(b) Undertaking as to damages
43 I raised with counsel for the ACCC on the ex parte application whether the ACCC should give an undertaking as to damages, but was persuaded not to extract that price. It is appropriate to record my reasons for that position, which position I have maintained.
44 Now section 137F does not refer to such an undertaking not being required from the ACCC. Section 137F(4), which contemplates ex parte and inter partes orders, may be contrasted with provisions such as s 80(6) of the Act and s 234(2) of the Australian Consumer Law which stipulate that the Court must not require the ACCC to give such an undertaking as the price for the grant of the "interim" injunctions to which those provisions refer. Accordingly, in the present case the Court is not precluded from requiring such an undertaking as the price of any ex parte order or inter partes order under s 137F. It is also, of course, not precluded under r 7.32.
45 There is little, if any, authority on the present question. In Australian Competition and Consumer Commission v Unique International College Pty Ltd (No 4) [2016] FCA 628, Flick J relieved the ACCC and the Commonwealth of Australia from the requirement to give an undertaking as to damages in the context of an application for freezing orders under rules 7.32 and 7.35 of the Federal Court Rules. His Honour at [17] cited Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (in liq) (No 3) [2016] FCA 284. In the Clinica litigation, there were earlier decisions reflecting that no undertaking was required. Middleton J made the original ex parte freezing orders on 4 August 2015. The transcript discloses his Honour's reasons on this point where he said:
There is just one other matter I observe, and that is the question of any undertaking that would normally be given by an applicant in these circumstances. It seems to me that the applicant in this case would not be required to give an undertaking on the basis of the provisions of the ACL. But in any event, this is a matter which involves a statutory authority enforcing legislation to protect the public, and in the exercise of my discretion I would not require an undertaking to be given, even if it wasn't specifically excluded by the legislation that is being relied upon. So on the basis of those reasons I made the orders that were sought, as I indicated, and are on the file.
46 The matter was next dealt with by Mortimer J on 10 September 2015 where her Honour dealt with an application to vary the freezing orders. At that stage, the respondent in that proceeding did not press for the applicant to give an undertaking as to damages (see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006 at [8]). The matter was not raised on a separate occasion the subject of her Honour's reasons on 23 March 2016 (see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (in liq) (No 3) [2016] FCA 284).
47 None of these decisions dealt directly with s 137F.
48 Quite appropriately the ACCC drew my attention to the decision of Lindgren J in Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 84 FCR 512 where his Honour required the ACCC to give the usual undertaking as to damages as the price for the grant of a mareva injunction, holding inter alia that a mareva injunction was not an "interim injunction" within the meaning of s 80(6) (at 538).
49 In my view, I am not prevented from requiring an undertaking as to damages from the ACCC, but I will not require it in the exercise of my discretion. This case is not simply private litigation between private parties for their own private purposes.
50 First, the ACCC is a Commonwealth regulator performing and exercising statutory functions and powers in the public interest and for the benefit of the public.
51 Second, although there is no analogue provision in s 137F of the type set out in, for example, s 80(6) of the Act and s 234(2) of the Australian Consumer Law, the rationale underpinning the latter provisions is also present when considering s 137F. At the least, an analogous rationale justifies an exercise of discretion on my part not to insist on an undertaking as to damages.
52 Third, my approach is consistent with the approach of other judges of this Court, save for Lindgren J's approach in Giraffe where he required an undertaking to be given.
53 I do not consider the approach in Giraffe to be persuasive. Moreover, it is not strictly binding on me in any event.
54 If I needed to say so, I do not consider that the language in s 80(2) of "interim injunction" precludes a mareva injunction. The language used is "interim injunction pending determination of an application under subsection (1)". It does not say that the form of the interim injunction must be consonant with the final form of the injunction that could be made under subsection (1), save only of a more limited temporal duration. The constraint on the scope of the power in s 80(2) is that the power is to be read and exercisable by reference to the scope and purpose of the Act. It seems difficult to see why a mareva injunction would be outside such a scope and purpose pending the determination of any application under s 80(1). There are other monetary remedies that could be granted under the Act to which the mareva injunction is ancillary, providing that an application under s 80(1) is also made. There is nothing expressed in s 80(2) that states that the interim injunction can only attach to that part of the relief sought under s 80(1). I should note that there is no tension as between that analysis and my analysis of the interaction between s 137F(1) and s 137F(2); the latter regime more closely aligns the orders referred to in s 137F(1) with the s 137F(2) remedies. But in any event, given the breadth of s 80(1), there is nothing in its terms to suggest that it could not also deal with the holding and disposition of property. But I do not need to dwell further on such matters.
55 The other point with which I would respectfully disagree is Lindgren J's statement at 539 where his Honour said:
In the present case, the Mareva injunctions are in aid of private rights. Indeed, the rights in question are those, not of the Crown, but of private individuals. The ACCC submits that by bringing the proceeding under Pt IVA, it is endeavouring to carry forward the policy of the TP Act. However, the only application which the ACCC could have a "duty" to make in order to ensure that the statute is enforced, is one for an injunction. Indeed, given the fact that any person has standing to seek injunctive relief, it is doubtful whether, consistent with the passage from the speech of Lord Diplock set out above, the ACCC has a "duty" even to apply for that form of relief. Although it would, in a general sense, fulfil the policy of the TP Act if Group Members obtained any compensation to which they may be held to be entitled in respect of any loss or damage caused to them by a contravention of the TP Act, this does not necessarily give rise to a duty incumbent on the ACCC to apply for such compensation on their behalf. There is nothing to suggest that the Group Members are incapable of bringing proceedings themselves, even though it would obviously be more convenient if their claims could be heard and determined together, and, better still, if they could be made and determined in the one proceeding.
56 At one level a Mareva injunction is in aid of a private right. Yet that is not the whole story. Under the Act, the ACCC is given the statutory function and powers to pursue remedies on behalf of private individuals. These are being exercised in the public interest and for a public purpose, albeit that they may also benefit private individuals. No binary choice or division is being made or is necessary as between public and private. The ACCC is exercising a public function. But that public function exists to ensure, inter alia, that victims of the contravening conduct are compensated and that there are available assets for that purpose. Moreover, it is artificial and unrealistic to assume that victims would or could bring their own individual claims. First, they may not have the wherewithal. Second, the cost/benefit analysis would be unlikely to justify separate claims. Third, victims may not have knowledge of the contravening conduct or the evidence sufficient to bring proceedings. Fourth, the prospect that there could be a group proceeding is no answer or panacea. Such proceedings cannot be readily assumed, particularly as they are usually initiated and driven not by victims per se but other actors for their own commercial interests, ie external litigation funders. There is another point I would make concerning Lindgren J's analysis. His Honour may have taken too narrow a view of the doctrinal basis for the grant of freezing orders in any event (see PT Bayan Resources TBK v BCBC Singapore Pty Ltd (2015) 325 ALR 168; [2015] HCA 36 at [43], [46] and [47] per French CJ, Kiefel, Bell, Gageler and Gordon JJ and at [64] and [65] per Keane and Nettle JJ).
57 There are further points to be made that may not have been applicable to the context Lindgren J was discussing:
(a) First, s 137F is clearly for a public purpose.
(b) Second, the power exercisable thereunder may be used to preserve property so that it is available to meet other remedies that are clearly for a public purpose (see the types of proceedings referred to in s 137F(2), particularly s 137F(2)(d)).
58 The prospective respondents have made a number of other points which it is convenient to deal with at this point being:
(a) First, reliance has sought to be placed upon some observations of Lord Diplock in F. Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295 at 363. But the present case does not involve any attempt by the ACCC to enforce or protect its proprietary or contractual rights (jus privatum). Further, when his Lordship discusses the situation of suits brought to enforce jus publicum, nothing in his observations at 364 and 365 dictates that I am bound to extract an undertaking in the context before me. Indeed his reference to "in the light of the particular circumstances of the case" indicates flexibility. Further, I consider it to be a distraction to talk of whether there is a duty (as such) to initiate any law enforcement action. Where there is such a duty, the case for not extracting an undertaking may be even stronger. But where there is no duty as such, it does not follow that I should ordinarily require an undertaking from a public authority exercising a power in the public interest rather than for its own private interest. Finally, I consider proceedings by the ACCC seeking a remedy under inter alia s 239 of the Australian Consumer Law to be a "law enforcement action" within his Lordship's phrase.
(b) Second, the prospective respondents made a reference to Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 59 per Mason J where his Honour said:
The injunction will be granted on the usual undertaking as to damages. As the Crown in right of the Commonwealth is not immune from suit or from liability in damages (see ss. 56 and 64 of the Judiciary Act 1903, as amended; Maguire v. Simpson), there is no reason why a distinction should be drawn between the Commonwealth, at least when it seeks an interim injunction to protect a proprietary or private right, and a private citizen (see F. Hoffmann-La Roche Co. A.G. v. Secretary of State for Trade and Industry). The court should in each case require an undertaking as to damages as a condition of granting an interlocutory injunction. (footnotes omitted).
Neither this case nor this passage nor ss 56 and 64 of the Judiciary Act 1903 (Cth) assist the prospective respondents. We are not here dealing with a Commonwealth agency seeking to enforce its own proprietary or private rights. We are in the territory of jus publicum rather than jus privatum. The submission of the prospective respondents that "[t]he effect of s 64 of the Judiciary Act is that the freezing order cannot be made if the usual undertaking is not proffered" frankly pushes the envelope. I reject it. A similar argument was rightly rejected by Logan J in another context (Australian Communications and Media Authority v Mobilegate Ltd (2009) 256 ALR 85; [2009] FCA 539 at [18] to [22]).
(c) Third, the prospective respondents have submitted that "[t]he express ouster of the requirement for the usual undertaking by s 80(6) of [the Act] and s 234(2) of the [Australian Consumer Law] evinces a legislative intention that the general law would be modified to the extent of these provisions and no further". Perhaps that is right in form, but I am not sure where the argument goes, for the general law confers on me a discretion which, in the context of a public authority exercising a public power for a public purpose, well justifies that a proper exercise of discretion may involve not requiring the usual undertaking.
(d) Fourth, I agree with the prospective respondents that the absence in s 137F of an equivalent provision such as s 80(6) should not be treated as an "oversight". But to accept that submission does not take the prospective respondents forward. Section 137F leaves open my discretion as to whether to require that an undertaking be given.
59 In summary, I will not require an undertaking as to damages. But I do accept that the absence of such an undertaking is an important matter to be taken into account in the balance of convenience and the prejudice to the prospective respondents caused by the freezing orders that will not be ameliorated by any undertaking; see Trade Practices Commission v Santos Ltd (1992) 38 FCR 382 at 388 and 389 per Davies J (albeit in dissent on the question of whether leave to appeal should be granted). Whilst referring to Santos, I would also note in passing Davies J's observations at 388 that "[w]hen the Crown or an emanation of the Crown acts in pursuance of its function to enforce the law, no such undertaking [as to damages] is ordinarily sought". In that context, observations of the type set out in National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 at 277 must be read in their own context. They are not directly apposite to the case of a regulator exercising a power for a public purpose and bringing litigation in the public interest.
60 As to prejudice flowing from the orders, I have sought to minimise this by allowing for broad and large monetary exclusions from the freezing orders, so that the prospective respondents' business and activities are not unduly restricted. If necessary I can make further modifications. I do of course accept that on any view, even with the carve outs, inconvenience and some prejudice will be caused to the prospective respondents as a consequence of these orders, including reputational issues vis-à-vis dealing with third parties. I have taken this into account.