Office of Fair Trading v Miller

A stop-now order made under the Stop Now Orders (EC Directive) Regulations 2001 must be read within the statutory and directive framework that enabled it. A breach does not require a course of conduct: a single act may amount to a Community infringement if it harms the collective interests of consumers. Separate defective transactions may establish that harm through their pattern and risk of repetition. An order must give fair warning and describe prohibited conduct as clearly as circumstances permit, although some generality is acceptable. A person may breach an order through authorised employees or agents. Where an order separately requires a course of conduct, repeated connected failures may satisfy that requirement. The sanctions imposed were not manifestly excessive.

The Office of Fair Trading obtained an order in 2002 against Mr Miller concerning the supply of kitchen units by Discount Kitchens Direct. The order prohibited specified consumer-protection failures and similar conduct. Following evidence from nine complainants, the Manchester County Court found breaches and, on 29 May 2008, imposed a six-month suspended committal sentence, a £90,000 fine and a £30,000 costs contribution.

Mr Miller appealed. The issues were whether the order extended to conduct carried out by employees or agents, whether paragraph 1 required a course of conduct or a Community infringement, whether paragraph 2’s course-of-conduct requirement was proved, and whether the penalties were excessive.

Arden LJ gave the leading judgment. Moore-Bick and Sedley LJJ agreed, with Sedley LJ adding clarification on the requirement of harm to the collective interests of consumers.

1. Conduct by employees or agents. An individual subject to an order regulating business activity may breach it through employees or agents acting within the scope of their authority. The absence of express wording dealing with servants or agents was not critical where Mr Miller was the proprietor and an active force in the business.
2. Paragraph 1 and Community infringement. Paragraph 1 was made under paragraphs 11 and 13 of Schedule 2 to the Stop Now Orders (EC Directive) Regulations 2001. It therefore had to be construed within those enabling powers and applied only to Community infringements. The regulations were to be interpreted, so far as possible, consistently with Directive 98/27/EC. The Court rejected the submission that every act expressly prohibited by the order constituted a breach regardless of whether it was a Community infringement.
3. Meaning of Community infringement. A course of conduct was not required. The essential question was whether harm was caused to the collective interests of consumers. A single act could suffice, and separate acts need not be connected in the manner required for a course of conduct. The nine defective supplies, viewed together and in light of the risk of repetition, established the necessary harm. It was unnecessary to compare complaint levels with competitors or to prove systemic culpability. Sedley LJ emphasised that the legislation protected consumers collectively from commercial malpractice rather than merely supplementing individual contractual remedies.
4. Specificity of orders. The order should have stated clearly that it applied only to Community infringements causing harm to the collective interests of consumers. Some generality was permissible, but the prohibited conduct had to be described as clearly as the circumstances allowed so that the defendant received fair warning. The issue could not be left to prosecutorial or sentencing discretion. The Court agreed in part with OFT v MB Designs (Scotland) Ltd [2005] SLT 69, but rejected the view that a considerable degree of generality was acceptable.
5. Paragraph 2 and course of conduct. Paragraph 2 did require a course of conduct. The judge was entitled to find one on the evidence of the nine cases and the continuing deficiencies in the business’s internal arrangements.
6. Penalties and disposition. The sentencing judge had addressed the relevant aggravating and mitigating matters. Given the previous contempt, the need to secure future compliance, the continuing complaints and the inadequate corrective measures, the suspended sentence, fine and costs contribution were not manifestly excessive. The Court granted permission to appeal to the extent required, dismissed the appeal and allowed the respondent’s notice.

• Court of Appeal (Civil Division): On 3 February 2009, in [2009] EWCA Civ 34, dismissed the appeal and allowed the respondent’s notice.
• Manchester County Court: HHJ Holman found breaches of the 2002 order and imposed a six-month suspended committal sentence, a £90,000 fine and a £30,000 costs contribution.