Case: Australian Communications and Media Authority v Clarity1 Pty Ltd [2006] FCA 1399 ; (2006) 155 FCR 377
Outcome: followed
is but one directly applicable authority in respect of the Spam Act and the imposition of penalties under that Act. That is a judgment delivered by Nicholson J in Australian Communications and Media Authority v Clarity1 Pty Ltd [2006] FCA 1399 ; (2006) 155 FCR 377 (Clarity1). One finds, with respect, in his Honour's judgment in Clarity1 a very helpful collation indeed of relevant principle. It is apparent from Clarity1 that Nicholson J was of the opinion that assistance was to be derived in terms of principle from judgments delivered in respect of civil penalties imposed under the Trade Practices Act . I respectfully agree with this approach. To that end, the following general principles are pertinent: the size of the contravening company; the deliberateness of the contravention and the period over which it occurred; whether the contravention arose out of the conduct of senior management in a corporation or at a lower level; whether the corporation has a culture conducive to compliance with the Act, as, for example, evidenced by educational programs and disciplinary or other corrective measures which are taken institutionally in response to an acknowledged contravention; whether the respondent, be it corporate or individual, has cooperated with the authorities responsible for the enforcement of the Act in relation to the contravention; (and this may be part of the size of the corporation, where it is a corporate respondent), the financial position of the contravener and its, his or her capacity to pay; the deterrent effect, both specific and general, of the proposed penalty; the totality principle; and parity and, I think, also relativity of penalty, with other respondents, having regard to individual circumstances of involvement in a contravention. There are other statements in authorities under the Trade Practices Act which are, in my opinion, germane in relation to the imposition of penalty in respect of Spam Act prosecutions. There is no evidence before me in relation to capacity to pay in respect of any of the Respondents. The Authority submits that an approach evident in Nicholson J's judgment in relation to capacity to pay in Clarity1 is apposite in the circumstances of this case. His Honour stated at para 43: Also I accept that the issue of capacity to pay is, although a relevant factor, of less relevance when balanced against the necessity of imposing a penalty that satisfies the objective of general deterrence. His Honour then makes reference in that regard to Leahy Petroleum (No 2). Deterrent Effect of the Proposed Penalty I have already made reference to a particular importance in general deterrence in the imposition of penalty in respect of contraventions of this Act. It may be noted that Parliament itself has, in a sense, capped daily maximum penalties so as to avoid what one might regard as exponential and thus unrealistically large penalties for multiple contraventions. That said, Parliament has, nonetheless, provided for penalties which accrue, at least on a daily basis, which are significant penalties. In this case, the Authority seeks penalties which are not particularly large, having regard to theoretical maximums, but are large having regard to totality, but not so large as to offend that principle. The totality principle requires that the total penalty for related offences ought not to exceed what is proper for the entire contravening conduct involved. So far as penalty is concerned, the Authority submits that penalties should fall within the following ranges: The Authority submits that, though these penalty ranges are substantial, they do not violate the totality principle. They represent a relatively small proportion of the theoretical legislatively-derived maximum amounts in the circumstances of these contraventions. So far as the corporate Respondents are concerned, they are in the order of 5% to 7% of theoretical maximums. I agree with this particular submission so far as the application of the totality principle is concerned. Parity and Relativity The proposed penalty ranges do, in my opinion, reflect appropriate parity and relativities. This might be highlighted in the following way. As between Mobilegate and Winning Bid, Mobilegate's conduct covered a longer period: 331 days as opposed to 187 days. Next, as between individual Respondents, Messrs Owen and Salcedo had a higher level, and a significantly higher level, of authority in the management and control of the corporations than did Mr Maughan. Nonetheless, each of the individual Respondents was involved for over 800 individual days of contraventions. Mr Maughan's subordination is recognised by the penalty range submitted for him being in the order of 40 % to 50 % of that submitted as apt in respect of Messrs Owen and Salcedo.