Case: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285
Outcome: referred to
I start by reminding myself of some well-known general principles relevant to the fixing of pecuniary penalties. What follows is taken from the reasons for judgment of Burchett and Keifel JJ in NW Frozen Foods v Australian Competition and Consumer Commission (1996) 71 FCR 285. 63 First, the effect of the respondent's conduct on the function of markets and other economic effects of the conduct will generally be regarded as a significant matter, and the court is likely to be assisted by views put forward by the Commission, or by experts called on behalf of the parties (at 290). In this case, the Commission put forward no direct evidence as to the effects of the respondents' conduct on the function of the relevant market. 64 Secondly, deterrence (both general and personal) is important in assessing the appropriate penalty. It has been described as a 'principal purpose' of s 76 and a factor of 'particular significance' (see the cases referred to at 293). However, at the same time, it is important that the penalty imposed is not oppressive. 65 Thirdly, cooperation and the implementation of a compliance programme by the contravener is also an important matter in fixing the appropriate penalty. Burchett and Keifel JJ said (at 294): 'Where the Commission established to administer the Act is satisfied that an appropriate programme has been undertaken, or the undertaking of it is proved to the Court, this is the most important matter to take into account on penalty.' 66 Fourthly, the penalties imposed in one case cannot dictate the appropriate penalty in another case. That follows from the fact that the circumstances in two cases are rarely the same or equal. 67 The fifth point is perhaps an observation more than anything else. Burchett and Keifel JJ expressed the view that the penalties imposed by s 76 are not criminal sanctions and their purpose, established now by a long line of cases, is not punishment (at 296-297). Carr J, on the other hand, considered that the question was an open one (at 299). 68 Section 76 identifies four matters which are relevant to the determination of the appropriate pecuniary penalty. They are: 1. the nature and extent of the act or omission; 2. the loss or damage suffered as a result of the act or omission; 3. the circumstances in which the act or omission took place; and 4. whether the contravening company and accessory have been found guilty of previous relevant contraventions. 70 The above matters are not exhaustive of all the relevant circumstances: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (supra) per Burchett and Keifel JJ (at 292). Other factors have also been identified, such as the respondents' financial position and any profit made by the contravening company. A number of the matters overlap and, clearly, the significance or weight to be accorded to any particular matter will depend on the circumstances of the particular case. 71 As to the nature and extent of the acts constituting the contravening conduct, in the case of Pete N Peppa I have found that there were eight acts which contravened s 48 of the Act. Those acts occurred over a period of about 16 months and the conduct culminated in the withholding of supply of Cambur products. In the case of Tabletop and Kitchen, there were four acts which contravened s 48. Those acts occurred over a period of about three-and-a-half years from January 2002 to July 2005, during which time, as a result of the respondents' conduct, Tabletop and Kitchen did not discount Cambur products. 72 As to any loss or damage suffered as a result of the contravening conduct, there are two groups which may have suffered loss or damage and they are the retailers and consumers. There is no precise evidence of loss or damage suffered by either group. As far as retailers are concerned, it was suggested that retailers other than Pete N Peppa or Tabletop and Kitchen may have been induced not to discount. Certainly there is evidence to suggest Mr Caulfield was speaking to other retailers about the price of Cambur products, but I do not think that I could find on the evidence that other retailers suffered loss or did not discount so that they or consumers suffered loss and damage. Mr Milosevic of Pete N Peppa gives some general evidence of loss and damage suffered by Pete N Peppa when he says that the Bamix and Magimix products were the best on the market and Pete N Peppa lost money because they were not selling them and were sending customers to other stores. There is no evidence from Mr Mitchell or Ms Gilbert of Tabletop and Kitchen of the effect of the contravening conduct on the business of Tabletop and Kitchen. I am prepared to assume that some loss was suffered by Pete N Peppa and Tabletop and Kitchen, but I can be no more precise than that. The conduct in each case occurred over a considerable period of time and Bamix and Magimix products were popular in the marketplace. Both businesses sought to discount the products. As far as the effect on consumers is concerned, I am prepared to assume that some loss and damage was caused because consumers could not buy discounted Cambur products from Pete N Peppa and Tabletop and Kitchen.