Jeweller forced to sell $34,000 diamond ring for $1100

A SYDNEY-BASED diamond retailer says it will have to close down after mispricing a ring online.

NICHOLAS Buttle bought his fiancee a two-carat diamond engagement ring online for $1100 but the retailer wouldn’t deliver it, saying the price was wrong. It should have been $34,000.

Mr Buttle took the matter to court and won. The ­retailer, Sydney-based Royal Diamonds Pty Ltd, appealed but lost again and must deliver a “substitute ring” with a “diamond of similar or higher grade” — plus pay Mr Buttle’s legal costs as well as its own solicitor’s bill of $15,000.

“This company is going to be closing down because of this,” said a Royal Diamonds director, who asked not to be named.

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“We are going to make the ring and close the company.”

The director said any person on the street would know a two-carat diamond ring does not cost $1100: “I can’t believe how the tribunal ­allowed for that.”

Nicholas Buttle bought an engagement ring for Hanne-Marie Marais but the price was wrong. Picture: Instagram

The director said he believed the NSW Civil and ­Administrative Tribunal (NCAT) was not aware Royal Diamonds does not sell “off the shelf” products but custom-made rings, where a purchaser selects a setting then a diamond from a list based on size, clarity, cut — and price.

He said the NCAT decision would “open the door — it will set the precedent” for other consumers to buy valuable goods advertised at ­incorrect prices.

Both sides in the case relied on contract law, not the Australian Consumer Law (ACL). The tribunal found there was an “absolute contract of sale made between the parties ... that payment for the ring had been accepted” and the retailer “was unable to avoid the agreement by virtue of its claimed mistake”.

The NCAT appeal panel was told that previous cases had found one party is entitled “to an order rescinding the contract” if the other party “is aware that circumstances exist which indicate that the first party is entering the contract under some serious mistake”.

The Royal Diamonds website.

“(But) in this appeal there is simply no evidence to support the application of such principles.

“The only matters ... justifying a finding that the respondent knew or must have known of the mistake lies in the fact that he was a mathematician, that he conducted a web search at some ­unspecified time and located the ring on the cheapdiamonds.com website which advertised a 2.15 carat ring for the price of $US4499.99 ($5844) and in his application to the tribunal, the respondent (Mr Buttle) stated that the value of a similar ring is $34,429,” NCAT said.

A ring similar to the one Nicholas Buttle bought from Royal Diamonds. Picture: bluenile.com

Mr Buttle, who is from Brisbane, said “there are still orders being dealt with”.

He wouldn’t comment further. The matter is listed to return to NCAT today.

He said he couldn’t claim against insurance or sue the party that made the mistake — its supplier in Israel.

The company’s staff would be redeployed, not sacked.

Experts said, generally speaking, consumers could use the ACL provisions that prohibit misleading conduct.

Consumer Action Law Centre CEO Gerard Brody said there was however a ­defence if the contravention was caused by a “reasonable mistake of fact”. Mr Brody said consumers must also prove “loss or damage”.

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