Counsel for the Trade Practices Commission: Mr S.P. Charles QC with Mr N. Young and Mr P. Jopling.

Solicitors for the Commission: Australian Government Solicitors

Counsel for the First respondent: Mr D. Williamson QC with Mr S. Whelan

Solicitors for the respondent: Corrs Australian Solicitors

Counsel for the Second to Fourth respondents: Mr M.F.R. Bielecki

Solicitors for the Second to Fourth respondents: Arthur Robinson and Hedderwicks

1. In early February 1987, Peter Tasman Bartels of

Carlton and United Breweries Ltd. ("C.U.B."), (who

then held the position of Managing Director with

C.U.B. for whose conduct C.U.B. accepts

responsibility) telephoned Mr G.W. Wheatland the

then Managing Director of the South Australian

Brewing Co. Ltd. ("S.A.B.") and told him that C.U.B.

was most concerned about the agreement made on or

about 3 December 1986 by S.A.B. with Payless

Superbarn (N.S.W.) Pty. Ltd. and Payless Superbarn

(Vic.) Pty. Ltd. (hereinafter collectively referred

to as "Payless") whereby S.A.B. agreed to

manufacture, package and supply to Payless in

accordance with orders placed by Payless from time

to time a regular strength beer and a light strength

beer in cans bearing the brand name "Payless Beer"

and the sale of generic brand beer (being the

marketing of beer under the "house brand" labels of

retailers as distinct from marketing under the well

known brand names of brewers) in retail outlets in

Victoria and New South Wales. During that telephone

conversation Mr Bartels told Mr Wheatland that

C.U.B. was so concerned about the impact of generic

beer upon the brewing industry that C.U.B. would be

reviewing its purchases of beer cans from J. Gadsden

Australia Ltd. ("Gadsden") if S.A.B. continued to

sell and supply generic beer to payless;

2. Later on the same day Mr Bartels telephoned Mr I.R.

Wilson, the Managing Director of Gadsden. Mr

Bartels informed Mr Wilson of C.U.B.'s concern about

S.A.B. and Payless making generic beer available.

Mr Bartels then told Mr Wilson that as a result

C.U.B. had decided to substantially reduce its

purchases of cans from Gadsden;

3. Since February 1987 C.U.B. and its related companies

have continued to purchase beer cans from Gadsden at

a rate consistent with its rate of purchase prior to

the telephone conversations referred to in

paragraphs A.1. and A.2. hereof;

C.U.B. in contravention of Section 46 of the Trade Practices Act 1974 ("the Act") took advantage of:-

(a) its substantial market power in the market for

beer in Australia; and/or

(b) its substantial market power as an acquirer of

beverage cans in the beverage can market-

for the purposes of deterring or preventing Payless Superbarn (NSW) Pty. Ltd. and Payless Superbarn (Vic.) Pty. Ltd. from engaging in competitive conduct by selling and supplying beer bearing the brandname "Payless" in Victoria and New South Wales.

C.U.B. be restrained, whether by itself, its officers, servants or agents or otherwise however for a period of three years from the date of this Order from:-

(a) inducing or attempting to induce S.A. Brewing

Holdings Ltd. ("Holdings") and, or, S.A.B. not

to supply beer to Payless or any other person

being beer packaged in cans or bottles bearing

the brand name of Payless or of that other

person; or

(b) hindering or preventing Holdings and, or,

S.A.B. supplying that beer to Payless or any

other person-

for the purpose of deterring or preventing Payless or that other person engaging in competitive conduct by reselling or resupplying that beer to retailers or consumers.

C.U.B. pay to the Commonwealth of Australia a pecuniary penalty of $175,000 in respect of the contravention of Section 46 of the Act referred to in Order A hereof.

D. By Consent, The Court Orders That:

1. Pursuant to Section 77 of the Act judgment be

entered for the Trade Practices Commission on behalf

of the Commonwealth of Australia against C.U.B. for

the sum of $175,000.

2. The Trade Practices Commission pay the costs of

Holdings, S.A.B. and Gadsden of and incidental to

these proceedings.

3. C.U.B. pay the costs of the Trade Practices

Commission of and incidental to these proceedings

including those costs incurred by it by virtue of

the Order D.2. hereof.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Paragraph 46(1)(c) of the Trade Practices Act 1974 provides:-

"46.(1) A corporation that has a substantial

degree of power in a market shall not take

advantage

of that power for the purpose of-

(a) ...

(c) deterring or preventing a person from

engaging in competitive conduct in that or

any other market."

2. Under s.76 of the Act, if the Federal Court is satisfied that a person, being a corporation, has contravened s.46 of the Act, the Court is empowered to order that corporation to pay to the Commonwealth such pecuniary penalty not exceeding $250,000:-

"... as the Court determines to be appropriate

having regard to all relevant matters including

the nature and extent of the act or omission

and of any loss or damage suffered as a result

of the act or omission, the circumstances in

which the act or omission took place and

whether the person has previously been found by

the Court in proceedings under this Part to

have engaged in any similar conduct."

3. Section 77 of the Act empowers the Trade Practices Commission to institute a proceeding in the Federal Court for the recovery on behalf of the Commonwealth of a pecuniary penalty referred to in s.76.

4. In addition, under sub-section 80(1) of the Act where, on the application of the Commission, a person has engaged in conduct that constitutes a contravention of the Act, the Court is empowered to grant "an injunction in such terms as the Court determines to be appropriate".

5. Carlton and United Breweries Ltd. (C.U.B.) is a corporation. The Commission instituted proceedings in this Court seeking a declaration that C.U.B. has contravened s.46 of the Act, an injunction restraining C.U.B. from engaging in conduct of that kind and the imposition of a pecuniary penalty on C.U.B. in respect of its contravention of s.46 of the Act. When the application came on for hearing C.U.B. admitted that it had contravened paragraph 46(1)(c) of the Act and consented to the Court making a declaration to that effect, consented to an injunction being granted and agreed that the Court should order it to pay to the Commonwealth a pecuniary penalty, the amount of which was to be determined by the Court. Thus theonly issue for the Court to determine is the amount of the pecuniary penalty to be imposed on C.U.B. The Commission is not pursuing its claims against the other respondents to the application and the Commission and those respondents have agreed to the form of the orders to be made to give effect thereto.

6. By consenting to the orders sought C.U.B. has conceded it has contravened each of the elements of the conduct proscribed by paragraph 46(1)(c) of the Act. Being a corporation within the meaning of the Act, it has conceded that it had a substantial degree of power in a market being the market for beer in Australia and/or its "market power as an acquirer of beverage cans in the beverage can market"; that it took advantage of that power for the purpose of deterring or preventing persons being Payless Superbarn (N.S.W.) Pty. Ltd. and Payless Superbarn (Vic.) Pty. Ltd. from engaging in competitive conduct in those markets, namely by selling and supplying beer bearing the brand name "Payless" in Victoria and New South Wales.

7. In order to determine what is the appropriate pecuniary penalty to be paid by C.U.B., the Court must have regard to all relevant matters including those matters referred in sub-section 76(1) of the Trade Practices Act as set out earlier in these reasons. The material put before the Court is contained in a document headed "Agreed Statement of Facts" and in an affidavit sworn by Peter Tussman Bartels, who, at the relevant time, was the Managing Director of C.U.B., and at the time of the hearing, was the Chief Executive of the Brewing Group of Elders IXL Ltd., the ultimate holding company of C.U.B. It is necessary to summarise this material.

8. It is accepted that the facts agreed to in the statement are so agreed only for the purposes of this proceeding. Further, some of the respondents, other than C.U.B., are not in a position to agree to all of the matters in the statement since they have no sufficient knowledge of them. The respondents S.A. Brewing Holdings Ltd. ("Holdings"), The South Australian Brewing Co. Ltd. (S.A.B.) and J. Gadsden Australia Ltd. ("Gadsden") are each corporations. At all material times S.A.B. and Gadsden were each a wholly owned subsidiary of Holdings. At all material times C.U.B., among other activities, carried on "the business of manufacturing, and supplying beer to retailers and distributors, including beer packaged in bottles or cans ("packaged beer") throughout Australia and in each of its States and internal Territories". The statement sets out details of the estimated share of sales of beer by C.U.B. during 1987 in Australia and in N.S.W. and Victoria and the proportion of packaged beer within those percentages. The details of these estimates need not be set out. It is sufficient to say the estimates fully support the concessions made by C.U.B. that it has a substantial degree of power in the markets mentioned earlier in these reasons.

9. At all material times S.A.B., among other activities, carried on the business of manufacturing and supplying beer, including packaged beer, to retailers and distributors in South Australia and in other States and internal Territories. For the year ended 30 June 1987 it estimates its sales of packaged beer constituted approximately 5% of total sales of packaged beer in Australia and approximately 75% of total sales of packaged beer in South Australia. It estimates that in the same year its sales of canned beer constituted approximately 2% of total sales of canned beer in Australia and approximately 80% of total sales of canned beer in South Australia. At all material times S.A.B. owned and operated brewing and packaging facilities known as "the Southwark Brewery" in South Australia which was its sole brewing and packaging facility. From this material it is apparent that S.A.B. was a competitor to C.U.B. in the markets referred to earlier in these reasons.

10. At all material times Gadsden, among other activities, carried on the business of manufacturing and supplying beverage cans in Victoria, New South Wales and elsewhere in Australia. It supplied beverage cans to manufacturers or canners within Australia and estimates that for the year ended 30 June 1987 it accounted for approximately 30% of the total number of beverage cans sold or distributed in Australia. Its major competitor was Containers Ltd. which it estimated accounted for approximately 70% of the total number of beverage cans sold or supplied in Australia in the same year.

11. Paragraphs 13 to 28 inclusive of the statement are set out:-

approximately 70% of the beer cans which CUB

used to package beer sold or intended for sale

in Australia were supplied to it by Gadsden.

The only other supplier of cans to CUB was

Containers Limited. CUB had an agreement with

Gadsden for the period from 1 July, 1986 to 30

June, 1987, which provided that CUB would

proceed to order cans at a 400 million minimum

level.

14. In the year ended 31 January, 1987 CUB

purchased approximately 460 million beer cans

from Gadsden. These purchases represented in

excess of 50% of Gadsden's sales of beverage

cans. Purchases during the year ended 31

January, 1988 continued at similar levels.

15. At all material times there was a market for

the supply of beer in Australia. At all

material times CUB operated principally as a

manufacturer and wholesaler of beer.

16. At all material times there was a market for

beverage cans in Australia, which market

included beer cans.

17. At all material times CUB had a substantial

degree of market power in the market for beer

in Australia, and in the beverage can market as

an acquirer of beverage cans.

18. On or about 3 December, 1986 SAB made an

agreement with Payless Superbarn (NSW) Pty.

Ltd. and Payless Superbarn (Vic.) Pty. Ltd.

(hereinafter collectively referred to as

"Payless") whereby SAB agreed ("Payless

agreement") to manufacture, package and supply

to Payless in accordance with orders placed by

Payless from time to time a regular strength

beer and a light strength beer in cans bearing

the brand name "Payless beer" ("Payless beer").

The Payless agreement is recorded in a letter

dated 3 December, 1986 from SAB to Payless.

19. Between 3 December, 1986 and the telephone

conversations referred to in paragraphs 21 and

22 approximately 450,000 cans of Payless beer

were delivered by SAB to Payless.

20. Commencing on or about 12 January, 1987 Payless

advertised and supplied Payless beer to

purchasers at various retail outlets in New

South Wales and Victoria and at prices

substantially below the prices charged by

retailers of canned beer manufactured and

supplied to them by CUB.

21. In early February 1987 Mr P. Bartels of CUB

(who then held the position of Managing

Director with CUB for whose conduct CUB accepts

responsibility) telephoned Mr G.W. Wheatland

the then Managing Director of SAB and told him

that CUB was most concerned about the Payless

agreement and the sale of generic brand beer in

retail outlets in Victoria and New South Wales.

During that telephone conversation Mr Bartels

told Mr Wheatland that CUB was so concerned

about the impact of generic beer upon the

brewing industry that CUB would be reviewing

its purchases of beer cans from Gadsden if SAB

continued to sell and supply generic beer to

Payless.

22. Later on the same day Mr Bartels telephoned Mr

I.R. Wilson, the Managing Director of Gadsden.

Mr Bartels informed Mr Wilson of CUB's concern

about SAB and Payless making generic beer

available. Mr Bartels then told Mr Wilson that

as a result CUB had decided to substantially

reduce its purchases of cans from Gadsden.

23. On or about 23 March, 1987 Mr R.J. Powell of

Payless placed with an officer of SAB, and that

officer accepted, an order for one semi-trailer

load to Payless beer.

24. By a letter dated 24 March, 1987 from Mr J.E.

Braniff, the General Manager-Marketing of SAB

to Mr P. Rigbye of Payless, SAB informed

Payless that as a result of the matters

referred to therein it would be unable to

continue to supply Payless beer to Payless.

25. On 24 March, 1987 an officer of SAB told Mr

Powell of Payless that SAB would cease to

supply Payless and would not fulfil the order

placed by Mr Powell on behalf of Payless and

accepted by SAB on 23 March, 1987. That order

was subsequently filled between 24 March and 30

March 1987. Thereafter, SAB ceased to supply

Payless beer to Payless.

26. After the telephone conversations referred to

in paragraphs 21 and 22 deliveries totalling

approximately 1,160,000 cans of Payless beer

were made by SAB to Payless, the last such

delivery being made on or about 30 March, 1987.

These deliveries included deliveries pursuant

to the order referred to in paragraphs 23 and

27. After taking into account the matters referred

to in the letter of 24 March 1987, the matters

referred to in paragraphs 21 and 22 above, its

contractual obligations to Payless and its

commercial position, SAB:-

(a) wrote the letter of 24 March, 1987; and

(b) did not supply Payless beer to Payless

after 30 March, 1987.

28. Since February 1987 CUB and its related

companies have continued to purchase beer cans

from Gadsden at a rate consistent with its rate

of purchase prior to the telephone

conversations referred to in paragraphs 21 and

22."

12. The letter dated 3 December 1986 referred to in paragraph 18 of the statement is lengthy and contains the terms of the agreement. It appears the agreement was to continue indefinitely but there is a warning given as follows:-

"8. Industrial Disputes

The South Australian Brewing Company and in

fact the brewing industry generally is going

through a period of unrest. We have just

experienced a series of overtime and transport

bans which necessitate priority being given to

recovering supply of our corporate brands on

the South Australian market. It must be

accepted that we will do whatever can be done

to supply Private Labels on an initial and

continuing basis whenever possible, but these

cannot take priority over our corporate brands

on our home and other state markets."

13. The contents of the letter dated 24 March 1987 referred to in paragraph 24 are set out:-

"I am writing to advise you that The South

Australian Brewing Company Limited has concluded

that it will be unable to continue to supply Payless

beer to your company.

As a result of an assessment of our plant

maintenance schedules and capacities, and in view of

brands, we will be unable to accept any further

orders for the foreseeable future.

Thank you for your co-operation."

14. C.U.B. admits that by engaging in the conduct described in paragraphs 21,22 and 28 of the statement it, in contravention of s.46 of the Trade Practices Act, took advantage of:-

"(a) its substantial market power in the market for

beer in Australia; and/or

(b) its substantial market power as an acquirer of

beverage cans in the beverage can market-

for the purpose of deterring or preventing Payless

Superbarn (NSW) Pty. Ltd. and Payless Superbarn

(Vic.) Pty. Ltd. from engaging in competitive

conduct by selling and supplying beer bearing the

brandname "Payless" in Victoria and New South

Wales."

15. Paragraphs 2 to 8 of the affidavit of Mr Bartels are set out in full:-

"2. CUB has Australia-wide operations in brewing

and distributing beer, and for many years prior

to the events referred to in these proceedings,

the senior management of CUB (including myself)

have been acutely aware of the need to ensure

that CUB complies with the Trade Practices Act.

It has been CUB's policy to seek legal advice

whenever management has perceived that there

is the possibility of a trade practices issue in

proposed conduct. It has been CUB's policy not

to proceed with proposed conduct if legal

advice has indicated either that the proposed

conduct would be in breach of the Act or that

there would be a reasonable possibility of

breach.

3. I did not advert to the need for legal advice

prior to the conversations with Mr Wheatland

of SAB and Mr Wilson of Gadsden that are set

out in paragraphs 21 and 22 of the Statement of

Agreed Facts. At the time of the conversations

I was not conscious of the possibility that the

conversations could give rise to issues under

the Trade Practices Act.

4. As referred to in the Statement of Agreed

Facts, I was most concerned about the impact of

generic beer upon the brewing industry. By

this I mean the effect of the marketing of beer

under the "house-brand" labels of retailers as

distinct from marketing under the well known

brand-names of brewers. This concern led me to

make the statements to Mr Wheatland and Mr

Wilson that are set out in paragraphs 21 and

5. By stating that CUB had decided to

substantially reduce its purchases of cans from

Gadsden I intended to register a strong protest

against Gadsden and SAB facilitating the supply

of generic beer to Payless, and intended

thereby to discourage that supply. The

conversations with Mr Wheatland and Mr Wilson

took place over a short period of time, each in

the course of the same day. Without the

benefit of legal advice I was unaware that a

reduction in the purchase of cans by CUB could

constitute a breach of section 46 of the Trade

Practices Act.

6. I have now had the benefit of legal advice as

to the application of section 46 of the Trade

Practices Act to the events referred to in

these proceedings. I now appreciate that

regard must be had to section 46 with respect

to CUB as a purchaser of cans, as well as a

supplier of beer. I am also aware now of the

developments in the interpretation of section

46 contained in the reasons for judgment

delivered by the High Court in February 1989 in

Queensland Wire Industries v. BHP, as to what

may constitute a relevant market, as to what

may amount to the possession of substantial

power within that market, and as to what is meant

by the taking advantage of such power for

an anti-competitive purpose. I am now acutely

conscious of the potential reach of section 46.

7. It is my belief that had I sought and obtained

legal advice in February 1987 prior to

embarking upon the proposed conduct, then in

conformity with CUB policy I would not have

made the statements that I did in the

conversations with Mr Wheatland and Mr

Wilson, and in the circumstances I would not

have decided to review the quantity of cans to

be purchased by CUB from Gadsden.

8. I wish to express my sincere regret that in

February 1987 I did not recognize the potential

for breach of section 46, and that I engaged in

the conduct the subject of these proceedings."

16. The judgment referred to in paragraph 6 of the affidavit is Queensland Wire Industries Pty. Ltd. v. The Broken Hill Pty. Co. Ltd. [1989] HCA 6; (1989) 167 CLR 177. This was the first occasion the High Court had to consider s.46 of the Trade Practices Act. In that case, the Court rejected the suggestion that the phrase "take advantage" of the power required a hostile intent inquiry to establish whether a defendant exercised the power reprehensibly. The Court rejected the suggestion that the purpose of s.46 was the economic well being of competitors. At p 191 Mason C.J. and Wilson J. said:-

"But the object of s.46 is to protect the interests

of consumers, the operation of the section being

predicated on the assumption that competition is a

means to that end. Competition by its very nature

is deliberate and ruthless. Competitors jockey for

sales, the more effective competitors injuring the

less effective by taking sales away. Competitors

almost always try to "injure" each other in this

way. This competition has never been a tort (see

Keeble v. Hickeringill [1809] EngR 7; (1809) 11 East 574 (103 ER

1127. and these injuries are the inevitable

consequence of the competition s.46 is designed to

foster. In fact, the purpose provisions in

s.46(1)are cast in such a way as to prohibit conduct

designed to threaten that competition - for example,

s.46(1)(c) prohibits a firm with a substantial

degree of market power from using that power to

deter or prevent a rival from competing in a market.

The question is simply whether a firm with a

substantial degree of market power has used that

power for a purpose proscribed in the section,

thereby undermining competition, and the addition of

a hostile intent inquiry would be superfluous and

confusing."

17. At p 193-4 Deane J. discussed the construction of the words "take advantage of ... power" which is described as the first question. At p 194 His Honour said:-

"The starting point of a consideration of that first question is

the fact that the essential notions the which s.46 is concerned and

the objective which the section is designed to achieve are economic

and not moral ones. The notions are those of markets, market

power, competitors in a market and competition. The objective is

the protection and advancement of a competitive environment and

competitive conduct by precluding advantage being taken of "a

substantial degree of power in a market" for any of the proscribed

purposes. If the substantial degree of market powers exists and is

"take(n) advantage of" for one or other of those purposes, it is

not to the point that that degree of market power was acquired by

praiseworthy means (e.g. hard work, efficiency, product quality

and service) or that the anti-competitive purpose is inspired by

altruistic or even patriotic motives (e.g. to avoid the

consequences to the small trader of irrational and extreme price

competition or to protect local standards and employment). That

is, of course, unless the words "take advantage of ... power"

introduce a need for some distinct examination of the morality or

social acceptability of the conduct involved. In my view, they do

not."

18. Before referring to the submissions of counsel some comments are made in relation to the injunction which the Commission and C.U.B. have agreed should be granted by the Court. The injunction is expressed to restrain C.U.B. from engaging in conduct in contravention of paragraph 46(1)(c) of the Trade Practices Act insofar as that conduct relates to Holdings or S.A.B. supplying beer being packed in cans or bottles bearing the brand name of Payless or of any other person, to Payless or that other person, or from hindering or preventing Holdings or S.A.B. supplying that beer to Payless or any other person for the purpose of deterring or preventing Payless or that other person engaging in competitive conduct by the reselling of that beer to retailers or consumers. The injunction is to operate for a period of three years from the date of the order of the Court.

19. The Commission and C.U.B. request the Court to grant that injunction. The Court will make the order sought but raises for consideration the question of whether such an injunction should be granted in cases similar to this where a pecuniary penalty is to be imposed.

20. There is no doubt the Court has power to grant the injunction. This is a case where there is no suggestion that C.U.B. previously has engaged in conduct in contravention of Part IV of the Trade Practices Act, which includes s.46, and there is no suggestion that C.U.B. is likely to engage, intentionally, in any such conduct in the future. This of itself is not a bar to the giving of the injunction. Sub-section 80(4) provides:-

"(4) The power of the Court to grant an injunction

restraining a person from engaging in conduct may be

exercised-

(a) whether or not it appears to the Court that the

person intends to engage again, or to continue

to engage, in conduct of that kind;

(b) whether or not the person has previously

engaged in conduct of that kind; and

(c) whether or not there is an imminent danger of

substantial damage to any person if the

first-mentioned person engages in conduct of

that kind".

21. The question was considered by Toohey J. in Trade Practices Commissioner v. Mobil Oil Australia Ltd. [1984] FCA 363; (1984) 4 FCR 296. In that case, following the hearing of contested proceedings, His Honour imposed pecuniary penalties but refused to grant an injunction. After referring to sub-section 80(4), His Honour said at p 300:-

"It is clear that in determining whether to

grant an injunction the Court is not restricted

because the factors mentioned in subs (4) are

absent. The question must still be asked - where

those facts are absent, what purpose is an

injunction intended to serve? The imposition of an

injunction may, in an appropriate case, be an

additional sanction to a pecuniary penalty. For

instance, in the case of a particularly flagrant

breach, even though there was no evidence to

indicate the offender's intention to continue the

offending conduct, it might be appropriate to mark

the court's disapproval by an injunction as well as

a monetary penalty.

The present case is not one of flagrant

contraventions of the Act. Furthermore, it is not

in issue that when the Commission drew the attention

of Mobil to the allegations of Mr Quayle, Mobil

co-operated with the Commission in providing

information. I am not persuaded that an injunction

is either necessary or appropriate in the present case."

22. Commodore Business Machines Pty. Ltd. v. Trade Practices Commission (1990) 92 ALR 563 is an illustration of a case where, in contested proceedings, an injunction was granted.

23. The granting of the injunction exposes C.U.B. to the possibility of being charged with contempt of court if the injunction is breached. Of necessity, the facts constituting the contempt of court would constitute a contravention of paragraph 46(1)(c) of the Trade Practices Act. In proceedings for the second contravention, the earlier contravention is a matter to be considered when determining the amount of a pecuniary penalty to be imposed under sub-section 76(1) of the Trade Practices Act. In the absence of particular facts justifying the granting of an injunction, the question arises whether the Court should expose a party to a risk of a penalty greater than that imposed by the Parliament.

24. This matter was raised during the course of the hearing. Counsel for the Commission drew attention to the fact that in a number of orders, this Court has, by consent, granted injunctions for limited periods in circumstances similar to the present proceeding. They referred also to the fact that the material did not disclose any steps that had been taken by C.U.B. to instruct its officers to prevent contraventions in the future and it was suggested that the injunction would be effective in preventing a future contravention. There is little force in that submission having regard first to the fact that in this case it was the managing director of C.U.B. who engaged in the proscribed conduct and secondly to the material contained in the affidavit of Mr Bartels.

25. Counsel for C.U.B. submitted that the granting of an injunction is itself a very public sanction and commercial restraint in its own right and a regulator of conduct. In addition it is a public recognition, it was said, of the seriousness of the conduct engaged in. All this is accepted but, nevertheless, the granting of an injunction in the circumstances of the facts of this case has overtones of the placing of C.U.B. on a good behaviour bond. Section 76 of the Trade Practices Act requires the Court to have regard to "all relevant matters" including the specific matters therein mentioned. These matters normally relate to the circumstances under which the proscribed conduct occurred. The injunction applies to possible future conduct the engaging in which would constitute contempt of court.

26. In determining the pecuniary penalty to be imposed, the Court has regard to the injunction being granted but does not place much weight on that fact. In this regard the declaration to be made is a far more effective public statement by C.U.B. that it has committed breaches of the Trade Practices Act. This aspect will be referred to later in these reasons.

27. As far as the Court knows, this is the first case in which application has been made for the imposition of apecuniary penalty for a contravention of s.46 of the Trade Practices Act. The maximum penalty of $250,000 that can be imposed upon a corporation which contravenes a provision of Part IV, shows that Parliament considered that breach of that proscribed conduct is a very serious matter. There have been many cases where the Court has imposed penalties for breaches of other provisions of Part IV. A reference to those cases illustrates the wide range of circumstances which can constitute a breach and the wide range penalties imposed. In the present case, counsel for the Commission handed to a Court a list of 36 cases where the Court has imposed penalties and a summary of the facts of each of those cases and the amount of the penalty imposed. They are of interest but not of much assistance in determining the amount of penalty to be imposed in this case. Further, reference was made to a number of authorities which discussed principles to be applied in determining the amount of the penalty. These decisions amount to commentaries on sub-section 76(1) of the Trade Practices Act. These are helpful but in a case such as this it is more helpful to the Court to rely upon the submissions of counsel, moulded, as they were, to the particular facts of this case. There was no real dispute between counsel as to the principles to be applied even though counsel for the Commission said there were 17 considerations to be taken into account and counsel for C.U.B. referred to a number of other considerations.

28. In considering this matter, it must be remembered that the conduct proscribed by s.46 cannot be authorised by the Commission under Part VII of the Trade Practices Act. Further, it must be accepted that discovering and obtaining evidence to support an application for a penalty for contravention of s.46 is very difficult and expensive. A contravention may take many forms and in many cases a wink, a look or a nod may be more effective than the written or expressed word. Proof of those aspects may be difficult to obtain. This is relevant in considering the pecuniary penalty and its deterrent effect on other corporations which may engage in conduct in contravention of s.46.

29. A serious "offence" has occurred. The conduct was engaged in by the managing director of C.U.B. It was engaged in at a time shortly after s.46 was amended in June 1986. Before then, sub-section 46(1) applied to a corporation "that is in a position substantially to control a market for goods or services." After the amendment, the section applies to a corporation "that has a substantial degree of power in a market". The amendment came into operation some 8 months before the conduct relevant to this proceeding occurred and the full implications of the amendment may not have been properly understood by Mr Bartels although there is no evidence that C.U.B. had sought legal advice on the amendment. Little weight however can be given to ignorance of the law by a corporation of the size and strength of C.U.B. It is a factor, however, to be considered. Further, it was not untill 1989 that the High Court gave its judgment in the Queensland Wire Industries case. In this regard particular reference is made to the construction of the words "take advantage". In this respect, it is important to note the apparent conflict arising from persons being in competition in a market and the restrictions imposed by s.46 as referred to in the passages from the Queensland Wire Industries case set out earlier in these reasons. These matters are taken into account in support of the submissions made on behalf of C.U.B.

30. In the present case, sub-section 46(1)(c) is designed to protect the interests of consumers, it is not designed to prevent injury to competitors. Further, the concept of the nature of the market, when used in sub-section 46(1)(c), was explained in the Queensland Wire Industries case. Before then the relevance of the beverage can market as distinct from the market for beer may not have been fully understood at the time of the relevant conduct.

31. In the present case, weight is given to the fact that C.U.B. has admitted the contraventions alleged. In doing this it has made public its acceptance of the fact that it has contravened sub-section 46(1) of the Trade Practices Act It has not forced the Commission to engage in long and expensive litigation to prove the contravention in Court. It has not taken every technical point to avoid liability. These are important considerations in proceedings alleging breaches of Part IV of the Trade Practices Act.

32. It must be accepted that on the material before the Court, the conduct by Mr Bartels was deliberate. It was not accidental or unintended. This is made clear from the facts set out in paragraphs 21 and 22 of the statement. The expression of concern in relation to the action therein described by the Managing Director by a corporation of the size, strength and standing of C.U.B. could only be described as a blatant, if not fully understood, contravention of sub-section 46(1)(c) of the Trade Practices Act. This is the most serious aspect of the contravention and great weight must be given to it. At the same time, regard must be had to the explanation given by Mr Bartels as set out in paragraphs 4 and 5 of his affidavit.

33. On the facts of this case regard must be given to the strength of C.U.B. in these markets and the deterrent effect of the penalty imposed.

34. A number of matters in favour of C.U.B. have been mentioned already. C.U.B. is conscious of what it has done. It has not previously offended against Part IV of the Trade Practices Act. It regrets and apologises for what it has done and makes it clear it will attempt to avoid contravention in the future. It is paying the costs of the Commission and has admitted the contravention. The Court has accepted all the matters referred to in the affidavit of Mr Bartels. They were not challenged by the Commission.

35. Counsel for C.U.B. submitted that Mr Bartels had no intent to contravene sub-section 46(1). Intent is not an element in the contravention of that sub-section. Reference has been made already to the changed circumstances arising from the amendment made in 1986 and to the views expressed by the High Court. These can be taken into account. Counsel also argued that although Gadsden was dependant upon C.U.B. in selling its cans, C.U.B. was dependent upon Gadsden to provide cans and there was no evidence that Containers could supply them if C.U.B. decided to cease acquiring cans from Mr Gadsden. This is immaterial. A threat from a corporation of the stature of C.U.B. may well be sufficient in itself. To be effective, the threat need not be carried out. What did develop was that Payless ceased being supplied with its packaged beer. The reasons given by S.A.B. in its letter of 24 March 1987 are cryptic at the very least and an inference is drawn that its inability to accept further orders from Payless may well have been as a result of the conduct of C.U.B. This, however, is not an element for the establishment of a contravention of sub-section 46(1) of the Trade Practices Act. In the same way the proof of damage to Payless is not an element of such a contravention. For this reason, it is immaterial, in my opinion, whether S.A.B. has committed any breach of its agreement with Payless. Certainly there is no evidence before the Court of any loss or damage suffered as a result of the conduct of C.U.B.

36. Having regard to all the relevant matters, in the circumstances of this case the Court determines the appropriate pecuniary penalty to be paid by C.U.B. to the Commonwealth to be the sum of $175,000.00.