SINGAPORE: Two businesses under nail salon chain Nail Palace on Tuesday (May 6) appealed against the jail term given to their managing director for failing to comply with court orders to protect consumers.
Managing director Kaiden Cheng appealed to have his four-month jail term replaced with a S$10,000 (US$7,700) fine, or reduced to five days' imprisonment.
Justice Audrey Lim reserved her judgment after hearing arguments on whether the nail salons had done enough to inform customers of their past unfair trade practices and make up for the breach of court orders.
Nail Palace (BPP) and Nail Palace (SM) were originally taken to task for unfair trade practices over the sale of anti-fungal treatment packages.
This included misleading a consumer over the need for anti-fungal treatment, and failing to inform a consumer that certain lip products were not free but included in the price of an anti-fungal treatment package.
In August and September 2022, the Competition and Consumer Commission of Singapore (CCCS) obtained injunctions to stop both businesses from these unfair practices.
A district court ordered both businesses to publish a notice of the declarations and injunctions against them in four major Singapore newspapers by Aug 18, 2023.
For a period of two years, the businesses were also supposed to inform customers that they had engaged in the unfair practices and obtain customers' written acknowledgement of this before entering into contracts with them.
However, the businesses failed to comply with these requirements. In a first, CCCS took them to court for breach of the orders, and they were found guilty of contempt of court in September 2024.
Mr Cheng was sentenced to jail while Nail Palace (BPP) and Nail Palace (SM) were each fined S$15,000 (US$11,500), which they have paid.
On Tuesday, Mr Cheng's counsel argued that both businesses had made concerted efforts since the contempt of court finding to comply with the orders, and that this remedied the breach and demonstrated their remorse.
The steps they took included publishing the required notices in four major newspapers on Jan 28 and implementing a new consumer notification form from Jan 24, said lawyer Gary Low of Drew & Napier.
Even if these actions to comply with the orders came late in the day, Mr Low argued they could be allowed by the court. He urged Justice Lim to give them "heavy consideration" and reduce Mr Cheng's sentence.
Mr Kenny Chooi of Adsan Law, who acted for CCCS, argued that a jail term for Mr Cheng was warranted by his businesses' repeated breach of the court orders.
Parliament's intention behind the provision for court orders under the Consumer Protection (Fair Trading) Act is to raise consumer awareness, allow consumers to make informed purchasing decisions, give consumers the right to decide whether they want to transact with an errant retailer, monitor errant businesses and act as deterrence, said Mr Chooi.
These intentions point to the types of harm caused when court orders are breached. It meant that customers were deprived of the ability to make informed decisions about Nail Palace for the period of the breach, he argued.
He pointed out that there was a period of about two-and-a-half years between the original court orders given to Nail Palace in September 2022 and the steps the businesses took in January.
Parties also disagreed on whether Nail Palace's new consumer notification form satisfied the court orders.
Mr Chooi, the CCCS lawyer, argued that that the orders were not satisfied because the forms were only brought to customers' attention after a portion of the nail services had already been performed.
This was based on affidavits by two CCCS officers stating that when they visited the two Nail Palace branches in February and March, they were not shown the forms until after their manicures or pedicures had already started.
When Mr Low - Kaiden Cheng's lawyer - countered this by claiming that only "preparatory acts" for the nail services had started, Justice Lim questioned him on whether buffing nails and applying basecoats were not part of manicures and pedicures.
At one point, she asked: "What's the meaning of a manicure or pedicure? Can you please tell me? Means apply the paint only, is that it?"
Mr Chooi also cited the CCCS officers' description of how Nail Palace staff had told them to "just sign at the bottom" of the form and did not explain what it was for, but claimed that it was required by the government.
This would give a false impression that a signature was mandatory and put pressure on the customer to sign the form, he argued.
Mr Chooi said these practices did not comply with the "substance, purpose and spirit" of the court orders but were merely a "box-ticking exercise".
Parties will return to the High Court for the decision on May 19.
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Managing director Kaiden Cheng appealed to have his four-month jail term replaced with a S$10,000 (US$7,700) fine, or reduced to five days' imprisonment.
Justice Audrey Lim reserved her judgment after hearing arguments on whether the nail salons had done enough to inform customers of their past unfair trade practices and make up for the breach of court orders.
Nail Palace (BPP) and Nail Palace (SM) were originally taken to task for unfair trade practices over the sale of anti-fungal treatment packages.
This included misleading a consumer over the need for anti-fungal treatment, and failing to inform a consumer that certain lip products were not free but included in the price of an anti-fungal treatment package.
In August and September 2022, the Competition and Consumer Commission of Singapore (CCCS) obtained injunctions to stop both businesses from these unfair practices.
A district court ordered both businesses to publish a notice of the declarations and injunctions against them in four major Singapore newspapers by Aug 18, 2023.
For a period of two years, the businesses were also supposed to inform customers that they had engaged in the unfair practices and obtain customers' written acknowledgement of this before entering into contracts with them.
However, the businesses failed to comply with these requirements. In a first, CCCS took them to court for breach of the orders, and they were found guilty of contempt of court in September 2024.
Mr Cheng was sentenced to jail while Nail Palace (BPP) and Nail Palace (SM) were each fined S$15,000 (US$11,500), which they have paid.
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On Tuesday, Mr Cheng's counsel argued that both businesses had made concerted efforts since the contempt of court finding to comply with the orders, and that this remedied the breach and demonstrated their remorse.
The steps they took included publishing the required notices in four major newspapers on Jan 28 and implementing a new consumer notification form from Jan 24, said lawyer Gary Low of Drew & Napier.
Even if these actions to comply with the orders came late in the day, Mr Low argued they could be allowed by the court. He urged Justice Lim to give them "heavy consideration" and reduce Mr Cheng's sentence.
Mr Kenny Chooi of Adsan Law, who acted for CCCS, argued that a jail term for Mr Cheng was warranted by his businesses' repeated breach of the court orders.
Parliament's intention behind the provision for court orders under the Consumer Protection (Fair Trading) Act is to raise consumer awareness, allow consumers to make informed purchasing decisions, give consumers the right to decide whether they want to transact with an errant retailer, monitor errant businesses and act as deterrence, said Mr Chooi.
These intentions point to the types of harm caused when court orders are breached. It meant that customers were deprived of the ability to make informed decisions about Nail Palace for the period of the breach, he argued.
He pointed out that there was a period of about two-and-a-half years between the original court orders given to Nail Palace in September 2022 and the steps the businesses took in January.
Parties also disagreed on whether Nail Palace's new consumer notification form satisfied the court orders.
Mr Chooi, the CCCS lawyer, argued that that the orders were not satisfied because the forms were only brought to customers' attention after a portion of the nail services had already been performed.
This was based on affidavits by two CCCS officers stating that when they visited the two Nail Palace branches in February and March, they were not shown the forms until after their manicures or pedicures had already started.
When Mr Low - Kaiden Cheng's lawyer - countered this by claiming that only "preparatory acts" for the nail services had started, Justice Lim questioned him on whether buffing nails and applying basecoats were not part of manicures and pedicures.
At one point, she asked: "What's the meaning of a manicure or pedicure? Can you please tell me? Means apply the paint only, is that it?"
Mr Chooi also cited the CCCS officers' description of how Nail Palace staff had told them to "just sign at the bottom" of the form and did not explain what it was for, but claimed that it was required by the government.
This would give a false impression that a signature was mandatory and put pressure on the customer to sign the form, he argued.
Mr Chooi said these practices did not comply with the "substance, purpose and spirit" of the court orders but were merely a "box-ticking exercise".
Parties will return to the High Court for the decision on May 19.
Continue reading...