IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) GENERAL DIVISION ) No.VG368 of 1993 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSTON Applicant AND:AMPOL PETROLEUM (VICTORIA) PTY. LTD., WERNER SPREEN, KENNETH McKAY, WILLIAM MITHEN and ROBERT MACARTHUR Respondents No.VG873 of 1995 BETWEEN: THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND:AMPOL PETROLEUM (VICTORIA) PTY. LTD., BEST OIL COMPANY PTY. LTD., KENNETH McKAY and MICHAEL DANTELLI Respondents CORAM : Jenkinson J. PLACE: Melbourne DATE: 12 March 1996 CORRIGENDA Amendment to the Reasons for Judgment of Justice Jenkinson delivered 12 March, 1996: Page 5 line 2 for "$10,000" substitute "$10.000,000". Counsel for the Applicant were Mr. A..H. Goldberg Q.C. and Mr. M.J. Crennan Counsel for the Respondent were Mr. P.J. O"Callaghan Q.C. and Mr. D.E. Curtain Q.C. W.M.J. Hardman Associate to Justice Jenkinson Date: 20 March, 1996 IN THE FEDERAL COURT OF AUSTRALIA _) VICTORIA DISTRICT REGISTRY ) No. VG368 of 1993 GENERAL DIVISION ) BETWEEN:AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND:AMPOL PETROLEUM (VICTORIA) PTY. LTD., WERNER SPREEN, KENNETH McKAY, WILLIAM MITHEN _ and ROBERT MACARTHUR Respondents CORAM: | Jenkinson J. PLACE: Melbourne DATE: — 12 March, 1996 MINUTES OF ORDER THE COURT ORDERS BY CONSENT THAT: The proceeding as against each of the respondents Werner Spreen, William Mithen and Robert MacArthur be dismissed. AND THE COURT ORDERS THAT: 1.The Respondent Ampol Petroleum (Victoria) Pty. Ltd. pay to the Commonwealth of Australia in respect of the contraventions of Part IV of the Zrade Practices Act 1974 which are specified in the amended statement of claim filed this day in paragraph 20 thereof and the particulars under that paragraph as having occurred before 13 January 1993 and in paragraph 26 and the particulars under that paragraph pecuniary penalties in the aggregate of $100,000. 2.The Respondent Kenneth McKay pay to the Commonwealth of Australia in respect of the contraventions of Part IV of the Zrade Practices Act 1974 which are specified in the amended statement of claim filed this day in paragraph 20 thereof and the particulars under that paragraph as having occurred before 13 January 1993 and in paragraph 26 and the particulars under that paragraph pecuniary penalties in the aggregate of $4,000. 3.The respondent Ampol Petroleum (Victoria) Pty. Ltd. pay to the Commonwealth of Australia in respect of the contraventions of the said Part IV specified in the said amended statement of claim in paragraph 20 thereof and the particulars under that paragraph as having occurred after 13 January 1993 pecuniary penalties in the aggregate of $900,000. 4.The respondent Kenneth McKay pay to the Commonwealth of Australia in respect of the contraventions of the said Part IV specified in the said amended statement of claim in paragraph 20 thereof and the particulars under that paragraph as having occurred after 13 January 1993 pecuniary penalties in the aggregate of $36,000. 5.The respondent Ampol Petroleum (Victoria) Pty. Ltd. be restrained for the period of 2 years from this day from engaging in the practice of resale price maintenance by attempting to induce a seller of petrol supplied to him by the said respondent not to sell the petrol at a price less than a price specified by the said respondent. 6.The respondent Kenneth McKay be restrained for the period of 2 years from this day from being party to the engaging by a corporation in the practice of resale price maintenance by being party to an attempt by a corporation to induce a seller of petrol supplied to him by the said corporation not to sell the petrol at a price less than a price specified by the said corporation. 7.The respondent Ampol Petroleum (Victoria) Pty. Ltd. pay the applicant's costs of the proceeding fixed at $140,000. 8.Each document read on the hearing of the proceeding to and including this day be filed. 10.Every person who is not a party to the proceeding have leave to search in the Registry for, and to inspect, each document filed in the proceeding on or before this day. (Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules) IN THE FEDERAL COURT OF AUSTRALIA _) VICTORIA DISTRICT REGISTRY ) No. VG873 of 1995 GENERAL DIVISION ) BETWEEN:THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND:AMPOL PETROLEUM (VICTORIA) PTY. LTD., BEST OIL COMPANY PTY. LTD., KENNETH McKAY and MICHAEL DANIELLI Respondents CORAM: | Jenkinson J. PLACE: Melbourne DATE: — 12 March, 1996 MINUTES OF ORDER THE COURT ORDERS THAT: 1.The Respondent Ampol Petroleum (Victoria) Pty. Ltd. pay to the Commonwealth of Australia in respect of the contraventions of Part IV of the Zrade Practices Act 1974 which are specified in the amended statement of claim filed 12 February 1996 in paragraphs 16 and 26 thereof pecuniary penalties in the aggregate of $2,500,000. 2.The Respondent Kenneth McKay pay to the Commonwealth of Australia in respect of the contraventions of Part IV of the Zrade Practices Act 1974 which were constituted by his having been party to the contraventions specified in the order contained in paragraph 1 of this order pecuniary penalties in the aggregate of $60,000. 3.The respondent Ampol Petroleum (Victoria) Pty. Ltd. be restrained for the period of 2 years from this day from making a contract or arrangement or arriving at an understanding a provision of which contract or arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition in a way which would constitute the making of the contract or arrangement or the arriving at the understanding a contravention of sub- paragraph 45(2)(a)(1i) of the Zrade Practices Act 1974. 4.The respondent Kenneth McKay be restrained for the period of 2 years from this day from being party to the making by a corporation of a contract or arrangement or the arriving by a corporation at an understanding of the description expressed in the order contained in paragraph 3 of this order. 5.The respondent Ampol Petroleum (Victoria) Pty. Ltd. be restrained for the period of 2 years from this day from giving effect to a provision, of a contract or arrangement made by a corporation or of an understanding arrived at by a corporation, which has the purpose, or is likely to have the effect, of substantially lessening competition in a way which would constitute the giving of effect to that provision a contravention of sub-paragraph 45(2)(b)(i1) of the Trade Practices Act 1974. 6.The respondent Kenneth McKay be restrained for a period of 2 years from this day from being party to the giving of effect to a provision of a description expressed in the order contained in paragraph 5 of this order. 7.The respondent Ampol Petroleum (Victoria) Pty. Ltd. pay the applicant's costs of the proceeding against that respondent and the respondent Kenneth McKay fixed at $10,000. 8.Further consideration of the proceeding as against the respondents Best Oil Company Pty. Ltd. and Michael Danielli be adjourned. 9.Each document read on the hearing of the proceeding to and including this day be filed. 10.Every person who is not a party to the proceeding have leave to search in the Registry for, and to inspect, each document filed in the proceeding on or before this day. (Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules) IN THE FEDERAL COURT OF AUSTRALIA _) VICTORIA DISTRICT REGISTRY ) GENERAL DIVISION ) No. VG368 of 1993 BETWEEN:AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND:AMPOL PETROLEUM (VICTORIA) PTY. LTD., WERNER SPREEN, KENNETH McKAY, WILLIAM MITHEN _ and ROBERT MACARTHUR Respondents No. VG873 of 1995 BETWEEN:THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND:AMPOL PETROLEUM (VICTORIA) PTY. LTD., BEST OIL COMPANY PTY. LTD., KENNETH McKAY and MICHAEL DANIELLI Respondents CORAM: | Jenkinson J. PLACE: Melbourne DATE: — 12 March, 1996 REASONS FOR JUDGMENT Trial of proceedings in respect of contraventions of sections 45 and 48 of the Trade Practices Act 1974. In each proceeding the applicant and two of the respondents, Ampol Petroleum (Victoria) Pty. Ltd. ("Ampol") and Kenneth McKay, sought and gained the leave of the court to amendment of the statement of claim and of the defences of each of those two respondents. The amended statement of claim in the proceeding numbered VG368 of 1993 ("the first proceeding") contains no allegation of any contravention against any of the other respondents and the proceeding as against each of them is to be by consent dismissed. The amended statement of claim in the proceeding numbered VG875 of 1995 ("the second proceeding") contains allegations of contraventions against each of the other two respondents, each of whom has been made aware of what is proposed by the applicant, Ampol and Mr. McKay, and of the hearing at which the proposals have been placed before the court. Neither of those other respondents has appeared at that hearing. In the first proceeding the amended statement of claim alleges that Ampol, being a trading corporation within the meaning of the Zrade Practices Act 1974 ("the Act") and being a supplier of petroleum products to Jamberbay Pty. Ltd. ("Jamberbay") for retail sale by Jamberbay at its petrol station in Bayswater, attempted by its servant or agent Mr. McKay to induce Jamberbay not to sell or advertise for sale petroleum products at a price less than a price specified by Ampol. There were, according to the statement of claim, nine such attempts in and after July 1992 and before 21 January 1993, when the maximum penalty payable by a body corporate for contravention of a provision of Part IV of the Act, wherein ss. 45 and 48 lie, was enlarged from $250,000 to $10,000,000, and nine further attempts after 21 January 1993 and before the end of June 1993. In addition to those attempts, a further attempt was alleged in paragraph 26 of the amended statement of claim to have been made "[iJn or about January 1993". None of the material before me enables me to conclude that the latter attempt occurred on or after 21 January 1993. That material does enable me to conclude, however, that the petroleum products the subject of each attempt were goods supplied to Jamberbay by Ampol, and that Ampol by its counsel, Mr. O'Callaghan Q.C. and Mr. Curtain Q.C., admitted not only the allegations in the statement of claim, but also that circumstance. Such an attempt constitutes engaging in resale price maintenance in contravention of s.48 of the Act : see ss. 4, 48, 96(1), 96(3)(b), 96(7)(a). Mr. McKay is alleged in the statement of claim, and he admits, that he was party to each of the contraventions of s.48 by Ampol. He may be ordered, as Ampol may be ordered, to pay to the Commonwealth "such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part to have engaged in a similar conduct" : paragraphs 76(1)(a) and 76(1)(e) of the Act. Mr. McKay's was the conduct which constituted the contravention. But, this being a civil proceeding, I do not consider myself obliged to pursue the consideration, to which Dixon J. referred in Mallan v. Lee (1949) 80 C.L.R. 198 at 216, and which was noticed in Yorke v. Lucas (1985) 158 C.L.R. 661 at 671, that "to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious responsibility for his acts .... would be an inversion of the conceptions on which the degrees of offending are founded". Counsel for the applicant, Ampol and Mr. McKay joined in a submission that the aggregate of the penalties which each of Ampol and Mr. McKay should be ordered to pay to the Commonwealth in respect of the contraventions in the first proceeding was $1,500,000 and $40,000 respectively. The submission was in conformity with a course which has been accepted for many years by a number of judges of this court. The course which has been accepted is described, and the considerations in accordance with which the court exercises the function of fixing penalties for contraventions of Part IV of the Act are stated, in Zrade_ Practices Commission y. TNT Australia Pty. Ltd. (1995) A.T.P.R. 41-375. I adopt, without repeating, what is there set out, except what is said about the adoption - or perhaps one should say the adaptation - of the totality principle in sentencing for crime. In the circumstances of this case it is unnecessary, and therefore undesirable, to consider that question : it is only the aggregates of penalties which have been proposed. Counsel accepted my view that the enlargement of the maximum penalty on 21 January 1993 (from $250,000 to $10,000 in the case of a body corporate and from $50,000 to $500,000 in the case of a person other than a body corporate) made it desirable that in the case of each of the respondents Ampol and Mr. McKay an order should be made for payment of an aggregate sum for contraventions before that date and another order should be made for payment of an aggregate sum for contraventions after that date. Counsel for the applicant suggested, and counsel for Ampol and Mr. McKay made no contrary submission, that, in the case of Ampol the 10 contraventions before 21 January 1993 should attract penalties aggregating $100,000 and the 9 contraventions after that date should attract penalties aggregating $900,000. In the case of Mr. McKay the suggested aggregates were $4,000 before that date and $36,000 after that date. Information relevant to a determination of the appropriate penalties was furnished to the court by counsel for the applicant and counsel for Ampol and Mr. McKay, each side treating the information furnished by the other as not denied. Neither Ampol nor Mr. McKay has previously been found by the court in proceedings under Part VI of the Act to have engaged in a similar conduct, according to that information. All the contraventions occurred in the course of administration of a system of price support of retailers of petroleum products supplied by Ampol. None of them resulted from direction by Mr. McKay's superiors. He was Ampol's manager of the price support system in an area within which Bayswater lies. Upon the information furnished to the court I have concluded that the proposed penalties in the first proceeding are appropriate, and will make orders accordingly. The applicant sought, and Ampol and Mr. McKay did not oppose, orders that each of them be restrained for two years from engaging in the practice of resale price maintenance by attempting what is specified in paragraph 96(3)(b) of the Act. Orders giving effect to that proposal will be made, but not quite in the terms proposed. Mr. McKay has not engaged in that practice and seems unlikely to do so in the next two years : see sub-section 96(2) of the Act. It was agreed that Ampol pay the applicant's costs of the first proceeding fixed at $140,000. In the second proceeding the admitted allegations in the amended statement of claim include allegations (a) that at material times Ampol supplied petroleum products, for resale to the public, to Marchurch Pty. Ltd. ("Marchurch"), which conducted a petrol station at Doveton under a franchise agreement with Ampol, and the respondent Best Oil Company Pty. Ltd. ("Best Oil") conducted, by the respondent Michael Danielli, a retail petrol station at Doveton, (b) that in December 1994 Ampol entered into a contract, arrangement or understanding ("the arrangement") with Best Oil and Marchurch, a provision of which arrangement was that the retail price at which motor spirits and liquified petroleum gas supplied by Ampol to Marchurch for resale to the public were to be sold by Marchurch at its retail petrol station in Doveton should not fall below the price at which "the equivalent motor spirits and liquified petroleum gas" were to be sold by Best Oil at its retail petrol station in Doveton, (c) that in the Melbourne metropolitan area, and also in Doveton within that area, there was a market for the retail sale of petroleum products to members of the public, in each of which markets Ampol, Best Oil, Marchurch and others were in competition, and (d), that the provision would be likely to have the effect of substantially lessening competition in each of those markets. There was accordingly an admission by Ampol of contravention by it of s.45(2)(a)(11) of the Act. There was an admission by Mr. McKay, who was at material times Ampol's manager for the area in which Doveton lies, that he had been party to the contravention. N Also admitted are allegations that in February 1995 Ampol, by Mr. McKay, gave effect to the provision by requesting Marchurch to alter its price for sale by retail of liquified petroleum gas in accordance with that provision. There was accordingly an admission by Ampol of contravention by it of s.45(2)(b)(ii) of the Act. Mr. McKay admitted that he had been party to that contravention. Section 45 being in Part IV of the Act, s.76(1)(a), in the case of Ampol, and s.76(1)(e) in the case of Mr. McKay authorised the court to make an order for the payment of pecuniary penalties in respect of each of the contraventions. The parties propose the imposition of penalties aggregating $2,500,000 in respect of the two contraventions by Ampol and penalties aggregating $60,000 in respect of the two contraventions by Mr. McKay. As in respect of the first proceeding, uncontradicted information about the circumstances relevant to an assessment of appropriate penalties in the second proceeding was furnished by the parties. These contraventions occurred in the context of the administration of a price support system in respect of Marchurch. Neither of the contraventions by Ampol was alleged to have resulted from direction by Mr. McKay's superiors. The second proceeding was commenced on 14 November 1995 and accord between the applicant and each of Ampol and Mr. McKay was reached and notified to the court at the beginning of February 1996, thus saving much court time and other public resources invested in the applicant Commission and the Australian Government Solicitor. Upon the information furnished to the court I have concluded that the proposed penalties are appropriate and will make orders accordingly. Injunctive and costs orders, concerning which the three parties are in accord, will be made. Because the factual material upon a consideration of which the orders in both proceedings are to be made is contained in several documents which were handed to the court without being read out in court, in each proceeding an order will be made that those documents be filed and the leave of the court which Order 46 Rule 6 contemplates will be granted to every person not a party to the proceeding to inspect all the documents filed in the proceeding on or before the day on which the orders are pronounced. I certify that this and the 8 preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice Jenkinson. Associate Dated: 12 March, 1996 Counsel for the Applicant :Mr. A.H. Goldberg Q.C. and Mrs. M.J. Crenna Solicitors for the Applicant :Australian Government Solicitor Counsel for the Respondent 'Mr. P.J. O'Callaghan Q.C. Solicitors for the Respondent :Hall and Wilcox Date of Hearing : 12 February, 1996 Date of Judgment :12 March, 1996