Nail Palace (BPP) Pte. Ltd. v Competition and Consumer Commission of Singapore

Nail Palace (BPP) Pte Ltd and Nail Palace (SM) Pte Ltd, which provide manicure, pedicure and foot treatments at Bukit Panjang Plaza and East Point Mall under the Nail Palace name, appealed in Registrar's Appeals (State Courts) Nos 27 and 28 of 2022 against orders obtained by the Competition and Consumer Commission of Singapore under s 9 of the Consumer Protection (Fair Trading) Act (CPFTA).

In [2022] SGDC 171, the District Judge found that employees of each company had told a customer, on a visual inspection alone, that her toenails had fungus and that a fungal treatment package was needed. She found these representations misleading, and that the customers relied on them to buy the packages. She also found that the East Point company omitted to tell one customer that lipsticks and lip balms were included in the package price. She granted declarations and injunctions, and accompanying orders. The appellants appealed only against two of these: an order to publish a full-page notice of the declaration and injunction in the Straits Times, Lianhe Zaobao, Berita Harian and Tamil Murasu, and an order to notify every consumer in writing of the declaration and injunction, and obtain written acknowledgement, before contracting, for two years from 2 September 2022. They did not dispute the findings of unfair practice, but argued that the orders were onerous and would cripple their business when there were only two complaints. They had not complied with the orders, and their later stay application was dismissed. The Commission sought to extend the orders to four years. Goh Yihan JC appointed a young amicus curiae to assist.

1. Whether accompanying orders under s 9(4) of the CPFTA may be granted only after an injunction has been breached, and what factors govern them.
2. Whether the publication order and consumer notification order were disproportionate on the facts.
3. Whether the duration of the orders should be extended, and from when it should run.
4. What principles govern the grant of a final injunction under ss 9(1)(b) and 9(2) of the CPFTA.

From the Second Reading Speech for the 2016 amendments, the judge held that accompanying orders serve to inform consumers, enhance monitoring and generally deter errant suppliers; apart from extensions for non-compliance, they are not punitive. Nothing in s 9(1) makes them depend on a prior breach of an injunction, and they are made at the same time as the declaration or injunction. Unlike the District Judge, the judge held that the detriment to the supplier's business is relevant: orders must be proportionate, meaning they must not significantly exceed what is necessary to address the harm. Orders requiring notice to the Commission can be granted more readily than those requiring notice to consumers, which call for weighing the risk of harm and repetition, existing publicity and the breadth of a blanket notification order. The duration should be what is needed to achieve the order's purpose, subject to the rule in s 9(6) that concurrent orders share one period. The judge urged that the broad wording of s 9(4) and s 9(6) be reconsidered.

On the facts, the misrepresentations were deliberate and moderately severe, a second incident occurred months after the first, no evidence of preventive measures was offered, and the appellants had not complied with the orders despite not obtaining a stay. A one-time notice in each of four newspapers was not excessive, and the managing director's own evidence, that he opened a new outlet after supposedly complying, suggested little detriment. Extending the orders by a year would be disproportionate, but running them from the High Court's decision prevented the appellants from benefiting from their non-compliance.

By way of guidance, the judge held that a CPFTA injunction also serves to mark disapproval and deter, and that where an unfair practice has occurred or is occurring an injunction should be the norm, with more caution where it is merely likely.

Goh Yihan JC dismissed both appeals and affirmed the publication order and consumer notification order. The two-year duration was not extended, but it was to run from the date of the High Court's decision rather than from 2 September 2022. Costs were to be agreed or the subject of written submissions.