Case: Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693 , 207 ALR 329
Outcome: cited
In addressing the role that agreement between the parties may have when addressing penalties to be imposed under the Trade Practices Act in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 , Burchett and Kiefel JJ observed: The Act places on the shoulders of the Court the responsibility to determine the "appropriate" penalty in each particular case, having regard to "all relevant matters" including the matters specified in the section. But effects upon the functioning of markets, and other economic effects, will generally be among the most significant matters to be considered as relevant, so that the Court is likely to be assisted greatly by views put forward by the Australian Competition and Consumer Commission, or by economists called on behalf of the parties. Since the decision in Trade Practices Commission v Allied Mills Industries Pty Ltd [(1981) 60 FLR 38], it has been accepted that both the facts, and also views about their effect, may be presented to the Court in agreed statements, together with joint submissions by both the Commission and a respondent as to the appropriate level of penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount. There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case. It appears to us that the authorities in both Australia and New Zealand have provided unanimous support for the approach we have outlined... They approved the general acceptance of a "negotiated settlement", reserving for further consideration only the case where a compromise was based, not on considerations bearing on the quantum of the penalty, but on doubts or difficulties attending the proof of the contravention. In Simsmetal [Trade Practices Commission v Simsmetal Ltd [1996] ATPR 41 ,510], Lee J, in approving agreed penalties, said (at 41,512) that "the approach adopted by the parties in fixing (the figures put to the Court) is not dissimilar to the approach that would have been adopted by the Court had it been necessary for the Court to undertake the penalty fixing exercise itself", and that he agreed with the approach of Lockhart J in another case of refraining from "stating whether the penalties to which the parties have agreed are the size of [those] which the Court itself would have imposed". In Pioneer [Australian Competition and Consumer Commission v Pioneer Concrete (Qld) Pty Ltd [1996] ATPR 41 ,579] Lockhart J said (at 41,582): "I am of the view that the agreement that has been reached, subject to the Court's concurrence, is broadly in accord with what the Court would have done itself based upon the facts as I have read them from the affidavits, and I think the result is a sensible one. I propose to endorse it." In TNT [Trade Practices Commission v TNT Australia Pty Ltd [1995] HCA 4 ; [1995] ATPR 40 ,161] Burchett J said (at 40,165): "[I]t cannot be denied that the fixing of the quantum of a penalty is not an exact science. It is not done by the application of a formula, and, within a certain range, courts have always recognised that one precise figure cannot be incontestably said to be preferable to another." When the Court approaches the task of assessing a penalty under s 76, or of determining whether an agreed penalty is appropriate, there are certain principles which must be kept steadily in mind. The section itself lays down that the penalty is to be "appropriate having regard to all relevant matters", and then indicates certain matters which the legislature regarded as relevant... Reference may also be made to Australian Competition &amp; Consumer Commission v Econovite Pty Ltd [2003] FCA 964 at [11] where French J stated that the " Court has, over many years, accepted as a general principle that it should encourage fair and appropriate settlements to reduce the burdens of litigation on public and private resources ". See also: Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693 at [15] [18], [2004] FCA 693 ; 207 ALR 329 at 332 3 per Lee J; Australian Competition &amp; Consumer Commission v FChem (Aust) Ltd [2008] FCA 344 at [22] [27] per Cowdroy J. These comments were obviously directed to the specific statutory provisions and objectives of the 1974 Act.