The Australian Competition and Consumer Commission (ACCC) alleged that Lorna Jane Pty Ltd (Lorna Jane) contravened ss 18, 29(1)(g) and 33 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)). The allegations concerned Lorna Jane’s marketing campaign to promote activewear treated with a spray described by Lorna Jane as “LJ Shield”. Lorna Jane admitted that in the course of the marketing campaign, it falsely represented that LJ Shield Activewear would protect wearers against, stop the spread of, or otherwise eliminate viruses including COVID-19. Further that it falsely represented that it had a reasonable basis to make each of those representations at the time they were made.
The contravening conduct occurred between 2 July and 23 July 2020, such period being described by Rangiah J as “a time of considerable uncertainty, fear, and concern amongst the public about the consequences and spread of COVID-19”. His Honour observed that “Lorna Jane sought to exploit the fear and concern of the public through the use of misleading, deceptive, and untrue representations about the properties of LJ Shield Activewear. The behaviour of Lorna Jane can only be described as exploitative, predatory, and potentially dangerous”.
His Honour found that the conduct “must be regarded as very serious” and there “is a need to impose a substantial penalty to reflect the seriousness of the conduct and to demonstrate that exploitative conduct of this kind will not pay.” It was relevant to the penalty imposed that “the making of the representations was directed by Ms Clarkson, so that the conduct emanated from a very high managerial level within the company”.
The Court made orders sought jointly by the parties including a pecuniary penalty of $5,000,000, injunctive relief and declaratory orders.
The judgment is published here.