Case: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285
Outcome: followed
the views of the Authority will be of significant weight in assisting the Court to fix an appropriate pecuniary penalty for a contravention of s 140A(3) of the Act. The Authority's functions and role under the Act enable it to offer insight into the circumstances and impact of the contravention and the measures taken or proposed to guard against similar conduct in the future. And, one purpose of enacting the civil penalty provisions was to give the Authority access to a greater range of enforcement measures. Thus, its choice of remedy and the manner in which it ought be imposed are important factors to weigh in assessing the appropriateness of its suggested pecuniary penalties: cp NW Frozen Foods Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 at 290G-291C, where Burchett and Kiefel JJ said: "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." Their Honours emphasised that the Court in such cases recognised that the selection of a penalty is not an exact science and that, as in the formation of other discretionary judgments, there will usually be a range of penalties that could be appropriate. Generally, the Court does not undertake the exercise of fixing a penalty itself to assess whether it is prepared to give effect to the parties' suggestion: NW Foods 71 FCR at 291B-G. The assessment of a pecuniary penalty that is appropriate, having regard to all relevant factors under s 205F(3) is, like a criminal sentence, the result of the "process of instinctive synthesis" described in Markarian 228 CLR at 373-374 [36]-[37] and Wong v The Queen [2001] HCA 64 ; (2001) 207 CLR 584 at 611-612 [74] - [76] per Gaudron, Gummow and Hayne. If what is suggested by the parties as an appropriate penalty is unreasonable or plainly unjust, the court can reject it on similar principles to those used when sentences are either manifestly excessive or inadequate: cf Markarian 228 CLR at 370-371 [25]; Lukatela v Birch (2008) 223 FLR 1 at 7 [25]-[26]. In Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR p41-993 at 48,632 [77] Branson, Sackville and Gyles JJ said: "Just as the criminal court will take into account the prosecution's views on the appropriate sentence, so the court in the civil penalty case, as NW Frozen Foods explained, will take account of the regulator's position. But in neither case is the court relieved from the responsibility of exercising its own judgment as to the appropriate sentence (in criminal cases), or whether the proposed penalty is within the appropriate range for the contravention (in civil penalty cases). In each case, the Court should be satisfied that it is being given accurate, reliable and complete information on critical questions." In Australian Competition and Consumer Commissioner v Qantas Airways Ltd (2008) 253 ALR 89 at 107-108 [25]-[27] Lindgren J identified 11 propositions relating to the fixing of penalties under the Trade Practices Act as flowing from the decisions in NW Foods [1996] FCA 1134 ; 71 FCR 285 and Mobil (2004) ATPR p41-993 (and these were recently applied by Jacobson J in Australian Competition and Consumer Commission v PRK Corporation Pty Ltd [2009] FCA 715 at [20] - [24] ). These included the propositions that: the Court is not obliged to commence its reasoning with the level of the agreed penalty and limit itself to considering whether that penalty is within the range; the Court is entitled to address the question independently at the outset of its reasoning; the admissions and agreed facts should not be approached as if they had been "tailored or modified to reflect the difficulties faced by the [regulator] in proving its case"; the regulator should always explain to the Court the process of reasoning said to justify a discounted penalty.