CATCHWORDS
TRADE PRACTICES )
CIVIL PENALTIES ) - purpose of imposition of a civil penalty - primacy of deterrence - appropriate penalties for conduct amounting to serious systematic and deliberate defiance of the law - propriety of parties agreeing on a "settlement" involving admissions of liability and a joint submission as to the amounts of penalties - ultimate decision remains that of the Court, but an agreement within the range of proper penalties may be accepted by the Court - public interest that very complex and potentially very lengthy penalty proceedings should be so concluded - entitlement of respondents to a discount for the public benefit conferred by their recognition of their liability and withdrawal of their defences - indication of resolve to comply with the law in future - significance for quantum of penalty of the size of a respondent corporation - significance of any evidence of a corporate culture of compliance - principle that total of penalties should be appropriate for the totality of the contraventions where numerous contraventions flow from a single arrangement or set of arrangements.
Trade Practices Act 1974, ss. 45, 45A, 76 and 78.
Trade Practices Commission v. Allied Mills Industries Pty Ltd (No 4) (1981) 37 ALR 256
Commerce Commission v. New Zealand Milk Corporation Ltd [1994] 2 NZLR 730
Trade Practices Commission v. Hymix Industries Pty Limited, unreported, Lockhart J., 25 August 1994
Trade Practices Commission v. CC (New South Wales) Pty Limited, unreported, Lindgren J., 24 November 1994
Trade Practices Commission v. Axive Pty Ltd, unreported, Sheppard J., 15 December 1994
Trade Practices Commission v. CSR Limited (1991) ATPR 52,135
Trade Practices Commission v. Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 17,882
Trade Practices Commission v. Mobil Oil Australia Ltd (1984) 4 FCR 296
Trade Practices Commission v. Prestige Motors Pty Ltd, unreported, Lee J., 18 November 1994
L. Vogel and Son Pty Limited v. Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia (1968) 120 CLR 157
Trade Practices Commission v. Carlton United Breweries Ltd (1990) 24 FCR 532
McDonald v. The Queen (1994) 48 FCR 555
Trade Practices Commission v. Patterson Cheney Pty Ltd (1990) ATPR 51,748
The Queen v. Shannon (1979) 21 SASR 442
R v. Bulger (1990) 2 Qd R 559
Schumacher (1981) 3 A Crim R 441
The Queen v. Hudson (1985) 8 FCR 228
Short v. The Queen, unreported, Davies, von Doussa and Higgins JJ., 13 May 1994
Miller v. Fiona's Clothes Horse of Centre-point Pty Ltd (1989) ATPR 50,515
TRADE PRACTICES COMMISSION v. TNT AUSTRALIA PTY LIMITED & ORS
NG 807 of 1992
Burchett J.
Sydney
31 January 1995
IN THE FEDERAL COURT OF AUSTRALIA)
)
NEW SOUTH WALES DISTRICT REGISTRY) NG 807 of 1992
)
GENERAL DIVISION )
BETWEEN: TRADE PRACTICES COMMISSION
Applicant
AND: TNT AUSTRALIA PTY LIMITED
First Respondent
ANSETT TRANSPORT INDUSTRIES (OPERATIONS) PROPRIETARY LIMITED
Second Respondent
MAYNE NICKLESS LIMITED
Third Respondent
PAUL VALENTINE CHADWICK BROWN
Fourth Respondent
RICHARD TAUBER PEDLOW
Fifth Respondent
WILLIAM JAMES GROSE
Sixth Respondent
JOHN GEORGE ROSS
Seventh Respondent
KENNETH STANLEY AIKEN
Eighth Respondent
JOHN MULLEN
Ninth Respondent
KINGSLEY ALWYN MUNDEY
Tenth Respondent
ANTHONY PETER MARKOU
Eleventh Respondent
GERALD MAURICE ROWE
Twelfth Respondent
IAN BISHOP
Thirteenth Respondent
WILLIAM THOMAS BYTHEWAY
Fourteenth Respondent
PETER CHEESEMAN
Fifteenth Respondent
PAT KEARNS
Sixteenth Respondent
VINCENT JOHNSON
Seventeenth Respondent
MICHAEL DENNIS ISON
Eighteenth Respondent
ROBERT JAMES SADLER
Nineteenth Respondent
PETER NOLAN
Twentieth Respondent
ARTHUR GEORGE BRAGG
Twenty First Respondent
TIMOTHY JOHN GOODMAN
Twenty Second Respondent
CORAM: Burchett J.
PLACE: Sydney
DATE : 31 January 1995
REASONS FOR JUDGMENT
BURCHETT J.:
By an application supported by a statement of claim which, as amended, was over two hundred pages in length, the Trade Practices Commission brought proceedings against the respondents for penalties and injunctions for contraventions of Part IV of the Trade Practices Act 1974. The respondents were three large companies, TNT Australia Pty Limited, Ansett Transport Industries (Operations) Proprietary Limited and Mayne Nickless Limited, and nearly twenty individuals sued as their executives said to have been involved in the alleged contraventions. The conduct pleaded against the respondents related to ss. 45 and 45A of the Act. For a substantial time after the proceedings were launched, they were defended. The allegations concerned arrangements and conduct extending over a period of years, and it was anticipated that the matter would be both extremely expensive and very lengthy. A contested hearing might have taken up to a year, or even more.
However, on 10 August 1994, after the directions hearings and interlocutory procedures in the case had already occupied much time and involved very considerable expenditures by the parties, the respondents TNT Australia Pty Limited and Ansett Transport Industries (Operations) Proprietary Limited, together with a number of the individual respondents associated with those companies, informed the Court that they withdrew their defences. As against two respondents, who were the only other individual respondents associated with those companies, the applicant agreed to discontinue the proceedings.
By the withdrawal of their defences, the parties doing so made it clear that they intended, for the purposes of the proceedings, to admit the allegations in the amended statement of claim, so as to permit the Court to proceed to impose suitable penalties. As to the amount of those penalties, it was, of course, accepted that it was for the Court to fix what was just. However, the Commission and the parties in question had negotiated penalties which they regarded as appropriate, and they jointly submitted that these were the penalties the Court should fix. The Court was informed of the Commission's acknowledgment that "it was an essential element in the decision of the companies to withdraw their defences that they had received an indication from the Commission that if they did so, the Commission would urge upon the Court that the penalties should be as ... submitted and no more", and the companies had similarly agreed to contend for no less. In the circumstances, as I found them to be, I was of the opinion that the proposed penalties were fitting, and that I should make the orders suggested. I did so, reserving my reasons.
After the making of the orders to which I have referred, the interlocutory procedures in the case continued as against the remaining respondents, Mayne Nickless Limited and the executives associated with that company. However, on 6 December 1994, a similar announcement was made to the Court on their behalf. Again, the proceedings were discontinued as against two particular individuals, but the remaining respondents withdrew their defences and accepted for the purposes of the case the allegations made against them. Again, the parties had agreed upon a joint submission to the Court as to the appropriate penalties to be imposed, which was made upon the same basis as the joint submission to which I have already referred. In this case also, I was satisfied that the suggested orders were appropriate, and I made them, reserving my reasons.
I come now to deliver my reasons in relation to the whole matter, and it is convenient to set out at once the orders I have made, so far as they relate to penalties, which are that:
1. The First Respondent [TNT Australia Pty Limited] pursuant to section 76 of the Trade Practices Act 1974 (Cth) (the "Act"), pay to the Commonwealth pecuniary penalties in the aggregate of $4,100,000 on or before 9 October 1994.
2. The Second Respondent [Ansett Transport Industries (Operations) Proprietary Limited] pursuant to section 76 of the Act pay to the Commonwealth pecuniary penalties in the aggregate of $900,000 on or before 9 October 1994.
3. The Fourth Respondent pursuant to section 76 of the Act pay to the Commonwealth pecuniary penalties in the aggregate of $75,000 on or before 30 June 1995.
4. The Fifth to Seventh, Ninth to Eleventh and Thirteenth Respondents, pursuant to section 76 of the Act, each pay to the Commonwealth a pecuniary penalty in the sum of $50,000 on or before 30 June 1995.
5. The Third Respondent [Mayne Nickless Limited], pursuant to section 76 of the Trade Practices Act 1974 (Cth) (the "Act"), pay to the Commonwealth pecuniary penalties in the aggregate of $6,000,000 on or before 12 January 1995.
6. The Fourteenth Respondent, pursuant to section 76 of the Act, pay to the Commonwealth a pecuniary penalty in the sum of $40,000 on or before 30 June 1995.
7. The Fifteenth and Sixteenth Respondents, pursuant to section 76 of the Act, each pay to the Commonwealth a pecuniary penalty in the aggregate of $75,000 on or before 30 June 1995.
8. The Seventeenth to Twentieth Respondents, pursuant to section 76 of the Act, each pay to the Commonwealth a pecuniary penalty in the sum of $50,000 on or before 30 June 1995.
In addition, I granted certain injunctions, to operate until 31 December 1998, in order to restrain the companies from engaging in similar conduct, and I ordered the First and Second Respondents to pay costs in the sum of $1,075,000 and the Third Respondent to pay costs in the sum of $1,300,000.
The first aspect of this case which calls for consideration is the question whether it is right that parties should negotiate the quantum of penalties, to be proposed jointly by them to the Court as the basis of an arrangement for the withdrawal of defences and effective admission by respondents of allegations made against them. It must be borne in mind that the responsibility and duty of fixing a proper penalty is reposed by the law in the Court. This was acknowledged by all parties. However, it cannot be denied that the fixing of the quantum of a penalty is not an exact science. It is not done by the application of a formula, and, within a certain range, courts have always recognized that one precise figure cannot be incontestably said to be preferable to another. Outside the range, of course, a figure can be pronounced to be wrong, and from time to time appellate courts make such pronouncements. It is on this basis that I consider each of the figures which have been fixed in the present case to be appropriate. It would not be possible to be confident that, unaided by the agreement of the parties, I would have arrived at precisely the same amounts in respect of all of the respondents. With the benefit of that assistance, I was myself satisfied that it was right to make orders in those amounts, accepting the joint submissions put before me.
So long as a negotiated sum is not outside the range within which a court would fix a penalty, there is no good reason why parties should not be at liberty to reach an agreement about what will be submitted to the court. If they were to attempt to go outside the range, the purposes of the law would be in danger of frustration, and it would be incumbent upon the court to insist upon its function of determining the matter, irrespective of the agreement of the parties. But, subject to that, the public interest was obviously served by what was done in the present case, insofar as great expense to a public authority was avoided, as well as the inevitable unavailability of its human and material resources for other tasks. At the same time, considerable further cost to the community in other ways was averted, including the clogging effect of very lengthy litigation upon the Court lists.
In Trade Practices Commission v. Allied Mills Industries Pty Ltd (No 4) (1981) 37 ALR 256 at 259, Sheppard J. considered a similar problem, saying:
"It is, of course, true that the penalty has been suggested to me by the agreement of the parties. Uninformed of their agreement, I may have selected a different figure, but I am satisfied that it would not have been very different from theirs. There is from time to time, amongst members of the profession and amongst the public, discussion concerning plea bargaining. Sometimes it is suggested that it involves disreputable conduct. It is my opinion that that is so if it at all implicates the court in private discussions as to what the court's attitude will or would be likely to be if a particular course is taken. In this case nothing of that kind has occurred. The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be. That was the course adopted, perhaps in a less positive way, in a customs prosecution heard in the original jurisdiction of the High Court: Chipp (Minister for Customs) v Campbell Beaumont Trading Pty Ltd (22 December 1969, unreported). The court there accepted the parties' view of the matter. This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices."
What his Honour said has since been accepted, and his decision has been followed, on a number of occasions: Commerce Commission v. New Zealand Milk Corporation Ltd [1994] 2 NZLR 730; Trade Practices Commission v. Hymix Industries Pty Limited (unreported, Lockhart J., 25 August 1994); Trade Practices Commission v. CC (New South Wales) Pty Limited (unreported, Lindgren J., 24 November 1994); Trade Practices Commission v. Axive Pty Ltd (unreported, Sheppard J., 15 December 1994) at 31. In Commerce Commission v. New Zealand Milk Corporation Ltd, Eichelbaum C.J., delivering the judgment of the Full Court (Eichelbaum C.J. and Greig J.), said (at 733):
"Just as there can be no objection to each side presenting its own submissions regarding the appropriate quantum so there is none to a joint view being tendered. Nor is it objectionable if, as one would expect, any joint view has been reached as a result of negotiations, so that it represents what has been described as a settlement."
He went on to cite the same passage from the judgment of Sheppard J. in Trade Practices Commission v. Allied Mills Industries which I have already quoted, and commented:
"We adopt those remarks, and also the Judge's further comments that in cases such as this it is strongly in the public interest that litigation should be brought to a conclusion, and if possible at an early date. ... Further, in considering the level of the penalty it would be proper for the Court to take into account the benefit to the community by the early disposal of proceedings in this manner."
I turn to the facts of the case. What was alleged, supported by voluminous evidence, and is now admitted, is that at five primary meetings attended by representatives of the three companies, which took place between 1987 and 1990, a series of agreements were reached, as follows:
1. That the companies would not "poach" each other's customers, by which the admissions of Mayne Nickless Limited specified, and I understand the other respondents to have meant, that if one was requested to quote by a customer of another, it would either fail to do so or would submit a quotation above the price charged by the other company, the existing supplier, a practice described as "giving cover";
2. That if one received the custom of customers of another, compensation would be made by returning customers of the same value by the process of up-rating them or driving them away by the provision of poor service;
3. That there would be a balancing of accounts of customers lost and gained and payment of compensation;
4. That no quotes would be given to customers of another firm over the telephone; and
5. That uniform prices would be charged for what were referred to as "air satchels".
Effect was given to these agreements by each of the companies on many occasions. A great number of instances was specified in documents filed in the proceedings.
As a result, between 1987 and mid 1991, the market shares of the companies were systematically protected from the effects of competition, and in particular their ability to set prices in the relevant market, the express freight market, was freed from the constraints of competition. Not only were the arrangements and their objects and consequences in flagrant breach of the obligations imposed on the companies, in the public interest, by law; the means for effecting the intended illegal results were themselves damaging to the public interest in a healthy economy, and were in direct conflict with the fundamental purposes of the Trade Practices Act. From the point of view of those purposes, an arrangement to maintain a cartel by deliberately providing poor service in order to compel customers to turn or to return to a supplier with whom they might be dissatisfied, must be particularly pernicious.
Arrangements so fundamentally affecting the operations of the companies could not have been reached, and maintained for such a lengthy period, without the involvement of senior management. The contraventions of the law were serious, deliberate, and systematic.
The individual respondents, of course, were implicated in the contraventions in varying degrees, and the penalties imposed upon them reflect that fact. Although all three companies were principals, again there is some room to differentiate between them. In particular, the second respondent (to which I shall refer as Ansett) was during the relevant period carrying on its activities involved in the contraventions, its express freight businesses, under the management and control of the first respondent. There was no suggestion that Ansett's airline business was implicated in any way in the conduct of which complaint was made.
It need hardly be said that, on any view of the purposes of the law providing for penalties, very considerable penalties must be called for by a case of this kind. The law cannot tolerate systematic and deliberate defiance of rules laid down by Parliament in the interests of the community as a whole. In respect of contraventions of Part IV of the Trade Practices Act, liability to pecuniary penalties is provided for by s. 76, as follows:
76(1) If the Court is satisfied that a person:
(a) has contravened a provision of Part IV;
(b) has attempted to contravene such a provision;
(c) has aided, abetted, counselled or procured a person to contravene such a provision;
(d) has induced, or attempted to induce, a person, whether by threats or promises or otherwise, to contravene such a provision;
(e) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) has conspired with others to contravene such a provision;
the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, 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.
(1A)The pecuniary penalty payable under subsection (1) by a body corporate is not to exceed $10,000,000 for each act or omission to which this section applies.
(1B)The pecuniary penalty payable under subsection (1) by a person other than a body corporate is not to exceed $500,000 for each act or omission to which this section applies.
. . .
(3) If conduct constitutes a contravention of two or more provisions of Part IV, a proceeding may be instituted under this Act against a person in relation to the contravention of any one or more of the provisions but a person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.
With reference to the maximum penalties referred to in the section, it should be noted that the conduct involved in the present case occurred before the current levels of penalty were fixed, and the appropriate maximum penalties for the purposes of this matter are $250,000 in respect of bodies corporate and $50,000 in respect of other persons. It should also be noted that by virtue of s. 78 the conduct in question, though attracting these penalties, is not criminal.
The case law makes it plain that, while there are many matters to which the court must give attention, the imposition of penalties under s. 76 in respect of a contravention of Part IV of the Trade Practices Act was provided for by the legislature, and must be carried out by the courts, so as to secure, so far as possible, compliance with the provisions of Part IV outlawing anti-competitive conduct. Parliament has thought those provisions to be greatly in the public interest. Penalties are not designed to express outrage; but they certainly should not be in an amount suggesting a weak tolerance of defiance of the law. The purpose of penalties imposed under s. 76 is that the provisions of the Act shall be adhered to in commerce and industry. It follows that a serious, deliberate, and systematic course of conduct contrary to the requirements of the Act must generally be met by really severe penalties. Especially must that be so where the senior management of a large company is involved. This approach to the task of assessing penalties was described by French J. in Trade Practices Commission v. CSR Limited (1991) ATPR 52,135 at 52,152 as involving the "primacy of the deterrent purpose in the imposition of penalty". He mentioned (at 52,153) the judgment of Smithers J. in Trade Practices Commission v. Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 17,882 at 17,896, a passage which has been frequently cited. There, Smithers J. said that a penalty
"should be sufficiently high to have a deterrent quality, and it should be kept in mind that the Act operates in a commercial environment where deterrence of those minded to contravene its provisions is not likely to be achieved by penalties which are not realistic. It should reflect the will of Parliament that the commercial standards laid down in the Act must be observed, but not be so high as to be oppressive."
The requirement to enforce observance of the policy of the Trade Practices Act was also emphasized by Toohey J. in Trade Practices Commission v. Mobil Oil Australia Ltd (1984) 4 FCR 296 at 297-298. At 298, his Honour said:
"The penalty should be such as to deter not only the particular offender but others who may be disposed to engage in prohibited conduct of a similar kind. ... Clearly much depends on the deliberateness of the offender's conduct, the extent to which resale price maintenance [the contravention there involved] has been carried on and the damage caused to anyone by that conduct. At the same time one must not lose sight of the fact that s 76 of the Act is not directly concerned with compensation; that is the role of s 82. There is the wider public interest in ensuring that the provisions of the Act are observed."
In his recent decision in Trade Practices Commission v. Axive Pty Ltd (supra, at 34), Sheppard J. drew attention to the importance that Parliament appeared to have ascribed to deterrence when the size of the penalties was increased. In Trade Practices Commission v. Prestige Motors Pty Ltd (unreported, Lee J., 18 November 1994), Lee J. said (at 15) that "the particular facts of each case must determine the appropriate penalty having regard to the object to be served by s. 76, namely, to promote competitive conduct in trade or commerce by use of penalties sufficient to deter acts that would tend to be destructive of such competition". And again (at 16) he said:
"The principal purpose of s. 76 is to underline the seriousness of Parliament's intention that corporations engaged in trade or commerce adhere to the standards set out in the Act and to secure that adherence by providing for the exaction of penalties sufficient to deter a trader from contravening the Act and from taking the risk of being ordered to pay such a penalty."
This approach by Judges of this Court to the penal provisions of the Trade Practices Act is consistent with the view expressed by Kitto J. concerning the offences created by Customs laws in L. Vogel and Son Pty Limited v. Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia (1968) 120 CLR 157 at 164, where he said:
"The Customs laws represent the judgment of Parliament upon an important aspect of the economic organization of the community, and the object of the penal provisions is to make that judgment as effective as possible. ... No doubt ordinary conceptions of honesty and of civic responsibility suffice to ensure a great deal of fair dealing with the Customs, but for some people little seems to matter but fear of the consequences of discovery. The Customs Act makes those consequences potentially drastic. It is for the courts to make them, in suitable cases, drastic in fact, for otherwise traders who are not saved by qualms of conscience from willingness to defraud their fellow citizens may weigh the profits they hope for against the penalties they have cause to fear and find the gamble worthwhile."
Of this, on appeal, Taylor, Menzies and Owen JJ. said in their joint judgment (at 168):
"(H)is Honour's reasons make it plain why penalties of this magnitude were imposed and amply demonstrate the need for such penalties."
From the importance of deterrence in the fixing of penalties, some other considerations emerge. The size of a corporation involved in a contravention of Part IV must be a relevant matter. What would deter a small company might have little effect on a very large one. This point was emphasized by Northrop J. in Trade Practices Commission v. Carlton United Breweries Ltd (1990) 24 FCR 532 at 542, where he referred, as being "the most serious aspect of the contravention", to "blatant" conduct "by a corporation of the size, strength and standing" of the respondent in that case. In Trade Practices Commission v. CSR Ltd (supra, at 52,154), French J. referred to the Carlton and United Breweries case, and commented:
"I think it right, that large corporations contravening s. 46 of the Trade Practices Act can expect penalties in the upper reaches of the range for which the law presently provides. Indeed having regard to the size and strength of some of the corporations to which the section is addressed, it may be concluded that the present day value of the maximum penalty no longer reflects the seriousness with which Parliament intended contraventions of Pt IV to be treated when the Act was passed in 1974."
Another matter which follows from the importance of deterrence should not be overlooked. It is a most important factor in mitigation of the amount of a penalty that, in a particular case, there may be acceptable evidence of a corporate culture of compliance, and of concern to ensure that the contravention which has occurred will not be repeated. The importance of this factor may perhaps be compared with references in the criminal law to the effect of remorse. But no exact parallel can be drawn. Remorse is often hard to assess and, in any case, cannot be felt by a corporate abstraction. In the present case, the admissions made, belated though they were, do provide reason to expect compliance in the future with the requirements of the Act, particularly, but not only, in the case of the two companies which first conceded their liability and accepted the imposition of penalties.
In Trade Practices Commission v. CSR Ltd (supra), French J. identified a number of matters, including those I have been discussing, as matters to be taken into account. He said (at 52,152-52,153):
"The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused.
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.
The first three factors are all expressly mentioned in s. 76. They can be regarded as measures of the scope and impact of the conduct and it is conducive to deterrence that the greater the significance of these elements, the heavier the penalty should be."
While the objective of deterrence is implicit, a number of these matters, as French J. noted, are set out in s. 76 itself. In varying degree, and according to the facts of different cases, each consideration has weight, and must be taken into account.
Certain further principles of law require specific mention. In Trade Practices Commission v. Allied Mills (supra) at 258, Sheppard J. drew attention to the approach followed by Kitto J. in Vogel (supra), where he did not impose substantial penalties for each of a number of breaches arising out of the one plan or arrangement, but had regard to the proper total penalty. The adoption of such an approach, as Sheppard J. recognized, is consistent with that adopted in the criminal law (Vogel being a criminal case), where a court imposing penalties for a number of related offences does not allow the total penalty to exceed what is proper for the entire criminality involved: the totality principle discussed in McDonald v. The Queen (1994) 48 FCR 555. The Court should follow the same course in assessing civil penalties in a case of the present kind. It was accordingly appropriate, as the parties submitted, to select certain only of the contraventions for the imposition of penalties, taking others into account, but not imposing separate penalties in respect of them.
It was also,
in my opinion, appropriate to give weight to the fact that the respondents had
saved the community the burden of litigating a lengthy and expensive case by
withdrawing their defences and admitting the allegations. The saving in costs alone, quite apart from
the matter of the time and energies of officers of the Trade Practices
Commission which can now be devoted to other tasks, was agreed to be
extremely large. In Trade Practices
Commission v. Carlton United Breweries (supra), Northrop J. said (at 542):
"In the present case, weight is given to the fact that CUB has admitted the contraventions alleged. In doing this it has made public its acceptance of the fact that it has contravened s 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 Pt IV of the Trade Practices Act."
See also Trade Practices Commission v. Patterson Cheney Pty Ltd (1990) ATPR 51,748 at 51,759. A similar view has been taken, in the criminal law, in cases such as The Queen v. Shannon (1979) 21 SASR 442; R v. Bulger (1990) 2 Qd R 559; Schumacher (1981) 3 A Crim R 441 at 448, 451-452; The Queen v. Hudson (1985) 8 FCR 228 at 236, 245-246; Short v. The Queen (unreported, Davies, von Doussa and Higgins JJ., 13 May 1994); Miller v. Fiona's Clothes Horse of Centrepoint Pty Ltd (1989) ATPR 50,515 at 50,522; and see now s. 16A of the Crimes Act 1914, inserted by the Crimes Legislation Amendment Act (No. 2) 1989.
It need hardly be emphasized that the acceptance by the Court of the principle recognizing the taking into account of an admission of liability, and the saving of time and expense involved in it, does not imply any doctrine that would increase a penalty because there was no admission. The law does not permit that. The contravener who fights the case to the bitter end will obtain no discount, but the penalty imposed will be the proper penalty, and no more. However, the penalties I have ordered to be paid here do not represent what I would have imposed as proper in such circumstances, since I have made substantial allowance for the admissions, both as indicative of a true resolve to comply with the law in future, and as involving a benefit to the community, belated though it was, that ought to be recognized in the fixing of penalties that are just in all the circumstances.
It was after taking these matters into account (including the relatively low maximum penalties obtaining at the time of the contravening conduct), and after considering for myself their appropriateness, that I fixed the penalties at the amounts suggested in the joint submissions of the parties, and made orders accordingly. The foregoing are my reasons for doing so.
I certify that this and the preceding twenty (20) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.
Associate:
Date: 31 January 1995
Counsel for the Applicant: Mr C.A. Sweeney Q.C. with Mr M.R.J. Ellicott and
Mr D.R. Pritchard
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the First and Mr A.R. Emmett Q.C. with
Fourth to Ninth Respondents: Mr D.L. Williams
Counsel for the Second and Mr L.D.S. Waddy Q.C. with
Tenth to Thirteenth Respondents: Mr M.R. Speakman
Solicitors for the First Clayton Utz
and Second Respondents:
Counsel for the Third and Mr S.P. Charles Q.C. with
Fourteenth to Twenty-Second Mr J.D. Heydon Q.C. and Respondents: Mr R.J. Wright
Solicitors for the Fourth to Bradfield & Scott
Seventh, Ninth to Eleventh and
Thirteenth Respondents:
Solicitors for the Third and Blake Dawson Waldron
Fifteenth to Twenty-Second
Respondents:
Solicitors for the Fourteenth Arthur Robinson &
Respondent: Hedderwicks
Dates of hearing: 6 August 1994 and
6 December 1994
