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[2005] FCA 683
plaintiff. Orders made against Liquorland: injunction restraining specified exclusionary conduct for three years; pecuniary penalty of $950,000 (representing $4,750,000 aggregate penalties for five...
Liquorland admitted that, between 1997 and 2001, it entered into five deeds with liquor‑licence applicants which contained contractual restrictions designed to limit takeaway liquor competition. The Federal Court found these deeds were exclusionary provisions under the Trade Practices Act and ordered Liquorland to pay $950,000 in penalties for the five contraventions, granted a three‑year consent injunction preventing similar conduct, accepted discontinuance on agreed terms, ordered Liquorland to contribute $250,000 to ACCC costs, and refused ACCC liberty to seek later declarations. The Court accepted the parties' agreed relief after independent assessment, applied guidance from Mobil Oil and expressed reservations about time‑limited injunctions under s 80.
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This litigation concerned a series of private deeds negotiated by Liquorland with prospective liquor‑licence applicants in New South Wales between 1997 and 2001. The background in each case was an application to the Licensing Court for a licence to sell liquor for takeaway (or for a licence that included takeaway sales). Liquorland, which operated nearby retail liquor outlets and was a competitor or potential competitor to the applicant, either lodged or threatened to lodge objections to those licence applications. The parties negotiated, and Liquorland agreed to withdraw or not press objections in return for the applicants entering into deeds which imposed restrictive conditions on their ability to sell takeaway liquor (see Reasons [5]–[11], [20]–[33], [36]–[43], [44]–[51], [52]–[60]).
The restrictive provisions varied between deeds but commonly included limitations on display, prohibition on on‑premises retail sales, restricting sales channels (telephone/mail/order only), limits on stock value, territorial or distance restraints on deliveries, conditions preventing application to amend or vary licence conditions, and covenants requiring transferees to enter similar deeds. The deeds were expressed to operate independently of the statutory licensing regime: they imposed contractual obligations on the applicants in addition to any court‑imposed conditions (see Reasons [7]–[10], [26], [33], [41], [49], [58]).
Liquorland admitted that these deeds fell within the statutory definition of exclusionary provisions in s 4D of the Trade Practices Act 1974 and thereby contravened s 45(2)(a)(i). The ACCC and Liquorland agreed a statement of facts and were substantially in agreement on the relief to be ordered. Woolworths, the second respondent and parent of Liquorland, continued to defend separate proceedings; however Woolworths consented to the Court proceeding with Liquorland’s disposition so long as admissions or findings made against Liquorland would not be binding on Woolworths (see Reasons [1]–[3]).
On 31 May 2005 Gyles J made orders: a three‑year injunction restraining Liquorland from placing or being knowingly concerned in exclusionary contracts with applicants for NSW liquor licences as defined in the order; a pecuniary penalty of $950,000 payable by Liquorland in respect of the five admitted contraventions (the parties characterized this figure as representing $4,750,000 in total penalties); leave to discontinue the remaining proceedings against Liquorland on conditions; and an order that Liquorland contribute $250,000 towards the ACCC’s costs (see Orders, Reasons [62]–[72]).
Liability was not contested by Liquorland: that was the very basis for the hearing. The legal question was not whether the deeds contravened the Act, but what relief was appropriate in light of admissions and the agreed facts. The central statutory tests are in s 4D (when a provision is an 'exclusionary provision') and s 45(2)(a)(i) (prohibiting making such a contract), read together with the discretionary remedies and penalties provisions: s 76 (civil penalties) and s 80 (injunctions) (see Reasons [3], [63], [70]).
Gyles J began by emphasising that the proceedings were driven by agreed facts and admissions and that the parties were substantially agreed about relief, but emphasised the Court's continuing responsibility to assess proposed relief independently (see Reasons [1], [64], [68]). The judge adopted the approach in Mobil Oil (Full Court) as a guide to the weight to be given to party agreements when the Court is fixing pecuniary penalties (see Reasons [64]). The Court was mindful that judicial discretion should not be ossified into a rigid checklist but that guidance from appellate authorities should be applied (see Reasons [64]).
In assessing penalties the judgment noted incomplete quantification: neither loss to the licensees nor gain to Liquorland had been precisely calculated (see Reasons [66]). The Court nonetheless assumed, against Liquorland, that each applicant had a significant chance of obtaining an unrestricted licence and therefore that there was significant loss to the applicants and gain to Liquorland (see Reasons [67]). That assumption allowed the Court to accept the parties’ agreed penalty figure, albeit with the caveat that the conclusion turned on the particular agreed facts and timing of the agreement (see Reasons [68]).
On injunctions, the Court accepted that s 80 plainly permitted grants of injunctive relief in favour of the ACCC and that the parties agreed form of injunction (see Reasons [69]–[70]). However Gyles J recorded reservations about the imposition of a time limit on a s 80 injunction: s 80(3) allows the Court to rescind or vary injunctive orders, and the statutory power may justify continuing injunctions where appropriate. The three‑year limit was accepted on the parties’ consent, but the judge noted he was not persuaded by the submissions justifying the time limit and expressed a cautionary note for future cases (see Reasons [69]–[71]).
Finally, the ACCC sought liberty to seek declarations later once the proceedings against Woolworths concluded; the Court refused that liberty, describing such loose ends as unsatisfactory and observing that any appropriate declaration would be ancillary to the substantive relief already ordered (see Reasons [72]).
Before this judgment, the statutory framework for exclusionary provisions and penalties under the Trade Practices Act was settled by text and prior authority. The case sits within an existing line of ACCC enforcement actions and judicial consideration of appropriate remedies for breach of Pt IV.
This judgment confirms several points in existing law:
Application of s 4D: a private contractual deed negotiated by a market participant and a licence applicant may be an exclusionary provision when its purpose is to restrict supply to particular persons or classes of persons; Gyles J applied s 4D to factual instances of restrictive covenants tied to withdrawal of objections (see Reasons [26], [33], [41], [49], [58], [61]).
Approach to agreed facts and penalties: consistent with Mobil Oil, where parties agree facts and propose penalties, the Court will consider that agreement but retain an unfettered discretion to impose an appropriate penalty after independent assessment; the judgment emphasises that consent figures are not necessarily precedent for contested cases (see Reasons [64], [68]).
Injunction practice under s 80: the Court again confirmed its power to grant injunctions for contraventions of Pt IV but signalled caution about imposing time limits by consent given statutory power to vary or rescind (see Reasons [69]–[71]).
After the decision, practitioners have a clearer example of how private settlement deeds that operate as independent contractual restraints in parallel to statutory licensing can be characterised as exclusionary provisions. The decision also illustrates the Court’s willingness to accept agreed remediation but not to abdicate responsibility for independent assessment of the adequacy of penalties and injunctive relief.
Reasons [1]: "a statement of facts has been agreed ... Liquorland has admitted ... contraventions of s 45(2)." Plain English: The decision about liability rests on facts Liquorland accepted; the Court was asked to decide only the relief.
Reasons [26], [33], [41], [49], [58]: Each deed "included an exclusionary provision within the meaning of s 4D." Plain English: Each contract imposed restrictions that, under the statute, were designed to limit who could be supplied takeaway liquor and so are banned exclusionary provisions.
Reasons [63]–[68]: discussion of s 76 and penalty assessment. Plain English: The law says penalties should reflect nature and extent of conduct and any loss/gain. Here, the factual record did not quantify losses or gains, so the Court accepted a sensible assumption that the applicants probably would have had unrestricted licences and that Liquorland benefited. The Court relied on appellate guidance but kept an unfettered discretion.
Reasons [69]–[71]: on injunctions and temporal limits. Plain English: The Court can grant injunctions to stop prohibited conduct; the judge accepted the consent injunction but warned that putting a time limit on such an injunction needs good reason because the Court can always vary or cancel the order later.
Reasons [72]: on declarations. Plain English: The Court refused to leave open a later, free‑standing declaration; if a declaration were needed it should follow immediately as part of the orders, not be left as a loose end.
This decision is triggered where:
A competitor engages with a licence applicant in a regulated licensing process and offers to withdraw or not press objections in exchange for contractual covenants that restrict the applicant’s ability to supply goods or services that would otherwise increase competition.
The contractual restrictions operate independently and in addition to regulatory/licensing conditions, especially where the deed prevents future amendment, imposes transfer covenants, restricts display, delivery radius, stock or sales channels.
There are admissions (or clear evidence) that the purpose or substantial purpose of the provisions was to prevent, restrict or limit supply to particular persons or classes of persons.
If these elements exist, this case supports a finding the contract contains an exclusionary provision under s 4D and thus contravenes s 45(2)(a)(i).
Within the judgment Gyles J planned to apply Full Court guidance in Mobil Oil to weight parties’ agreements. The decision itself does not report subsequent judicial treatment. Practitioners should note two features likely of interest to later courts:
Consent penalties and injunctive relief are permissible, but courts will independently evaluate their appropriateness and resist treating consent figures as binding precedent.
The caution about time-limited s 80 injunctions will be influential where defendants seek short‑term consent restraints; courts will expect justification for temporal limits because s 80(3) gives flexibility to vary or rescind orders.
Users should check subsequent appellate rulings for refinement of these principles; this judgment is best read as an example of the Court’s approach where liability is admitted and relief is consensual but judicial oversight remains robust.
Quantification of loss and gain: Gyles J notes that greater attention to the quantification of loss to the applicants and gain to the wrongdoer would have been advantageous and may be necessary before fixing penalties in contested proceedings (see Reasons [66]). The appropriate method and evidential standard for quantifying counterfactual commercial opportunities in licensing contexts remains a practical question for future cases.
Temporal limits on s 80 injunctions: The decision records judicial unease about imposing time limits by consent without clear justification (see Reasons [69]–[71]). Future cases will need to address when a time limit is appropriate and what evidence supports limiting a statutory injunction.
Precedential value of consent orders: Gyles J stresses the limited precedential value of agreed penalties and orders reached under a particular factual matrix (see Reasons [68]). The line between persuasive and binding effect of consented figures remains a live question in assessing civil penalties across varied markets.
Treatment of admissions as against co‑defendants: Woolworths consented to Liquorland's disposition on the condition findings would not bind Woolworths. The procedural and substantive implications of separate dispositions in multi‑defendant competition cases could create inconsistent outcomes and raise questions about res judicata and estoppel in related, but independently litigated, matters.
Practitioners should use this decision as authoritative on the application of s 4D to commercially negotiated deeds tied to licensing processes and as guidance on the Court's approach to consent relief, while recognising the judgment’s cautionary remarks about evidential detail and injunctive time limits.
(a) has legal effect independently of proceedings in the Licensing Court in respect of a liquor licence application; and
(b) was made or arrived at by the first respondent for the purpose, or a substantial purpose, of preventing, restricting or limiting the supply of take-away liquor by the said applicant -
provided that this order does not prevent the first respondent from raising any objection or making any submission in the Licensing Court of New South Wales to the effect that, in exercising its powers with respect to a liquor licence application, the Licensing Court should have regard to the fact that the applicant for the liquor licence, or any other person consents, or previously consented to conditions being placed on a liquor licence, whether such consent is or was given pursuant to a settlement of a dispute or otherwise.
(a) dated 18 August 1997, with Jin Ro Australia Pty Ltd and Deannah Jang and the second respondent;
(b) dated 26 November 1998 with Ettamogah Darling Harbour Pty Ltd, Leigh Christopher O'Brien and Ralph Joseph Patterson and the second respondent;
(c) dated 1 March 2000 with Sandra May Hopkins, The Palms Shopping Village Pty Ltd, John Saunders, Malcolm Logan, Thomas Cahill, the second respondent and D&D Haslam Pty Ltd;
(d) dated 12 May 2000 with Rhonda Christine Franks and Bo-Jean Pty Limited; and
(e) made in or about November 2000 with David John Dixon and Donna-Marie Dixon and the second respondent
the first respondent pay to the Commonwealth a pecuniary penalty in the sum of $950,000 (representing penalties totalling $4,750,000).
(a) the applicant not make any claim, demand or institute or reinstitute any proceeding against the first respondent in respect of any of the matters contained in the further amended statement of claim; and
(b) there be no order as to costs against the applicant by reason of the discontinuance against the first respondent.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
AND: LIQUORLAND (AUSTRALIA) PTY LTD (ACN 007 512 419)
REASONS FOR JUDGMENT 1 In this case a statement of facts has been agreed between the applicant, the Australian Competition and Consumer Commission (the ACCC) and the first respondent, Liquorland (Australia) Pty Ltd (Liquorland). Liquorland has admitted that the agreed facts establish certain contraventions of s 45(2) of the Trade Practices Act 1974 (Cth) (the Act). That is reflected in admissions on the pleadings. These parties are substantially in agreement as to the relief that is appropriate to be granted. 2 The other respondent, Woolworths Ltd (Woolworths), is defending the proceedings. That case is presently proceeding before Allsop J. Liquorland desires to have its position clarified as soon as possible and the ACCC agrees with that course. I therefore agreed to deal with the case against it. After some initial hesitation, Woolworths is now content that this take place provided that it is understood that no admission made by Liquorland and no finding of fact by me will be binding upon Woolworths. That is agreed by all parties. 3 The statutory provisions in issue are as follows: '45(2) A corporation shall not:
(a) make a contract or arrangement, or arrive at an understanding, if:
(i) the proposed contract, arrangement or understanding contains an exclusionary provision;' '4D(1) A provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be taken to be an exclusionary provision for the purposes of this Act if:
(a) the contract or arrangement was made, or the understanding was arrived at, or the proposed contract or arrangement is to be made, or the proposed understanding is to be arrived at, between persons any 2 or more of whom are competitive with each other; and
(b) the provision has the purpose of preventing, restricting or limiting:
(i) the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons; or
(ii) the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons in particular circumstances or on particular conditions;
by all or any of the parties to the contract, arrangement or understanding or of the proposed parties to the proposed contract, arrangement or understanding or, if a party or proposed party is a body corporate, by a body corporate that is related to the body corporate.
(2) A person shall be deemed to be competitive with another person for the purposes of subsection (1) if, and only if, the first-mentioned person or a body corporate that is related to that person is, or is likely to be, or, but for the provision of any contract, arrangement or understanding or of any proposed contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person, or with a body corporate that is related to the other person, in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision of the contract, arrangement or understanding or of the proposed contract, arrangement or understanding relates.' 4 I have decided to adopt the substance of the relief suggested by the parties. In order to explain that decision I should set out the precise agreed facts and admissions which have been made. These follow, with necessary editing. Evidence supplementing the facts was admitted. 5 In these proceedings the ACCC alleges that Liquorland entered into agreements, constituted and evidenced by a deed, which constituted contracts, arrangements or understandings for the purposes of s 45 of the Act with various applicants for liquor licences in New South Wales (and related interests) during the period 1997 to 2001, which, in each case, contained exclusionary provisions in relation to the retail supply of liquor for off-premises consumption (also known as takeaway liquor). During that period Liquorland was a major retailer of takeaway liquor. 6 The context of the deeds in each case was that there had been an application to the Liquor Licensing Court, for the grant of a liquor licence. In each case Liquorland had existing retail liquor outlets in the vicinity of the licence applicant's proposed premises. Relevantly, Liquorland then lodged an objection to the application or advised the licence applicant that an objection would be made. The consequence of making such objections was that there would be a contested hearing for the grant of the application. If, on the other hand, the objections were withdrawn and there were no objections by the second respondent, then the licence was likely to be granted. 7 In each case Liquorland then entered into negotiations with the applicant for the licence, offering to withdraw or not pursue the objection, provided that the applicant (and interests associated with the applicant) agreed to restrictions being placed upon their ability to retail takeaway liquor. After those negotiations, the liquor licence applicants entered into deeds with Liquorland containing restrictive conditions. In each case agreement was reached as to restrictions to be incorporated as conditions attached to the licence which restrictions were also to be specified in a deed between the parties. The deeds constituted specific contractual obligations on the applicants to conform to restrictions in similar terms to the conditions imposed on the licence. Such contractual obligations operated in addition to and independently of the statutory licensing regime. In each case the applicant was contractually obliged to request the Court to impose conditions upon the licence itself and, in four of the five cases the subject of these agreed facts, could not, at a later date, apply to amend, revoke or vary the conditions imposed upon the licence. In the fifth case the applicant was contractually obliged to request the Court to impose conditions upon the licence itself and could not, at a later date, apply to amend, revoke or vary the conditions imposed upon the licence without first giving 14 days notice to Liquorland at its registered office. None of the objections thus proceeded to a hearing on the merits. 8 In broad terms, these deeds restricted the type and/or quantity of takeaway liquor the licence applicant/owner would be able to stock at the premises; restricted the location and configuration of the store and/or restricted the means by which such sales could be made (eg restricted the supply to mail order sales). 9 The deeds also, in each case, restricted the applicant's ability to apply to revoke, amend or vary the conditions imposed on the licence pursuant to the deeds entered into with Liquorland. 10 Furthermore, the deeds restricted any subsequent sale of the licence to a third party by requiring that the applicant procure the third party to enter into a like deed with Liquorland. 11 The deeds provided that the consideration for the covenants the licence applicant (and related interests) gave was the withdrawal of any objection which Liquorland had made or had indicated would be made to the licence application. 12 Liquorland is a trading corporation which carries on the business of retailer of goods which includes the supply of takeaway liquor. 13 Each of the five licence applicants applied for a liquor licence in relation to particular premises, specifically: (a) Deannah Jang for Jin Ro Australia Pty Limited (Jin Ro) at 7 Willis Street Arncliffe, New South Wales;
(b) Ralph Patterson for Ettamogah Darling Harbour Pty Limited (Ettamogah) at MacArthur Square Shopping Centre, Campbelltown, New South Wales;
(c) Sandra Hopkins for The Palms Shopping Village Pty Limited (Palms Village) at 122 Dry Dock Road Tweed Heads South, New South Wales;
(d) Rhonda Franks for Bo-Jean Pty Limited (Bo-Jean)/Henry Kendall at 299 Brisbane Waters Drive West Gosford New South Wales; and
(e) David Dixon for Global Beer Importers at 44-46 Ourimbah Road, Tweed Heads, New South Wales.
14 Part 8 of the Liquor Act 1982 (NSW) (the Liquor Act) rendered it a criminal offence to, inter alia, sell liquor without being authorised to do so under that Act (s 122). The authority to sell liquor under the Liquor Act was obtained by way of licences issued by the Licensing Court of New South Wales. That Court, established pursuant to Pt 2 of the Liquor Act, had jurisdiction and powers conferred on it by the Liquor Act (and other Acts). It had jurisdiction throughout New South Wales. The Licensing Court comprised a chairperson, a deputy chairperson and other licensing magistrates appointed under s 8 of the Liquor Act. Proceedings before the Court were generally instituted by way of an application and such proceedings were regulated in the same way as summary proceedings before a Local Court (s 12(1)). 15 Section 18(1) empowered the Licensing Court to: 'grant a licence in a form approved by the Board authorising the licensee to sell liquor on the premises specified in the licence' ['Board' meant the Liquor Administration Board]. The types of licences which could be granted by the Licensing Court were set out in s 18(2). In relation to the present proceedings, there were two relevant forms of licence, namely:
(1) a hotelier's licence, being a licence that authorises the licensee to sell liquor by retail on the licensed premises, whether or not for consumption on those premises (Hotelier's Licence) (s 18(2)(a)); and
(2) an off-licence, being a licence that authorises the licensee to sell liquor on the licensed premises, but only for consumption otherwise than on those premises (off-licence) (s 18(2)(b)).
An off-licence could be a licence to sell liquor by retail (s 18(3)(a)) or by wholesale (s 18(3)(c)).
16 The conditions which could be imposed on a liquor licence were dealt with in Div 2 of Pt 3 of the Liquor Act. The issue of liquor licences by the Licensing Court were always subject to prescribed conditions such as fulfilling requirements related to harm minimisation and the responsible service of alcohol. For the purposes of the present proceedings, such conditions are not of significance. 17 Under the Liquor Act, other conditions could be imposed by the Licensing Court. Section 20(1) of the Liquor Act provided, relevantly. 'The Court may: (a) On the hearing of an application for the grant of a licence or of any matter relating to a licence - of its own motion or on the application of a party to the hearing ... impose conditions not inconsistent with this Act without prior compliance with which the grant does not take effect or to which the licence is to be subject.' 18 Section 20(2) of the Liquor Act provided that: 'A licence is subject to: … (b) any conditions imposed under sub section (1) ...' 19 The procedure for making applications for liquor licences was set out in Pt 3, Div 4 of the Liquor Act. Section 37(1) provided as follows: 'An application under this Act shall be made and advertised as prescribed, shall be accompanied by the prescribed documents and shall be lodged as prescribed.'
Jin Ro: Willis Street, Arncliffe, New South Wales 20 Some time in 1997 Jae Jang and Deannah Jang proposed to apply pursuant to the Liquor Act for: (a) a wholesale off-licence; and
for premises in Willis Street, Arncliffe, New South Wales (the Willis premises).
21 Liquorland was a competitor or potential competitor to Jin Ro. 22 On or about 11 July 1997 Deannah Jang applied for a retail off-licence for the Willis premises to supply takeaway liquor, specifically the supply of Korean liquor by mail order (the Jin Ro application). 23 A Liquorland representative appeared as an objector in the Licensing Court at the mention of the Jin Ro application. 24 Jin Ro's representatives entered into negotiations with Liquorland in relation to conditions to be imposed upon their licence; failing agreement Liquorland would maintain its objection to the licence. 25 On or about 18 August 1997 a Deed of Agreement (the Jin Ro Deed) was entered into between, amongst others, Jin Ro Australia Pty Limited, Deannah Jang, (together the Jin Ro parties) and Liquorland. 26 By entering into the Jin Ro Deed the parties made a contract or arrangement or entered into an understanding which included an exclusionary provision within the meaning of s 4D of the Act. Pursuant to the Jin Ro Deed: (a) The Jin Ro parties agreed to comply with certain conditions imposed on their licence, including:
(i) not to maintain a display of, or display, liquor available for sale at the premises;
(ii) not to allow customers to attend on the premises to make purchases of, place orders for the purchase of, any liquor or to collect any such liquor,
(iii) not to accept any order for the sale of liquor other than orders received by telephone, post, facsimile, telex or electronic mail;
(iv) not to deliver or cause to be delivered liquor to any customer on the premises or any other premises within 100 metres of the Willis premises; and
(v) to sell only traditional Korean liquor products made and packaged in Korea and imported into Australia from Korea.
(b) The Jin Ro parties agreed to request that the Licensing Court impose those conditions on the off-licence granted in respect of the Willis premises;
(c) The Jin Ro parties agreed jointly and severally not to cause to be made or allow to be made any application for amendment, revocation or variation of the conditions contained in clause 1 of the Jin Ro Deed whilstever the Licence attached to the Willis premises or any other premises to which the licence may be removed from time to time;
(d) The Jin Ro parties agreed that in the event the licence was transferred, the Jin Ro parties agreed to procure agreement from the transferee to enter into a deed containing the same restrictions as the Jin Ro Deed; and
(e) Liquorland agreed not to press its objection to the Jin Ro parties' application for the off-licence.
27 A substantial purpose of the Jin Ro Deed was to prevent, restrict or limit the supply of takeaway liquor by Jin Ro to particular persons or classes of persons, including: (a) customers or potential customers of Jin Ro;
(b) customers or potential customers of Jin Ro who wanted to purchase takeaway liquor other than Korean liquor; and
28 The application was granted on 18 August 1997 subject to the conditions in the Jin Ro Deed.
Ettamogah: Macarthur Square Shopping Square, Campbelltown, New South Wales 29 On or about 15 April 1998 Ralph Patterson (Patterson) applied for a grant of a Hotelier's licence in respect of premises operated by Ettamogah situated at Campbelltown, New South Wales, premises to enable Ettamogah to operate a bar and restaurant at those premises, such an operation to include the supply of takeaway liquor (the Ettamogah application). 30 Liquorland was a competitor or potential competitor to Ettamogah. 31 Ettamogah representatives entered into negotiations with Liquorland in relation to conditions to be imposed upon their licence; failing agreement Liquorland would lodge or maintain an objection to the licence. 32 On or about 26 November 1998 a Deed of Agreement (the Ettamogah Deed) was entered into between, amongst others: Ettamogah and Patterson (the Ettamogah parties); and Liquorland. 33 By entering into the Ettamogah Deed the parties made a contract or arrangement or entered into an understanding which included an exclusionary provision within the meaning of s 4D of the Act. Pursuant to the Ettamogah Deed: (a) The Ettamogah parties agreed to comply with certain conditions, including:
(i) not to construct or maintain a bottle shop or drive away facility on the Campbelltown premises for the supply or sale of liquor to be consumed off the premises;
(ii) restricting the sale of take away liquor to a single place in Campbelltown premises;
(iii) not to sell or advertise the sale or conduct promotions for the sale of any take away liquor other than that which specifically referred to the thematic concept of the Ettamogah Pub Mob cartoon and its characters and are sold under Ettamogah Pub Mob Cartoon label which is owned by Patterson or by his employer, and
(iv) not to deliver or cause to be delivered liquor other than at the Campbelltown premises.
(b) The Ettamogah parties also agreed not to apply to amend, revoke or vary any of the conditions;
(c) The Ettamogah parties agreed to request that the Licensing Court impose those conditions on the licence granted in respect of the premises;
(d) The Ettamogah parties agreed, in the event the licence was transferred, that they would procure agreement from the transferee to enter into a deed containing the same restrictions as the Ettamogah Deed;
(e) Liquorland agreed not to press its objection to the Ettamogah application.
34 A substantial purpose of the Ettamogah Deed was to prevent, restrict or limit the supply of takeaway liquor by Ettamogah to particular persons or classes of persons, including: (a) customers or potential customers of Ettamogah who wished to purchase takeaway liquor at the Campbelltown premises;
(b) customers of Liquorland's two stores in Campbelltown.
35 The Ettamogah application was granted on 26 November 1998 with effect from 19 January 1999.
Palms Village: Dry Dock Road Tweed Heads South, New South Wales 36 On or about 5 July 1999 Sandra Hopkins (Hopkins) applied to the Licensing Court for the grant of an off-license (retail) in respect of premises in Dry Dock Road, Tweed Heads South, New South Wales (the Dry Dock premises), operated by Palms Village to enable Palms Village to operate a retail bottle shop for those premises, such an operation to include the supply of takeaway liquor (the Palms Village application). 37 In August 1999 Liquorland lodged a notice of objection to the Palms Village application. 38 Liquorland was a competitor or potential competitor to Palms Village. 39 Representatives of Palms Village entered into negotiations with Liquorland in relation to conditions to be imposed upon their licence; failing agreement Liquorland would lodge or maintain an objection to the licence. 40 On or about 1 March 2000 a Deed of Agreement (the Palms Village Deed) was entered into between, amongst others: Hopkins and Palms Village (the Palms Village parties); and Liquorland. 41 By entering into the Palms Village Deed the parties made a contract or arrangement or entered into an understanding which included an exclusionary provision within the meaning of s 4D of the Act. Pursuant to the Palms Village Deed: (a) the Palms Village parties agreed to comply with certain conditions, restricting certain activities for ten years, specifically, that:
(i) the area and stock rooms of the Dry Dock premises would be that area depicted in the Palms Village application;
(ii) no application would be made for the licence to be removed to other premises;
(iii) no application would be made to redefine the premises for the licence to be transferred to other premises; and
(iv) liquor would not be kept on the Dry Dock premises and associated stockrooms which (in the aggregate) was of a greater wholesale value than $55,000.
(b) the Palms Village parties agreed to request that the Licensing Court impose those conditions on the licence granted in respect of the premises.
(c) the Palms Village parties also agreed not to apply for amendments, revocation or variation of the conditions to the licence;
(d) The Palms Village parties agreed, in the event the licence was transferred, that they would procure agreement from the transferee to enter into a deed containing the same restrictions as the Ettamogah Deed; and
(e) Liquorland agreed to withdraw its notice of objection.
42 A substantial purpose of the Palms Village Deed was to prevent, restrict or limit the supply of takeaway liquor by Palms Village to particular persons or classes of persons, including: (a) customers or potential customers of Palms Village who wished to purchase liquor at Palms Village's premises;
(b) customers of Liquorland's two Tweed Head stores.
43 On 10 August 2000 the Palms Village application was granted.
Henry Kendall: Brisbane Waters Drive, West Gosford, New South Wales 44 On or about 26 April 2000, Rhonda Franks (Franks) applied to the Licensing Court for the grant of a Hotelier's licence in respect of certain West Gosford, New South Wales, premises to operate a business by Bo-Jean that would include the supply of takeaway liquor (the Henry Kendall application). 45 Liquorland was a competitor or potential competitor of Bo-Jean. 46 On or about 3 May 2000 Liquorland represented to Franks that it required Franks to enter into a deed, failing which Liquorland reserved its right to lodge an objection to the Henry Kendall application. 47 Representatives of Bo-Jean entered into negotiations with Liquorland in relation to conditions to be imposed upon the licence; failing agreement Liquorland would lodge or maintain an objection to the licence. 48 On or about 12 May 2000 a Deed of Agreement (the Henry Kendall Deed) was entered into between Franks, Bo-Jean (the Henry Kendall parties) and Liquorland. 49 By entering into the Henry Kendall Deed the parties made a contract or arrangement or entered into an understanding which included an exclusionary provision within the meaning of s 4D of the Act. Pursuant to the Henry Kendall Deed: (a) The Henry Kendall parties agreed to comply with certain conditions, including:
(i) not to sell or supply liquor on or from the West Gosford premises for consumption off the premises;
(ii) no separate takeaway liquor facility available at the West Gosford premises;
(iii) no display of takeaway liquor available at the West Gosford premises; and
(iv) not to deliver or cause to be delivered liquor at a place other than the West Gosford premises.
(b) the Henry Kendall parties agreed to request that the Licensing Court impose those conditions on the licence granted in respect of the West Gosford premises;
(c) the Henry Kendall parties agreed not to apply for amendments, revocation or variation of the conditions contained in the Henry Kendall Deed;
(d) the Henry Kendall parties agreed, in the event the licence was transferred, that they would procure agreement from the transferee to enter into a deed containing the same restrictions as the Henry Kendall Deed; and
(e) Liquorland agreed not to press its objection to the Henry Kendall application.
50 A substantial purpose of the Henry Kendall Deed was to prevent, restrict or limit the supply of takeaway liquor by Bo-Jean to particular persons or classes of persons, specifically: (a) customers or potential customers of Bo-Jean; and
51 The Henry Kendall application was granted, with conditions, to take effect from 7 September 2000.
Global Beer Importers: Ourimbah Road, Tweed Heads, New South Wales 52 On or about 4 November 1999 David Dixon (Dixon) applied to the Licensing Court for the grant of an off-license (retail) license in respect of premises in Tweed Heads, New South Wales, to enable a business (Global Beer Importers) to operate a business from those premises with respect to certain supply of takeaway liquor specifically boutique beer (the Global Beer Importers application). 53 In February 2000 Liquorland lodged a notice of objection to the Global Beer Importers application. 54 On 7 September 2000 a second application was lodged by Dixon for Global Beer Importers (the Global Beer lmporters second application). 55 Liquorland was a competitor or potential competitor of Global Beer Importers. 56 The Dixons and their representatives entered into negotiations with Liquorland in relation to conditions to be imposed upon their licence; failing agreement Liquorland would maintain its objection to the licence. 57 In or about November 2000 a Deed of Agreement (the Global Beer Importers Deed) was entered into between, amongst others: Dixon and Donna-Marie Dixon (the Dixons); and Liquorland. 58 By entering into the Global Beer Importers Deed the parties made a contract or arrangement or entered into an understanding which included an exclusionary provision within the meaning of s 4D of the Act. Pursuant to the Global Beer Importers Deed: (a) the Dixons agreed to comply with certain conditions being imposed upon their licence, including:
(i) no sales other than sales of boutique imported beer from the premises. Boutique imported beer meaning beer/s which were imported into Australia and were of similar type to those shown in Annexure A to the affidavit of Dixon dated 13 October 2000 and/or which were not generally available in Liquorland's retail liquor stores in Tweed Heads;
(ii) no sales to be made to the public attending the premises and no deliveries within 200 metres of the premises;
(iii) no display area to be erected at the premises for the viewing of the public and no signage other than that required by law and for identification purposes to be erected at the premises;
(iv) that the business would be conducted as a direct marketing business and orders would be accepted only via mail, internet, fax or phone order;
(b) the Dixons agreed to request that the Licensing Court impose those conditions on the licence granted in respect of the premises;
(c) the Dixons also agreed not to apply for amendments, revocation or variation of the conditions to the licence without first giving 14 days notice to Liquorland at its registered office;
(d) the Dixons agreed, in the event the licence was transferred, that they would procure agreement from the transferee to enter into a deed containing the same restrictions as the Global Beer Importers Deed and give notice of any sale to Liquorland; and
(e) Liquorland agreed to withdraw its notice of objection.
59 A substantial purpose of the Global Beer Importers Deed was to prevent, restrict or limit the supply of takeaway liquor by Global Beer Importers to particular persons or classes of persons, namely: (a) customers or potential customers of Global Beer Importers who wished to purchase takeaway liquor from Global Beer Importers' other premises (the proposed premises the licence was to be transferred to);
(b) customers of Liquorland's two Tweed Heads stores.
60 On 6 November 2000 the Global Beers Importers' second application was granted with effect from 15 January 2001. 61 By engaging in the conduct referred to in paragraphs 26, 33, 41, 49 and 58 above, Liquorland admits, in each case, it made a contract or arrangement or arrived at an understanding containing exclusionary provisions, and thereby contravened of s 45(2)(a)(i) of the Act five times. 62 In the light of those agreed facts, the parties are agreed that the following is the appropriate order in relation to pecuniary penalty: 'In respect of each contravention of s 45(2)(a)(i) constituted by the entry of the first respondent into the written agreements in the form of deeds:
(a) dated 18 August 1997, with Jin Ro Australia Pty Ltd and Deannah Jang and the second respondent;
(b) dated 26 November 1998 with Ettamogah Darling Harbour Pty Ltd, Leigh Christopher O'Brien and Ralph Joseph Patterson and the second respondent;
(c) dated 1 March 2000 with Sandra May Hopkins, The Palms Shopping Village Pty Ltd, John Saunders, Malcolm Logan, Thomas Cahill, the second respondent and D&D Haslam Pty Ltd;
(d) dated 12 May 2000 with Rhonda Christine Franks and Bo-Jean Pty Limited; and
(e) made in or about November 2000 with David John Dixon and Donna-Marie Dixon and the second respondent
the first respondent pay to the Commonwealth a pecuniary penalty in the sum of $950,000 (representing penalties totalling $4,750,000).' 63 The imposition of civil penalties is governed by s 76 of the Act which, so far as is relevant, provides: '(1) … the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part or Part XIB to have engaged in any similar conduct.
(1A) The pecuniary penalty payable under subsection (1) by a body corporate is not to exceed:
(b) for each other act or omission to which this section applies - $10,000,000.' 64 Leaving aside the particular matters identified in s 76(1) to which regard must be had, the Court's discretion is unfettered. Counsel referred to many authorities in which various judges had expressed views as to how the discretion ought to be exercised in particular circumstances. Some appear to have been treated as if they lay down a mandatory checklist to be followed. Judicial discretion should not be encrusted or confined in that way. However, one matter that does warrant guidance in this case is the relevance of the agreement between the parties and the weight to be given to it if relevant. That topic has recently been dealt with in a cognate context by the Full Court in Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; (2004) ATPR 41-993. I propose to direct myself in accordance with that decision. There is no need to paraphrase or summarise it. 65 The agreed facts disclose the nature and extent of the acts and omissions relied upon and the circumstances in which those acts and omissions took place. Further, it is agreed that neither Liquorland nor its parent has previously been found to have engaged in conduct in breach of Pt IV of the Act. 66 There is a question as to whether the agreed facts sufficiently deal with any loss or damage suffered as a result of these breaches. Each of the deeds in question constituted a significant restriction upon the business of the third party compared with the position that would have pertained had that party obtained an unrestricted licence. There has been no attempt to quantify the chance of obtaining an unrestricted licence in each case or the loss or damage which have been sustained by reason of the agreed restrictions. It is also obvious that consumers lost the choice and competition between outlets that otherwise would have been available in the event that the third party did obtain an unrestricted licence. Correspondingly, little attention has been paid to the other side of the coin - the gain accruing to Liquorland as a result of the breaches. 67 For present purposes, I am prepared to assume against the wrongdoer that there was a significant chance that each of the third parties would have obtained an unrestricted licence. It follows that there would have been significant loss or damage to those parties and a significant gain to Liquorland by reason of the contravening conduct. It may also be assumed that there would have been a restriction of choice and competition affecting consumers. Some greater attention to the detail of these matters would have been advantageous and may be necessary in some cases before penalty can properly be assessed, whether agreed or not. 68 Counsel for each party put separate submissions in support of the proposed penalties. Counsel for the ACCC emphasised the more serious aspects of the facts in order to justify a significant figure. Counsel for Liquorland emphasised those aspects of the facts that would support a more lenient result. It is necessary to consider the submissions in the light of the facts with a somewhat critical eye as there is no real contradictor. Having done so in the manner explained recently by the High Court in Markarian v The Queen [2005] HCA 25 and having given appropriate weight to the agreement between the parties, I am satisfied that the proposed order for pecuniary penalties is appropriate. It should be emphasised that this conclusion is based upon a particular set of agreed facts and a particular set of agreed contraventions, taking into account the time at which the agreement was reached. It will provide little guidance one way or the other as to what penalties might have been appropriate if no agreement had been reached and the case had been fought through to a conclusion. 69 The parties are agreed as to a form of injunction. I am satisfied that it is appropriate that an injunction be granted pursuant to s 80 of the Act in the form proposed with one reservation, namely, the limit of the injunction to three years. In a somewhat similar case of Australian Competition and Consumer Commission v George Weston Foods Limited [2004] FCA 1093; 210 ALR 486 at [30] I said: 'I see every reason for making an order in relation to contravention ... It is difficult to see the reason for a time limit in relation to a properly framed injunction, bearing in mind s 80(3).' I was nonetheless persuaded to grant an injunction limited in time in that case. 70 The relevant parts of s 80 are as follows: '(1) … where … the Court is satisfied that a person has engaged … in conduct that constitutes …
the Court may grant an injunction in such terms as the Court determines to be appropriate.
(3) The Court may rescind or vary an injunction granted under subsection (1) or (2).
(4) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised:
(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind;
(b) whether or not the person has previously engaged in conduct of that kind; and
(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind.' 71 It will be seen that an order pursuant to s 80 is different from the grant of equitable relief by way of injunction which is, amongst other things, conditioned upon threat of repetition. Whilst I do not doubt the jurisdiction and power to grant an injunction limited in time pursuant to s 80, I can only repeat my reservation as to the circumstances under which it may be appropriate to do so, bearing in mind the existence of sub-section (3). Neither counsel was able to satisfactorily explain to me the logic behind the time limit in this case although it is fair to say that they did not come prepared to justify it. Counsel for Liquorland did submit that the existence of a compliance program and the change in New South Wales licensing laws, together with the sharp shock administered by this case, means that it is unnecessary to subject Liquorland to the threat of contempt of court for any longer than three years. As my reservations do not go to jurisdiction or power, I am prepared to make the order sought based upon the consent of the parties. 72 The only other contentious aspect of relief is that the ACCC sought liberty to seek declaratory relief against Liquorland following disposition of the proceedings against Woolworths. That was opposed on behalf of Liquorland. In my opinion, it is not appropriate to grant that liberty. It is unsatisfactory to leave loose ends in litigation. The only utility of making belated declarations that was advanced by counsel for the ACCC was that there should be no doubt as to the findings of contravention against Liquorland. That concern is unnecessary in the present case. The orders to be made impose pecuniary penalties for specified breaches of the Act and injunct future breaches. Declarations should not be made in the abstract. Any declaration which would be appropriate to be made in the present case would only be ancillary to the substantive relief. With that exception, orders are made as sought. I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.
Dated: 31 May 2005 Counsel for the Applicant: ST White SC, KC Morgan
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the First Respondent: NJ Young QC, MR Speakman SC, S Nixon
Solicitor for the First Respondent: Allens Arthur Robinson
Counsel for the Second Respondent: R Smith SC, JM Jones
Australian Competition and Consumer Commission
Liquorland
Orders made against Liquorland: injunction restraining specified exclusionary conduct for three years; pecuniary penalty of $950,000 (representing $4,750,000 aggregate penalties for five contraventions); discontinuance of remaining proceedings against Liquorland on conditions (no further claims and no costs order against ACCC); contribution to ACCC's costs $250,000 (see Orders and Reasons).