Petition The Office Of Fair Trading V. Mb Designs (scotland) Limited+martin Black+paul Bradley Bett
| Jurisdiction | Scotland |
| Judge | Lord Drummond Young |
| Neutral Citation | [2005] CSOH 85 |
| Court | Court of Session |
| Docket Number | P1992/04 |
| Published date | 28 June 2005 |
| Date | 29 June 2005 |
| Year | 2005 |
| OUTER HOUSE, COURT OF SESSION [2005] CSOH 85 | |
| P1992/04
| OPINION OF LORD DRUMMOND YOUNG in the petition of THE OFFICE OF FAIR TRADING Petitioner; against (FIRST) MB DESIGNS (SCOTLAND) LIMITED, (SECOND) MARTIN BLACK, AND (THIRD) PAUL BRADLEY BETT Respondents: For Enforcement Orders and Enforcement Orders ad interim under and in terms of Part 8 of the Enterprise Act 2002 _________
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Act: S Wolffe; Hugh Macdiarmid, Solicitor to the Advocate General
Alt: Bartos; Blacklock Thorley, (for Cannons, Glasgow)
29 June 2005
[1]The petitioner is a body corporate constituted under section 1 of the Enterprise Act 2002. Under section 213 of that Act, it is designated a general enforcer for the purposes of Part 8 of the Act. Part 8, which comprises sections 210-236 of the Act, deals with the enforcement of certain consumer legislation and other provisions of law designed to protect consumers. The relevant legislation has two sources, the domestic legislation of the United Kingdom, including such provisions as the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, and directives and other legislation of the European Union. For Part 8 to apply, it is necessary that a person carrying on a business should have committed an "infringement", as defined in the 2002 Act. Two categories of infringement are recognized, a domestic infringement, which involves a contravention of United Kingdom legislation or other provisions of the domestic law of contract within the United Kingdom, and a Community infringement, which involves a contravention of European Union legislation. For an infringement of either sort to occur, it is necessary that there should have been a contravention of the requirements imposed by the law on suppliers of goods and services, whether under United Kingdom or European legislation or at common law. In addition, it is necessary that such contravention should harm the collective interests of consumers. The latter expression is of fundamental importance; it makes clear that Part 8 is not concerned with individual breaches of contract or breaches of statutory provisions on the part of traders, but is rather concerned with the enforcement of general standards of trading.
Part 8 of the Enterprise Act 2002
[2]The legislation covered by Part 8 is aimed at the protection of consumers, and the word "consumer" is defined in section 210 of the Act. In relation to domestic infringements, a consumer is an individual in respect of whom two conditions are satisfied. First, goods or services are supplied or are sought to be supplied to the individual in the course of a business carried on by the person making the supply. Secondly, the individual must receive or seek to receive the goods or services otherwise than in the course of a business. In relation to Community infringements, a consumer is a person who is so defined for the purposes of a number of listed European directives. These provide, generally speaking, that a consumer is a natural person who acts for purposes outside his trade, business or profession. Thus in both cases a consumer may be described as an individual who is not acting in a trading or professional capacity.
[3]"Domestic infringement" is defined by section 211 of the Act. So far as material, that section provides as follows:
"(1) In this Part a domestic infringement is an act or omission which -
(a) is done or made by a person in the course of a business,
(b) falls within subsection (2), and
(c) harms the collective interests of consumers in the United Kingdom.
(2) An act or omission falls within this subsection if it is of a description specified by the Secretary of State by order and consists of any of the following -
...
(c) an act done or omission made in breach of contract ...
(d) an act or omission in respect of which an enactment provides for a remedy or sanction enforceable by civil proceedings; ...".
[4]The descriptions of acts and omissions that fall within subsection (2) are specified in The Enterprise Act 2002 (Part 8 Domestic Infringements) Order 2003 (SI 2003 No. 1593). Two categories of such acts and omissions are relevant for present purposes. The first, found in Part I of the Schedule, comprises acts or omissions in respect of a number of Acts of Parliament, which include the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982; in both these cases the whole Act is specified. The second category, found in Part II of the Schedule, is defined as "An act done or omission made in breach of contract for the supply of goods or services to a consumer". It follows that a domestic infringement must involve something done by a seller or supplier in the course of his business. It must in addition involve either the contravention of one of the enumerated statutes or the breach of a statutory or common law contractual term. It is also necessary that the act or omission in question should harm "the collective interests of consumers" in the United Kingdom. I discuss the meaning of this expression below at paragraphs [12] et seq.
[4]"Community infringement" is defined by section 212 of the 2002 Act. The material provisions of that section are as follows:
"(1) In this Part a Community infringement is an act or omission which harms the collective interests of consumers and which -
(a) contravenes a listed Directive as given effect by the laws, regulations or administrative provisions of an EEA State, or
(b) contravenes such laws, regulations or administrative provisions which provide additional permitted protections.
...
(3) The Secretary of State may by order specify for the purposes of this section the law in the United Kingdom which -
(a) gives effect to the listed Directives;
(b) provides additional permitted protections".
The listed Directives are those specified in Schedule 13 to the 2002 Act; the most important are the Injunctions Directive, Directive 98/27/EC of 19 May 1998, and Council Directive 93/13/EEC of 5 April 1993, dealing with unfair terms in consumer contracts. What is required for a Community infringement, therefore, is an act or omission that contravenes one of the listed Directives, or certain other legislation, and which harms "the collective interests of consumers".
[5]The enforcement procedure to be followed by the petitioner is specified in section 214 and the following sections of the 2002 Act. Section 214 provides that an enforcer cannot make an application for an enforcement order unless he has engaged in appropriate consultation with the person against whom the enforcement order is to be made. "Appropriate" consultation is defined, generally speaking, as consultation for the purpose of achieving the cessation of the infringement and ensuring that there will be no repetition. In the case of Community infringements, it also covers consultation for the purpose of ensuring that an infringement does not take place which the enforcer believes is likely to take place. Section 215 authorizes an enforcer to apply for an enforcement order in respect of any infringement to a range of courts, including the Court of Session.
[6]Section 217 of the Act authorizes the court to make an enforcement order and defines the circumstances in which such an order can be made. Its material provisions are as follows:
"(1) This section applies if an application for an enforcement order is made under section 215 and the court finds that the person named in the application has engaged in conduct which constitutes the infringement.
(2) This section also applies if such an application is made in relation to a Community infringement and the court finds that the person named in the application is likely to engage in conduct which constitutes the infringement.
(3) If this section applies the court may make an enforcement order against the person.
...
(5) An enforcement order must -
(a) indicate the nature of the conduct to which the finding under subsection (1) or (2) relates, and
(b) direct the person to comply with subsection (6).
(6) A person complies with this subsection if he -
(a) does not continue or repeat the conduct;
(b) does not engage in such conduct in the course of his business or another business;
(c) does not consent to or connive in the carrying out of such conduct by a body corporate with which he has a special relationship (within the meaning of section 222(3)). ...".
[7]Section 217 is concerned with the making of an enforcement order after a full hearing of the case against the trader, including evidence if that should be necessary. The legislation contemplates, however, that it may be necessary for an enforcer to take action on a more urgent basis. Consequently section 218 authorises the court to make an interim enforcement order, and specifies the conditions that must be satisfied before such an order can be made. So far as material, this section is in the following terms:
"(1) The court may make an interim enforcement order against a person named in the application for the order if it appears to the court -
(a) that it is alleged that the person is engaged in conduct which constitutes a domestic or Community infringement or is likely to engage in conduct which constitutes a Community infringement,
(b) that if the application had been an application for an enforcement order it would be likely to be granted,
(c) that it is expedient that the conduct is prohibited or prevented (as the case may be) immediately....
(2) An interim enforcement order must -
(a) indicate the nature of the alleged conduct, and
(b) direct the person to comply with subsection (3).
(3) A person complies with this subsection if he -
(a) does not continue or repeat the conduct;
(b) does not engage in such conduct in the course of his business or another business;
(c) does not consent to or connive in the carrying out of such conduct by a body corporate with which he has a special relationship (within the meaning of section 222(3)).
...
(5) An...
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