Australian Competition & Consumer Commission v Vanderfield Pty Ltd

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

REASONS FOR JUDGMENT 1 In this application the applicant, the Australian Competition and Consumer Commission ("ACCC"), asserts breaches of s 45 of the Trade Practices Act 1976 (Cth) (the "Act"). In argument, although not in the application, it was indicated that the applicant also relies upon s 45A of the Act. The first and second respondents are involved in the retail sale of trucks. The third and fourth respondents are employed by the first respondent ("Vanderfield"). The fifth respondent ("Mr Goodwin"), is employed by the second respondent ("Sci-Fleet"). The material facts as they appear from joint submissions submitted in this matter are as follows. 2 Sci-Fleet and Vanderfield are Hino truck dealers operating pursuant to dealership agreements with Hino Motor Sales Australia Pty Ltd. Under those agreements there is a non-exclusive prime marketing area ("PMA") for each dealer, including Vanderfield and Sci-Fleet, which is an area including particular listed postcodes, and which is contiguous to, but does not overlap with, other dealers' areas. In February 2005, Mr Goodwin (of Sci-Fleet) and Mr Cherry (of Vanderfield) made an arrangement, or arrived at an understanding, by which they agreed not to compete with each other for a Hino truck sale to Mr Goetsche, a customer located in Vanderfield's Toowoomba PMA. This is referred to in the statement of claim as the "February 2005 Arrangement". 3 The ACCC alleges (and Sci-Fleet admits) that this was both an exclusionary provision within the meaning of s 4D of the Act, and had the purpose, effect or likely effect of fixing, controlling or maintaining the price for a Hino truck to be supplied by Vanderfield within the meaning of s 45A of the Act. The February 2005 Arrangement was given effect by Sci-Fleet on one occasion. 4 Between June and November 2005 Mr Goodwin and Mr Cherry made an arrangement, or arrived at an understanding, by which they agreed not to compete with each other for Hino truck sales to customers located in Brisbane and Toowoomba, with any potential customer to be allocated to the dealer in whose PMA the customer was located. This is referred to in the statement of claim as the "June 2005 Arrangement". The ACCC alleges, and Sci-Fleet admits, that this was both an exclusionary provision within the meaning of s 4D of the Act, and had the purpose, effect or likely effect of fixing, controlling or maintaining the price for Hino trucks to be supplied by Vanderfield and Sci-Fleet within the meaning of s 45A of the Act. Sci-Fleet gave effect to the June 2005 Arrangement on two occasions. 5 Subsequently, in November 2005 after Vanderfield acquired the Gold Coast Hino dealership, Mr Goodwin, Mr Cherry and Mr McGuinn (of Vanderfield) made an arrangement, or arrived at an understanding, by which they agreed not to compete with each other for Hino truck sales to customers located in Brisbane, Toowoomba or the Gold Coast, with any potential customer to be allocated to the dealer in whose PMA the customer was located. This is referred to in the statement of claim as the "November 2005 Arrangement". The ACCC alleges, and Sci-Fleet admits, that this was both an exclusionary provision within the meaning of s 4D of the Act, and had the purpose, effect or likely effect of fixing, controlling or maintaining the price for Hino trucks to be supplied by Vanderfield and Sci-Fleet within the meaning of s 45A of the Act. Sci-Fleet gave effect to the November 2005 Arrangement on 18 occasions between November 2005 and September 2006. 6 The ACCC alleges, and Sci-Fleet admits, that it contravened s 45(2)(a)(i) and s 45(2)(b)(i) of the Act by making and giving effect to an arrangement which contained an exclusionary provision within the meaning of s 4D. The ACCC alleges, and Sci-Fleet admits, that it contravened s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Act by operation of s 45A. The ACCC alleges, and Mr Goodwin admits, that Mr Goodwin aided, abetted or procured and was directly knowingly concerned in the breaches by Sci-Fleet. I have referred to particular admissions made by Sci-Fleet, but as I understand it, similar admissions are, in effect, made by Vanderfield. 7 It seems that Vanderfield was engaged in somewhat fewer infringements than was Sci-Fleet. However, nobody suggests that is of any significance for present purposes. The ACCC seeks pecuniary penalties and declaratory and injunctive relief together with costs. I am told that each of Vanderfield and Sci-Fleet has given appropriate undertakings as to implementation of compliance programs to ACCC, which undertakings will be enforceable pursuant to s 87B of the Act. The parties have reached agreement as to appropriate penalties. 8 In the case of Sci-Fleet, it has been agreed that the appropriate pecuniary penalty is the sum of $500,000. In the case of Mr Goodwin the appropriate penalty is said to be $30,000. In the case of Vanderfield, it has been agreed that the appropriate pecuniary penalty is $500,000. In the cases of Mr Cherry and Mr McGuinn, the penalty should be fixed at $30,000. The fixing of the penalties is very much a matter for the Court. The parties' agreement cannot be determinative of the matter. The parties have, in their submissions, outlined the relevant considerations. It is appropriate that I recite them. They include: · the nature and extent of the contravening conduct; · the amount of loss or damage caused; · the circumstances in which the conduct took place; · the size of the contravening company; · the degree of power it has as evidenced by its market share and ease of entry into the market; · the deliberateness of the contravention and the period over which it extended; · whether the contravention arose out of the conduct of senior management or at a lower level; · 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; and · whether the company has shown disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to contravention. 9 Other considerations include: · similar conduct in the past; · effect on the functioning of the market and other economic effects of the conduct; · the financial position of the contravening company; and · whether the conduct was systematic, deliberate or covert. 10 In the case of Sci-Fleet it is said that it gave effect to the relevant arrangements on 21 occasions between February 2005 and September 2006. The most senior staff member of Sci-Fleet who was aware of the conduct was Mr Goodwin, who was the Hino truck sales manager from September 2004. He directed his subordinates to give effect to the arrangement, and they did so. Mr Goodwin consistently sought to apply the arrangement and to comply with it. It is likely that customers of Sci-Fleet suffered some loss as a result of the arrangement, and that some benefit accrued to each of the respondents from the conduct. However, it is not possible to quantify the impact. 11 Sci-Fleet operates through a number of divisions. Its operations include various car dealerships not related to the conduct in question. In addition to selling trucks, the Hino division also sells spare parts and provides servicing for Hino trucks. Sci-Fleet employs approximately 400 staff in its various divisions, with approximately 37 staff in the Hino division. 12 At the relevant times the annual turnover of the Hino division of Sci-Fleet, comprising sales of both new and used trucks, servicing and parts, was approximately 8.4 to 9.5% of the total annual turnover. The total annual turnover during the relevant period was as follows: 2004 - 2005 $380,567,991 2005 - 2006 $397,066,616 2006 - 2007 $450,837,121 13 There is also some evidence as to net profit but it does not seem necessary that I refer in detail to that. Sci-Fleet has sufficient net assets, and its financial position is such that it has the capacity, to pay the proposed pecuniary penalty. 14 Sci-Fleet has operated as a Hino dealership for more than 15 years. It does so from truck yards at two locations in Brisbane. Hino trucks compete with other truck brands, including the main competitors, Isuzu and Mitsubishi. The arrangements, the subject of these proceedings, did not extend to the other brands. At the relevant times Hino trucks represented around 20% of all light duty trucks sold and 24% of medium duty trucks sold in Australia, with the remaining percentages sold by competing brands. Sci-Fleet was selling a similar but slightly lower percentage of the total sales of both light duty and medium duty trucks in the Brisbane area. Hino trucks represented approximately 13% of light duty trucks and 27% of medium duty trucks sold in the Brisbane area. 15 The ACCC does not allege that Sci-Fleet had the ability to act unconstrained by competition from other non-Hino dealerships. The conduct occurred over a period of more than a year and a half, and was deliberate. Customers were, of course, not made aware of the contravening arrangement. As I have said, Mr Goodwin was the most senior staff member who was aware of it. He reported to Mr Anderson who was, until July 2006, the general manager. He reported to the dealer principal and director, Mr Gordon Scifleet. It is not alleged that either Mr Anderson or Mr Scifleet was aware of the contravening conduct. 16 At the time the conduct occurred Sci-Fleet was not providing Act compliance training to its sales staff. Some contact generally occurred between employees of Hino dealerships in the context of conferences held by Hino Motor Sales Australia Pty Ltd, relating to vehicles, stocks, parts, service information, and factory issues. Accordingly, there was always a risk that discussions would occur between employees about price. On learning of the conduct when a s 155 notice was served upon Sci-Fleet in September 2006, Sci-Fleet management instructed staff not to engage in the conduct, not to make arrangements or arrive at understandings with other dealers, and not to give effect to, or attempt to give effect to provisions of any such arrangements or understandings. 17 It undertook a comprehensive investigation into the conduct. It conducted an investigation whilst a detailed response to the s 155 notice was prepared, and its investigation included a forensic review of Mr Anderson and Mr Goodwin's computers by an independent information technology company. Compliance training for staff and positions identified at risk of contravention was provided by solicitors. Sci-Fleet appointed a compliance officer and developed and implemented a trade practices compliance program. Separate one-on-one training was provided for Mr Goodwin in December 2006. 18 Sci-Fleet has fully cooperated with the ACCC's investigations since the service of the s 155 notice. Mr Goodwin has also fully cooperated since he was served with the notice to appear in late 2007. Sci-Fleet has offered an enforceable undertaking, pursuant to s 87B of the Act, in relation to the development and implementation of the trade practices compliance programme. This offer has been accepted by the ACCC. 19 Sci-Fleet provided the ACCC with a detailed compilation of the incidents it had identified during its investigation, and voluntarily provided a small number of documents not caught by the s 155 notice. These documents exposed a wider scope to the arrangement than that under investigation by the ACCC. In particular, Sci-Fleet disclosed earlier conduct involving the Toowoomba operations of Vanderfield, when at that time only the Gold Coast-Brisbane conduct had been under investigation. 20 In May 2007 Sci-Fleet provided a detailed submission, on a "without prejudice and confidential" basis, summarizing its views of its involvement in the conduct. Subsequently, it approached ACCC, offering a detailed outline of its admissions. This conduct greatly assisted in the early resolution of the matter. Sci-Fleet and Mr Goodwin have not been the subject of any previous court proceedings by the ACCC for a contravention of the Act. 21 The total revenue over the financial years 2004-2005 and 2005-2006 generated by Sci-Fleet in the Hino division was in the vicinity of $68 million. The conduct ended early in 2006-2007. Sci-Fleet sold 426 new Hino trucks in the year ended June 2005, and 450 in the year ended June 2006. Only a limited number of those sales followed contact between Sci-Fleet and Vanderfield pursuant to the arrangement, but it is likely that the contravening conduct had the effect of reducing price competition generally between them, as they represented the only sites located in Toowoomba, Brisbane or the Gold Coast selling new Hino vehicles. 22 The ACCC considers that the same penalty should be applied in respect of both Vanderfield and Sci-Fleet. I will return to that matter after I have summarized the facts concerning Vanderfield. Vanderfield operates Hino truck dealerships in two locations in South-East Queensland: Toowoomba, and from August 2005, the Gold Coast. Vanderfield has operated as a Hino dealership for approximately 16 years. Hino trucks compete with other truck brands, including Isuzu, Mitsubishi and UD Trucks. The arrangement did not extend to or involve these other brands. 23 The contravening conduct occurred on some 16 occasions, between February 2005 and September 2006. The most senior staff members who were aware of the conduct were Mr Cherry, who had been the truck sales manager for Toowoomba for 16 years, and Mr McGuinn, who became the branch manager for Gold Coast Hino in November 2005. He retired from his management position in June 2007, and currently works as a casual truck driver with Vanderfield. Mr Cherry's retirement from Vanderfield was brought forward as a result of his role in the contravening conduct. 24 At the relevant time Vanderfield operated six branches. In addition to sales of Hino trucks at its Gold Coast and Toowoomba branches, Vanderfield sells agricultural equipment and related products from its Toowoomba, Gold Coast, Gatton, St George, Darwin and Kununurra branches, and Hino trucks at its Darwin dealership, operating since 2001. These other undertakings are not related to the contravening conduct. At the relevant time Vanderfield employed approximately 175 staff at its various branches, with approximately seven staff involved in Hino sales. In addition to selling Hino trucks, Vanderfield also sold spare parts and provided servicing for Hino trucks, which activities are not alleged to be subject to contravening arrangements. 25 The revenue from Hino sales by Vanderfield, comprising both sales of new and used trucks, was 10-25% of the total revenue received by Vanderfield, and 3-5% of the net profit before tax in the financial years 2004-2005 and 2005-2006. The table below sets out the revenues and net profits before tax for the company, and relevant operations involved in the conduct: Fin Year Vanderfield Gold Coast Hino Sales branch1 Toowoomba2 Revenue Net Profit Revenue Net Profit Revenue Net Profit3 2005 93,814,449 3,198,791 11,281,306 112,812 2006 98,167,972 1,421,250 14,377,825 -36,386 10,865,916 108,658 2007 97,642,389 602,292 23,517,745 -344,203 11,561,704 115,618

26 The net assets of Vanderfield are set out below: Fin Year Net Assets Total Assets 2005 9,182,944 20,191,741 2006 8,953,781 27,694,387 2007 8,225,616 27,793,998

1 Sales of the Gold Coast branch includes sales of Hino trucks (new and used), spare parts and servicing, as well as a small amount of sales of lawn and garden products. Net profit is calculated on the same basis, but includes the allocation of Gold Coast branch administration and operation expenses, which have a significant impact on the net profit result. 2 Only sales of new and used Hino trucks are included in the revenue totals. Expenses relating to the administration of the Toowoomba branch are included in the net profit calculation and have a significant impact on the net profit result. 3 Figures are estimated, as existing reporting does not include this calculation. 27 Vanderfield has determined that it will pay the penalties recommended in respect of Mr Cherry and Mr McGuinn, although Vanderfield was not aware of, and would not have authorized, the conduct of Mr Cherry and Mr McGuinn. Vanderfield concedes that its compliance training and management systems were inadequate to prevent Mr Cherry and Mr McGuinn from engaging in the proscribed conduct. In analogous circumstances, where a penalty was being paid by a union rather than the individuals penalised, and impecuniosity of individual respondents was not raised as an issue, Gilmour J held that it was not a matter relevant to the amount of penalties that they were to be paid by a third party. See Hadgkiss v Aldin (2007) 164 FCR 344 at [105]-[107]. I am not sure that I entirely agree with that proposition. However, it is of no real relevance for present purposes. 28 At all relevant time Hino trucks represented around 20% of all light duty trucks sold and 34% of medium duty trucks sold in Australia while the remaining percentages were sold by competing brands. The ACCC does not allege that Vanderfield had the ability to act unconstrained by competition from other non-Hino dealerships and other Hino dealerships located outside Brisbane, Toowoomba and the Gold Coast. The conduct occurred over a period of more than a year and a half and the conduct by Mr Cherry and Mr McGuinn was deliberate. Customers were, of course, not made aware of the contravening arrangements, nor were the directors or more senior staff of Vanderfield aware of the conduct engaged in by Mr Cherry and Mr McGuinn. 29 The most senior staff members who were aware of the conduct were Mr Cherry and Mr McGuinn. Mr Cherry reported to Mr Robert Vandersee, who was Toowoomba branch manager and a director. Mr Cherry's responsibilities were limited to the operations relating to the sale of new or used Hino trucks at the Toowoomba site. Mr McGuinn reported to Mr Cherry until late 2005 when he was appointed branch manager of Hino Gold Coast. Thereafter he reported to Mr Bruce Vandersee, who was managing director of Vanderfield. In 2002 Vanderfield circulated a Trade Practices Compliance Policy, including to Mr Cherry, concerning the application of the Act. 30 Mr Cherry also participated in online compliance training about Trade Practices in the period 2002 to 2004. Mr McGuinn had not been provided with either the policy or other training by Vanderfield at the time of the conduct. Clearly, the training that was offered to Mr Cherry was ineffective in preventing the contravening conduct. Vanderfield accepts that poor compliance training and management systems were factors that led to the conduct occurring. Some contact generally occurs between Hino dealers in the context of conferences, a matter to which I have previously referred. On learning of the conduct when compulsory notices were served, Vanderfield management recirculated a compliance manual. The manual had previously been circulated some years earlier. 31 Vanderfield has also offered a s 87B undertaking concerning its compliance systems, which the ACCC has accepted. Vanderfield has cooperated with the ACCC in finalizing settlement documents. Vanderfield's cooperation in filing defences admitting the conduct and making joint submissions is a matter relevant to penalty. The Vanderfield respondents have not been penalized for any previous contraventions of the Act. The total revenue produced by the Vanderfield Toowoomba and Gold Coast branches over the relevant financial years relating to new Hino sales was in the vicinity of $30 million. Vanderfield Toowoomba sold 125 new Hino trucks in the year ended June 2005 which generated revenue of $10,266,852. Vanderfield Toowoomba and Gold Coast sold 260 new Hino trucks in the year ended June 2006, generating revenue of $19,758,717. 32 Only a limited number of these sales followed contact between Vanderfield and Sci-Fleet pursuant to the arrangement, but it is likely that the conduct had the effect of reducing price competition generally between them as the parties representing the only sites located in Toowoomba, Brisbane or the Gold Coast selling new Hino customers. It is, therefore, likely that customers were, to some extent, disadvantaged by the arrangements. However, again, it is not possible to quantify the impact. 33 It is submitted that the following matters lead to the conclusion that similar penalties ought be imposed. First, that neither party overpowered or coerced the other into the arrangement. Secondly, although Sci-Fleet was a larger firm it provided a higher level of cooperation. However, both parties have offered substantial cooperation, leading to a speedy and relatively economical resolution of the matter. As Mr Cherry and Mr McGuinn will not be paying their respective penalties, their personal circumstances are irrelevant. 34 Mr Goodwin is 58 years of age, does not own a home or a car, and has responsibility for three school-age children. The penalty of $30,000 is equal to approximately 38% of his income after tax and is more than twice his current personal savings. In all of those circumstances, I have no difficulty in concluding that the proposed penalties are appropriate in the circumstances, that they constitute an appropriate discouragement to future infringements by either of the companies, or by those employees who are parties to these proceedings. I also think that the penalties offer appropriate discouragement to infringement by other corporations and other employees of corporations. I am therefore satisfied to impose penalties in accordance with the proposals. 35 I also accept the proposals as to payment of the penalties by Vanderfield and Mr Goodwin. In Vanderfield's case it is proposed that of the penalty, $125,000 be paid within three months of this order, a further sum of $125,000 within 10 months of this order, a third sum of $125,000 within 17 months of this order, and the balance, within 24 months of this order. It has been agreed that in the event that any instalment is not paid by the due date, the total is to become due and payable. In the case of Mr Goodwin, it has been agreed that the penalty be payable in one instalment of $10,000 within 14 days of this order, and in four separate instalments of $5,000 within six months, 12 months, 18 months and 24 months of this order, again subject to the proviso that in the event of non-payment of an instalment, the total penalty then outstanding will become due for payment. Sci-Fleet is to pay the applicant, within 14 days of this order. Mr Cherry and Mr McGuinn are also to pay their penalties within 14 days of this order. 36 As to the application for declarations, I note and refer to the general comments made concerning declaratory relief in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) (2007) 161 FCR 513. However, I do not discern any difficulties in the proposed declarations sought by the ACCC in the present case. They are to be found in paras 1, 2, 3 and 4 of the orders sought in connection with Vanderfield and paras 1, 2 and 3 in connection with the orders proposed in respect of Sci-Fleet. I am content to make declarations in those forms. 37 That leaves only the question of injunctive relief. 38 ACCC seeks the following injunctions against Vanderfield: Vanderfield be restrained for a period of three years from the date of the order, whether by itself or by its servants or agents or otherwise howsoever, from: 5.1 making, arriving at or giving effect to; or 5.2 being directly or indirectly knowingly concerned in or party to, inducing or attempting to induce, aiding or abetting, counselling or procuring another corporation that supplies trucks making, or arriving at, or giving effect to; any contract, arrangement or understanding with any corporation that is a competitor for the supply of trucks containing provisions: 5.3 which have the purpose, effect or likely effect of fixing, controlling or maintaining the price of any part of the price at which it or any of them will supply trucks in competition with each other; or 5.4 which have the purpose of preventing, restricting or limiting the supply of trucks by which it or any of them to a particular person or particular class of persons. 39 ACCC seeks similar injunctive relief against Sci-Fleeet. ACCC seeks the following injunctions against Mr Cherry, Mr McGuinn and Mr Goodwin: Each of [Mr Cherry, Mr McGuinn and Mr Goodwin] be restrained for a period of three years from the date of the order from being knowingly concerned in or part to, inducing or attempting to induce, aiding, abetting, counselling or procuring a corporation that supplies trucks making or arriving at, or giving effect to, any contract, arrangement or understanding with any competitor of that corporation for the supply of trucks containing provisions: 6.1 which have the purpose, effect or likely effect of fixing, controlling or maintaining the price of any part of the price at which it or any of them will supply trucks in competition with each other; or 6.2 which have the purpose of preventing, restricting or limiting the supply of trucks by which it or any of them to a particular person or particular class of persons. 40 As is demonstrated in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) 161 FCR 313, to which I have already referred, significant issues arise as to the appropriateness of injunctive relief under the Act. I adopt and repeat the observations made concerning that matter in that case. However those considerations do not lead to the conclusion that injunctive relief will never be granted. In particular, I acknowledge the provisions in the Act which provide that injunctive relief may be granted, notwithstanding the absence of any real risk of further contraventions, and notwithstanding the fact that actual contraventions may not have been established. 41 I accept that the discretion to grant injunctive relief is generally at large, and that it should not be seen as hampered by any of the discretionary bars which may have arisen in respect of injunctive relief in equity or at common law. Having said that, however, I observe that many of the policy considerations which limit the availability of injunctive relief in equity, apply with equal force for present purposes. I speak particularly of the need to maintain the integrity of the injunction as a powerful instrument for compelling compliance with orders of the court and the court's decisions as to legal and equitable rights. 42 It cannot be denied that familiarity breeds contempt or, more particularly for present purposes, that the more commonplace the grant of injunctive relief becomes, the less effective it will be. Enforcement of injunctions is a difficult matter. The Court has no resources of its own with which to enforce its orders, and yet, if its orders are ignored, its authority and its capacity to administer justice to others will be significantly impaired. For that reason the Court has a vested interest in only making orders which can and will be enforced. 43 Generally, in litigation between private parties, the party seeking injunctive relief has a very direct interest in enforcing any order so made. However, where the ACCC seeks relief of the kind which is sought in the present case, it is inherent in that relief that unless it makes a particular effort to ensure that it is enforced, nobody else will. The ACCC has frankly conceded that it is unlikely to take any steps to police compliance with any injunctive order, other than as an incident of another investigation commenced in the usual course of its activities. That would, I infer, normally involve receipt of a complaint from some third party, or information from somebody in the position of a whistleblower. 44 I do not criticise the ACCC for that position. I have no doubt that it is all that it can do with its resources. However, it does mean that it is asking the Court to make an order which it does not propose actively to police. That leads me to fear that to make an injunction of this kind would be to risk undermining of the Court's authority. I do not mean to say that I would not, in any circumstances, make an injunction if the ACCC did not intend to enforce the observance of it. However much depends upon the purpose to be served by it. If I could see a clear purpose, I would be disposed to make the injunction, notwithstanding the difficulty in enforcing it. However I remain unpersuaded that in the present case, any sufficient purpose will be served by such injunctive relief. I stood the matter over for quite some time to allow the ACCC an opportunity to demonstrate to me, based upon their extensive experience in this area, the merit which it saw as likely to be derived from the making of such an order. In the end little has emerged. 45 ACCC suggests that the making of an injunction will be a further expression of the Court's disapproval of the relevant conduct. That is no doubt so, but the declarations and the penalties, in my view, adequately fulfil that function. It is then said that the effect of making such injunctive relief is to place a particular burden on the company to comply with the law. Of course, as is frequently said in other jurisdictions in respect of such a submission, everybody is obliged to comply with the law in any event. If Parliament's authority is not sufficient, it is doubtful whether the Court's authority will add anything to it. It is not the practice in the general law to make injunctions compelling compliance with the law. Injunctions are more frequently granted to enforce individual rights. I stress that I do not discount the possibility that in some circumstances such relief would be justified. However I have difficulty in seeing any purpose for doing so in the present case. 46 It is said that in placing this additional obligation upon the company, additional responsibility would be placed upon the directors. Rather than simply being obliged not to become knowingly involved in conduct contrary to the Act, they would be obliged to take steps to ensure that the company complied with the injunction, and that they would themselves be party to any breach. I doubt whether, in practice, that adds very much to a director's duty to ensure that the company complies with the law. It is a thin pretext for making an injunction. One might say that the Act identifies the circumstances in which a person is to be liable for the conduct of another, and that it is not appropriate to seek to add to those circumstances in the way suggested. It might also be said that the Parliament not having chosen to impose imprisonment as a remedy for breaches of this kind, the Court should not add the additional jeopardy of imprisonment as is suggested would be the likely consequence of breach of an injunction. 47 In the end, I am unpersuaded that the proposed injunctive relief would serve any useful purpose. I am concerned that it may also undermine the authority of the Court's orders. There are a number of other problems that arise. Firstly, I have found it very difficult to see how the general wording of the Act could readily be incorporated into an injunction, which would be sufficiently clear to be observed by the recipient of the injunction and to be enforced by the Court. The difficulty is that both s 45 and s 45D seem to me to involve terminology which is neither legal nor in common lay usage. In many respects it reflects the language of economists. 48 The sections are also very complex. Although it is relatively easy to reduce them to a neat formula on a page, it is, in my view, not so easy to explain them to people, or to ensure that parties fully understand them. To some extent, too, the proposed orders would create a degree of absolute liability for conduct which had certain consequences. Such consequences may not be easy to predict. To my mind the difficulties inherent in reducing the provisions of the Act and the relevant factual basis of the relief to an acceptable formula militate against the grant of such relief, particularly given the absence of any substantial reason for so doing. 49 There is, however, a further curiosity about the relief. It is that it is sought for a limited period of time, namely three years. Nobody suggests that such an injunction ought be made permanently. I understand the thinking behind the limitation. During that fixed period an appropriate compliance culture may be developed. Nonetheless, it looks very curious that a court should order that illegal conduct be restrained for a limited period of time. To many observers, it would seem to suggest that at some time in the future, the relevant recipient will no longer be restrained from such conduct. Of course the order does not mean that, but it may look as if it does. The conduct is either illegal or it is not. To create even the suspicion of a doubt about that proposition would, in my view, be counterproductive. In those circumstances, I decline to grant injunctive relief. I will make the orders for costs identified in the drafts. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Counsel for the Applicant: Mr M Hodge

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the First, Third and Fourth Respondents: Mr K Dorney QC

Solicitor for the First, Third and Fourth Respondents: Carter Newell Lawyers

Counsel for the Second and Fifth Respondents: Mr P O'Shea SC with Mr T Bradley

Solicitor for the Second and Fifth Respondents: Minter Ellison Lawyers