FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Tyco Australia Pty Ltd

[2000] FCA 401

TRADE PRACTICES - penalty and injunctive relief imposed for breach of s 45 Trade Practices Act 1974 (Cth) where breach acknowledged by respondents and joint submissions lodged

Trade Practices Act 1974 (Cth), s 45

AUSTRALIAN CONSUMER AND COMPETITION COMMISSION v TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 AND ORS

Q 239 OF 1999

DRUMMOND J

22 MARCH 2000

BRISBANE

THE COURT DIRECTS THAT:

1.                  By consent of the applicant and the fifth, sixth, thirtieth, thirty-first and thirty-second respondents, Order 2 of the orders of Justice Drummond made on 14 December 1999 be complied with by 26 April 2000, if required by any of those respondents.

2.                  On or before 26 April 2000 the applicant and any further respondents proposing to put submissions jointly with the applicant to the Court as to the pecuniary penalty that ought be imposed on them and all other orders to be made to finalise the matter with respect to them shall file their joint submissions and any affidavits to be relied upon at the hearing.

3.                  On 13 June 2000 the matter be set down for hearing as against all respondents which have filed joint submissions in accordance with the preceding order.

4.                  Those respondents who have not signed joint submissions as to penalty on or before 26 April 2000 file a defence on or before 26 May 2000.

5.                  On or before 9 June 2000 the applicant file and serve any replies.

6.                  By 3 May 2000 the applicant serve on all respondents who have not filed a joint submission with the Court all affidavits of other respondents that have been filed and served on the applicant since 28 January 2000.

7.                  The matter be relisted for further directions on 13 June 2000.

8.                  The costs of today’s directions hearing, save as specifically ordered, be the parties’ costs in the cause.

THE COURT FURTHER ORDERS THAT:

9A.      In respect of his ancillary involvement in the contraventions by the twelfth respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 166 of the statement of claim, a penalty in respect of all contraventions of $20,000 be imposed upon the forty-fifth respondent.

9B.       The penalty of the forty-fifth respondent is to be paid to the Commonwealth of Australia within thirty days of the date of this order.

THE COURT FURTHER ORDERS BY CONSENT OF THE APPLICANT AND THE FORTY-FIFTH RESPONDENT THAT:

10A.    The forty-fifth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)                has the purpose or effect or likely effect that:

(i)                  that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)               has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

10B.     The forty-fifth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $3,000 within thirty days of the date of this order.

THE COURT FURTHER ORDERS THAT:

11A.    In respect of its contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth), and of its ancillary involvement in contraventions of those sections, alleged in paragraph 134 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $150,000 be imposed upon the thirteenth respondent.

11B.     In respect of his ancillary involvement in the contraventions by the thirteenth respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 167 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $50,000 be imposed upon the forty-sixth respondent.

11C.    The penalty of the thirteenth respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $40,000 within seven days of the date of this order;

(b)               the further sum of $35,000 on or before 1 July 2000;

(c)                the further sum of $25,000 on or before 1 July 2001;

(d)               the further sum of $25,000 on or before 1 July 2002;

(e)                the further sum of $25,000 on or before 1 July 2003;

(f)                 if any instalment is not paid on or before the due date then the entire balance of the penalty of $150,000 then unpaid becomes immediately due and payable.

11D.    The penalty of the forty-sixth respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $15,000 on or before 1 July 2000;

(b)               the further sum of $20,000 on or before 1 July 2001;

(c)                the further sum of $15,000 on or before 1 July 2002;

(d)               if any instalment is not paid on or before the due date then the entire balance of the penalty of $50,000 then unpaid becomes immediately due and payable.

THE COURT FURTHER ORDERS BY CONSENT OF THE APPLICANT AND THE THIRTEENTH AND FORTY-SIXTH RESPONDENTS THAT:

12A.    The thirteenth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)                has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the thirteenth respondent is a party, that:

(i)                  the thirteenth respondent will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                the thirteenth respondent will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow the thirteenth respondent to win any tender let by a third person for the provision of such services; or

(b)               has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

12B.     The forty-sixth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)                has the purpose or effect or likely effect that:

(i)                  that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)               has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

12C.    The thirteenth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $10,000 within seven days of the date of this order.

THE COURT FURTHER ORDERS THAT:

13A.    In respect of its contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth), and of its ancillary involvement in contraventions of those sections, alleged in paragraph 130 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $150,000 be imposed upon the ninth respondent.

13B.     In respect of his ancillary involvement in the contraventions by the ninth respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 160 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $50,000 be imposed upon the thirty-ninth respondent.

13C.    The penalty of the ninth respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $20,000 within sixty days of the date of this order;

(b)               the further sum of $45,000 on or before 10 February 2001;

(c)                the further sum of $45,000 on or before 10 February 2002;

(d)               the further sum of $40,000 on or before 10 February 2003;

(e)                if any instalment is not paid on or before the due date then the entire balance of the penalty of $150,000 then unpaid becomes immediately due and payable.

13D.    The penalty of the thirty-ninth respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $25,000 on or before 10 February 2001;

(b)               the further sum of $25,000 on or before 10 February 2002;

(c)                if any instalment is not paid on or before the due date then the entire balance of the penalty of $50,000 then unpaid becomes immediately due and payable.

THE COURT FURTHER ORDERS BY CONSENT OF THE APPLICANT AND THE NINTH AND THIRTY-NINTH RESPONDENTS THAT:

14A.    The ninth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)                has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the ninth respondent is a party, that:

(i)                  the ninth respondent will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                the ninth respondent will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow the ninth respondent to win any tender let by a third person for the provision of such services; or

(b)        has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

14B.     The thirty-ninth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)        has the purpose or effect or likely effect that:

(i)         that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)        that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)       another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)        has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

14C.    The ninth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $20,000 within sixty days of the date of this order.

THE COURT FURTHER ORDERS THAT:

15A.    In respect of its contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth), and of its ancillary involvement in contraventions of those sections, alleged in paragraph 131 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $335,000 be imposed upon the tenth respondent.

15B.     In respect of its contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth), and of its ancillary involvement in contraventions of those sections, alleged in paragraph 132 of the statement of claim, a penalty in respect of all contraventions of $30,000 be imposed upon the eleventh respondent.

15C.    In respect of his ancillary involvement in the contraventions by the tenth respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 161 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $50,000 be imposed upon the fortieth respondent.

15D.    In respect of his ancillary involvement in the contraventions by the tenth respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 162 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $50,000 be imposed upon the forty-first respondent.

15E.     In respect of his ancillary involvement in the contraventions by the eleventh respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 163 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $10,000 be imposed upon the forty-second respondent.

15F.     In respect of his ancillary involvement in the contraventions by the eleventh respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 164 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $10,000 be imposed upon the forty-third respondent.

15G.    The penalty of the tenth respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $130,000 within seven days of the date of this order;

(b)               the further sum of $70,000 on or before 22 March 2001;

(c)                the further sum of $70,000 on or before 22 March 2002;

(d)               the further sum of $65,000 on or before 22 March 2003;

(e)                if any instalment is not paid on or before the due date then the entire balance of the penalty of $335,000 then unpaid becomes immediately due and payable.

15H.    The penalty of the eleventh respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $6,000 within seven days of the date of this order;

(b)               the further sum of $8,000 on or before 22 June 2000;

(c)                the further sum of $8,000 on or before 22 December 2000;

(d)               the further sum of $8,000 on or before 22 June 2001;

(e)                if any instalment is not paid on or before the due date then the entire balance of the penalty of $30,000 then unpaid becomes immediately due and payable.

15I.      The penalties of each of the fortieth and forty-first respondents are to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $25,000 within seven days of the date of this order;

(b)               the further sum of $25,000 on or before 22 March 2001;

(c)                if any instalment is not paid on or before the due date then the entire balance of the penalty of $50,000 then unpaid becomes immediately due and payable.

15J.      The penalties of each of the forty-second and forty-third respondents are to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $5,000 within seven days of the date of this order;

(b)               the further sum of $5,000 on or before 22 June 2000;

(c)                if any instalment is not paid on or before the due date then the entire balance of the penalty of $10,000 then unpaid becomes immediately due and payable.

THE COURT FURTHER ORDERS BY CONSENT OF THE APPLICANT AND THE TENTH, ELEVENTH, FORTIETH, FORTY-FIRST, FORTY-SECOND AND FORTY-THIRD RESPONDENTS THAT:

16A.    The tenth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)                has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the tenth respondent is a party, that:

(i)                  the tenth respondent will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                the tenth respondent will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow the tenth respondent to win any tender let by a third person for the provision of such services; or

(b)               has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

16B.     The eleventh respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)        has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the eleventh respondent is a party, that:

(i)                  the eleventh respondent will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or

(ii)                the eleventh respondent will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire alarm system installation services will allow the eleventh respondent to win any tender let by a third person for the provision of such services; or

(b)               has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

16C.    Each of the fortieth and forty-first respondents be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)        has the purpose or effect or likely effect that:

(i)                  that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)        has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

16D.    Each of the forty-second and forty-third respondents be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire alarm system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)        has the purpose or effect or likely effect that:

(i)                  that corporation will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or

(ii)                that corporation will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire alarm system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)        has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

16E.     The tenth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $15,000 within seven days of the date of this order.

16F.     The eleventh respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $5,000 within seven days of the date of this order.

THE COURT FURTHER ORDERS THAT:

17A.    In respect of his ancillary involvement in the contraventions by the third respondent of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 145 of the statement of claim, a penalty in respect of all contraventions of $35,000 be imposed upon the twenty-fourth respondent.

17B.     The penalty of the twenty-fourth respondent is to be paid to the Commonwealth of Australia as follows:

(a)                the sum of $5,000 within thirty days of the date of this order;

(b)               the further sum of $10,000 within six months of the date of this order;

(c)                the further sum of $20,000 within twelve months of the date of this order;

(d)               if any instalment is not paid on or before the due date then the entire balance of the penalty of $35,000 then unpaid becomes immediately due and payable.

THE COURT FURTHER ORDERS BY CONSENT OF THE APPLICANT AND THE TWENTY-FOURTH RESPONDENT THAT:

18A.    The twenty-fourth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)                has the purpose or effect or likely effect that:

(i)                  that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)                that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)        has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

18B.     The twenty-fourth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)                  being directly or indirectly knowingly concerned in or party to;

(ii)                inducing or attempting to induce; or

(iii)               aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire alarm system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)        has the purpose or effect or likely effect that:

(i)                  that corporation will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or

(ii)                that corporation will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services; or

(iii)               another provider of fire alarm system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)               has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

18C.    The twenty-fourth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $7,000 within thirty days of the date of this order.

AND THE COURT FURTHER ORDERS THAT:

19.              The notice of motion filed by the first and second cross-respondents on 16 March 2000 be adjourned sine die.

20.              The first and second cross-respondents, being the applicants on the notice of motion, the cross-claimant and the applicant, being respondents to the notice of motion, have liberty to apply on seven days’ notice to the other parties to bring the notice of motion back for hearing.

21.              The costs of and incidental to today’s hearing of the notice of motion be reserved.

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

REASONS FOR JUDGMENT

1                     In the judgment I gave on 14 December last in which I dealt with the first group of respondents involved in the collusive arrangements in contravention of s 45 of the Trade Practices Act 1974 (Cth) out of which today’s proceedings arrive, I summarised the history of these arrangements which, in a general sense, operated, though with breaks and with different groups of participants from time to time, for a period of about six years from 1992.  The arrangements affected, in a very substantial way, competition and thus consumer interests in the fire sprinkler installation market in Queensland and northern New South Wales and in the fire alarm market in south-east Queensland, both apparently highly profitable markets for suppliers in those markets.

2                     There were very many meetings throughout this period, as I say, not attended by every one of the respondents, including the respondents I am dealing with today.  Some of the respondents that I am dealing with today attended only a few.

Judgment in respect of the forty-fifth respondent

3                     So far as Mr Starkey is concerned, he was employed by the twelfth respondent, Firevac Pty Ltd, as sprinkler contracts manager, from March 1994 until May 1998, ie, until a date after cessation of the collusive arrangements the subject of the proceedings in which he is involved.

4                     He has been a shareholder of Firevac since 1995 but it is pointed out that he is but one of a number of shareholders and his interest in the company has yielded him only a small amount by way of dividend payments.  Firevac was involved in the collusive arrangements only in the Queensland fire sprinkler market and then for a period of about three years.  Throughout that period Firevac was one of the smallest competitors in that particular market with an estimated market share of less than 5 per cent.

5                     Mr Starkey was quite an active participant in the collusive arrangements attending up to ninety of the meetings of the cartel (as I describe it).  Firevac was allocated a small number of projects of which it won some, so the inference is that but for Mr Starkey’s activities on behalf of Firevac, it may well not have won that small number of projects which it did.  Mr Starkey’s managing director, the forty-fourth respondent, was, according to Mr Starkey, aware of the latter’s attendance at these meetings of the cartel, but did not intervene in any way other than late in 1997, when he suggested that it might be wise for Mr Starkey to no longer go along to those meetings.

6                     Mr Starkey has provided a high level of co-operation to the Australian Consumer and Competition Commission and its investigations and that is a powerful factor in his favour.  In all the circumstances and having regard to the fact that he has what appears to be a small interest in Firevac, that his financial circumstances are not robust and that he intends to borrow the whole of the moneys necessary to pay the penalty and the agreed costs, ie, the penalty proposed of $20,000 and the agreed costs of $3,000, I am prepared to make orders in terms of par 1 and par 2 of the agreed minutes handed up to me and to further make orders by consent as between the Commission and the forty-fifth respondent in terms of par 3 and par 4 of those consent minutes.

Judgment in respect of the thirteenth and forty-sixth respondents

7                     So far as the thirteenth respondent, Impact Fire Protection Pty Ltd, is concerned, it is said to be one of the smallest competitors in the fire sprinkler market.  It was, however, an active participant, in terms of the extent to which its controller, Mr Thomson, the forty-sixth respondent, participated in the cartel meetings in the Queensland fire sprinkler market, from 1992 practically through the whole of the period that the cartel operated.

8                     It achieved some benefit in terms it would appear of winning a small number of projects that, but for its participation in the cartel, it would not otherwise have won.    In my opinion, the penalty proposed in respect of Impact Fire Protection itself of $150,000 is appropriate.  Mr Thomson is the sole shareholder of the company.  He will indirectly suffer the consequences of his company being inflicted with what is for a small operator a substantial penalty.

9                     In view of this and in view of the order of penalties that have been imposed on natural persons involved in these collusive arrangements, I consider that the appropriate penalty for Mr Thomson is $50,000 in lieu of the $75,000 proposed.   I will therefore make an order in terms of par 1 of the agreed minutes of orders.  I will make an order in terms of par 2, with the figure of $50,000 substituted for $75,000.

Judgment in respect of the ninth and thirty-ninth respondents

10                  The ninth respondent, Associated Fire Systems Pty Ltd, is in much the same situation as the thirteenth respondent.  One of the smallest competitors in the fire sprinkler market, Mr Golemba, like Mr Thomson, is the sole shareholder in the company; he is also its managing director.  He was quite active in the cartel, attending a large number of meetings over practically the whole of the life of the cartel.  I think the penalty proposed of $150,000 for the ninth respondent is appropriate for reasons similar to those which I gave in relation to Mr Thomson, the forty-sixth respondent.  I think, however, a penalty of $50,000, rather than the $75,000 proposed, is appropriate for Mr Golemba.

11                  I will therefore make orders in terms of par 1 of the agreed minutes of order.  I will make an order in terms of par 2 of those minutes, with the figure of $50,000 substituted for $75,000.  I will also make orders in terms of pars 3, 4A, 4B and 4D, with the figure in par 4D of $75,000 being deleted and $50,000 substituted.   I will make, by consent, orders in terms of pars 5, 6 and 7.  

Judgment in respect of the tenth, eleventh, fortieth, forty-first, forty-second and forty-third respondents

12                  In relation to the tenth respondent, Enterprise Fire Protection Pty Ltd, it is a privately owned company.  The directors and sole shareholders are the fortieth and forty-first respondents, Messrs Wild and Spurr.  It was involved in the price-fixing and collusive arrangements in the Queensland fire sprinkler market for a long period, about four years.  It was a significant competitor in that market.  Messrs Wild and Spurr were very active participants in the cartel, attending many meetings over that four year period.

13                  The tenth respondent and thus the fortieth and forty-first respondents, as sole shareholders in the tenth respondent, appear to have benefited from their participation in the fire sprinkler market cartel in so far as it seems that the company won a number of jobs which it may well not have won if it had not been involved in the cartel.  The penalty of $335,000 proposed for the tenth respondent therefore appears to be appropriate and the penalties of $50,000 proposed for each of Messrs Wild and Spurr appear equally appropriate, having regard to the indirect burden that the substantial penalty to be imposed on the tenth respondent will, in turn, impose on them.

14                  Very moderate penalties are proposed for the eleventh respondent, Enterprise Fire Protection Electrics Pty Ltd, a company in which Messrs Wild and Spurr are also shareholders, though the forty-second and forty-third respondents, Messrs Prickett and Taylor, are also shareholders and were the directors of that company.  However, there is a significant distinction to be drawn, I think, between the tenth respondent’s activities in the fire sprinkler market and the eleventh respondent’s activities in the fire alarm market.  The eleventh respondent, via the activities of Messrs Prickett and Taylor, only participated in the cartel arrangements in the fire alarm market for a very short period of time, no more than about three months.

15                  It would appear that participation did not involve any benefit to the eleventh respondent.  Significantly, also, Messrs Prickett and Taylor ceased to attend cartel meetings on behalf of the eleventh respondent at quite an early date, August 1995.  I therefore am prepared to make orders in terms of pars 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 of the agreed minutes of orders and I am prepared to make orders by consent in terms of pars 11, 12, 13, 14, 15 and 16 of the agreed minute.

Judgment in respect of the twenty-fourth respondent

16                  The thing that concerns me in relation to the proposal for a $35,000 penalty in relation to the twenty-fourth respondent, Mr King, is that, having regard to the very senior position he held, particularly in the latter part of the time he was with FFE Building Services Ltd in Queensland, and that he participated in the cartel meetings, the proposed penalty is out of line with the general range of penalties that I have imposed on other people in comparable positions, comparable senior positions, in this case.

17                  However, having regard to the evidence which indicates that Mr King was a most reluctant participant in the cartel activities and felt a degree of what might be called pressure from his national superiors, I am prepared to make the order proposed.  I will therefore make orders in terms of par 1 and par 2 of the consent draft minutes of order and I will make, by consent, orders in terms of pars 3, 4 and 5 of those draft minutes.

Associate:                                                                    

Dated:              30 March 2000