Pecuniary penalties
77 The parties seek orders imposing pecuniary penalties pursuant to s 224 of the ACL in the amount of:
(1) $500,000 on MSY Technology for its contravening Website Representations and its contravening In-Store Representations;
(2) $200,000 on MSY Group for its contravening Website Representations; and
(3) $50,000 on MSY NSW for its contravening In-Store Representations.
78 Section 224(1)(a)(ii) provides that if a court is satisfied that a person has contravened a provision of Pt 3-1 of the ACL then it may order the person to pay such pecuniary penalty, in respect of each act or omission by the person to whom s 224 applies, as the court determines to be appropriate. Section 29 is in Pt 3-1. No pecuniary penalty applies to a contravention of s 18 of the ACL.
79 Pursuant to s 224(3), Item 2, the maximum penalty for a contravention of a provision of Pt 3-1 of the ACL for a body corporate is $1.1 million. However, a person is not liable to more than one pecuniary penalty in respect of the same conduct: s 224(4)(b).
80 Section 224(2) provides that in determining the appropriate pecuniary penalty the Court must have regard to all relevant matters including:
(1) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission;
(2) the circumstances in which the act or omission took place; and
(3) whether the person has previously been found by a court in proceedings under Ch 4 or Pt 5-2 of the ACL to have engaged in any similar conduct.
81 Section 224 of the ACL is in substantially identical terms to the former s 76E of the Trade Practices Act. In Australian Competition and Consumer Commission v Pepe's Ducks Ltd [2013] FCA 570 (ACCC v Pepe's Ducks) at [16] Bromberg J noted that a number of judgments of the Court had confirmed that, with some exception, the guiding principles relevant to the imposition of a civil penalty under former s 76 of the Trade Practices Act had application to s 76E(2) of the Trade Practices Act. His Honour further noted that, given the substantial identicality of s 224(2) and the former s 76E(2) of the Trade Practices Act, the guiding principles developed for the former s 76 of the Trade Practices Act are of relevance to s 224(2).
82 In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 (NW Frozen Foods) at 292 Burchett and Kiefel JJ, as her Honour then was, set out a checklist of matters that their Honours regarded as being of assistance in considering "the circumstances in which the act or omission took place" in the assessment of a pecuniary penalty under s 76 of the Trade Practices Act. In Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) (2011) 282 ALR 246; [2011] FCA 761 (Singtel Optus (No 4)) Perram J at [10]-[12] updated the checklist of guiding considerations for the purposes of s 76E of the Trade Practices Act. That updated checklist was referred to without demur on appeal: see Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20 (Singtel Optus v ACCC) at [37]. The non-mandatory considerations identified by Perram J in Singtel Optus (No 4) as relevant to the Court's assessment of the appropriate penalty are:
(1) the size of the contravening conduct;
(2) the deliberateness of the contravention and the period over which it extended;
(3) whether the contravention arose out of the conduct of senior management of the contravener or at some lower level;
(4) whether the contravener has a corporate culture conducive to compliance with the ACL, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention;
(5) whether the contravener has shown a disposition to cooperate with the authorities responsible for the enforcement of the ACL in relation to the contravention;
(6) whether the contravener has engaged in similar conduct in the past;
(7) the financial position of the contravener; and
(8) whether the contravening conduct was systematic, deliberate or covert.
83 Before considering the application of the mandatory and non-mandatory factors in the circumstances of this case and the appropriateness or otherwise of the proposed pecuniary penalties, it is relevant to note, as the authorities well establish, that the principal objective of a pecuniary penalty is deterrence, both general and specific: see ACCC v Pepe's Ducks at [18].
84 In NW Frozen Foods Burchett and Kiefel JJ said at 294-295:
There are, of course, limits to the approach accepted in these cases. The Court should not leave room for any impression of weakness in its resolve to impose penalties sufficient to ensure the deterrence, not only of the parties actually before it, but also of others who might be tempted to think that contravention would pay, and detection lead merely to a compliance program for the future.
85 In Singtel Optus v ACCC a Full Court of this Court (Keane CJ, Finn and Gilmour JJ) said at [62]:
There may be room for debate as to the proper place of deterrence in the punishment of some kinds of offences, such as crimes of passion; but in relation to offences of calculation by a corporation where the only punishment is a fine, the punishment must be fixed with a view to ensuring that the penalty is not such as to be regarded by that offender or others as an acceptable cost of doing business. …
86 It is also appropriate to say something about the approach to take in relation to what are, in effect, agreed penalties.
87 The parties jointly submitted that, provided the Court is satisfied that their terms are appropriate, it is in the public interest for the Court to make orders on the terms that have been agreed between the parties. That submission reflects the following statements from the joint judgment of Burchett and Kiefel JJ in NW Frozen Foods at 291:
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.
88 Further, at 298-99 their Honours held:
We agree with the statement made in several of the cases cited that it is not actually useful to investigate whether, unaided by the agreement of the parties, we would have arrived at the very figure they propose. The question is not that; it is simply whether, in the performance of the Court's duty under s 76, this particular penalty, proposed with the consent of the corporation involved and of the Commission, is one that the Court should determine to be appropriate. In our opinion, it is appropriate.
89 NW Frozen Foods was considered by a Full Court of this Court in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72. At [51] the Full Court set out the propositions that emerged from the reasoning in NW Frozen Foods as follows:
(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.
(ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
(iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.
(iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters.
(v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.
(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.
90 At [54] their Honours referred to the sixth proposition. They held that that proposition did not mean that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range but that, while a court may wish to take that approach, it is also open "first to address the appropriate range of penalties independently of the parties' proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range".
91 The process of arriving at an appropriate sentence for a criminal offence was considered by the High Court in Makarian v The Queen (2005) 228 CLR 357. That process has also been held to be applicable to civil penalty proceedings and involves an intuitive or instinctive synthesis of all relevant factors: see Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540; [2015] FCA 330 (ACCC v Coles) at [6]. In Australian Competition and Consumer Commission v Fisher & Paykel Customer Services Pty Ltd [2014] FCA 1393 at [85] Wigney J summarised the approach as one where the Court should have regard to "all relevant facts and circumstances and arrive at a result which takes due account of, and balances, the many different and conflicting features".
92 With those principles in mind I now turn to consider both the mandatory considerations to be taken into account and the non-mandatory considerations that may be taken into account for the purpose of determining a penalty pursuant to s 224(2) of the ACL.