Misleading price offence needs no consumer

LAW REPORT v 21 September 1995 MFI Furniture Ltd v Hibbert; Queen's Bench Divisional Court (Lord Justice Balcombe and Mr Justice Collins); 6 July 1995

On the prosecution of an offence under section 20 of the Consumer Protection Act 1987 of giving a consumer a misleading price indication, it was not necessary to prove that the misleading price indication actually was given to a particular consumer.

The Divisional Court dismissed an appeal by MFI by way of case stated by Newcastle Crown Court who had dismissed MFI's appeal against conviction by Newcastle City justices of two sample offences under section 20 of the Consumer Protection Act 1987.

Section 20 provides:

(1) . . . a person shall be guilty of an offence if, in the course of any business of his, he gives (by any means whatsoever) to any consumers an indication which is misleading as to the price at which any goods . . . are available . . .

The trading standards officer employed by Newcastle City Council found items of kitchen and bedroom furniture displayed as "room sets" in an MFI store. Brochures and price leaflets referring to the furniture displayed were available for customers. They claimed a 40-per-cent saving for the kitchen furniture and a 50-per-cent saving on the bedroom furniture. The officer did not actually see any member of the public reading the price leaflets but the store was open to the public and members of the public were in the store wandering around looking at the furniture.

MFI was convicted by justices of offences under section 20 of indicating savings by means of price comparison when the goods had not been available at the higher price for 28 consecutive days in the preceding six months. The Crown Court dismissed MFI's appeal.

MFI appealed on the grounds that on the true construction of section 20 it was necessary for the prosecution to prove that the misleading price indication actually was given to a particular consumer, and on the construction of the minutes of delegation for Newcastle City Council there had been no delegation to the informant, the assistant director (consumer and environmental protection), to lay the informations and prosecute the offences.

Ian Croxford QC and Thomas Lowe (Cripps & Shone, Marlow) for MFI; Patrick Cosgrove QC (City Solicitor) for the council.

Lord Justice Balcombe said that the references to and definition of consumers in section 20 were intended to limit the offence to cases where the misleading indication was intended to affect the actions of a person who might wish to be supplied with the goods for his own private use or consumption.

Thus it would not be an offence for a wholesaler to give a misleading indication to a retailer buying for retail resale nor to a misleading indication as to the price of goods which by their nature could not have been intended for private use or consumption, such as dental equipment which would only be used by a dentist in the course of his professional practice.

There was nothing in section 20 or 21 which required the prosecutor to prove that a particular misleading indication of price had been given to a particular person who might wish to be supplied with the goods for his own private use or consumption. If in every case the prosecution had to lead evidence by an individual or individuals showing that those individuals might wish to be supplied with the goods, as well as establishing that the indication as to the price of the goods was misleading, it might well deprive the section of much of its effect.

Turning to the minutes, although it could not be pretended that they were a model of clarity and precision, the council was defining public health and safety as including all aspects of consumer protection and there was effective delegation. If that were wrong the 1987 Act did not limit the power of others to prosecute and thus the informant, like any other person, had the power to prosecute.

Mr Justice Collins, concurring, said that it was not necessary for the prosecutor to call evidence to establish that any particular person was misled by any price display.

The officer laying the information on behalf of the council was entitled to lay the information in his private capacity. This was not a case where the right to prosecute was limited to the local authority. Thus whether or not there was valid delegation was irrelevant.