ACCC v Carrerabenz Diamond Industries Pty Ltd  FCA
Further challenges from "was/now" and a large number
Continuing the theme of misleading jewellery prices, Carrerabenz
Diamond Industries' business was the buying and selling of
diamonds and other items of jewellery. After purchasing an item of
jewellery, it adopted a practice whereby on one side of a price tag
a staff member would write two prices, one in red ink which was
then immediately crossed out, with a lower price being written
underneath it in black ink.
It placed newspaper advertisements advertising diamond sales
which described jewellery with a "usual mark.price" and a
"crazy price". The ACCC alleged that the advertisements
would led a reasonable person to believe that the diamond had
previously been offered for sale to the general public at a
"usual mark.price" and was now being offered for sale for
a limited period at a substantially lower "crazy price".
Further, a reasonable person would believe that if they purchased
the diamond they would obtain a substantial saving, which amounted
to the difference between those two prices, as described. However,
in each instance, the diamond in question had never previously been
offered for sale to the general public at the "usual
Twenty-seven offences were alleged against Carrerabenz Diamond
Industries arising from six advertisements placed in metropolitan
newspapers. During the course of a trial, Carrerabenz Diamond
Industries objected to the form of the charges on the basis that
they were duplex. The prosecution made an election which resulted
in an amended information and summons and a change of plea by the
The conduct was held to amount to a breach of section
75AZC(1)(g) of the Trade Practices Act which prohibits false or
misleading representations about the price of goods or
In determining penalty, the court considered the motive of
Carrerabenz Diamond Industries behind its pricing practice. It
concluded that what was involved was criminal conduct, not an
isolated aberration. It gave weight to the fact that a particular
purpose of the Trade Practices Act is consumer protection. The
court thought that there was a need for specific and general
deterrence in relation to further conduct in the marketplace and
that both were pertinent considerations on sentencing:
"The purchase of a diamond by a consumer can be a very
special thing, and common experience of most Australians would take
one to the proposition that in making that purchase it can involve
saving, at some financial sacrifice, for a special occasion. So one
should not downplay the mischief involved in this type of
Because of the large number of charges, there was some
controversy as to how the penalty should be aggregated, in
particular, whether section 79(2) of the Trade Practices Act has
application so as to allows "grouping". Each of the
charges alleged an offence against the same provision, but the
offences were committed over a period of time.
The court thought that to impose individual penalties would
produce an aggregate result which would be disproportionate to the
gravity of the criminal conduct, having regard to the totality
principle. In these circumstances, the court concluded that one
penalty of $220,000 should be imposed.
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