Applicable principles
7 As I noted in Daiso (No 1) at [5], the Court has jurisdiction to deal with the Director's claims arising under the ACL: see s 138(1) of the Competition and Consumer Act and s 39B(1A)(c) of the Judiciary Act 1903 (Cth). Insofar as the Director brings claims under the ACL (Vic), it has been accepted that, in circumstances such as this, such claims are within the Court's accrued jurisdiction: see Walker v Sell (2016) 245 FCR 308 at [83]-[85] per Bromwich J; Director of Consumer Affairs Victoria v Gibson [2017] FCA 240 at [1] per Mortimer J. However, the expression "accrued jurisdiction" is best avoided: see Rizeq v Western Australia (2017) 344 ALR 421 at [55]-[56] per Bell, Gageler, Keane, Nettle and Gordon JJ.
8 The applicable principles as regards the making of orders by agreement and as regards declarations are well established. They were summarised by Gordon J in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 (Coles) at [70]-[79] as follows:
2.3.1 Orders sought by agreement
…
70 The applicable principles are well established. First, there is a well-recognised public interest in the settlement of cases under the Act: NW Frozen Foods Pty Ltd v Australian Competition & Consumer Commission (1996) 71 FCR 285 at 291. Second, the orders proposed by agreement of the parties must be not contrary to the public interest and at least consistent with it: Australian Competition & Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at [18].
71 Third, when deciding whether to make orders that are consented to by the parties, the Court must be satisfied that it has the power to make the orders proposed and that the orders are appropriate: Real Estate Institute at [17] and [20] and Australian Competition & Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 at [1]. Parties cannot by consent confer power to make orders that the Court otherwise lacks the power to make: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163.
72 Fourth, once the Court is satisfied that orders are within power and appropriate, it should exercise a degree of restraint when scrutinising the proposed settlement terms, particularly where both parties are legally represented and able to understand and evaluate the desirability of the settlement: Australian Competition & Consumer Commission v Woolworths (South Australia) Pty Ltd (Trading as Mac's Liquor) [2003] FCA 530 at [21]; Australian Competition & Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [24]; Real Estate Institute at [20]-[21]; Australian Competition & Consumer Commission v Econovite Pty Ltd [2003] FCA 964 at [11] and [22] and Australian Competition & Consumer Commission v The Construction, Forestry, Mining and Energy Union [2007] FCA 1370 at [4].
73 Finally, in deciding whether agreed orders conform with legal principle, the Court is entitled to treat the consent of Coles as an admission of all facts necessary or appropriate to the granting of the relief sought against it: Thomson Australian Holdings at 164.
2.3.2 Declarations
74 The Court has a wide discretionary power to make declarations under s 21 of the Federal Court Act: Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-8; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-2 and Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 99.
75 Where a declaration is sought with the consent of the parties, the Court's discretion is not supplanted, but nor will the Court refuse to give effect to terms of settlement by refusing to make orders where they are within the Court's jurisdiction and are otherwise unobjectionable: see, for example, Econovite at [11].
76 However, before making declarations, three requirements should be satisfied:
(1) The question must be a real and not a hypothetical or theoretical one;
(2) The applicant must have a real interest in raising it; and
(3) There must be a proper contradictor:
Forster v Jododex at 437-8.
77 In this proceeding, these requirements are satisfied. The proposed declarations relate to conduct that contravenes the ACL and the matters in issue have been identified and particularised by the parties with precision: Australian Competition & Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378 at [35]. The proposed declarations contain sufficient indication of how and why the relevant conduct is a contravention of the ACL: BMW Australia Ltd v Australian Competition & Consumer Commission [2004] FCAFC 167 at [35].
78 It is in the public interest for the ACCC to seek to have the declarations made and for the declarations to be made (see the factors outlined in ACCC v CFMEU at [6]). There is a significant legal controversy in this case which is being resolved. The ACCC, as a public regulator under the ACL, has a genuine interest in seeking the declaratory relief and Coles is a proper contradictor because it has contravened the ACL and is the subject of the declarations. Coles has an interest in opposing the making of them: MSY Technology at [30]. No less importantly, the declarations sought are appropriate because they serve to record the Court's disapproval of the contravening conduct, vindicate the ACCC's claim that Coles contravened the ACL, assist the ACCC to carry out the duties conferred upon it by the Act (including the ACL) in relation to other similar conduct, inform the public of the harm arising from Coles' contravening conduct and deter other corporations from contravening the ACL.
79 Finally, the facts and admissions in Annexure 1 provide a sufficient factual foundation for the making of the declarations: s 191 of the Evidence Act; Australian Competition & Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 at [57]-[59] endorsed by the Full Court in Australian Competition & Consumer Commission v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513 at [92]; Hadgkiss v Aldin (No 2) [2007] FCA 2069 at [21]-[22]; Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [77]-[79] and Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543.
9 In Daiso (No 3), I discussed the applicable principles relating to the imposition of pecuniary penalties. The following discussion of the applicable principles is largely based on the discussion in Daiso (No 3).
10 In Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (FWBII), the High Court held that, in the context of civil penalty provisions, it was open to the Court to receive submissions, including joint submissions, as to an appropriate penalty. French CJ, Kiefel, Bell, Nettle and Gordon JJ (with whom Keane J agreed) stated at [46] that there is "an important public policy involved in promoting predictability of outcome in civil penalty proceedings" and that "the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers". Their Honours stated that, as was recognised in Trade Practices Commission v Allied Mills Industries Pty Ltd (No 5) (1981) 60 FLR 38; 37 ALR 256 and determined in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 (NW Frozen Foods), "such predictability of outcome encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention".
11 Their Honours stated, at [57], that in civil proceedings there is generally very considerable scope for the parties to agree on the facts and their consequences; and that there "is also very considerable scope for them to agree upon the appropriate remedy and for the court to be persuaded that it is an appropriate remedy". In relation to civil penalty proceedings, their Honours stated at [58]:
Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills, highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty.
(Footnote omitted.)
12 Their Honours in FWBII also made observations, at [60]-[61], regarding submissions by a regulator in such a context.
13 It follows from the above that the questions to be determined in the present case are: first, whether the Court is sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences; and secondly, whether the penalty that the parties propose is an appropriate remedy in the circumstances thus revealed.
14 In the present case, insofar as the proceeding involves an application by the Director for the imposition of a pecuniary penalty, the application is made under s 228(1) of the ACL (Vic). This provides that the regulator may institute a proceeding in a court for the recovery on behalf of the Commonwealth, a State or a Territory, as the case may be, of a pecuniary penalty referred to in s 224. Section 10(1) of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (the Victorian Act) provides that, in the ACL (Vic), "regulator" means the Director. Section 10(2) of that Act provides that, for the purposes of the application of the ACL (Vic), "court" has the meaning given in s 223 of the Victorian Act. Section 223(1) of the Victorian Act provides that, subject to certain provisions (one of which is s 224), in the ACL (Vic), "court" means the Supreme Court, the County Court, the Magistrates' Court and VCAT. Section 224 of the Victorian Act provides that, subject to s 223, VCAT "or any court of competent jurisdiction" may hear and determine a cause of action arising under any provision of the ACL (Vic). I proceed on the basis that this Court is such a court. I note that pecuniary penalties have been imposed by this Court in other cases brought by the Director in like circumstances: see Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd (No 2) [2016] FCA 1435; and Director of Consumer Affairs Victoria v Gibson (No 3) [2017] FCA 1148. Neither party in the present case suggested otherwise.
15 Section 224(2) of the ACL (Vic) sets out certain mandatory considerations relating to the imposition of a pecuniary penalty. Section 224(2) provides:
(2) 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; 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 this Part to have engaged in any similar conduct.
16 The principles applicable to the discretion to impose pecuniary penalties have been discussed in many cases including the following authorities: Trade Practices Commission v CSR Ltd [1991] ATPR 41-076; [1990] FCA 762; Australian Competition and Consumer Commission v Kokos International Pty Ltd (No 2) [2008] ATPR 42-212; [2008] FCA 5; NW Frozen Foods; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 (Singtel Optus); Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 (TPG); FWBII; and Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25. (See also Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] ATPR 42-557; [2017] FCAFC 159 (Cement Australia) at [569].) In these circumstances, it is unnecessary to set out the principles, which are well-established, in any detail.
17 It is convenient, nevertheless, to set out the following list of relevant factors from the judgment of French J (as his Honour then was) in Trade Practices Commission v CSR Ltd at 52,152-52,153:
1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused [by the contravening conduct].
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.
18 In FWBII, French CJ, Kiefel, Bell, Nettle and Gordon JJ explained the purpose of a civil penalty as follows at [55]:
… whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
"Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act."
(Footnotes omitted.)
19 In TPG at [64], French CJ, Crennan, Bell and Keane JJ endorsed the observation of the Full Court in Singtel Optus that the Court, in fixing a penalty, must make it clear to the contravenor and the market that the cost of courting a risk of contravention cannot be regarded as an acceptable cost of doing business.
20 In relation to the course of conduct principle, I refer to Cement Australia at [421]-[426] and Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73 at [226]-[236].