England and Wales High Court (Administrative Court) Decisions

1. LORD JUSTICE SIMON BROWN: MGN Limited, publishers of "The People" newspaper, appeal by way of case stated from the adjudication of Northampton Justices sitting at Wellingborough on October 1996, convicting them of an offence under section 20(1) of the Consumer Protection Act 1987.

2. In "The People" newspaper published on 19th February 1995 the Appellants offered "A £50 watch for just £4.99". That was alleged and found to be "... misleading as to the price at which any goods ... are available (whether generally or from particular persons)" within the meaning of section 20(1), having regard to section 21(1)(e) which provides:

3. It is convenient at once to describe the advertisement itself, a document appended to the case stated. Its top half consists of the headline offer, "A £50 watch for just £4.99", alongside a photograph of two watches, respectively a ladies' and gentleman's watch. Immediately above that headline and photograph appear the words "YOU LUCKY PEOPLE", and immediately below them the words "FOR EVERY READER!" Then comes the following text:

4. I need not quote no more.

5. I come to the facts found. These have been set up by the Justices in very considerable detail, but given the relatively narrow basis upon which this appeal is now sought to be advanced, it is unnecessary to set them out in full. Amongst the facts found were that Mr Story, Chairman of Peers Hardy UK Limited, the manufacturers and suppliers of this Realm brand, on 16th February 1995 wrote to Mr Williams, a part-time employee both of the Appellants and of Readers Response Limited, a company with whom the Appellants had collaborated on this watch promotion, stating that this brand of watch "... will be launched on 1st March 1995 at a retail price of £50".

6. The advertisement was seen by Patricia Lewin, a housewife who believed the offer to be a bargain and who ordered two watches, one male and one female. When she received the watches in May 1995 she felt disappointed and complained both to the Appellants and to the Respondent County Council. She did not think them worth £50 each. No watches were available for sale in the shops until 1st March 1995 at the earliest. Even then, on the evidence before the court, no more than 16 watches were on sale in the five months between 1st March and 31st July 1995, and they were on offer variously at £49.95 and £19.95.

7. The central basis both of prosecution and conviction appears to have been less that the watches were not worth £50 than that the advertisement had indicated that the watches to have been generally available for retail at £50 on 19th February 1995. As to that, the relevant findings made by the Justices (and I omit those findings which went to the Appellants' due diligence defence which failed and which is not raised afresh on this appeal) were these:

8. Kingdom until at least two weeks after 'the

9. The question posed for the opinion of the High Court is this:

10. On behalf of the Appellants, Mr Saggerson contends that no fair-minded consumer could reasonably have inferred from the advertisement that general or retail availability was being suggested or implied. He emphasises, in particular, the three passages in the advertisement in which reference is made to "our watches" notably "our amazing bracelet watch", "our fantastic timepiece", and "our great watches". There was, he says, no suggestion of any kind that these watches could to be bought elsewhere. As to the question of comparison, he says at paragraph 6(b) of his skeleton argument:

11. Paragraph 7 of his written argument submitted in conclusion that the Justices --

12. Put that way, the Appellants' argument seems to me quite impossible. As Mr Scholz for the Respondent prosecutor points out, the concept of worth itself in this context is meaningless except by reference to the touchstone of availability at a given price. To say that a particular make of watch is worth £X implies that that is its open market value, i.e. that such watches are not merely being offered for sale but are actually purchased at this price.

13. Clear support for such an approach is, moreover, to be found in the Code of Practice for Traders on Price Indications issued by the DTI in 1988. Paragraph 1.8 of the Code reads as follows:

14. Section 25(2) of the 1987 Act provides that:

15. In these circumstances, I have no difficulty whatever in concluding that the Justices were well entitled to reach the view that a consumer might reasonably judge that watches, such as those offered in this advertisement, were generally available. It is, I should note, sufficient for the prosecutor's purpose to establish that some readers might reasonably interpret the advertisement as an indication that the watches are being sold elsewhere at a price approximating to their stated value, even though many more readers might, in fact, take a contrary view. That is clear on the authorities. I repeat, the Appellants' main argument that this advertisement raised no suggestion that such watches might be available otherwise than to those responding to 'The People' newspaper's offer appears to me plainly unsustainable.

16. Altogether more promising had seemed to me a much narrower argument which may or may not have been lurking within Mr Saggerson's original formulation, but which at our invitation he eventually canvassed. This was to the effect that it was not necessary for these watches to be available, priced at £50 in the open market, on the actual date of publication of the advertisement: rather it was sufficient that such watches shortly thereafter became available at that price.

17. Put that way, the argument, at first blush, seemed to me persuasive. I cannot accept for a moment that if, for example, the Appellants were to strike a deal with Asprey's that a new watch to be introduced in Asprey's Bond Street shop for retail sale in a fortnight's time, priced at £1,000, was to be made available to the readers of 'The People' newspaper for £100 for delivery, say, as here, in 8 weeks, an advertisement to that effect would fall foul of this legislation merely because the watches were not already available at Asprey's at the date of publication. That, however, is not this case - far from it.

18. True, at the date of this advertisement it was, apparently, proposed to put this brand of watch on sale within some two weeks for £50. But two comments immediately fall to be made as to that. First, the scheme seems to me to run into the difficulty of paragraph 1.6.3 of the Code:

19. The words to be emphasised there are "sold" (in contradistinction to merely being offered for the sale) and "at the time you first make that comparison". Second, the evidence in this case of eventual availability on the open market was very sketchy and unsatisfactory. Very few watches were shown to have been on retail sale at all. Some, at least, were clearly priced at less than £49.95. There was, moreover, no evidence that any watches at all were ever actually sold.

20. In short, contrary to my initial view, I have concluded that on the particular facts of this case the Appellants' subsidiary argument also fails. Generally speaking, I would hold it to be necessary, in order to justify an advertisement of this kind, for those concerned to prove that there are, indeed, articles of the description under offer already available for sale on the open market so that the necessary price comparison can be made. In certain exceptional circumstances I recognise that that may not be necessary, but it would, it seems to me, generally speaking, be for the defendants to bring their case within such an exception. That, in my judgment, the Appellants here cannot do. On the contrary, everything about this case suggests that the mere fact that some watches were shortly after the advertisement to become available in the open market was wholly insufficient to defeat this prosecution. Even, indeed, had the main emphasis of the prosecution been as to the value rather than the availability of these watches, the same information would still have been laid under the same statutory provision.

21. In the result I would answer the question posed in the case stated in the affirmative and accordingly dismiss this appeal.

22. MR SCHOLZ: My Lords, the only other Order is that costs should follow the event.

23. LORD JUSTICE SIMON BROWN: I doubt that there can be any arguments as to that, Mr Saggerson; can there?

24. MR SAGGERSON: No, I do not resist that, my Lords.

25. LORD JUSTICE SIMON BROWN: So be it. Appeal dismissed with costs.