case_title: Astrazeneca Pty Ltd v GlaxoSmithKline Australia Pty Ltd [2006] ATPR 42-106

case_text: It is appropriate to consider each advertisement, as viewed by a consumer, in its entirety, taking account of content and presentation and also the circumstances in which it was published ( Astrazeneca Pty Ltd v Glaxosmithkline Australia Pty Ltd [2006] ATPR 42-106 at [24]). The message conveyed by the advertisements is for the Court to determine ( Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2006) 228 ALR 719 ). 25 The significance of an elucidator in similar terms was considered by the Full Court in Astrazeneca . In that case, the GOAL study referred to in the advertisements was said to be based on observations of clinical tests undertaken with ' 3416 patients with uncontrolled asthma ' and no more (at [48]). The elucidator represented that, in that study, 41% of patents achieved "total control" of asthma symptoms and 71% achieved "well controlled" asthma for periods of 7 out of 8 weeks over the 12 month study by using the promoted product, "Seretide Total Control" (at [43]). The elucidator, in those specific advertisements, did not allow inferences to be drawn by the reader that all, virtually all, or even a majority of asthma patients, would achieve total control of asthma symptoms by using Seretide (at [43]). 26 In considering the advertisements then before it, the Full Court recognised that the significance of footnotes to which a consumer's attention is drawn depends on the material in question and the surrounding circumstances in each individual case (at [22]). This is not limited to questions of format. 27 In the present case, I am of the view that the invitation to generalise is stronger and more comprehensive than in the advertisements considered in Astrazeneca . It is clear from the Summer Glow advertisements as a whole that the message conveyed was that, as a generalisation and supported by the "use test", 7 out of 10 "Holiday Skin users" preferred Summer Glow. The message conveyed is that the study supported the generalisation and that, as a properly conducted and representative test, the preference of those women should be extrapolated to the population of Holiday Skin users. It cannot be said that if, for example, the 105 women had been carefully chosen from a population of Dove aficionados who had once used Holiday Skin, the representation was other than misleading. It follows that if the results or methodology of the study do not support the generalisation sought to be drawn, the fact that the surveyed population expressed the stated preference does not prevent the advertisements from being misleading. 28 Johnson contends that the advertisements emphasise the tanning aspect of the products and that the user preference claim relates directly to the tanning attributes of the products: that is, that 7 out of 10 Holiday Skin users preferred Summer Glow because it gives a better tanning effect. It submits that the "heart of the ads" is the reference to "the best summer tan", emphasised in the television advertisement by the exhortation to ' think again '. Johnson submits that Unilever intended to communicate superiority in terms of performance attributes and, in particular, that the television advertisement stresses tanning rather than moisturising or other attributes such as fragrance. Johnson makes these submissions with an eye to what it says is a disconformity between the study (which relevantly measured "7 out of 10" as a general preference) and the advertisements (which communicate performance superiority as to tanning). 29 Unilever contends that the competing products are sold as body lotions with a tanning component. The products are sold in the "moisturiser" section of the supermarkets, rather than among self-tanning or sunscreen products, where they are marketed as moisturisers that give a tan rather than as tanning agents. Unilever submits that the emphasis in the television advertisement is on the body lotion and the moisturising capacity of the body lotion that, additionally, provides for tanning; that is, a moisturiser with a hint of tanning where use will moisturise the skin and build a gentle tan. 69 In order to determine whether there has been a contravention of s 52(1) of the Act, ' it is necessary to determine whether or not the conduct complained of amounted to a representation which has or would be likely to lead to a misconception arising in the minds of that section of the public to whom the conduct...has been directed ' ( Astrazeneca at [34]). 70 Where the persons to whom the conducted is directed are not identified individuals, but members of a class to which the conduct is directed in a general sense, it is necessary to isolate a representative member of that class ( Campomar at [103]). The question then is whether a misconception is likely to arise on the part of that representative consumer from the conduct alleged ( Campomar at [103]); Astrazeneca at [34]). For there to be a contravention of s 52 , the ordinary or reasonable representee must be shown to labour under some erroneous assumption ( Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200; Campomar at [104]). The question is whether any misconceptions or deceptions alleged to arise from the advertisements are properly to be attributed to the ordinary or reasonable members of the class of the public towards whom the conduct has been directed ( Campomar at [104] [105]; Astrazeneca at [37]). 108 The distinction between the advertisements in this case and those in Astrazeneca illustrates why Johnson's criticism of the age of the population tested is made out. The appellant in Astrazeneca complained that patients with significant concomitant diseases, smokers and children under 12 years of age had been excluded from the study of ' 3416 patients with uncontrolled asthma ' upon which the advertisements were based. This was said to give rise to a misrepresentation that the results of the GOAL study would likely be achieved in clinical practice. No mention was made in the advertisements of the fact that the GOAL study did not include those patients. However, no contravention of s 52 of the Act arose because ' none of the flyers or advertisements represented that the GOAL Study patients were representative of the asthma suffering members of the community at large ' (at [48]). 109 Unilever chose to exclude certain women of certain ages from the study and now submits that age is not relevant to the outcome. Johnson has not established that the exclusion of women under 25 in fact biased the results but does not need to do so. Women of a variety of age groups, including those who appear to be in the under 25 age group, are portrayed in the television advertisement. The print advertisement invites "every woman", regardless of age, to use Summer Glow. The assertion of preference is thereby represented to be over the class of all women, or at least women over a range of ages that clearly includes under 25's. 110 The advertisements should be considered, in their totality, as directed to women without age restriction. The context of the advertisements was that a new market had been established. Previously, there was a market in tanning agents, moisturisers and sunscreens. Johnson established a new market in moisturisers that had a tanning effect. Unilever wished to enter that market and to take customers from Johnson as well as to expand the market. Unilever's existing market for its Dove products was, I infer from Mr Kibble's evidence absent Unilever submitting to the contrary, largely in the age group of 25 to 45 year old women. Johnson's market was particularly significant in the under 25 year old age group. The representation asserts a preference for Summer Glow by Holiday Skin users. However, the population surveyed excluded a substantial proportion of those users in circumstances where Unilever was, at least in part, targeting Johnson's market in which the under 25's were a substantial class. Where the conclusion drawn from the study should have been based on the Johnson user cohort, it was based on the Dove user cohort.


case_outcome: cited

case_title: Bateman v Slatyer (1987) 71 ALR 553

case_text: The advertisements were not a mere reporting of the study. Unilever did not expressly hold itself out as having itself conducted the market research but it did present the market research as capable of generalisation to all Holiday Skin users; it did not qualify the variants used and it represented that the "7 out of 10" general preference was a preference for the tanning attributes of the products. By presenting the preference claim including the elucidator in this manner, Unilever conveyed the impression that the study provided a basis for the representations ( Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88). A statement of opinion cannot be regarded as false or misleading or as misleading and deceptive simply because it is incorrect ( Global Sportsman at 88; Bateman v Slatyer (1987) 71 ALR 553 at 559). However, in this case, as in RAIA at 175, it is implicit in the statement of the comparison that Unilever had ascertained that the facts justified the opinion it presented.


case_text: The more specialised the report or the more remote from the corporation's area of business, the easier it will be to establish that the corporation is merely passing on the information "for what it's worth". In Harkins v Butcher [2002] NSWCA 237 ; [2005] 55 NSWLR 558, for example, the New South Wales Court of Appeal found that an agent who distributed a brochure incorporating a copy of a survey diagram to purchasers was not liable for a contravention of s 52 on the basis that ' the recipients would know that the agents did not hold themselves out as professional surveyors, and had not carried out the survey themselves ' (at [47]). The Court of Appeal's decision was affirmed by a majority of the High Court, who had regard to the nature of the parties, the character of the transaction and the contents of the brochure itself in deciding that the agent ' did no more than communicate what the vendor was representing, without adopting it or endorsing it ' ( Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 ; (2004) 218 CLR 592 at [40] ).


case_text: It is appropriate to consider each advertisement, as viewed by a consumer, in its entirety, taking account of content and presentation and also the circumstances in which it was published ( Astrazeneca Pty Ltd v Glaxosmithkline Australia Pty Ltd [2006] ATPR 42-106 at [24]). The message conveyed by the advertisements is for the Court to determine ( Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2006) 228 ALR 719 ).


case_outcome: applied

case_text: The question for the Court is whether reasonably minded members of the class of consumers to whom each advertisement is directed would take from it the representation which is alleged: Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at [103] . 18 By its amended statement of claim, Johnson alleges that the representations in each advertisement are: (a) that 7 out of 10 users of Holiday Skin preferred Summer Glow to Holiday Skin for its tanning attributes ('the first representation'); (b) that 7 out of 10 users of Holiday Skin preferred Summer Glow to Holiday Skin, with respect to each of the four respective product variants (Fair to Normal and Normal to Darker) ('the second representation'); (c) that 7 out of 10 users of Holiday Skin preferred Summer Glow to Holiday Skin ('the third representation'); and (d) that Summer Glow is the best tanning body lotion available ('the fourth representation'). 19 The first and second representations are said to raise for determination the construction of the advertisements. The third and fourth representations raise the validity of the market research. 70 Where the persons to whom the conducted is directed are not identified individuals, but members of a class to which the conduct is directed in a general sense, it is necessary to isolate a representative member of that class ( Campomar at [103]). The question then is whether a misconception is likely to arise on the part of that representative consumer from the conduct alleged ( Campomar at [103]); Astrazeneca at [34]). For there to be a contravention of s 52 , the ordinary or reasonable representee must be shown to labour under some erroneous assumption ( Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200; Campomar at [104]). The question is whether any misconceptions or deceptions alleged to arise from the advertisements are properly to be attributed to the ordinary or reasonable members of the class of the public towards whom the conduct has been directed ( Campomar at [104] [105]; Astrazeneca at [37]). 114 A contravention of s 52 may occur even when a corporation is acting reasonably and honestly ( Campomar at [103] citing Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 197). A corporation will not be liable for merely relaying false information when it is clear that the corporation does not adopt the information ( Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 666). However, the fact that a corporation acts honestly and reasonably and does not intend to mislead or deceive does not necessarily absolve it from liability ( Parkdale at 197; Yorke ). It is a matter of fact in each case. Unilever submits that the reference to the "use test" in the elucidator would lead the consumer to understand that it had been carried out bona fide by a research house and that Unilever relied upon it. That representation was true.


case_text: It is the case that the study was a specialised report. It can not be said, however, that the study was remote from Unilever's business. Unilever is engaged in the sale of consumer products to the public and conducts advertising to sell those products. It was not suggested that Unilever had no knowledge or understanding of market surveys. Indeed, Unilever issued sophisticated instructions to Colmar Brunton and indicated in clear terms the result it wished to achieve. It cannot be said that Unilever in any way disclaimed a belief in the truth or falsity of the comparison or the study on which it was based or was merely ' passing it on for what it is worth ' ( Yorke at 666). To the contrary, the results of the study were conveyed to the public as part of an integrated advertising campaign. In the circumstances, Unilever adopted them; it was not a ' mere conduit ' ( Gardam v George Wills & Co Ltd (1988) 82 ALR 415 at 427).


case_text: The preference claim is qualified by the elucidator. However, there can be no doubt that Unilever intended to communicate superiority. This is not a case of "mere puffery" ( Gillette Australia Pty Ltd v Energizer Australia Pty Ltd (2002) 193 ALR 629 at [44]). That asserted superiority was in terms of performance attributes, rather than other attributes such as fragrance. While Mr Kibble may have intended the testing to be of ' the performance of the product and its sensory appeal (skin feel and fragrance)' (emphasis added), the advertisement made no reference to fragrance and little or no reference to sensory, in contrast to tanning performance, appeal. 40 It follows that I accept Johnson's submission that the message communicated by the commercial is that 7 out of 10 users of Holiday Skin preferred Summer Glow to Holiday Skin for its tanning attributes. The first representation was made in the television advertisement. 41 The print advertisement states that Summer Glow ' combines rich body lotion with a hint of self tanning agents ' and includes in its list of the product's attributes ' everyday body moisturiser ' and ' gradually builds a beautiful light tan '. This places greater emphasis than does the television advertisement on the moisturising capacity of the product. 76 Comparative advertising does not create any presumption with respect to a breach of the Act ( Energizer at [20]). However, as Heerey J pointed out in Energizer , the more actual comparison is used, the more potential there is for error and half-truth (at [20]). The factual assertions must be ' not untrue, or misleading half-truths ' (at [22]). Lindgren J discussed at [34] the comparator to which the consumer would understand the advertisement to be making reference. In that case, it was conceded that, if the comparator to which the consumer would understand the advertisement was referring was all Energizer batteries rather than the one particular battery the subject of comparison, the advertisement was misleading or deceptive. 77 Unilever's reliance on the failure by Johnson to establish that a different preference would have been expressed had all four variants been tested by the study is ill-founded. The fact is that the study simply did not include the two variants of Holiday Skin or compare them to both variants of Summer Glow. The reasonable consumer would have understood, in the absence of qualification, that the user preference was found to exist across all variants, or at the least, to a comparison of each comparable variant, when no such preference had been expressed in the "use test".


case_title: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82


case_title: Harkins v Butcher [2002] NSWCA 237 ; [2005] 55 NSWLR 558


case_text: That is not, however, the totality of the representation in these advertisements. A statement which is literally true may still be misleading and deceptive if it conveys to others ' something more than the literal meaning which the words spelled out ' ( Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11 ; (1978) 140 CLR 216 at 227). The elucidator, which refers to the "leading research company" is used to validate an assertion that the "7 out of 10" preference relates to Holiday Skin users generally, not to restrict it. The television advertisement portrays a group of women who are presented as representative of women generally. There is no suggestion that these women personally participated in the "use" test, but there is, in my view, a clear assertion that Summer Glow is the better product because the results of the market research can be extrapolated to them. The print advertisement expands the application to "every woman" or, at least, every user of Holiday Skin.


case_text: Unilever has represented to the consumer that the preference exhibited by Holiday Skin users is supported by the "use test". The study was silent as to the preference of Holiday Skin users under the age of 25, who represented a substantial proportion of those users. The onus is on Johnson to establish that the representation was misleading and deceptive but, following Burchett J's observations in Janssen Pharmaceutical Pty Ltd v Pfizer Pty Ltd (1986) 6 IPR 227 at 234, if Johnson establishes that there is no foundation in the study for a statement in the advertisements, that may be sufficient proof that the statement is misleading. As his Honour recognised, the question is whether the context in which the representation is made implies that adequate foundation exists for making it. Johnson submits that the claim made was not supported to the degree that the ordinary and reasonable consumer would understand and that the evidentiary onus shifts to Unilever to show that consumers will not be mislead. 106 A comparison, said to be supported by a "use test" conducted by a "leading research company", gives the impression that the study has been carefully conducted and that the results support the precise statement made. A reader or viewer, seeing the reference to the leading research company, would understand that the study had been conducted properly and with care and that it fully supported the claim based upon it (cf RAIA Insurance Brokers Limited v FAI General Insurance Co Limited (1993) 41 FCR 164 at 166). As in Janssen , the context of these advertisements must be, or is likely to be, taken as implying that there is an adequate foundation in the market research to enable the statement to be made. If Unilever chose to advertise that comparison, it was obliged to ensure that it did not mislead the public. The making of such a comparison, without adequate foundation, is misleading.


case_text: Johnson applied to the Court for an interlocutory injunction to restrain Unilever from so advertising Summer Glow. Justice Tamberlin granted interlocutory relief ( Johnson & Johnson Pacific Pty Limited v Unilever Australia Limited (2006) 69 IPR 232 (' Johnson (No 1) '). 5 The proceedings now are before the Court for final orders. The issues that arise are: (1) What representations are made by the Summer Glow advertisements? (2) Are those representations misleading and deceptive? (3) Is Unilever liable for any contravention of s 52 of the Act? 6 Johnson alleges that Unilever contravened the Act by representations made in three advertisements: • a television advertisement, first broadcast on national television on 27 March 2006 ('the television advertisement'); • a print advertisement, first published in the print media in April 2006 ('the print advertisement'); and • an online advertisement, first published at http://www. dovefacecare.com.au ('the website') on or about 28 March 2006 ('the internet advertisement').


case_text: A contravention of s 52 may occur even when a corporation is acting reasonably and honestly ( Campomar at [103] citing Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 197). A corporation will not be liable for merely relaying false information when it is clear that the corporation does not adopt the information ( Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 666). However, the fact that a corporation acts honestly and reasonably and does not intend to mislead or deceive does not necessarily absolve it from liability ( Parkdale at 197; Yorke ). It is a matter of fact in each case. Unilever submits that the reference to the "use test" in the elucidator would lead the consumer to understand that it had been carried out bona fide by a research house and that Unilever relied upon it. That representation was true.


case_text: A comparison, said to be supported by a "use test" conducted by a "leading research company", gives the impression that the study has been carefully conducted and that the results support the precise statement made. A reader or viewer, seeing the reference to the leading research company, would understand that the study had been conducted properly and with care and that it fully supported the claim based upon it (cf RAIA Insurance Brokers Limited v FAI General Insurance Co Limited (1993) 41 FCR 164 at 166). As in Janssen , the context of these advertisements must be, or is likely to be, taken as implying that there is an adequate foundation in the market research to enable the statement to be made. If Unilever chose to advertise that comparison, it was obliged to ensure that it did not mislead the public. The making of such a comparison, without adequate foundation, is misleading.


case_text: The study did, of course, test the comparable Dove and Johnson light variants. For this reason, it may be that the second representation is closer to a "half-truth" than the first representation. However, if a bald preference claim is suggested by the "elucidator" and that claim requires qualification, then to make it without qualification is misleading ( Reiffel v ACN 075 839 226 [2003] FCA 194 ; (2003) 132 FCR 437 at [38] and [48] [50]). Unilever knew that the Johnson dark variant was on the market at the time it published the advertisements but no qualification was given in respect of the variants tested. The bald preference claim was misleading or deceptive, or likely to mislead or deceive the consumer to whom it was directed. 79 As to the third and fourth representations, Johnson accepts that 73 % of participants in the study preferred Summer Glow and that that result, as a matter of mathematics, is capable of supporting a general preference claim of 7 out of 10. Johnson contends, however, that the deficiencies in the study methodology mean that no preference claim is justifiable. 80 Unilever makes a number of overarching submissions: • Johnson accepts that Colmar Brunton is a reputable market research company. • No suggestion was made that Colmar Brunton participated in the formulation of a study designed to secure a particular result. • The most that Johnson's evidence can suggest is that certain variations in the study methodology might have given different results but this is mere speculation. • In the absence of proof that the results would have been so different that the making of the alleged representation by Unilever was misleading or likely to be so, Johnson has not discharged the onus to prove a breach by Unilever of s 52.


case_text: Where the persons to whom the conducted is directed are not identified individuals, but members of a class to which the conduct is directed in a general sense, it is necessary to isolate a representative member of that class ( Campomar at [103]). The question then is whether a misconception is likely to arise on the part of that representative consumer from the conduct alleged ( Campomar at [103]); Astrazeneca at [34]). For there to be a contravention of s 52 , the ordinary or reasonable representee must be shown to labour under some erroneous assumption ( Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200; Campomar at [104]). The question is whether any misconceptions or deceptions alleged to arise from the advertisements are properly to be attributed to the ordinary or reasonable members of the class of the public towards whom the conduct has been directed ( Campomar at [104] [105]; Astrazeneca at [37]).


case_text: A contravention of s 52 may occur even when a corporation is acting reasonably and honestly ( Campomar at [103] citing Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 197). A corporation will not be liable for merely relaying false information when it is clear that the corporation does not adopt the information ( Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 666). However, the fact that a corporation acts honestly and reasonably and does not intend to mislead or deceive does not necessarily absolve it from liability ( Parkdale at 197; Yorke ). It is a matter of fact in each case. Unilever submits that the reference to the "use test" in the elucidator would lead the consumer to understand that it had been carried out bona fide by a research house and that Unilever relied upon it. That representation was true. 115 It is the case that the study was a specialised report. It can not be said, however, that the study was remote from Unilever's business. Unilever is engaged in the sale of consumer products to the public and conducts advertising to sell those products. It was not suggested that Unilever had no knowledge or understanding of market surveys. Indeed, Unilever issued sophisticated instructions to Colmar Brunton and indicated in clear terms the result it wished to achieve. It cannot be said that Unilever in any way disclaimed a belief in the truth or falsity of the comparison or the study on which it was based or was merely ' passing it on for what it is worth ' ( Yorke at 666). To the contrary, the results of the study were conveyed to the public as part of an integrated advertising campaign. In the circumstances, Unilever adopted them; it was not a ' mere conduit ' ( Gardam v George Wills & Co Ltd (1988) 82 ALR 415 at 427).


case_outcome: followed

case_text: leading English case of the composition of classes is Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 ( Sovereign Life ). In that case Bowen LJ said (at 583) that classes must be defined so as to prevent confiscation and injustice and that a class must be "confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest". This approach has often been cited with approval. I do not see why it is "impossible" for Kingsway and Assif SA "to consult" with all other holders of in-the-money options with a view to persuading them to vote against the Option Scheme on the ground that the consideration being offered for their options is inadequate because it is not calculated according to the Black-Scholes methodology (cf Sovereign Life , above). According to their contention, all holders of in-the-money options will be underpaid for the same reason: that they are denied the benefit of receiving any consideration for loss of the prospect of an increase in the value of the underlying shares and the corresponding prospective increase in the value of their options. All holders of in-the-money options have a "common interest" or "community of interest" in considering the merits of this contention. For the above reasons I was not persuaded that the two classes of option holders proposed were inappropriate. It will remain open to Kingsway and Assif SA (and others) to contend on the second court hearing that the Option Scheme should not be approved because it is unfair or oppressive to them. Share Scheme Deed Poll and Option Scheme Deed Poll


case_outcome: referred to

case_text: UDL Argos Engineering & Heavy Industries Co Ltd v Li Oi Lin [2001] HKCFA 54 ; [2001] 3 HKLRD 634 Lord Millett (at [27]) emphasised that the test was based on similarity or dissimilarity of legal rights against the company, not on similarity or dissimilarity of interest derived otherwise than from such legal rights. His Lordship stated: The question is whether the rights which are to be released or varied under the Scheme or the new rights which the Scheme gives in their place are so different that the Scheme must be treated as a compromise or arrangement with more than one class.


case_text: court will not ordinarily order that a meeting be convened unless the scheme is of such a nature and cast in such terms that if it receives support from the statutory majority at the meeting, the court would be likely to approve it on the final hearing: F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72; Re Central Pacific Minerals NL [2002] FCA 239 at [8] . Nonetheless, the court is not bound by the decision of the meeting so that if, for example, the court considered that there had been oppression, it would not approve the Scheme: see, for example, In the matter of Opes Prime Stockbroking Limited (2009)73 ACSR 385 at [66]. CONSIDERATION The Share Scheme Under the proposed Share Scheme, all of Sino Gold's issued ordinary shares not already owned by members of the Eldorado Group will be acquired by Eldorado Pacific. The consideration to be received by the Sino Gold shareholders will be: The new Eldorado shares will rank equally with each existing Eldorado shares. In In the matter of Opes Prime Stockbroking Limited (2009) 73 ACSR 385 , Finkelstein J said (at [66]): The application of the relevant test involves a comparison of the rights creditors have in the absence of the scheme and any new rights that are established under the scheme: Re T & N Ltd (No 3) [2007] 1 All ER at 882. Once those differences are identified the question whether they form separate classes must be assessed with the following factors in mind. First, when creditors are broken up into classes, each class is given power to veto the scheme and that is a process that undermines the basic approach of decision by majority: Nordic Bank Plc v International Harvester Australia Ltd [1983] 2 VR 298 , 301. Second, there is a built-in safeguard against majority oppression in that the court is not bound by the decision of the meeting. Thus, it is necessary to ensure that there is no oppression by the minority. Third, practical considerations are relevant. If a judge is too assiduous in identifying classes, it is possible to end up with any number of classes. In the end, schemes of arrangement are propounded in a business context. The judge should adopt a practical business-like approach to the issue, as would the creditors if they were to decide the matter.


case_title: Re MIA Group Ltd (2004) 50 ACSR 29

case_text: holders of the options are treated as "creditors" in the proposal in accordance with the prevalent view (the authorities were reviewed by Barrett J in Re MIA Group Ltd (2004) 50 ACSR 29 at [3]-[9]) a view from which I will not depart. It is proposed that Eldorado Gold Corporation (Eldorado), a corporation incorporated in Canada, will, through its wholly owned subsidiary, Eldorado Pacific Pty Ltd (Eldorado Pacific), acquire all of the shares in and options issued by Sino Gold. Eldorado is a public company limited by shares with its headquarters in Vancouver (it was originally incorporated in Bermuda but was continued and now exists under Canadian law). It is listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). Eldorado shares are traded on the TSX and the NYSE. Two schemes are proposed: a Share Scheme and an Option Scheme. It is proposed that there be one meeting of the shareholders (Share Scheme Meeting) but two meetings of the option holders (Option Scheme Meetings). There are two Option Scheme Meetings because those responsible have divided the option holders into two classes according to whether their options are "in-the-money" or "out-of-the-money". They are in-the-money if their exercise price is less than (i) for options with an A$ exercise price A$7.17, and (ii) for options with a C$ exercise price C$6.49. The options are out-of-the-money if their exercise price is equal to or greater than (i) for options with an A$ exercise price A$7.17, and (ii) for options with a C$ exercise price C$6.49. It is not for this Court, when considering an application under s 411(4)(b), to express any view as to whether the procedures and processes of the Court or under the Act are sufficient to satisfy the requirements for exemption to be enlivened: see Re Central Pacific Minerals NL [2002] FCA 239 at [31] per Emmett J; Re Simeon Wines Ltd [2002] SASC 204 ; (2002) 42 ACSR 454 at [21] - [26] per Lander J; Re Permanent Trustee Co Ltd [2002] NSWSC 1177 ; (2002) 43 ACSR 601 at [20] per Barrett J. Exclusivity under the Scheme Implementation Deed Eldorado and Sino Gold are parties to a Scheme Implementation Deed dated 26 August 2009 as amended on 26 October 2009 (SID). Clause 11 of the SID contains "no-talk" and "no-shop" provisions. The period during which those provisions operate is from the date of the SID until the earlier of 31 March 2010 ("End Date") and the termination of the SID. The "sunset date" is therefore 31 March 2010. It follows that the maximum overall period is just over seven months, and the period from the first court hearing to that date is close enough to five months. In Re APN News & Media Ltd [2007] FCA 770 ; (2007) 62 ACSR 400 , I said (at [31]) that I did not regard an overall period of some three and a half months as unreasonably long. In Re MIA Group Ltd (2004) 50 ACSR 29 , Barrett J observed in relation to the Black-Scholes methodology (at [12]): ...its use for pricing purposes (and voting purposes) in the scheme of arrangement context is sufficiently reasonable, at least on a prima facie basis, to allow the proposed scheme in which it plays a part to go forward for optionholders' consideration on the basis proposed. In that case orders were made for the convening of two meetings only: a meeting of members and a meeting of option holders. His Honour noted (at [10]-[14]) that the Black-Scholes methodology took into account the different expiry dates and strike prices of the various series of options with which he was concerned, and that its use militated against the prescription of different classes. However, his Honour noted that it remained open for any question of unfairness to be raised at the second court hearing as an objection to approval. The class issue in the present case Kingsway is the holder of 588,830 in-the-money options. They are some of a series of 777,700 options which expire on 8 August 2012. Their exercise price was originally C$5.63 but, as a result of a consensual amendment, was reduced by 16c to C$5.47. Assif SA holds options in the same series. For all I know, it may hold the remaining 188,870 options in the series. In correspondence, Kingsway and Assif SA contended that in-the-money options should be valued, not according to the intrinsic value methodology, but according to the Black-Scholes methodology so that their holders would enjoy the benefit of the prospect of an increase in the value of Sino Gold shares down to the expiry date of the options, 8 August 2012. Finally, in Re MIA Group Ltd , above, Barrett J stated (at [14]): In the present case, consistent and indiscriminate application of the same pricing or valuation methodology to options having different characteristics in terms of exercise price and expiry, being a methodology that has regard to value criteria in one market at one time, should lay to rest any argument that those different characteristics so destroy community of interest as to indicate different classes. The matter is, to my mind, sufficiently clear to make it appropriate that a single meeting of all optionholders be convened on the basis that separate classes do not exist. Any contrary view can be agitated in due course should anyone see fit to raise it. Barrett J's reference to "consistent and indiscriminate application of the same pricing or valuation methodology" is reflected in the classes that have been adopted in the present Option Scheme: the intrinsic value methodology has been applied to all in-the-money options, while the Black-Scholes methodology has been applied to all out-of-the-money options. Accordingly, it is appropriate to describe the proposed in-the-money class as the intrinsic value methodology class, and the proposed out-of-the-money class as the Black-Scholes methodology class.


case_text: Samuel has expressed the opinion that the valuation methodology adopted for the in-the-money options is fair and reasonable (the Grant Samuel report is annexure A to the Scheme Booklet). An "intrinsic" valuation method formed the basis of the scheme that was approved in Re Solution 6 Holdings Ltd (2004) 50 ACSR 113 (Jacobson J described the calculation at [7]). As noted earlier, out-of-the-money options are those that have a strike price at or above A$7.17 (or C$6.49). The view could be taken that they have no value. However, because the underlying shares will continue to trade in the future, there is the possibility that their value will increase by the expiry date for those options, so that the options will become "in-the-money" options with an intrinsic value after all. So long as they remain unexercised, the options may fluctuate between being in-the-money and out-of-the money. The extent to which this is likely to occur depends on the volatility of the market for the underlying shares, the level of the exercise price, the period that the option has yet to run to its expiry date, and, no doubt, other considerations. The question of what value is to be ascribed to out-of-the-money options is difficult. In the Option Scheme they have been valued using the Black-Scholes option pricing methodology which takes into account factors of the kind mentioned. Grant Samuel has discussed the appropriateness of applying that methodology (in section 9.7 at pp 90-91 of its report), and has expressed the opinion that the valuation arrived at for the out-of-the-money options is "generous" and is "fair and reasonable and in the best interests of holders of [out-of-the-money] options and [that] overall the option proposal is fair and reasonable and accordingly in the best interests of option holders".


case_outcome: considered

case_title: Australian Competition and Consumer Commission v ABB Power Transmission Pty Ltd [2004] FCA 819 ; (2004) ATPR 42-011

case_text: The proceeding against the second respondent be otherwise dismissed.' 3 Having heard submissions I made the declaration and orders sought and indicated that I would publish my reasons at a later date. These are those reasons. 4 The Court is not, of course, bound to make orders giving effect to terms of settlement agreed on between the parties. The principles to be applied by the Court in determining whether to order the imposition of a pecuniary penalty for contravention of the Act, where parties propose a particular sum, are expounded in N W Frozen Foods Pty Ltd v Australian Competition & Consumer Commission (1997) 71 FCR 285 at 290-5. They are refined and elaborated upon in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] to [58]; (2004) ATPR 41-993 at [51] to [58]. I am also mindful of the observations of Emmett J in Australian Competition and Consumer Commission v ABB Power Transmission Pty Ltd [2004] FCA 819 at [46] to [56]; (2004) ATPR 42-011 at [46] to [56]. In particular, I note the following observations made by his Honour in that case: '[53] ... there is a public interest in prompting settlement of litigation, particularly litigation that is likely to be lengthy and complex. Thus, in giving weight to a joint submission on a proposal that would resolve a proceeding, the Court can have regard to the savings of resources both for a regulator, such as the Commission, and for the Court if the proposal were to be accepted. The savings in resources, for example, are capable of being used by the regulator to increase the likelihood that other contraveners will be detected and brought before the court. [ 54] The view of a regulator such as the Commission as a specialist body is relevant in determining the question of penalty, although it is by no means determinative. The Court will expect a regulator such as the Commission to explain to it the process of reasoning that has led to the resolution proposed. In particular, if a proposed penalty involves a discount from that which might otherwise be considered to be the appropriate penalty so as to reflect a degree of cooperation, the Court would expect the Commission to explain the basis upon which the discount had been calculated. ... [56] The Court will be mindful that, where an agreed penalty is proposed, there may be elements of compromise involved in both sides. Thus, it may be that evidentiary difficulties perceived by the Commission would warrant the abandonment of some claims. Certainty of outcome for both parties may be a very significant factor in the reasoning process that leads to agreement on penalty. For reasons such as those, if the Court is not disposed to impose a penalty proposed by the parties, it would be appropriate to give the parties the opportunity to withdraw consent for all of the proposed orders and to permit the proceeding to continue on a contested basis." See also Commerce Commission v New Zealand Milk Corporation Ltd [1994] 2 NZLR 730 at 733.


case_title: Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd (Administrators Appointed) [2004] FCA 376 (2004); ATPR 41-983

case_text: In this proceeding the Australian Competition and Consumer Commission ('the ACCC') sought various remedies against the second respondent ('Mr Carney') for contraventions of the Trade Practices Act 1974 (Cth) ('the Act'). The relief sought included declarations that Mr Carney had knowingly been concerned in contraventions of ss 46 and 47 of the Act and the imposition of pecuniary penalties for contraventions of those provisions. The ACCC alleged that Mr Carney was a person knowingly concerned in contraventions of the Act by the first respondent of which he was, at relevant times, the Managing Director. The proceeding, in so far as it involved the first respondent, was dealt with by Heerey J: see Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd (Administrators Appointed) [2004] FCA 376 ; (2004) ATPR 41-983. The circumstances in which the contraventions by the first respondent occurred (and in which it was alleged Mr Carney was knowingly concerned) are explained in his Honour's reasons at [5] to [19] and need not be repeated here. Suffice to say the contraventions were serious. They related to the marketing of sporting products to supporters of Australian Football League clubs and involved attempts by the first respondent (which were to a significant extent successful) to exclude competitor's products from retail outlets. The ACCC discontinued the proceeding against the third respondent and he gave evidence against Mr Carney. 2 The trial of the proceeding between the ACCC and Mr Carney commenced on 28 August 2006 and was estimated at that time to take three weeks. Mr Carney represented himself and cross-examined each of the witnesses who was called by the ACCC. On 15 September 2006, at the end of the three week period allotted for the trial, only about half of the ACCC's witnesses had given evidence. It was estimated that up to a further five weeks would be necessary to complete the hearing. The further hearing of the proceeding was adjourned until 27 November 2006. Before the trial was adjourned the parties had agreed to the suggestion that the matter be referred for mediation by a Court appointed mediator. When the hearing resumed on 27 November 2006 the parties announced that the mediation had been successful and invited the Court to make a declaration and orders in accordance with agreed minutes. Those minutes read: 'THE COURT DECLARES THAT: 1. Between September or October 1999 and November 2000, the second respondent was a person involved in a contravention by the first respondent of section 47 of the Trade Practices Act 1974 (Cth). THE COURT ORDERS THAT: 2. The second respondent pay to the Commonwealth a pecuniary penalty pursuant to section 76 of the Trade Practices Act 1974 (Cth) in respect of his conduct referred to in paragraph 1 above, in the amount of $20,000 by four yearly instalments of $5,000 each, the first such instalment payable on or before 30 June 2007, and the second, third and fourth instalments payable on or before 30 June 2008, 30 June 2009 and 30 June 2010 respectively, provided that if the second respondent defaults in any payment and the default continues for one month after written notice of the default, the total outstanding balance shall become immediately due and payable. 3. The applicant and the second respondent bear their own costs of and incidental to the proceeding against the second respondent.


case_title: Commerce Commission v New Zealand Milk Corporation Ltd [1994] 2 NZLR 730


case_title: Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 ; (2004) ATPR 41-993


case_title: N W Frozen Foods Pty Ltd v Australian Competition & Consumer Commission (1997) 71 FCR 285


case_text: In agreeing to make the declaration and orders proposed by the parties I have also had regard to the evidence received during the first three weeks of the trial to the extent that it was not contested. I also treat Mr Carney's consent to the making of the orders as 'an admission of all facts necessary or appropriate to the granting of the relief sought': see Thomson Australian Holdings Pty Ltd v The Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150 at 164. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY J. Associate: Dated: 5 December 2006 Counsel for the Appellant: Mr S Marks SC & Mr P Renehan Counsel for the Second Respondent: Litigant in Person Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 27 November 2006 Date of Judgment: 5 December 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/1652.html


case_text: It is well understood that the discretion given by O 9 r 1 imposes no threshold requirement, for example, the demonstration of special or exceptional circumstances. Nonetheless the discretion must be exercised in accordance with judicial principle in light of the evident expectation of the rule that ordinarily a corporation will be required to be represented by a solicitor: see Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241. In the present matter Mr Jorgensen was informed of what was expected of Dynacast before consideration would be given to his representation of it. It, or he, I know not which, chose not to take the course indicated. Hence I refused his application. 22 These now relate only to the Phoneflasher Co and can be dealt with compositely. They provide respectively: " First Charge 14. Order 3 of the orders required the First Respondent to provide a corrective notice and letter, in the terms specified by the order, to all retail outlets to which the First Respondent had distributed the Phoneflasher , within 30 days of the date of the orders. 15. The date by which the First Respondent was to have complied with order 3 of the orders was 2 December 2004. 16. The First Respondent has not to the date of this Statement of Charge, supplied the corrective notice and letters in the terms specified by order 3 of the orders, to all the retail outlets to which it had distributed the Phoneflasher. 17. The First Respondent has committed a contempt of court as it has failed or refused to comply with order 3 of the orders to provide by 2 December 2004 all retail outlets to which it distributed the Phoneflasher a corrective notice and letter in the terms specified by order 3. ... Second Charge 21. Order 4 of the orders required the First Respondent to provide to the Applicant within 35 days of 2 November 2004 a list of names and addresses of retail outlets to which it had provided the corrective notice and letter in accordance with order 3 of the orders. 22. The date by which the First Respondent was to have complied with order 4 of the orders was 7 December 2004. 23. The First respondent did not supply to the Applicant a list of names and addresses of the retail outlets to which it had provided the corrective notice and letter by 7 December 2004.


case_text: It is well accepted that strict compliance with the terms of mandatory orders, such as Order 3 and 4 of the consent orders in this matter, is required of the party to whom they are addressed. Nonetheless the orders themselves must be clear and unambiguous: see Australian Consolidated Press Ltd v Morgan [1965] HCA 21 ; (1965) 112 CLR 483 at 515-516. It equally is well accepted that breach of an order must be proved beyond reasonable doubt: see Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525; Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41 ; (2006) 150 FCR 110 at [15] .


case_title: Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525


case_text: It is well accepted that strict compliance with the terms of mandatory orders, such as Order 3 and 4 of the consent orders in this matter, is required of the party to whom they are addressed. Nonetheless the orders themselves must be clear and unambiguous: see Australian Consolidated Press Ltd v Morgan [1965] HCA 21 ; (1965) 112 CLR 483 at 515-516. It equally is well accepted that breach of an order must be proved beyond reasonable doubt: see Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525; Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41 ; (2006) 150 FCR 110 at [15] . 26 In the quotation above of the first charge I have highlighted the words "all retail outlets to which [Phoneflasher Co] had distributed the Phoneflasher". I have done so because there is an issue as to the proper construction of the order: on construction see Universal Music Australia Pty Ltd, at [19] ff. The ACCC has tendered evidence taken from the phoneflasher website which indicated that (i) on 6 January 2003, the number of retail outlets in Australia listed as having Phoneflashers available for sale, was 157; and (ii) on 3 March 2005, the website listed more than 350 such retail suppliers. Order 4 of the consent orders required the company to provide the ACCC with the required names and address of the retail outlets to which it had provided corrective signs and letters on or before 7 December 2004. No such names were by then provided. Letters informing the respondent of the breach were sent to Phoneflasher Co's solicitors and to Mr Jorgensen. 27 An ACCC officer in late December 2004 observed a Phoneflasher display stand in an Adelaide retail centre. On speaking to the manager she was informed that the manager had not received the notice required to be sent in the order. 28 On 27 January 2005, a letter from the company's lawyers was received by the lawyer for the ACCC. It enclosed a letter from Mr Kerville of 23 January 2005 which stated that (i) "the company ceased trading over 18 months ago and there are few customers on the books"; (ii) the person "who took over the distribution at that time has also since ceased trading"; and (iii) the ACCC notices had been sent "to prior Phoneflasher customers shown on the attached list". That list contained eight names and addresses.


case_text: Insofar as both of the definitions refer to a person in accordance with whose instructions or wishes the directors are accustomed to act, I should note the following well settled principles: (i) though the purpose of the definition is to identify those persons, other than professional advisers, who have real influence in, or indeed control of, the corporate affairs of a company, it is not necessary that such influence or control should be exercised over the whole field of its corporate activities: Secretary of State of Trade and Industry v Deverell [2001] Ch 340 at 354; and (ii) the influence or control exercised by a shadow director may be strategic in character, defining the context in which, or conditions upon which, the company operates, or else contriving the transactions of significance to the company: Australian Securities Commission v A S Nominees Ltd (1995) 133 ALR 1 at 52-53. See generally Ho v Akai Pty Ltd (in liq) [2005] FCAFC 265 ; (2006) 24 ACLC 1, 526.


case_text: Insofar as both of the definitions refer to a person in accordance with whose instructions or wishes the directors are accustomed to act, I should note the following well settled principles: (i) though the purpose of the definition is to identify those persons, other than professional advisers, who have real influence in, or indeed control of, the corporate affairs of a company, it is not necessary that such influence or control should be exercised over the whole field of its corporate activities: Secretary of State of Trade and Industry v Deverell [2001] Ch 340 at 354; and (ii) the influence or control exercised by a shadow director may be strategic in character, defining the context in which, or conditions upon which, the company operates, or else contriving the transactions of significance to the company: Australian Securities Commission v A S Nominees Ltd (1995) 133 ALR 1 at 52-53. See generally Ho v Akai Pty Ltd (in liq) [2005] FCAFC 265 ; (2006) 24 ACLC 1, 526. 72 For all practical purposes relating to the principal proceedings (the only known matter of continuing significance to the company), Mr Jorgensen presumed, without apparent let or hindrance of Mr Kerville, to act as the company's mind and will notwithstanding that he was not at the time a person who had been appointed to the position of director. I emphasize in this the importance of the matter to the company: cf Deputy Commissioner of Taxation v Austin (1998) 28 ACSR 565 at 570; the strategic nature of the intervention being made by Mr Jorgensen in the company's affairs; cf Australian Securities Commission v A S Nominees Ltd , at 52-53; and his apparent real influence in the affairs of the company. I should add that, while Mr Jorgensen is referred to in a website extract of 28 August 2005 a "Director" in China, I do not consider that this advances the matter. That reference could well be to a position he held in Shanghai Connexion.com Co Ltd.


case_title: Ho v Akai Pty Ltd (in liq) [2005] FCAFC 265 ; (2006) 24 ACLC 1, 526


case_text: For all practical purposes relating to the principal proceedings (the only known matter of continuing significance to the company), Mr Jorgensen presumed, without apparent let or hindrance of Mr Kerville, to act as the company's mind and will notwithstanding that he was not at the time a person who had been appointed to the position of director. I emphasize in this the importance of the matter to the company: cf Deputy Commissioner of Taxation v Austin (1998) 28 ACSR 565 at 570; the strategic nature of the intervention being made by Mr Jorgensen in the company's affairs; cf Australian Securities Commission v A S Nominees Ltd , at 52-53; and his apparent real influence in the affairs of the company. I should add that, while Mr Jorgensen is referred to in a website extract of 28 August 2005 a "Director" in China, I do not consider that this advances the matter. That reference could well be to a position he held in Shanghai Connexion.com Co Ltd.


case_text: If Mr Jorgensen is to be found guilty of contempt because of the company's failure to comply with that order, it can only be on the basis that he aided or abetted the breach by the company or that did an act intending to subvert the effect of the order: see Australian Competition and Consumer Commission v World Netsafe Pty Ltd (No 3) [2003] FCA 159 ; (2003) 127 FCR 542 at [86] - [87] ; LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213 at [50] ; Arledge, Eady & Smith on Contempt , 12-109 (3 rd ed, 2005).


case_title: LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213


case_text: As to the first and second of the charges, the company made no apparent attempts to comply with the orders in the times respectively prescribed for compliance. It was only in response to communications from the ACCC that steps were taken in purported compliance with the order. These steps as I have found did not remedy the non-compliance. I am satisfied that the company was indifferent to the obligation imposed on it by the orders and acted, and has continued to act, accordingly up until the time of these proceedings. There has been nothing "casual, accidental or unintentional" about its non-compliance with Orders 3 and 4, rather there has been "wilful disobedience": Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 at 112-113. The company has offered no explanation for its conduct. Indeed its indifference to the matter has been reflected in the approach it has taken to the present proceedings. It needs to be made aware of the seriousness of its conduct: Australian Competition and Consumer Commission v Info4PC.com Pty Ltd [2002] FCA 949 ; (2002) 121 FCR 24 at [139] , [144]. Its conduct, moreover, needs to be considered in the context of its having consented to the very orders it then proceeded to disregard.


case_text: As to the first and second of the charges, the company made no apparent attempts to comply with the orders in the times respectively prescribed for compliance. It was only in response to communications from the ACCC that steps were taken in purported compliance with the order. These steps as I have found did not remedy the non-compliance. I am satisfied that the company was indifferent to the obligation imposed on it by the orders and acted, and has continued to act, accordingly up until the time of these proceedings. There has been nothing "casual, accidental or unintentional" about its non-compliance with Orders 3 and 4, rather there has been "wilful disobedience": Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 at 112-113. The company has offered no explanation for its conduct. Indeed its indifference to the matter has been reflected in the approach it has taken to the present proceedings. It needs to be made aware of the seriousness of its conduct: Australian Competition and Consumer Commission v Info4PC.com Pty Ltd [2002] FCA 949 ; (2002) 121 FCR 24 at [139] , [144]. Its conduct, moreover, needs to be considered in the context of its having consented to the very orders it then proceeded to disregard. 84 The only penalty sought by the ACCC is the imposition of a fine. There is no doubting the Court's power to impose such a penalty: see Info4PC.com Pty Ltd at [138]. In deciding an appropriate amount for a fine, the Court ordinarily will take into account the contemnor's financial means: Smith v The Queen (1991) 25 NSWLR 1. I am unable to do so in this case as no proper evidence has been put before me on this matter. However I have no reason to believe that the company has significant assets.


case_title: Smith v The Queen (1991) 25 NSWLR 1

case_text: The only penalty sought by the ACCC is the imposition of a fine. There is no doubting the Court's power to impose such a penalty: see Info4PC.com Pty Ltd at [138]. In deciding an appropriate amount for a fine, the Court ordinarily will take into account the contemnor's financial means: Smith v The Queen (1991) 25 NSWLR 1. I am unable to do so in this case as no proper evidence has been put before me on this matter. However I have no reason to believe that the company has significant assets.


case_text: It is said commonly that the power to impose penalties in cases of civil contempt is to be exercised so as both to ensure that orders are complied with and to deter conduct in contravention of court orders: see e.g. Australian Competition and Consumer Commission v Contact Plus Group Pty Ltd (in liq) (No 2) [2006] FCA 695 at [57] . In the present matter it is the second of these purposes that is of present significance: on this duality in cases of civil contempt see generally Arlidge, Eady & Smith on Contempt 3-6 ff. It in turn must be viewed in a context in which the principal proceedings brought by the ACCC was to protect the public interest: see generally Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11 ; (1999) 200 CLR 591. 89 The ACCC has sought an award of costs on an indemnity basis. Costs can be awarded on such a basis where it is warranted by the interests of justice. This is commonly found to be so in contempt cases where such proceedings have had to be brought after judgment to vindicate the authority of the Court and to uphold the public interest in the administration of justice: Australian Competition and Consumer Commission v Australian Business Reports Pty Ltd (1997) 19 ATPR 41-577 at 44,010; Contact Plus Group Pty Ltd (in liq) at [67] ff. Such is particularly the case where the proceedings have been brought by the ACCC in prosecution of its charter to act in the public interest: see Australian Competition and Consumer Commission v Globex Systems Pty Ltd (2005) 27 ATPR 42-069 at 43,105.


case_text: It is said commonly that the power to impose penalties in cases of civil contempt is to be exercised so as both to ensure that orders are complied with and to deter conduct in contravention of court orders: see e.g. Australian Competition and Consumer Commission v Contact Plus Group Pty Ltd (in liq) (No 2) [2006] FCA 695 at [57] . In the present matter it is the second of these purposes that is of present significance: on this duality in cases of civil contempt see generally Arlidge, Eady & Smith on Contempt 3-6 ff. It in turn must be viewed in a context in which the principal proceedings brought by the ACCC was to protect the public interest: see generally Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11 ; (1999) 200 CLR 591.


case_text: The ACCC has sought an award of costs on an indemnity basis. Costs can be awarded on such a basis where it is warranted by the interests of justice. This is commonly found to be so in contempt cases where such proceedings have had to be brought after judgment to vindicate the authority of the Court and to uphold the public interest in the administration of justice: Australian Competition and Consumer Commission v Australian Business Reports Pty Ltd (1997) 19 ATPR 41-577 at 44,010; Contact Plus Group Pty Ltd (in liq) at [67] ff. Such is particularly the case where the proceedings have been brought by the ACCC in prosecution of its charter to act in the public interest: see Australian Competition and Consumer Commission v Globex Systems Pty Ltd (2005) 27 ATPR 42-069 at 43,105.


case_title: Australian Competition and Consumer Commission v Globex Systems Pty Ltd (2005) 27 ATPR 42-069


case_text: Division 2 of Part 8 of the Migration Act 1958 (Cth) provides for the manner in which decisions may be reviewed by the Federal Magistrates Court, the Federal Court and the High Court. Section 476 provides for the jurisdiction of the Federal Magistrates Court. Section 476(2)(a) and (d), it has recently been held, are not invalid because they oblige the High Court to exercise exclusively and without remitter the jurisdiction conferred by s 75(v) of the Constitution with respect to certain decisions of the Minister: MZXOT v Minister for Immigration & Citizenship [2008] HCA 28. Section 476A provides for the limited original jurisdiction to be entertained by this Court: eg, Assad v Minister for Immigration & Citizenship [2008] FCA 1039 ; La Bara v Minister for Immigration & Citizenship [2008] FCA 785 at [3] ; Shuster v Minister for Immigration and Citizenship [2008] FCA 215 at [6] [7], [2008] FCA 215 ; 167 FCR 186 at 188. The appellate jurisdiction of this Court is relevantly that conferred by s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth). That appellate jurisdiction may be exercised by a single Judge of this Court: s 25(1AA)(a).


case_title: La Bara v Minister for Immigration & Citizenship [2008] FCA 785


case_title: MZXOT v Minister for Immigration & Citizenship [2008] HCA 28


case_title: Shuster v Minister for Immigration and Citizenship [2008] FCA 215 , 167 FCR 186


case_text: The Tribunal affirmed the delegate's decision by way of a decision signed on 10 January 2008. On 18 June 2008 the Federal Magistrates Court dismissed an application seeking to review the decision of the Tribunal: SZLZM v Minister for Immigration & Citizenship [2008] FMCA 887. 4 The Appellant now appeals to this Court. He appeared today unrepresented, albeit with the benefit of an interpreter. He read to the Court (via his interpreter) a detailed statement in support of his appeal. That statement fully addressed the issues sought to be canvassed. Although he maintained that a copy of the Respondent Minister's submissions had only been received by him on 13 August 2008, he accepted that his statement made orally today fully set forth his case. Any further opportunity to respond would be for the purpose of reducing to writing the statement made orally. Such a further opportunity was not considered necessary. The interpreter experienced no difficulty in translating the Appellant's oral contentions. 5 Although the present proceeding is an appeal from the decision of the Federal Magistrates Court, the Grounds of Appeal as filed in this Court do not attempt to identify any error made by the learned Federal Magistrate. Those Grounds merely set forth the errors alleged to have been committed by the Tribunal.


case_text: This Ground should be rejected. It was (most probably) not raised before the Federal Magistrates Court and no reason has been exposed as to why it should now be entertained. In those circumstances where this Court has a discretion to permit a new ground to be raised on appeal, there should generally be an adequate explanation for not raising the ground before the Federal Magistrates Court ( SZIBR v Minister for Immigration & Citizenship [2008] FCA 502 at [38] [41]) and leave should only be granted if it is expedient in the interests of justice to do so ( VUAX v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 158 at [46] [48]).


case_title: Thang Gia Uy Vo v Minister for Immigration & Citizenship [2007] FCA 1599 , 101 ALD 57

case_text: Notwithstanding the deficiency in the content of the Notice of Appeal , it nevertheless remains clear that the Appellant sought to invoke the appellate jurisdiction of this Court and not its original jurisdiction. Whatever other deficiencies there may be in his Notice of Appeal , that Notice does state (without alteration) that " the appellant appeals from the whole of the judgment of the Federal Magistrate Court given on 18.6.2008 at Sydney ". In some circumstances, it may be accepted, it is not appropriate for this Court to deal with an application before it solely upon the basis of " procedural errors committed by an unrepresented applicant ": eg, Thang Gia Uy Vo v Minister for Immigration & Citizenship [2007] FCA 1599 at [12] , [2007] FCA 1599 ; 101 ALD 57 at 59. 11 In the present appeal no submission was advanced on behalf of the Respondent Minister that the appeal should be dismissed by reason of the failure of the Appellant to identify any error alleged to have been committed by the learned Federal Magistrate; indeed, the Minister's written submissions addressed the substance of each of the three purported Grounds of Appeal . 12 But, even if the Grounds of Appeal be construed as an identification of the errors which were said to have been committed by the Tribunal, and an implicit contention that the Federal Magistrate erred in not concluding that there were such errors, no different conclusion -- it should be noted -- would have been reached and the appeal would have been dismissed.


case_title: VUAX v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 158


case_text: The appeal is based on three grounds. The first is that the Federal Magistrate failed to find error of law, jurisdictional error or lack of procedural fairness in the Tribunal's reasons. A second ground refers to the High Court judgment in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. The third ground simply refers to the High Court judgment in Plaintiff S157 of 2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476. 12 Finally, it is said that the Federal Magistrate and the Tribunal erred in not finding that the appellant satisfied the definition of refugee. This is simply a generalised statement and no indication of any specific error has been asserted. I should add that in this case there is no evidence of any lack of procedural fairness and the case does not come within the principles enunciated in Muin. There is nothing pointed to by the appellant to indicate that the reasoning in that case has any application. 13 I have also considered the reasoning of the Federal Court Magistrate who deals with the arguments, some of a different nature, which were advanced before him and I can find no error in that reasoning. 14 Accordingly for the above reasons the order of the Court in this matter is that the appeal is dismissed with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 28 May 2007 Counsel for the Appellants: None Solicitor for the Appellants: None Counsel for the Respondents: Ms R. Francois Solicitor for the Respondents: Clayton Utz Date of Hearing: 14 May 2007 Date of Judgment: 14 May 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/818.html


case_text: The appeal is based on three grounds. The first is that the Federal Magistrate failed to find error of law, jurisdictional error or lack of procedural fairness in the Tribunal's reasons. A second ground refers to the High Court judgment in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. The third ground simply refers to the High Court judgment in Plaintiff S157 of 2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476.


case_title: Kennedy v Queensland (2002) 190 ALR 707

case_text: I am satisfied that I have power to make the orders. Although I do not have a formal minute of consent, the provisions of s 86G(2) sufficiently cover an application made co-operatively as is done in the present case. If authority is needed for this proposition, it may be found in the decision of Sackville J in Kennedy v Queensland (2002) 190 ALR 707 at 24-26. 8 I will make orders in terms of the short minutes provided by the parties. The Minister has agreed to pay the Applicant's costs of the application and I will therefore make an order in those terms. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 20 January 2009 Counsel for the Applicant: M R Hall Solicitor for the Applicant: Solari Legal Solicitor for the First Respondent: NSW Crown Solicitor Counsel for the Second Respondent: S Phillips Solicitor for the Second Respondent: NTSCORP Limited Date of Hearing: 2 September and 17 December 2008 Date of Judgment: 17 December 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1934.html


case_outcome: discussed

case_text: It is necessary to note these facts because the prosecutor has urged that the factors relevant to penalty are those outlined by French J (as he then was) in Trade Practices Commission v CSR Limited (1991) ATPR 41-076 at 52,152 ( TPC v CSR Limited ). The defendant contended that those factors should be applied with some caution, because (it was argued) TPC v CSR Limited was decided before the introduction of Pt 1B of the Crimes Act and involved a civil pecuniary penalty imposed for contraventions of ss 46 and 47 (misuse of market power and exclusive dealing) in Pt IV of the TP Act for restrictive trade practices, rather than for contravention of a consumer protection provision of the TP Act in Pt V, or for present purposes now Pt VC. Part VC Offences was introduced into the TP Act by the Treasury Legislation Amendment (Application of Criminal Code ) Act (No 1) 2001 (Cth). 13 The judgment in TPC v CSR Limited was given on 20 December 1990 but concerned conduct engaged in from 1 May 1998 and until 5 September 1990 when consent injunctive orders were made. It is clear that the penalty imposed in that case was imposed in respect of contraventions of Pt IV of the TP Act, and was determined under s 76 of the TP Act as a civil pecuniary penalty. That does not make the observations of French J in that case irrelevant, but I accept the submission on behalf of the defendant that they should not be the starting point for determining the appropriate penalty in this matter. In any event, I do not think that the factors identified by French J in TPC v CSR Limited in any significant respect are different from those now specified in s 16A(2) of the Crimes Act . Section 16A(2)(a) of the Crimes Act directs attention to the nature and circumstances of the offence. That encompasses certain of the factors identified by French J. Section 16A(2) of the Crimes Act directs attention to the injury, loss or damage resulting from the offence. That too is a matter to which French J referred. Sections 16A(2)(f) , (g) and (h) of the Crimes Act direct attention to the contrition of the offender, the cooperation with the law enforcement agency, and whether there has been a plea of guilty to the charge in respect of the offence. That, in general terms, is encompassed also within the factors mentioned by French J. Sections 16A(2)(k) and (m) of the Crimes Act direct attention to the need to ensure that the person is adequately punished and to the personal elements of the offence. I think those factors are also encompassed within the factors identified by French J where he refers to the size of the contravening company and its degree of power in the market (not a matter directly relevant to a contravention of s 75AZC(1)(g) of the TP Act). Section 16A(2)(j) of the Crimes Act directs attention to the deterrent effect of the sentence upon the offender. That too was noted by French J. In certain circumstances, the matters referred to by French J will in fact fall into subsets of the matters listed in s 16A(2) of the Crimes Act . 14 I propose first to consider the factors specifically mentioned in s 16A(2) of the Crimes Act which are relevant in the circumstances. There is another relevant matter, namely, deterrence. Deterrence has two elements, namely specific deterrence of the offender and general deterrence in the community. It is also necessary to impose a penalty of sufficient magnitude to signal to the community the significance of the offending and to ensure that those who operate in a like commercial environment would be reminded of the consequences of contravention of the like provisions. The object of the TP Act is "to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection". The defendant's conduct, as it acknowledged, was both serious and inconsistent with that object. The penalty imposed must be such as to reinforce in the mind of the community the consequences of non-compliance with the relevant legislative prescription as to how that object is to be achieved.


case_text: On 21 August 2008 I found the defendant guilty of 11 counts of making a false or misleading representation about the price of goods, contrary to s 75AZC(1)(g) of the Trade Practices Act 1974 (Cth) (the TP Act): Australian Competition and Consumer Commission v Ascot Four [2008] FCA 1295. The question of the appropriate penalty to be imposed for those contraventions was then deferred. That matter has now been addressed. 2 Each contravention related to the advertising of the price of jewellery items in the defendant's 2005 Christmas Sale Catalogue (the catalogue). There were some 2.6 million copies of the catalogue. Generally there was a depiction of the jewellery item, a printed description of the item, a printed price in black print which had been struck through (the strike-through price) and a different and highlighted price printed in red and in a larger print (the sale price). I found that by that conduct the defendant represented to consumers or potential purchasers of the 11 jewellery items that, during the sale period from 24 November 2005 to 24 December 2005, the consumer would be saving the difference between the sale price and the strike-through price, or that there was a group of ordinary and reasonable members amongst prospective purchasers of those items who would understand the sale catalogue in that way in respect of the jewellery items. 3 In fact, none of the 11 jewellery items had been sold at the strike-through price. All but the Count 1 item had been offered for sale at least from 1 July 2005, and the Count 1 item had been offered for sale only from 24 November 2005. In each instance, the jewellery item had been ticketed at the strike-through price, at least for the period from 1 July 2005 (apart from the Count 1 item), but the highest price at which each of those items of jewellery had been sold over that period was significantly less than the ticketed price. The explanation given by the defendant is that the defendant operates in a "discount jewellery market" and its staff are encouraged to offer competitive price discounts to customers if that is required to secure a sale. At least in respect of the 11 jewellery items, there had been (over the period covered by the evidence) no sales at the ticketed price, and as noted all sales had been at a substantial reduction from the ticketed price.


case_text: I have also had my attention drawn to some other cases involving imposition of penalty relating to comparative price advertising where the TP Act has been contravened. I accept that I should be cautious in drawing too much from such cases. Necessarily, the contravening conduct will differ in nature, quality and effect, as will the circumstances of the individual contravention from one case to another. Although consistency in penalty is clearly important and is desirable to ensure a rational and fair system of justice (see Lowe v The Queen [1984] HCA 46 ; (1984) 154 CLR 606 at 610-1), it is necessary to consider the individual circumstances of the contraventions and of the contravener. Nevertheless, in the manner described below, I have derived some assistance by looking at cases in which the TP Act has been contravened by comparative price advertising representations and the penalty applied in those cases. 16 I referred to the nature and circumstances of the offence in the primary judgment, and briefly above. I will not repeat that, save to note that at material times, the defendant was a proprietor of a chain of retail jewellery stores operating under the name of "Zamel's". It operated 69 retail stores throughout South Australia, Victoria, Western Australia, Tasmania and the Australian Capital Territory. The 2005 Christmas Sale Catalogue was distributed across each of those regions. 17 The catalogue was issued centrally, that is, through the defendant's head office. It, and the elements of it which contravened s 75AZC(1)(g) of the TP Act, were not the consequence of some local or store-based conduct. In fact, two of the defendant's directors were responsible for authorising the price of the jewellery items offered and advertised for sale, and for the issue of the catalogue. 31 Although parity of penalty should be achieved, so that similar contraventions of the TP Act attract similar penalties, that of course depends upon the individual circumstances of each case. Consistency is desirable, as it flows from a rational and fair system of justice: Lowe v The Queen [1984] HCA 46 ; (1984) 154 CLR 606 at 610-1 per Mason J. 32 I was referred by senior counsel for the prosecutor and senior counsel for the defendant to a number of cases in which penalties were imposed for misleading and deceptive conduct in relation to comparative price advertising.


case_text: Sest v Copperart Pty Ltd (1989) ATPR 40-945 concerned nine offences by three related defendants contrary to s 53(e) of the TP Act. There was, in three sales campaigns, comparative price advertising in a television advertisement one advertisement during each sales campaign where the "was" price was either an artificially inflated recommended retail price or a fictitious regular price, so the claimed savings were significantly overstated. The sentencing judge found the defendants were aware of the falsity of each of the representations. The defendants pleaded guilty. Section 79(2) of the TP Act did not apply, so separate penalties were imposed. On the three counts against the principal offender, it was fined $30,000, $20,000 and $25,000 (a total of $75,000) and ordered to pay the costs of the prosecutor. The maximum fine for each offence at the time was $100,000. The principal points of difference from the present circumstances are clear from the recital of those matters, although there were of course other factual differences of degree. The sentencing judge also was satisfied that, in applying the totality principle, the overall penalty imposed was not so high as to be oppressive.


case_text: Trade Practices Commission v Cue Design Ltd (1996) 85 A Crim R 500 concerned 30 offences contrary to s 53(e) of the TP Act to which the defendants had pleaded guilty. A large retail chain had offered certain garments for sale by dual priced swing tags, with the higher price crossed out; the higher price had not been one at which the garment had been offered for sale. There was no widespread advertising campaign; the contravening conduct occurred only by the in-store price tags. The contraventions attracted one penalty only, by reason of s 79(2) of the TP Act and s 4K(4) of the Crimes Act . The sentencing judge regarded the sales strategy as widespread, and the contraventions as serious. The maximum penalty was $200,000. A penalty of $37,500 was imposed against each of the defendants, making a total of $75,000. As the two defendants were related, the Court treated the contraventions as being by one offender, and imposed on each defendant a penalty equal to half of the whole intended penalty. Again, these are obviously points of difference from the present circumstances, some of which are evident from the above brief description.


case_text: Australian Competition and Consumer Commission v Allans Music Group Pty Ltd [2002] FCA 1552 also concerned a prosecution under s 53(e) of the TP Act. The defendant pleaded guilty to nine charges, and cooperated fully in the inquiry into the contraventions. The defendant was a retailer of musical instruments and associated products. The contravening conduct occurred through a Christmas sale catalogue, of which there were 750,000 copies distributed in areas relevant to the defendant's six stores in Melbourne (2), Sydney, Brisbane, Adelaide and Ballarat. The catalogue offered the items the subject of the nine charges for sale at a "was"/"now" price, but had not sold any of the six items at the "was" price. The defendant, since the offending conduct, had implemented a detailed trade practices compliance program. The sentencing judge imposed one penalty of $80,000 pursuant to s 79(2) of the TP Act. At the time the maximum penalty was $200,000. As appears, there are significant similarities at a general level between the circumstances of that case, and the present circumstances. By contrast with the position of the present defendant is the level of cooperation with the ACCC and the guilty plea, whereas here the cooperation was somewhat later in coming and there was no guilty plea although the defendant cooperated in the presentation of evidence and confined its defence to, in effect, legal contentions based on the uncontested facts. That defendant also acted perhaps in a little more structured a way to ensure ongoing compliance with the TP Act, but I do not consider that difference is of much moment, as the present defendant agreed to abandon the (then potentially) impugned conduct and has since ceased to trade as a jeweller, having sold its business. There are obvious factual differences: the relative number of stores, the relative number of catalogues, the relative number of sales of the items the subject of the offending conduct, the relative cost of the advertised items (as overall, and not surprisingly, the cost of the jewellery items was much less than of musical instruments) and (as the prosecutor pointed out) the relative difference between the strike-through price and the sale price and so the suggested saving as a percentage of the strike-through price.


case_text: Australian Competition and Consumer Commission v Carrerabenz Diamond Industries Pty Ltd [2008] FCA 1103 concerned six counts of contraventions of s 75AZC(1)(g) of the TP Act by six separate newspaper advertisements in a daily newspaper circulating in Melbourne, Sydney (2), Perth (2) and Adelaide. Those advertisements offered in all 25 items of diamond jewellery at a "usual mark . price"" and a "crazy price". The defendant did not retail its products from established stores in those cities. During the trial, that defendant pleaded guilty to those charges, acknowledging that none of those items had previously been offered for sale at the "usual mark . price". A multiplier was used to the wholesale or acquisition price to arrive at the "usual mark . price" and the sentencing judge accepted as a mitigating factor that comparable items were in fact retailed at two locations at comparable prices to the "usual mark . price". A penalty of $220,000 was imposed, under s 4K(4) of the Crimes Act , having regard to what his Honour described as a "uniqueness about this case". The maximum penalty for a contravention was the same as that presently applicable.


case_text: In Wong v The Queen [2001] HCA 64 ; (2001) 207 CLR 584 , Gaudron, Gummow and Hayne JJ at 611-2 re-affirmed the need for a sentencing judge to balance many different and conflicting elements to reach an appropriate sentence. The balancing exercise must take account of all of the circumstances of the offence and of the offender. I have undertaken that process. 38 In the result, in my view, the appropriate penalty to be imposed on the defendant on the counts (in respect of which as I indicated earlier I would impose a conviction) is the total sum of $380,000. I also order the defendant to pay the costs of the prosecutor. 39 There will be recorded a conviction against the defendant on each count. On the 11 counts collectively the defendant is ordered to pay a penalty of $380,000. The defendant is to pay that penalty within two calendar months of the date of these orders. Leave is given to the defendant within 21 days to apply to vary that period. The defendant is also ordered to pay the prosecutor's costs of the prosecution. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 23 January 2009 Counsel for the Plaintiff: Mr M Griffin QC and Mr R Perrotta Solicitor for the Plaintiff: Commonwealth Director of Public Prosecutions Counsel for the Defendant: Mr M Livesey QC and Mr I White Solicitor for the Defendant: Fisher Jeffries Date of Hearing: 23 December 2008 Date of Judgment: 23 January 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/28.html


case_text: On 19 December 2006, I delivered judgment in relation to the claims brought by the ACCC against the CEPU, except for the claims relating to penalty and costs: Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd [2006] FCA 1777. Amongst other relief, I said that I would grant the following declarations in relation to the CEPU's accessorial conduct: '1. Prior to August 2001, the First Respondent was accustomed to acquire goods or services from certain Contractors, and in those circumstances, in August 2001, the Second Respondent: (a) aided, abetted, counselled, procured and induced the First Respondent to make; and (b) was knowingly concerned in and party to the First Respondent making, a contract, arrangement or understanding with the Second Respondent which contained a provision that: (c) the First Respondent would not engage a Contractor to perform work at the Loy Yang B power station in Victoria unless that Contractor had a current certified agreement with the Second Respondent; and (d) was included in the contract, arrangement or understanding for the purpose of preventing or hindering the First Respondent from acquiring goods or services from Contractors who did not have a current certified agreement with the Second Respondent, with the consequence that the First Respondent thereby contravened s 45E(3) of the Trade Practices Act 1974 (Cth). 2. Prior to August 2001, the First Respondent was accustomed to acquire goods or services from certain Contractors, and in those circumstances, in August 2001, the Second Respondent counselled, procured and induced the First Respondent to give effect to the provision of the contract, arrangement or understanding with the Second Respondent referred to in paragraph 1 of these declarations, with the consequence that the First Respondent thereby contravened s 45EA of the Trade Practices Act .' I also held that the ACCC was entitled to injunctive relief against the CEPU. 3 For convenience, I will adopt the terms defined in my principal judgment for the purposes of these reasons for judgment. 4 The ACCC sought orders that a pecuniary penalty be imposed on the CEPU pursuant to s 76 of the TPA and that the CEPU pay the ACCC's costs of the proceedings against the CEPU on an indemnity basis. The CEPU disputes that it should pay the ACCC's costs of the proceedings on an indemnity basis. At the request of the parties, I heard submissions on penalty on 22 December 2006 and deferred the question of costs. I was informed by the parties that this course was necessary because both parties had made Calderbank offers during the course of the proceedings and that it was not possible to address the question of indemnity costs until the Court has determined what penalty should be imposed on the CEPU. These reasons for judgment are therefore confined to the question of penalty.


case_text: 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 & 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.


case_text: 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 & 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. 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.