Case: Trade Practices Commission v CSR Ltd (1991) ATPR 41-076
Outcome: followed
There was no dispute between the parties as to the principles which govern the imposition of a penalty under s 76(1). The relevant principles have been discussed at length in numerous cases: see Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 ( 'CSR' ) at 52,151 52,153 per French J; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 ( 'NW Frozen Foods' ) at 291-295 per Burchett and Kiefel JJ; Schneider Electric (Australia) Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 2 ; (2003) 127 FCR 170 at 172 173 [2]-[6] per Sackville J and at 181 184 [47]-[60] per Merkel J; J McPhee &amp; Son (Australia) Pty Ltd v Australian Competition and Consumer Commission (2000) 172 ALR 532 ( 'McPhee' ) at 577-579 [158]-[166]; Australian Competition and Consumer Commission v Visy Paper Pty Ltd (No 2) (2004) 212 ALR 564 ( 'Visy Paper (No 2)' ) at 571-572 [28]-[32] per Sackville J; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2 ) (2005) 215 ALR 281 at 283 285 [5]-[12] per Merkel J; and Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301 ( 'Leahy (No 3)' ) at 307-311 [31]-[43] per Goldberg J. 10 In CSR at 52,152 52,153, French J identified six additional factors: (i) the size of the contravening company; (ii) the degree of its power, evidenced by its market share and ease of entry into the market; (iii) the deliberateness of the contravention and the period over which it extended; (iv) whether the contravention arose out of the conduct of senior management or at a lower level; (v) whether the company had a corporate culture conducive to compliance with the TPA, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; and (vi) whether the company has shown a disposition to cooperate with the authorities responsible for the enforcement of the TPA in relation to the contravention. These factors were approved by Burchett and Kiefel JJ, with whom Carr J agreed, in NW Frozen Foods at 292. 13 Deterrence is the principal object of the penalties regime. In CSR at 52,152, French J said that the principal, and he thought probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the TPA. His Honour also observed that it is conducive to deterrence to adopt an approach under which the greater the scope and impact of the conduct, the heavier the penalty should be: at 52,153. 14 In NW Frozen Foods at 293 295, Burchett and Kiefel JJ said that the deterrent effect of a penalty, both specific and general, is an important factor to be taken into account in determining the appropriate penalty in a particular case, although it must also be borne in mind that the penalty should not be so great as to be oppressive. 60 The ACCC said that the existence of a trade practices compliance program was 'possibly relevant' to the determination of penalty. I do not see any need for the qualification added by the ACCC. In my opinion, the introduction of a compliance program in 2004, and its continuing operation, is a relevant factor in determining penalty: see CSR per French J at 52,123; and NW Frozen Foods at 293-294 per Burchett and Kiefel JJ. In Rural Press at 43,291 [22], Mansfield J said: 'The fact that, following a contravention, a contravening entity has implemented at its own expense a trade practices compliance program to ensure its compliance and that of its employees and agents with the Act, will also be a consideration which will mitigate the level of a pecuniary penalty: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commissioner (1997) ATPR |P41-546; (1996) 141 ALR 640...; Prestige Motors . Such conduct gives some confidence that the particular contravener will not engage in similar conduct in the future, and it may also be assumed would come to the knowledge of the community through the reasons given when fixing penalty, so as also to serve the purpose of community deterrence.' I agree with these observations.