5.1 Relevant law on penalty
31 Each of ss 29, 34 and 48 is within Part 3-1 of the ACL and accordingly is a pecuniary penalty provision: s 224(1)(a)(ii). In the liability judgment, I have found that each of the representations contravenes one or more of these provisions. The Court may order the person contravening those provisions to pay such pecuniary penalties in respect of each act or omission as the Court determines appropriate.
32 As a corporate respondent, the maximum penalty that may be imposed on viagogo for each contravention of ss 29, 34 and 48 during the relevant period was $1.1 million: s 224(3), item 2.
33 The High Court in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 confirmed (at [55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ) that the principal purpose in the imposition of a civil penalty is the capacity to deter so as to promote the public interest in compliance. The targets of such deterrence are both the contraveners before the Court and any other would-be contraveners, the dichotomy being between specific and general deterrence: Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (No 2) [2020] FCA 724 at [21] (Bromwich J).
34 In relation to offences of calculation by a corporation, the punishment must be fixed with a view to ensuring that the penalty is not such as to be regarded by the offender or others as an acceptable cost of doing business. Those engaged in trade and commerce must be deterred 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] FCAFC 20; 287 ALR 249 at [62] - [63] (Keane CJ, Finn and Gilmour JJ).
35 One factor of the need for deterrence arises where there is a potential distortion of competition in the market on the part of the contravener, who gains an unfair advantage over competitors who complied with the law: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [149] (Jagot, Yates and Bromwich JJ). As the Full Court said in that case at [151]:
All others [sic] things being equal, 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. Tipping the balance of the risk/benefit equation in this way is even more important when the benefit in contemplation is profit or other material gain. It is especially important if there are disadvantages, including increased costs or lesser sales or profits, in complying with legal obligations for those who "decide" to be law-abiding.
36 Section 224(2) of the ACL requires that in determining the appropriate pecuniary penalty, the Court has 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; and
(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 Chapter 4 or Part 5-2 to have engaged in any similar conduct.
37 Section 224(4) provides:
(4) 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 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.
38 Relevant factors beyond those specifically identified in s 224(2) ACL have been identified in numerous cases. In Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; 327 ALR 540 Allsop CJ said at [8]:
A convenient summary of the other matters that will usually be relevant in such cases can be found in the judgment of Perram J in Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761; 282 ALR 246 at 250 [11]:
(1) The size of the contravening company.
(2) The deliberateness of the contravention and the period over which it extended.
(3) Whether the contravention arose out of the conduct of senior management of the contravener or at some lower level.
(4) Whether the contravener has a corporate culture conducive to compliance with the Act (or the new Australian Competition and Consumer Law) as evidenced by educational programmes and disciplinary or other corrective measures in response to an acknowledged contravention.
(5) Whether the contravener has shown a disposition to cooperate with the authorities responsible for the enforcement of the Act in relation to the contravention.
(6) Whether the contravener has engaged in similar conduct in the past.
(7) The financial position of the contravener.
(8) Whether the contravening conduct was systematic, deliberate or covert.
39 These matters are not exhaustive, and may overlap: see, for instance, TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190; 210 FCR 277 at [140] - [141] (Jacobson, Bennett and Gilmour JJ). In general terms, the factors that may be relevant when fixing a pecuniary penalty may conveniently be categorised according to whether they relate to the objective nature and seriousness of the offending conduct, or concern the particular circumstances of the contravener in question: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (ABCC Case) (Dowsett, Greenwood and Wigney JJ) at [102]. As the Full Court said in that case:
[103] The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention.
[104] The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law.
40 In the ABCC Case the Full Court provided a summary of the process for determining civil penalties (at [98], [100] - [107]). In relation to the general task and the often cited "instinctive synthesis" required, the Full Court said at [100]:
The fixing of a pecuniary penalty involves the identification and balancing of all the factors relevant to the contravention and the circumstances of the defendant, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purpose of a pecuniary penalty. While there may be differences between the criminal sentencing process and the process of fixing a pecuniary penalty (cf. Commonwealth v Director, FWBII at 491 [56]-[57]), the fixing of a pecuniary penalty may to an extent be likened to the "instinctive synthesis" involved in criminal sentencing: TPG Internet Pty Ltd v Australian Competition and Consumer Commission (2012) 210 FCR 277 at 294. Instinctive synthesis is the "method of sentencing by which the judge identifies all the factors that are relevant to the sentence, discusses their significance and then makes a value judgment as to what is the appropriate sentence given all the factors of the case": Markarian v The Queen (2005) 228 CLR 357 at 378 [51] (per McHugh J). Or, as the plurality put it in Markarian (at 374 [37], per Gleeson CJ, Gummow, Hayne and Callinan JJ) "the sentencer is called on to reach a single sentence which … balances many different and conflicting features". Like the exercise of imposing a sentence for an offence, the process of fixing an appropriate pecuniary penalty should not be approached as a mathematical exercise involving increments to or decrements from a predetermined range of sentences: Wong v The Queen (2001) 207 CLR 584 at 611-612 [74]-[76].
41 The totality principle and the course of conduct principle are both relevant to the present case. It is also a fundamental principle of sentencing that double punishment should be avoided for the commission of multiple offences. Section 224(4) provides that a person is not liable for more than one pecuniary penalty in respect of the same conduct.
42 Each of the representations were made numerous times. A contravention occurs each time a false representation is made in breach of one of the relevant provisions of the ACL: Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 5) [2013] FCA 1109; ATPR ¶42-450 at [23] (Tracey J); Coles Supermarkets at [17]. There is no dispute between the parties that the number of individual contraventions was so great in the present case (numbering many thousands of clicks on the viagogo ad and the website pages) such that if they were taken as an approximation of the number of instances a consumer saw each representation, to multiply the number of contraventions by the maximum penalty of $1.1 million per offence would be impractical and wrong: see Reckitt at [157].
43 The course of conduct principle is commonly referred to as the recognition that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality: Australian Competition and Consumer Commission v Cement Australia Ltd [2017] FCAFC 159; 258 FCR 312 at [421] (Middleton, Beach and Moshinsky JJ). The interrelationship may be legal, in the sense that it arises from the elements of the contraventions. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of essentially the same act, omissions or circumstances: Cement Australia at [422], citing Royer v Western Australia [2009] WASCA 139; 197 A Crim R 319 at [22]. In Cement Australia the Full Court noted at [423] that the Court must be cautious in the application of the course of conduct principle in a civil penalty context, given it uses the language of the criminal law. Nevertheless, the course of conduct principle is, as the Court noted at [424], commonly employed and is a useful tool in the determination of appropriate civil penalties.
44 The Court is not limited to ordering a penalty fixed by the number of courses of conduct established. A course of conduct may attract a maximum penalty which exceeds the maximum penalty for an individual contravention: Coles Supermarkets at [15], [16] and [20]. In Reckitt at [157], the Full Court noted that the theoretical maximum was in the trillions of dollars given that there were over 5 million contraventions. Accordingly, the appropriate range for penalty was best assessed by reference to other factors, there being no meaningful maximum. See also Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 at [231] and [234] (Allsop CJ, Middleton and Robertson JJ).
45 In addition to the foregoing, the totality principle requires the Court to consider the entirety of the underlying contravening conduct to determine whether the total or aggregate penalty is appropriate: Mill v The Queen [1988] HCA 70; 166 CLR 59 at 63 [8] - [9].
46 Viagogo places considerable emphasis on the parity principle, which requires that persons or corporations guilty of similar contraventions should incur similar penalties and that "there should not be such an inequality as would suggest that the treatment meted out has not been even-handed": NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 295 (Burchett and Kiefel JJ, with whom Carr J agreed at 299). The ACCC submits that caution should be exercised in this regard.
47 In Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 5) [2019] FCA 1544 Gleeson J said at [55]:
By application of the parity principle, assessments of penalty in analogous cases may provide guidance to the Court to ensure that there is parity of treatment of similar circumstances. However, as Hill J observed in Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; (2002) 201 ALR 618 at [34], "while pecuniary penalties imposed in one case provide a guide, that guide will seldom, if ever, be able to be used mechanically". Furthermore, "other things are rarely equal where contraventions of the [TPA] are concerned": NW Frozen Foods at 295. In Singtel at [60], the Full Court observed that:
…the Court is not assisted by… citation[s] of penalties imposed in other cases, where the combination of circumstances were different from the present, as if that citation is apt to establish a "range" of penalties appropriate in this case.