Mock Auctions Act 1961–Meaning of ‘sale of goods by way of competitive bidding’–Meaning of ‘highest bid’ in the context of a Dutch auction process–General point of constitution of proceedings–Separate incidents add up to ‘conducting a mock auction’
This was an
appeal by Mr Francis John Lomas, of Wolsey Road, Lytham Road, Blackpool,
Lancashire, from the dismissal by Preston Crown Court on May 2 1974 of his
appeal against his conviction by Blackpool justices on seven charges of
offences against the Mock Auctions Act 1961 brought by the respondent, Mr Alan
Rydeheard, the chief superintendent of police, Blackpool.
Mr I McCulloch
(instructed by Simpson, Silvertown & Co, agents for D Betesh & Co, of
Manchester) appeared for the appellant, and Mr W R Wickham (instructed by
Norton, Rose & Co, agents for A C Brewer, of Lancashire Police Authority,
Blackpool) represented the respondent.
Giving the
first judgment, BRIDGE J said: This is an appeal by case stated from a decision
of the Crown Court at Preston given on May 2 1974, affirming the conviction by
justices of the petty sessions at Blackpool of the present appellant of seven
offences in contravention of the provisions of the Mock Auctions Act 1961. That
statute is unfamiliar territory in this court, and I turn at once to the
provisions which create the relevant offence. Section 1 (1) provides:
‘It shall be
an offence to promote or conduct, or to assist in the conduct of, a mock
auction at which one or more lots to which this Act applies are offered for
sale.’
Subsection (2)
prescribes penalties for the offence, and then by subsection (3) it is
provided:
‘Subject to
the following provisions of this section, for the purposes of this Act a sale
of goods by way of competitive bidding shall be taken to be a mock auction if,
but only if, during the course of the sale (a) any lot to which this Act
applies is sold to a person bidding for it, and either it is sold to him at a
price lower than the amount of his highest bid for that lot, or part of the
price at which it is sold to him is repaid or credited to him or is stated to
be so repaid or credited, or,’ and then (b) is immaterial for present purposes,
‘or (c) any articles are given away or offered as gifts.’
The
circumstances out of which the seven informations on which the appellant was
convicted arose occurred at premises known as the Bonnie Street Sale Rooms on
two successive days, July 29 and 30, as long ago as the year 1972. The evidence
of a number of police officers who visited those sale rooms from time to time
on those two dates is set out at some length in the case stated. It should be
said at once that there is no dispute that if the activities going on in those
sale rooms amounted to the holding of a mock auction or mock auctions, the
appellant was a person who was either conducting or assisting in the conduct of
those mock auctions. Again there is no doubt that the articles which were being
offered for sale and sold were within the phrase ‘lots to which this Act
applies.’ The primary issue canvassed in
this court as a ground on which it is said that the convictions should be
quashed relates to the question whether the relevant activities fell within the
phrase in section 1 (3), ‘a sale of goods by way of competitive bidding.’ That phrase is the subject of a more elaborate
definition in section 3 (1) of this Act, which is in these terms:
‘In this Act
‘sale of goods by way of competitive bidding’ means any sale of goods at which
the persons present, or some of them, are invited to buy articles by way of
competitive bidding, and ‘competitive bidding’ includes any mode of sale
whereby prospective purchasers may be enabled to compete for the purchase of
articles whether by way of increasing bids or by the offer of articles to be
bid for at successively decreasing prices or otherwise.’
It is perhaps
a convenient shorthand to refer to the two different kinds of competitive
bidding which that definition contemplates as an English auction and a Dutch
auction, the latter phrase being one which is well understood in practice.
With that
definition in mind it is necessary to turn and look at the seven instances in
the evidence of goods being sold or offered for sale in circumstances which led
the Crown Court to the conclusion that there were in this case sales of goods
by way of competitive bidding. The first instance is spoken to by a police
officer who visited the sale rooms on July 29 and whose evidence is summarised
in the case. Mr Velleman was the auctioneer or salesman, and he said to the
assembled company in the sale room ‘Right, I’ll make this a good lot,’ and he
held up a cigarette lighter, two transistor radios and two alarm clocks. He
said ‘I’m not asking £10, £9 or £8: hands up who will give me £7,’ where-upon
several persons present put their hands up, and one of them was selected to
receive the lot by Mr Velleman. She did. Some ballpoint pens were then
distributed free among members of the public in attendance, and having given to
the lady the lot which she had offered to buy at £7 by putting her hand up, Mr
Velleman said, ‘There, I don’t want your £7, lady. Give it her back, Walter.
Let her have them for £1, no, 14 bob.’
In the second instance to which I refer, which occurred the following
morning, again Mr Velleman was the salesman. The articles being offered for sale
in this case were umbrellas. Mr Velleman said, ‘These umbrellas must be worth
£2.50. I don’t ask £2.50, £2 not even 30 bob. Today’s price £1. Hands up. Blue
one over there. Red one over there. Lady over there. What colour blue one?’ A number of persons who put their hands up
received umbrellas of their chosen colour. The third instance relates to a
later time on July 30 when, after distributing some boxes free which turned out
to contain cuff links, Mr Velleman said, facetiously, obviously, in the context
of what had gone before, to his assembled prospective customers, shaking the
boxes, ‘Can you hear anything? No? Well, that’s because the box is empty. Who’s
going to buy an empty box? Shall I give
it to you for 25 bob? No. Who wants an
empty box
number of takers at 10 bob of the boxes, which were not empty but contained,
like the ones that had earlier been distributed, in each case a pen and a pair
of cuff links.
The learned
circuit judge who presided at the Crown Court helpfully in the case sets out
the judgment he gave, explaining the court’s reasons for arriving at a
conclusion that there were here mock auctions being conducted. The way it is
put in the judgment in one succinct paragraph is as follows: ‘The issue the
court is concerned with is what would have happened if nobody had put their
hands up. It is clear that a further inducement would have been given to people
to put their hands up by putting the price down further. The idea was to get
members of the public in who were looking for a bargain. If nobody put their
hands up, then the goods would be reduced to the lower price. This was a mock
auction: there was competitive bidding.’
Mr McCulloch, on behalf of the appellant, has attacked that reasoning
and said that there was no basis in the evidence for the inference which is
drawn in that paragraph by the court that if no one had put their hands up at a
certain price, for example, at the figure of £1 in relation to the umbrellas,
the umbrellas would then have been offered at a lower price. Mr McCulloch
submits that the court could not legitimately conclude that this evidence
established sales of goods by way of competitive bidding within the meaning of
section 3 (1) of the statute, because it was not legitimate to look at what
would have happened if hands had not been put up at a particular point; all the
court could look at was what did happen. For my part, I am wholly unable to
accept that argument. The question the court had to decide was whether persons
at the sale were being invited to buy articles by way of competitive bidding,
and that requirement was satisfied by an offer of articles to be bid for at
successively decreasing prices in the context of this Dutch auction situation.
It seems to me that the evidence abundantly justified the inference drawn by
the Crown Court as indicated in the passage from the judgment which I have
read, and that the drawing of that inference established as clearly as could
be, and perfectly legitimately, that the business at these sale rooms was being
carried on by way of offers of articles to be bid for at successively
decreasing prices. Accordingly, in my judgment the main contention on which
this appeal has been argued fails.
But there are
a number of subsidiary points to which I must make reference. The offending
activities which contravened section 1 (3) of the statute setting out the seven
offences of which the appellant was convicted were in six cases the giving away
of free gifts contrary to section 1 (3). But in one case, the case of the lady
who bought the mixed lot of transistors and clocks, what was alleged was that
that lot had been sold to her at a price lower than the amount of her highest
bid for that lot in contravention of section 1 (3) (a). Mr McCulloch submits
that her bid of £7 for the lot, which it will be remembered she was eventually
allowed to purchase for 14 shillings, could not properly be termed her highest
bid because she had never made any lower bid. That is, as I understand, the
argument, but it seems to me that in the statutory context where one form of
competitive bidding within the explicit definition of section 3 (1)
contemplates a Dutch auction as opposed to an English auction, the phrase ‘his
highest bid’ in section 1 (3) (a) must be construed as applicable to the first
effective bid made by a taker as the seller progressively reduces his offer
price. Another point which Mr McCulloch argued before us, although not strongly
pressed, was to the effect that when the free gifts were given away, which
brought the proceedings within the definition of a mock auction, because that
is one of the activities which turns an otherwise respectable auction into a
mock auction under section 1 (3), the gifts in question were given after the
relevant sales by way of competitive bidding were completed. He refers to the
provisions of the Sale of Goods Act 1893 as to when a sale must be considered
as complete. But the whole answer to this argument, it seems to me, is clearly
provided by an express provision again in the interpretation section of the
Act, section 3 (5):
‘For the
purposes of this Act anything done in or about the place where a sale of goods
by way of competitive bidding is held, if done in connection with the sale,
shall be taken to be done during the course of the sale, whether it is done at
the time when any articles are being sold or offered for sale by way of
competitive bidding or before or after any such time.’
In the light
of that provision, Mr McCulloch’s point on the time of the gift in relation to
the time of the relevant sale is clearly unarguable.
Finally, it is
said on the appellant’s behalf that the way in which the prosecution here
sought to distinguish between the seven different occasions when seven
different offences were committed by the appellant was inaccurate and did not
accord with the statute, in that each separate information related to a
separate instance of an offending activity under section 1 (3); and it is said
that because you may find different offending activities under subsection (3)
which bring the proceedings within the definition of a mock auction, that does
not necessarily mean that you find that there are separate mock auctions being
conducted on the different occasions when these activities are carried on. It
is said that what constitutes the offence here is the conducting of a mock
auction. Speaking for myself, I think there is considerable force in this
point, and I am inclined to think it is right that a single offence is
committed by one who conducts or assists in the conduct of a single mock
auction, and there may be a single mock auction at which a variety of the
offending activities, as I have called them, under subsection (3) are carried
on. But the difficulty in the way of the appellant so far as this point is concerned
is it was never taken in the court below, nor is anything said about it in the
case. The question of what amounts to a single mock auction as opposed to a
series of distinct and separate mock auctions must be a question of fact. I
should imagine that in a sale room like these Bonnie Street Sale Rooms in
Blackpool it is perfectly clear that there is a separate auction each day. It
may well be that there is a separate auction each morning and each afternoon,
or given appropriate evidence, it might be apt to say that there were half a
dozen auctions or more which could be seen to be separate and distinct carried
on within the space of a single day. But all those questions must be questions
of fact, and since the point was never raised below, it does not seem to me
possible for us to give the appellant any relief in respect of it, subject only
to this. The prosecution alleged seven distinct offences by reference to the
distinct offending activities which were established by the evidence on seven
different occasions. They must be able in the evidence to point to a clear
connection between a particular offending activity and a relevant sale by way
of competitive bidding, and if, as Mr McCulloch cogently pointed out, one looks
at the facts on which the last of the seven convictions was founded, when
plastic combs were given away free, and therefore in contravention (if there
was a mock auction going on at the time) of section 1 (3) (a), it is quite
impossible to find anything in the evidence to which that distribution of free
plastic combs can be sufficiently proximately related to say that that evidence
justified a conviction for that seventh offence. Accordingly I would allow the
appeal on that ground alone, and to the strictly limited extent of saying that the
conviction of the appellant on the seventh of the seven cases of which he was
convicted should be quashed. Subject to that, I would dismiss the appeal and
affirm the other six convictions.
ASHWORTH J: I
agree.
LORD WIDGERY:
I agree.
The respondent
was awarded four-fifths of the costs of the appeal.
