Westminster City Council v Peirglow Limited

Date

28 February 1994

Legislation

Trade Descriptions Act 1968, ss.1(1)(b), 24(1)(b)

Keywords

counterfeit goods; defences; meaning of "reasonable belief"

Counsel

J Greaves, R Buswell

Solicitors:

unknown.

Judge:

Kennedy LJ, Scott-Baker J.

Court:

High Court (Queen’s Bench Division, Crown Office List)

Reported:

unreported, CO/1024/93.

Summary:

Pierglow Ltd were carrying on business as clothing retailers. 166 pairs of jeans were offered for sale to which, so it was alleged, false trade descriptions contrary to s.1(1)(b) of the Trade Descriptions Act 1968 had been applied, in that they purported to have been made by Levi Strauss when that was not the case.

The evidence was that the proprietor of Pierglow Ltd had been informed by a business associate in Greece, with whom he had been dealing for two years, that the business associate had purchased a lot of Levi's 501 jeans, and was prepared to sell some to Pierglow at £1 or £2 less than the usual United Kingdom wholesale price. When the goods arrived, the goods were examined by the proprietor and his assistant. They appeared to be in order and they found nothing about them, or the manner in which they had been supplied, which caused them to doubt their authenticity.

The magistrate concluded that Pierglow took all reasonable precautions and exercised all due diligence to avoid the commission of the offence and that accordingly the defence under s.24(1)(b) had been made out. He concluded that he did not consider that it would have been reasonable or realistic to expect Pierglow to have made enquiries of the manufacturer or his supplier.

Decision

The High Court reviewed the authorities in relation to the scope of the defence and concluded that:

• the very fact that the price charged was only very little less than the current wholesale price might be taken to be an indication that the goods were that which they purported to be. The difference of £1 or £2 on an article which is going to be retailed at a price of nearly £30 does not seem to be in the slightest bit significant, save that it is some indication that the goods were indeed manufactured by the person who was alleged to be the manufacturer;
• requiring suppliers to go back to the manufacturer to ensure the goods were genuine every time they received new stock was far beyond the extent of the reasonable precautions and due diligence required for the defence;
• there was evidence on which the Magistrate was entitled to conclude that the defence under s.24 was established. Both the proprietor and his assistant examined the jeans. There was nothing about the jeans or the manner in which they had been supplied to raise any suspicions about them, nor was the price so low as to require further inquiries;
• what is to be expected of a Defendant to meet his obligations under s 24 will vary according to the facts of each case; and
• in this case, nothing more than was done could reasonably have been required of the Defendants. Had there been anything to raise their suspicions the position would have been otherwise.

Accordingly the Council’s appeal was dismissed.