Federal Court of Australia
Water Efficiency Labelling and Standards Regulator v Renaissance Traditional Bathrooms Pty Ltd [2022] FCA 1456
ORDERS
DATE OF ORDER: |
A. Introductory matters
These orders are accompanied by the following annexures, taken from the Originating Process dated 4 June 2019:
(a) Annexure A: Renaissance Bathrooms products
(b) Annexure B: Traditional Taps products
(c) Annexure C: Castironbaths products
(d) Annexure D: Farmhouse Sinks products
B. Definitions
In these orders, the following definitions apply:
Belfast Sinks | Belfast Sinks.com.au Pty Ltd ACN 142 098 548, the fourth respondent in these proceedings. | |
Castironbaths | Castironbaths.com Pty Ltd ACN 142 098 548, the third respondent in these proceedings. | |
Insolvent Respondents | The Insolvent Respondents are Traditional Taps (the second respondent) and Castironbaths (the third respondent). | |
Renaissance Bathrooms | Renaissance Traditional Bathrooms Pty Ltd ACN 091 105 574, the first respondent in these proceedings. | |
Solvent Respondents | The Solvent Respondents are Renaissance Bathrooms (the first respondent), Belfast Sinks (the fourth respondent) and Mr Andrew Shaw (the fifth Respondent). | |
Traditional Taps | Traditional Taps.com.au Pty Ltd ACN 142 098 575, the second respondent in these proceedings. | |
WELS Act | The Water Efficiency Labelling and Standards Act 2005 (Cth). | |
WELS Determination | The Water Efficiency Labelling and Standards Determination 2013 (No 2) (Cth). |
C. SOLVENT RESPONDENTS (FIRST, FOURTH AND FIFTH RESPONDENTS)
DECLARATIONS
THE COURT DECLARES THAT:
Contraventions by Renaissance Bathrooms, the First Respondent
1. During the period 17 May 2018 to 18 November 2019, Renaissance Bathrooms contravened s 33 of the Water Efficiency Labelling and Standards Act 2005 (Cth) (WELS Act) on a daily basis in relation to each of the 51 tap and shower products in rows 1 to 51 and 57 of Annexure A, by advertising those products on its website when those products were not registered as required under the Water Efficiency Labelling and Standards Determination 2013 (No 2) (Cth) (WELS Determination).
2. During the period 17 May 2018 to 18 November 2019, Renaissance Bathrooms contravened s 34 of the WELS Act on a daily basis in relation to each of the 11 tap and shower products in rows 52 to 63 of Annexure A, by advertising those products on its website without the water efficiency labelling and/or text advice required for each product under the WELS Determination.
Contraventions by Belfast Sinks, the Fourth Respondent
3. Belfast Sinks contravened s 33 of the WELS Act on a total of three occasions in November 2018 by selling two tap products and one shower product when those products were not registered as required under the WELS Determination.
Contraventions by Andrew Shaw, the Fifth Respondent
4. Andrew Shaw contravened s 33 of the WELS Act as sole director and shareholder of Renaissance Bathrooms and Belfast Sinks by:
(a) aiding, abetting, counselling or procuring, and
(b) being knowingly concerned in,
each of the contraventions of that provision by Renaissance Bathrooms and Belfast Sinks described in paragraphs 1 and 3 above.
5. Andrew Shaw contravened s 34 of the WELS Act as sole director and shareholder of Renaissance Bathrooms by:
(a) aiding, abetting, counselling or procuring, and
(b) being knowingly concerned in,
each of the contraventions of that provision by Renaissance Bathrooms described in paragraph 2 above.
PECUNIARY PENALTIES
THE COURT ORDERS THAT:
6. For the contraventions of the WELS Act described in paragraphs 1 and 2 above, Renaissance Traditional Bathrooms, pay to the Commonwealth of Australia a pecuniary penalty of $150,000.
7. For the contraventions of the WELS Act described in paragraph 3 above, Belfast Sinks, pay to the Commonwealth of Australia a pecuniary penalty of $25,000.
8. For the contraventions of the WELS Act described in paragraphs 4 and 5 above, Andrew Shaw, pay to the Commonwealth of Australia a pecuniary penalty of $200,000.
INJUNCTIONS
THE COURT ORDERS THAT:
Renaissance Bathrooms
9. Pursuant to s 44 of the WELS Act Renaissance Bathrooms be restrained for a period of 5 years from the date of the Court’s order, whether by itself, its servants, agents or otherwise howsoever, from taking any steps to supply (within the meaning of s 7A of the WELS Act):
(a) products which are not registered as required by the WELS Determination (as in force from time to time);
(b) products without the water efficiency labelling and/or text advice required under the WELS Determination (as in force from time to time).
Belfast Sinks
10. Pursuant to s 44 of the WELS Act Belfast Sinks be restrained for a period of 5 years from the date of the Court’s order, whether by itself, its servants, agents or otherwise howsoever, from taking any steps to supply (within the meaning of s 7A of the WELS Act):
(a) products which are not registered as required by the WELS Determination (as in force from time to time);
(b) products without the water efficiency labelling and/or text advice required under the WELS Determination (as in force from time to time).
Andrew Shaw
11. Pursuant to s 44 of the WELS Act Andrew Shaw be restrained for a period of 5 years from the date of the Court’s order, from supplying (within the meaning of s 7A of the WELS Act), or being directly or indirectly involved, or knowingly concerned in any way, in such supply, of:
(a) products which are not registered as required by the WELS Determination (as in force from time to time);
(b) products without the water efficiency labelling and/or text advice required under the WELS Determination (as in force from time to time).
By consent, the Court orders:
Costs
12. Renaissance Bathrooms, Belfast Sinks and Andrew Shaw, jointly and severally, pay a contribution in the total sum of $75,000 to the Applicant’s costs of the proceedings.
Payment Schedule
13. The amount in Order 6 above be paid in instalments according to the following schedule:
(a) $5,000, two months after these orders are made;
(b) 14 monthly payments of $10,000, commencing one month after the payment referred to at 13(a); and
(c) $5,000, one month after the last payment referred to at 13(b).
14. In the event that any of the instalment payments in Order 13 above is not made within the time specified for that instalment, the full remaining balance of the penalty in Order 6 that has not been paid will be immediately due and payable, with interest accruing from the date these orders are made.
15. The amount in Order 7 above be paid within 28 days of these orders being made.
16. The amount in Order 8 above be paid within 28 days of these orders being made.
17. The amount in Order 12 above be paid within 28 days of these orders being made.
D. INSOLVENT RESPONDENTS (Traditional Taps and CASTIRONBATHS)
DECLARATIONS
THE COURT DECLARES THAT:
Contraventions by Traditional Taps, the Second Respondent
18. During the period 27 March 2017 to 20 November 2019, Traditional Taps contravened s 33 of the WELS Act on a daily basis in relation to each of the 46 tap, shower and lavatory products in rows 1 to 46 of Annexure B, by advertising those products on its website when those products were not registered as required under the WELS Determination.
19. During the period 2 February 2017 to 20 November 2019, Traditional Taps contravened s 34 of the WELS Act on a daily basis in relation to each of the 25 tap, shower and lavatory products in rows 47 to 60 and 62 to 72 of Annexure B, by advertising those products on its website without the water efficiency labelling and text advice required for each product under the WELS Determination.
Contraventions by Castironbaths, the Third Respondent
20. During the period 22 May 2018 to 18 November 2019 Castironbaths contravened s 33 of the WELS Act on a daily basis in relation to each of the 13 tap and shower products in rows 1 to 13 of Annexure C, by advertising those products on its website when those products were not registered as required under the WELS Determination.
21. During the period 29 May 2018 to 19 November 2019 Castironbaths contravened s 33 of the WELS Act on a daily basis in relation to each of the 55 tap and shower products in rows 1 to 55 of Annexure D, by advertising those products on the Farmhouse Sinks website when those products were not registered as required under the WELS Determination.
22. During the period 22 May 2018 to 18 November 2019, Castironbaths contravened s 34 of the WELS Act on a daily basis in relation to each of the 25 tap, shower and lavatory products in rows 14 to 39 of Annexure C, by advertising those products on its website without the water efficiency labelling and/or text advice required for each product under the WELS Determination.
23. During the period 30 May 2018 to 19 November 2019, Castironbaths contravened s 34 of the WELS Act on a daily basis in relation to each of the 24 tap and shower products in rows 56 to 80 of Annexure D, by advertising those products on the Farmhouse Sinks website without the water efficiency labelling and/or text advice required for each product under the WELS Determination.
24. On 5 June 2015, Castironbaths contravened s 33 of the WELS Act on a total of 3 occasions by selling one tap, one shower and one lavatory product when those products were not registered as required under the WELS Determination.
PECUNIARY PENALTIES
25. For the contraventions of the WELS Act described in paragraphs 18 and 19 above, Traditional Taps, pay to the Commonwealth of Australia a pecuniary penalty of $750,000.
26. For the contraventions of the WELS Act described in paragraph 20 to 24 above, Castironbaths, pay to the Commonwealth of Australia a pecuniary penalty of $1,070,000.
Costs
27. Traditional Taps and Castironbaths pay the Applicant’s costs of the proceedings.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A: Renaissance Bathrooms products
Annexure B: Traditional Taps products
Product No. | Product Description | WELS Product Kind | Registration Number |
TT1 | Sink Mixer with Extendable Vegie Sprayer - Porcelain Lever | Tap - s6(1)(a) | N/A |
TT2 | Sink Mixer with Extendable Vegie Sprayer - Metal Lever | Tap - s6(1)(a) | N/A |
TT3 | High Neck Pillar Taps - Porcelain Levers | Tap - s6(1)(a) | N/A |
TT4 | High Neck Pillar Taps - Metal Levers | Tap - s6(1)(a) | N/A |
TT5 | High Neck Pillar Taps - Cross Handles | Tap - s6(1)(a) | N/A |
TT6 | Colonial Bathroom Taps - Goose Spout - Metal Lever | Tap - s6(1)(a) | N/A |
TT7 | Colonial Bathroom Tap - Goose Spout - Cross Handles | Tap - s6(1)(a) | N/A |
TT8 | Art Deco Bathroom Taps - Low Level Spout - Porcelain Lever | Tap - s6(1)(a) | N/A |
TT9 | Art Deco Bathroom Taps - Low Level Spout - Metal Levers | Tap - s6(1)(a) | N/A |
TT10 | Art Deco Bathroom Taps - Low Level Spout - Cross Handles | Tap - s6(1)(a) | N/A |
TT11 | Heritage Bathroom Tap - Porcelain Lever | Tap - s6(1)(a) | N/A |
TT12 | Heritage Bathroom Tap - Cross Handle | Tap - s6(1)(a) | N/A |
TT13 | Heritage Bathroom Tap - Metal Lever | Tap - s6(1)(a) | N/A |
TT14 | English Bathroom Tap - Porcelain Lever | Tap - s6(1)(a) | N/A |
TT15 | English Bathroom Tap - Metal Lever | Tap - s6(1)(a) | N/A |
TT16 | Art Deco Basin Three Hole Set - Porcelain Lever | Tap - s6(1)(a) | N/A |
TT17 | Art Deco Basin Three Hole Set - Metal Lever | Tap - s6(1)(a) | N/A |
TT18 | Art Deco Basin Three Hole Set - Cross Handles | Tap - s6(1)(a) | N/A |
TT19 | Heritage Basin Three Hole Set with Concealed Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
TT20 | Heritage Basin Three Hole Set with Concealed Spout - Metal Levers | Tap - s6(1)(a) | N/A |
TT21 | Heritage Basin Three Hole Set with Concealed Spout - Cross Handles | Tap - s6(1)(a) | N/A |
TT22 | Traditional Bath Shower Mixer - Deck Mounted | Shower - s6(1)(b) | N/A |
TT23 | Traditional Bath Shower Mixer - Wall Mounted | Shower - s6(1)(b) | N/A |
TT24 | Traditional Bath Shower Mixer On Pipe Stands - Metal Lever | Shower - s6(1)(b) | N/A |
TT25 | Traditional Bath Shower Mixer On Pipe Stands - Cross Handle | Shower - s6(1)(b) | N/A |
TT26 | Heritage Bathroom Wall Tap Shower System - Porcelain Levers | Shower - s6(1)(b) | N/A |
TT27 | Heritage Bathroom Wall Tap Shower System - Metal Levers | Shower - s6(1)(b) | N/A |
TT28 | Heritage Bathroom Wall Tap Shower System - Cross Handles | Shower - s6(1)(b) | N/A |
TT29 | Antique Shower System - Porcelain Levers | Shower - s6(1)(b) | N/A |
TT30 | Antique Shower System - Metal Levers | Shower - s6(1)(b) | N/A |
TT31 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Porcelain Levers | Shower - s6(1)(b) | N/A |
TT32 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Metal Levers | Shower - s6(1)(b) | N/A |
TT33 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Cross Handles | Shower - s6(1)(b) | N/A |
TT34 | Traditional Shower Rose & J Neck | Shower - s6(1)(b) | N/A |
TT35 | Clasic [sic] Shower Rose & S Neck | Shower - s6(1)(b) | N/A |
TT36 | High Standing Toilet Toilet | Lavatory - s6(1)(e) | N/A |
TT37 | High Standing Winchester Toilet - White Seat | Lavatory - s6(1)(e) | N/A |
TT38 | Traditional Bath Shower Mixer On Pipe Stands - Porcelain Lever | Shower - s6(1)(b) | N/A |
TT39 | Brunel - Old English Bridge Sink Mixer - Porcelain Levers | Tap - s6(1)(a) | N/A |
TT40 | Brunel - Old English Bridge Sink Mixer - Metal Levers | Tap - s6(1)(a) | N/A |
TT41 | English Lever Taps - English Tap Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
TT42 | English Lever Taps - English Tap Spout - Metal Lever | Tap - s6(1)(a) | N/A |
TT43 | English Lever Taps - English Tap Spout - Cross Handles | Tap - s6(1)(a) | N/A |
TT44 | Colonial Bathroom Taps - Goose Spout - Porcelain Lever | Tap - s6(1)(a) | N/A |
TT45 | Traditional Concealed Shower System Arm Rose Diverter & Flexible Kit - Porcelain Levers | Shower - s6(1)(b) | N/A |
TT46 | Traditional Concealed Shower System Arm Rose Diverter & Flexible Kit - Metal Levers | Shower - s6(1)(b) | N/A |
TT47 | Traditional Kitchen Tap | Tap - s6(1)(a) | T20492 |
TT48 | Kitchen Mixer Tap - later called 'Traditional Kitchen Mixer Tap' or 'Traditional Kitchen Mixer Tap - Metal Levers' | Tap - s6(1)(a) | T20496 |
TT49 | Traditional Kitchen Tap (later called 'Traditional Kitchen Tap - Porcelain Lever') | Tap - s6(1)(a) | T20492 |
TT50 | Antique Concealed Shower - Traditional Shower Mixer (Later called 'Traditional Shower System' or 'Traditional Shower System -Porcelain Lever') | Shower - s6(1)(b) | S10101 |
TT51 | Antique Hand Shower - Traditional Shower | Shower - s6(1)(b) | S10091 |
TT52 | Antique Flexi Shower -Mizer Shower Taps (Later called 'Heritage Shower System Arm Rose Diverter & Flexible Kit - Porcelain Lever') | Shower - s6(1)(b) | S10093 |
TT53 | Traditional Exposed Shower System (Later called ' Traditional Exposed Shower System - Porcelain Level') | Shower - s6(1)(b) | S10102 |
TT54 | Traditional Kitchen Mixer Tap - Porcelain Levers | Tap - s6(1)(a) | T20496 |
TT55 | Traditional Kitchen Mixer Tap - Wall Mounted - Porcelain Levers | Tap - s6(1)(a) | T20496 |
TT56 | Traditional Kitchen Mixer Tap - Wall Mounted - Metal Levers | Tap - s6(1)(a) | T20496 |
TT57 | Victorain [sic] Kitchen Tap - Porcelain Levers | Tap - s6(1)(a) | T20494 |
TT58 | Victorain [sic] Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20494 |
TT59 | Country Farmhouse Kitchen Tap - Porcelain Levers | Tap - s6(1)(a) | T20495 |
TT60 | Country Farmhouse Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20495 |
TT61 | Country Farmhouse Kitchen Tap - Cross Handles | Tap - s6(1)(a) | T20495 |
TT62 | Traditional Kitchen Tap - Metal Lever | Tap - s6(1)(a) | T20492 |
TT63 | Brunel - Old English Kitchen Tap - Cross Handles | Tap - s6(1)(a) | T20497 |
TT64 | Traditional Exposed Shower System - Metal Lever | Shower - s6(1)(b) | S10102 |
TT65 | Traditional Shower System - Metal Lever | Shower - s6(1)(b) | S10101 |
TT66 | Traditional Shower With Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10092 |
TT67 | Traditional Shower With Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10092 |
TT68 | Traditional Concealed Shower With Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10091 |
TT69 | Heritage Shower System Arm Rose Diverter & Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10093 |
TT70 | Heritage Exposed Shower System Arm Rose Diverter & Handshower - Porcelain Lever | Shower - s6(1)(b) | S10094 |
TT71 | Heritage Exposed Shower System Arm Rose Diverter & Handshower - Metal Lever | Shower - s6(1)(b) | S10094 |
TT72 | Classic Toilet | Lavatory - s6(1)(e) | L01764 |
Annexure C: CASTIRONBATHS products
ProductNo. | Product description | WELS Product Kind | Registration Number |
CB1 | English Lever Tap - English Tap Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
CB2 | English Lever Tap - English Tap Spout - Metal Levers | Tap - s6(1)(a) | N/A |
CB3 | English Lever Tap - English Tap Spout - Cross Handles | Tap - s6(1)(a) | N/A |
CB4 | Colonial Bathroom Taps - Goose Spout - Cross Handles | Tap - s6(1)(a) | N/A |
CB5 | English Lever Taps - English Tap Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
CB6 | Country Kitchen Tap - Cross Handles | Tap - s6(1)(a) | N/A |
CB7 | Sink Mixer with Extendable Vegie Sprayer - Porcelain Lever | Tap - s6(1)(a) | N/A |
CB8 | Brunel - Old English Bridge Kitchen Sink Mixer - Porcelain Levers | Tap - s6(1)(a) | N/A |
CB9 | Brunel - Old English Bridge Kitchen Sink Mixer - Metal Levers | Tap - s6(1)(a) | N/A |
CB10 | High Neck Single Pillar Tap single only - Porcelain Levers Pewter / Porcelain Lever | Tap - s6(1)(a) | N/A |
CB11 | Traditional Concealed Shower System Arm Rose Diverter & Flexible Kit - Porcelain Levers | Shower - s6(1)(b) | N/A |
CB12 | Traditional Concealed Shower System Arm Rose Diverter & Flexible Kit - Metal Levers | Shower - s6(1)(b) | N/A |
CB13 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Porcelain Levers | Shower - s6(1)(b) | N/A |
CB14 | Traditional Exposed Shower System - Porcelain Lever | Shower - s6(1)(b) | S10102 |
CB15 | Traditional Exposed Shower System - Metal Lever | Shower - s6(1)(b) | S10102 |
CB16 | Traditional Shower System - Porcelain Lever | Shower - s6(1)(b) | S10101 |
CB17 | Traditional Shower System - Metal Lever | Shower - s6(1)(b) | S10101 |
CB18 | Traditional Shower Mixer Concealed Valve Only - Porcelain Lever | Shower - s6(1)(b) | S10101 |
CB19 | Traditional Shower Mixer Concealed Valve Only - Metal Lever | Shower - s6(1)(b) | S10101 |
CB20 | Traditional Concealed Shower With Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10091 |
CB21 | Traditional Concealed Shower With Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10091 |
CB22 | Traditional Shower With Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10092 |
CB23 | Traditional Shower With Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10092 |
CB24 | Heritage Shower System Arm Rose Diverter & Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10093 |
CB25 | Heritage Shower System Arm Rose Diverter & Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10093 |
CB26 | Heritage Exposed Shower System Arm Rose Diverter & Handshower - Porcelain Lever | Shower - s6(1)(b) | S10094 |
CB27 | Classic Toilet | Lavatory - s6(1)(e) | L01764 |
CB28 | Traditional Kitchen Bridge Mixer Tap - Porcelain Levers | Tap - s6(1)(a) | T20496 |
CB29 | Traditional Kitchen Bridge Mixer Tap - Metal Levers | Tap - s6(1)(a) | T20496 |
CB30 | Traditional Kitchen Mixer Wall Mounted - Porcelain Levers | Tap - s6(1)(a) | T20496 |
CB31 | Traditional Kitchen Mixer Wall Mounted - Metal Levers | Tap - s6(1)(a) | T20496 |
CB32 | Victorain Kitchen Tap - Porcelain Levers | Tap - s6(1)(a) | T20494 |
CB33 | Victorian Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20494 |
CB34 | Country Kitchen Tap - Porcelain Levers | Tap - s6(1)(a) | T20495 |
CB35 | Country Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20495 |
CB36 | Traditional Kitchen Tap - Porcelain Lever | Tap - s6(1)(a) | T20492 |
CB37 | Traditional Kitchen Tap - Metal Lever | Tap - s6(1)(a) | T20492 |
CB38 | Brunel - Old English Bridge Kitchen Sink Mixer - Cross Handles | Tap - s6(1)(a) | T20497 |
CB39 | Country Farmhouse Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20495 |
Annexure D: Farmhouse Sinks products
Product No. | Product description | WELS Product Kind | Registration Number |
FS1 | Antique Shower System - Metal Levers | Shower - s6(1)(b) | N/A |
FS2 | Antique Shower System - Porcelain Levers | Shower - s6(1)(b) | N/A |
FS3 | Art Deco Basin Three Hole Set - Cross Handles | Tap - s6(1)(a) | N/A |
FS4 | Art Deco Basin Three Hole Set - Metal Lever | Tap - s6(1)(a) | N/A |
FS5 | Art Deco Basin Three Hole Set - Porcelain Lever | Tap - s6(1)(a) | N/A |
FS6 | Art Deco Bathroom Taps - Low Level Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS7 | Art Deco Bathroom Taps - Low Level Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS8 | Art Deco Bathroom Taps - Low Level Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS9 | Art Deco Bathroom Taps- Low Level Spout - Porcelain Lever | Tap - s6(1)(a) | N/A |
FS10 | Art Deco Bathroom Taps- Low Level Spout - Porcelain Lever | Tap - s6(1)(a) | N/A |
FS11 | Art Deco Bathroom Taps- Low Level Spout - Porcelain Lever | Tap - s6(1)(a) | N/A |
FS12 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Cross Handles | Shower - s6(1)(b) | N/A |
FS13 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Metal Levers | Shower -s6(1)(b) | N/A |
FS14 | Art Deco Shower System With Arm Rose Diverter & Slide Bar Handshower - Porcelain Levers | Shower - s6(1)(b) | N/A |
FS15 | Brunel - Old English Bridge Kitchen Sink Mixer - Metal Levers | Tap - s6(1)(a) | N/A |
FS16 | Brunel - Old English Bridge Kitchen Sink Mixer - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS17 | Clasic Shower Rose & S Neck | Shower - s6(1)(b) | N/A |
FS18 | Clasic Shower Rose & S Neck | Shower - s6(1)(b) | N/A |
FS19 | Clasic Shower Rose & S Neck | Shower - s6(1)(b) | N/A |
FS20 | Colonial Bathroom Tap - Goose Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS21 | Colonial Bathroom Tap - Goose Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS22 | Colonial Bathroom Tap - Goose Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS23 | Colonial Bathroom Taps - Goose Spout - Metal Lever | Tap - s6(1)(a) | N/A |
FS24 | Colonial Bathroom Taps - Goose Spout - Metal Lever | Tap - s6(1)(a) | N/A |
FS25 | Colonial Bathroom Taps - Goose Spout - Metal Lever | Tap - s6(1)(a) | N/A |
FS26 | Copy of Traditional Kitchen Mixer Wall Mounted - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS27 | Country Kitchen Tap - Cross Handles | Tap - s6(1)(a) | N/A |
FS28 | English Bathroom Tap - Metal Lever | Tap - s6(1)(a) | N/A |
FS29 | English Bathroom Tap - Porcelain Lever | Tap - s6(1)(a) | N/A |
FS30 | English Lever Tap - English Tap Spout - Metal Lever | Tap - s6(1)(a) | N/A |
FS31 | English Lever Tap - English Tap Spout - Metal Lever | Tap - s6(1)(a) | N/A |
FS32 | English Lever Tap - English Tap Spout - Metal Lever | Tap - s6(1)(a) | N/A |
FS33 | English Lever Taps - English Tap Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS34 | English Lever Taps - English Tap Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS35 | English Lever Taps - English Tap Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS36 | Heritage Basin Three Hole Set with Concealed Spout - Cross Handles | Tap - s6(1)(a) | N/A |
FS37 | Heritage Basin Three Hole Set with Concealed Spout - Metal Levers | Tap - s6(1)(a) | N/A |
FS38 | Heritage Basin Three Hole Set with Concealed Spout - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS39 | Heritage Bathroom Wall Tap Shower System - Cross Handles | Shower - s6(1)(b) | N/A |
FS40 | Heritage Bathroom Wall Tap Shower System - Metal Levers | Shower - s6(1)(b) | N/A |
FS41 | Heritage Bathroom Wall Tap Shower System - Porcelain Levers | Shower - s6(1)(b) | N/A |
FS42 | High Neck Pillar Taps - Cross handles | Tap - s6(1)(a) | N/A |
FS43 | High Neck Pillar Taps - Metal Levers | Tap - s6(1)(a) | N/A |
FS44 | High Neck Pillar Taps - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS45 | Sink Mixer with Extendable Vegie Sprayer - Porcelain Lever | Tap - s6(1)(a) | N/A |
FS46 | Traditional Bath Shower Mixer On Pipe Stands - Cross Handle | Shower - s6(1)(b) | N/A |
FS47 | Traditional Bath Shower Mixer On Pipe Stands - Metal Lever | Shower - s6(1)(b) | N/A |
FS48 | Traditional Bath Shower Mixer On Pipe Stands - Porcelain Lever | Shower - s6(1)(b) | N/A |
FS49 | Traditional Concealed Shower System Arm Rose Diverter & Flexible Kit - Metal Levers | Shower - s6(1)(b) | N/A |
FS50 | Traditional Concealed Shower System Arm Rose Diverter & Flexible Kit - Porcelain Levers | Shower - s6(1)(b) | N/A |
FS51 | Traditional Kitchen Mixer Wall Mounted – Metal Levers | Tap - s6(1)(a) | N/A |
FS52 | Traditional Kitchen Mixer Wall Mounted – Porcelain Levers | Tap - s6(1)(a) | N/A |
FS53 | Traditional Shower Rose & J Neck | Shower - s6(1)(b) | N/A |
FS54 | Traditional Shower Rose & J Neck | Shower - s6(1)(b) | N/A |
FS55 | Traditional Shower Rose & J Neck | Shower - s6(1)(b) | N/A |
FS56 | Victorain Kitchen Tap - Porcelain Levers | Tap - s6(1)(a) | N/A |
FS57 | Victorian Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20494 |
FS58 | Brunel - Old English Bridge Kitchen Sink Mixer - Cross Handles | Tap - s6(1)(a) | T20497 |
FS59 | Country Kitchen Tap - Metal Levers | Tap - s6(1)(a) | T20495 |
FS60 | Traditional Kitchen Bridge Mixer Tap - Porcelain Levers | Tap - s6(1)(a) | T20496 |
FS61 | Traditional Kitchen Tap - Metal Lever | Tap - s6(1)(a) | T20492 |
FS62 | Traditional Shower System - Metal Lever | Shower - s6(1)(b) | S10101 |
FS63 | Traditional Shower System - Porcelain Lever | Shower - s6(1)(b) | S10101 |
FS64 | Traditional Shower With Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10092 |
FS65 | Traditional Shower With Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10092 |
FS66 | Heritage Exposed Shower System Arm Rose Diverter & Handshower - Metal Lever | Shower - s6(1)(b) | S10094 |
FS67 | Heritage Exposed Shower System Arm Rose Diverter & Handshower - Porcelain Lever | Shower - s6(1)(b) | S10094 |
FS68 | Heritage Shower System Arm Rose Diverter & Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10093 |
FS69 | Heritage Shower System Arm Rose Diverter & Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10093 |
FS70 | Traditional Concealed Shower With Flexible Kit - Metal Lever | Shower - s6(1)(b) | S10091 |
FS71 | Traditional Concealed Shower With Flexible Kit - Porcelain Lever | Shower - s6(1)(b) | S10091 |
FS72 | Traditional Exposed Shower System - Metal Lever | Shower - s6(1)(b) | S10102 |
FS73 | Traditional Exposed Shower System - Porcelain Lever | Shower - s6(1)(b) | S10102 |
FS74 | Traditional Kitchen Bridge Mixer Tap – Brushed Nickel/Porcelain Lever | Tap - s6(1)(a) | T20496 |
FS75 | Traditional Kitchen Bridge Mixer Tap - Metal Levers – Chrome / Metal Lever | Tap - s6(1)(a) | T20496 |
FS76 | Traditional Kitchen Bridge Mixer Tap - Metal Levers – Nickel / Porcelain Lever | Tap - s6(1)(a) | T20496 |
FS77 | Traditional Kitchen Bridge Mixer Tap - Metal Levers – Nickel / Porcelain Lever | Tap - s6(1)(a) | T20496 |
FS78 | Traditional Kitchen Bridge Mixer Tap - Porcelain Levers Chrome / Porcelain Levers | Tap - s6(1)(a) | T20496 |
FS79 | Traditional Kitchen Bridge Mixer Tap - Porcelain Levers Chrome / Porcelain Levers | Tap - s6(1)(a) | T20496 |
FS80 | Traditional Kitchen Bridge Mixer Tap - Porcelain Levers Chrome / Porcelain Levers | Tap - s6(1)(a) | T20496 |
CHEESEMAN J
Introduction
1 This is the first civil penalty proceeding under the Water Efficiency Labelling and Standards Act 2005 (Cth) (WELS Act). The WELS Act forms part of a co-operative scheme between the Commonwealth and the States and Territories to provide for national water efficiency labelling and standards: s 8 of the WELS Act. The objects of the WELS Act are to conserve water supplies by reducing water consumption; provide information for consumers of water-use and water-saving products; and promote the adoption of efficient and effective water-use and water-saving technologies: s 3 of the WELS Act. Part 3 of the WELS Act establishes a national WELS scheme pursuant to which designated WELS products, relevantly in the present proceedings, tap products, shower products, and lavatory products, are required to be registered and labelled before being supplied for sale.
2 The role of the Water Efficiency Labelling and Standards Regulator is established by s 21 of the WELS Act. The Regulator’s functions relevantly include to administer, and monitor and enforce compliance with, the WELS scheme: s 22(a) and (d) of the WELS Act. The Regulator is the applicant in these proceedings and seeks relief in respect of alleged contraventions of the WELS Act against five related respondents.
3 The first to fourth respondents are, respectively, Renaissance Traditional Bathrooms Pty Ltd ACN 091 105 574 (Renaissance Bathrooms); Traditional Taps.com.au Pty Ltd ACN 142 098 575; Castironbaths.com Pty Ltd ACN 142 098 548; and Belfast Sinks.com.au Pty Ltd ACN 142 098 548 (together, the Respondent Companies). The fifth respondent, Andrew Shaw, is the sole director and ultimate shareholder of each of the Respondent Companies.
4 The Regulator alleges that each of the Respondent Companies contravened s 33 of the WELS Act by advertising and selling unregistered WELS products – which products were required to be registered – and s 34, by advertising registered WELS products which were not labelled, but which were required to labelled or carry designated text advice. The Regulator further alleges that Mr Shaw contravened s 33 and s 34 of the WELS Act by aiding, abetting, counselling, procuring, or being knowingly concerned in, the contraventions by the Respondent Companies: s 44M of the WELS Act.
5 Although the proceedings were initially contested, Renaissance Bathrooms, Belfast Sinks and Mr Shaw (together, the Solvent Respondents) ultimately admitted some of the alleged contraventions in their amended defence. The Regulator does not press the allegations in the amended statement of claim in respect of the balance of the contraventions.
6 The remaining two respondents, Traditional Taps and Castironbaths, are in liquidation (together, the Insolvent Respondents). The Regulator was granted leave to proceed against them: see Water Efficiency Labelling and Standards Regulator v Renaissance Traditional Bathrooms Pty Ltd [2020] FCA 1757 (WELS (No 1)). The Insolvent Respondents have not taken an active part in these proceedings since leave was granted.
7 As part of the agreement between the Regulator and Mr Shaw, the Regulator does not press the accessorial contraventions alleged against Mr Shaw arising from the conduct of the Insolvent Respondents, and, accordingly, does not seek any further penalties against Mr Shaw in respect of ancillary liability for the Insolvent Respondents’ alleged contraventions.
8 The Regulator and the Solvent Respondents jointly submit to the Court that the following orders are appropriate to resolve the proceeding between them:
(1) declarations in relation to each of the admitted contraventions;
(2) injunctions restraining the supply of WELS products in breach of ss 33 and 34 of the WELS Act;
(3) pecuniary penalties in the following amounts:
(a) $150,000 against Renaissance Bathrooms;
(b) $25,000 against Belfast Sinks; and
(c) $200,000 against Mr Shaw; and
(4) that the Solvent Respondents will together pay a contribution of $75,000 toward the Regulator’s costs of the proceedings.
9 The Regulator submits that the following orders ought be made against the Insolvent Respondents:
(1) declarations in respect of the contraventions;
(2) pecuniary penalties in the following amounts:
(a) $750,000 against Traditional Taps; and
(b) $1,070,000 against Castironbaths; and
(3) that the Insolvent Respondents pay the Regulator’s costs.
10 Notwithstanding that the Insolvent Respondents are in liquidation, the Regulator presses the claim for relief against them “for reasons of general deterrence”. In doing so, the Regulator acknowledges that it must obtain leave of the Court to enforce against the Insolvent Respondents.
Conclusion in summary form
11 I am satisfied that I have the power, and that it is appropriate, to make orders substantially as sought by the Regulator against the Solvent Respondents. I am also satisfied that the Regulator has established, to the requisite standard, that the Insolvent Respondents contravened s 33 and s 34 of the WELS Act as alleged. Notwithstanding that the Insolvent Companies are in liquidation, it is appropriate to make orders substantially as sought by the Regulator for reasons of general deterrence.
THE STATUTORY FRAMEWORK
12 The relevant statutory framework is comprised of the WELS Act, the Water Efficiency Labelling and Standards Determination 2013 (No. 2) (Cth) (the WELS Determination) and the ‘Australian Standard AS/NZS 6400:2016 Water efficient products – Rating and labelling’ (version published 6 April 2016) (the WEPRL Standard).
13 The relevant period during which the contraventions occurred is from 5 June 2015 to at least 20 November 2018.
14 References to the WELS Act in these reasons are to the consolidated version of the WELS Act registered on 27 July 2016. For the purpose of these proceedings, there is no material difference in the relevant provisions between the version of the WELS Act in force as at 5 June 2015 (being the date of the three contraventions which predate the consolidated version of the WELS Act registered on 27 July 2016) and the consolidated version registered on 27 July 2016.
15 References to the WELS Determination are to the version registered 23 August 2016. There is no material difference in the relevant definitions and standards provided in the version of the WELS Determination that was in force at 5 June 2015.
16 References to the WEPRL Standard are to the Australian Standard AS/NZS 6400:2016 Water efficient products – Rating and labelling, which was approved on behalf of the Council of Standards Australia on 23 December 2015, and was published on 6 April 2016.
17 The present proceedings concern contravention of: (1) the requirement in s 33 of the WELS Act that certain WELS products be registered in order to be supplied as new products; and (2) the requirement in s 34 of the WELS Act that certain registered WELS products must be WELS labelled or carry text advice in lieu of a WELS label in order to be supplied as new products. The present proceedings do not concern allegations of contravention based on the content of the labels on the WELS products the subject of the contraventions. For this reason, it is not necessary to descend into the further reaches of what is a complicated statutory framework. The following outline of the statutory framework focusses only on the critical provisions relevant to the present proceeding.
Prohibition on supply of unregistered products: s 33
18 Section 33 of the WELS Act is a civil penalty provision which relevantly prohibits the supply of WELS products which are unregistered:
33 Supply of unregistered WELS products
(1) A person contravenes this subsection if:
(a) the person supplies a WELS product; and
(b) the applicable WELS standard requires the product to be registered for the purposes of the supply.
(2) Subsection (1) does not apply if the WELS product is registered at the time of the supply.
…
19 A person is liable to a civil penalty of up to 60 penalty units in respect of each contravention if the person contravenes s 33(1): s 33(3) of the WELS Act.
20 A person who wishes to rely on s 33(2) of the WELS Act in proceedings for a civil penalty order bears an evidential burden in relation to proving that the WELS product was registered at the time of the supply.
Prohibition on supply of unlabelled products: s 34
21 Section 34 of the WELS Act is a civil penalty provision which relevantly prohibits the supply of WELS products which are not WELS-labelled when the WELS standard requires them to be labelled:
34 Supply of WELS products that are not WELS-labelled
(1) A person contravenes this subsection if:
(a) the person supplies a WELS product; and
(b) the applicable WELS standard requires the WELS product to be WELS-labelled for the purposes of the supply; and
(c) the product is not WELS-labelled.
22 The term WELS-labelled has the meaning given by s 20(1) of the WELS Act.
23 A person is liable to a civil penalty of up to 60 penalty units in respect of each contravention of s 34(1) of the WELS Act: s 34(3) of the WELS Act.
Defined terms
24 The terms “WELS product”, “WELS standard”, “registered”, “WELS labelled” and “supply” are defined in the WELS Act.
“WELS products”
25 Sections 33 and 34 of the WELS Act are concerned with WELS products. Under s 18 of the WELS Act, the Minister may, by legislative instrument in writing, determine that water-use products or water-saving products of a specified kind are WELS products. Section 18(2) of the WELS Act requires that such a determination must set out, or incorporate by reference, the WELS standard for WELS products.
26 WELS products are defined in s 6 of the WELS Determination, which relevantly provides that the following are WELS Products:
6 Determination of WELS products
A water-use product or water-saving product of any of the following kinds is a WELS product:
(a) tap equipment that is for use over a fixed basin, sink or laundry tub, other than:
(i) tap equipment that is for use exclusively over a bath or spa; and
(ii) thermostatic taps; and
(iii) bidet taps; and
(iv) taps that are part of an appliance (such as a chilled or boiling water dispenser);
(b) fixed showers that are for use exclusively for personal bathing, other than:
(i) emergency deluge showers; and
(ii) safety showers;
…
(e) lavatory equipment that uses water, including toilets, cisterns, pans and associated flushing devices;
…
Applicable WELS standards
27 Section 32 of the Act defines “applicable WELS standard” as follows:
32 Meaning of applicable WELS standard
(1) The applicable WELS standard for a WELS product that is registered is the WELS standard under which the product is registered.
(2) The applicable WELS standard for a WELS product that is not registered is the WELS standard included in the most recent determination made under section 18 that relates to products of that kind.
28 Section 19 of the WELS Act addresses what must be set out in the WELS standards: s 19(1). The WELS standard for the WELS products in s 6 of the WELS Determination is set out in s 7 of the WELS Determination. The performance, testing and labelling requirements set out in the WEPRL Standard form part of the WELS standard for WELS products: s 7(2)(a) of the WELS Determination.
29 The WELS standard must require WELS products to be registered for the purposes of specified supplies of the product: s 19(2). WELS products which are taps (s 6(a) of the Determination), showers (s 6(b) of the Determination) or lavatory equipment (s 6(c) of the Determination) must be registered for supply as a new product for any purpose: ss 7(2)(b) and 8(1) of the WELS Determination.
30 A WELS product is “registered” if the product is registered under the WELS scheme, which is a scheme formulated under s 26(1) of the WELS Act: s 7 of the WELS Act. The registration process and the Register which is to be maintained are provided for in Parts 2A and 3 of the WELS Determination.
WELS-labelled
31 The WELS standard may require that WELS products be WELS-labelled for the purpose of specified supplies of the product, amongst other things: s 19(3). A WELS product that is registered must be WELS-labelled for supply as a new product for any purpose: s 8(3) of the WELS Determination.
32 A product is WELS-labelled if it is labelled in accordance with the requirements in the WELS standard applicable to the particular WELS product: s 20(1) of the WELS Act.
33 The relevant labelling requirements for WELS products the subject of the present proceedings are contained in the WEPRL Standard. For present purposes, it is sufficient to note that those provisions require the relevant WELS products, namely taps, showers and lavatory equipment, to be labelled with a “star rating”, which depicts the water efficiency rating conferred in respect of the relevant product on registration. An example of a WELS label with a star rating is shown below.
34 The star rating can be included as part of either the WELS label, or as part of text advice which may be used in lieu of a WELS label as provided in the WEPRL Standard.
“Supply”
35 “Supply” of a WELS product is defined in s 7A of the WELS Act:
(1) A supply of a WELS product means a supply of the product in the course of trading or commercial activities, and includes:
(a) an offer to supply; and
(b) a supply (including a re-supply) by way of sale, exchange, gift, lease, loan, hire or hire-purchase; and
(c) a supply as part of the supply of another thing (including as a fitting or fixture).
(2) For the purposes of subsection (1):
(a) offer to supply includes make available, expose, display or advertise; and
(b) it is irrelevant whether the supply is:
(i) for consideration; or
(ii) a wholesale or retail supply.
36 The definition is broad. Relevantly, “supply” is not limited to supply by way of sale, but extends to include “offer to supply”, which in turn includes to “make available, expose, display or advertise” a WELS product. Supply must occur in the course of trading or commercial activities. It is irrelevant whether the supply is for consideration, or is a wholesale or retail supply.
Summary of ss 33 and 34 – WELS products must be registered and labelled
37 In summary, ss 33 and 34 of the WELS Act require all WELS products supplied, or offered for supply, including by way of advertising, as a new product, in the course of trading or commercial activities to be registered. Once registered, the product must either be WELS-labelled, or bear the alternative text advice in accordance with the WEPRL Standard.
Enforcement
Standing
38 The Regulator has standing to bring the present proceedings: s 44(1) – injunctions – and s 44A(1) – civil penalty orders.
Declarations
39 The Court’s power to make declarations is conferred by s 21 of the Federal Court of Australia Act 1976 (Cth).
Injunctions
40 The Court may grant an injunction restraining a person from engaging in conduct that constituted, constitutes, or would constitute an offence against the WELS Act, or contravention of a civil penalty provision: s 44(1)(a) of the WELS Act. The Court may, if it thinks appropriate, grant an injunction by consent of all parties to the proceedings, whether or not the Court is satisfied that the person has engaged, is engaging or is proposing to engage in any conduct that constituted, constitutes or would constitute, an offence against the WELS Act or a contravention of a civil penalty provision: s 44(2) of the WELS Act. The Court must not require an undertaking as to damages to be given: s 44(4) of the WELS Act. The power to grant an injunction may be exercised whether or not it appears to the Court that the person intends on engaging in the contravening conduct again, or whether the person has previously engaged in such conduct: s 44(6) of the WELS Act.
Civil penalty orders
41 An application by the Regulator for a civil penalty order must be made within four years of the alleged contravention: s 44A(2) of the WELS Act. The present proceedings were commenced within that time. If the court is satisfied that the person has contravened the civil penalty provision, the court may order the person to pay to the Commonwealth such pecuniary penalty for the contravention as the court determines to be appropriate: s 44A(3) of the WELS Act.
42 In determining the pecuniary penalty, the Court may take into account all relevant matters, including the nature and extent of the contravention, the nature and extent of any loss or damage suffered by reason of the contravention, the circumstances in which the contravention took place, and whether the person has previously been found by a court to have engaged in similar conduct: s 44A(6) of the WELS Act.
43 The relevant penalty for both ss 33 and 34 is 60 penalty units in the case of an individual: ss 33(3) and 34(2) respectively. If the contravenor is a corporation, the pecuniary penalty must not exceed five times the pecuniary penalty specified in the civil penalty provision: s 44A(5). At the time of the 2018 and 2019 contraventions, the value of a penalty unit was $210. The maximum penalty for each contravention by an individual was $12,600 and by a body corporate was $63,000. At the time of the three contraventions alleged against Castironbaths in 2015, the value of a penalty unit was $170 and the maximum penalty for each contravention by a body corporate was $51,000.
44 If conduct contravenes two or more civil penalty provisions, the Regulator may commence proceedings in relation to the contravention of any one or more of those provisions. However, the person cannot be liable to more than one civil penalty provision in relation to the same conduct: s 44C of the WELS Act.
45 Where a person has engaged in multiple contraventions, the Court may make a single civil penalty order against a person for multiple contraventions of a civil penalty provision if proceedings for the contraventions are founded on the same facts, or if the contraventions form, or are part of, a series of contraventions of the same or a similar character: s 44D of the WELS Act. A penalty in respect of multiple contraventions must not exceed the sum of the maximum penalties that could be ordered if a separate penalty was ordered for each contravention: s 44D(2) of the WELS Act.
46 The rules of evidence and procedure for civil matters apply in proceedings for a civil penalty order: s 44F of the WELS Act.
Ancillary liability – actual knowledge of essential facts and sufficient involvement
47 Ancillary contraventions of the civil penalty provisions are established by s 44M of the WELS Act, which relevantly provides:
(1) A person must not:
…
(b) aid, abet, counsel or procure a contravention of a civil penalty provision; or
…
(d) be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of a civil penalty provision; or
…
48 To be liable in respect of an ancillary contravention, a person must have actual knowledge of the essential facts constituting the primary contraventions (although it is not necessary to prove that the person knew that those matters amounted to a contravention); and a level of involvement in the primary contraventions that satisfies one of the descriptions in s 44M(1)(b) or (d) of the WELS Act. As to the first requirement, see s 44Q of the WELS Act.
Liability of the solvent respondents
49 The Solvent Respondents admit that they each contravened the WELS Act in the following ways.
Renaissance Bathrooms
50 Renaissance Bathrooms admits that in the period 17 May 2018 to 18 November 2019 it contravened s 33 of the WELS Act by supplying WELS products by advertising the products for sale as new products on its website (www.renaissancebathrooms.com.au) for the purposes of its business. Renaissance Bathrooms admits contraventions of s 33, referrable to the supply of 51 different WELS products that each were required to be registered under the WELS scheme, but which were not so registered: see Rows RB1 to RB51 of Annexure A.
51 Renaissance Bathrooms further admits that, in that same period, it contravened s 34 of the WELS Act by advertising for sale as a new product 12 registered WELS products on its website which were not WELS-labelled but which were required to be WELS-labelled or carry text advice in accordance with the WEPRL Standard: see Rows RB52 to RB63 of Annexure A.
52 Together, the admitted contraventions of ss 33 and 34 of the WELS Act by Renaissance Bathrooms relate to 63 separate products.
Belfast Sinks
53 Belfast Sinks admits that in November 2018, in contravention of s 33 of the WELS Act, in the course of its business, it sold three WELS products as new products which were required to be, but were not, WELS registered. Each of the three sales constituted a separate contravention of s 33 of the WELS Act. The three relevant sales comprised purchases by WELS investigators, one being in person, one being over the internet, and one by telephone order.
Mr Shaw
54 The Regulator alleges that Mr Shaw caused or permitted the non-compliant WELS products to be advertised by personally sourcing, or directing or procuring the sourcing of, each of the non-compliant WELS products and directing or approving the placement of those images on the relevant websites. Mr Shaw admits liability in respect of the Renaissance Bathrooms website, but denies any liability in respect of the websites of the Insolvent Companies.
55 Additionally, Mr Shaw is alleged to be liable under s 44M(2) for his involvement in respect of Castironbaths’ and Belfast Sinks’ physical sales that contravened s 33. Mr Shaw admits ancillary liability in respect of the Belfast Sinks physical sales, but denies liability in respect of the Castironbaths physical sales.
56 In summary, Mr Shaw admits that he contravened ss 33 and 34 of the WELS Act as a result of his knowing involvement and procurement of the contraventions admitted by each of Renaissance Bathrooms and Belfast Sinks: s 44M(2) of the WELS Act. In total, Mr Shaw has admitted accessorial liability in respect of 66 products – 54 products were not registered as required by s 33, and 12 products were not WELS-labelled as required by s 34.
Liability of the insolvent respondents
Traditional Taps – alleged contraventions
57 The Regulator alleges Traditional Taps contravened the WELS Act in relation to 72 products which were advertised on its website (www.traditionaltaps.com.au). The majority of the products, 46 in total, were not registered in alleged contravention of s 33. The remaining 26 products were not WELS-labelled in alleged contravention of s 34.
Castironbaths – alleged contraventions
58 The Regulator alleges that Castironbaths contravened ss 33 or 34 in respect of 119 products which were advertised – 39 of which were on the Castironbaths website (www.castironbaths.com) and 80 of which were on the Farm House Sinks website (www.farmhousesinks.com.au). Both websites were operated by Castironbaths. The majority of the alleged contraventions relate to Castironbaths’ alleged failure to register WELS products in breach of s 33. The balance of the alleged contraventions relate to Castironbaths’ alleged failure to label registered WELS products in breach of s 34. Most of the relevant website advertisements, 112 in total, were online for the period May 2018 to November 2019. The remaining seven website advertisements were online for only one day on 30 May 2018.
59 A further three contraventions of s 33 are alleged against Castironbaths arising from the physical sale of unregistered tap, fixed shower and lavatory equipment to a retail consumer in June 2015.
Findings on liability
60 The Regulator bears the onus to prove the case advanced to the requisite civil standard having regard to the gravity of the matters alleged: s 140 of the Evidence Act 1995 (Cth).
61 In the present proceedings, the Insolvent Respondents were served with the amended statement of claim and leave to proceed against them in liquidation was granted, over their opposition. They have not filed a defence in the proceedings as they were required to do by orders entered on 30 January 2020 and pursuant to r 16.32 of the Federal Court Rules 2011 (Cth).
62 Rule 16.07(2) provides that “[a]llegations that are not specifically denied are taken to be admitted”. By reason of r 16.07(2), the Insolvent Respondents are taken to have admitted all of the allegations in amended statement of claim. Notwithstanding that these are civil penalty proceedings, as corporations, the Insolvent Respondents do not have the benefit of privilege against exposure to a penalty: s 187 of the Evidence Act. It follows that pursuant to r 16.07 of the Rules, the Insolvent Respondents are taken to have admitted all matters pleaded in the amended statement of claim: Michell, in the matter of Aizome1 Pty Ltd (in liq) v Millar [2019] FCA 2169 at [19]. It is therefore open to the Regulator to rely on deemed admissions of all the facts pleaded in the amended statement of claim: Thunder Studios Inc (California) v Kazal (No 9) [2020] FCA 846 at [32].
63 On that basis, Traditional Taps is deemed to have admitted to contravening s 33 of the WELS Act in respect of 46 products (see TT1 to TT46 of Annexure B). These products were required to be registered for supply as a new product, but were not registered. Castironbaths is further deemed to have admitted to contravening s 33 of the WELS Act in respect of 13 products advertised on the Castironbaths website (see CB1 to CB 13 in Annexure C, and 55 products advertised on the Farmhouse Sinks website (see FS1 to FS55 in Annexure D).
64 Further, Traditional Taps is deemed to have admitted to contravening s 34 of the WELS Act in respect of 26 products (see TT47 to TT72 of Annexure B). These products were required to be WELS labelled, or bear the alternative text advice, but did not.
65 Castironbaths is deemed to have admitted to contravening s 34 of the WELS Act in respect of 26 products advertised on the Castironbaths website (see CB14 to CB 39 in Annexure C) which were not labelled as required, and 25 products advertised on the Farmhouse Sinks website which were similarly not labelled as required (see FS56 to FS80 in Annexure D).
66 Notwithstanding that the Insolvent Respondents are deemed to have admitted the contraventions, the Regulator supplemented the deemed admissions with a body of evidence that reinforces the Regulator’s right and entitlement to relief of the kind claimed. Even though the Insolvent Respondents did not attempt to discharge their burden in respect of registration under s 33(5) of the WELS Act, the Regulator led evidence to establish that the relevant products were not registered. Evidence was led from two WELS inspectors who had undertaken examinations of the websites operated by the Insolvent Respondents on multiple occasions. The WELS inspectors combed the websites to identify specific model names and model codes associated with WELS products offered for sale by the Insolvent Respondents, and then verified that the products the subject of the s 33 contraventions were registered in the WELS register. This evidence demonstrates that the Insolvent Respondents contravened s 33 in the manner alleged by the Regulator.
67 The Regulator also led evidence as to the detailed steps taken by the WELS inspectors to demonstrate that the WELS products in issue did not have the requisite WELS labelling or other alternative text advice. A collection of screenshot images taken from the relevant websites operated by the Insolvent Respondents is in evidence. This evidence further demonstrates that the Insolvent Respondents contravened s 34 in the manner alleged. Eight of the Traditional Taps website advertisements were available for the period between February or March 2017 to 20 November 2019 (about 2.5 years), and the remaining 64 were available for the period between December 2017 or January 2018 to 20 November 2019 (about 2 years).
68 I am satisfied on the basis of the deemed admissions of the Insolvent Respondents, which is supplemented by the evidence before me, that each of the alleged contraventions against each of the Insolvent Respondents is established on the civil standard.
Principles
Principles relevant to orders by agreement and the assessment of penalty
69 Penalties and other relief are agreed by the Solvent Respondents. The principles relevant to making orders and declarations by consent are well-settled. These principles are not confined to agreed submissions on pecuniary penalties – they apply to agreed declarations, injunctions and the like in civil regulatory proceedings: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [70] to [74]; Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18; 161 ALR 79 at [1], [20], [21] and [29]; Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [24]; Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 at [2]; Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 at [4]. In Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at 519 at [57] French CJ, Kiefel, Bell, Nettle, and Gordon JJ (with whom Keane J agreed) observed “that it is entirely consistent with the nature of civil proceedings for a court to make orders by consent to approve a compromise of proceedings on terms proposed by the parties provided the court is persuaded that what is proposed is appropriate.” At [58], their Honours said (footnotes omitted):
…There is, however, no reason in principle or practice why civil penalty proceedings should be treated as an exception. Subject to the court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills, highly desirable in practice for the court to accept the parties’ proposal and therefore impose the proposed penalty…
and at [59]:
… Once it is understood that civil penalties are not retributive, but like most other civil remedies essentially deterrent or compensatory and therefore protective, there is nothing odd or exceptionable about a court approving an agreed settlement of a civil proceeding which involves the public interest; provided of course that the court is persuaded that the settlement is appropriate.
70 A further reason given by the plurality for courts acting upon submissions as to agreed penalty is that they are advanced by a specialist regulator able to offer “informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance”: see [60] to [61].
71 The principles to be applied in considering an agreed penalty were recently summarised by Burley J in Australian Securities and Investments Commission v Squirrel Superannuation Services Pty Ltd [2022] FCA 702 at [58] to [59] as follows:
58 First, there is a well-recognised public interest in the settlement of cases such as the present. Secondly, the orders proposed by agreement must not be contrary to the public interest and at least consistent with it. Thirdly, when deciding whether to make orders that are consented to, the Court must be satisfied that it has to power to make the orders proposed and that they are appropriate. Fourthly, once the Court is satisfied these requirements are met, the Court should exercise a degree of restraint when scrutinising the proposed settlement terms, particularly where both parties are legally represented and able to understand and evaluate the desirability of the settlement. Finally, in deciding whether agreed orders conform with legal principle, the Court is entitled to treat the consent of the respondent as an admission of all facts necessary or appropriate to the granting of the relief sought against it: see Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [70]-[73] (Gordon J) and the authorities cited there.
59 Furthermore, where declarations are sought by consent, the Court will exercise its discretion under s 21 of the Federal Court of Australia Act, but provided that; (a) the issue in respect of which the declaration is sought is not hypothetical or theoretical; (b) the applicant has a real interest in raising it; and (c) there is a proper contradictor; the Court will be slow to refuse to give effect to the terms of a settlement reached by consent; Coles Supermarkets at [75]-[76].
72 The task of the Court where parties have agreed an appropriate penalty includes two steps: first, the Court forming a view as to whether it is sufficiently persuaded of the accuracy of the parties’ agreement as to the relevant facts and consequences; and secondly, the Court determining whether the penalty the parties propose is an appropriate remedy in all the circumstances: Australian Competition and Consumer Commission v Apple Pty Ltd (No 4) [2018] FCA 953 at [7]; Australian Competition and Consumer Commission v Google LLC (No 4) [2022] FCA 942 at [19].
73 The emphasis on whether the agreed penalty is an appropriate penalty is important. There is no single appropriate penalty – the enquiry is whether the agreed penalty falls within a range which is appropriate having regard to all relevant circumstances: Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited (No 3) [2020] FCA 1421 at [78].
Assessment of the appropriate penalty value
74 The matters relevant to the assessment of penalty of appropriate deterrent value comprise both statutory considerations and discretionary factors. The discretionary factors were described by the majority in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 399 ALR 599 at [18]:
The assessment of penalty of appropriate deterrent value will have regard to a number of factors… [including] 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, as evidenced by educational programs or other corrective measures in response to an acknowledged contravention; and
9. Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to contravention.
75 These factors are not to be considered as a rigid list of factors to be ticked off (Pattinson at [19]), but rather are to inform a multifactorial investigation that leads to a result arrived at by a process of “instinctive synthesis” addressing the relevant considerations: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [44]; viagogo AG v Australian Competition and Consumer Commission [2022] FCAFC 87 at [149] and [167].
76 In the present context, the statutory considerations derive from s 44A(6) of the WELS Act, which provides that, in determining the pecuniary penalty, the court may take into account all relevant matters, including:
(a) the nature and extent of the contravention; and
(b) the nature and extent of any loss or damage suffered because of the contravention; and
(c) the circumstances in which the contravention took place; and
(d) whether the person has previously been found by a court to have engaged in any similar conduct.
The central purpose – ensuring deterrence
77 Deterrence, both general and specific, is the principal object of civil penalties – they are “primarily if not wholly protective in promoting the public interest in compliance”: Fair Work Building Industry Inspectorate at [55] and [110]. A penalty must have the necessary sting or burden to secure the specific and general deterrent effects that are the raison d'être of its imposition: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157 at [116].
78 As explained by the Full Court in Reckitt at [151], it is important that penalties be such as to “make the risk/benefit equation less palatable to a potential wrongdoer and the deterrence sufficiently effective in achieving voluntary compliance”. This requires that the penalty place a price on the risk of being caught which makes clear that that risk is not worth taking. As the Full Court observed:
Tipping the balance of the risk/benefit equation in this way is even more important when the benefit in contemplation is profit or other material gain. It is especially important if there are disadvantages, including increased costs or lesser sales or profits, in complying with legal obligations for those who “decide” to be law-abiding.
79 While a penalty must be appropriate to ensure deterrence, it is also necessary to ensure that the penalty is not oppressive, in the sense that it is greater than the objective of deterrence requires: Pattinson at [39] to [41].
Approach to separate contraventions
80 Section 44C of the WELS Act provides that where conduct constitutes a contravention of “2 or more provisions” the person is not liable to more than one penalty “in respect of the same conduct”. This provision applies to conduct which is “the same”, not merely similar or repeated. Where separate acts give rise to separate contraventions which are inextricably interrelated, they may be regarded as a “course of conduct” for penalty purposes: Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 at [234].
81 Section 44D(1) of the WELS Act provides that the court may make a single civil penalty order against a person for multiple contraventions of a civil penalty provision if proceedings for the contraventions are founded on the same facts, or if the contraventions form, or are part of, a series of contraventions of the same or a similar character.
82 This provides one way of avoiding double punishment for those parts of the legally distinct contraventions which involve overlap in wrongdoing. Whether certain contraventions ought to be treated as a single course of conduct depends on the circumstances of the case. However the principle has been applied consistently in imposing penalties for breaches of civil penalty provisions, particularly when the number of legally distinct breaches is large: Reckitt at [139] to [145] and see also Yazaki at [234]; Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159 at [421] to [424].
The totality principle
83 The principle of totality requires the Court to make a “final check” of the penalties to be imposed on a wrongdoer, considered as a whole, and adjust the cumulative total as necessary to ensure that it is “just and appropriate” and does not exceed what is proper for the entire contravening conduct: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1997] FCA 450; 145 ALR 36 at 53; Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2014] FCA 336 at [101] to [102].
CONSIDERATION
84 I now turn to consider the assessment of penalty in relation to the contraventions of ss 33 and 34 of the WELS Act by each of the respondents.
General deterrence considerations in this case
85 General deterrence is a central consideration in assessing the appropriate penalty against each of the respondents. I accept the Regulator’s submission that penalties with a robust general deterrent effect are called for in this case, having regard to the objectives promoted by the national WELS scheme and the circumstances of the contravening conduct.
86 The WELS scheme is directed to reducing urban water consumption. It is important to Australia’s water security. Critical to the success of the WELS scheme is ensuring clear and consistent water-efficiency information is made available to consumers. The requirement for, and use of, a standardised and readily recognisable water-efficiency rating label serves to drive consumer behaviour and in turn promote the development of more water-efficient technologies. The WELS scheme aims to encourage favourable consumer perceptions and behaviour by providing consumers with water-efficiency information at the point of display and sale. The consistent application and enforcement of the registration and labelling requirements at the point of display or sale underpins industry and consumer confidence in the WELS scheme.
87 Water and energy costs are reduced when consumers choose products which are more water efficient. Over time, savings increase as more efficient products replace less efficient products in use across the community. The registration and labelling requirements of the WELS scheme are key to realising these benefits. In order to be effective in achieving the desired objective, water-efficiency information available to consumers at the point of sale must be accurate, credible and prominent. The objectives of accuracy and credibility are supported by the requirement that accredited laboratories conduct standardised tests for the purpose of determining a rating for WELS products. The WELS labelling requirements ensure that information is both intelligible and prominent to enable consumers to make an informed choice. These requirements includes the well-recognised “star rating” label, which allows consumers to compare products at a glance.
88 Evidence led by the Regulator demonstrates that the WELS scheme has significantly contributed to reductions in water consumption across Australia. That water efficiency is the highest or second highest consideration for consumers of WELS products is supported by market research. Consumer interest in water efficiency is reflected in a general shift towards greater availability and sales of more water-efficient products with higher “star ratings”, which have grown substantially since 2007, whereas sales of less efficient, lower “star rated” products have decreased. The Regulator led evidence in respect of estimated water consumption savings, which demonstrate a continuing reduction in water consumption. In 2017 to 2018, the estimated savings were around 112GL/year. This is equivalent to 21% of the water supplied for all purposes in Greater Sydney in that year, or approximately 25% of the total volume of Sydney Harbour, with a corresponding about $1.05 billion dollars in annual utility bill savings for households and businesses. These figures are projected to increase to around 185 GL/year in 2026 and 231 GL/year in 2036. The broader benefits of these savings include deferral of investment in water supply infrastructure, re-tasking of water supply, reductions in wastewater treated and discharged, and significant saving of greenhouse gas emission through reduced energy use in supply and heating.
89 Non-compliant supply, including by advertisement, of WELS products that are not registered as required or not labelled as required has the potential to erode confidence in the integrity of the WELS scheme. That is particularly so if it creates a perception that the WELS requirements are not enforced, or that compliance is not adequately enforced. In turn, that has the potential to lead to lower compliance rates from industry, and a decrease in favourable consumer sentiment, with the consequence that less consumers use accurate water-efficiency information to inform their purchasing decisions. The projected water savings associated with the WELS scheme would be put in peril.
90 The civil penalties in this case must be informed by a recognition of the nexus between compliance with the registration and labelling requirements and the effective functioning of the WELS scheme and the objectives served by it. The imposition of an appropriate civil penalty for contraventions of the type committed by the Respondents will enhance industry and consumer confidence in the WELS scheme.
91 Another feature of the present case that is relevant to general deterrence is the need to deter smaller businesses – who utilise direct internet sourcing – from side-stepping the requirements of the WELS scheme. The Regulator has identified as a current and emerging risk changes to the traditional supply chain caused, in part, by direct internet purchasing. In the past, the importation of WELS products rested with a relatively small number of large importers and wholesalers who were responsible for ensuring that imported products complied with all Australian regulations before supplying them to smaller retailers for on-sale to consumers. As the present case demonstrates, the internet makes it easier for small to medium businesses to directly source WELS products from overseas manufacturers. Direct internet sourcing diversifies the supply chain and increases the number of businesses responsible for the first point of supply, whether by advertising, or physical supply, of new WELS products in Australia. The result is that the responsibility for having a new imported product appropriately tested, WaterMark certified, WELS registered and WELS labelled prior to the first supply as a new product now rests with a broader spectrum of businesses of different sizes and sophistication, and, importantly, with varying levels of familiarity with the WELS scheme.
92 Due to the large volume of material on the internet and the number of suppliers, it is not possible for WELS inspectors to detect every new sales website, or monitor every webpage or update to existing websites. Conducting test purchases is the way in which WELS inspectors actively monitor the labelling at the point of the supply of the physical product, especially for online or telephone purchases. That it is difficult to detect contravening conduct factors into how businesses approach the risk/benefit calculus. Higher levels of deterrence are required to offset the difficulty in detecting contraventions as a means of, in effect, recalibrating the risk/benefit calculus in such cases: Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission [2021] FCAFC 49 at [152].
93 Relatedly, penalties imposed should be sufficient to send a positive signal to compliant businesses. This is the other side of the risk/benefit calculus: Reckitt at [152]. Effective self-monitoring by compliant businesses involves a cost, as do WELS registration fees, which are set to reflect an 80% industry contribution to the costs of the WELS Scheme. Robust deterrent penalties serve to validate compliant behaviour and support and encourage voluntary compliance with the law. Similarly, robust penalties serve to deter rogue businesses who would otherwise prioritise the commercial advantage derived from the lower operating costs in being non-compliant, above being put to the expense of compliance.
94 Another factor that is relevant is the real world harm that is caused to consumers who are supplied with products that are not registered. Suppliers are required to provide the Regulator with WaterMark certification and laboratory testing certification as part of the registration process. When an unregistered product is supplied to a consumer, the Regulator cannot know whether that product meets relevant Australian standards for safety and fitness for purpose, or whether water-efficiency information, if any, is accurate. State and Territory regulations require WaterMark certification for plumbing-related WELS products. Consumers may find that they cannot have such products installed. Plumbers cannot lawfully install products if they do not have a current WaterMark. Further, if the water-efficiency information is not accurate, and the product is less efficient than indicated, consumers who purchase and install the product will use more water and pay more in utility bills than they would if the product performed as represented.
95 In assessing an appropriate penalty to achieve deterrence, it is relevant to have regard to the fact that the conduct in this case was persistent. It continued in the face of repeated warnings by the Regulator. The conduct continued after the commencement of these proceedings. The more determined the wrongdoer, the greater the requirement for deterrence: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 356 ALR 389 at [71].
96 Mr Shaw personally – and through him each of the Respondent companies of whom he is the sole director and ultimate shareholder – was warned verbally and in writing on many occasions, was aware of infringement notices issued to Traditional Taps in 2017 which were not paid, and was aware of the commencement of these proceedings. Mr Shaw was on notice of the obligations owed by the Respondent Companies under the WELS scheme since 2013. That Mr Shaw and the Respondent Companies persisted in their contravening business model in the face of escalating regulatory action implies that to their perception the risk/benefit calculus involved in advertising and selling WELS products did not favour compliance. As a matter of general deterrence, the penalties imposed should be sufficient to reset the risk/benefit calculus for other wrongdoers who might otherwise be minded to engage in contravening conduct.
97 It is necessary to say something specific about the general deterrence in relation to the penalty to be imposed upon Mr Shaw. Directors of companies akin to the Respondent Companies would be expected to be sensitive to the potential for personal liability. The imposition of a penalty on an individual director can operate as a powerful deterrent. In cases where a company’s contraventions largely result from the conduct of its executive officers, a significant penalty imposed on a director personally may be warranted. Conversely, the imposition of inadequate penalties may encourage directors and others to believe that the risks of non-compliance will be borne primarily by the company itself. In the case of smaller companies, such as in the present case, imposing penalties on the company and not the individual involved may encourage a business model in which companies are effectively abandoned to deregistration or liquidation. The liquidation of Traditional Taps and Castironbaths after the commencement of the present proceedings illustrates this risk.
98 I now turn to consider specific deterrence, which is relevant in the case of the Solvent Respondents. Traditional Taps and Castironbaths are in liquidation, with the only remaining step being deregistration. Accordingly, specific deterrence is not relevant to the assessment of penalty in respect of their contraventions. The Regulator seeks penalties against them on the basis of general deterrence alone.
99 Many of the considerations relevant to general deterrence discussed above are also relevant to specific deterrence. As mentioned above, the contraventions by Mr Shaw and the Respondent Companies were determined and persistent, and demonstrated disregard for the warnings issued, and actions taken, by the Regulator. I accept the Regulator’s submission that the Solvent Respondents are contraveners who demonstrated a preparedness to court the risk of being penalised in the pursuit of commercial gain.
100 The fact that the Solvent Respondents belatedly admitted some of the contraventions alleged against them and agreed orders and penalties with the Regulator does not, in my view, significantly reduce the need for specific deterrence. Those actions were taken late in the proceedings, after the Regulator had served all of her evidence on liability and penalty and after the matter had been listed for hearing. Neither Mr Shaw nor the Respondent Companies have led evidence on which the Court could be satisfied that they are unlikely to contravene in the future. In some cases, the need for specific deterrence is shown to be reduced in a variety of ways, for example, where a business has accepted the wrongdoing, made frank and full admissions, taken action to remediate its conduct, established compliance processes to prevent a recurrence and apologised: see Volkswagen at [153]; Australian Competition and Consumer Commission v Telstra [2021] FCA 502 at [63] to [68]. On the contrary, Renaissance Bathrooms, Belfast Sinks and Mr Shaw adopted an adversarial approach in these proceedings from the outset. While those respondents were entitled to defend the proceeding in that way, that approach does not bespeak an acceptance of their wrongdoing. There is no evidence of any steps taken or systems implemented by Mr Shaw or his companies to increase compliance.
Principles and factors applicable to determining penalty amounts
Maximum penalty
101 The maximum penalty indicates the scope of Parliament’s intended deterrent response to each contravention and can serve as a useful numerical guide: Reckitt at [154] to [155]; Flight Centre at [55]. As noted above, the statutory maximum is the same for each contravention of ss 33 and 34, being 60 penalty units, and five times that for bodies corporate. For all of the 2018 and 2019 contraventions, the value of a penalty unit was $210. Accordingly, the statutory maximum penalties for each contravention are $12,600 for an individual and $63,000 for a body corporate. For the three contraventions alleged in respect of Castironbaths in 2015, the value of a penalty unit was $170 at that time, and the statutory maximum for each of those three contraventions in respect of a body corporate is $51,000.
102 Every day that each website advertisement was available comprises a legally distinct contravention: s 44N of the WELS Act. On this basis, the total statutory maximum penalties for Mr Shaw and the Respondent Companies, in aggregate, are well over $1 billion. The cumulative total of the available maximum penalty in respect of all the individual contraventions is so large that precise calculation is both unnecessary and unhelpful: Reckitt at [157] to [158]. The large number of the contraventions are such that the imposition of penalties is properly approached on a course of conduct basis.
The approach to be taken to multiple contraventions
103 I am satisfied it is appropriate to group the continuing daily contraventions in respect of each of the 254 website advertisements into 254 courses of conduct, one for each contravening product advertisement, for the following reasons.
104 The prohibitions in the WELS Act attach to each separate product that is unregistered or unlabelled. Penalties should reflect this regulatory framework by applying to each of the different contravening product advertisements. This approach permits the overall course of conduct for each product to be assessed by reference to the total period during which the website advertisement was available to the public. Although the presentation of the website advertisement of each product was specific to that product, the presentation of each product remained largely unchanged throughout the contravening period, and it is appropriate to reflect this commonality and continuity of the contraventions in respect of each product advertisement. That some contraventions persisted for longer than others and, for that reason, are more serious makes some allowance appropriate in this case.
105 The parties’ agreed assessment of penalties is on a course of conduct basis in respect of the contraventions involving website advertisements. I am satisfied that the approach agreed between the parties results in an appropriate penalty. The approach does not reduce the many separate contraventions into a smaller number of contraventions, nor does it constrain the available maximum penalty in a way that is not appropriate having regard to the actual, substantive wrongdoing of each of the Solvent Respondents.
106 The contraventions concerning the six instances of physical supply, three by each of Castironbaths and Belfast Sinks, concern different WELS products and are appropriately dealt with as separate contraventions and not as a course of conduct.
107 Due to the similarities between the website advertising courses of conduct, and the cumulative effect of the many penalties that would otherwise result, a significant totality reduction is appropriate.
Factors informing penalities for each of the respondents
108 There is considerable overlap in the factors informing the penalties for the different respondents. The reason for this is obvious – Mr Shaw was the sole director and ultimate sole shareholder of each of the Respondent Companies and his knowledge of the registration and labelling requirements of the WELS Act, and his interactions with the Regulator apply equally to each of the Respondent Companies. In view of this commonality, and the agreement reached with each of Mr Shaw, Renaissance Bathrooms and Belfast Sinks, it is convenient to consider them together. In light of the absence of agreement between the Regulator and the Traditional Taps and Castironbaths, and given their different circumstances, it is appropriate to consider the appropriate penalty against each of them separately.
Penalty factors for Mr Shaw, Renaissance Bathrooms and Belfast Sinks
Nature and extent of the contraventions
109 Mr Shaw’s contraventions of ss 33 and 34 of the WELS Act arise from his knowing involvement and procurement of the Renaissance Bathrooms website advertisement contraventions (63 website advertisements in respect of 63 different WELS products: 51 relating to contraventions of s 33 and 12 concerning contraventions of s 34) and Belfast Sinks’ sale contraventions (three contraventions). The website advertising contraventions took place in the period from May 2018 to November 2019 (about 1.5 years) and the sale contraventions arose from internet, telephone and in-person purchases of two taps and a fixed shower in November 2018 by WELS investigators.
110 Mr Shaw was closely involved and responsible for the deliberate contravening conduct of Renaissance Bathrooms and Belfast Sinks. Mr Shaw’s personal responsibility for the contraventions is underscored by a number of matters.
111 First, Mr Shaw was the sole director, ultimate sole shareholder and controlling mind of the Solvent Companies at all relevant times. The contravening conduct of the Solvent Companies was undertaken either by Mr Shaw personally or by employees or agents of Renaissance Bathrooms or Belfast Sinks, respectively, acting under Mr Shaw’s direction or with Mr Shaw’s consent or authority.
112 Secondly, Mr Shaw was well aware of the registration and labelling requirements imposed by ss 33 and 34 of the WELS Act, prior to and during, the contraventions by Renaissance Bathrooms and Belfast Sinks. He personally received multiple warnings that explained those requirements and detailed the Regulator’s concerns that advertisements for WELS products on the relevant websites did not comply with the WELS Act. Mr Shaw received his first formal warnings in October and November 2013, and was warned again in February 2016 and February and May 2017. Mr Shaw personally received, and interacted with, WELS Inspectors in respect of those warnings.
113 Thirdly, Mr Shaw was personally involved in the registration of the WELS products which were registered by Renaissance Bathrooms. He was named as the contact on each of the applications by Renaissance Bathrooms for the registration of WELS products. As a consequence, I infer that Mr Shaw was aware of which products being advertised and/or sold by the Solvent Respondents were registered, and which were not.
114 Fourthly, Mr Shaw is personally named as the registrant’s contact for the Renaissance Bathrooms’ website.
Nature and extent of any loss or damage suffered
115 The relevant loss and damage and risk of harm are addressed above. The need for deterrence to prevent such harms is underscored in the present case by the number of products involved, and the persistence in non-compliance over an extended period.
116 There is no evidence as to any specific harm to particular consumers. The purchases of unregistered products purchased from Belfast Sinks were all test purchases by WELS inspectors; consumers did not bear these costs. The Regulator does not know whether any of the Renaissance Bathroom website advertisements resulted in the sale of unregistered WELS products to consumers. Further, as Renaissance Bathroom has not provided the Regulator with documentation to satisfy the WaterMark certification and laboratory testing requirements, the Regulator does not know if the products the subject of the contraventions meet relevant Australian standards for safety and fitness for purpose, or whether any water-efficiency information, if provided, was accurate.
117 In the circumstances, the Regulator does not press for penalties on the basis that particular consumers experienced specific harms and, accordingly, I have not made any allowance of this kind in considering the appropriateness of the agreed penalties.
Circumstances in which the contravention took place
118 As mentioned above, Mr Shaw knowingly persisted in a business model which involved ongoing supply of unregistered WELS products, or registered WELS products that were not WELS labelled, in the face of escalating regulatory action.
119 Moreover, the contravening conduct occurred under the cloak of false representations as to compliance – Renaissance Bathrooms falsely represented on its website that its products complied with the WELS Scheme. In June 2018, the ‘Approval’ page on the RB website stated:
Approvals
As of 1st July 2006 it became law that all shower systems, taps and shower roses joined the Wells [sic] scheme. As part of this scheme it became a prerequisit [sic] of being able to supply products in Australia that all relevant items be labelled with a Wells [sic] compliance sticker. Stickers must now appear on both physical product and marketing literature. If a product does not carry the Wells [sic] emblem it is illegal for a wholesaler to supply this product after 30th June 2006.
All Renaissance products that are required to comply with this scheme do so, and as such are legal to be supplied throughout Australia, giving you peace of mind that whatever Renaissance product you specify the necessary legislative requirements have been met. For more information about Wells [sic] legislation please contact our sales team or visit www.waterrating.gov.au.
120 Renaissance Bathrooms and Belfast Sinks engaged in commercially motivated advertising and sales activities while avoiding compliance costs. As the sole director and ultimate sole shareholder of Renaissance Bathrooms and Belfast Sinks, Mr Shaw stood to gain personally from any financial benefits to those companies by reason of their non-compliance.
121 In the period of the contraventions, the annual cost to register between 51 and 75 products was $5,600: Sch 1, Water Efficiency Labelling and Standards (Registration Fees) Amendment Determination 2015 (No. 1). In May 2018, the indicative costs of obtaining a 5-year WaterMark licence for a WELS product were approximately $22,950-$33,500. However, a single licence may cover a set of similar products, so it is difficult to estimate the total indicative costs saved by Renaissance Bathrooms and Belfast Sinks in respect of their supply of unregistered products. It is unclear whether a WaterMark licence could be obtained for the unregistered products.
122 It was open to Mr Shaw, Renaissance Bathrooms and Belfast Sinks at all times after receiving the warnings and other action by the Regulator, and during the contravening period, to simply cease engaging in the advertising and sales conduct. The multiple warnings referenced above invited the respondents to correct their non-compliance, and offered advice and assistance to Mr Shaw. The Regulator has led evidence to the effect that, in the ordinary course, voluntary corrective action, whether by registering products or taking down particular advertisements, or amending the labelling presentation of already registered products, would have resolved the issue without the need for further action. That the Solvent Respondents chose instead to persist in their conduct is significant. Mr Shaw, and through him Renaissance Bathrooms and Belfast Sinks, were prepared to take the odds as an acceptable business risk: Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; 131 FCR 529 at [308] to [310]. As explained in Reckitt at [151], the resulting penalties must be such as to firmly disabuse them, and any like-minded would-be contraveners, of taking such a punt.
123 For completeness, I note the evidence led from Mr Shaw as to his personal and familial circumstances, including that he was at the relevant times, and continues to be, affected by adverse health issues which may have impacted his ability to oversee the Respondent Companies’ compliance with the WELS scheme. I further note that Mr Shaw sought legal advice and representation. I accept the submission made on behalf of Mr Shaw that these matters are of some relevance in assessing the amount of penalty: s 44A(6)(c) of the WELS Act. Also relevant in this regard is the very belated expression of contrition and regret by Mr Shaw.
Any similar prior conduct
124 Mr Shaw, Renaissance Bathrooms and Belfast Sinks have not previously been found by a court to have contravened the WELS Act or any other relevant law. Where, as here, the contravention is serious and persistent, the absence of similar prior conduct attracts less weight: Volkswagen at [142] to [144].
Penalties against both the companies and the sole director and shareholder
125 As the sole director and ultimate sole shareholder of Renaissance Bathrooms and Belfast Sinks, Mr Shaw is likely to feel the financial effect of the penalties imposed on the companies. Where respondents are very closely related, such that the cumulative burden for the penalties on each effectively falls upon one individual or entity, it can be appropriate, but is not mandatory, to reduce the amount of penalties payable by one of the respondents. However, the mere fact that two contravenors are closely related does not mean that only one penalty is appropriate or that a purely nominal penalty should be imposed on one of them: Minister for Sustainability, Environment, Water, Population and Communities v Woodley [2012] FCA 957 at [66].
126 The approach taken in the penalties proposed in respect of the Solvent Respondents reflects that more culpability and responsibility for the conduct rests with Mr Shaw, such that a higher penalty (relative to the respective maximum) is required to deter him as an individual than may be the case for the Solvent Companies: Australian Competition and Consumer Commission v Geowash Pty Ltd (Subject to a Deed of Co Arrangement) (No 4) [2020] FCA 23 at [143]. The proposed penalties for Renaissance Bathrooms and Belfast Sinks are significantly reduced to take into account that Mr Shaw bears the weight of those penalties – as sole director and ultimate shareholder – and who, himself, is personally subject to penalties. If penalties were not sought in respect of Mr Shaw, the Regulator submits that she would have sought significantly higher penalties against the Solvent Companies. However, in view of Mr Shaw’s agreement that significant penalties totalling $200,000 are appropriately to be imposed upon him, and recognising the additional burdens that will be felt through the penalties agreed by Renaissance Bathrooms and Belfast Sinks, the Regulator accepts that lower penalties can be imposed on those companies than would in other circumstances have been called for.
127 The same considerations do not arise in relation to Traditional Taps and Castironbaths, which are both in liquidation. They have not agreed to penalties and the effect of such penalties as will be imposed on those companies will not be felt by Mr Shaw. Accordingly, appropriate penalties against the Insolvent Respondents should not be reduced in the ways and for the reasons applicable to Solvent Companies.
Co-operation by the Solvent Respondents
128 As noted above, at a relatively late stage in the proceedings, the Solvent Respondents made admissions of contraventions in their amended defence, and agreed with the Regulator on a joint approach to the Court on declarations, injunctions and penalties. This obviated the need for a contested hearing, and reduced the hearing time.
129 The earlier stages of the proceedings were attended by a markedly adversarial approach. The Solvent Respondents filed a defence which claimed penalty privilege, and put the Regulator to proof on both liability and penalty. They did not substantively engage with the Regulator’s case – by way of a substantive defence, or evidence – until after the Regulator’s evidence on liability and penalty was complete. Furthermore, Mr Shaw funded the liquidators of Traditional Taps and Castironbaths to oppose the Regulator’s application for leave to proceed against them, and also intervened personally to make submissions against the application: WELS (No 1) at [50]. Mr Shaw has made admissions in respect of his ancillary liability for the contraventions by the Solvent Companies, but not the alleged contraventions by the Insolvent Respondents. The agreed contribution to the Regulator’s costs of the proceedings on the part of the Solvent Respondents is modest.
130 Taking all this into account, I am satisfied that the agreed penalties adequately reflect the Solvent Respondents’ level of co-operation.
Penalty factors for Traditional Taps and Castironbaths
131 Largely similar considerations inform the penalties for Traditional Taps and Castironbaths. However, as those penalty amounts are not agreed, and as this gives rise to some difference in penalty factors and proposed penalties, it is appropriate to consider them separately.
Nature and extent of the contraventions
132 The contraventions of ss 33 and 34 of the WELS Act by Traditional Taps and Castironbaths are set out at paragraphs [57] to [59] above.
133 The same considerations explained in paragraphs [109] to [114] above in respect of Mr Shaw’s knowledge of the requirements of ss 33 and 34 of the WELS Act, and involvement in the contraventions, apply equally to the contraventions by Traditional Taps and Castironbaths. The contraventions demonstrate that the Insolvent Respondents favoured the commercial advantage derived from avoiding the cost of compliance to the expense in terms of resources, time and cost in voluntarily complying with their obligations under the WELS scheme.
Nature and extent of any loss or damage suffered
134 The same considerations explained in paragraphs [115] to [117] above apply in respect of the loss or damage suffered as a result of the website advertising contraventions by Traditional Taps and Castironbaths. Again, there is no evidence of any particular harm to consumers. The relevant harm is that which is occasioned to operation of the WELS scheme and the undermining of the objectives served by that scheme.
135 The position is different however with respect to the three physical sale contraventions of s 33 by Castironbaths, which involved the sale of three unregistered WELS products to a consumer.
Circumstances in which the contravention took place
136 The analysis in paragraphs [96] and [97] above applies equally to the contraventions by the Insolvent Respondents. The contravening conduct by Traditional Taps and Castironbaths was undertaken in the persistent implementation of a non-compliant business model despite the escalating action taken by the Regulator in 2013, 2016, 2017 and 2019. Traditional Taps and Castironbaths gained a financial advantage by not paying WaterMark and registration fees, and other costs associated with complying with the WELS scheme.
137 The Insolvent Respondents’ websites contained similar assertions to those on Renaissance Bathrooms’ website, to the effect that products were compliant with WELS requirements and Australian standards. The Traditional Taps website stated:
Traditionaltaps.com.au is proud to be Australian owned and operated and has worked hard to bring European & Uk [sic] faucets to market in Australia with Australian standards approval Approved (sic) and Wells [sic] Approval making all products we sell legal for sale and installation within Australia.
138 On the Castironbaths’ websites, false statements were made in respect of individual products being WELS compliant.
139 It was open to Traditional Taps and Castironbaths to cease the advertising of these WELS products at any time during the contravening periods. They did not do so, even after becoming aware of the Regulator’s concerns.
Any similar prior conduct
140 Traditional Taps and Castironbaths have not previously been found by a court to have contravened the WELS Act or any other relevant law. However, as noted above, this does not warrant a penalty discount where, as here, the contraventions are serious and persistent.
Penalties against companies in liquidation
141 As noted above, because Traditional Taps and Castironbaths are in liquidation, the burden of the penalties imposed on them will not be felt by Mr Shaw. Therefore, the considerations which apply to reduce the penalties imposed on Renaissance Bathrooms and Belfast Sinks do not require a reduction to be made to the penalties imposed on the Insolvent Respondents.
142 The penalties imposed on the Insolvent Respondents are not provable debts. Nevertheless, there is a public interest in imposing appropriate penalties that reflect the seriousness of the contraventions in order to ensure that the penalties achieve general deterrence: Australian Competition and Consumer Commission v Birubi Art Pty Ltd (in liq) (No 3) [2019] FCA 996 at [23] to [25].
Co-operation by the Insolvent Respondents
143 The Insolvent Respondents have not filed any defence or taken any active part in the proceedings. They have not co-operated with the Regulator, despite an invitation to do so: WELS (No 1) at [50].
Penalties that reflect the above factors
The Solvent Respondents
144 Given the agreement between the Regulator and the Solvent Respondents, the task is to determine whether the agreed penalty is “an” appropriate penalty in the way earlier described.
145 The penalties for the Solvent Respondents are as follows.
Renaissance Bathrooms
Conduct / duration | Number of WELS products / courses of conduct / contraventions | Appropriate penalties for each respective course of conduct / contravention | Penalties for all courses of conduct | Final total penalties |
Website advertising, for about 1.5 years | 63 courses of conduct (51 for s 33, 12 for s 34) | $15,000 (x 63 = $945,000) ($63,000 maximum for a single contravention) | $600,000 (after 30% to 40% totality reduction) | $150,000 (after a further reduction as the burden will fall on Mr Shaw) |
Belfast Sinks
Conduct | Number of WELS products / courses of conduct / contraventions | Appropriate penalties for each respective course of conduct / contravention | Penalties for all courses of conduct | Final total penalties |
Physical sale, three discrete sales (test purchases) | Three contraventions of s 33 | $12,000 (x 3 = $36,000) ($63,000 maximum for a single contravention) | $36,000 (no totality reduction) | $25,000 (after a further reduction as the burden will fall on Mr Shaw) |
Mr Shaw
Conduct / duration | Number of WELS products / courses of conduct / contraventions | Appropriate penalties for each respective course of conduct / contravention | Penalties for all courses of conduct | Final total penalties |
Website advertising, for about 1.5 years | 63 courses of conduct (51 for s 33, 12 for s 34) | $4,500 (x 63 = $283,500) ($12,600 maximum for a single contravention) | $185,000 (after 30% to 40% totality reduction) | $200,000 ($185,000 + $15,000) |
Physical sale, three discrete sales (test purchases) | Three contraventions of s 33 | $5,000 (x 3 = $15,000) ($12,600 maximum for a single contravention) | $15,000 (no totality reduction) |
146 Applying an instinctive synthesis to all the relevant factors outlined above, I am satisfied that the agreed penalties above are appropriate in that they fall within an appropriate range. They are sufficient to achieve the necessary specific and general deterrent objectives, and are not excessive having regard to the actual, substantive wrongdoing of each of the Solvent Respondents and taking into account reductions for the limited co-operation, totality and to reflect where there is an overlap in the burden of the penalties arising from Mr Shaw’s relationship with the Solvent Companies. I am satisfied that a totality reduction in the order of 30% to 40% is appropriate having regard to the large number of separate courses of conduct for each respondent; the overlapping time periods for many courses of conduct (some of which were simultaneous); and that some products advertised on the websites were very similar to others – including multiple variants of a particular model, which could have been included under the same registration.
147 Both s 33 and s 34 have the same statutory maximum penalty and protect important aspects of the WELS scheme, being registration and WELS labelling. They are complementary mechanisms and the need to secure compliance with each requirement is equally important from the perspective of general deterrence.
148 Beyond the general risk and harms to the integrity of the WELS scheme, there is no evidence that any of the website advertising contraventions have caused any loss or damage to consumers or particular individuals. As such, there is no clear distinction to be made between the appropriate penalties for different WELS products. In this case, minor presentational differences between the website advertisements do not lead to different penalty amounts when considered as a part of the course of conduct as a whole. Accordingly, I will order penalties in the amounts agreed.
Insolvent Respondents
149 The Regulator seeks the following penalties in relation to the Insolvent Respondents:
Traditional Taps
Conduct / duration | Number of WELS products / courses of conduct / contraventions | Appropriate penalties for each respective course of conduct / contravention | Penalties for all courses of conduct | Final total penalties |
Website advertising, for about 2 to 2.5 years | 72 courses of conduct (46 for s 33, 26 for s 34) | $17,500 (x 72 = $1,260,000) ($63,000 maximum for a single contravention) | $750,000 (after 30% to 40% totality reduction) | $750,000 |
Castironbaths
Conduct / duration | Number of WELS products / courses of conduct / contraventions | Appropriate penalties for each respective course of conduct / contravention | Penalties for all courses of conduct | Final total penalties |
Website advertising, for about 1.5 years | 112 courses of conduct (68 for s 33, 44 for s 34) | $15,000 (x 112 = $1,680,000) ($63,000 maximum for a single contravention) | $1,000,000 (after 30% to 40% totality reduction) | $1,070,000 ($1,000,000 + $25,000 + $45,000) |
Website advertising, for one day | Seven contraventions of s 34 | $5,500 (x 7 = $38,500) ($63,000 maximum for a single contravention) | $25,000 (after 30% to 40% totality reduction) | |
Physical sales, three direct sales to consumers | Three contraventions of s 33 | $15,000 (x 3 = $45,000) ($51,000 maximum for a single contravention) | $45,000 (no totality reduction) |
150 I am satisfied that, having regard to all of the penalty factors considered above which are relevant to them, and adopting an approach in relation to course of conduct and totality, which is consistent with that adopted in respect of the Solvent Respondents’ conduct, the penalties necessary to achieve the objective of general deterrence in respect of contraventions established against the Insolvent Respondents are in the amounts for which the Regulator contends. In making this assessment, I note that there is no need to factor in specific deterrence as the companies are in liquidation. I further note that there is no basis to reduce the penalties imposed on them in circumstances where they have not co-operated with the Regulator. Additionally, the penalty imposed on them will not fall on Mr Shaw and should not be reduced for that reason. Penalties in these amounts accord with the seriousness of the contraventions established against the Insolvent Respondents.
Injunctions
151 I am satisfied that it is appropriate to make injunctions in the form agreed by the Regulator and the Solvent Respondents, pursuant to s 44(2) of the WELS Act. The injunctions have a close nexus to the admitted contraventions – they are expressed in terms that are directly tied to the contraventions. Making the injunctions serves to deter any future conduct similar to the contravening conduct. Given the persistence of the conduct in the face of regulatory action, the injunctions are warranted.
Declarations
152 I am satisfied that it is appropriate to make declarations as sought by consent in respect of the Solvent Respondents. It is appropriate to do so to give effect to the agreement reached, but also because they are within the Court’s jurisdiction and are otherwise unobjectionable: Australian Competition and Consumer Commission v Coles at [75]. Further, the questions involved in this proceeding are real and not hypothetical, the Regulator has a real interest in raising them in discharging her functions in the public interest, and the Solvent Respondents are proper contradictors in respect of them in the sense that, notwithstanding the admissions and agreement reached, the Solvent Respondents have an interest in opposing the relief: see Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56 at [30] to [33]. The preconditions for declaratory relief are made out in the present case: see Forster v Jododex Australia Pty Ltd [1972] HCA 61; 127 CLR 421 at 437 to 438 and Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564 at 581 to 582.
153 Traditional Taps and Castironbaths have not consented to the declarations which the Regulator seeks against them. I am satisfied on the evidence before me that it is appropriate to make the declarations against the Insolvent Respondents. The declarations serve the purpose of encapsulating the particular liability found and the basis for penalties ordered. The declarations are also a desirable and appropriate means to record the Court’s disapproval of the contravening conduct, vindicate the concerns of consumers and industry, assist the Regulator in carrying out the duties conferred on her by the WELS Act, and make clear to other would-be contravenors that such conduct is unlawful: Australian Securities and Investments Commission v Axis International Management Pty Ltd [2009] FCA 852 at [26] to [43]; MSY Technology at [35].
Costs
154 The Regulator and the Solvent Respondents have agreed that the Solvent Respondents will pay a contribution of $75,000 to the Regulator’s costs of the proceedings. The Regulator will also have a costs order against the Insolvent Respondents. In making this order, I note that, as a condition of the grant of leave to proceed against the Insolvent Respondents, the Regulator may not take steps to enforce the penalty or costs orders against those respondents without the leave of the Court.
Conclusion
155 For these reasons, I will make orders substantially in accordance with the short minutes provided by the Regulator.
I certify that the preceding one hundred and fifty-five (155) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. |
Associate:
ACD 42 of 2019 | |
BELFAST SINKS.COM.AU PTY LTD | |
Fifth Respondent: | MR ANDREW MARK SHAW |
