Applicable principles - pecuniary penalties
56 Section 224(1) of the Australian Consumer Law relevantly provides that, if the Court is satisfied that a person has contravened a provision of Pt 3-1 (which includes ss 29 and 34), 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 the section applies, as the court determines to be appropriate.
57 Section 224(2) provides that, in determining the appropriate pecuniary penalty, the court must have regard to all relevant matters, including:
(a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission;
(b) the circumstances in which the act or omission took place; and
(c) whether the person has previously been found by a court in proceedings under Ch 4 or Pt 5-2 of the Australian Consumer Law to have engaged in any similar conduct.
58 The maximum pecuniary penalty changed during the Relevant Period. In the period up to 1 September 2018, the maximum pecuniary penalty for each act or omission to which s 224 applies (that relates to s 29 or 34) was, if the person was a body corporate, $1.1 million. In the period from 1 September 2018, the maximum pecuniary penalty for each such act or omission was, if the person was a body corporate, the greater of the three amounts mentioned in s 224(3A), namely:
(a) $10 million;
(b) if the court can determine the value of the benefit that the body corporate, and any body corporate related to the body corporate, have obtained directly or indirectly and that is reasonably attributable to the act or omission - 3 times the value of that benefit; and
(c) if the court cannot determine the value of that benefit - 10% of the annual turnover of the body corporate during the 12-month period ending at the end of the month in which the act or omission occurred or started to occur.
59 Section 224(4) provides as follows:
If conduct constitutes a contravention of 2 or more provisions referred to in subsection (1)(a):
(a) a proceeding may be instituted under this Schedule [ie, the Australian Consumer Law] against a person in relation to the contravention of any one or more of the provisions; but
(b) a person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.
60 The principles applicable to the discretion to impose pecuniary penalties have been discussed in many cases.
61 In Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (the Agreed Penalties Case), the High Court emphasised that the primary purpose of civil penalties is to secure deterrence. In contrast to criminal sentences, they are not concerned with retribution and rehabilitation but are "primarily if not wholly protective in promoting the public interest in compliance": Agreed Penalties Case at [55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ; see also at [110] per Keane J. This point was also emphasised by the High Court in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson) at [15]-[16], [43], [45], [55] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ.
62 The primacy of deterrence has been emphasised in various cases in relation to contraventions of the Australian Consumer Law. For example:
(a) The Full Court of this Court has explained the need to ensure that the penalty in such cases "is not such as to be regarded by that offender or others as an acceptable cost of doing business" and will deter them "from 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) 287 ALR 249 (Singtel Optus) at [62]-[63]; see also Pattinson at [17].
(b) The High Court, applying the observations in Singtel Optus, has referred to the "primary role" of deterrence in assessing the appropriate penalty for contraventions where commercial profit is the driver of the contravening conduct: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [64]-[66].
(c) The Full Court of this Court has emphasised that the "critical importance of effective deterrence must inform the assessment of the appropriate penalty": Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25 (Reckitt Benckiser) at [153]. The Court explained that "the greater the risk of consumers being misled and the greater the prospect of gain to the contravener, the greater the sanction required, so as to make the risk/benefit equation less palatable to a potential wrongdoer and the deterrence sufficiently effective in achieving voluntary compliance": Reckitt Benckiser at [151]; see also at [57], [148]-[153], [164] and [176].
63 The plurality in Pattinson affirmed (at [18]) the well-known statements of French J, as his Honour then was, in Trade Practices Commission v CSR Ltd [1991] ATPR ¶41-076; [1990] FCA 762 (CSR). In that case, his Honour listed several factors that informed the assessment of a penalty of appropriate deterrent value under the Trade Practices Act 1974 (Cth). His Honour stated:
The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
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 with the Act, 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 the enforcement of the Act in relation to the contravention.
64 After setting out the above passage, the plurality in Pattinson stated at [19]:
It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a "rigid catalogue of matters for attention" as if it were a legal checklist. The court's task remains to determine what is an "appropriate" penalty in the circumstances of the particular case.
(Footnotes omitted.)
65 The plurality in Pattinson considered the role of the prescribed maximum penalty as a yardstick in a civil penalty context, affirming (at [53]) the explanation provided by the Full Court of this Court in Reckitt Benckiser at [155]-[156]. See also Pattinson at [54]-[55].
66 In cases involving a very large number of contraventions, it may be unhelpful to seek to make a finding as to the precise number of contraventions, or to calculate a maximum aggregate penalty by reference to such a number: see Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540 at [18] and [82] per Allsop CJ; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 at [143] per Dowsett, Greenwood and Wigney JJ.
67 It is relevant to refer to the course of conduct principle, which was considered by the Full Court of this Court in Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2017) 258 FCR 312 at [421]-[428]. The Full Court (Middleton, Beach and Moshinsky JJ) stated at [424] that the course of conduct principle is a useful "tool" in the determination of appropriate civil penalties. The Full Court continued:
As we have already indicated, the principal object of the penalties imposed by s 76 of the [Trade Practices Act 1974 (Cth)] is that of specific and general deterrence. With this in mind, in a civil penalty context, the course of conduct principle can be conceived of as a recognition by the courts that the deterrent effect in respect of a civil penalty (at both a specific and general level) is measured by reference to the nature of the conduct for which it is imposed. It is therefore of paramount importance to identify whether multiple contraventions constitute a single course of conduct or separate instances of conduct, so as to ensure that an appropriate deterrent effect is achieved by the imposition of the penalty or penalties in respect of that particular conduct.
68 In relation to the course of conduct principle, in Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698, Beach J stated at [25]:
… the "course of conduct" principle does not have paramountcy in the process of assessing an appropriate penalty. It cannot of itself operate as a de facto limit on the penalty to be imposed for contraventions of the ACL. Further, its application and utility must be tailored to the circumstances. In some cases, the contravening conduct may involve many acts of contravention that affect a very large number of consumers and a large monetary value of commerce, but the conduct might be characterised as involving a single course of conduct. Contrastingly, in other cases, there may be a small number of contraventions, affecting few consumers and having small commercial significance, but the conduct might be characterised as involving several separate courses of conduct. It might be anomalous to apply the concept to the former scenario, yet be precluded from applying it to the latter scenario. The "course of conduct" principle cannot unduly fetter the proper application of s 224.
69 The above passage was cited with approval by the Full Court in Reckitt Benckiser at [141].
70 Where multiple separate penalties are to be imposed upon a particular wrongdoer, the 'totality principle' requires the Court to make a 'final check' of the penalties to be imposed on a wrongdoer, considered as a whole. It will not necessarily result in a reduction. However, in cases where the Court believes that the cumulative total of the penalties to be imposed would be too high, the Court should alter the final penalties to ensure that they are 'just and appropriate': see Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53 per Goldberg J; Australian Competition and Consumer Commission v Energy Australia Pty Ltd (2014) 234 FCR 343 at [101]-[102] per Middleton J.
71 In determining the appropriate penalty, it is relevant to consider steps taken to ameliorate loss or damage (such as payment of compensation) as potentially mitigatory considerations: Australian Competition and Consumer Commission v Woolworths Limited [2016] ATPR ¶42-251; [2016] FCA 44 at [166]-[167] per Edelman J; Australian Competition and Consumer Commission v AGL South Australia Pty Ltd (2015) 146 ALD 385; [2015] FCA 399 at [38] per White J.
72 Co-operation with authorities in the course of investigations and subsequent proceedings can properly reduce the penalty that would otherwise be imposed. The reduction reflects the fact that such co-operation: increases the likelihood of co-operation in future cases in a way that furthers the object of the legislation; frees up the regulator's resources, thereby increasing the likelihood that other contravenors will be detected and brought to justice; and facilitates the course of justice: see, eg, Agreed Penalties Case at [46]; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 293-294.