The Federal Court has imposed penalties by consent totaling $1 million against Cotton On Kids Pty Ltd in relation to its supply of unsafe children’s nightdresses and pyjamas.
“By supplying around 2,500 unsafe children’s nightdresses and pyjamas across Australia, Cotton On Kids Pty Ltd and Cotton On Clothing Pty Ltd breached the Australian mandatory standard for children’s nightwear,” ACCC Deputy Chair Delia Rickard said.
The nightwear was supplied between September and December 2010 and involved the ‘Nicki Short Sleeve White/Petal Spot Nightdress’ and the ‘Girls Short Sleeve Burst Pyjamas Pea Green’.
“The nightwear was so flammable that they should not have been supplied in Australia at all. To compound this, the highly flammable nightwear was misrepresented by being labelled ‘low fire danger’,” Ms Rickard said.
In his judgment Justice Tracey recognised that the potential consequences of the nightwear not complying with the standard were most serious and was a factor which weighed in favour of a significant penalty. His Honour noted that the garments were intended to be used by infants and children who were a significantly vulnerable class of consumers.
“Children can suffer serious burns when the nightwear they’re wearing catches fire, so it’s important that suppliers take the necessary precautions to ensure their products are safe and compliant with Australian laws,” Ms Rickard said.
The Court also made orders by consent against Cotton On Clothing Pty Ltd in relation to its supply of the children’s nightdresses and pyjamas.
The penalties and other orders follow civil proceedings instituted by the ACCC against Cotton On Clothing and Cotton On Kids for contravening the Trade Practices Act 1974 (the TPA now the Competition and Consumer Act 2010).
Justice Tracey imposed a total penalty of $1 million comprised of:
-$400,000 for the contraventions relating to the sale of the nightdresses that did not comply with the standard;
-$400,000 for the contraventions relating to the sale of the pyjamas that did not comply with the standard;
-$100,000 for the contraventions relating to the misrepresentations regarding the nightdresses; and
-$100,000 for the contraventions relating to the misrepresentations regarding the pyjamas.
The penalties imposed are the highest imposed against a company for breaches of a mandatory product safety standard.
“This decision sends a strong message to suppliers of products subject to mandatory product safety standards. These breaches were very serious as they placed the safety of young children at risk. This case demonstrates that failure to comply with mandatory safety requirements can see a supplier end up in court and exposed to substantial penalties,” Ms Rickard said.
Ms Rickard said that the case highlights the need for suppliers to have appropriate procedures in place to ensure that the products they supply comply with the standard.