Federal Court of Australia

Commonwealth Director of Public Prosecutions

v

Aussie Skips Bin Services Pty Ltd; Aussie Skips Recycling Pty Ltd; Roussakis

[2024] FCA 122

JUDGMENT SUMMARY

Reasons or remarks on sentence in criminal matters are traditionally delivered orally. Given the length of the reasons in this matter, that course is not desirable. In those circumstances, the appropriate course is to provide a short summary of the reasons for imposing the sentences that are to be imposed on the offenders today. The summary is intended to assist the offender and others to understand the reasons for imposing the sentences that are to be imposed. It is not a complete statement of the findings and conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be provided to the parties and made available on the internet at the Court’s website. This summary is also available there.

Aussie Skips Bin Services Pty Ltd (Aussie Skips), Aussie Skips Recycling Pty Ltd (Aussie Recycling), and the former chief executive officer of both those corporations, Mr Emmanuel Roussakis, have each pleaded guilty to an offence of making an arrangement containing a cartel provision contrary to s 45AF(1) of the Competition and Consumer Act 2010 (Cth). The Court must now impose sentences on each of the offenders in respect of those offences.

Aussie Skips is a waste management company which provides collections services for mixed building and demolition waste in the Sydney metropolitan region. Collections services involves the collection and transportation of waste in skip bins to facilities for processing. Aussie Recycling is a waste management company which provides processing services for building and demolition waste in Sydney. Processing services involve the sorting, processing and recycling of waste.

Mr Roussakis was the chief executive officer of both Aussie Skips and Aussie Recycling at the time the offences were committed. Unless it is necessary to refer to them individually, Aussie Skips and Aussie Recycling will be referred to collectively as the Aussie Companies.

Several other companies provided collections services and processing services in respect of building and demolition waste in Sydney. The largest provider of both collections services and processing services was Bingo Industries Ltd. Mr Daniel Tartak was the chief executive officer of Bingo at the time.

Needless to say, the Aussie Companies competed with Bingo in the market for collections services and processing services in Sydney.

Over a five-day period commencing on 20 May 2019, Mr Roussakis and Mr Tartak engaged in a series of communications during which they made arrangements which contained provisions concerning the prices at which their respective companies would provide collections services and processing services. Mr Roussakis and Mr Tartak first met in a café at Mr Tartak’s request. They then engaged in a series of WhatsApp messages, WhatsApp being an encrypted messaging service.

It is unnecessary, for the purpose of this summary, to detail the content of those messages. Suffice it to say that through those messages Mr Roussakis and Mr Tartak made an arrangement about the prices Bingo and the Aussie Companies would charge for collections services and processing services in the Sydney metropolitan region.

The essence of the arrangement in respect of collections services was that Aussie Skips would increase its prices by at least 20% and that Bingo would maintain a price increase of 25%. The essence of the arrangement concerning processing services was that Aussie Recycling would increase its prices at its Strathfield South facility by at least $50/tonne and $27.5/m3 and Bingo would maintain a price increase of at least $60/tonne and $35/m3 at its facilities which were near Aussie Recycling’s Strathfield South facility.

Over the following three months, Aussie Skips and Aussie Recycling gave effect to those arrangements, aided by Mr Roussakis. So too did Bingo, aided by Mr Tartak.

In relation to collections services, Aussie Skips increased the price that it charged its customers by: 20% in approximately 9% of cases; between 20-25% in approximately 22% of cases; and 20% or more in approximately 46% of cases.

In relation to processing services, Aussie Recycling increased the price it charged its customers by: exactly $50/tonne or $27.5/m3 (excluding GST) in approximately 25% of cases; and $50/tonne or $27.5/m3 (excluding GST) in approximately 39% of cases.

While a portion of those price increases may have been referrable to an increase in the Aussie Companies’ costs arising from the imposition of a waste levy by the Queensland Government which came into effect on 1 July 2019, there could be no doubt that it was likely that some customers paid more than they otherwise would have paid for collections services and processing services as a result of the anti-competitive arrangements between the Aussie Companies and Bingo. Mr Roussakis was no doubt aware of the likely effects of the arrangements.

The Aussie Companies effectively abandoned the arrangements they had made with Bingo by about 1 September 2019, mainly as a result of market pressures.

Aussie Skips and Aussie Recycling each pleaded guilty to an offence of intentionally making a cartel arrangement containing a cartel provision contrary to s 45AF(1) of the Competition and Consumer Act. The charge against Aussie Skips concerned the cartel arrangement with Bingo in respect of prices in the market for collections services. The charge against Aussie Recycling concerned the cartel arrangement with Bingo in respect of prices in the market for processing services.

Mr Roussakis pleaded guilty to one charge of aiding and abetting both Aussie Skips and Aussie Recycling to contravene s 45AF(1) of the Competition and Consumer Act by making arrangements with Bingo which contained cartel provisions.

The Aussie Companies and Mr Roussakis each asked the Court to take into account, when passing sentence upon them in respect of the offences to which they have pleaded guilty, the fact that they have admitted their guilt in respect of another offence. That procedure is available pursuant to s 16BA of the Crimes Act 1914 (Cth). The offence which the Court was asked by both Aussie Skips and Aussie Recycling to take into account was an offence of giving effect to an arrangement with Bingo that contained a cartel provision contrary to s 45AG(1) of the Competition and Consumer Act. Mr Roussakis asked the Court to take into account an offence of aiding and abetting Aussie Skips and Aussie Recycling to give effect to arrangements with Bingo that contained cartel provisions contrary to s 45AG(1) of the Competition and Consumer Act.

On just about any view, the offences committed by the Aussie Companies and Mr Roussakis were extremely serious offences against Australia’s laws which prohibit cartel conduct. The task for the Court is to impose appropriate sentences on Aussie Skips, Aussie Recycling and Mr Roussakis for those serious offences.

In considering the appropriate sentence in any criminal case, the Court is required to have regard to, and weigh in the balance, a broad range of relevant factors and considerations and then arrive at a value judgment as to the appropriate sentence. In broad terms, those factors and considerations relate to either the objective seriousness of the offending conduct, or the subjective circumstances of the offender in question. The overarching principle is that the sentence imposed by the Court must be of a “severity appropriate in all the circumstances of the offence”.

The sentence to be imposed on Aussie Skips and Aussie Recycling

I will commence with the sentences to be imposed on Aussie Skips and Aussie Recycling.

The maximum penalty for the offence committed by each of Aussie Skips and Aussie Recycling is $10,000,000.

The maximum penalty for an offence is generally seen as a “yardstick” that bears on the ultimate discretionary determination of the sentence for the offence. That is essentially because it represents the legislature’s assessment of the seriousness of the offence. It also essentially invites comparison between the worst possible case and the case before the court at the time.

There are a number of factors or considerations that tend to weigh in favour of the imposition of substantial fines on both Aussie Skips and Aussie Recycling.

The offences committed by both Aussie Skips and Aussie Recycling were very serious offences in all the circumstances.  Cartels are widely condemned as the most egregious forms of anti-competitive behaviour. At its heart, a cartel is an agreement between competitors not to compete.  Cartel conduct harms consumers, businesses, and the economy, and is likely to increase prices, reduce choice and distort innovation processes.

The cartel conduct encompassed by the offences committed by the Aussie Companies undoubtedly involved serious criminality.

The price-fixing arrangements between the Aussie Companies and Bingo persisted for about three months before they were abandoned. They had the effect of stifling and distorting price competition in respect of collections services and processing services in the Sydney metropolitan region or a significant part thereof. The markets for collections services and processing services in that region were large and lucrative. The effect of the cartel conduct was that some consumers of collections services and processing services in the region were likely to have paid more for those services than they otherwise would have. Correspondingly, both Aussie Skips and Aussie Recycling were likely to have benefited from their unlawful conduct. Among other things, they were able to increase their prices, and profit from those increased prices, without the usual associated risk of losing customers to Bingo and perhaps even other suppliers.

The conduct engaged in by the Aussie Companies was also covert, deliberate and carried out by their most senior executive officer. There was little or no corporate culture of compliance at the Aussie Companies at the time of the offences.

Neither Aussie Skips nor Aussie Recycling, as separate entities, could fairly be described as small or insignificant. Nor could the group of companies of which they formed part. Both Aussie Skips and Aussie Recycling conducted lucrative businesses. They derived substantial revenue and turned over very large sums of money in conducting those businesses. They were significant participants in the waste management markets in Sydney.

I have also taken into account the admission of guilt by both Aussie Skips and Aussie Recycling in respect of the corresponding offences of giving effect to the cartel arrangements. They were also serious offences.

There are, however, some mitigating circumstances in the case of both offenders.

Aussie Skips and Aussie Recycling both entered pleas of guilty in this Court at the earliest opportunity. The early pleas of guilty were made in circumstances which avoided the need for any committal proceedings. The early pleas also meant that it was unnecessary to conduct what would most likely have been a relatively lengthy and costly trial in this Court.

The early guilty pleas by both Aussie Skips and Aussie Recycling were also reflective of their contrition and remorse and a willingness to facilitate the course of justice.

The prospects of rehabilitation on the part of both Aussie Skips and Aussie Recycling are also good. Prior to committing these offences, they had not been convicted of any criminal offences and had no history or record of having engaged in anti-competitive conduct. Aussie Recycling has, however, recently been convicted of a serious workplace health and safety offence. Perhaps more significantly, since the offending conduct came to light, the Aussie Companies have taken some steps, albeit fairly modest steps, to improve their policies so as to reduce the risk of any similar conduct occurring in the future.

It is generally accepted that deterrence, both specific and general, are important considerations in imposing penalties for offences like cartel offences. Cartel conduct is notoriously difficult to detect, investigate, and prosecute. It is also an essentially economic or commercial crime that generally involves an offender weighing up whether the expected financial or other benefit from the conduct outweighs the risk of detection and the resulting imposition of a penalty. The fines imposed for such offences must be sufficiently high that they could not be regarded to be an acceptable cost of doing business. They must also be sufficiently high that others who may be tempted to offend will come to appreciate that the risk of having a substantial penalty imposed well outweighs the likely benefits from the anti-competitive conduct.

In sentencing both Aussie Skips and Aussie Recycling, I must also have regard to the principle of parity.  That principle requires that co-offenders should be treated in a like manner, though allowance must be made for different sentences to be imposed upon like offenders to reflect different degrees of culpability and different circumstances. I must ensure that there is no marked disparity between the sentences imposed on co-offenders which would give rise to a justified sense of grievance.

In the circumstances of this case, I must ensure that there is no unjustified or unjustifiable disparity between the sentences I impose on the Aussie Companies and the sentence I impose on their co-offender, Bingo.

The application of the parity principle in this case is particularly difficult and complex. Bingo was the subject of separate sentence proceedings. The agreed facts and evidence before the Court in the sentence proceedings involving Bingo differed in some, albeit fairly minor, respects from the agreed facts and evidence in these proceedings. The offences to which Bingo pleaded guilty were different to the offences to which each of the Aussie Companies have pleaded guilty. Perhaps more significantly, the maximum penalties for the offences committed by Bingo are significantly higher than the maximum penalties for the offence committed by each of the Aussie Companies, essentially because Bingo was and is a significantly larger company then either of the Aussie Companies. Finally, there are also some differences between the objective seriousness of the offences committed by the Aussie Companies and those committed by Bingo. There are also some differences between the subjective circumstances of the offenders in each case.

I do not propose to refer in this summary to the sentence that I have imposed on Bingo. Suffice it to say that the fines I will impose on the Aussie Companies are lower than the aggregate fine that I have imposed on Bingo. The explanation for the difference may be found in the respective sentence judgments.

Having regard to all of the factors and considerations to which I have referred, and giving them appropriate weight, I have determined that the appropriate sentences to impose on the Aussie Companies in all the circumstances are:

   (a)    for Aussie Skips, a fine of $1,750,000; and

   (b)    for Aussie Recycling, a fine of $1,750,000.

I should note that those fines incorporate a discount of 25% having regard to the early pleas of guilty by each of the companies. The fines have also been moderated having regard to the principle of totality, which I have applied by analogy having regard to the relationship between the two companies and the close connection between the offending conduct in each case.

The sentence to be imposed on Mr Roussakis

Turning, then, to the sentences to be imposed on Mr Roussakis, the maximum penalty for the offence committed by Mr Roussakis is a term of imprisonment not exceeding 10 years, or a fine not exceeding $420,000, or both.

I have had regard to several important factors and considerations in considering the appropriate sentence to impose on Mr Roussakis.

For the reasons referred to earlier in the context of the sentence to be imposed on the Aussie Companies, the offence committed by Mr Roussakis was undoubtedly a very serious offence. In summary, and at risk of repetition, cartel offences are inherently serious offences, a fact reflected in the fact that, where the cartel offence is committed by an individual, the legislature has seen fit to provide a penalty involving imprisonment for up to 10 years. The cartel offence which Mr Roussakis committed was also undoubtedly serious. He was the chief executive officer of companies which were significant participants in the markets for waste collections services in the Sydney metropolitan region. He caused those company to make arrangements which included cartel provisions with a major competitor in those markets. His conduct in that regard was covert and deliberate. The arrangements, which persisted for a not insubstantial period of time, stifled and distorted price competition in those markets to the benefit of the Aussie Companies and to the detriment to consumers of collections and processing services in the Sydney metropolitan region.

I have also taken into account Mr Roussakis’s admission of guilt in respect of a corresponding offence relating to giving effect to the cartel arrangements. That was also a serious offence.

While the offence committed by Mr Roussakis is serious, his subjective circumstances compel a degree of leniency.

Mr Roussakis has some prior convictions, though they mostly involve fairly minor summary offences that were dealt with many years ago. He was, however, more recently convicted of a workplace health and safety offence associated with the offence committed by Aussie Recycling. He has not been convicted of any offences similar to the one currently under consideration.

Putting to one side those prior convictions, and the commission of the offence currently under consideration, Mr Roussakis is generally considered to be a man of good character. He is well regarded and respected by his colleagues, employees, and friends. I have also taken into account the evidence of a psychologist concerning Mr Roussakis’s personal circumstances.

Mr Roussakis entered a plea of guilty at the earliest opportunity. He indicated his intention to plead guilty in circumstances which avoided the need for the ACCC to compile a brief of evidence and permitted the Prosecutor to file an indictment directly in this Court without the need for committal proceedings. His early plea also avoided a potentially lengthy and costly trial in this Court.

Mr Roussakis’s early plea of guilty is demonstrative of his contrition and remorse, as well as a willingness to facilitate the course of justice.

I am satisfied that the risk of Mr Roussakis reoffending is low and that the prospects of his rehabilitation are good.

I have also taken into account the fact that, on the application of the Prosecutor, I have decided to disqualify Mr Roussakis from managing corporations for a period of five years.

For the reasons referred to earlier, the need for sentences imposed in respect of cartel offences to have a deterrent effect is an important consideration. In the particular circumstances of this case, the need for specific deterrence is not a particularly weighty consideration given the findings I have made concerning Mr Roussakis’s character, low risk of reoffending and good prospects of rehabilitation. It is, nevertheless, a consideration that must be weighed in the balance. The need for the sentence to provide general deterrence is, however, a weighty consideration. Officers of corporations in similar positions to that of Mr Roussakis should be left in no doubt that they will face condign punishment if they cause their corporations to enter into, or give effect to, cartel arrangements.

As was the case with the sentence imposed on the Aussie Companies, I am required to have regard to the parity principle when sentencing Mr Roussakis. In particular, I must avoid any marked disparity between the sentences imposed on Mr Roussakis and his co-offender, Mr Tartak, that cannot be reasonably justified or explained.

Some of the difficulties and complexities in applying the parity principle that were discussed earlier in the context of the sentences imposed on the Aussie Companies also apply in the context of the application of the parity principle to the sentences imposed on Mr Roussakis and Mr Tartak. Mr Tartak pleaded guilty to different charges and was the subject of separate sentence proceedings involving different facts and evidence. There are also some differences between the objective seriousness of Mr Tartak’s offences and the objective seriousness of Mr Roussakis’s offence and some material differences between their respective subjective circumstances.

I again do not propose to refer in this summary to the sentence that I have imposed on Mr Tartak. Suffice it to say that the sentence I propose to impose on Mr Roussakis differs slightly from the sentence I have imposed on Mr Tartak. The explanation for the difference may be found in the respective sentence judgments.

Having regard to all of the factors and considerations to which I have referred, and giving them appropriate weight, I have determined that the appropriate sentence to impose on Mr Roussakis in all the circumstances is a sentence of imprisonment for 18 months to commence on 23 February 2024 and to be served by way of intensive correction in the community pursuant to s 7(1) of the Crimes (Sentencing Procedure) Act 1999 (NSW) (Sentencing Procedure Act), and a fine of $75,000.

I should note that the sentence of imprisonment incorporates a discount of 25% for Mr Roussakis’s early plea of guilty.

The intensive correction order pursuant to which the term of imprisonment is to be served will be subject to the standard conditions prescribed by s 73 of the Sentencing Procedure Act, namely that Mr Roussakis must not commit an offence and must submit to supervision by a community corrections officer, and an additional condition pursuant to s 73A(2)(d) of the Sentencing Procedure Act, being that Mr Roussakis perform community service work for 300 hours.

I will also make an order, pursuant to s 86E of the Competition and Consumer Act, that Mr Roussakis be disqualified from managing corporations for a period of five years commencing on 23 February 2024.

JUSTICE MICHAEL WIGNEY

23 February 2024

Sydney