Nail Palace boss fails to avoid jail over failure to tell consumers about its unfair practices

The managing director of a nail salon chain, who flouted court orders to inform consumers about the errant business practices at two outlets, failed in his appeal to avoid prison time.

However, Kaiden Cheng had his jail term of four months reduced to three months on May 19 after the High Court took into account that Nail Palace eventually complied with one of the court orders.

Cheng’s sentence in 2024 was the first time a prison term had been meted out in a case involving consumer protection.

He had appealed to the High Court for a $10,000 fine or five days’ jail.

In 2022, a district judge declared that the Nail Palace outlets at Bukit Panjang Plaza and Eastpoint Mall misled customers into signing up for unnecessary nail anti-fungal treatment packages.

The judge granted injunctions against the outlets to stop engaging in these unfair practices. 

Nail Palace was also ordered to publish notices in four major newspapers detailing the court declarations and injunctions.

In addition, the outlets had to notify individual customers about the declarations and injunctions before entering into a contract with them.

The deadline to publish the notices was Aug 18, 2023, but Nail Palace did so only on Aug 31 that year.

Nail Palace condensed all 66 pages of the district judge’s judgment into a single page and published four one-page advertisements in The Straits Times, Lianhe Zaobao, Berita Harian and Tamil Murasu.

This resulted in printed words that “were extremely small and were presented in a practically unreadable manner”, said the Competition and Consumer Commission of Singapore (CCCS).

Nail Palace also failed to notify customers of the declarations and injunctions.

CCCS started contempt of court proceedings against Nail Palace and Cheng – the first time the regulator had taken such actions against an errant business and its manager for breaching court orders.

In September 2024, he was sentenced to four months’ jail for failing to comply with the orders.

The two companies that ran the outlets were each fined $15,000.

On Jan 28, 2025, Nail Palace published a second notice in the newspapers. The salon also put in place a new consumer notification form on Jan 24, 2025.

On May 19, High Court Judge Audrey Lim said a custodial sentence for Cheng remained warranted.

“The appellants’ conduct shows that they have been slow to comply with the court orders and were not serious about purging their contempt,” said the judge.

She noted that the first publication of the notices was in such a way as to intentionally obscure the declarations and injunctions.

While the second publication was made more than 17 months after the deadline – and about one to two weeks before the first hearing of the appeals before her – Justice Lim concluded that the second publication amounted to compliance with the court order, and reduced the length of imprisonment.

But the purported attempts at customer notification did not amount to compliance, she added.

This was because two CCCS officers who visited the salons posing as new customers said services were provided to them on four occasions before they signed the consumer notification form.

Justice Lim said the belated compliance and non-compliance meant that customers have been prevented from making informed decisions, to protect themselves from any unfair practices, before purchasing goods or services from Nail Palace.

Cheng was allowed to start serving his sentence on May 26.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

Pregnant women in the workplace deserve better: Opinion