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[2004] FCA 128
Federal Court of Australia
2004-02-18
Mansfield J
Original judgment source is linked above.
THE COURT DECLARES THAT: 1. The First Respondent by entering into a contract, arrangement or understanding, at meetings on 22 January 1997 and 27 February 1997 at Nhulunbuy in the Northern Territory of Australia, that the First, Second and Third Respondents would not sell at a discounted price at their respective Nhulunbuy retail stores from 14 March 1997: a. Berri Estate 5 litre Riesling wine casks; b. Jim Beam bourbon whisky 700 ml bottles; and c. cartons of Victoria Bitter beer; ('the Beverages') engaged in conduct in contravention of s 45(2)(a)(ii) of the Trade Practices Act 1974 (Cth) (the Act). 2. The First Respondent in giving effect to the contract arrangement or understanding referred to in declaration 1 hereof by: a. not advertising the Beverages at a discounted price in newspapers circulating in Nhulunbuy; and b. not selling the Beverages at a discounted price in Nhulunbuy;
from March 1997 until a meeting on 26 August 1999 at Nhulunbuy, engaged in conduct in contravention of s 45(2)(b)(ii) of the Act. 3. The Second Respondent by entering into a contract, arrangement or understanding, at meetings on 22 January 1997 and 27 February 1997 at Nhulunbuy in the Northern Territory of Australia, that the First, Second and Third Respondents would not sell at a discounted price at their respective Nhulunbuy retail stores from 14 March 1997: a. Berri Estate 5 litre Riesling wine casks; b. Jim Beam bourbon whisky 700 ml bottles; and c. cartons of Victoria Bitter beer; ('the Beverages') engaged in conduct in contravention of s 45(2)(a)(ii) of the Act. 4. The Second Respondent in giving effect to the contract arrangement or understanding referred to declaration in 3 hereof by: a. not advertising the Beverages at a discounted price in newspapers circulating Nhulunbuy; and b. not selling the Beverages at a discounted price in Nhulunbuy;
from March 1997 until a meeting on 26 August 1999 at Nhulunbuy, engaged in conduct in contravention of s 45(2)(b)(ii) of the Act.
THE COURT NOTES THAT: 5. In order to resolve the issues between the Applicant and the Third to Sixth Respondents without a lengthy and expensive proceeding, the Third to Sixth Respondents: a. consent to the orders contained in these Short Minutes of Order; and b. have provided undertakings to the Applicant pursuant to section 87B of the Trade Practices Act 1974 ('the Act') in the terms of the Annexure to these orders. THE COURT DECLARES THAT: 6. The Third Respondent, by entering into a contract, arrangement or undertaking (the Arrangement) at meetings on 22 January 1997 (the First Meeting) and 27 February 1997 (the Second Meeting) at Nhulunbuy in the Northern Territory that the First, Second and Third Respondents would not sell at a discounted price at their respective Nhulunbuy retail stores with effect from at least 14 March 1997: a. Berri Estate 5 litre Riesling wine cases; b. Jim Beam bourbon whiskey 700 ml bottles; and c. cartons of Victoria Bitter beer ('the Beverages'), engaged in conduct in contravention of s 45(2)(a)(ii) of the Act. 7. The Third Respondent, in giving effect to the Arrangement by not selling the Beverages at a discounted price in Nhulunbuy from March 1997 until at least 28 August 1999, engaged in conduct in contravention of s 45(2)(b)(ii) of the Act. 8. The Fourth Respondent: a. for the purposes of s 76(1)(c) and s 80(1)(c) of the Act, aided, abetted, counselled or procured; and b. for the purposes of s 76(1)(e) and s 80(1)(e) of the Act, was knowingly concerned in, or party to, the contraventions by the Third Respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Act by reason of the fact that: c. on behalf of the Third Respondent he attended and participated in the First Meeting on behalf of the Third Respondent; d. on behalf of the Third Respondent he agreed with representatives of the First and Second Respondents at the First Meeting that the First, Second and Third Respondents would not sell the Beverages at a discounted price at their respective Nhulunbuy retail stores with effect from at least 14 March 1997; and e. he authorised the Third Respondent not to sell, and knew that the Third Respondent did not sell, the Beverages at a discount price in Nhulunbuy from March 1997 until at least 28 August 1999. 9. The Fifth Respondent: a. for the purposes of s 76(1)(c) and s 80(1)(c) of the Act, aided, abetted, counselled or procured; and b. for the purposes of s 76(1)(e) and s 80(1)(e) of the Act, was knowingly concerned in, or party to, the contraventions by the Third Respondent of s 45(2)(a)(ii) of the Act by reason of the fact that he attended and participated on behalf of the Third Respondent in the Second Meeting at which the Arrangement was confirmed and a date was set for the Arrangement to take effect. 10. The Sixth Respondent: a. for the purposes of s 76(1)(c) and s 80(1)(c) of the Act, aided, abetted, counselled or procured; and b. for the purposes of s 76(1)(e) and s 80(1)(e) of the Act, was knowingly concerned in, or party to, the contraventions by the Third Respondent of s 45(2)(b)(ii) of the Act by reason of the fact that, in her position as director of the Third Respondent and as a participant in the management of the Third Respondent, she became aware of the Arrangement shortly after it was formed and supported the Third Respondent's participation in the Arrangement, including by the Third Respondent refraining from selling the Beverages at a discount price in Nhulunbuy from March 1997 until at least 26 August 1999. AND THE COURT ORDERS THAT: 11. The Third Respondent, whether by its directors, servants, agents, or otherwise howsoever, and the Fourth, Fifth and Sixth Respondents be restrained for a period of 5 years from: a. making or arriving at; b. giving effect to; c. inducing, or attempting to induce, any person to make or arrive at, or give effect to; d. aiding, abetting, counselling or procuring any person to make or arrive at, or give effect to; or e. being in any way knowingly concerned in, or party to, the making or arriving at, or giving effect to; any contract, arrangement or understanding which contains a provision that: f. has the purpose, or has or is likely to have the effect, of fixing controlling or maintaining, or provides for the fixing, controlling or maintaining of, the prices for or the discounts in relation to take away alcoholic beverages in Australia; or g. has the purpose, or has or is likely to have the effect, of substantially preventing, hindering or lessening competition in the sale of takeaway alcoholic beverages in Australia. 12. The Third Respondent whether by its directors, servants, agents, or otherwise howsoever, and the Fourth, Fifth and Sixth Respondents each be restrained for a period of 5 years from organising, attending or otherwise participating in, any meeting of representatives of vendors of take away alcoholic beverages in Australia, being a meeting held for the purpose of, or for purposes which include the purpose of, fixing, controlling or maintaining the prices for or the discounts in relation to take away alcoholic beverages in Australia. 13. There be no order as to costs of the application as between the Applicant and the Third Fourth Fifth and Sixth Respondents. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
ANNEXURE TO ORDERS TRADE PRACTICES ACT 1974 - SECTION 87B UNDERTAKING Persons giving Undertaking:
BETWEEN: AUSTRALIAN COMPETITION & CONSUMER COMMISSION
REASONS FOR JUDGMENT 1 On 30 May 2003 I gave judgment in this matter in relation to the proposed consent orders to be made against the first and second respondents: Australian Competition & Consumer Commission v Woolworths (South Australia) Pty Limited (Trading as Mac's Liquor) (2003) 198 ALR 417; [2003] FCA 530 (the first judgment). I declined at the time to make the declaratory orders to which those parties had consented. The proceedings against the third to sixth respondents were then continuing. I was not prepared to make general declaratory orders when the issues between the applicant and the third to sixth respondents gave rise to factual matters which (although agreed as between the applicant and the first and second respondent) may not ultimately have been made out. See the first judgment at [27]-[31]. It is appropriate to add to the references there to the subsequent decision of Carr J in Australian Competition & Consumer Commission v The Australian Medical Association Western Australia Branch Inc (2003) 199 ALR 423; [2003] FCA 686. 2 The issues between the applicant and the third to sixth respondents were subsequently listed for hearing. They resolved immediately before the commencement of the hearing. I was asked on 4 February 2004 to make consent orders against the third to sixth respondents, and to make the declaratory orders previously proposed against the first and second respondents. I was presented with a statement of agreed facts as between the applicant and the third to sixth respondents, their joint submissions, the short minutes of proposed orders, and an undertaking from the third to sixth respondents. The proposed orders are in the following terms: 'THE COURT NOTES THAT: 1. In order to resolve the issues between the Applicant and the Third to Sixth Respondents without a lengthy and expensive proceeding, the Third to Sixth Respondents: a. consent to the orders contained in these Short Minutes of Order; and b. have provided undertakings to the Applicant pursuant to section 87B of the Trade Practices Act 1974 ("the Act") in the terms of the Annexure to these orders. THE COURT DECLARES THAT: 2. The Third Respondent, by entering into a contract, arrangement or undertaking (the Arrangement) at meetings on 22 January 1997 (the First Meeting) and 27 February 1997 (the Second Meeting) at Nhulunbuy in the Northern Territory that the First, Second and Third Respondents would not sell at a discounted price at their respective Nhulunbuy retail stores with effect from at least 14 March 1997: a. Berri Estate 5 litre Riesling wine cases; b. Jim Beam bourbon whiskey 700 ml bottles; and c. cartons of Victoria Bitter beer ('the Beverages'), engaged in conduct in contravention of s 45(2)(a)(ii) of the Act. 3. The Third Respondent, in giving effect to the Arrangement by not selling the Beverages at a discounted price in Nhulunbuy from March 1997 until at least 28 August 1999, engaged in conduct in contravention of s 45(2)(b)(ii) of the Act. 4. The Fourth Respondent: a. for the purposes of s 76(1)(c) and s 80(1)(c) of the Act, aided, abetted, counselled or procured; and b. for the purposes of s 76(1)(e) and s 80(1)(e) of the Act, was knowingly concerned in, or party to, the contraventions by the Third Respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Act by reason of the fact that: c. on behalf of the Third Respondent he attended and participated in the First Meeting on behalf of the Third Respondent; d. on behalf of the Third Respondent he agreed with representatives of the First and Second Respondents at the First Meeting that the First, Second and Third Respondents would not sell the Beverages at a discounted price at their respective Nhulunbuy retail stores with effect from at least 14 March 1997; and e. he authorised the Third Respondent not to sell, and knew that the Third Respondent did not sell, the Beverages at a discount price in Nhulunbuy from March 1997 until at least 28 August 1999. 5. The Fifth Respondent: a. for the purposes of s 76(1)(c) and s 80(1)(c) of the Act, aided, abetted, counselled or procured; and b. for the purposes of s 76(1)(e) and s 80(1)(e) of the Act, was knowingly concerned in, or party to, the contraventions by the Third Respondent of s 45(2)(a)(ii) of the Act by reason of the fact that he attended and participated on behalf of the Third Respondent in the Second Meeting at which the Arrangement was confirmed and a date was set for the Arrangement to take effect. 6. The Sixth Respondent: a. for the purposes of s 76(1)(c) and s 80(1)(c) of the Act, aided, abetted, counselled or procured; and b. for the purposes of s 76(1)(e) and s 80(1)(e) of the Act, was knowingly concerned in, or party to, the contraventions by the Third Respondent of s 45(2)(b)(ii) of the Act by reason of the fact that, in her position as director of the Third Respondent and as a participant in the management of the Third Respondent, she became aware of the Arrangement shortly after it was formed and supported the Third Respondent's participation in the Arrangement, including by the Third Respondent refraining from selling the Beverages at a discount price in Nhulunbuy from March 1997 until at least 26 August 1999. AND THE COURT ORDERS THAT: 7. The Third Respondent, whether by its directors, servants, agents, or otherwise howsoever, and the Fourth, Fifth and Sixth Respondents be restrained for a period of 5 years from: a. making or arriving at; b. giving effect to; c. inducing, or attempting to induce, any person to make or arrive at, or give effect to; d. aiding, abetting, counselling or procuring any person to make or arrive at, or give effect to; or e. being in any way knowingly concerned in, or party to, the making or arriving at, or giving effect to; any contract, arrangement or understanding which contains a provision that: f. has the purpose, or has or is likely to have the effect, of fixing controlling or maintaining, or provides for the fixing, controlling or maintaining of, the prices for or the discounts in relation to take away alcoholic beverages in Australia; or g. has the purpose, or has or is likely to have the effect, of substantially preventing, hindering or lessening competition in the sale of takeaway alcoholic beverages in Australia. 8. The Third Respondent whether by its directors, servants, agents, or otherwise howsoever, and the Fourth, Fifth and Sixth Respondents each be restrained for a period of 5 years from organising, attending or otherwise participating in, any meeting of representatives of vendors of take away alcoholic beverages in Australia, being a meeting held for the purpose of, or for purposes which include the purpose of, fixing, controlling or maintaining the prices for or the discounts in relation to take away alcoholic beverages in Australia. 9. There be no order as to costs. The Applicant and the Third, Fourth, Fifth and Sixth Respondents consent to the Court making the orders set out above.' 3 It is unnecessary to repeat the principles which are applicable in the present circumstances. The important public policy of the Court encouraging fair and appropriate settlement of litigation is explained in the cases referred to in the first judgment at [21]. On the other hand, as I then pointed out at [22], the Court must be satisfied that, by making the orders which it is being asked to make, it is not exceeding its jurisdiction and that the orders sought are appropriate. The parties cannot by consent confer power upon the Court to make orders which the Court otherwise lacks power to make. Moreover, where part of a settlement involves an undertaking offered to the applicant, it is necessary that the proposed undertaking be disclosed to the Court and that the Court be satisfied that it is within the power of the applicant to accept the proposed undertaking: see the discussion in the first judgment at [38]-[58]. 4 The facts admitted or agreed as between the applicant and the third to sixth respondents largely correspond with the facts admitted by the first and second respondents. They are recorded in the first judgment at [7]-[16]. I shall not repeat them. However, they do not correspond with the facts agreed by the first and second respondents in all respects. For example, the third to sixth respondents admit only that, as a result of the agreement which was made in January and February 1997, the third respondent discounted only two of the three beverages which are defined as 'the beverages' (see [8] of the first judgment), and in any event did not discount any of the beverages after January 1996. That is some 12 months before the first of the meetings on 22 January 1997 which led to the agreement which contravened s 45(2)(a)(ii) of the Trade Practices Act 1976 (Cth) (the TP Act), and to the giving effect to the contravening agreement between March 1997 and August 1999 in contravention of s 45(2)(b)(ii) of the TP Act. More significantly, the third to sixth respondents do not admit that the third respondent advertised the beverages for sale at discounted prices at all, or that the third respondent agreed not to advertise the beverages for sale at a discounted price after 14 March 1997. 5 The proposed declaratory orders to be made in the case of the first and second respondents are set out in [17] of the first judgment. It is necessary to alter them slightly, as one asserts a term of the contravening agreement which the third to sixth respondents do not admit, namely the alleged agreement not to advertise the beverages for sale. The applicant and the first and second respondents agree to the proposed alteration. Accordingly, in the case of each of the first and second respondents, I declare by consent that: 1. The First Respondent by entering into a contract, arrangement or understanding, at meetings on 22 January 1997 and 27 February 1997 at Nhulunbuy in the Northern Territory of Australia, that the First, Second and Third Respondents would not sell at a discounted price at their respective Nhulunbuy retail stores from 14 March 1997: (a) Berri Estate 5 litre Riesling wine casks; (b) Jim Beam bourbon whisky 700 ml bottles; and (c) cartons of Victoria Bitter beer; ('the Beverages') engaged in conduct in contravention of s 45(2)(a)(ii) of the Act.
'TRADE PRACTICES ACT 1974 - SECTION 87B UNDERTAKING Persons giving Undertaking:
Obligations under the Undertaking: 7. Donation: a. The Walkabout Respondents together will make a donation in the sum of $85,000 to Miwatj within 30 days of the Court making orders in terms of the Short Minutes of Orders attached hereto. b. The Walkabout Respondents' obligations under this undertaking are joint and several, and c. The Walkabout Respondents will forward to the ACCC evidence of such payment within 30 days of receipt by it of a receipt issued by Miwatj. Acknowledgments: 8. The Walkabout Respondents acknowledge and accept that: a. the ACCC may make this undertaking available for public inspection including by placing it on a register, publishing it and allowing third parties to publish it, and that the ACCC may from time to time publicly refer to this undertaking, including by way of media release; b. this undertaking in no way derogates from the rights and remedies which may be available to any other person arising from the alleged conduct.' It is dated 4 February 2004. 17 In this matter, the undertaking renders each of the third to sixth respondents jointly liable to pay the amount the subject of the proposed undertaking. There is no differentiation between the position of the several respondents. That is with their express assent. As I was told by their counsel, then assent was given on the basis that the third respondent has the resources to, and will, pay the amount of the undertaking. Because of their consent, and that additional information, I am prepared to note the undertaking notwithstanding that it creates a joint liability of each of the third to sixth respondents. It does not reflect that there would be different penalties imposed under the Act upon a corporate respondent as a primary contravener and upon individuals as aiders and abetters under the Act, having regard to the relative involvement of each of the fourth to sixth respondents in the contravening conduct. 18 There is one matter which I wish to add to the reasons for decision concerning the preparedness of the Court to accept the undertakings, discussed in the first judgment. It concerns the quantum of the amount to be paid pursuant to the undertakings. In my view the amount of any sum to be paid pursuant to an undertaking of the kind which is applicable to either the first, second or third to sixth respondents may be a relevant consideration in determining whether the Commission has the power to accept the undertaking. An extreme example may arise where the Commission was prepared to accept an undertaking to pay to a third party a sum of money which was outside the range which the Court would regard as appropriate if the Court were to be imposing a penalty upon a party for the contravention. In the decisions discussed at [21] of the first judgment, there is discussion of that circumstance. I have not heard argument as to whether similar considerations should apply in the case of a figure to be paid by way of an undertaking in circumstances such as the present. Nor have I heard submissions as to what, in this matter, may have been an appropriate monetary penalty if the court were proceeding to impose a penalty upon the basis of the agreed facts. Indeed, I do not have agreed facts as to the financial status or situation of any of the third to sixth respondents. I do not wish to be taken as accepting that the amount of money to be paid pursuant to a proposed undertaking should be unrelated to the amount which the Court might otherwise impose by way of penalty, or is not a matter which the Court has no role to address. When agreeing to note the proposed undertakings of the first and second respondents, I record that it seemed to me that the amount to be paid by each of the first respondent and the second respondent pursuant to their undertakings to the applicant was in the range of monetary penalties which the Court might otherwise have applied. Similarly, in the present circumstances, I do not think that the sum proposed to be paid by the third to sixth respondents by way of the undertaking is outside the range of the total monetary penalties which the Court might otherwise have imposed upon the third to sixth respondents. That is a very rough judgment on the limited information which I have. There may, however, be cases where the Court needs to address that aspect further and may require further information from the parties, for instance about the financial status of a particular party or parties. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.
Counsel for the Applicant: C Moore
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the First Respondent: S Panayi
Solicitor for the First Respondent: Clayton Utz
Counsel for the Second Respondent: D de L Winter
Solicitor for the Second Respondent: David de L Winter
Counsel for the Third to Sixth Respondents: M Burnett
Solicitor for the Third to Sixth Respondents: Hyland Lawyers
Date of Hearing: 4 & 18 February 2004
Date of Judgment: 18 February 2004
Australian Competition & Consumer Commission
Woolworths