Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd [2011] FCA 1216 | Case summary

REASONS FOR JUDGMENT 1 On 24 August 2011, for reasons which I then published, I made findings in respect of the application which was brought by the Australian Competition and Consumer Commission (the Commission) against the respondents alleging particular contraventions of Pt IV or, as the case may be, Pt V of the Act then known as the Trade Practices Act 1974 (Cth) (Trade Practices Act). At the time I directed the Commission to bring in proposed minutes of orders to give effect to those reasons for judgment and adjourned the proceedings for the purpose of later consideration of those proposed orders and questions as to penalty. These reasons for judgment must be read in conjunction with those which I published on that earlier occasion: Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd [2011] FCA 973. 2 The contraventions concerned occurred in 2004, 2005 and 2007 at a time when, as I have mentioned, the governing legislation was known as the Trade Practices Act. In my earlier judgment I made findings by reference to particular projects. It is convenient now to offer a summary by reference to particular respondents: (a) Woollam In respect of the Callemondah Project the first respondent, TF Woollam & Son Pty Ltd (Woollam), gave a cover price, a term to which I shall revert later. In so doing it contravened s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act. In respect of a separate project, the Jilalan project, Woollam gave a cover price and in so doing contravened those same provisions. In respect of the Rockhampton Airport project in its first tender phase, Woollam gave a cover price and in so doing contravened those same provisions of the Trade Practices Act. (b) Kelly The second respondent, JM Kelly (Project Builders) Pty Ltd (Kelly), in respect of the Callemondah project, received a cover price. In so doing it contravened s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act. In respect of the Jilalan project, Kelly received a cover price. In so doing it contravened each of those same provisions of the Trade Practices Act. In respect of the first tender phase of the Rockhampton Airport project, Kelly received a cover price and once again, in so doing, contravened those same provisions of the Trade Practices Act. In respect of the second tender phase of the Rockhampton Airport project, Kelly gave a cover price. In so doing it contravened those same provisions of the Trade Practices Act. Finally, in respect of the West Pacific Pines project, Kelly received a cover price. Yet again in respect of that conduct, it contravened those same provisions of the Trade Practices Act. (c) Carmichael The third respondent, Carmichael Builders Pty Ltd (Carmichael), received a cover price in respect of the second tender phase of the Rockhampton Airport project. In so doing it contravened s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act. (d) Mr Murphy The fourth respondent, Mr John Geoffrey Murphy, was knowingly concerned or involved in the contravention by Kelly, arising from the provision of a cover price in respect of the second tender phase of the Rockhampton Airport project. (e) Mr Bogiatzis The fifth respondent, Mr George Luke Bogiatzis, was involved in Woollam's contraventions arising from the giving of the cover price in respect of the Callemondah project. He was likewise involved in the giving, by Woollam, of the cover price in respect of the Jilalan project. Further, he was involved in the giving by Woollam of the cover price in respect of the first tender phase of the Rockhampton Airport project, by Woollam. The latter was an involvement in the contravention of s 45(2)(a)(ii). 3 Of the projects mentioned, the Callemondah, Jilalan and West Pacific Pines projects were what one might generally describe as State Government projects. The Rockhampton Airport project was a local government building project. 4 A contravention by a corporation of the provisions mentioned subjects that corporation to a maximum pecuniary penalty, according to the Act as in force at the time, of $10 million: see s 76(1A)(b) of the Trade Practices Act. Contraventions by an individual, which include being involved in a corporate contravention, subject an individual, according to the Act as in force at the time, to a maximum penalty of $500,000: see s 76(1B) of the Act. 5 It is important to note that the legislation at the time provided for civil penalties in respect of such contraventions. The proceedings which the Commission brought are a species of proceeding which has a very long heritage in our law. They fall within that type of proceeding known as a suit by the Crown for the recovery of a pecuniary penalty. They are not criminal in character. What is recovered is a pecuniary penalty, not a fine. The position now is different in the sense that Parliament has made provision in what is now known as the Competition and Consumer Act 2010 (Cth) (Competition and Consumer Act) for the alternative of criminal proceedings to be brought in respect of conduct of this kind. Axiomatically, these respondents must be dealt with according to the law in force at the time when the contraventions occurred. 6 Related to the contravening conduct were instances of misleading or deceptive conduct contrary to s 52 of the Trade Practices Act. Those contraventions arose either from a statement in the tender submitted or, further or alternatively, from a statement made in a resultant contract. Contraventions of s 52 of the Trade Practices Act did not and, for that matter, in terms of the present state of the law, do not attract a civil penalty, much less criminal sanction. They can, though, subject the contravener to a suit for damages or for declaratory, injunctive and ancillary relief. In this case, both in respect of the contraventions of Pt IV, as well as the s 52 contraventions, the Commission has sought declaratory, injunctive, and ancillary relief. The case is not one where any claim in respect of damages is brought. 7 It would not be correct to describe the contravening conduct which has occurred as "price fixing". Here, tender prices were not fixed; rather, they were controlled by an agreed ceiling in respect of the person giving the cover price, and an agreed floor in the case of the person requesting and receiving the cover price. All that was "fixed" was the floor or the ceiling, with the parties to the arrangement then free to select a price below the ceiling, in the case of the person giving the cover price or, in the case of the person requesting and receiving the cover price, above the floor. In that description, one finds the essence of what amounts to a cover price. 8 The conduct here is aptly described as price-controlling behaviour. It is a form of collusive tendering and an unlawful civil conspiracy. Section 45A of the Trade Practices Act extends to price-controlling as well as price-fixing and price-maintaining behaviours. It deems such conduct to be conduct which substantially lessens competition in a way which then violates the general prohibition in respect of conduct substantially lessening competition in a market, as found in s 45 of the Trade Practices Act. 9 "Bid rigging" is a term which has been used by the Commission in its media release which followed my findings as to contraventions. That description has derivatively been used in the media to describe the conduct concerned. Bid rigging was not a term found in the Trade Practices Act as it stood at the time when these contraventions occurred. In that sense the use of the description was inapt. The term is now found in the Act as renamed the Competition and Consumer Act. In the current Act, bid rigging is a form of cartel conduct, as defined: see Div 1 of Pt I in Sch 1 to the Competition and Consumer Act. 10 The term "bid rigging", foreign until recent times to our law, would seem to have its origins in American academic commentary over the course of the previous century in relation to what has come to be known as the Sherman Anti-Trust Act 1890 15 USC s 1 (Sherman Act), of which more later. It has, though, found resonance not only in recent times in Australia but also in the United Kingdom, in s 188(2)(e) of the Enterprise Act 2002 (UK), and in Canada, in s 47 of the Competition Act 1985 (Can). 11 In the common law world, the origins of provisions such as those found in Part IV of the Trade Practices Act, including materially s 45 and s 45A, may be traced to the Act which has come to be known as the Sherman Act, the provisions of which are found in Title 15 of the United States Code, ch 1 and, more particularly, to the prohibition of conduct in restraint of trade found in s 1 of that chapter. Whether the prolixity of provision in Pt IV of the Trade Practices Act, or the present Sch 1 is an improvement on the elegant, direct, but potent simplicity of its origin is perhaps moot, but it is a matter for the value judgment of parliament, which must be respected. 12 In relation to the Sherman Act, and in Spectrum Sports, Inc v McQuillan (1993) 506 US 447 at 458, the Supreme Court of the United States observed that "The purpose of the [Sherman Act] is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself". That observation has equal application in relation to Pt IV of the Trade Practices Act, of which s 45 and s 45A are constituent parts. Those provisions are directed to conduct which substantially lessens competition in the market. 13 In the overall market in which the conduct in this case occurred, none of the corporate respondents was a dominant participant. Hindsight instructs that each was not without prominence in relation to the tenders which came to be submitted for particular projects. At the time, though, when these tenders were submitted, each respondent had at best an imperfect knowledge of the number of competitors, actual or potential. 14 The tender prices of those who gave a cover price were, on the evidence, struck on the basis of being priced by a person who wanted to win the tender. Those who received the cover price did not strike their prices on that basis. The effect was to eliminate, in respect of the person receiving the cover price, someone who appeared to external observation and, in particular, to the agency of State or local government letting the tender, to be a competitor. There is, though, no evidence in this case that the tender price of the person who gave the cover price was inflated after the request. Nor is there evidence that, in a monetary sense, either the State Government, State Government agency or the local government suffered loss or damage. This is a moderating influence necessarily in relation to assessment of penalty. 15 The Commission led evidence from an economist, Dr Williams, in relation to the types of harm which can occur in a market from the practice of cover pricing. This evidence, though, was at a level of abstraction which was divorced from the conduct which I have found in fact occurred. It is by no means impossible to see how monetary loss could occur in relation to cover pricing if the giver succumbs to the temptation of inflating its price after the receipt of a request from a competitor or would-be competitor, so the giver might otherwise have thought, for a cover price. The strength of the temptation would depend very much on the degree of knowledge and certainty of knowledge of competition. In a duopoly market, that temptation would be very strong. It is important, though, that these respondents be dealt with on the basis of the conduct which in fact occurred, not on the basis of conduct which might occur in other contexts. 16 There is, in the conduct which I have found, what has come in earlier cases to be described as a "per se" quality. All that means is that this particular conduct, per force of s 45A, is taken to substantially lessen competition in the marketplace. The conduct, per se, on its occurrence, is taken substantially to lessen competition. That is not to render irrelevant the fact that there was no monetary loss or damage. 17 Though there was no monetary loss or damage, it does not follow that this conduct is without its seriousness. What it does is to create a false market. Mr Atkins, a senior officer in the State Public Works Department, who gave evidence in relation to penalty, rightly, in my respectful opinion, voiced a concern about this. This type of conduct sends to those in, materially, the State Government or a local government, false signals about price or about a range of prices for a particular building works undertaking. It creates an illusion both as to a range of prices and as to the existence of a particular level of competition. It is by no means impossible to see how the illusion thus created can have, over time, effects in terms of an assessment of the range of prices for particular tasks which ought to be regarded as reasonable. 18 In the particular context in which the conduct occurred in relation to the State Government projects, the conduct also involved a betrayal of trust. That is a feature of the facts of this case. The State Government, for public policy reasons associated with the efficient administration of State works projects, developed a system for the prequalification of contractors. The conduct which occurred here involved transgressing the expectations of the State in relation to its prequalified contractors. 19 It is a feature of the case, apparent on the evidence and unsurprisingly so, that in the letting of both State and local government public works contracts, value for public money is sought via a process of competitive tendering either through select tenderers or more generally open tenders. That the contravening conduct was antithetical to such processes cannot in my opinion be ignored in relation to the assessment of penalty. Of course the penalty must be imposed in respect of the conduct found to contravene the Trade Practices Act, but that conduct occurred in a particular context. 20 On the evidence, the practice of cover pricing was well-known in the building industry and well-known in the market in which the respondents were participants. Knowledge of a vice is, of course, not to be equated with its practice or prevalence. Nonetheless, when I have regard to the knowledge so generally evident on the evidence which I heard, including in particular evidence from Mr Matthews as to its application, and also when I have regard to the disparate nature of the projects and to the fact that they involved the State as well as local government, there is, in my view, a strong inference open, and one which I draw, that the practice of cover pricing was widespread. This, too, has implications in relation to the imposition of penalty. It is very relevant indeed to the question of general deterrence. 21 That the practice is widespread may also have implications for how other agencies come to deal with the consequences of findings that a respondent has contravened the Trade Practices Act. These particular contraventions do seem to be but exemplars rather than idiosyncratic behaviours by the particular respondents. I have in evidence before me evidence as to action already taken by the State by way of suspension and also potential action in respect of builder registration. It is relevant to note these actualities as well as contingencies but the implications under other regimes as to a practice being widespread for these particular respondents are for other agencies, not for me. It falls to me to determine penalty and whether to grant other relief under the Trade Practices Act. It is just that, in relation to the imposition of penalty, it is relevant to take into account that the respondents may be subject to consequential adverse consequences. 22 I have already made reference to some considerations that are relevant in relation to the moderating or not of penalty. Prevalence is obviously relevant on the subject of general deterrence. Relevant considerations in respect of the imposition of penalty are stated in a declaratory but not exhaustive way in s 76(1) of the Trade Practices Act. I use the description "declaratory" because one finds in s 76(1) a statement of considerations that would, even absent that statement, be relevant under general principles in relation to the imposition of penalty. 23 As to general principles in relation to the imposition of penalty, the Full Court of this Court offered, in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (in liq) (2007) 161 FCR 513 at 527 (Dataline) at [58] and following, a comprehensive summary of the prevailing position. One sees there, at [59], approval by the Full Court of the taking into account by a judge exercising original jurisdiction of a submission as to penalty made by the Commission, especially as the Commission is a specialist regulator in this field. Equally, and perhaps with respect obviously, while the Commission's submissions are relevant, they are not, as the Full Court there observed, determinative. 24 The Full Court further observed at [60]: The primary objective of imposing a pecuniary penalty … is deterrence with a view to putting a "price on contravention that is sufficiently high to deter repetition by the contravener and by other who might be temped to contravene the Act." Their Honours continue: Accordingly, a pecuniary penalty ought to be imposed upon the [contravener] sufficient to deter him from engaging in further contraventions of the Trade Practices Act (specific deterrence) and to deter members of the public from engaging in similar conduct (general deterrence) by demonstrating to the public that a contravention is a serious matter and that the burden or consequences of a contravention [of the provision] outweighs the cost of adopting a culture of compliance with the legislation. Any penalty ought not to be disproportionate so as to be oppressive. The character of the contravention must be the central determinate of the penalty taking into account any ameliorating circumstances. [Authorities cited not represented] I interpolate that that case concerned a contravention of s 48, also found within Pt IV of the Trade Practices Act. Their Honours continue, in language which is equally apt for this case in relation to s 45 and s 45A: Although contraventions of section 48 of the Trade Practices Act involve contraventions of a per se prohibition, an analysis of the character of the offence as a "central determinant" of penalty necessarily involves contrasting such a contravention with other classes of contravention such as "major cases of price fixing by companies with considerable market power in industries of wide significance to society" and contraventions which strike at the "very heart of the objectives of the Trade Practices Act" involving "collusive tendering arrangements" with the "subsequent destruction of a competitive market." They further state at [61]: In determining a pecuniary penalty the Court will have regard to the nature, character, content and extent of the contravening conduct; whether the conduct was deliberate and undertaken in disregard of the prohibition imposed by the legislation; the scale (size, resources and market power) of the corporation engaging in the conduct; the seniority and role [of the person] through whom the conduct occurred in relation to the conduct of the corporation; the commercial consequences of the conduct upon all participants affected by the conduct; the contextual events within which the conduct occurred (such as the nature of the industry and the methodology adopted to give effect to the conduct); whether the contravention is truly isolated or aberrant, notwithstanding a demonstrated culture of compliance (if one exists) on the part of the corporation or a demonstrate culture of compliance on the part of the senior manager engaged in the conduct giving rise to the contravention; whether [the individual] and the corporation has cooperated with the ACCC in seeking to address the conduct in the face of examples of contravening conduct identified and put by the ACCC to him; and whether [that individual] has previously been found by the Court to have contravened a provision of Part IV of the Trade Practices Act. 25 Also pertinent are the following additional observations made at [62] in Dataline: The very designation of the conduct as a per se prohibition is said to reflect an expression of the Parliament that in that case, resale price maintenance conduct poses a real threat, like price fixing conduct, "to the central nervous system of the economy." In respect of a per se prohibition, it has been observed that: Whilst any known effect may be of considerable importance to the question of penalty, an inability to quantify it is not a factor which operates in favour of contraveners. This inability will often be present. It is evident in Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] ATPR 42-031 that such a consideration was influential in relation to Selway J's assessment of penalty. In Dataline, the Full Court observed, at [62] of this: However, in determining an appropriate pecuniary penalty the character of the contravention as a contravention of a per se prohibition does not mean that evidence of the effect of the conduct upon particular parties or the public more generally or evidence of the circumstances of the corporation, its turnover, resources, scale, market share, and other evidence of market circumstances, is not relevant and important. The pecuniary penalty must be determined by the Court as 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 Part IV … to have engaged in any similar conduct." 26 I propose to follow the approach counselled by the Full Court in Dataline in the imposition of penalty in this case. Indeed, I consider I am duty bound so to do. I have already adverted, as will perhaps be obvious from the passages which I have quoted from Dataline, to considerations which are relevant in relation to the imposition of penalty. Here, there are, in truth, no precedents in respect of price-controlling behaviour. Earlier examples of contraventions of s 45 and s 45A are to be found. I was pressed with many of these, but they concerned other types of conduct, conduct where all or many of the competitors in a marketplace had met so as to divide the market, to allocate work and to inflate or maintain prices. That is not this case. 27 The conduct which occurred here was ad hoc and opportunistic. It did not involve profiteering. It certainly presented a temptation for the same, but that was not a temptation to which the respondents and materially, in particular, either Mr Murphy or Mr Bogiatzis succumbed. It is desirably repeated that the respondents must be dealt with for the conduct which did occur, not for conduct which, in other cases, might occur. There is not, as in the more obvious type of cartel case, evidence here of a longstanding arrangement involving the fixing and maintaining of prices in a market. For all that, as with the more obvious types of cartel conduct, this conduct is covert. It is difficult, but as this case amply demonstrates, by no means impossible for this conduct to be detected. These features are also highly relevant in relation to general deterrence. 28 As Dataline underscores, it is relevant to take into account the particular circumstances of the respondents, both corporate and individual. I have before me in evidence financial information concerning the respondents. I have taken that into account in relation to the imposition of penalty. I do not propose to detail the particular circumstances of each corporate respondent. For reasons which commended themselves to me in the course of the penalty hearing, I was persuaded that there was a degree of genuine commercial sensitivity in relation to that information. I make it plain, though, that in the assessment of penalty, I have particularly taken into account the financial positions as revealed in the evidence before me. 29 Also relevant, in my opinion, is the size of the projects concerned. These were most certainly not domestic building projects, but neither were they major building projects involving tens or scores of millions of dollars. Capacity to pay and the size of the projects are relevant, but not decisive in relation to the imposition of penalty. 30 Each of the corporate respondents, though not a dominant participant in the market, is on the evidence, a significant local employer. It was put to me that it would be ironic if the effect of the imposition of penalty were to be such that the corporation, having regard to the size of the penalty, must necessarily be wound up. Capacity to pay is certainly relevant, but as I have observed, it is not determinative. If, truly, by contravening conduct of a particular kind and severity, a corporation exposes itself to a penalty that is apt for the circumstances, and that penalty happens to be of an order that must lead to the liquidation of the company, so be it. That is a message which those who contravene the Trade Practices Act need to assimilate very clearly, in my opinion. 31 I have found the fixing of penalty in this case a singularly difficult task. There is a need for general deterrence. There was, on the part of the respondents, cooperation of sorts with the Commission, but it is not, in my view, cooperation of a kind which ought greatly to resonate in mitigation. Each of the respondents responded to notices which the Commission gave under its investigatory power in s 155 of the Trade Practices Act. Our law obliges them so to do. Thereafter, the conduct concerned having been highlighted, a lengthy trial nonetheless ensued, with all of the consumption of public resources that entails. The respondents contested liability. They were entitled so to do. There had not been earlier a case directly on point in relation to price-controlling behaviour. That said, the word "control" has been sitting there for a very long time indeed in s 45A of the Trade Practices Act. 32 Having regard to the conclusions which I reached in my earlier judgment, it is apparent that the respondents, including the individuals concerned, did not before this case, have an insight into the prohibition in respect of price-controlling behaviour. I am quite convinced now, especially having seen in respect of penalty, the evidence from Messrs Murphy Senior and Junior, and Mr Bogiatzis, that they have no doubt about the prohibition now. 33 Each of the corporate respondents, without the need for coercive order by the Court, has already engaged in trade practices compliance training. That training has been given by appropriately skilled professional people. That is a factor which is a mitigating factor. Having said that, I do not see this case as one where the respondents ought to be given the type of credit in mitigation of penalty that one sees in cases where the conduct concerned, having been alleged and drawn to the attention of a respondent, is readily acknowledged with all of the savings that entails. 34 I doubt very much whether any of the respondents, be they corporate or individual, will again embark on this type of conduct. The case has doubtless had a scarifying influence. It is highly likely that there has been, having regard to the publicity which has already occurred, and which may yet occur, a diminution in the goodwill of each of these corporate respondents. They have also jeopardised, by their conduct, a major source of their work; namely, the State Government and its agencies. 35 Mr Carmichael did not give oral evidence in relation to penalty. I did, though, hear from him in relation to the question of liability and I made particular findings in my earlier judgment in relation to him. Again, it seems to me highly unlikely, in light of that experience, that Carmichael will engage in this type of conduct again. To do so truly would be an act of folly, for on repetition, and in the absence of highly singular extraordinary mitigating circumstances, one could only expect a draconian penalty as a response. 36 When I look at the factors to which I have adverted, the conclusion to which I am drawn is that the level of penalties promoted by the Commission would be manifestly excessive in the circumstances of this case. Equally, it seems to me that the penalties promoted on behalf of respondents, be they corporate or individual, reflect a degree of mitigation of penalty such as one might be disposed to consider in the event of ready acknowledgment of contravening conduct. 37 There is no mathematical approach to the imposition of penalty. Further, it is singularly important to have regard, in the case of multiple contraventions, to the totality principle. Parity is important but not to a degree of mathematical precision. It is necessary, even in respect of a single contravention, or a single event giving rise to what are strictly two contraventions, to impose a penalty which is sufficient generally to deter that type of conduct from happening at all. It does not follow that a penalty apt for that ought then uncritically to be extrapolated mathematically according to the number of separate contraventions in which other respondents have engaged. 38 There is power, in my opinion, to impose one penalty in respect of the various contraventions. That is the course which I propose to follow, both in respect of the corporate respondents and the individuals. 39 The penalties which I have assessed, therefore, in light of all that I have observed, are these. In respect of the contraventions by Carmichael I impose a pecuniary penalty of $250,000. The intent in so doing is to make it plain generally that even to take a phone call and to respond to it by giving a cover price will cost a quarter of a million dollars, even in the circumstances such as I have related. In respect of the various contraventions by Woollam I impose one penalty in the sum of $450,000. In respect of the various contraventions by Kelly I impose one penalty in the sum of $600,000. 40 It will be apparent from the corporate penalties that I have deliberately not engaged in a process of mere mathematics. My intention in respect to the penalties for Woollam and Kelly is to reflect that there was more than one contravention and also to reflect a degree of parity, but nonetheless to recognise that Kelly engaged in the case before me in more proven contraventions than Woollam. 41 Those same sentiments attend the penalties which I impose on Mr Murphy and Mr Bogiatzis. In respect of Mr Murphy I impose a penalty in the sum of $30,000. In respect of Mr Bogiatzis I impose one penalty in the sum of $50,000. In so doing, I have also expressly taken into account a need to avoid what on the cases has been described as double penalisation. In other words, it is important in the case of companies where the control is close, and the effect of the penalty will resonate indirectly on its shareholders not doubly to penalise the individual for a loss which is already visited upon him by virtue of an interest in the company. That said, there has to be recognition of the occurrence of this conduct via individuals. It is not, conduct which occurs without a deliberate decision by an officer of a corporation having the requisite authority to embark upon it. 42 The Commission has sought, in addition to penalty, the granting of injunctive and ancillary relief. Here, too, the Full Court in Dataline offers guidance in relation to what are in the end matters which call for the exercise of a judicial discretion. By that I mean, that it does not follow automatically, even where contraventions are found to have occurred and even where penalties have been imposed, that either injunctive or ancillary relief should be granted. 43 As to injunctive relief, counsel quite properly drew to my attention a peculiarity, and that is an apt description, in respect of the transitional provisions found in the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth) (Australian Consumer Law). Within Sch 7 to that Act one finds provisions dealing with transitional matters. Some of these might perhaps have been left to well-settled provisions in the Acts Interpretation Act 1901 (Cth). Nonetheless, Parliament has chosen otherwise in this instance. Clause 6 in Sch 7 provides materially that: (1) The Trade Practices Act 1974, as in force immediately before the commencement of this item continues to apply, after that commencement, in relation to acts or omissions that occurred before the commencement. 44 Clause 7 of Sch 7 is in these terms: Proceedings already commenced (1) The Trade Practices Act 1974 as in force immediately before the commencement of this item continues to apply to or in relation to any proceedings, under or in relation to that Act, that were commenced, but not concluded, before that commencement. (2) However, to the extent that any such proceedings are proceedings for an injunction under section 80 of that Act as so in force, the proceedings are taken, after that commencement to be proceedings for an injunction under section 232 of the Australian Consumer Law. 45 Quite what commended itself to Parliament about cl 7(2) is something of a mystery. It is difficult to see either rhyme or reason for the provision. Nonetheless, meaning must be given to it and I must eschew an absurd or unlikely construction. Read literally, the clause may give rise to this absurdity, s 232 of the Australian Consumer Law has nothing to say about this type of contravening conduct. It is not directed to the type of conduct which constitutes a contravention of Pt IV of the Trade Practices Act. It is unlikely, to say the least, that conduct which before the commencement could have resulted in the granting of injunctive relief was intended by Parliament not to be able to be the subject of such relief after the passing of what has been termed by some a reform. The effect, in my opinion, of the provision, is to do nothing more than to pick up the power to grant injunctive relief in s 232 of the Australian Consumer Law. In other words, one must read it as incorporating by reference, in relation to this type of past contravening conduct, a power to grant injunctive relief such as one finds in s 232, but not to confine that power only to the type of conduct to which s 232 is directed. It follows that I am persuaded that there is power to grant injunctive relief. 46 Whether or not so to exercise that power is to be determined by reference to observations made by the Full Court in Dataline at p 537 and following. The observations there made are lengthy. I do not propose to recite them, but record that I have taken all that is there stated into account. In particular, a Full Court quotes with approval statements made by Lockhart J in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 (ICI Case) at page 255 and following, where, amongst other things, his Honour stated: Injunctions are traditionally employed to restrain repetition of conduct. A statutory provision that enables an injunction to be granted to prevent the commission of conduct that has never been done before and is not likely to be done again is a statutory enlargement of traditional equitable principles. But this is because traditional doctrine surrounding the grant of injunctive relief was developed primarily for the protection of private proprietary rights. Public interest injunctions are different. Parts IV and V of the Act involve matters of high public policy. 47 An injunction must do something more than require a person just to obey the terms of a statute. The injunctive relief promoted by the Commission was more detailed than a mere recitation of a statutory provision. That said, I bear in mind the following statement made by the Full Court in Dataline at [110]: We are inclined to think that in general, a court order requiring a person to conduct themselves in a particular way, when a statute requires that conduct in any event, will add little to the statutory prescription or proscription and the statutory sanctions attending non-compliance. We accept that such an order may add the possibility of imprisonment for contempt where the relevant contravention would not otherwise lead to that consequence. However, if Parliament has not provided for imprisonment in connection with a contravention, it may not be appropriate for a court to enjoin such conduct simply in order to create the possibility of imprisonment. While Parliament has provided for an injunction as a possible remedy, it may be doubted that it intended that an injunction would be a remedy granted in the ordinary course in the face of the statutory sanctions Parliament has itself provided. Moreover, a Court has an interest in maintaining the efficacy of injunctive relief, which requires that orders be respected. They will only be respected if they consistently serve a useful purpose, and if breaches are discovered and punished. It may also be doubted that a court order requiring conduct which a statute otherwise requires will be seen to have any greater or different significance to the statutory requirement. Their Honours continued at [114]: The experience of the law is that unlawful or illegal conduct does not lead to an injunction against repetition of such conduct being sought or granted. A range of other remedies exist in the civil and criminal law which are treated as adequate and appropriate sanctions for such conduct. Normally, it is only where there is a real risk of further misconduct that injunctive relief is contemplated. 48 Here, as I have said, there is no doubt that there is power to grant injunctive relief, nor, as Lockhart J stated in the ICI Case, should one conceive that power as constrained by traditional notions of where injunctive relief might be granted under the general law in relation to matters of private rights. Giving full weight to that consideration, it nonetheless appears to me that this is not a case for the granting of injunctive relief. As I have already observed, I am persuaded that it is unlikely that any of these respondents, be they corporations or individuals, will again embark on the conduct concerned. If they do, apart from civil penalties the alternative under the law as it now stands is criminal prosecution with the prospect on conviction of imprisonment. Our parliament has now aligned our law in this regard with that of the United States, the United Kingdom, and Canada, in relation to the contingency of imprisonment being present. I am not persuaded that the granting of injunctive relief would add anything to the general deterrence that I intend from the imposition of the penalties mentioned. Nor should it, for the injunctions are specific to particular individuals or corporations, if granted. 49 Those same sentiments attend why it is that I have decided not to grant ancillary relief in respect of the undertaking of compliance training or the publication of advertisements of one sort or another. There has already been wide scale publicity. Indeed, the Commission has promoted the same. Further, it is apparent on the evidence that this publicity has carried over into responsive actions of the State, including its Builders Registration Board. In those circumstances, whilst there is doubtless some benefit to be obtained from the publication of a note such as in a journal of Master Builders Association, I do not see that benefit as one which requires the granting of relief which would make the respondents cause such advertisements to be published. 50 It is very important in cases such as the present that there not be an uncritical recitation in claims for relief by the Commission, or at least in the pressing of claims for relief by the Commission, of relief which, in the circumstances of other cases of a different kind to the one at hand, have commended themselves to the Court. It is not a question of whether there is power to grant such relief but whether, in the circumstances of this case, and in the exercise of a discretion, such relief ought to be granted. I decline to order injunctive or ancillary relief, save in respect of the granting of declaratory relief. There is, in this type of case, a very strong public interest in the granting of declaratory relief. 51 The question which arises in relation to the granting of declaratory relief is whether, in so doing, there ought to be reference to Sommer & Staff Constructions Pty Ltd (Sommer & Staff). That corporation was not a party to the proceeding. It seemed to me in the interests of justice that an opportunity ought to be afforded to that company to make submissions in respect of whether or not the declaratory relief should make reference to it. Sommer & Staff took advantage of that opportunity. I have taken into account the submissions which were advanced. It seems to me, though, that in those cases where the Court has chosen not to name a person in the granting of declaratory relief, that is explicable by reference to considerations such as pending, yet unresolved proceedings against such a person. It is sufficient, in my opinion, if I record that there is no finding by me of any contravention of the Trade Practices Act by Sommer & Staff. Nonetheless, to name that company in a declaration will be to accord with the evidence before me. The declarations will be in the terms sought by the Commission in the revised order proposed by it. 52 It remains to make such observations in relation to the subject of the media release by the Commission and resultant derivative use of that by the media. In some cases, intemperate or inaccurate publicity, particularly by a government agency, is a factor which tells in diminution of a penalty that would otherwise be apt. I have expressly considered the Commission's media release in the fixing of the penalties I have indicated. The Commission was, at the time, by s 28 of the Trade Practices Act, given very particular functions with respect to the dissemination of information, law reform and research in relation to markets and anti-competitive practices in markets. Those functions do not render the Commission, its members or officers, immune from being dealt with by the Court in respect of conduct that amounts to interference in the administration of justice. The same applies in relation to the reporting of cases by the media. Particular care must be taken by the media not uncritically to adopt media releases by the Commission. That adoption might, perhaps, go in a gross case to mitigation of penalty, but not to exculpation. 53 Under our system of law, the imposition of penalties in respect of contravening conduct, including the assessment of their seriousness, is consigned to the judicial branch of government, not to a court of public opinion. It is fraught for the Commission to make particular comments concerning conduct in an interval between when the Court finds liability and when the Court imposes penalty. There are aspects of the media release concerned which, at least on one reading, conflate uncritically with this case conduct which is demonstrably more serious than that which occurred in the present case. It is axiomatic that the Commission must take care itself to avoid misleading or deceptive conduct. I do not wish to make any further observation on this subject, because I readily acknowledge the vital public interest served, particularly in cases of conduct which is covert and requires lengthy, intensive investigation to unearth, by the Commission publicising the results of a court case. All I counsel is care in that regard. 54 The orders, then, will be in the terms that I have indicated in respect of declaratory relief and in respect of penalties. 55 As to costs, a variety of different scenarios were put to me in terms of proportionate outcomes. Once again, it is not a process of mere mathematical extrapolation by reference, for example, to number of hours upon which a particular counsel for a particular party was or was not on his or her feet in relation to the conduct of a case. What is required is a more global and robust assessment. Given my experience of the trial and of the penalty hearing, I consider that the interests of justice are served if costs are divided equally. In other words, each corporate respondent is to pay one third of the Commission's costs of and incidental to the proceeding. In respect of the individuals, the order that I make is that each be jointly and severally liable in respect of the costs of the corporation in whose contravening conduct he was involved. The intent of that order, is that in respect of Mr Bogiatzis, for example, he is jointly and severally liable in respect of the costs associated with the corporate respondent in whose conduct he was knowingly concerned. The same applies in relation to Mr Murphy. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd

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Judgment (21 paragraphs)

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