Australian Competition and Consumer Commission v Neville

Federal Court of Australia|2007-10-16|Before: Lindgren J

INTRODUCTION 1 The defendant, John Patrick Neville, has pleaded guilty to two charges of having contravened s 155(5)(b) of the Trade Practices Act 1974 (Cth) (the TP Act) by, in purported compliance with a notice issued under s 155(1)(c) of the TP Act, knowingly giving evidence before a member of the prosecutor (the Australian Competition and Consumer Commission (ACCC)) that was misleading. 2 The defendant gave the evidence over two days, on 28 February 2006 and 20 March 2006. There are two charges - one in respect of each day. The defendant knowingly gave misleading evidence on both occasions. 3 Section 155(6A) of the TP Act provides that a person who contravenes s 155(5) is guilty of an offence punishable on conviction by a fine not exceeding 20 penalty units ($2,200) or imprisonment for 12 months. Since there are two contraventions, the total of the maximum penalties is $4,400 or imprisonment for 24 months. 4 Section 163(2) of the TP Act confers jurisdiction on this Court to hear and determine prosecutions for offences against the TP Act.

THE OBJECTIVE CIRCUMSTANCES 5 The hearing on penalty proceeded on a statement of agreed facts. The following account of the objective circumstances is based on that statement. 6 Real estate agents generally compete on price through the level of commission charged. Most real estate agents charge a commission calculated as a percentage of the sale price. During the period of about January 2004 to July 2004, McGregor Real Estate (MRE), a real estate agency which operated in the Blue Mountains area, advertised a flat fee of $4,400 on the sale of real estate effected through it. MRE's advertisements referred to the greater amounts that were being charged by other agents. The defendant was one of a number of real estate agents in the Blue Mountains who attempted to prevent MRE's advertisements of its flat fee from coming to public attention. That conduct, if established, may have constituted one or more contraventions of s 45(2) of the TP Act. 7 The conduct included the removal of the MRE advertisements from The Blue Mountains Gazette (BMG) and the Focus on Property magazine (FOP), both publications in the Blue Mountains area. 8 The defendant was licensee of Century 21 Combined Wentworth Falls office between August 1994 and May 2005. The defendant was also Chairman of the Century 21 Blue Mountains Advisory Council from a date estimated by him to be 1995 until the sale of his Century 21 office in May 2005. The Advisory Council comprised licensees of eight Century 21 offices from Blaxland to Blackheath who met on a regular basis to discuss general advertising and promotions and other matters of interest to Century 21 offices in the Blue Mountains area. 9 The ACCC investigated the alleged anti-competitive conduct. The first charge relates to evidence the defendant gave a member of the ACCC on 28 February 2006. On that date, he denied that the "ripping out" or "tearing out" of the MRE advertisements from the BMG had been coordinated by Century 21 agents and that he was part of it. In truth he was involved in a Century 21 meeting in which consensus had been reached to embark on a campaign, which included the removal of MRE advertisements, and the defendant in fact coordinated and organised for MRE advertisements to be removed from the copies of the BMG that were in Century 21 offices. 10 The second charge relates to three pieces of evidence the defendant gave on 20 March 2006. They were as follows: (a) in his evidence the defendant denied that he was the person who coordinated the ripping out of MRE advertisements and that he had spoken to a number of other people within the Century 21 "cell" about coordinating the tearing out of the advertisements, whereas in truth, as noted above, he had been involved and had in fact coordinated and organised the activity mentioned, and, in addition, took about 20 copies of the FOP to his office and ripped more than 20 pages containing MRE advertisements out of them; (b) the defendant gave evidence that Bianca Brown, a member of his staff, ripped out the advertisements from the BMG and that he and she had a conversation about her having done so, but in truth she had not removed any of the MRE advertisements and he had no conversation with her regarding her supposed removal of them; (c) the defendant gave evidence that, so far as he knew, no other member of his staff ripped out any MRE advertisements, but in truth he directed his employee, Jessica Tatam, to remove the MRE advertisements so that his clients would not see them, and he was often present when she removed them.

THE SUBJECTIVE CIRCUMSTANCES 11 There is before the Court a Pre-Sentence Report dated 25 September 2007 relating to the defendant prepared by the New South Wales Community Offender Services Probation and Parole Service (respectively the Report and the Service). 12 The defendant was born in North London on 12 February 1944, and is therefore 63 years old. He migrated to Australia in 1967 when he was aged 22. He was an only child and both of his parents are deceased. He was married for 23 years to his first wife and has two children aged 35 and 36 to that union. He also has two grandchildren. 13 The defendant resides with his present wife of two years, and her two children aged 16 and 18 years. According to the Report, it appears that he has close and supportive marriage and familial relationships. 14 The defendant left school at the age of 16 years and subsequently completed a Certificate in Mechanical Engineering in London and a Diploma in Real Estate Management after he settled in New South Wales. He was employed by an automobile company, in managerial positions from 1971 to 1985, and with another similar company from 1985 to 1989. He informed the Service that from 1985 to 1992 he also owned a restaurant, and subsequently, from 1992 to 1993, a coffee shop. 15 From 1993 until 2005, the defendant was the principal, and "for most of the time" licensee, of a real estate agency. (It was during that time that the offences were committed.) According to the defendant, following that period, from 2005 to 2007, he was the Group Sales Manager/Licensee of another real estate agency. At the present time, he is employed in sales with a real estate agent, working three to four days a week. 16 The defendant informed the Service that during his interviews with the ACCC he had not realised the "gravity of the situation" and had felt overwhelmed and "intimidated" by the "circumstances of the investigation". He told the Service that with the benefit of hindsight, he was remorseful for his actions. 17 According to the Report, the defendant seems to enjoy a stable marriage and family life and is involved in community activities. He has had a varied and lengthy employment and business history and appears to be currently gainfully employed. The Service has assessed the defendant as representing a low risk of re-offending, with the result that he is considered unlikely to benefit from supervision by the Service.

THE s16A CONSIDERATIONS AND GENERAL DETERRENCE 18 Section 16A(2) of the Crimes Act 1914 (Cth) (the Crimes Act) lists matters that the court must take into account when passing sentence, to the extent that they are relevant and known to the court. However, the list is not exhaustive, and, in particular, a court must consider general deterrence although it is not listed in s 16A(2): see R v Paull (1990) 20 NSWLR 427 at 434C-E; Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370 at 377F-378G. 19 Counsel for the ACCC made submissions in relation to each of the considerations listed in s 16A(2). Counsel for the defendant, while making certain opposing submissions, did not, generally speaking, challenge the ACCC's submissions.

The nature and circumstances of the offence: s 16A(2)(a) 20 The nature and circumstances of the two offences were outlined above. 21 The defendant's contraventions were serious. The transcript of his examination shows that at the outset on both 28 February 2006 and 20 March 2006, the Commissioner explained that if the defendant gave evidence to the ACCC which he knew to be false or misleading, he would liable upon conviction to a fine not exceeding $2,200 or imprisonment for 12 months. 22 I doubt very much that the defendant was overwhelmed and intimidated, as has been suggested. He had ample time between the two hearing dates to consider the seriousness of his position, yet on the second hearing day resumed and persisted in the practice of giving evidence that he knew to be misleading. 23 Counsel for the defendant submitted that it had not been made clear to the defendant that his answers, although they might tend to incriminate him, would not be admissible in evidence against him in any criminal proceeding against him other than a proceeding under s 155 itself: see s 155(7) of the TP Act. In substance, the submission is that it is credible that the defendant felt overwhelmed and intimidated, as he claims, because it is likely that he believed that if he answered truthfully his answers might expose him to a criminal prosecution. 24 I think, however, that the more likely explanation is simply that the defendant treated the entire process in a cavalier and offhand manner. 25 I accept a submission by counsel for the ACCC that the conduct of the defendant during the examinations on 28 February 2006 and 20 March 2006 was that of denial and laying of a false trail rather than that of minimisation and evasion: cf Australian Competition and Consumer Commission v GIA Pty Ltd (2002) ATPR 41-902 at 45,419 [19] per Heerey J.

Other offences (if any) that are required or permitted to be taken into account: s 16A(2)(b) 26 There are no such other offences.

If the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character - that course of conduct: s 16A(2)(c) 27 The offences occurred on both 28 February 2006 and 20 March 2006 and to that extent each offence formed part of a course of conduct, at least within the boundaries of the defendant's giving of evidence before the member of the ACCC.

The personal circumstances of any victim of the offence: s 16A(2)(d) 28 This consideration is not relevant.

Any injury, loss or damage resulting from the offence: s 16A(2)(e) 29 This consideration is not relevant.

The degree to which the defendant has shown contrition for the offence: s 16A(2)(f) 30 The defendant pleaded guilty at the earliest opportunity and this shows a degree of contrition on his part.

If the person has pleaded guilty to the charge in respect of the offence - that fact: s 16A(2)(g) 31 I find it convenient to set out here paras 18-21 of the submissions of counsel for the ACCC: 18. In Siganto v The Queen (1998) 194 CLR 656 the High Court said at 663[-664]: A person charged with a criminal offence is entitled to plead not guilty, and defend himself or herself, without thereby attracting the risk of the imposition of a penalty more serious than would otherwise have been imposed. On the other hand, a plea of guilty is ordinarily a matter to be taken into account in mitigation; first, because it is usually evidence of some remorse on the part of the offender, and second, on the pragmatic ground that the community is spared the expense of a contested trial. The extent of the mitigation may vary depending on the circumstances of the case. 19. In Cameron v The Queen (2002) 209 CLR 339, Gaudron, Gummow and Callinan JJ, after referring to this passage, said at 343: ... the rationale for that rule [that a plea of guilty should be taken into account in mitigation], so far as it depends on factors other than remorse and acceptance of responsibility, [should] be expressed in terms of willingness to facilitate the course of justice and not on the basis that the plea has saved the community the expense of a contested hearing. 20. Their Honours went on to say (at 346) that a significant consideration on the issue of the extent to which a plea of guilty is indicative of remorse, acceptance of responsibility and willingness to facilitate the course of justice is whether it was entered at the first available opportunity. 21. Although there appears to be a divergence of opinion in the High Court with respect to a "two stage" approach to sentencing as opposed to an "instinctive synthesis" (as discussed by Kirby J in Cameron v The Queen at 361[ff]) it is submitted that it is permissible for a sentencing judge to identify the measure of discount allowed for a plea of guilty. 32 The summons by which the present proceeding was commenced was filed on 11 April 2007 and returnable on 9 May 2007. By consent the first directions hearing was adjourned to 23 May 2007 and again to 27 June 2007, when the Court was informed that the defendant would be pleading guilty. I do not know the reasons for the two adjournments and I treat the defendant as having indicated at the earliest opportunity that he would plead guilty to both charges. 33 Because of this, there will be a discount of 20 percent off the penalties that I would otherwise have imposed.

The degree to which the person has co-operated with law enforcement agencies in the investigation of the offence or of other offences: s 16A(2)(h) 34 The defendant provided a statement to the ACCC which was admitted into evidence in which he sought to respond to the two charges in the amended summons by elaborating on the answers which he gave in the examinations. I do not find the defendant's statement of particular assistance. It repeats the questions and answers set out in the particulars to the two charges in the amended summons and elaborates a little on the answers.

The deterrent effect that any sentence or order under consideration may have on the person: s 16A(2)(j) 35 It must be regarded as unlikely that the defendant will, on a second occasion in his life, be required to give evidence under oath or affirmation to an administrative law enforcement body such as the ACCC. I do not regard any sentence or order under consideration to have the purpose of specific deterrence of the defendant.

The need to ensure that the person is adequately punished for the offence: s 16A(2)(k) 36 I will take this factor into account. I regard the offending conduct as serious. The defendant persisted in giving false evidence to the ACCC in the face of the warnings that were given to him not long before each offence was committed.

The character, antecedents, cultural background, age, means and physical or mental condition of the person: s 16A(2)(m) 37 I have referred to some of these considerations at [11]-[17] above. It will be recalled that the defendant is a 63 year old man with no criminal history. He is not known to suffer from any physical or mental ailment. Counsel for the defendant submitted, and I agree, that the publicity that has already attended the ACCC's investigation and the defendant's prosecution in the fairly small community of the Blue Mountains will itself have had an adverse effect on the defendant. 38 On the hearing a statement by Kerry Bartlett MP, Federal Member for Macquarie, was tendered. Mr Bartlett states that he has known the defendant for over 11 years and that the defendant has been an active member of the Blue Mountains community for nearly 30 years and a local businessman since 1986; that he has been involved in a number of community activities including charity work for Cystic Fibrosis and Multiple Sclerosis; and that in the time he has known him, Mr Bartlett has not had any reason to doubt the defendant's integrity or his business ethics. 39 I was informed by his counsel that the defendant is earning about $600 per week, plus a commission on any sales effected through his efforts. Counsel said that the defendant had earned a commission of about $4000 over the last three months. Counsel also said that there was a redraw facility available on the defendant's mortgage over his family home. 40 The defendant's financial position is relevant to his capacity to pay a fine and therefore to the impact that a fine in any particular sum will have on him (see s 16C of the Crimes Act).

The prospect of rehabilitation of the person: s 16A(2)(n) 41 This consideration has little relevance. As I indicated earlier, I do not think it likely that the defendant will reoffend.

The probable effect that any sentence or order under consideration would have on any of the person's family or dependants: s 16A(2)(p) 42 There may be a degree of embarrassment caused to the defendant's family by reason of the order that I have in mind making, and I take that into account.

General deterrence 43 It appears to me that an important purpose of the penalty to be imposed in the present case is that of general deterrence. It is most important that persons furnishing information or giving evidence in response to a notice issued by the ACCC under s 155 of the TP Act do so frankly and honestly. It serves the public interest that the ACCC be enabled to carry out its investigations efficiently and effectively. Section 155 of the TP Act is directed to that end. If a person who is required to give evidence under s 155(1)(c) of the TP Act gives false or misleading evidence, not only does this have the immediate effect of obstructing and delaying the particular investigation: it also has the potential to direct the ACCC away from other sources of information and to draw human and financial resources away from its other work. The general public should know that conduct of that kind will be treated seriously by the Court.

LEGISLATION 44 Section 16 of the Crimes Act provides that an offence against the law of the Commonwealth is a "federal offence". Since the offence described in s 155(6A) of the TP Act is an offence against a law of the Commonwealth, it is a "federal offence". It follows that upon conviction, the defendant is a "federal offender": also s 16 of the Crimes Act. 45 Part 1B of the Crimes Act contains provisions in relation to the sentencing of federal offenders. Within Div 2 of that Part, s 16A(1) provides that in determining the sentence to be passed or the order to be made in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity that is appropriate in all the circumstances of the offence. 46 Section 17A(1) of the Crimes Act provides that a court must not impose a sentence of imprisonment for a federal offence unless, after having considered all other available sentences, the court is satisfied that no other sentence is appropriate. 47 Section 20(1) of the Crimes Act provides that where a person is convicted of a federal offence or federal offences, the court may, if it thinks fit, (a) by order, release the person, without passing sentence on him, upon his giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he will comply with certain conditions (that may be described as "good behaviour" conditions) for a period not exceeding five years as specified in the order, or (b) sentence the person to imprisonment but direct that he be released, upon giving security of the kind referred to in (a), either forthwith or after serving a specified period of imprisonment in respect of the offence or offences. 48 Section 20AB(1) of the Crimes Act provides for additional sentencing alternatives. The scheme of the provision is to make certain sentencing alternatives that are available in a "participating State or participating Territory" also available to a court in respect of a person convicted of a federal offence in the relevant state or territory. Relevantly, the expression "participating State" is defined in s 3B(2) of the Crimes Act. New South Wales is a participating State. Section 20AB(4)(a) permits a court to impose a fine in addition to making an order under s 20AB(1). 49 I will not identify all of the additional sentencing alternatives identified in s 20AB(1) of the Crimes Act, although I have considered them all. 50 Section 20AB(2) provides that, before passing a sentence or making an order under s 20AB(1), the court shall explain or cause to be explained to the person: (a) the purpose and effect of the proposed sentence or order; (b) the consequences that may follow if the person fails, without reasonable cause or excuse, to comply with the sentence (or with the relevant provisions of state or territory law that apply); (c) if the proposed sentence may be revoked or varied under state provisions - that the proposed sentence may be so revoked or varied.

CONSIDERATION AND CONCLUSION 51 I do not consider that a term of imprisonment is appropriate. The defendant is a 63 year old man who has no prior convictions. 52 For two reasons, I do not think he is likely to reoffend. First, it is not often that a person is called upon to give evidence under oath or affirmation before a court or administrative body. Second, I accept that the defendant now appreciates the seriousness of his offence: the consequences that have already flowed from it have brought this home to him. 53 It seems to me that penalties in the nature of fines and community service orders are appropriate. 54 The Crimes (Sentencing Procedure) Act 1999 (NSW) (the NSW Act) provides in s 8 for community service orders. These provisions are elaborated upon in Part 7 of that Act. 55 Section 8(2) of the NSW Act limits the number of hours of community service that a court is empowered to impose for any one offence to 500 hours, or the number of hours limited by the regulations. Clause 22 of the Crimes (Sentencing Procedure) Regulation 2005 (NSW) relates the maximum number of hours permissible to the maximum term of imprisonment available for the offence. As noted at [3] above, in the present case the latter term is twelve months. Under cl 22 the maximum number of hours of community service is 200 hours when the maximum term of imprisonment is more than six months but does not exceed one year. It follows that for the present two offences the maximum number of hours of community service that can be ordered is 400 hours. 56 Within Pt 7 of the NSW Act, s 86(1) provides: A community service order may not be made with respect to an offender unless the court is satisfied: (a) that the offender is a suitable person for community service work, and (b) that it is appropriate in all of the circumstances that the offender be required to perform community service work, and (c) that arrangements exist in the area in which the offender resides or intends to reside for the offender to perform community service work, and (d) that community service work can be provided in accordance with those arrangements. 57 Section 86(4) of the NSW Act provides that a court may make a community service order only if an assessment report states that, in the opinion of the person making the assessment, the offender is a suitable person for community service work. The Report states that the present defendant has been assessed as suitable for a community service order, and that if such an order is made, the offender should report to the Service's Katoomba District Office within seven days. Section 86(5) states that if a court makes a community service order, the offender must, as soon as practicable, sign an undertaking to comply with the offender's obligations under the order. The defendant has in fact signed such an undertaking. 58 The culpability associated with the second offence is somewhat greater than that associated with the first because the defendant had had the opportunity over a period of some three weeks to reflect on his having offended on the first day, yet he resumed and persisted in the practice on the second day.

59 But for the early plea of guilty, I would have imposed the following penalties: First offence Second offence A fine of $1,200 and 110 hours of community service A fine of $1,500 and 140 hours of community service

These penalties would total: Fines: $2,700 Community Service: 250 hours If a discount of 20 percent is applied in recognition of the defendant's early plea of guilty, these penalties become: Fines: $2,160 Community Service: 200 hours 60 I now step back and consider whether, on an overall view, these penalties are appropriate. In my view they are. I take into account the fact in favour of the defendant that the two offences were part of a single course of conduct, and against him, that he deliberately repeated his offence on an occasion separated by three weeks from the first and the associated opportunity for reflection. 61 Section 4K(3) and (4) of the Crimes Act provides: (3) Charges against the same person for any number of offences against the same provision of a law of the Commonwealth may be joined in the same information, complaint or summons if those charges are founded on the same facts, or form, or are part of, a series of offences of the same or a similar character. (4) If a person is convicted of 2 or more offences referred to in subsection (3), the court may impose one penalty in respect of both or all of those offences, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if a separate penalty were imposed in respect of each offence. Accordingly, I propose to fine the defendant $2,160 in respect of the charges. The fine will be payable within three months. He will also be ordered to perform 200 hours of community service, for which purpose he will be required to report to the Katoomba District Office of the New South Wales Probation and Parole Service within seven days. 62 Pursuant to s 20AB(2) of the Crimes Act, I add the following observations in relation to the defendant's obligations under the community service order. The defendant will be handed a copy of Pt 5 of the Crimes (Administration of Sentences) Act 1999 (NSW) and Ch 5 of the Crimes (Administration of Sentences) Regulation 2001 (NSW). The defendant should understand that s 20AC of the Crimes Act provides that if he fails, without reasonable cause or excuse to comply with the sentence, or obligations imposed by the sentence, the Court may impose a pecuniary penalty on him, or revoke the sentence or order and deal with him in any manner in which he could have been dealt with for the offence for which sentence is now passed. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Solicitor for the Prosecutor: Commonwealth Director of Public Prosecutions

Crimes Act 1914(Cth)ss 4K,16A, 17A, 20, 20AB

Trade Practices Act 1974(Cth)s 155

Crimes (Sentencing Procedure) Regulation 2005(NSW)

Crimes (Administration of Sentences) Regulation 2001(NSW)

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