Court of Appeal of New Zealand · [2020] NZCA 549
After guilty pleas to 24 Fair Trading Act charges, the Court of Appeal set total fines at $1.56 million.
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SE62 mesh is reinforcing steel used in concrete. In a country with significant earthquake risk, claims about seismic grade and standards compliance carry obvious weight for builders, engineers and customers.
Steel & Tube represented that its mesh complied with AS/NZS 4671 and had been tested independently. Those claims turned technical evidence into a commercial assurance.
The Commerce Commission case found that the mesh had not been tested and shown to comply in the way represented, and the testing was not independent as claimed. Steel & Tube pleaded guilty to 24 charges under the Fair Trading Act.
The representative conduct covered 482 batches, about 480,000 sheets and sales of around $24 million. Scale mattered because the same unsupported assurance travelled through a large volume of product and into construction decisions.
| Marketing claim | Evidence question |
|---|---|
| Complies with AS/NZS 4671 | Were all required tests performed using the specified method? |
| Independently tested | Who selected samples and controlled the test? |
| Seismic grade | Does the technical evidence support that exact performance description? |
| Certified product | Who certified what, for which batches and period? |
The District Court fined the company $1.885 million. The High Court increased that to $2,009,280. On the final appeal, the Court of Appeal set the aggregate fine at $1.56 million.
The changing total reflected legal questions about penalty method and proportionality. It did not turn the underlying conduct into a minor paperwork problem. The final amount remained substantial because the representations were repeated, commercially important and widespread.
Create the evidence before approving the claim. The file should identify the exact standard, edition, test method, sample, laboratory, result, certificate scope and expiry or review date. Marketing should quote only what that evidence proves.
Assign an owner to monitor changes in manufacturing, suppliers and standards. A valid test for one product or batch may not support a broader claim after the process changes.
Key points
No. The charges concerned misleading representations about standards compliance and independent testing. The legal issue was whether the claims were substantiated, not a finding that every installed sheet failed in use.
They were representative charges covering repeated conduct across a much larger volume of production and sales.
A competent laboratory is important, but the business should verify what was sampled, which method was used, what the report concludes and whether marketing says more than the report supports.