Asda Stores Ltd v Birmingham City Council
| Jurisdiction | England & Wales |
| Judge | THE LORD CHIEF JUSTICE,MR JUSTICE DYSON |
| Judgment Date | 11 March 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0311-4 |
| Docket Number | CO/0058/98 |
| Date | 11 March 1998 |
| Court | Court of Appeal (Civil Division) |
[1998] EWCA Civ J0311-4
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CROWN OFFICE LIST
DIVISIONAL COURT
Royal Courts of Justice
The Strand
London
The Lord Chief Justice of England
(Lord Bingham of Cornhill)
and
Mr Justice Dyson
CO/0058/98
MISS CLAIRE ANDREWS (instructed by Mr Gary McHale, Solicitor for Asda Stores Ltd, Asda House, Leeds LS1 5AD) appeared on behalf of THE APPELLANT
MR JAMES FINDLAY (instructed by the Solicitor to Birmingham City Council) appeared on behalf of THE RESPONDENT
Wednesday 11 March 1998
I will ask Mr Justice Dyson to give the first judgment.
This is an appeal by way of case stated from a decision of the Birmingham Justices that the appellant was guilty of two offences of giving to consumers an indication which was misleading as to the price at which goods were available, contrary to section 20 of the Consumer Protection Act 1987. The offences were found to have been committed on 21 and 27 October 1995 and concerned indications to customers at the appellant's store at Small Heath, Birmingham as to the price at which a 500 gramme tub of Clover margarine was available for purchase. On each occasion, as was admitted by the appellant, the selling price was indicated by means of a shelf edge label ("SEL") as £1.17, whereas the price charged at the checkout was £1.35.
The 1987 Act so far as material provides:
"20(1) Subject to the following provisions of this Part, a person shall be guilty of an offence if, in the course of any business of his, he gives (by any means whatever) to any consumers an indication which is misleading as to the price at which any goods …. are available….
….
21(1) For the purpose of s20 above an indication given to any consumers is misleading as to a price if what is conveyed by the indication …. includes any of the following, that is to say —
(a) that the price is less than in fact it is …."
….
39(1) Subject to the following provisions of this section, in proceedings against any person for an offence to which this section applies it shall be a defence for that person to show that he took all reasonable steps and exercised all due diligence to avoid committing the offence.
(2) Where in any proceedings against any person for such an offence the defence provided by subsection (1) above involves an allegation that the commission of the offence was due:
(a) to the act or default of another ….
that person shall not, without the leave of the court, be entitled to rely on the defence unless, not less than seven clear days before the hearing of the proceedings, he has served a notice under subsection (3) below on the person bringing the proceedings.
(3) A notice under this subsection shall give such information identifying or assisting in the identification of the person who committed the act or default or gave the information as is in the possession of the person serving the notice at the time he served it."
The appellant duly served a notice under section 39(3) identifying John Pontefract, who was the store manager, and Cindy Cabey, a Trading Standards Clerk, as persons whose act or default had led to the commission of the offences.
The findings of the justices were as follows. Trading Standards Clerks were responsible for carrying out routine checks for the accuracy of SELs. The butters and fats were required to be routinely checked once within a three-week cycle by a hand-held terminal used by the clerks, and also were visually checked three times a week. The offences were committed because on 5 October 1995 Mrs Cabey made an alteration on the computer which generated the SELs. The reason for this alteration appears to have been that on that date routine checking of the accuracy of the SELs showed that the 500g tubs of Clover margarine had an SEL of £1.35 with a marking "15%free", whereas they scanned in at £1.17, i.e. a reading of the electronic bar code on the product showed that price. The product bore an electronic bar code but no other price marking.
The discrepancy arose because the Clover tubs were at that time subject to a promotional offer. It was the appellant's policy not to reduce the SEL for promotional offers, and also not to show an assertion of a percentage free on the SEL, although that assertion was on the promotional packaging. Mrs Cabey operated the computer to delete the reference to "percentage free" and to reduce the sum shown on the SEL to £1.17. When the promotional items came off sale and the sale of standard stock was resumed, the price shown on the SEL remained at £1.17. The alteration was done by Mrs Cabey without permission. The management was not told. It was contrary to instructions given to staff. The appellant's due diligence system was devised in conjunction with the West Yorkshire Trading Standards service. At the time when she made the alteration Mrs Cabey was under pressure because of the recent death of her former husband.
The case stated then sets out a short statement of part of the evidence of three witness as to the function of the Trading Standards Clerk and Mrs Cabey's state of mind at the time when she made the alteration. I infer from the case that the justices accepted that evidence. It included the following. Mr Pontefract said that he only put good people into the trading standards department; it was a very important job since the company did not want to mislead its customers. He said, "Since the discovery of these offences Cindy has asked if she could go to another department. She was under pressure. Her ex-husband died a short time earlier and she didn't want the responsibility. We transferred her to bakery. She is a good colleague and we would not have transferred her if she did not want to go."
Denise Reynolds, the Administration Manager, said, "Cindy Cabey is a very nice, very reliable, pleasant individual. She performed her job very well, very capably. Her training records state that she was doing a good job." She was asked, "We have heard that Mrs Cabey was under stress at the time of the alteration of the computer. Do you accept that colleagues under stress might make mistakes?" Her answer was, "I appreciate Cindy was under pressure. Cindy was asked whether she wanted compassionate time off and she said that she didn't want it. It is not always the case that people make mistakes when under pressure."
The case stated then sets out in outline the contentions advanced by counsel on each side. It also records the fact that neither counsel addressed the court on the question whether it would be practicable or desirable for the company to have a policy requiring the removal of staff who were under pressure from the position of trading standards clerks. The case continues:
"The Court accepted the detailed and lengthy evidence about the due diligence system, and has seen copies of training and operations manuals. The Court accepted that Asda spent large sums of money on training. It accepted that at various points Mrs Cabey was given a clear indication that she must not alter SELs without reference to managers and Mrs Cabey was in breach of her instructions in making the alterations on 5 October 1995. We were satisfied that Asda used all due diligence in relation to training and regarding checking the stock.
The concern of the Court was the state of mind of Mrs Cabey at the time. The trading standards clerks had great responsibility and were highly regarded. They were in a position such that the company's compliance would depend on their accuracy. We accepted that Mrs Cabey was asked if she wished to be relieved of her duties and said no. We considered that Asda failed to take all reasonable steps by not immediately relieving Mrs Cabey of her responsible position. It should have been a rule or policy of the company that if there was a suggestion of personal pressure there would be an immediate transfer."
Accordingly the defence failed. The company was found guilty and fined £500 on each charge and ordered to pay £1,000 towards the prosecution costs.
On behalf of the appellant it is submitted that the decision of the justices should be quashed on the grounds that, first, it was irrational in the Wednesbury sense; secondly, it was reached without regard to relevant considerations; and thirdly, that the decision is tainted by procedural unfairness because the appellant was not given an opportunity to address the court on the point which eventually carried the day.
I start with irrationality. Miss Andrews submits that it would be wholly unreasonable to expect the appellant to operate a policy whereby members of staff holding important positions of responsibility must be transferred from those positions if there is "a suggestion of personal pressure". Reference is made to the speech of Lord Diplock in Tesco v Nattrass [1972] AC 153, when at page 194 he said:
"What the employer or principal can reasonably be expected to do to prevent the commission of an offence will depend upon the gravity of the injury which it is sought to prevent and the nature of the business in the course of which such offences are committed."
That was a case under section 24 of the Trades Descriptions Act 1968 which provides:
"(1) In any proceedings for an offence under this Act it shall, …. be a defence for the person charged to prove —
(a) that the commission of the offence was due to …. the act or default of another person …. and
(b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of...
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