Singapore nail salon chain Nail Palace was fined S$30,000, and its managing director, Kaiden Cheng Kai Teng, was sentenced to four months’ jail on 10 September 2024. This penalty was imposed after Cheng was found guilty of contempt of court for failing to comply with court orders related to unfair trade practices. This marks the first such case in Singapore, according to a media release by the Competition and Consumer Commission of Singapore (CCCS).
Background
Nail Palace’s outlets at Bukit Panjang Plaza and Eastpoint Mall in Simei had previously misled a consumer about the necessity of either a fungal treatment or a fungal treatment package. The company lost an appeal against a court order on 28 July 2023, which required it to inform the public about these unfair practices.
Previously ordered to publish details on unfair practices
The CCCS found that Nail Palace’s Bukit Panjang Plaza and Eastpoint Mall outlets had misled customers about the need for fungal treatments. Additionally, the Eastpoint Mall outlet falsely claimed that several products, such as lipsticks and lip balms, were free as part of the anti-fungal treatment package, but later charged the customer for these items. The District Court ordered the outlets to publish details of the declarations and injunctions against them in four major newspapers in Singapore: The Straits Times, Lianhe Zaobao, Berita Harian, and Tamil Murasu. They were also required to inform customers of these orders for two years and ensure customers were aware before entering into any contracts.
Filed appeal, breached orders thrice
On 14 September 2022, Nail Palace filed appeals against the court orders, which were subsequently dismissed by the High Court. CCCS monitored Cheng and the two outlets and found three breaches of the court orders. The first breach involved failing to publish details of the declarations and injunctions by the deadline of 18 August 2023. The second breach occurred when Cheng and the outlets published notices in the four major newspapers on 31 August 2023 with text that was “extremely small” and “practically unreadable.” These notices also failed to adequately publicise the details of the declarations and injunctions and were only written in English, not the languages used by the respective newspapers. The third breach involved failing to notify consumers of the declarations and injunctions and not obtaining their written acknowledgements before entering into contracts.
CCCS took action
CCCS initiated committal proceedings against Nail Palace and Cheng in the State Courts for breaches of the court orders, seeking fines and imprisonment in November 2023. On 9 September 2024, the District Court found that there had been “continuing, deliberate, egregious and persistent conduct” by all parties involved, demonstrating a disregard for existing obligations and a “lack of urgency and a cavalier approach.” The court deemed a jail sentence for Cheng appropriate as the consistent breaches were “irremediable and had prejudiced the public at large.” Consequently, the two outlets were fined S$15,000 each, and Cheng was sentenced to four months in jail.
CCCS chief executive Alvin Koh stated, “Unfair trade practices curtail the ability of consumers to make informed choices, and CCCS will continue to take errant businesses to task, including seeking fines and imprisonment sentences should they fail to comply with court orders issued.”
Future implications
This case sets a precedent in Singapore for handling businesses that engage in unfair trade practices and fail to comply with court orders. It underscores the importance of consumer protection and the role of regulatory bodies like CCCS in enforcing compliance. Businesses are now on notice that persistent non-compliance can result in severe penalties, including imprisonment for responsible individuals. This development may lead to stricter adherence to fair trade practices across various industries in Singapore.
