Issue Date:  -  Friday, 8 May 1998

Karate Firm guilty

A company operating karate classes throughout Perth, has been convicted of failing to comply with the Door to Door Trading Act. The company was ordered to pay costs totalling $2355, but the Magistrate declined to impose a fine.

G-K-R Karate Australia Pty Ltd pleaded guilty in the Perth Court of Petty Sessions to 20 breaches of the Door to Door Trading Act arising out of their dealings with three different consumers.

The charges related to G-K-R Karate failing to use contracts that complied with the Act.

The company was also convicted of failing to provide notices to consumers that explained their right to end the contract within ten days, failing to provide forms consumers could use to rescind the contracts, and accepting payments during the cooling off period.

The case went to trial late last year and was initially dismissed on the basis that the company's method of doing business was not caught by the Door to Door Trading Act.

The Ministry appealed to the Supreme Court in January and the appeal was upheld and referred back to the Court of Petty Sessions. In light of the Supreme Court decision, G-K-R Karate changed its plea to one of guilty on all charges.

At the time of the offences, G-K-R Karate representatives - often karate instructors - went door to door offering four-month memberships for $40 which entitled the consumer to attend karate classes operated by the company at an agreed further charge per class.

The Door-to-Door Trading Act only applies to contracts entered into outside the trader's business premises where the price of goods or services is $50 or more, or where the total amount the consumer will pay can't be determined at the time the contract is signed.

The Ministry contended that G-K-R Karate's business fell into the latter category, and the Supreme Court upheld this view.

Acting Commissioner for Fair Trading, Mark Bodycoat, said attempts to educate the company about its obligations under the Act had been unsuccessful and the Ministry was obliged to pursue the matter in the public interest.

"This was a case where after the membership contract was made, the consumer was caught between either having to outlay more money in class fees to receive anything tangible from G-K-R Karate, or not go to classes and effectively receive nothing for their payment of $40," Mr Bodycoat said.

"Traders must realise that the consumer in the home is recognised by law to be susceptible to pressure by salespeople," Mr Bodycoat said.

"For that reason, the Door to Door Trading Act specifically protects householders' interests when signing contracts.

"Obviously, we're disappointed that a stronger deterrent message has not been sent to traders in WA - and for that matter Australia - who choose to ignore the provision of the Door to Door Trading Act.

Mr Bodycoat said Fair Trading would consider appealing the non-imposition of a fine.

Media contact:
Neil Stanbury
Tel: (08) 9282 0613