Australian Competition and Consumer Commission v Qteq Pty Ltd

Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission [2021] FCAFC 49; 284 FCR 24

(a) CCA means the Competition and Consumer Act 2010 (Cth);

(b) Declarations means the declarations made by the Court in these proceedings on 21 May 2025;

(c) FAOA means the applicant's Further Amended Originating Application filed on 15 September 2023;

(d) Qteq means the first respondent; and

(e) Mr Ashton means the second respondent.

1. Qteq pay to the Commonwealth of Australia, pursuant to s 76(1) of the CCA, total pecuniary penalties in the amount of $5,000,000 in respect of the attempts to contravene s 44ZZRJ and/or s 45AJ of the CCA referred to in paragraphs 2, 4, 6, 8 and 10 of the Declarations.
2. Mr Ashton pay to the Commonwealth of Australia, pursuant to s 76(1) of the CCA, total pecuniary penalties in the amount of $1,000,000 in respect of the attempts to induce a person to contravene s 44ZZRJ and/or s 45AJ of the CCA referred to in paragraphs 3, 5, 7, 9 and 11 of the Declarations.
3. Compliance with orders 2 and 3 is required within 60 days.
4. Mr Ashton is not to pursue any claim or accept any indemnity under any applicable insurance policy, including the management liability insurance policy with AIG under policy number 9627481PVE, to which Qteq or Mr Ashton is a party or an insured for payment or reimbursement of any part of the pecuniary penalty the subject of order 3 above.
5. The respondents pay the applicant's costs of and incidental to this proceeding (excluding costs in relation to [1] to [3] of the FAOA and the discontinued claim at [19] and [20] of the FAOA).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. On 17 April 2025, I delivered a judgment on liability in this civil (or pecuniary) penalty cartel proceeding brought under s 76(1)(b) and (d) of the Competition and Consumer Act 2010 (Cth) (CCA): Australian Competition and Consumer Commission v Qteq Pty Ltd [2025] FCA 371 (Liability Judgment or LJ). The case arises out of the supply of goods and services to well operators in the coal seam gas (CSG) industry. I found in favour of the applicant, the Australian Competition and Consumer Commission (ACCC), in relation to five out of six allegations of attempts by the first respondent, Qteq Pty Ltd, to enter into contracts, arrangements or understandings (CAUs) with a competitor or likely competitor containing cartel provisions contrary to s 44ZZRJ and/or s 45AJ of the CCA. Those attempts were carried out principally, but not solely, via the second respondent, Mr Simon Ashton, Qteq's Chief Executive Officer (CEO), and later its Executive Chairman. I also found in favour of the ACCC's allegation that Mr Ashton in his personal capacity attempted to induce those competitors or likely competitors to enter the five CAUs.
2. This judgment concerns the pecuniary penalties to be imposed upon Qteq and Mr Ashton (and ancillary orders relating to the payment of those penalties). The ACCC no longer seeks any other kind of relief, apart from the costs in relation to the successful components of its case at trial and on penalty. The costs orders sought are not opposed.
3. The appropriate penalties to be imposed on Qteq and Mr Ashton were the subject of a contested penalty hearing on 27 October 2025. However, after that hearing, on 29 January 2026, the ACCC was notified by the respondents that, pursuant to an asset sale agreement, Qteq had sold its assets and business to a third party with effect from 31 December 2025, as detailed further below (business sale). As a result of that development, the delivery of my judgment, which was intended to occur on 6 February 2026, was delayed to allow the filing of evidence and additional submissions addressing the business sale and its relevance to the appropriate penalties. In the meantime, Qteq, Mr Ashton and Qteq IQ (the other vendor under the asset sale agreement) have furnished undertakings to the effect that they will not deal with the funds relating to the sale proceeds currently held in trust until 30 days after the delivery of this judgment.
4. The last of the supplementary evidence and submissions on penalty was filed on 13 March 2026. Also, on 20 March 2026, I considered written and oral submissions in open court about suppression orders sought over parts of the asset sale agreement, and made confined orders to that effect covering a small amount of commercial in confidence material.
5. Based on the fact that each of the respondents engaged in five attempted contraventions, the maximum aggregate penalty which could be imposed would be (per ss 76(1A) and 76(1B) of the CCA, as in force at the time of the contraventions):

(a) $50 million for Qteq, being $10 million per attempted contravention;

(b) $2.5 million for Mr Ashton, being $500,000 per attempted inducement of a contravention.

1. It should be noted that the maximum penalties for conduct of this kind have been substantially increased since the time of the attempted contraventions in this case.
2. The respondents do not dispute that pecuniary penalties against both of them are necessary and appropriate so long as the liability findings stand, noting that a liability appeal has been foreshadowed, for which I have made orders extending the commencement of the time for an appeal to be filed until the delivery of this judgment. However, the parties are a long way apart on the quantum of the penalties which they contend are appropriate to meet the objective of deterrence (both specific and general).
3. As against Qteq, the ACCC seeks the imposition of an overall penalty of between $11 million and $13 million, whereas Qteq seeks to limit that overall penalty to $1.5 million. Qteq originally contended that it would be appropriate to allow that penalty to be paid in two equal instalments, 12 months and 24 months from the delivery of this judgment, and if larger penalties were imposed than those it contended was appropriate, it sought leave to apply to the Court for the grant of an alternative payment plan. The ACCC did not oppose the grant of a payment plan if the Court considered it appropriate to facilitate payment of the penalty necessary to achieve deterrence. However, both a delayed payment regime and the alternative of payment by instalment is no longer pressed by Qteq following the business sale, as it has effectively gone out of business with effect from 31 December 2025.
4. As against Mr Ashton, the ACCC seeks the imposition of an overall penalty between $750,000 and $950,000, whereas Mr Ashton seeks to limit that overall penalty to $500,000. The ACCC also seeks a non-indemnification order, precluding Mr Ashton from calling upon an insurance policy to pay the pecuniary penalty imposed upon him. Mr Ashton opposes that order being made.

1. These reasons should be read with the Liability Judgment in order to understand the full scope of the attempts that I have found proven. However, it is useful to provide a high-level summary of those attempts in order to deal with the parties' submissions on penalty, and in particular, the respondents' contention that some of the attempts should be treated as a single course of conduct, and/or penalties should be reduced in the application of the totality principle.
2. The following introductory portion of the Liability Judgment conveniently captures the essence of the six alleged attempts, and key facts relating to the CSG industry in which they occurred:

[4] All of the alleged cartel conduct took place in relation to the supply of upstream CSG services and related goods. Upstream oil and gas production concerns the discovery and extraction of CSG. This is described in general terms in the following uncontroversial introductory parts of the further amended concise statement, admitted to by the respondents (original emphasis):

The upstream production of oil and gas involves discovering and extracting raw materials from reservoirs beneath the surface of the earth. It is distinct from downstream production, which involves processing and refining the raw materials into usable oil and gas products for distribution to end customers.

Upstream activities include: exploration; drilling wells; well testing (including through a procedure known as drill stem testing); completions of wells after drilling (which involves securing, stabilising and managing the wells); monitoring and measurement or "data acquisition", and "workover" or maintenance of wells.

Oil and gas producers acquire equipment and services from third party suppliers for the purposes of upstream activities. Relevantly, they acquire permanent downhole gauges and related services (together, gauge works) for data acquisition purposes. Permanent downhole gauges are instruments installed in wells to monitor and measure pressure, temperature, fluid flows and other information. They can be used to control the extraction of water in the production of coal seam gas (CSG).

CSG, also known as coal bed methane, is a form of natural gas extracted from coal seams underground. CSG is described as an unconventional gas because, unlike other natural gases, which flow through the production well to the surface under high pressure, CSG is trapped in the coal seams underground by water pressure. To release the CSG, water must first be pumped out of the coal seam in a controlled fashion using permanent downhole gauges or alternative technologies to monitor water levels and pump rates.

[5] It is not in dispute that at all times relevant to this proceeding, Qteq was a supplier of gauge works to the operators of CSG wells, thereby providing subsurface fluid monitoring services, including by the use of permanent downhole gauges (PDHGs). However, there is a live dispute between the parties as to whether Qteq also had the capacity to supply drill stem testing (DST) of CSG wells to such operators, so as to be a likely competitor in relation to such services.

[6] The substance of the ACCC's case is that Qteq, as the incumbent supplier of gauge services to a Shell Plc joint venture business, QGC Pty Ltd, was facing a tender process for the replacement contract for that work. An adverse tender outcome to any marked degree therefore had the potential to affect a major source of Qteq's revenue. The ACCC alleges that on six occasions spread over the period leading up to, during and following that tender process, Qteq mainly via Mr Ashton attempted, or attempted to induce, the entry into CAUs with competitors or likely competitors containing proposed cartel provisions. The ACCC also alleges that Mr Ashton in his personal capacity attempted to induce the entry into those CAUs. The alleged attempts in general terms are characterised by the ACCC as being aimed to reduce or preclude competition by way of allocating customers (two attempts), structuring the tender bids (one attempt), sharing the market (one attempt) and non-compete agreements (two attempts). Three of those attempts involved a company called Pro-Test Pty Ltd, two of those attempts involved a business called Easternwell and specifically a company within it, Eastern Well Service No 2 Pty Ltd (Eastern Well No 2), and one of those attempts involved a company called Firetail Energy Services Pty Ltd.

[7] ...

Overview of the ACCC's case

[8] The ACCC's case is that Qteq was the incumbent contractor to QGC for gauge works, that work being the subject of one of the four tenders QGC released on 24 October 2017. Qteq was also a leading supplier of gauge works to the CSG industry. This work accounted for the majority of its revenue. It had also secured an exclusive supply of QGC's preferred gauges from Geo Pressure Systems International Inc (GeoPSI). Gauges are installed in CSG wells to monitor water levels and to adjust pump rates. The tender for gauge works gave rise to a concern on Qteq's part and on the part of Mr Ashton, to protect its market position. That much is not disputed. However, what is disputed is the next step.

[9] The ACCC alleges, and the respondents deny, that they had adopted a strategy to neutralise competitive threats posed by the tender process and its outcome by attempting to collude with current or prospective competitors for the supply of gauge works to QGC and other CSG customers, giving rise to the six alleged attempts. The attempts were directed towards three businesses, each of which is discussed further below. It is sufficient to note at this stage that each company operated, or sought to operate, in the CSG industry.

[10] As detailed at some length below, the respondents deny aspects of what is alleged to have taken place and characterise other aspects as benign.

[11] The six alleged attempts by Qteq, via and also by Mr Ashton, are said to have taken place as follows, each of which is designated with the definition used by the ACCC and given an attempt number for the purpose of these reasons:

(a) three attempted proscribed arrangements or understandings with Pro-Test:

(i) between about 27 June and October 2017: Pro-Test 2017 Customer Allocation Understanding (Attempt #1);

(ii) between about 27 October and 10 November 2017: Pro-Test 2017 QGC Tender Understanding (Attempt #2);

(iii) on about 24 June 2019: Pro-Test 2019 Market Sharing Understanding (Attempt #3),

also referred to together as the Pro-Test Attempts;

(b) two attempted proscribed contracts with Eastern Well No 2, an entity within the Easternwell business:

(i) between about 6 and 17 November 2017: Easternwell 2017 Non-Compete Agreement (Attempt #4);

(ii) between about 7 December 2018 and 11 February 2019: Easternwell 2018-2019 Non-Compete Agreement (Attempt #5),

also referred to together as the Easternwell Attempts;

(c) an attempted proscribed arrangement or understanding with Firetail between 19 and 20 September 2017: Firetail Understanding (Attempt #6), also referred to as the Firetail Attempt.

1. Terms defined in the extract immediately above are adopted for the purpose of these reasons, save that the term Easternwell is used for convenience and ease of reading to refer to either or both the broader Easternwell business and/or the particular Eastern Well No 2 Pty Ltd entity.
2. The ACCC's alleged Attempt #6 (relating to Firetail) was not made out, as the ACCC was unable to establish the competition condition as between Firetail and Qteq. Accordingly, Attempt #6 will not feature further in these reasons.
3. Having provided that high level summary of the industry and allegations, I set out below a brief and, in some respects, simplified summary of my findings relating to the conduct which was the subject of Attempts #1 to #5 and the context for that conduct, with a focus on the aspects which are relied upon by the parties as relevant to the penalty assessment.

The first stage of the QGC tender and the context for Attempts #1 and #2

1. QGC was a joint venture business operated by Shell Plc. In October 2017, QGC invited market participants to tender for the supply of workover rigs and associated services for certain CSG wells (QGC rig tender), followed by a package of four invitations to tender relating to the supply of other components and associated services for the Artificial Lift System used in those wells. One of those four invitations to tender related to the supply of gauge works (including the supply of PDHGs and installation services relating to those gauges) (QGC gauge tender). The further tender package specified that each tenderer had the option to bid for a single component of the package (for example, the QGC gauge tender alone) or multiple components. Additionally, each tenderer was permitted to partner up with another tenderer to cover the full scope of the package. At the time of the tender, Qteq was the incumbent supplier of gauge works to QGC, and Pro-Test was a potential competitor for the provision of those services.
2. Qteq had an agreement with GeoPSI, a provider of PDHGs, for exclusive access to GeoPSI's gauges for the purpose of the QGC gauge tender: LJ [74]. Although the QGC gauge tender did not explicitly specify that it required the tenderer to use GeoPSI's PDHGs, the specifications so closely aligned with those gauges that relevant participants in the tender process (including Pro-Test) considered that it would be disadvantageous to tender based on a different kind of PDHG product: LJ [154]. That meant that Qteq considered that Pro-Test would need to reach an agreement with it for the supply of GeoPSI gauges in order for it to provide a competitive bid for the QGC gauge tender: LJ [242]-[244].

Pro-Test 2017 Customer Allocation Understanding (Attempt #1)

1. The conduct which underpinned Attempt #1 was primarily (but not exclusively) the statements made by Mr Ashton at a dinner attended by representatives of Pro-Test at Kingsley's restaurant in Brisbane on 26 October 2017 (Kingsley's dinner). Those statements were to the effect that Pro-Test should not bid for the QGC gauge tender, and in exchange, Qteq would not attempt to win work (including gauge works and drill stem testing) from Santos Ltd, one of Pro-Test's customers: LJ [187].
2. I accepted in the Liability Judgment that the Kingsley's dinner was not organised for the purpose of the attempted contravention. Rather, the dinner was organised by Pro-Test, including for the legitimate purpose of discussing the potential sale to Qteq of a new automatic diverter valve (ADV) system it had recently developed (potentially for inclusion in Qteq's tender): LJ [176]-[177]. I also accepted that it was plausible that there had been discussion about the potential for Qteq to provide Pro-Test with GeoPSI gauges for use in connection with Pro-Test's response to the QGC gauge tender: LJ [179]-[181]. None of those findings gainsaid the existence of the attempted contraventions, but they are now relied upon by the respondents to characterise the conduct, making them relevant to the assessment of the appropriate penalty.
3. In relation to Attempt #1, I found that by the conduct summarised above, Qteq had attempted to enter, and Mr Ashton had attempted to induce the entering of, a CAU with Pro-Test which contained the following cartel provisions (at LJ [187]-[190]):

(a) Pro-Test would not compete with Qteq for the supply of gauge works to QGC; and

(b) Qteq would not compete with Pro-Test for the supply of gauge works and drill stem testing to Santos, being one of Pro-Test's customers.

Pro-Test 2017 QGC Tender Understanding (Attempt #2)

1. The conduct which constituted Attempt #2 occurred in the period from around 27 October to around 10 November 2017, following the Kingsley's dinner on 26 October 2017. It involved a change in approach by Qteq, which seems to have been motivated, in part, by a concern on the part of Qteq that QGC would be unwilling to award the QGC gauge tender to one bidder exclusively: LJ [231]. As a result, instead of proposing that Pro-Test should not bid for the QGC gauge tender at all, Qteq proposed that it should only bid for up to 15% of the work. By this strategy, Qteq sought to ensure that it would retain a large portion of the work, by engineering a situation in which its most competitive alternative bidder would only bid for 15%: LJ [235]-[236].
2. Qteq sought to achieve this by offering to provide GeoPSI gauges to Pro-Test under a tiered pricing structure which would make it economical for Pro-Test to complete 15% of the work under the tender, but no more than that: LJ [231]. Importantly, I found that the respondents did not intend to take this course unilaterally, but, through various conversations and communications in the relevant period, attempted to obtain Pro-Test's assent to the proposal: LJ [235]-[236]. This conduct included conversations between Mr Ashton and Mr Timothy Dabrowski (a Director of Pro-Test) directly, as well as meetings and communications between Mr Ashton's subordinates (including Mr Ewan Meldrum, Qteq's Chief Operating Officer (COO) and later CEO) and Pro-Test representatives: LJ [199]-[201], [208]-[211], [214], [217].
3. In relation to Attempt #2, I found that by the conduct summarised above, Qteq had attempted to enter, and Mr Ashton had attempted to induce the entering of, a CAU with Pro-Test that contained the following cartel provisions (at LJ [193], [249]):

(a) Pro-Test would bid for the QGC gauge tender so as to win only around 15% of the work to be performed under the contract and would not seek to win the contract outright using either GeoPSI gauges or any other gauges; and

(b) Qteq would not compete with Pro-Test for the supply of gauge works or drill stem testing to Santos.

Pro-Test 2019 Market Sharing Understanding (Attempt #3)

1. Attempt #3 occurred almost two years after Attempts #1 and #2, and unlike those earlier attempts, was not centrally concerned with the QGC gauge tender. Attempt #3 was constituted by a proposal conveyed by Mr Ashton to a founding director of Pro-Test, Mr Ewan McDonald, to the effect that Pro-Test should not supply gauge works, and in exchange, Qteq would not supply completions and drill stem testing (which were supplied by Pro-Test). That proposal was conveyed at a dinner Mr Ashton had organised with Mr McDonald on 24 June 2019 at the Fantauzzo Hotel in Brisbane (Fantauzzo Hotel dinner), and supported by the contents of a text sent by Mr Ashton to him the following morning: LJ [265].
2. In relation to Attempt #3, I found that by the conduct summarised above, Qteq had attempted to enter, and Mr Ashton had attempted to induce the entering of, a CAU with Pro-Test that contained the following cartel provisions (at LJ [266]):

(a) Pro-Test would not supply gauge works; and

(b) Qteq would not supply completions or drill stem testing.

1. Like Attempts #1 and #2, Attempts #4 and #5 took place in the context of, and were centrally concerned with, the QGC tender. As well as the general facts about the tender outlined in these reasons at [15] to [16] above, one additional and unusual aspect of the tender was that its requirements included that the ultimate gauge contractor (being the winner of the QGC gauge tender) would, over time, train the staff of the ultimate rig contractor (being the winner of the QGC rig tender) to provide certain gauge works to QGC, being gauge installations. The rig contractor would then progressively take over the provision of certain gauge works to QGC, such that the gauge contractor's role would eventually be reduced to providing equipment and holding liability. The specifics of this arrangement, including the timing of the transition, were not set in stone at the time of the invitation to tender: LJ [149]-[151].
2. At the time the QGC tenders were issued, Qteq was the incumbent gauge contractor (as described at [15] above), and Easternwell was the incumbent rig contractor: LJ [310].

Easternwell 2017 Non-Compete Agreement (Attempt #4)

1. Attempt #4 occurred between 6 and 17 November 2017, in the context of discussions with Easternwell regarding the terms on which Qteq might provide services relating to the QGC tenders. In particular, as outlined above, if Qteq and Easternwell were successful in relation to the QGC gauge and rig tenders respectively, the terms of the tender envisaged that Qteq would train Easternwell to perform gauge installations, so that some of those services could be transitioned from Qteq to Easternwell. As a result, on 2 November 2017, Easternwell sent Qteq a request for quotation for the supply of various equipment and services relating to gauge works, including the training of personnel: LJ [334]. However, Qteq held a concern that if it provided these services to Easternwell (as envisaged by the QGC tender), it would be creating a viable and potentially vigorous competitor by providing Easternwell with the knowhow, skills and expertise required to provide gauge works, which Easternwell had not previously possessed: LJ [326]-[328], [486].
2. In the context of those discussions, on 6 November 2017, Easternwell sent Qteq a draft two-way confidentiality and non-disclosure deed (First Easternwell NDA), with the stated purpose of allowing an exchange of information between them regarding the QGC tenders. The First Easternwell NDA also included an unusual clause which required Qteq to notify Easternwell of proposals by third parties for the provision of competing services, and prevented Qteq from responding to any such proposals (exclusivity clause). The respondents were legitimately concerned about the inclusion of that clause, given they were likely to receive such proposals from other bidders for the QGC rig tender: LJ [341]-[342].
3. Later, on 6 November 2017, Qteq replied to Easternwell attaching a draft mutual non-disclosure, non-circumvention and non-compete agreement drafted by its in-house lawyers (First Qteq NDA), and requested that this version of the agreement be used instead. The First Qteq NDA included at cl 8 a non-compete clause to the effect that, other than in concert with Qteq, Easternwell would not provide or pursue opportunities to provide gauge installation services to QGC or any other persons in competition with Qteq: LJ [343]-[344], [364]. I found that the purpose of the inclusion of this clause was, effectively, to protect Qteq from the possibility that the knowhow, skills and expertise it would provide to Easternwell would be used to compete against it: see, eg, LJ [366]-[372].
4. Easternwell rejected the First Qteq NDA on 7 November 2017 and again requested for Qteq to agree to the First Easternwell NDA. Mr Meldrum responded, indicating that Qteq could not do so because the First Easternwell NDA required it to be exclusive to Easternwell for the services, other than direct to QGC (noting that the terms of the exclusivity clause are in terms directed to exclusivity in providing quotes): LJ [346]. Mr Meldrum also expressed the importance to Qteq of a non-compete agreement to allow it to respond fully to the request for quotation. Qteq thereafter continued to engage with Easternwell up to 17 November 2017 with the intention of convincing them to sign the First Qteq NDA, including by direct communication from Mr Ashton: LJ [350]-[357]. Ultimately, the First Qteq NDA was never signed, and Qteq provided Easternwell with a quotation only for the supply of equipment and installation services, but not training: LJ [349].
5. Attempt #4 was made out based on my findings regarding the First Qteq NDA and Mr Ashton's subsequent communication with Easternwell: LJ [360]. In relation to this attempt, I found that Qteq had attempted to enter, and Mr Ashton had attempted to induce the entering of, a CAU with Easternwell which included the cartel provisions set out in cl 8, being that, other than in concert with Qteq, Easternwell would not provide or pursue opportunities to provide gauge installation services to QGC or any other persons, or otherwise compete with the business of Qteq: LJ [415].

Easternwell 2018-2019 Non-Compete Agreement (Attempt #5)

1. Attempt #5 followed the failure of Attempt #4, and occurred between 7 December 2018 and 11 February 2019. Qteq had been awarded the QGC gauge tender on 20 August 2018, and Easternwell and another company were awarded the QGC rig tender on 9 October 2018, notwithstanding the lack of any agreement between them relating to the provision of services relating to gauge works: LJ [358]-[359]. Also on 9 October 2018, QGC confirmed via a statement that it intended to transition gauge installation services from Qteq to Easternwell and the other rig contractor in the second half of 2019, and thereafter Qteq would continue to supply equipment but not those related services: LJ [421]. As a result, Qteq was again concerned with the need to find a way to supply Easternwell with its knowhow, skills and expertise in a manner which would not jeopardise its commercial interests: LJ [423].
2. In this context, on 29 November 2018 Easternwell provided Qteq with a further draft confidentiality and non-disclosure agreement (Second Easternwell NDA): LJ [424]. Instead of signing that draft agreement as requested, on 7 December 2018 Qteq provided Easternwell with a draft revised version indicating its proposed amendments (Second Qteq NDA). Clause 4(B) of the Second Qteq NDA was concerned with competition between Qteq and Easternwell: LJ [425]. Given the length of that clause, rather than repeating it here, it is sufficient to note that I found it had the purpose of restricting the supply of gauge installation services by Easternwell to QGC and preventing or restricting such supply to other potential customers: LJ [417], [483].
3. After Easternwell indicated that it did not intend to agree to the Second Qteq NDA, Qteq wrote to QGC on 15 January 2019, requesting that QGC reconsider its plan to transfer the gauge installation services to the rig contractors, and also noting, in relation to the current progress on agreeing a transition plan with Easternwell (LJ [429]):

Easternwell will be required to sign a non-compete agreement with Qteq, whereby they will not offer gauge installation services to any other operators without prior agreement of Qteq. At present, Easternwell are not willing to sign this agreement and are therefore a competitor.

1. On 18 January 2019, Easternwell provided Qteq with a draft amended version of the Second Easternwell NDA (revised Second Easternwell NDA), which limited the scope of what had been clause 4(B) and was now renumbered as clause 4(e): LJ [431].
2. On 24 January 2019, Qteq provided to Easternwell a further draft version of the revised Second Easternwell NDA which included its proposed amendments to that draft (revised Second Qteq NDA). Again, it is sufficient to note that I found that cl 4(e) of the revised Second Qteq NDA (which had been renumbered from cl 4(B)) had the purpose of restricting the supply of gauge installation services by Easternwell to QGC, and preventing or restricting such supply to other potential customers: LJ [417], [483]. As I noted at LJ [442]:

the revised Second Qteq NDA also included a liquidated damages term, cl 26(B), which specified that Eastern Well No 2 would compensate Qteq $5.5 million if a breach of cl 4(e) related to Origin, $800,000 if it related to "Arrow Energy", and $250,000 if it related to any other customer.

1. On 11 February 2019, Qteq offered to remove the liquidated damages clause if Easternwell otherwise agreed to the revised Second Qteq NDA: LJ [443].
2. In March 2019, at a meeting between Qteq and Shell, which was the joint venture operator of QGC (as set out at [15] above), Qteq informed Shell that it was facing difficulties agreeing to a non-compete agreement with Easternwell. In response, a meeting between Qteq, Easternwell and QGC was envisaged: LJ [445]. Qteq later forwarded to QGC its previous correspondence with Easternwell, including the attached revised Second Qteq NDA. Further correspondence followed, including an email sent by Mr Ashton to QGC, outlining its motivation for insisting on the revised Second Qteq NDA, and its efforts to resolve the disagreement (including by removing the liquidated damages clause): LJ [447], [450].
3. In April 2019, Qteq agreed to an NDA in the form of the original Second Easternwell NDA, despite its significant concerns. Easternwell later issued a request to bid to provide products and services including the training of certain staff to provide gauge works, which Qteq declined. Pro-Test eventually agreed to provide training to the Easternwell rig crews: LJ [451]-[456].
4. In relation to Attempt #5, I found that Qteq had attempted to enter, and Mr Ashton had attempted to induce the entering of, a CAU with Easternwell which included the cartel provisions in cl 4(B) of the Second Qteq NDA and cl 4(e) of the revised Second Qteq NDA: LJ [483].

1. No oral evidence was adduced for the purpose of the penalty hearing on 27 October 2025. The respondents relied upon the following affidavit evidence, which was received without objection:

(a) two affidavits of Ms Karen Krisanski, Finance Manager at Qteq, sworn 27 August 2025 and 29 September 2025, deposing to various matters pertaining to Qteq's financial status; and

(b) two affidavits of Mr Gareth Ashton, Chief Commercial Officer and General Counsel at Qteq, sworn 28 August 2025 and 29 September 2025, deposing to Qteq's performance in the intervening period since the Liability Judgment and changes to its policies and procedures.

1. I refer to Mr Gareth Ashton by his full name in these reasons, to distinguish him from the second respondent, Mr Simon Ashton, to whom he is not related.
2. The parties also relied upon a third and fourth agreed statement of facts, and various other documents, including a bundle of character references relating to Mr Simon Ashton. The only objection taken to this evidence was by the ACCC in relation to those character references. As such, the entirety of the court book was admitted, save for the bundle of character references, which was provisionally admitted pending the determination of the ACCC's objection, which I deal with in these reasons below at [144].

Developments since the penalty hearing: sale of Qteq's business

1. Following the penalty hearing, Qteq effectively went out of business with effect from 31 December 2025, after selling its business and most of its assets (business sale) as adverted to at [3] above. As a result, the delivery of this judgment was delayed to allow evidence to be filed and submissions made by the ACCC and by the respondents regarding the impact of that development on the appropriate penalty. The respondents do not take issue with the part of the ACCC's supplementary submissions in chief which describe in general terms what took place, which are accordingly uncontroversial. As a result, the summary that follows is safely drawn from those submissions, omitting details contended to be confidential.
2. On 29 January 2026, the respondents' lawyers informed the ACCC's lawyers that Qteq's business and assets had been sold to Geo PSI Pty Ltd and subsequently served a third affidavit of Mr Gareth Ashton affirmed 29 January 2026. A copy of the asset sale agreement (ASA) between Qteq and Qteq IQ Pty Ltd (as vendors) and Geo PSI Pty Ltd (as purchaser) dated 19 December 2025 was subsequently provided to the ACCC on 2 February 2026. That was followed by a copy of an amendment to the ASA dated 5 January 2026 (ASA Amendment). Both the ASA and the ASA Amendment were provided to the Court shortly thereafter.
3. Pursuant to the ASA, Qteq and Qteq IQ agreed to sell their business and assets (as defined under the ASA) to Geo PSI Pty Ltd. Although certain Excluded Assets are not covered by the sale, the ASA disposes of the entirety of Qteq's business and most of its assets and as a result, it will apparently no longer be operating a business nor generating any revenue.
4. Completion of the business sale occurred on 31 December 2025. The Purchase Price which will be paid to Qteq and Qteq IQ comprises:

(a) an initial sum, the amount of which is confidential, but disclosed to the Court, less an adjustment for certain liabilities assumed by Geo PSI Pty Ltd as purchaser. The adjusted initial sum is described in the ASA as the Completion Cash Amount. While the respondents' legal representatives have advised that a certain sum disclosed to the Court has been paid and is currently held in a solicitor's trust account, the precise Completion Cash Amount is still not known;

(b) a further sum disclosed to the Court to be paid 24 months after completion; and

(c) certain additional amounts, subject to the purchaser's revenues or EBITDA exceeding specified thresholds within two years of completion.

1. The ASA provides for the apportionment of the Purchase Price between the vendors, Qteq and Qteq IQ, at their discretion provided that they apportion such amount to Qteq as is no less than the fair market value of the assets sold by Qteq to Geo PSI Pty Ltd. That fair market value is to be determined by Qteq and Qteq IQ in good faith taking into account third party professional advice. Via their respective lawyers, the respondents have advised the ACCC that that apportionment has not yet occurred and that the advice in relation to it has not been finalised. The evidence at the relief hearing was that Qteq's total net assets as at 30 June 2024 was approximately $8 million, as outlined at [96] below.
2. One of the vendors, Qteq IQ, and the purchaser, Geo PSI Pty Ltd, have not previously featured in these reasons. Qteq IQ was incorporated on 12 June 2018 and is wholly owned by The eQnomics Group Pty Ltd, being the company that owns Qteq. The current director of Qteq IQ is Mr Ewan Meldrum. The second respondent, Mr Simon Ashton was also a director until 14 August 2025. Its current secretaries are Mr Meldrum and Mr Gareth Ashton.
3. Geo PSI Pty Ltd was incorporated on 16 October 2025. It is wholly owned by Geo Pressure Systems Inc (a Canadian company). Initially, its sole director was Mr Nick Nazarovs, who previously held a role as a sales representative of Geo Pressure Systems Inc. Mr Gareth Ashton and Mr Meldrum were appointed as directors on 13 January 2026.

1. Having set out the relevant background, it is convenient first to address the respondents' contention that certain of the attempts should be grouped together and treated as constituting a single course of conduct for the purposes of penalty imposition. The attempts sought to be grouped are:

(a) Attempt #1 and Attempt #2 in relation to Pro-Test; and

(b) Attempt #4 and Attempt #5 in relation to Easternwell.

1. The respondents thereby seek to have the entirety of the conduct relating to each pair of attempts treated as one course of conduct, primarily on the basis that they were directed to achieving the same anticipated benefit. This approach is opposed by the ACCC.
2. The High Court in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 at [45] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) specifically found that both the course of conduct principle and the totality principle could be applied in ascertaining the appropriate penalty for the purposes of achieving the primary objective of pecuniary penalties, being deterrence. Their Honours endorsed the observations of the Full Court on the application of the course of conduct principle to civil penalty imposition in Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; 258 FCR 312 at [421]- [424] (Middleton, Beach and Moshinsky JJ).
3. The course of conduct principle for civil penalty imposition is engaged when there is a sufficient interrelationship between the legal and/or factual elements of two or more contraventions (here, attempted contraventions), to ensure that a pecuniary penalty is not imposed twice for what is in substance the same conduct. This principle (and the parallel principle of totality), are not rigid rules of law, but rather general principles, and therefore useful tools, to guide the exercise of the penalty imposition discretion.
4. While Attempt #1 and Attempt #2 were both directed to achieving the same overall objective of Qteq retaining its position as the incumbent supplier of gauge works to QGC, they each sought to achieve this outcome by a materially different method, and were carried out at different times, albeit consecutive and overlapping. As set out above, Attempt #1 involved seeking to persuade Pro-Test not to bid for the QGC contract at all, with the incentive being the allocation of customers between them. Qteq's proposal was that Pro-Test would not compete with it for the supply of gauge works to QGC (including, but not limited to, the work under the QGC gauge tender), while Qteq would not compete with Pro-Test for the supply of gauge works (and also drill stem testing) to Santos Ltd. By contrast, and involving a different proposed arrangement, Attempt #2 involved seeking to persuade Pro-Test to bid for the QGC contract, but only in a limited way so as to confine its participation to a 15% portion of the work that was required to be carried out for QGC, being the portion which was additional to Qteq's existing supply commitments. The difference between seeking to have a competitor not bid at all in relation to a tender, and seeking to have a competitor bid in a particular way for a tender, is significant.
5. Treating Attempts #1 and #2 as a single course of conduct would fail to recognise that each attempt had features that made them separate and distinct. That objective circumstance denies the necessary degree of commonality that I consider would be required to enable them to be treated properly as one course of conduct. The overall objective of preserving, at first wholly and later substantially, Qteq's role as the supplier of gauge works to QGC does not overwhelm the fundamental differences in the means by which this was sought to be achieved. It follows that I am not willing to treat Attempt #1 and Attempt #2 as a single course of conduct.
6. In the case of Attempt #4 and Attempt #5, while the ultimate objective was the same, and the method of achieving it was much the same, the two attempts were a full twelve months apart. To treat them as a single course of conduct would impose an artificial, if not fictional, view on the commonality of what had taken place. The two attempts were so temporally distinct as to deny them the character of being a single course of conduct.
7. While I will not treat either Attempts #1 and #2, or Attempts #4 and #5, as each constituting a single course of conduct, I will have regard to the relationship between each of those two sets of attempts, and I will review the individual penalties I arrive at by the application of the totality principle, but through the limited lens of deterrence authorised by Pattinson at [45].

1. Section 76(1)(a)(i), (b) and (d) of the CCA provides that if the Court is satisfied that a person has contravened a provision of Part IV (other than ss 45AF or 45AG), attempted to do so, or attempted to induce a person to do so:

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.

1. The above set of considerations identified as specific relevant matters required to be taken into account when appropriate are supplemented by a broader list of considerations developed by courts over time. I adhere to the summary of a wide range of principles that are capable of being relevant to penalty imposition, drawn from s 76(1) of the CCA and beyond, that I described in Australian Competition and Consumer Commission v Delta Building Automation Pty Ltd (No 2) [2024] FCA 580 at [16], such that it is convenient to reproduce that summary with only minor adjustments, but not in quotation format:

(a) Under the CCA's civil penalties regime, the purpose of a penalty is principally deterrence of further contravention of the CCA: Pattinson at [9], [15], [40]-[41] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).

(b) Deterrence, both specific (to the contravenor) and general (of others), is hence the primary objective to be taken into account in assessing the appropriate penalty: Australian Competition and Consumer Commission v BlueScope Steel Ltd (No 6) [2023] FCA 1029 (BlueScope (No 6)) at [25] (O'Bryan J).

(c) The penalty must not be so low that it may be regarded by the contravenor as "an acceptable cost of doing business": Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 (Singtel Optus v ACCC) at [62]-[63] (Keane CJ, Finn and Gilmour JJ) cited in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 (ACCC v TPG Internet Pty Ltd) at [65] (French CJ, Crennan, Bell and Keane JJ) and Pattinson at [17]. This is ultimately another facet of deterrence.

(d) The appropriate penalty "is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of a particular case": Pattinson at [46]. Whether a penalty would be considered "oppressive" is not to be determined by whether or not the contravenor has the capacity to pay a certain penalty: BlueScope (No 6) at [143]. A company's financial circumstances will be relevant for the determination of an appropriate penalty. An oppressive penalty is one which went beyond what was necessary for the purposes of deterrence: Pattinson at [40] citing NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 at 293 (Burchett and Kiefel JJ).

(e) In determining a penalty, the Court should have regard to the statutory maximum penalty as one of the relevant factors. While this is not the sole factor to be considered, there should be "some reasonable relationship between the theoretical maximum and the final penalty imposed": Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [55] and [155]-[156], cited in Pattinson at [53].

(f) The relevant factors for the determination of penalty include, but are not limited to, the "French factors", being those articulated by French J in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076 at 52,152 (French J), quoted with approval in the joint judgment in Pattinson at [18] as informing the assessment of "a penalty of appropriate deterrent value", and noting at [19] that this list of possible relevant considerations is not a legal checklist:

1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused.
3. The circumstances in which the conduct took place.
4. The size of the contravening company.
5. The degree of power it has, as evidenced by its market share and ease of entry into the market.
6. The deliberateness of the contravention and the period over which it extended.
7. Whether the contravention arose out of the conduct of senior management or at a lower level.
8. Whether the company has a corporate culture conducive to compliance, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9. Whether the company has shown a disposition to co-operate with the authorities responsible for enforcement of the Act in relation to contravention.

(g) Determination of an appropriate civil penalty requires a multi-factorial approach, "identifying and balancing all the factors relevant to the contravention, and where the result is arrived at by a process of 'instinctive synthesis' of the relevant factors": BlueScope (No 6) at [32], citing Reckitt Benckiser at [44].

(h) No discount will apply due to the contravention being in the nature of an attempt (including an attempt to induce), rather than a completed contravention. Such a discount is not contemplated by the CCA, with s 76(1)(b) and (d) indicating instead that the approach to assessing a penalty for, and the maximum penalty applicable to, an attempt is the same as that for a completed contravention.

(i) Where a pecuniary penalty is imposed as one part of penalty orders, the non-pecuniary orders are a relevant consideration for the Court's assessment of the level of penalty required to achieve general deterrence: see, e.g., Australian Competition and Consumer Commission v Ashton Raggatt McDougall Pty Ltd [2023] FCA 351; 167 ACSR 376 at [83] (Moshinsky J); Australian Competition and Consumer Commission v First Class State Roofing Pty Ltd [2022] FCA 1093 at [17] (Yates J). Thus, such orders as compliance programs and injunctions may affect the level of penalty having "appropriate deterrent value" in all the circumstances.

(j) While comparable cases may be used as a guide to assess the appropriateness of a pecuniary penalty, each case will turn on its own facts and there is no requirement for consistency in the size of penalties applied from case to case. Rather, there must be consistency in the legal principle applied to reach those penalties: see Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; 407 ALR 302 (Rares, Stewart, Abraham JJ); Singtel Optus v ACCC at [60] (Keane CJ, Finn and Gilmour JJ) and Australian Competition and Consumer Commission v Woolworths [2016] FCA 44 at [129], [133].

1. The ACCC relies upon a subset of the considerations summarised above at [60] to support the quantum of penalties it seeks to be imposed. I address each in turn, taking into account the position of the respondents. There are aspects of the competing arguments that go further than the overt parameters of those considerations, emphasising the limitations in applying them too rigidly, or as if they are exhaustive.

1. The ACCC characterises Qteq's conduct, and thereby Mr Ashton's conduct, as "deliberate, sustained and systematic", on the basis that it commenced virtually upon the incorporation of Qteq in mid-2017, continued over the following two years, and involved multiple different strategies which were pursued when previous approaches had failed. They also rely upon the fact that it was motivated by the potential for financial gain, which I consider more fully below from [85]. Qteq describes this characterisation as overstated upon the basis that I made no overt finding that the conduct was part of an anti-competitive strategy adopted by Qteq, a point to which I return shortly. The respondents submit that their conduct did not have the character of being deliberate, sustained and systematic. They point to a number of features of their conduct, and the context in which it occurred, to explain it, rather than to excuse it, essentially arguing that these features amount to a further basis for rejecting the ACCC's characterisation, and concluding that the penalties the ACCC seeks are excessive.
2. The features of their conduct that the respondents refer to are considered in some detail in the Liability Judgment, such that only a brief summary is needed to convey the substance and key points of the argument being advanced, necessarily omitting some of the detail of which I remain aware and keep in mind. The respondents point to the following features in particular, which are generally captured in the summary of the proven allegations provided above:

(a) The structure and requirements of the QGC tenders gave Qteq a legitimate reason to engage with a range of other companies, including Pro-Test and Easternwell. In particular:

(i) The QGC gauge tender formed part of a package of four separate requests for tender, and tenderers were invited to bid for all or part of that package, including by partnering with other tenderers, indicating that some degree of collaboration was expected.

(ii) In relation to Attempts #1 and #2, Qteq's exclusive rights over GeoPSI's gauges gave it a legitimate reason to engage with Pro-Test, being to provide pricing for the provision of those gauges for their bid. Implicitly, this exclusivity perhaps may have provided some scope to limit the use of those gauges lawfully, subject to competition law itself: LJ [153]-[154].

(iii) In relation to Attempt #1, the Kingsley's dinner had been organised by Pro-Test for the additional legitimate purpose of discussing the potential sale to Qteq of its newly developed ADV system, potentially for use in Qteq's tender.

(iv) In relation to Attempts #4 and #5, Qteq and Easternwell were required to engage with one another to plan for the transitioning of certain gauge works from Qteq (as the gauge contractor) to Easternwell (as the rig contractor).

(b) There was no secrecy involved in the attempts, in that none of them were covert or otherwise deliberately hidden. To the contrary, the attempts were reflected in contemporaneous notes and communications and carried out in view of multiple people, and Qteq expressly involved QGC in its negotiations with Easternwell regarding the NDAs by which Attempts #4 and #5 took place.

(c) In relation to Attempts #4 and #5, the QGC tender structure placed Qteq in a very difficult position by effectively requiring it to facilitate its replacement by Easternwell through the unusual requirement that the gauge contractor assist in transitioning part of its scope of work to the rig contractor. In that context, I found in the Liability Judgment that Qteq had a commercially understandable motive of preventing its information and knowhow from being used against it: LJ [489]. The respondents also rely upon the inclusion of the exclusivity clause in the draft First Easternwell NDA, and my finding that this was liable to be of legitimate concern to the respondents: LJ [342].

(d) The conduct underpinning each of Attempts #1 to #3 was limited, involving only a small number of communications, primarily at the Kingsley's and Fantuzzo Hotel dinners and as outlined at LJ [300], and the conduct underpinning each of Attempts #4 and #5 was confined to the exchange of draft agreements and related communications.

1. A number of these features are relied upon by the respondents as in themselves mitigating the level of penalty required. However, the respondents also contend that the combined effect of the above features leads to the conclusion that their conduct should be not be seen as deliberate, sustained or systematic, but rather as no more than a seriously misguided response to an unusual and challenging tender request.
2. I accept that the respondents' conduct did not have covert elements of the type described in BlueScope (No 6) at [65], in the sense of positive conduct engaged in to promote secrecy, or the deletion of excessively candid communications. However, the difficulty in detecting, investigating, litigating and proving cases of this kind, even where secrecy has not been actively pursued, is still highly relevant, especially in relation to general deterrence. As the chain of events from detection to sanction becomes harder to achieve and therefore less likely to occur, generally speaking the quantum of sanction required to deter others in a like position, is, as a matter of ordinary logic, likely to rise. Nonetheless, it can be accepted by the same logic that a still higher penalty might have been required if the respondents had taken active measures to try to ensure their conduct remained secret. The focus must be on deterrent effect, which must include the likely effectiveness of that deterrence by reference to the quantum of the penalty imposed.
3. Additionally, I accept that the unlawful conduct underpinning Attempts #1, #2, #4 and #5 took place in circumstances in which the respondents otherwise had a legitimate purpose for communicating with Pro-Test and Easternwell, in contrast to other cartel cases such as Delta (No 2) in which the competitors had no legitimate reason to be communicating with one another. However, I see no reason why this, without more, reduces the penalty required to achieve deterrence in the present circumstances. Where parties who are competitors in some respect come together for a legitimate purpose, it is all the more important that steps are taken to ensure that they do not stray into unlawful conduct: Australian Competition and Consumer Commission v Swift Networks Pty Ltd [2023] FCA 1064 at [17] (Colvin J). Additionally, as the ACCC pointed out in reply, while the tender package explicitly allowed tenderers to partner with one another, the QGC gauge tender also included conditions directed to ensuring compliance with competition law.
4. The remaining characteristics relied upon the by respondents are reflected in the detail of the Liability Judgment, which is necessarily at the heart of the penalty determination process. I am aware of the detail of what took place as established by the evidence and how the attempts were sought to be advanced and implemented. In relation to the unusual and challenging circumstances which Qteq was faced with, a fair way to characterise this aspect of the respondents' case on penalty is that the circumstances in which Qteq found itself gave rise to a degree of desperation due to the existential threat posed by QGC's tender demands and contract plans. That much may be accepted, as far as it goes. However, I am presently concerned with the appropriate penalty response to what the respondents did in reacting to the situation in which they found themselves, and what is needed to deter them and others from behaving in this way in the future, even in the face of extremely difficult or unusual circumstances. In some senses, deterrence may be more important when the pressures to succumb to illegal solutions to a commercial problem are at their greatest, because such circumstances are powerful motivators and therefore give real incentives to take the wrong course, which must be met by a response that provides a contrary motivation not to yield.
5. In relation to the arguments advanced by the respondents, I have no doubt that Qteq and Mr Ashton saw the QGC tender process as potentially amounting to an existential threat to Qteq's survival, and at least a serious financial threat if such a large and important contract was not able to be retained. But they, and others in a like position, must receive the message loud and clear that the illegal response they attempted to implement is unacceptable and cannot be tolerated, especially as it took place over a reasonably prolonged period of time (unlike the relatively short period of time in Delta (No 2)). After an attempt at one illegal remedy did not work, another was tried. As such, the fact that the respondents' conduct was motivated, at least in part, by commercially threatening circumstances does not, in itself, mitigate the level of penalty to be imposed, having regard to the primary object of deterrence. There were other options open to the respondents which would not have involved unlawful conduct: LJ [477]. In addition, I do not accept that the unusual nature of the QGC gauge tender in itself warrants a reduction in the need for specific deterrence, now effectively confined to Mr Ashton. They were not so unusual as to be exceptional, and but for the business sale, the respondents may well have faced other novel or unusual commercial challenges in the future, and would need to be sufficiently deterred from the temptation to navigate them in an unlawful way. Of course, the likelihood of that occurring by Qteq has now been effectively eliminated following the business sale, as discussed further at [137]. Therefore, specific deterrence no longer has any role to play in assessing Qteq's penalty as the corporate respondent. I note the ACCC's submission that Qteq could, in theory, resume business activities so as to keep some slight residue of specific deterrence in play. However, I do not consider that is sufficiently likely to occur to warrant taking into account, as addressed further below.
6. Returning to the ACCC's argument that the conduct overall was deliberate, sustained and systematic, the respondents contend that I did not make a finding to that effect. Such a finding was not necessary at the liability stage in order to find that the attempts had been proven, but having been raised by the ACCC and disputed by the respondents, it must be squarely addressed now. Because of the way in which the respondents have advanced their case on penalty, these issues of characterisation of the attempt conduct bifurcate into an objective assessment of what took place, and a further assessment of the state of mind that Mr Ashton and, through him, Qteq now assert they had in engaging in that conduct.
7. As to the objective aspect, the ACCC are correct in describing the attempts I found to be established as reflecting an overall business strategy that Qteq had by the time it agreed to purchase the business that had previously been run by Welldog Pty Ltd on 27 July 2017, a month after its incorporation by Mr Ashton on 27 June 2017, that the QGC contract was to be "guard[ed] jealously and protect[ed] vigorously": LJ [158]. This business strategy was revised and refined following the issue of the QGC gauge tender in late October 2017: LJ [199]. That strategy did not necessarily entail illegal conduct, but the findings I have made support the conclusion that this was ultimately an aspect of how the respondents sought to achieve the objectives of that strategy. I would add to the ACCC's characterisation that the strategy changed over time to encompass the protection of Qteq's gauge works business more generally, notwithstanding that its focus was initially limited to the QGC contract: see, eg, LJ [339].
8. The strategy for Attempts #1 and #2 was plainly and indeed overtly directed to ensuring that Qteq remained either the sole supplier of gauge services to QGC, or alternatively the dominant supplier (being another way of looking at the difference between those two attempts). This occurred after Qteq was rebuffed in its suggestion to QGC's joint venture operator, Shell, that Qteq retain the current scope of work it completed for QGC, being 85% of the scope of the gauge tender, and QGC only seek tenders for the remaining 15%, a proposal that was rejected upon the basis that QGC remained committed to the full tender process: LJ [152]. Qteq and thus Mr Ashton first tried to head off the tender process and its outcome in a lawful way, without success. On the evidence, it was only then that they resorted to unlawful means to pursue their strategy.
9. At LJ [155]-[160], I described the importance to Qteq of remaining the contractor providing gauge services to QGC. This was the context for the conduct that I found ensued, including discussions between Mr Ashton and Mr Timothy Dabrowski, an Executive Director of Pro-Test from 2017, in the period between June and October 2017, and at the Kingsley's dinner on 26 October 2017 during which the substance of the Attempt #1 took place: see LJ [162]-[172]. Attempt #2, which took place in November 2017, wholly after the release of the gauge tender, reflects a continued endeavour to ensure that Pro-Test was not a competitor for the QGC gauge work hitherto provided by Qteq, which Qteq adopted once it recognised that Pro-Test could not decline to tender due to the inclusion of an ADV product tender in the tender package: LJ [199].
10. Attempt #4 overlapped in time with Attempt #2, taking place in the first half of November 2017, and Attempt #5 followed a full year later. Attempt #4 followed on from the issue of the QGC gauge tender on 24 October 2017 (as did Attempt #2): LJ [326]. The circumstances giving rise to Attempt #4 (and thus later giving rise to Attempt #5) were described at LJ [326]-[328]. Essentially, they were that if Qteq succeeded in remaining the incumbent gauge work provider to QGC, and if Easternwell succeeded in remaining the incumbent rig services provider to QGC, the new transitional contract arrangements would compel Qteq to provide gauge installation training to Easternwell. That in turn would, as a practical matter, require Qteq to create an actual or at least potential competitor in a core area of its work. This, again, threatened Qteq's business strategy of retaining the QGC gauge works which I have described above, because it would facilitate Easternwell taking over Qteq's work under the QGC gauge contract, and, I would add, potentially similar contracts in the future.
11. The solution reflected in both Attempt #4 and later in Attempt #5, was to have Easternwell agree not to supply gauge services to QGC or anyone else, other than in concert with Qteq. In part, it seems that this may have been a reflection of the inherent difficulty in preventing Easternwell from using any training and thus expertise conveyed during the transitional arrangements to compete against Qteq. This was sought to be achieved by way of a binding written agreement which included an anti-competitive restraint to that effect, as reflected by Attempt #4, and when that attempt did not succeed, a year later by Attempt #5. The evidence, all of which was documentary, revealed a detailed process in seeking to have Easternwell agree to a contract that contained the proscribed provision.
12. Attempt #3 occurred about eighteen months after the other attempts involving Pro-Test, and after Qteq had been awarded the QGC gauge tender. Unlike the other attempts, it was not centrally concerned with retaining Qteq's existing gauge works for QGC. However, I consider that this reflected an evolution of the focus of that same business strategy, also reflected in the broader restraints sought to be imposed by Attempts #4 and #5. It represented a continuation or renewal of Qteq's goal of minimising the threat posed by competition from other potential suppliers of gauge works, as referred to above at [70]. It is also notable that this attempt was engaged in after two previous attempts in relation to Pro-Test had already been rebuffed.
13. It follows from the foregoing that I accept that the overall and combined effect of the conduct bears the objective character of being sustained and systematic, and that this also applies to each of the proven attempts. As a result, the respondents' submission that the conduct underpinning each individual attempt was confined is not to the point.
14. Turning now to the subjective aspect, in contending that the respondents' conduct formed part of a deliberate strategy, the ACCC does not submit, and has never submitted, that the conduct constituting any of the attempts was done with any actual awareness that it was unlawful under the CCA. Such awareness is not needed even for criminal cases, as the applicable state of mind required to be proved applies to engaging in the proscribed conduct (or in relation to a result or circumstance element), not to knowledge of its illegal character, or even awareness or recklessness as to that character. Accordingly, the ACCC did not seek at the liability stage, and do not seek now, a finding that the respondents engaged in the contravening conduct with the knowledge that it was unlawful. But the absence of such a finding is fundamentally different from it being positively established that there was a benign state of mind, namely that the conduct was believed to be lawful, or at least not known to be unlawful, so as to support a case for reducing the level of deterrence required. The respondents seek to have their state of mind in relation to the attempts characterised in that particularly benign way by inference drawn from the facts and circumstances listed at [63] above. In effect, the respondents assert that they had engaged in the conduct constituting the five proven attempts innocently, in the sense that they were not aware that what they were doing was illegal.
15. By doing so, the respondents effectively seek to deploy ignorance of the law not as a defence, but in a manner analogous to mitigation in a criminal law context: see the strict liability criminal case of Ostrowski v Palmer [2004] HCA 30; 218 CLR 493 at [2] (Gleeson CJ and Kirby J). Strict liability criminal offences may be seen to be somewhat closer in character to civil or pecuniary penalty contraventions, because neither require a guilty mind. In this case, which is concerned not with whether a contravention has occurred but with the appropriate penalty to be imposed, the respondents' ignorance of the unlawfulness of their actions is relevant to the assessment of the need for deterrence and thus to the quantum of penalty, as set out in Pattinson at [46].
16. The Full Court in Reckitt Benckiser at [131] (Jagot, Yates and Bromwich JJ) made it clear that if a party to a civil penalty proceeding, at the penalty imposition stage, seeks to rely upon a state of mind going beyond any state of mind required for liability (most commonly entailing no state of mind at all), either in aggravation or mitigation, it must prove it, necessarily to the ordinary civil standard of the balance of probabilities. It must be the most probable conclusion to draw.
17. The difficulty with the respondents' approach is that they have never adduced any direct evidence to establish that it is more probable than not that this was the state of mind of either of them. The respondents referred to the testimony given by Mr Meldrum, Qteq's COO and later CEO, during his s 155 examination, that he did not have concerns that Qteq's conduct in relation to Attempts #4 and #5 were illegal: LJ [339]. However, that evidence was not admissible in relation to Mr Ashton, and was only received into evidence as an admission exception to the hearsay rule in relation to Qteq. Even if Qteq were now able to rely on that evidence to advance its own interests, it is not evidence to which I would attach much weight. That is especially so as neither Mr Meldrum nor Mr Ashton gave evidence at either the trial or at the penalty hearing. No explanation for this absence from the witness box during the trial was sought and none was proffered. I do not accept that the s 155 examination evidence enables me to be satisfied that, on the balance of probabilities, the five proven attempts took place innocently, in the sense that the respondents have proven that they were not aware that what they were doing was illegal.
18. In relation to the penalty hearing, it was suggested that, given the respondents' position at trial that the conduct underpinning the attempts did not take place, Mr Ashton could not properly have given evidence about his and Qteq's state of mind at the time of that conduct. While I do not draw any adverse inference from the absence of evidence from Mr Ashton for the purposes of addressing this contention, because going that far is not necessary and has not been argued for, I must deal with the state of the evidence as I find it. I do not find anything in the circumstances of any of the proven attempts that enables me to conclude what the actual state of mind of either respondent was, let alone to be able to conclude that it was more probable that either or both respondents were proceeding on the basis that they did not consider what they were doing was unlawful. In particular, I do not consider that the features relied upon by the respondents, including the small number of occasions on which certain attempts took place, the trying and unusual commercial circumstances the respondents faced, and the lack of secrecy, provide a sufficient basis for drawing such an inference, in the absence of direct evidence on this point. It follows that this basis for a reduced penalty due to a reduced need for deterrence has not been established.
19. Upon having reviewed the Liability Judgment in some detail, and revived my memory of the evidence giving rise to the conclusions reached, including in particular the passages specifically identified above, I accept the ACCC's characterisation of the conduct underpinning the five proven attempts as sustained, systematic and deliberate, and engaged in by Qteq and Mr Ashton in pursuit of their overall corporate strategy. The strategy was not static, but rather developed in stages as the circumstances evolved. Each attempt and the attempts overall were directed to advancing this strategy. This characterisation extends to cover the conduct I found to have taken place and the evident objective it sought to achieve, but not its legal character. This conclusion is supported by the liability finding that an intention to engage in the conduct constituting the attempts was proven by the ACCC. I also reject the more benign characterisation ultimately advanced by the respondents that their conduct was no more than a seriously misguided response to an unusual and challenging tender request which was pursued in ignorance of its illegality, as there is little in the way of evidence to support that conclusion. The documentary and circumstantial evidence relied upon by the respondents was not just insufficient for that purpose, but in many material respects contrary to such a characterisation.
20. I consider that when the nature and circumstances of the attempted contraventions are seen in this light, they indicate that a higher penalty is required to meet the purpose of deterrence than if this feature was absent. Noting that Qteq is no longer carrying on a business following the business sale and is unlikely to do so in the future, that consideration is most relevant to the need for general deterrence of other potential contravenors who might otherwise consider engaging in conduct of a similar nature, and to the need for both general and specific deterrence in relation to Mr Ashton.
21. I am also unable to accept the submission made by senior counsel for the respondents to the effect that the while the seriousness of the attempts (in the sense of being sustained, systematic and deliberate as discussed above) might go to the desirability of deterrence, it could not be relevant to the level of the penalty necessary to achieve deterrence. While seriousness does not give rise to proportionality reasoning following Pattinson, it is a relevant factor to take into account on the level of penalty required to achieve the objective of deterrence.

Likely benefits if the attempted contraventions had succeeded as a measure of intended loss or damage

1. The ACCC characterises Qteq's conduct as motivated primarily by financial gain, and notes that this consideration has been described as highly relevant to the assessment of the appropriate penalty: Australian Competition and Consumer Commission v Uber B.V. [2022] FCA 1466 at [17] (O'Bryan J). In this regard, the size of the prospective financial gain is also relevant. As will be seen however, I consider that the motivation of financial gain is too narrow and simplistic a way to look at what took place, and why.
2. It is necessary to delve further into authority focusing more on this specific topic, and related topics, before turning to the competing arguments. In Reckitt Benckiser the Full Court observed in part of [153] that the right decision, that is, not to contravene or attempt to contravene, "is more likely to be made if the sanction for the conduct is substantial relative to the possible gain to be made from it" and that the "critical importance of effective deterrence must inform the assessment of the appropriate penalty".
3. In Cement Australia, the Full Court observed at [467]:

We would accept that to achieve deterrence, both specific and general, a penalty must be sufficient to render inutile "the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention" (Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 (Singtel Optus) at [63], cited with approval in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 (TPG) at [66]). Moreover, we would also accept that the intention to profit from contravening conduct must be deterred even if it could be shown by the contravenor that no actual profit was made. Indeed, the higher the intended benefit (even if not actually received), the higher the penalty required to satisfy the objective of deterrence, all else being equal. Generally, we accept that "the sanction for the conduct [must be] substantial relative to the possible gain to be made from it" (our emphasis) (Reckitt Benckiser at [153]).

(Emphasis added.)

1. I made the following observations on this topic in the penalty determination for proven attempted bid rigging in Delta (No 2), to which I adhere:

[52] ... proof of loss, damage or benefit turns on the evidence and arguments relied upon in the case at hand. None of this necessarily requires high levels of precision or certainty. There is room for inferences to be drawn and predictions to be made as to likely perceived benefits, going to the question of motivation and thus deterrence. As the Full Court in Cement Australia more generally pointed out in part of [509]:

Depending upon the context and the exercise, more or less precision in the assessment may be justified. At the end of the day the task is principally an evaluative exercise for the trial judge. And in any event it is only one input into a broader evaluative exercise being the setting of the pecuniary penalty itself, with any input only being weighed as part of an intuitive synthesis approach. Precision in the quantification of one of the inputs may be unrealistic given the broader nature and context of the task in setting a penalty. Of course, if probative evidence enabling greater precision is available, then more detailed quantification may be appropriate.

[53] What matters is that the penalty is not regarded as merely an acceptable cost of doing business: Pattinson at [17] referring to ACCC v TPG Internet Pty Ltd at [66] which in turn approved the statement by the Full Court in Singtel Optus v ACCC at [62]. That in turn may be influenced by the contravenor's likely or inferred perception of the benefits to be obtained from the conduct and the result sought to be obtained. Such benefits may not even necessarily be financial, even if that is not the most common, let alone immediate or short-term, benefit. The nature of the benefits accrued, or in the case of an attempt, that could accrue, may vary from case to case. As was pointed out in Reckitt Benckiser at [153], acknowledged and endorsed in Cement Australia at [467], and applied in BlueScope (No 6) at [28], the sanction for the conduct must be substantial relative to the benefit, including in the sense of possible gain, to be made from that conduct, even if that most commonly will be financial in nature. Non-financial benefits, including benefits with no immediately ascertainable dollar value, may properly be able to be taken into account in arriving at an appropriate deterrent penalty.

[54] An intention to profit will be most relevant in a case in which that is most likely the driving motivation, such as price fixing, but there may be other or different benefits that are relevant in another case where other objectives are in play. That may include such things as revenue, increasing market share, increasing operating scale, improving cashflow to cover fixed costs so that future contracts can be assessed by reference primarily to marginal costs, and so on. It may also extend to collateral benefits, such as those arising from obtaining a prestigious contract, which may be relied upon by the potential contravenor to characterise itself as a trusted supplier of services to certain customers, such as high profile or high-status customers or those belonging to a class of customers within a particular sector of the economy or a particular market. What matters is the range of the likely motivating benefits or perceived benefits that need to be outweighed by the penalty imposed so as to deter both the contravenor before the Court, and any would-be contravenor from engaging in like conduct.

[55] If motivating features are not taken into account, and as a result the penalty is lower, the deterrent effect may be less than is really required. That is because the penalty must exceed the benefit, or in the case of an attempt, the perceived benefit, both as to specific and general deterrence. Possible financial benefits will most easily justify a higher penalty, largely because of the greater ease of quantification in dollar terms, this being capable of being measured against risk of that penalty being imposed. However, that does not prevent the Court deciding upon a level of penalty that takes into account non-financial benefit motivations. If the risk of detection is low, the penalty will need to be correspondingly higher to account for that. Otherwise, it may remain worthwhile to take a chance that the conduct may be discovered and the penalty imposed to secure the full range of likely or anticipated benefits. After all, at the time of contemplating engaging in contravening conduct, which is when deterrence is most likely to be effective, the contemplated benefits may only be perceived or at least uncertain, even if sometimes they can be reliably predicted: Reckitt Benckiser at [153]. Contrary to the respondents' submission, this does not mean that only net benefit, in the sense of net or even gross profit, will be in contemplation.

[56] Any future potential contravenor may weigh up the chance of an uncertain benefit against the risk of a substantial but still uncertain penalty. If the risk of the latter is seen to be great enough, the chance of a benefit may not be great enough to encourage a contravening or attempted contravening action and, if so, the conduct is more likely to be deterred. Deterrence may be seen to be at its most effective when such contemplation is likely to be in play. Bid rigging, by its very nature, is planned at least to some degree, because it is directed to subverting a planned competitive process.

1. In common with many bid rigging cases, the financial motive in this case was indirect, in the sense that the primary motivation was retaining the work under the QGC gauge contract and reducing the competitive threat posed by alternative providers, with any financial benefit being a flow on consequence. Of course, there is a profit dimension to retaining a contract which was of itself profitable, and limiting competition for work which is profitable. Those more immediately tangible financial benefits formed the focus of the ACCC's case. But other benefits of the kind I identified in Delta (No 2) at [54], reproduced above, were plainly enough in play, even if there is limited express evidence in that regard.
2. In relation to those types of benefits, the ACCC refers to a letter dated 15 January 2019 from Mr Ewen Meldrum (who was the COO of Qteq at the time) to Shell, which states that the transfer of gauge installation services to rig contractors will lead to the redundancy of 40 local Qteq employees in Toowoomba and associated redundancy costs. The ACCC asserts that it may readily be inferred from this evidence that Qteq benefited from economies of scale and familiarity in serving a large client like QGC. I accept that this evidence, along with the very nature of Qteq's business activities and the sequence of events before me, make available the conclusion that ordinary indirect benefits of the kind identified in Delta (No 2) at [54] (extracted above) would, or at least could, have been anticipated to follow from the attempts if successful. There was no evidence that I consider stood in the way of such an obvious inference being drawn.
3. I now turn to the parties' submissions regarding the more readily identifiable financial benefits which were pursued in relation to Attempts #1 and #2, which were directed to ensuring that Qteq would retain the QGC contract, and as a result, the substantial revenue stream associated with it (in addition to the indirect benefits identified above). The ACCC relies upon the available evidence regarding the revenue which Qteq expected to, and actually did, derive under that contract. In an investor presentation apparently prepared in early 2018, Qteq estimated that its work with QGC was about two-thirds of its business. In her first affidavit filed for the purpose of the penalty hearing, Ms Karen Krisanski (Finance Manager at Qteq) deposes that the revenue received under contracts with QGC made up between 24% and 45% of Qteq's revenue in each of the last four full financial years. Further, a statement of agreed facts filed by the parties indicates that Qteq ultimately was paid a total of more than $88 million dollars up to and including the 2025 financial year under the QGC contract, which it eventually won notwithstanding the failure of the attempted contraventions.
4. In relation to Attempt #3, the ACCC submitted that the respondents sought to obtain the very significant financial benefits associated with removing an existing competitor, although it did not attempt to attribute any dollar value to this benefit.
5. The respondents make a number of submissions evidently designed to blunt the ACCC's case on Attempts #1 to #3. First, they assert that the total value of the revenue from the QGC gauge tender is not the correct measure of the anticipated benefit for Attempts #1 and #2, including because:

(a) any forward-looking assessment of anticipated benefit to be gained by the conduct would have accounted for the prospect that the attempt would fail, a submission that I can address immediately because I am simply unable to accept it either as to substance or as to weight as part of the penalty determination process;

(b) the attempts were directed only at Pro-Test, which was just one of the alternative bidders and unlikely to bid for the full scope of work regardless;

(c) Qteq was in a good position to secure the contract regardless of the attempts, as it did notwithstanding their failure; and

(d) profit, rather than revenue, is the more relevant measure of any anticipated benefit to be derived from the contract, particularly in a low margin business such as Qteq's.

1. Having challenged the relevance of the revenue associated with the entire QGC contract, the respondents submit that the Court has not been provided with any evidence capable of establishing the anticipated benefits of Attempts #1 to #3. They submit that there is no evidence that any actual benefit would have been obtained even if the attempts had succeeded, relying upon the absence of any evidence as to the extent to which prices would have been different or higher, or the value to Qteq of any increase in the likelihood that it would be the successful tenderer.
2. I am unable to accept that it is wrong or even unhelpful to have regard to the anticipated contractual revenue sought to be retained by the attempted anticompetitive conduct, given that this revenue is a feature of what was at stake, was sought to be preserved by anticompetitive means, and was inherently at least an aspect of the motive for the conduct in the absence of any evidence to resist such an obvious inference being drawn. Such revenue sought to be retained may be, and in this case, is, a clearer and more reliable measure of motivation contributing to the overall assessment of the deterrence required than something that is more speculative and therefore less likely to have been occupying Mr Ashton's mind, and through him the mind of Qteq. Given that the evidence plainly and clearly establishes that retaining the gauge contract, and necessarily as part of that the revenue flowing from it, was a central motivating factor for engaging in the conduct, that is legitimately part of what must guide the level of deterrence penalty required. To put it bluntly, the loss of that revenue must have been an aspect of the existential threat that the evidence so clearly establishes was in play.
3. For financial benefits or perceived financial benefits to be taken into account does not necessarily require a calculation as to the profit to be made. In this regard, the ACCC notes that revenue itself has been recognised as a relevant consideration, and that conversion into profit may be unnecessary: Delta (No 2) at [67]. However, to the extent that such a conversion may assist, the ACCC relies upon Qteq's general profit margin, calculated using the available data by comparing Qteq's revenue against its earnings before interest, taxes, depreciation, and amortisation (EBITDA) (for the 2018 to 2021 financial years) or earnings before interest and taxes (EBIT) (for the 2022 to 2024 financial years). These figures are set out in the following table (adapted from [54] of the ACCC's written submissions), alongside additional data which is relevant to my consideration of the further factors addressed below:

1. As outlined above, I consider that revenue in itself is relevant to an assessment of the anticipated benefit. For instance, a particular revenue stream may be important for covering fixed costs, independently of the profit directly attributable to that revenue stream. However, the ACCC's estimates of Qteq's profit margins are nonetheless useful for deriving some rough idea of the profit which may have been generated by the revenue that Qteq sought to retain by its conduct. In this respect, I note the respondents' submission (considered in more detail at [115] below) that the consolidated profit figures of Qteq's corporate group are more relevant than those of Qteq itself. Given the lack of specificity required for the present exercise, I do not consider that submission denies the relevance of the figures put forward by the ACCC.
2. In relation to the remainder of the respondents' submissions on this topic, the lack of an effect on competition by reason of an attempt not succeeding will ordinarily, if not always, be the case when the conduct goes no further than an attempt. However, the failure of an attempted contravention does not provide a basis for any discount in the penalty to be imposed: Delta No (2) at [16(h)], repeated in effect at [60] above. That is especially so in a case such as this, where the respondents engaged in further attempts when those earlier had failed. In such cases, this aspect of the need for deterrence must be assessed by reference to the anticipated effect. In doing so, it should be noted that anticompetitive conduct is not so narrowly proscribed and sanctioned by reference only to a direct or immediate effect on prices, or indeed on a direct or immediate effect on competition more broadly. The adverse effects on competition may be longer term, more insidious, or otherwise have a corrosive effect that is not readily apparent. Accordingly, the authorities recognise that a high level of precision when identifying the loss or perceived benefit is not required, if even possible: see [87]-[88] above.
3. In relation to Attempts #4 and #5, the ACCC submits that the anticipated benefit associated with restraining Easternwell from competing with Qteq in relation to services under the QGC contract, and gauge works services more generally, can be assessed by reference to the following:

(a) In his letter to QGC dated 15 January 2019 (referred to at [90] above), Mr Meldrum also indicated that if the gauge works services were transitioned to rig operators as QGC intended, this would result in the loss of about $5.5 million per annum in revenue to Qteq. The ACCC submits that this provides an indication of the revenue under the QGC contract which Qteq was attempting to retain by the impugned conduct.

(b) The liquidated damages clause in the revised Second Qteq NDA required payment of certain amounts in the event that Easternwell breached the (illegal) restraint clause in respect of particular customers, being $5.5 million for Origin, $800,000 for Arrow Energy and $250,000 for any other customer: LJ [442]. The ACCC submits that this provides an indication of the potential value of work for other clients which Qteq sought to protect from competition with Easternwell through the attempted contravention.

1. The respondents submit that this evidence does not provide any estimation of the anticipated benefit from Attempts #4 and #5. They claim that the mostly likely benefit of those Attempts would have been that Qteq could provide training to Easternwell, which could not thereafter perform the gauge installation work other than in concert with Qteq. They submit that the value of this benefit cannot be equated with the figures relied upon by the ACCC, being the revenue which Qteq would lose from the installation services transitioning to Easternwell, or the liquidated damages which it included in the revised Second Qteq NDA.
2. I accept that the gross financial value of the benefits anticipated to flow from Attempts #4 and #5, if successful, may not have been equivalent to the entirety of the revenue which was otherwise set to transition to Easternwell. However, as outlined above in relation Attempts #1 and #2, the $5.5 million revenue figure provides a useful indicative measure of what was at stake and therefore formed part of the motivation for the conduct in need of countering by deterrence. For the same reason, I do not consider it necessary to convert that figure into profit, or account for the possibility that the attempts would fail (as they in fact did). The present assessment does not require a precise valuation to be arrived at, even assuming that such a precise counterfactual is realistically ascertainable. What may matter, and be possible, is obtaining some sense of the value of what Qteq stood to gain if the proscribed CAU had been entered into.
3. For similar reasons, I consider that the liquidated damages clause is also a relevant matter to which I have regard when considering the anticipated benefits. A liquidated damages clause is far from a perfect measure of what was at stake, but it does give a relevant sense of the value that was proposed to be placed on the restraint being departed from, in the event that Qteq had provided training to Easternwell. That is, after all, the role of a liquidated damages clause in giving the contracting parties some certainty of what may later be sought and obtained. It can legitimately go into the mix of considerations informing the penalty arrived at for those two attempts in the ultimate process of instinctive synthesis.
4. As such, in relation to Attempts #4 and #5, I treat the figures relied upon by the ACCC as no more than an indication that the concern sought to be met by those attempts was real and substantial, and was of a significant and non-trivial order of magnitude, so as to be a reasonably strong motivating factor in need of a deterrent counterbalance. As I pointed out in the last sentence of Delta (No 2) at [54], reproduced in full above:

What matters is the range of the likely motivating benefits or perceived benefits that need to be outweighed by the penalty imposed so as to deter both the contravenor before the Court, and any would-be contravenor from engaging in like conduct.

1. Overall, I am satisfied on the evidence that, while the immediate and express objective was retention of the work under the QGC gauge contract in relation to Attempts #1, #2, #4 and #5, which necessarily entailed keeping competitors at bay, and also to reduce or prevent competition more generally in relation to Attempts #3 to #5, the overall anticipated benefit associated with this objective was all the usual fruits of conduct directed to, or having the effect of, reducing or eliminating competition, some more immediate, and some inevitably longer term. Those benefits may, depending on a myriad of other market and economic factors, be realised more immediately in profits, but were also capable of being more indirect, by reason of such things as scale of operations, increased revenue (which may help to cover fixed costs), less uncertainty, and better returns on capital more generally. The freedom, or increased freedom, in setting prices brought about by reduced competitive restraints is an important feature of proscribing anticompetitive conduct. The respondents' submission that the anticipated benefits are inherently constrained because they were directed to maintaining the status quo relating to the QGC gauge contract does not affect the relevance of those identified benefits, even setting aside the fact that the restraints which were sought to be imposed strayed beyond that goal.
2. I take the evidence relied upon by the ACCC regarding direct financial benefits, being an undoubtedly important and more immediate motivator, to provide a useful indicative measure of what was at stake, and thus formed part of the motivation for the conduct which must be countered by sufficient deterrence. Additionally, while the ACCC were not in error to focus more upon the likely direct financial benefits, I consider that the anticipated advantages were greater, wider and more strategic than that. It is that wider set of motivations that needs to be made less attractive by the deterrence effect of an appropriately condign penalty response.
3. I am satisfied that the benefits that Qteq, and thus Mr Ashton, perceived as being likely to flow from their conduct was a substantial motivation for engaging in that conduct persistently and over a prolonged period of time overall, as outlined in relation to the nature and circumstances of the attempts above. That Mr Ashton must have anticipated some personal benefit from the attempts is an obvious consequence of ownership of a significant share of the company, notwithstanding the lack of dividends he has received in the past. Those anticipated benefits are an important and significant feature to take into account in determining the appropriate quantum of deterrent penalty to be imposed on the respondents, most importantly as a warning to others.

Size and financial circumstances of Qteq and its capacity to pay the penalties imposed

1. Generally speaking, and as a matter of applied logic, the quantum of penalty to meet the objective of specific deterrence rises with the size and resources of the contravenor (here, the attempted contravenors): Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) [2005] FCA 265; 215 ALR 301 (Leahy No 3) at [39] (Goldberg J). To the converse, Goldberg J also noted that, in order to adequately meet the need for general deterrence, "consideration of the party's capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention": at [39]. That latter comment must be read in light of the High Court in Pattinson dispensing with the concept of proportionality between the seriousness of contravening conduct (and thus attempted contravening conduct) and the quantum of penalty imposed, and requiring primary focus on the quantum necessary to achieve deterrence. As such, Goldberg J's reference to a penalty being recognised as "significant and proportionate to the seriousness of the contravention", or as here, attempted contravention, is no longer a direct restraint on the quantum of the penalty imposed. That said, seriousness often ends up being, as a practical matter, an important consideration when assessing what is needed to achieve deterrence, if only in the sense that a more serious contravention may be one which is attended by features that warrant greater deterrence, such as greater motivating prospective gains or benefits.
2. It has been observed that the financial capacity of a contravenor and thereby their capacity to pay a civil penalty is more relevant to specific deterrence than general deterrence: see Australian Communications and Media Authority v Getaway Escapes Pty Ltd [2016] FCA 795 at [29]- [30] (Rangiah J). However, as I observed in Delta (No 2) at [28]:

The ACCC contends that difficulty in paying a given penalty is not a relevant consideration when it comes to general deterrence. I accept that is generally correct, and am prepared to allow the respondents to seek to pay the penalties imposed by way of instalments. However, I also give some weight to the respondents' submission to the effect that there is some scope for other would-be or might-be contravenors to scale the penalty imposed to their own circumstances. That is, that contravenors who are much larger than Delta should be taken to assume that they will be facing a larger penalty due to their greater size. However, it remains the case that the headline figure is the one most likely to be noticed by any would-be contravenor.

1. A parallel point, legitimately reasoning somewhat differently, was made by Murphy J in Australian Competition and Consumer Commission v Samsung Electronics Australia Pty Ltd [2022] FCA 875 at [65]:

The size of a contravening company is not only relevant to the power it can wield, but also to the size of the penalty necessary to have an appropriate deterrent effect, not only on the company itself but also on companies which will pay attention to the penalties imposed on businesses of a similar size: Reckitt at [158(2)]; Coles Supermarkets at [92]; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285, 293 at [D] (Burchett and Kiefel JJ (as her Honour then was)); Australian Competition and Consumer Commission v Valve Corporation (No 7) [2016] FCA 1553 at [7] and [53] (Edelman J); Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254; 215 ALR 281 at [8]- [9] (Merkel J).

1. The respondents also rely upon part of what the Full Court said in Australian Competition and Consumer Commission v BAJV Pty Ltd [2014] FCAFC 52; ATPR 42-470 at [43] (Rares, Jessup and Flick JJ) which I emphasise in bold below, and to which I add [42] because it has some relevance to the competing considerations in contest, albeit viewed through the lens of the determinative reasoning of the plurality in Pattinson:

[42] Self-evidently, any consideration of deterrence in the context of the imposition of penalties is a forwardlooking exercise. With respect to specific deterrence, the appropriate penalty is one that will be sufficient to deter the contravener from engaging in the same or similar contravening conduct in the future. If the "size" of the contravener has changed since the contraventions occurred, it would, in our view, involve no error for the court to fix the penalty by reference to the circumstances which existed at the time of judgment and which, as a matter of reasonable apprehension, would exist into the future when the deterrent effect of the penalty would be having its appropriate impact on the behaviour of the contravener. This is the approach which the primary Judge took in the present case, and we do not think he could be criticised on that account.

[43] Counsel for the Commission emphasised, unsurprisingly, the importance of general deterrence in this area of the law. As the High Court has recently emphasised: "General and specific deterrence must play a primary role in assessing the appropriate penalty in cases of calculated contravention of legislation where commercial profit is the driver of the contravening conduct": Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 304 ALR 186, 199 [65]. We accept that, in giving effect to the objects of the TP Act and the ACL so far as they involve the conduct of trading corporations, the perception by the wider business community of the firmness with which the court will deal with established the contraventions must be regarded as of the utmost significance. However, an observer, from that community, of the outcome of the present case as reflected in the judgment of the primary Judge would note that a small to medium sized family company was subjected to a penalty appropriate to its then size and circumstances. He or she would have no basis to assume that the penalty which might be imposed on a larger company in otherwise similar circumstances would be of the same order. Indeed, the very point, made in CSR and subsequent cases, that size is relevant in the context of deterrence will, in this way, be achieved by taking into account a contravener's size at the time when the penalty comes to be imposed.

(Emphasis added.)

1. The main point to derive from the above reasoning is that the size and financial position of a company (or indeed a natural person in relation to financial position) who has engaged in contravening conduct has a bearing on the quantum of penalty needed to achieve specific deterrence, but is also relevant to what is needed for general deterrence. Following the business sale, it is the latter which needs to be achieved in relation to Qteq.
2. At the penalty hearing, the ACCC relied on various financial figures and other evidence to establish Qteq's size and financial circumstances, including:

(a) the revenue, gross profit, EBITDA/EBIT and net asset figures outlined in the table at [96] above;

(b) the consolidated net asset position of the group of related companies containing Qteq (the Qteq Group), being $3.63 million as at 30 June 2024;

(c) the consolidated revenue of the group containing Qteq, which was around $30 million per year in each of the 2022 to 2024 financial years; and

(d) Qteq's own descriptions of its significance in the market for gauge works.

1. The evidence relied upon by the ACCC is now of limited relevance due to the sale of Qteq's business and assets since the penalty hearing, except insofar as it is capable of illuminating the proceeds from the sale that are likely to be owed to Qteq. The quantum of those proceeds are tied to the fair market value of its assets and are uncertain at this stage as discussed below.
2. At the penalty hearing, the respondents characterised Qteq as being, variously, not a large company, with about 50 full time equivalent employees, and as a small company with very limited financial resources. They described it as inaccurate to measure Qteq's size by revenue, because it operates a business that has a high cost of goods, but a low margin. The substance of the point seems to be that the gap between revenue and expenses was not substantial, such that revenue considered on its own may paint a misleading picture of its true scale. The respondents further relied upon Qteq's relatively modest profits and limited net assets. Again, these submissions no longer describe Qteq's present situation, and are thus of reduced relevance.
3. The respondents also submitted at the penalty hearing that the most relevant financial figures were the consolidated figures for the Qteq Group rather the equivalent figures for Qteq alone, because all substantial revenue generating activities were consolidated into Qteq (at least for the 2024 financial year), other entities within that group provided certain services to Qteq for which it is not charged, and due to intercompany loan arrangements. That contention was supported by the affidavit evidence of Ms Krisanski, which was to the same effect. In the 2024 financial year, the Group's consolidated figures for earnings before tax and net income were $321,621 and $508,275 respectively, and its net asset position during that financial year was $3,631,037 (substantially lower than Qteq's individual net asset position of around $8.3 million). The Group's net income and earnings before tax generated over the 2018 to 2024 financial years each total to around $850,000. No member of the Qteq Group has paid a dividend since September 2018.
4. In addition to the evidence of Qteq's historical performance, the affidavits of Ms Krisanski and Mr Gareth Ashton relied upon at the penalty hearing established that Qteq was facing additional financial difficulties which arose after the proceedings were commenced and had lost business from customers. These factors caused Qteq to make eight employees redundant (as is described in more detail below in relation to extra-curial detriment) prior to the business sale.
5. The respondents argued at the penalty hearing that the cumulative effect of this evidence was that Qteq will not be able to pay penalties "anywhere near those proposed by the ACCC," and "may face insolvency depending on the quantum of penalties imposed". It relied upon the impact this would have on Qteq's employees and on the market in contending that such a penalty should not be imposed.
6. Again, the specific evidence relied upon by the respondents no longer describes Qteq's situation following the business sale, and is thus of more limited relevance. The sale of Qteq's business and assets means that the imposition of a penalty will not impact the viability of its former business or the livelihood of its employees, all of whom have now been transferred to Geo PSI Pty Ltd. However, as outlined below, the respondents maintain their submission as to Qteq's borderline solvency, and now rely upon the adverse consequences for creditors and for Mr Ashton to contend that the penalties sought by the ACCC are not appropriate.
7. Following the business sale, the parties agree that the Court should have regard to the payment Qteq will receive under the ASA when assessing its financial position and capacity to pay. However, as outlined at [47]-[48] above, the precise amount which Qteq will receive under that agreement is uncertain, both because the Purchase Price is comprised of various components which have not been calculated or depend on Geo PSI Pty Ltd's future performance, and because the apportionment of that Purchase Price between Qteq and Qteq IQ has not yet been determined.
8. The ACCC primarily submitted that, given the proportion of the assets under the ASA that were being sold by Qteq, I should have regard to its entitlement to the corresponding proportion of the Purchase Price when assessing its capacity to pay. It continues to rely upon the fact that Qteq's net assets were around $8 million in the 2024 financial year. If one were to have regard instead to the consolidated position of the broader corporate group as was pressed for by the respondents at the penalty hearing (see [115] above), that figure would instead be around $3.6 million.
9. The respondents do not dispute the proportion of the assets sold by Qteq relative to Qteq IQ, but submit that there was no basis to assume that all of the Purchase Price would be proportionately attributed to those assets. Additionally, the respondents contend that the conditional parts of the Purchase Price are unlikely ever to be received.
10. The respondents also submit that the sale proceeds may have tax implications for Qteq. However, it is unclear how any weight could be placed on that submission in the absence of any evidence as to the likelihood or significance of any such implications.
11. Further, the respondents note that, in assessing Qteq's size and financial position following the business sale, I should have regard to the need for Qteq to pay its existing liabilities out of the proceeds of the business sale and the excluded assets. To that end, they rely upon the evidence of Ms Krisanski that the consolidated total liabilities of the Qteq Group as at 30 June 2024 were around $6.8 million, excluding employment liabilities which were transferred under the ASA.
12. The respondents submit that, based on these considerations, it remained the case following the business sale that a penalty in the range sought by the ACCC would be crushing to Qteq. Although they no longer point to the effect this would have on its employees (who have been transferred to Geo PSI Pty Ltd as outlined above), they submit that this result would significantly prejudice Qteq's pre-existing creditors, whom they describe in submissions as entirely innocent third parties.
13. However, whether Qteq's financial situation is in fact such that it is at risk of being rendered insolvent depending on the penalty imposed was left unclear, and is apparently unknowable on the present state of the evidence. Although the respondents generally sought to downplay Qteq's entitlement under the ASA, the evidentiary basis for that submission was lacking. For example, the respondents did not provide any direct evidence as to the likely adjustments to the initial sum, the likelihood of further payments conditional on financial performance, the likely apportionment of the Purchase Price between Qteq and Qteq IQ, or the value of the Excluded Assets retained by Qteq following the sale. The reliance on net asset figures from the 2024 financial year is insufficient to resolve this uncertainty.
14. As to the respondents' submissions regarding the impact on innocent creditors, there is no evidence of who they are or what they are owed. Additionally, as the ACCC points out, a pecuniary penalty pursuant to s 76 of the CCA is not a provable debt against an insolvent company, referring to s 553B of the Corporations Act 2001 (Cth), and citing Mathers v Commonwealth of Australia [2004] FCA 217; 134 FCR 135 at [29]. If Qteq was to go into liquidation after the imposition of a penalty, that will be a matter for the liquidator to consider. As to the impact on Mr Ashton as a shareholder, that impact is a consequence of mostly his own actions and cannot be a significant consideration on penalty determination.
15. I consider that Qteq's financial position following the business sale is too uncertain on the evidence before me to be given any substantial weight. In any event, I am mindful that a contravenor's limited capacity to pay must not prevent the Court from giving effect to the primary objective of general deterrence: BlueScope (No 6) at [143].

1. The ACCC submits that Mr Ashton "is a man of considerable wealth". They refer to the following facts which are said to arise from the documents tendered before the Court in relation to his financial position:

(a) he apparently has over $2.3 million in assets held in two superannuation funds; and

(b) he is apparently a joint or sole beneficiary of various other trusts which, as at 30 April 2025, held over $22 million in assets.

1. Mr Ashton did not dispute this characterisation of his financial position and is indeed described as a successful businessman in the respondents' written submissions. However, the respondents note that, given the close financial ties between Mr Ashton and Qteq (which were accepted by both parties) any penalty or other financial consequences suffered by Qteq will also have a serious impact on him.
2. I consider that Mr Ashton's strong financial position is a factor which means that a substantial financial penalty is necessary to achieve specific deterrence, and also general deterrence of other businessmen in his position. I am also satisfied on the evidence before me that he has the means available to pay such a penalty. However, I accept that the impact of the penalty I ultimately impose on Qteq will also have an impact on Mr Ashton by virtue of his connections to the business and thus have an additional deterrent effect on him personally. I will take this into account when I assess the appropriate penalty.

1. The attempts were mostly carried out by Qteq through its most senior officer, Mr Ashton, who is its founder, primary beneficial owner, and Executive Chairman.
2. The respondents submit that Mr Ashton's seniority should not be given significant weight, having regard to the Court's approach in BAJV. In that case, Murphy J found that because the respondent before his Honour was a relatively small and unsophisticated company, the involvement of its owner in the contraventions was not to be equated with senior management in a well-resourced, sophisticated corporation for the purpose of assessing the appropriate penalty: at [35]. However, the respondent in that case was described as a corporate entity for a small to medium family business, and its owner as not a wealthy man. They do not apply with any real degree of force in relation to Qteq (notwithstanding the evidence outlined above) or indeed Mr Ashton, who was described in the respondents' submissions as a successful businessman who has had a very long business life of almost 50 years.
3. There was no evidence of there being any overt culture of compliance at Qteq at the time of the attempted contraventions, consistent with the implication to be drawn from Mr Ashton's involvement in the contraventions. To the contrary, the affidavit evidence of Mr Gareth Ashton is that Qteq had no anti-corruption or competition compliance policy in place at that time, let alone any indication of a whistleblower policy. In any event, that is a common enough, and regrettable, feature of conduct in breach of what are on any view complicated provisions directed to the public interest in the benefits of competition in the cost and quality of goods and services in Australia, and the efficient allocation of resources. Those in trade and commerce are taking a real risk in not endeavouring to protect themselves by such readily available prophylactic means. Not having such arrangements in place is also an unfair avoidance of cost otherwise borne by compliant operators and especially compliant competitors: see the observations on this topic in Reckitt Benckiser at [152], quoted with approval by the plurality in Pattinson at [41].
4. At the penalty hearing, the respondents sought to address the lack of compliance policies at the time of the attempts, particularly as relevant to the risk of recurrence, by evidence of:

(a) the introduction of anti-competition and competition compliance policy in September 2021, which was updated on 2 August 2024 following the liability hearing;

(b) competition and consumer law compliance training by an external law firm at Qteq's offices in June 2025, with steps to put that in place being first taken in August 2024; and

(c) the introduction of a whistleblowing policy in January 2025.

1. The ACCC neither denies that the above steps have been taken, nor takes any issue with the quality of the regime that has been implemented, although they do rely upon Qteq's delay in arranging competition law compliance training. It does not seek any trade practices compliance regime orders.
2. While it might be observed that all of this could have been done sooner, what mattered was that it had been done by the time of the penalty hearing. If Qteq's business had not been sold, the need for specific deterrence would have been somewhat mitigated as a result of the implementation of the compliance regime. This Court should overtly endorse and support such steps being taken, rather than relying upon court orders to achieve it. I also consider that the voluntary implementation of such regimes is more likely to be successful that those required to be imposed by a court: cf Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd (No 3) [2024] FCA 156 (Bromwich J), in which the respondent was sentenced for breach of a Court-ordered compliance program, with the contempt sentence upheld on appeal in Ultra Tune Australia Pty Ltd v Australian Competition and Consumer Commission [2025] FCAFC 1; 307 FCR 13 (Markovic and Abraham JJ, Lee J agreeing).
3. The need for specific deterrence has been effectively eliminated in relation to Qteq by the fact that it has sold the majority of its assets and is no longer carrying on its previous business. While, as the ACCC points out, it remains possible for Qteq to be resurrected, I consider that is presently such a faint prospect that it should not influence the appropriate penalty determination. As a result, I consider that the need for specific deterrence has now disappeared as a meaningful consideration as a result of the business sale, and that whatever is left can be seen to be addressed by Qteq's efforts to ensure that conduct of this kind does not recur.
4. However, I note that the need for general deterrence weighs against the imposition of a lower penalty by virtue of the fact that Qteq has now sold its business, lest other would-be contravenors consider that the impact of a penalty could be mitigated by divestment in response to a finding of liability. As a result, although I consider the risk of Qteq engaging in similar conduct in the future to be insignificant, to the extent that assessment is a result of the divestment of its business and assets, I do not consider that it warrants any substantial reduction in the penalty to be imposed. It is a factor to be taken generally into account, but no more.
5. In relation to Mr Ashton's conduct and the need for specific deterrence in relation to him personally, I am unassisted by any evidence from him at any stage of this proceeding. Mr Ashton has been well represented at trial and on appeal by highly skilled and capable counsel. I have no reason to doubt that the same is true of his solicitors. However, the end result is that I am almost entirely left with the objective circumstances.
6. The fact that Qteq implemented a training and compliance program and a whistleblowing policy is relevant in relation to Mr Ashton, insofar as I doubt Qteq would have taken these steps without his support and approval. Additionally, the evidence indicates that Mr Ashton at least attended the competition and consumer law compliance training run in June 2025. However, there is no evidence of the impact, direct or indirect, that these developments have had upon him personally. As a result, I am unable to form any view of the likely effectiveness of these developments in deterring Mr Ashton from future contravening conduct, especially in light of the nature and extent of his conduct proven by the ACCC. I would hope that the outcome of this proceeding, both as to liability and as to prospective and then actual penalty, and also the loss of the Qteq business, would have a salutary effect on Mr Ashton, especially in light of the sheer time and legal cost this whole process has entailed from investigation all the way through to penalty. However, I have no means of knowing or evaluating the extent to which that might be so, as is discussed further below in relation to other penalty considerations. I have no real reason to discount the extent to which specific deterrence is needed in relation to Mr Ashton: he chose not to give evidence. This is also an important consideration in deciding whether or not to make a non-indemnification order, to ensure that the penalty imposed comes directly out of Mr Ashton's own pocket rather than being nullified by an insurer footing the bill.

1. Both respondents have at all times denied the allegations made against them, which they have defended with vigour, as is their right. The cooperative and professional approach taken by their counsel throughout, and I infer their solicitors as well, as I perceived it, is, without being churlish, no more than the Court is entitled to expect, especially having regard to ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth). A lack of cooperation of that kind might be a factor indicating that the need for deterrence was in some way, increased. But that is not the present case.
2. I have not seen any sign of contrition, which is to be expected when allegations are denied and continue to be denied, or at least not admitted. This is not a circumstance that can in any way elevate the penalty to be imposed, but it is a feature that provides no basis for finding any reduced need for penalty as specific deterrence in relation to Mr Ashton.

1. There is no suggestion of any prior relevant contraventions or attempted contraventions, which might serve to increase the need for deterrence. The ACCC contends that this should be given little weight, having regard to the nature and extent of the conduct and Qteq's relatively short corporate history. The respondents object to that stance, particularly in relation to Mr Ashton, given the duration and faultless character of his business career.
2. The respondents seek to establish Mr Ashton's good character by relying on a large bundle of character references. The ACCC objected to that bundle being received into evidence on the grounds of relevance, inadmissible hearsay, and opinion. Ultimately I am willing to receive the bundle into evidence, but afford it very limited weight given the absence of evidence of awareness by any of the providers of those references of what Mr Ashton has been found to have done: see Registered Organisations Commissioner v Australian Workers' Union [2019] FCA 1852 at [206]- [209] (Mortimer J); Australian Securities and Investments Commission v Hobbs [2013] NSWSC 106; 93 ACSR 421 at [275]- [279] (Ward JA). In any event, that evidence does not, in those circumstances, provide any basis for confidently concluding that Mr Ashton does not have a propensity to engage in conduct of the kind he has been found to have carried out in this proceeding: see Hobbs at [279].
3. A further and more fundamental difficulty I have with the submission as to Mr Ashton's character is that I have not heard from him in this respect, which would be the most compelling evidence. Further, as noted above I have no basis to know or infer that the persons who have written favourably about him know what he has been found to have done. I am left to infer, or worse, guess or predict this might be so, upon the most flimsy of bases.
4. White collar contravenors or attempted contravenors are ordinarily unlikely to be regarded as having poor character or anything approaching it. That is likely to be a part of the reason for their success. It is their very character and success that comprises their reputation and puts them in the position of being able to contravene or attempt to contravene. It is a person of that character that needs to be deterred, and it is person of a like character that need to be deterred more generally.
5. I will take into account the fact that neither Mr Ashton nor Qteq have previously been found to have contravened the CCA, and Mr Ashton's good character (noting the limitations outlined above). However, I cannot in all the circumstances give much weight to this consideration in light of the primacy of deterrence.

1. The respondents have not, in any sense, "gotten away with" their attempted contraventions, notwithstanding that it has taken expensive and protracted investigation and enforcement action by the ACCC to bring them to account. The allegations were denied, litigated, legitimately defended (albeit mostly unsuccessfully) and mostly found proven. That process is sure to have already resulted in a huge cost to Qteq and Mr Ashton, both directly to obtain advice and representation, and indirectly in the form of disruption to their business, and, importantly, the huge reputational damage caused by the finding that they both attempted to contravene the cartel prohibitions contained in the CCA. Those consequences have at least materially contributed to Qteq's demise.
2. The respondents, through the affidavit of Mr Gareth Ashton sworn 28 August 2025, adduced evidence illustrating the tangible impacts associated with that reputational damage in the lead up to the penalty hearing as follows:

(a) In June to July 2025, Mr Gareth Ashton was informed by representatives of Origin Energy Limited, as operator on behalf of Australian Pacific LNG Pty Ltd (APLNG), that Qteq would not be awarded a long-term contract for casing corrosion logging, after the APLNG board unanimously determined not to award Qteq the contract due to the findings of attempted contravention. This occurred after Origin had provisionally awarded the contract to Qteq subject to the APLNG board approving its recommendation, and entered into an interim contract with Qteq for the provision of those services in the meantime. Qteq expected to generate between around $35 million and $45 million of revenue under the long-term contract.

(b) In August 2025, a representative of QGC informed Mr Gareth Ashton that in light of the findings in the Liability Judgment, it would not be entering any further contracts with Qteq or issuing it with any new purchase orders. QGC has been Qteq's largest client since it was established and, and Ms Krisanski, in her first affidavit, estimated that the loss caused by QGC's decision would be around $10 million of revenue per annum, or more than 35% of Qteq's total revenue.

1. Mr Gareth Ashton deposed in a further affidavit sworn 29 September 2025 that, as a result of these consequences, eight of Qteq's employees had been made redundant, and further redundancies may be necessary unless it received more work in the coming months.
2. On 29 January 2026, in aftermath of the business sale, Mr Gareth Ashton swore a further affidavit in which he deposed to the following developments, which are also relied upon by the respondents as relevant extra-curial detriments:

(a) After the penalty hearing, Santos (Qteq's largest remaining customer) had made regular enquiries regarding the status of these proceedings, in the context of Qteq's bid for a new contract which was under tender. As a result, Mr Gareth Ashton formed the view that Santos had concerns for Qteq's long term viability in light of the penalties sought by the ACCC, and that this may have impacted its preparedness to award Qteq substantial work.

(b) As a result of its inability to win new work and its continued monthly losses, Qteq's business had become unsustainable in the long term and risked becoming insolvent, which led to the decision to sell its business to Geo PSI Pty Ltd, with the preservation of the jobs of Qteq's employees being a "key driver" for that sale.

1. Overall, it is clear that Qteq has lost more than it could ever reasonably have hoped to gain from its conduct in relation to the QGC tenders. The consequences have become all the more severe now that it has effectively been put out of business.
2. These consequences provide a salutary lesson for the respondents (primarily Mr Ashton), and for any other person considering participation in conduct of this kind, that the hope or promise of substantial benefits needs to be tempered by the risks, being not only that they will fail to achieve their objective, but that the means of seeking to achieve it will make things much worse than they otherwise would have been.
3. To that end, I accept the respondents' submission that, in general, the consequences suffered by a contravenor as a result of their conduct, referred to in submissions as extra-curial punishment or detriment, may be relevant to the fixing of the appropriate quantum of penalty, because they are plainly capable of affecting the level of penalty needed to achieve deterrence. In the context of the present exercise, these consequences are perhaps better described as extra-curial detriment than extra-curial punishment, given the disavowal of punishment as a purpose of a civil or pecuniary penalty by the High Court in Pattinson at [16]: see Wheelahan J's comments to this effect in Fair Work Ombudsman v Roach [2023] FCA 781 at [22]. The respondents rely upon the application of what was said by the Full Court in Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission [2021] FCAFC 49; 284 FCR 24 at [175] (Wigney, Beach and O'Bryan JJ):

It has been accepted, at least in the context of sentencing for criminal offences, that the fact that an offender has already been the subject of extra-curial punishment - loss or damage suffered by the offender as a result of having committed the offence, outside or in addition to the court-imposed sanction - may in some circumstances be a relevant consideration in sentencing the offender: [criminal cases cited and discussion of administrative penalties omitted]. This principle has also been accepted in the context of civil penalties: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68 at [104]; Australian Securities and Investments Commission v Wooldridge [2019] FCAFC 172 at [56]- [58].

1. Both the ACCC and the respondents accept that following the High Court's decision in Pattinson, any extra-curial detriments can still be relevant to the penalty assessment, but only insofar as they serve to reduce the need for deterrence. The ACCC contended that the extent to which this is so will depend on the facts of the case at hand, relying on the disparate approaches taken by the Court in different proceedings following Pattinson: see Australian Securities and Investments Commission v Hawkins [2025] FCA 121 at [175] (Stewart J); Fair Work Ombudsman v Construction, Forestry, Mining, Manufacturing and Energy Union [2023] FCAFC 63; 297 FCR 338 (FWO v CFMMEU) at [42]-[46], to which I add [49] and [52]-[57] (Logan, Thomas and Raper JJ); Roach at [22] (Wheelahan J); Australian Securities and Investments Commission v GetSwift [2023] FCA 100; 167 ACSR 178 at [119] and [146] (Lee J). In particular, the ACCC submitted that the weight given to such consequences should be less where they are the ordinary consequences of the respondent being found to have engaged in unlawful conduct.
2. It is well established in criminal sentencing that, when assessing whether there is scope for any mitigation arising from extra-curial punishment, the Court is not to have regard to any loss or detriment suffered by a defendant as an ordinary consequence of prosecution for and conviction of a criminal offence: Melville v R [2023] NSWCCA 284 at [85] (Wilson J, Leeming JA and Davies J agreeing on this point); R v Talia [2009] VSCA 260 at [28] (Ashley and Weinberg JJA). That is because, at least in part, having separate regard to those consequences as mitigating the sentence to be imposed would be to engage in double-counting: Einfeld v R [2010] NSWCCA 87; 266 ALR 598 at [85]- [97] (Basten JA, Hulme and Latham JJ agreeing on this point). However, given the fundamental distinction between the purpose of criminal sentencing and civil penalties, that principle does not immediately apply to civil penalties but must be justified by reference to the fundamental purpose of deterrence: Pattinson at [45].
3. I consider that such a justification does exist, on the basis that an adverse effect suffered by a respondent which is merely a natural and ordinary consequence of their contravention may not have a deterrent effect which goes beyond the deterrence that is achieved by the contravention proceedings and the penalty imposed by the Court, and if so, such an adverse effect should not be given independent weight as mitigating the need for deterrence. The extent to which that is the case will generally depend, at least in part, on the degree to which those effects are contemplated as an ordinary incident of the proceedings and penalty. As an example, the costs incurred by a respondent in engaging solicitors to defend legal proceedings might be said to be an extra-curial detriment which arises from the respondent's contravention. However, because those costs are almost inextricably and unavoidably tied to the investigation, litigation and penalisation of unlawful conduct, I do not consider that they are likely to have any meaningful independent deterrent effect, either specifically for the respondent or generally for third parties, beyond the deterrence provided by the declaration of the respondent's contravention and the imposition of penalties accordingly. Therefore, to regard the natural and ordinary consequences of a contravention as an extra-curial detriment which independently reduces the need for deterrence through a penalty may, in some cases, put the Court at risk of engaging in double-counting. However, the extent to which that is the case will depend on a careful assessment of the facts through the prism of deterrence, and to that end, characterisation of certain detriments as natural and ordinary consequences should not be regarded as determinative in itself.
4. The ACCC submits that the consequences for the respondents outlined in the evidence of Mr Gareth Ashton are no more than the ordinary consequences of the Court's decision which should not be given any meaningful mitigatory weight. The ACCC retains that argument following the demise of Qteq as an operating business.
5. In FWO v CFMMEU, the Full Court considered the primary judge's characterisation of the possibility of consequences under the Fair Work Act 2009 (Cth) which flowed from a contravention of Pts 3 or 4 of that Act as extra-curial consequences relevant to the assessment of civil penalty. Their Honours found that the primary judge erred in doing so, but only on the basis that such consequences were only speculative: [42]-[58]. Similarly, Wheelahan J in Roach considered the respondent's embarrassment and his perception of hardship as contributing to some extent to his Honour's consideration of the appropriate penalty for achieving the object of specific deterrence: [22]. Further, Lee J found in Getswift that damage to the respondent's reputation was relevant to specific deterrence: [146]. Although the comments of Lee and Wheelahan JJ avoid the terminology of extra-curial punishment or detriment, their Honours' approach is consistent with that which I have described above as a consideration of extra-curial detriment, being an assessment of the independent deterrent effect of consequences suffered by a contravenor which may reduce the level of penalty required.
6. Before the business sale occurred, I was satisfied that the loss of work from both QGC and Origin was likely to have an independent deterrent effect on the respondents. Although some impact of the contravention on Qteq's relationship with QGC (and, to a lesser extent, Origin) would have been contemplated as a natural and ordinary consequence of the attempted contraventions, having regard to the approach of the authorities in the preceding paragraph, I consider that the magnitude of this impact would have had at least some independent deterrent effect. I consider that the ACCC goes too far in characterising what has happened to Qteq as being no more than the ordinary consequences of its attempted contraventions.
7. Given that Qteq is now unlikely to undertake trading activities in the future, any specific deterrence is now confined to Mr Ashton, through the indirect effects of these consequences on him through his substantial interest in the company. In addition, I am satisfied that, having set out the consequences suffered by Qteq in these reasons and thus publicised them to potential future contravenors (or, perhaps more realistically, their legal advisers), those extra-curial detriments are also capable of having some general deterrent effect, although to a lesser extent, which remains relevant even following the business sale.
8. I am not prepared to reach the same conclusion in relation to the evidence regarding Qteq's failure to win the Santos tender. The evidence provided by the respondents goes no further than Mr Gareth Ashton's statement that he was concerned that Qteq was unlikely to win the Santos tender, and suspected that that result was connected to these proceedings. There was no evidence that those concerns had been confirmed by any representative from Santos.
9. Similarly, whilst it is clear that these proceedings have contributed to the need for Qteq to divest its business, some caution must be exercised not to engage in any double-counting by having regard both to the loss of revenue which led to the sale and to the sale itself. Additionally, whilst it may be that the business was sold for a significantly lower price than would otherwise have been achieved as a result of the proceedings, I am unwilling to draw an inference to that effect in the absence of any direct evidence on the point.
10. The final position that I have arrived at is that the loss of revenue which occurred as a result of Qteq's contraventions and at the very least contributed to the need for Qteq to sell its assets and business to a limited extent diminishes the need for general deterrence, with specific deterrence no longer having any real role to play in relation to Qteq, as discussed at [137] above. Although those factors would presumably have had an impact on Mr Ashton as Qteq's largest shareholder, particularly given he has never and now will never receive a dividend from his ownership of Qteq, I am unwilling to speculate as to the deterrent effect on him of any extra-curial detriment given he has not provided any evidence in the proceeding, consistent with my observations above at [140].

1. The parties did not place specific reliance on the comparative penalties imposed in other cases, beyond distinguishing specific aspects of the case before me from the facts relating to those considerations in other civil penalty cases.

1. As noted early in these reasons, at [8]-[9]:

(a) As against Qteq, the ACCC seeks the imposition of an overall penalty of between $11 million and $13 million, whereas Qteq seeks an overall penalty of $1.5 million;

(b) As against Mr Ashton, the ACCC seeks the imposition of an overall penalty between $750,000 and $950,000, whereas the Mr Ashton seeks an overall penalty of $500,000.

1. The parties' submissions as to the appropriate penalty did not change following the penalty hearing as a result of the business sale.
2. The ACCC's upper range figure of $13 million for Qteq was arrived at from the following breakdown:

(a) Attempt #1: $2 million

(b) Attempt #2: $3 million

(c) Attempt #3: $2.5 million

(d) Attempt #4: $2.5 million

(e) Attempt #5: $3 million

1. The ACCC's upper range figure of $950,000 for Mr Ashton was arrived at from the following breakdown:

(a) Attempt #1: $150,000

(b) Attempt #2: $250,000

(c) Attempt #3: $175,000

(d) Attempt #4: $150,000

(e) Attempt #5: $225,000

1. In oral submissions, the ACCC explained the basis for the differences in the penalties it proposes against Qteq for each attempt by reference to the following qualitative submissions:

(a) As a general proposition there is nothing about the attempts directed at Pro-Test which warrants a higher penalty than those directed at Easternwell;

(b) Attempt #2 warrants a higher penalty than Attempt #1 because it followed a previous unsuccessful attempt directed at Pro-Test, involved a more sophisticated and specific cartel provision, and was carried out by both Mr Ashton and Mr Meldrum, as opposed to Mr Meldrum alone;

(c) Attempt #3 warrants a penalty between Attempts #1 and #2, because it followed two earlier failed attempts, and involved a broader restraint encompassing the supply of gauge works generally (not just to QGC), but also involved a less specific and sophisticated cartel provision than Attempt #2; and

(d) Attempt #5 warrants a higher penalty than Attempt #4 because it was a further attempt directed at Easternwell which occurred after Attempt #4 had failed, and occurred over a longer period of conduct.

1. The ACCC indicated that essentially the same considerations explained the variation in the penalties it proposes against Mr Ashton for each attempt.
2. Neither side provided any detailed explanation of the methodology by which they arrived at the dollar figures for their proposed penalties. That observation is not intended as a criticism, but rather an explanation as to the state of the arguments advanced. The raw numbers advanced provide competing sets of benchmarks, but no particular rationale to prefer one figure over another.
3. Penalty imposition for pecuniary penalties is generally taken to involve a process of instinctive synthesis akin to that applied to criminal offence sentencing. It entails taking the outcome of the overt and express assessment and evaluation of the various features of the conduct and combining their collective and often competing effects instinctively to produce a single numerical result or set of results.
4. I have considered and assessed in some detail all of the features of the proven attempts, the various considerations that seemed to me to be most relevant, and the competing submissions, including as to the demise of Qteq and the consequences flowing from that. I am now required to reduce and synthesis all of that to produce numerical pecuniary penalties.
5. I am satisfied that substantial penalties are required to meet the objective of deterrence, including specific and general deterrence in relation to Mr Ashton, and in the circumstances only general deterrence in relation to Qteq. In relation to the top of the range of figures for Qteq advanced by the ACCC, I consider they are, individually, more than double what is reasonably required for deterrence in all the particular circumstances of this case, but also that those advanced by the respondents are manifestly and woefully inadequate for that purpose. I generally accept the submissions made by the ACCC about the approach as between the different penalties summarised at [170] above. In relation to Mr Ashton, where the competing figures are not so far apart, I consider overall penalties marginally above the higher total of $950,000 that the ACCC seeks are appropriate, provided that the payment of them comes out of his own pocket, as is discussed further below.
6. After consideration of totality in the manner endorsed by the High Court in Pattinson (at [45]), I have arrived at the following as the appropriate penalty to be imposed:

(a) Against Qteq:

(i) Attempt #1: $1 million

(ii) Attempt #2: $1.5 million

(iii) Attempt #3: $1.25 million

(iv) Attempt #4: $1.25 million

(v) Attempt #5: $1.5 million

(vi) Total: $5 million, reduced by totality from the tally of the above individual figures of $6.5 million.

(b) Against Mr Ashton:

(i) Attempt #1: $150,000

(ii) Attempt #2: $250,000

(iii) Attempt #3: $175,000

(iv) Attempt #4: $200,000

(v) Attempt #5: $225,000

(vi) Total: $1 million, being 20% of the final penalty imposed upon Qteq.

1. I have carefully considered the individual and overall penalties that I propose to impose upon Mr Ashton and am satisfied that no further adjustment is required for totality.
2. As payment by instalments is no longer sought, I will order that the penalties be paid within 60 days.

1. Mr Ashton has notified a claim to his insurer regarding these proceedings under a management liability policy which may include cover for any pecuniary penalty he is required to pay. In those circumstances, the ACCC seeks a non-indemnification order, precluding Mr Ashton from calling upon any insurance policy to any penalty ultimately imposed on him. Mr Ashton opposes that order being made. There was properly no dispute as to whether the Court is empowered to make a non-indemnification order of that kind: BlueScope Steel Ltd v Australian Competition and Consumer Commission [2025] FCAFC 118; 312 FCR 348 at [539] (Wigney, Bromwich and Halley JJ).
2. I am satisfied that it is appropriate that a non-indemnification order be made. The penalties imposed on Mr Ashton would have no real deterrent effect if he did not have to pay them himself. That would in one fell swoop undermine both specific and general deterrence. The objective of deterrence is especially important in relation to Mr Ashton given that he was, on the available evidence, the driving force for most of the conduct by Qteq, and stood to benefit from that conduct. Making this order significantly increases the general deterrence effect of the imposition of the penalties upon him, as well as the specific deterrence effect on him, and is appropriate having regard to the conclusions I have reached above.

I certify that the preceding one hundred and eighty (180) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich.