Conclusion
24 After giving this matter careful consideration, I have come to the conclusion that it is appropriate to impose pecuniary penalties totalling $500,000 upon Colgate. I have reached that conclusion in the light of the extensive body of authority which holds that where the ACCC and a respondent have reached a negotiated settlement in relation to a contravention of Pt IV of the Act, and the amount proposed is, broadly speaking, within the "permissible range" (having regard to all of the circumstances), the Court should not depart from that agreed figure.
25 In Trade Practices Commission v Allied Mills (No 4) (supra) Sheppard J said at 259:
"It is, of course, true that the penalty has been suggested to me by the agreement of the parties. Uninformed of their agreement, I may have selected a different figure, but I am satisfied that it would not have been very different from theirs. There is from time to time, amongst members of the profession and amongst the public, discussion concerning plea bargaining. Sometimes it is suggested that it involves disreputable conduct. It is my opinion that that is so if it at all implicates the court in private discussions as to what the court's attitude will or would be likely to be if a particular course is taken. In this case nothing of that kind has occurred. The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be. … This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices."
26 In North West Frozen Foods v Australian Competition and Consumer Commission (supra) Burchett and Kiefel JJ said at 290-291:
"The Act places on the shoulders of the Court the responsibility to determine the "appropriate" penalty in each particular case, having regard to "all relevant matters" including the matters specified in the section. But effects upon the functioning of markets, and other economic effects, will generally be among the most significant matters to be considered as relevant, so that the Court is likely to be assisted greatly by views put forward by the Australian Competition and Consumer Commission, or by economists called on behalf of the parties. Since the decision in Trade Practices Commission v Allied Mills Industries Pty Ltd, it has been accepted that both the facts, and also views about their effect, may be presented to the Court in agreed statements, together with joint submissions by both the Commission and a respondent as to the appropriate level of penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount.
There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case."
27 Their Honours referred to authorities in both Australia and New Zealand as having "provided unanimous support" for the approach outlined.
28 In Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (supra) French J said at 87:
"… in relation to proposed consent orders and undertakings the court will not simply substitute its own view of the orders or undertakings which it would have made if those proffered fall within the range of an appropriate disposition of the case."
29 I should make it clear that were it not for the fact that the parties have agreed that pecuniary penalties totalling $500,000 should be imposed, I would probably have fixed upon a higher figure. Contraventions of s 48 are serious violations of the conditions laid down by Parliament for the conduct of corporate trade and commerce. The prohibition upon resale price maintenance is intended to create conditions under which the public will benefit from traders competing with each other in respect of prices, unfettered by price restraints imposed by suppliers of goods upon retailers. Deliberate contravention of that prohibition should be visited with heavy penalties: Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 40-091 at 17,895.
30 The conduct of Colgate in the present case is aggravated to some degree by the fact that on both occasions, after the contravention came to the attention of middle management, the problem was, for all practical purposes, simply swept under the carpet.
31 If one of the principal objects to be achieved when imposing a pecuniary penalty is to deter both the offending company and others from engaging in the proscribed conduct, I am inclined to think that pecuniary penalties totalling $500,000 (out of a potential maximum of $20M, given that there are two separate and distinct contraventions) may fail to achieve that aim. I bear in mind that to a large corporation such an amount may not act as a significant deterrent. In this regard, I have taken note of the analysis of Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited (No 2) [2002] FCA 559 as to the principles to be taken into account when imposing pecuniary penalties for contraventions of s 45 of the Act.
32 I cannot leave this matter without commenting briefly upon what I consider to be the somewhat undesirable practice on the part of the ACCC in presenting this Court with a specific figure as an "agreed pecuniary penalty". I acknowledge that both the ACCC and Colgate have accepted that the figure proposed is in no way binding upon the Court. However, when pressed to point to a single instance when the Court has not, in the past, endorsed such a figure, counsel found it difficult to do so.
33 It is difficult to imagine that the parties would propose a pecuniary penalty that is so clearly beyond the permissible range that the Court would depart from it. As the authorities presently stand, the Court is bound to impose an agreed pecuniary penalty, save in such circumstances. I acknowledge that a contravention of s 48 is not a criminal offence. The liability is civil only. I also acknowledge the importance of the principles enunciated in NW Frozen Foods v Australian Competition and Consumer Commission (supra), and in particular the need for corporations to have certainty of outcome if they are to be encouraged to engage in negotiated settlements. I am bound by these principles, and a well established line of authority, to accept that the Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure.
34 However, there are dangers associated with this approach. The Court may be seen, perhaps not altogether incorrectly, to act as a "rubber stamp" in simply approving a decision taken at an executive level by a body charged with investigating and prosecuting contraventions of the Act, but having no role in actually imposing particular sanctions for those contraventions. Negotiated settlements are an important vehicle for resolving complex matters such as those involved in the present case. It must also be borne in mind, however, that the public interest in ensuring that corporations that engage in behaviour of the kind that occurred in this case are dealt with appropriately, and that proper recognition is given to the need for specific and general deterrence. There are important parallels between the fixing of a pecuniary penalty under s 76, and the ordinary sentencing process which is quintessentially a matter for the courts: Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383 at pars 4-6 per Finkelstein J.
35 I should emphasise that nothing that I have said should be regarded as a criticism of a joint submission being received regarding what might be the appropriate range of pecuniary penalties to be imposed. A submission couched in those terms can assist in achieving a measure of certainty, and consistency of treatment with other like cases. At the same time, unlike what seems to have emerged as the more usual practice, namely putting forward an "agreed penalty", the suggestions of an appropriate range of pecuniary penalties allows for the proper exercise of judicial discretion in what is fundamentally a matter for the courts to determine.
36 I propose to order that Colgate pay a pecuniary penalty of $250,000 for each of the two contraventions in which it has engaged. I also propose to grant injunctions in the terms agreed by the parties. I note the undertaking proffered by Colgate pursuant to s 87B of the Act. I will order that it pay the ACCC's costs which I fix in the sum of $50,000.