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Solal Tech Omega 3 & 6 / K Charleston / 16711 (FAC)

Ruling of the : ASA Appeal Committee
In the matter between:
Solal Technologies (Pty) Ltd Complainant(s)/Appellant(s)
Kevin Charleston Respondent

02 Feb 2012

The Respondent lodged a consumer complaint against the Appellant’s newspaper advertisement in the Business Day in October 2010.

The advertisement is headed: “Why omegas are so important and how to choose the safest one” (in bold type). It also contains, inter alia, the following claims; “… most people are deficient in omega 3. This common omega 3 deficiency can increase the risks of heart attacks, strokes, arthritis, diabetes and depression”………... “The information presented above is the informed opinion of Solal Technologies (the Appellant) after review of scientific research and medical literature”. “In bold capitals thereafter appears the words ‘PRESCRIBED BY DOCTORS – RECOMMENDED BY PHARMACISTS’ “

The latter words are not only in capital letters but are in a different colour from the claims set out above. The claims are in black type whilst the reference to doctors and pharmacists is in a yellow colour, the same as the colour at the top of the advertisement which has reference to omega 3 and omega 6.

The Respondent’s complaint dated 31 October 2010 was that these claims were in breach of Appendix A and Appendix F of the Code. In regard to the latter, he contended that this was due to the fact that the advertisement suggested that a deficiency in omega 3 increases risk for diseases listed in Appendix F.

The reference to the breach of Appendix A was not dealt with by the Directorate on the basis that between lodging the complaint and the Directorate considering it, the Advertising Standards Authority (ASA) adopted a completely different Appendix A. This expressly excluded complementary medicines such as the Respondent’s product and no longer contained reference to the specific provisions raised by the Respondent in his complaint.

Neither the Appellant nor the Respondent took issue with this conclusion by the Directorate and the matter proceeded after the Directorate’s ruling on the basis that the only matter for consideration was the alleged breach of Appendix F.

The Directorate on the 29 June 2011 ruled that the advertisement was in breach of Appendix F on the basis that in the advertisement, diseases such as heart attacks, strokes, arthritis and diabetes were referred to and these are listed in Appendix F. The Directorate found that the advertisement amounted to offering products and advice for the conditions listed in Appendix F and consequently it was a breach thereof.

The Directorate ordered that the advertisement and relevant claims must be withdrawn with immediate effect on receipt of the ruling within the deadline stipulated in Clause 15.3 of the Procedural Guide. Further it ruled the advertisement and relevant claims may not be used again in their current format.

The Appellant lodged an appeal to the Advertising Standards Committee (ASC) on 11 July 2011 and the ASC gave its ruling on 7 October 2011.

In that ruling the ASC found that the Appellant was bound by the provisions of Appendix F and assessed the purpose and intent of the advertisement. It concluded that the intent was to persuade consumers to buy omega 3 products offered by the Appellant as the increased intake of omega 3 would reduce the risk of heart attacks, strokes, arthritis, diabetes and depression, being illnesses listed in Appendix F. The ASC went on to state that couching the proposition as a deficiency that can increase the risk, still delivers the same message and the purpose of the advertisement is clear: namely to offer advice to the consumer.

The ASC consequently dismissed the appeal. The Appellant then lodged an appeal to the Final Appeal Committee (FAC) on 7 November 2011.

At the time of the complaint the introduction to all the Appendices to the ASA Code contained an annotation reading: “The individual codes contained in the Appendices are administered on behalf of the owner identified at the top of the first page of each Appendix.” Appendix F referred at the top of its first page to the “Department of Health: Medicines Control Council.” These references have been removed in the amended and updated Code.

Appendix F expressly refers to “References to diseases in advertising”. It provides in Clause 1: “Advertisements should not make or offer products, treatments or advice for any of the following illnesses or conditions unless recommendations accord with the full product registration by the Medicines Control Council (MCC). So as to make the list as wide as possible conditions are listed more than once under different names.”

Included in the conditions listed in Appendix F, are heart troubles, arthritis, and diabetes. There are many conditions listed but reference is made to these as they are the conditions referred to in the advertisement in casu.

In the matter of Mars Inc vs Advertising Standards Authority of South Africa and Nestle South Africa Pty Ltd 2000 (4)SA 511 Scarbot J. in considering the question of parallel jurisdiction between the ASA and the Registrar of Trade Marks, said: “The avowed main purpose of the Code is twofold: the protection of the consumer and the ensuring of fair play among advertisers. While laying down criteria for advertisers’ professional conduct, it keeps the public informed of the self-imposed limitations accepted by those using or working in advertising.”

In the appeal hearing before the SCA, the Court upheld the judgment of Scarbot J. which had effectively found that there was parallel jurisdiction between the Registrar of Trade Marks and the ASA in considering the same dispute. The appeal Court held that the principle could be applied only where the same dispute, between the same parties, was sought to be placed before the same tribunal or before two tribunals with equal authority to end the dispute authoritatively. In the absence of those elements there was no potential for a duplication of actions. None of those elements was present in the instant case: indeed it was difficult to see how they could be when the matters in issue had been placed before two different tribunals, one operating consensually, the other by force of statute, and each having its own functions, power and authority. The Registrar of Trade Marks had been called upon to decide whether the Mars brand qualified for registration in terms of Section 9 and 10 of the Trade Mark Act and if so on what conditions. The ASA, on the other hand, had been called upon to decide whether Nestle had copied Mars’ advertising or any part thereof in the manner and with the consequences referred to in Clause 9.1 of the Code. The questions before the Registrar and the ASA were thus quite different as the ruling by one would not preclude a ruling by the other.”

In Telematrix (Pty) Ltd vs ASA 2006 (1) SA 461 (SCA) the court said: “ The ASA, according to the particulars of claim, is an independent body set up and sponsored by the advertising industry to ensure that the industry’s system of self-regulation works “in the public interest”. The ASA has a self-contained code that is based on an internationally accepted model and determines its terms of reference and defines its scope of authority. Advertisers such as the plaintiff are “indirectly bound’ to observe the code because their advertising agents belong to a constituent member of the ASA. The main purpose of the code is to protect consumers and to ensure fair play among advertisers. Its procedural guide provides for the lodging of complaints and the method of resolution.”

The Health Products Association (HPA) is a member of the ASA and the Appellant being a member of the HPA is indirectly bound by the self-imposed limitations in the Code and its general principles.

Mr Trengove SC on behalf of the Appellant raised four points on appeal:

  • The first is that, on a proper interpretation of the Code as it read at the time of the complaint, its appendices, and Appendix F in particular, did not form part of the Code binding on the general membership of the ASA. Appendix F was accordingly not binding on the Appellant.
  • The second was that Appendix F only bans advertisements which make “curative” claims in that they offer “products, treatment or advice” as a cure for the listed diseases. It does not ban advertisements which make mere “preventative” claims in that they offer “products, treatment or advice” which reduce the risk of the listed diseases.
  • The third was that Appendix F is unconstitutional if it extends to advertisements which make mere preventative claims as being overbroad.
  • Finally, that the hearing of this matter before the ASC was procedurally unfair as the Directorate had been present during the hearing and deliberations.

In regard to the first submission, Mr Trengove raised it for the first time on appeal before the FAC. Normally an appeal tribunal would not permit a new matter to be raised unless the matter had been investigated in the evidence a quo. An appellate body does, however, have a discretion in this regard, more particularly when the issue is more a matter of law than a question of fact. Further, the FAC gave the Respondent an opportunity to file supplementary heads on this new point, in order to deal with any possibility of prejudice. In consequence, the FAC has considered this new submission on behalf of the Appellant.

It was submitted that the Articles of Association is the contract between the ASA and its members and that those Articles in effect provide that the ASA’s board of directors or its members in general meeting after recommendations from the Code Amendment Review Committee could make or amend the Code. The ASA, so it was submitted, does not have the power to make codes which are made by other people which would be binding on its members and indirectly the members of those associations.

Clearly the version of the Code that governs this Appeal is the one that was in force at the time of the complaint.

As the point had not been heard before the Directorate or the ASC, there was no evidence in support of this point nor was any evidence led before the FAC, despite it being a re-hearing of the matter. The interpretation of ASA’s constitution and its Code is a legal one, whereas the internal procedures followed by the ASA in creating the Code or approving any amendments thereto is a factual issue. Mr Trengove, without any facts was forced to argue the point on an interpretative basis referring to various clauses and paragraphs in the Code.

Thus he contended that paragraph 4 of the Preface to the Code which records that the Appendices were “determined by the various member organisations or negotiated with governmental institutions” meant that they were not made by the ASA in terms of its Articles. We do not agree this follows. It may well be that there were negotiations with the institutions involved in the various Appendices dealing with specific issues such as alcohol, cosmetics, diseases etc. and were then adopted by the board or included in amendments to the Code in general meetings. In this regard it is significant that the member, HPA, has not complained about Appendix F not being part of the Code and the ASA and its members have uniformly regarded Appendix F as having binding effect and being an integral part of the Code. The Appellant, likewise, regarded it as an integral part of the Code before the Directorate and the ASC until the point was raised for the first time on appeal. Further, determined means defined or assured. If another body defined provisions of the Code which were then adopted by the ASA, following its internal procedures, this would not result in those provisions not being part of the Code. Likewise, negotiating terms with a governmental institution.

On this interpretative approach Mr Trengove also relied on the contents page of the Appendices that “the individual codes contained in the Appendices are administered on behalf of the owner identified at the top of the first page of each Appendix.” Appendix F identifies its owner on behalf of whom it was administered by the ASA as the Medicines Control Council (MCC). In short, he argued that the correct interpretation was the narrow one of principal and agent.

He also referred to Clause 4.11 of the introduction to the Code which is: “In this Code, unless the context otherwise indicates … the Code means the Code of Advertising Practice of the ASA as amended by the ASA from time to time and includes all Appendices to the Code and the Procedural Guide.” He argued that this did not purport to address the status of the Appendices and did not even apply to the Appendices themselves.

Clause 4 to the Preface to the Code however provides: “This Code is supplemented by individual codes which are determined by the various member organisations or negotiated with governmental institutions. These individual codes are reflected in the Appendices to the Code. All such codes conform to the general principles laid down by this code and differ only in details where the individual needs are to be met.” Clause 5 of the Preface provides that: “the provisions of the Code are mostly broadly framed but special rules covered by the Appendices hereto apply to particular audiences of the certain categories of products and services.” Further, Clause 6 of the Preface records: “The Code is administered by the Directorate and the ASA committees drawn from the constituent member bodies and where applicable consumer organisations. Powers are vested in the Directorate and the ASA committees.”

The word “supplemented” used in Clause 4 to the preface must be given its ordinary meaning namely something added to the Code and if it is added to the Code it must form part of it or as defined in the Free Dictionary (on-line) Appendix F would be “a separate section devoted to a special subject.”

In the main body of the Code the general principles affect all advertising while the Appendices, including Appendix F, deal specifically with individual interests and needs for different industries such as timesharing, slimming, cosmetics, alcohol etc. In the case of Appendix F it deals with specific illnesses and conditions.

On a reading of the Code and the Appendices it is also clear that the Code and the Appendices are interrelated as there are cross references to the Appendices in the Code and to the Code in the Appendices.

We turn to the concept of “owning” a Code and the principal and agent submission.

In the introduction to the Appendices it provides that it is administered “on behalf” of the owner, namely the MCC in regard to paragraph F. The argument was that there was no evidence that the MCC had given permission to the ASA to administer the Code on its behalf as the owner. There cannot be the ownership of a Code in the strict legal sense of owning a thing. It is significant that the reference “on behalf of” is contained not in the Appendix itself but on the contents page to all the Appendices.

Judicially it has been held that the words “on behalf of” can be interpreted narrowly in the agency sense or meaning “for the benefit of” or “in the interests of” another party. This is well stated by Innes CJ in de Visser vs Fitzpatrick 1907 where he said: “The popular meaning of those words is that everything done for a man’s benefit or in his interest or to his advantage is a thing done on his behalf. On the other hand, the more legal view is that they mean something done by a man’s representative or agent.”

In arriving at an interpretation the factual matrix is that the “ownership” has been removed and any sanction under Appendix F is enforced by the ASA and not the MCC. On a principal and agent interpretation the MCC would enforce the sanction. Further, there is no condition precedent that such agency contract had to be concluded or remain in effect.

We have concluded from an analysis of the Appendices and the language of the Code that the correct interpretation of the annotation to the contents to the Appendices means “for the benefit of another party.”

The fact that some of the Appendices are to be regulated by bodies other than the ASA does not mean that that Appendix is not part of the Code. Simply because the Code is to be regulated by another body does not mean that that particular Appendix, for example Appendix A, does not form part of the Code. The Nestle judgment (supra) establishes the parallel jurisdiction exercised by the ASA.

We have consequently concluded on an interpretative basis, without any factual evidence being placed before us by the Appellant, that Appendix F is part of the Code and that it contains self-imposed limitations on the Appellants’ advertising.

The second argument concerned an interpretation on the limitation on advertising in regard to the illnesses and conditions listed in Appendix F. It was argued before the Directorate, the ASC and the FAC that on a proper construction of Appendix F it only dealt with curative claims and not preventative claims. As the advertisement claimed that taking omega 3 would result in a reduction of the risk of contracting the listed illnesses and conditions it was preventative and not hit by the provisions of Appendix F.

As pointed out above, the Appendix refers to illnesses and conditions. The language of the Clause is that one cannot offer a product, treatment or advice for any of the illnesses or conditions unless the product concerned has been registered by the MCC. Some of the illnesses and conditions have been listed more than once in order to make it as wide as possible.

It is to be seen that the wording refers to existing illnesses and conditions, Thus in the Christ Embassy Church matter, the FAC held that faith healing, which was claimed to be a treatment for an existing heart condition, was a breach of Appendix F. The finding was on the basis that the condition existed.

We have concluded that Appendix F is intended to protect consumers who have any of the illnesses or conditions and take a product which has not been registered by the MCC being the body skilled and appointed by statute to approve such products. Again this is for the protection of consumers. It is not helpful to label Appendix F as applying only to curative products and not preventative ones. There are also palliative products which are neither curative nor preventative. There could be a product which alleviates an existing illness or condition.

What this conclusion does mean, however, is that the advertisement in casu is not intended to be advice to consumers who have the illnesses and conditions listed in Appendix F. The advertisement is intended to offer consumers a product to reduce an omega 3 deficiency which it claims can increase the risk of contracting some of the illnesses and conditions listed in Appendix F. It consequently does not deal with consumers who have an existing illness and condition as listed in Appendix F.

We consequently do not agree with the construction placed on Appendix F by the Directorate or the ASC that it is advice which amounts to a breach of Appendix F.

On this interpretation, the appeal must succeed.

It follows that it is unnecessary to deal with the argument that if Appendix F is part of the Code, and the advertisement amounted to a breach of the Code, it was in any event overbroad and unconstitutional. This would have involved a consideration of weighing up whether the limitations are reasonable and justifiable in an open and democratic society based on human dignity, quality and freedom. We would have had to have regard to the fact that Appendix F is part of the Code, in the public interest, to protect consumers and is a limitation which the Appellant has imposed on itself for the purposes of advertising. None of these considerations is now necessary.

It also follows that it is unnecessary for us to consider the contention of prejudice, save to state that there is nothing to gainsay the Directorate’s statement that they were merely present as observers and did not, in any way, interfere with the ASC’s functions. Further, with the re-hearing in this appeal any prejudice would have been cured. It also would have made no sense to send this matter back to the ASC.

The final matter for consideration, as requested by Respondent’s counsel Ms Cowen, is the conduct of the Appellant.

After the complaint was received, the Appellant contended that the Respondent was misrepresenting his status as a consumer complainant and was in fact acting as agent for a competitor. It contended that the Respondent was acting in “bad faith”, “maliciously” and was “abusing” the ASA’s processes. It persisted in these arguments in its Notice of Appeal but ultimately abandoned these arguments without apology.

On 23 November 2011 the Appellant sent the Respondent a letter of demand claiming damages for “malicious complaints and publication of injurious falsehoods of and concerning Solal”(the Appellant). It accused the Respondent of being complicit in what the Appellant claimed was the “dishonest and fraudulent conduct” of the ASA.

The allegations of fraud and abuse were not relied on before us and are prima facie baseless.

We agree with the Respondent’s sporting reference to the Appellant playing the man and the referee instead of the ball. The Appellant’s conduct is a matter deserving of serious comment.

In curia, Ms Cowen formally invited the Appellant to retract the statements and demands and to apologise therefor. The Appellant through its counsel refused to retract the statements and demands. The only concession it made was to withdraw its prayer for the Respondent to pay all its costs and said that if it succeeded in the appeal, there should be no orders as to costs.

If the Respondent had succeeded in this matter, we would not have hesitated to order the Appellant to pay all his costs on the High Court scale as between party and party.

The Respondent, in its notice of appeal, asked for the repayment of its deposits for the appeal but this request was not made by Mr Trengrove at the hearing. He merely tendered that there should be no order as to costs. In any event on the question of returning a deposit to an Appellant, if we have that discretion, we would have exercised it against the Appellant because of its acrimonious conduct.

In all the circumstances we make the following order:
  • The appeal succeeds and the ruling of the ASC is set aside.
  • There will be no order as to costs.

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