CATCHWORDS Trade Practices - Resale price maintenance ~ Attemping to induce retailer not to advertise and/or sell goods supplied at less than "agreed" price ~ Claim not defended - Question of penalty - No evidence of any other contravention- Respondent acted promptly to prevent repetition of contravention. Trade Practices Act, 1974 s.48 Trade Practices Commission v. Gorenje Pacific Pty. Limited No. WAG 38 of 1983 Beaumont, J. 22 December, 1983. Sydney. {| IN THE FEDERAL COURT OF AUSTRALIA ) ) WESTERN AUSTRALIA DISTRICT REGISTRY) ) GENERAL DIVISION ) No. WAG 38 of 1983 BETWEEN : TRADE PRACTICES COMMISSION Applicant D: GORENJE PACIFIC PTY. LIMITED Respondent ORDERS Judge making order: Beaumont, J. Date order made: 22 December, 1983. Where made: Sydney THE COURT ORDERS THAT: 1. A penalty of $3,000 be imposed upon the respondent in respect of the offence referred to in these proceedings. 2. The respondent pay the applicant's costs including reserved costs. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIAN DISTRICT we ews ws REGISTRY GENERAL DIVISION No. WAG 38 of 1983 BETWEEN : TRADE PRACTICES COMMISSION Applicant D: GORENJE PACIFIC PTY. LIMITED Respondent CORAM: Beaumont, J. DATED: 22 December, 1983. REASONS FOR JUDGMENT By its statement of claim in this matter, the Commission alleged that in or about October, 1981 the respondent engaged in the practice of resale price maintenance in contravention of s.48 of the Trade Practices Act, 1974 ("the Act"). The Commission claimed a pecuniary penalty and injunctive relief. The respondent did not seek to defend the claim but proferred an undertaking to the Court in the terms of the injunction sought, and consented to an order that it pay the Commission's costs. The Commission having accepted the undertaking, the only remaining question is that of penalty. The facts are agreed and may be briefly stated. The respondent, a Sydney based company, is an importer and dis- tributor of home appliances including household refrigerators, carrying on its business in all mainland States. The impugned conduct arose out of a conversation in October 1981 between the respondent's then manager for the gtate of Western Australia and a representative of a partnership carrying on business of retailers of white goods and electrical goods, including refrigerators. In the conver- sation, the advertised price of three models of the respon- dent's refrigerators was discussed and agreed. It was further agreed that the respondent would make a contribution of $800 towards the cost of promoting these products. In November 1981, the retailers advertised one of the respondent's refrigerators at a price of $225 which was $4 less than the "agreed" price. On 26 November, 1981, the respondent's Western Australian state manager wrote to the retailers: "I bring to your attention that our company will not provide support for the type of advertising that occured on our refrigerators in the West Australian on Thursday 26th. (sic) Our policy is quite clear. We want each and every one of our prefered dealers to obtain maximum profit from our units. We don't need dealers promoting our product solely on price for obvious reasons. Our main objective, daily, is to outline to our customers that Pacific represents value. Thursday's advertising Makes that task that much harder. (sic) I make 1t quite clear that the minimum advertised price we would agree to support you on was as follows: 715 AB $229 715 ABC $239 717 B $299 I hope that you give more consideration in the future to this in the interest of both parties." In September 1982, the manager again wrote to the retailers referring again to the breach of the previous "agreement" and declining to honour the commitment to contribute $800 towards, inter alia, the advertising in the press. However, he offered the sum of $200 towards the cost of advertisement within the retailers' store. In November 1982, the matter was investigated by officers of the Commission. In December 1982, the respondent, by its managing director, wrote to the retailers explaining that there had been a "misunderstanding" and that it was not and never had been, the respondent's policy to engage in resale price maintenance. There is no evidence of any specific refusal by the respondent to supply goods to the retailers. There 1s no evidence of any other contravention of the Act on the part of the respondent. It 1s one of the smaller operators in the wholesale white goods field: the gross value, inclusive of sales tax and service of its range of goods in the year ended 31 December, 1982 was approximately $13.3 million whereas the total sales of all companies, involved in the white goods industry, in the year ended 31 December, 1982 amounted to something in excess of $1,500 million of which sales of white goods alone amounted to approximately $900 million. I also take into account, on the question of penalty, that, once alerted to the problem, senior management acted promptly to prevent any repetition of the contravention (cf. Trade Practices Commission v. Malleys Ltd. (1979) 25 A.L.R. 250 at p.255). One the other hand, the respondent must accept responsibility, not merely for the actions of the State manager at the time but also for its failure to ensure that its executives understood and implemented the provisions of the Act. In all the circumstances, I am of the opinion that an appropriate penalty is the sum of $3,000. 2 : at ihis and the 3 preceding f tng reasons for onourable i certify th pages are a true copy 9 i in ot The H judgment here . Mr Justice Beaumont. Deron eG . Dated DA Became 1993