepreneur but that did not exclude him from his obligations to comply with the law. Mr Miller had sought to distance himself from DKD. The judge held that the evidence as to the number of complaints made to the local standards officer had to be treated with caution but paid some regard to them, and I do likewise. In fact, however, there were continuing complaints: even as at March 2008, 23 complaints had been received in a single month. Mr Turner submits that Mr Miller is a relatively unsophisticated businessman. He employs people who would otherwise find it difficult to find work because of the prior record. This may be so, but, as the judge rightly said, Mr Miller still has to comply with the law. Mr Miller had already been the subject of an application for committal. The steps he had taken to regularise his business were not adequate. The nine cases placed before the judge were not isolated instances of complaints. The record of other kitchen suppliers was not in point. Mr Turner has not identified any relevant matter not dealt with by the judge. We have not been taken to any relevant guideline judgment by either party, and Mr Turner did not cite any authority in support of his submission that the sanctions imposed by the judge were excessive. A suspended custodial sentence is no doubt a serious matter. The fine was large in proportion to the profits of the business but there was no challenge in oral submissions to the way that this fine or the contribution to costs had been fixed by the judge. Given the history of this case, a suspended sentence of six months and the other sanctions imposed by the judge were not, in my judgment, manifestly excessive.
62. Mr Turner further submits in his written argument that they should have been no order for committal in the absence of intention or recklessness, relying on authorities such as Fairclough v Manchester Ship Canal Co. [1897] WN 7. But, as can be seen from the quotation from the judge's sentencing remarks, the judge found that Mr Miller was reckless. Mr Turner did not pursue this argument in his oral submissions and in my judgment it is not open to him to submit that no order for committal would be appropriate.

Disposition

63. For the reasons set out above, I would grant permission to appeal to the extent required, dismiss the appeal and allow the respondent's notice.
64. In his written submissions Mr Turner indicated that if this court is against him on the question of course of conduct he would apply for a variation of the order. Any such application should be made to the Manchester County Court.

Lord Justice Moore-Bick:

65. I agree that the appeal should be dismissed for the reasons given by Arden LJ. There is nothing I wish to add.

Lord Justice Sedley:

66. For the reasons given by Lady Justice Arden, I too would dismiss this appeal.
67. I agree with her in particular that there is no warrant for introducing into the offence a requirement for proof of a course of conduct. But, just as to introduce such a requirement would be to add to, and not merely to interpret, the statutory language, so to overlook the defining test of harm to the collective interests of consumers would be to subtract from it.
68. In my judgment, while the material provisions do not demand proof of a course of conduct, they do envisage something more than a simple breach of contract. This legislation does not seek to supplant or supplement individual consumers' private law rights; it seeks to protect the body of consumers from commercial malpractice. Accordingly, as it seems to me, infringement envisages a situation such that (at least in a case such as the present) the public cannot safely or confidently deal with the alleged infringer. There is nothing to prevent such a situation arising from a single event.
69. On this approach there was here a clear breach: consumers could not be confident that they would get what they had ordered, notwithstanding that most did.
70. I have been troubled nevertheless by the relative severity of the penalty. Mr Miller seems to have suffered by reason of two things that are not in themselves blameworthy. One is that he employs people, many of them ex-prisoners, who are otherwise practically unemployable. Whether or not this played a part in the poor standard of service to customers, it is a socially valuable act which deserves recognition. The other is that his business is not incorporated, with the result that he is not only personally liable for the business's debts but is also exposed in proceedings like these to a penalty of committal which cannot be imposed on a corporation.
71. Against this, non-incorporation was not a matter of choice: it was because Mr Miller was disqualified from acting as a company director. He has to face not only the shortcomings of his business methods but the consequences of having disclaimed personal responsibility for the way his business was operating. He had had more than one warning shot across his bows, and the judge was entitled now to impose penalties which would deter him from continuing on his haphazard course.