Australian Competition & Consumer Commission v Alice Car & Truck Rentals Pty Ltd & Ors [1997] FCA 920

GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY DG 9 of 1996 BETWEEN: AUSTRALIAN COMPETITION & CONSUMER COMMISSION Applicant AND: ALICE CAR & TRUCK RENTALS PTY LIMITED (ACN 009 596 561) First Respondent STAFFTOY PTY LIMITED (ACN 053 884 736) Second Respondent NORTHAUST AUTO HIRE PTY LTD (ACN 009 639 490) Third Respondent N.T. OUTBACK ADVENTURE RENTALS PTY LTD (ACN 009 631 270) Fourth Respondent ROBERT JAMES HUNTER Fifth Respondent NATHALIE JUNE KELLER Sixth Respondent NEVILLE CHARLES IVEY Seventh Respondent DAVID GEOFFREY BENNETT Eighth Respondent BRIAN HAROLD MEASEY Ninth Respondent JUDGE: MANSFIELD J DATE: 12 AUGUST 1997 PLACE: DARWIN REASONS FOR JUDGMENT By application dated 2 October 1996 the Australian Competition and Consumer Commission ("the Commission") brought proceedings under ss 45, 76, 77 and 80 of the Trade Practices Act 1974 ("the Act") against the first to seventh respondents claiming variously; declarations, pecuniary penalties, injunctions and other orders in the nature of compensatory and remedial orders. The claim for that relief was based upon an alleged price fixing agreement entered into by the first to seventh respondents in about November 1994 and given effect to in the period December 1994 to April 1995 with respect to the rental charged for "walk-up" clients of the first to fourth respondents in Alice Springs. The allegations, as made in the statement of claim with the original application, were initially denied by the then respondents. There were a series of interlocutory issues in relation to the allegations in the statement of claim. It is unnecessary to refer to those matters in detail. On 24 April 1997 directions were given including the provision of further and better particulars of the then amended statement of claim by the Commission and the making of further discovery by certain of the respondents. The matter was listed for trial commencing on 21 July 1997. Following those orders it appears that further information became available to the Commission, largely as a result of the fifth respondent Robert James Hunter ("Mr Hunter"). As a result, on 30 June 1997 the eighth and ninth respondents were added as parties on the application of the Commission and a further amended statement of claim was filed and served on 1 July 1997. Subject to any application by the eighth and ninth respondents, the trial date originally fixed was preserved. The ninth respondent has not filed a defence. Each of the other respondents has sought and been given leave to withdraw the defences which have been filed. The absence of a defence does not of itself entitle the Court to proceed to try the matters raised in the statement of claim as if the allegations in the statement of claim were themselves admitted, notwithstanding the provisions of O 11 r 13(1) of the Federal Court Rules ("the Rules"): see M Y Distributors Proprietary Limited v OMAQ Pty Ltd (1992) 36 FCR 578. In the event of an applicant seeking to proceed in default of defence, the appropriate course is by motion for judgment as provided for by O 11 r 23 and O 10 r 7. This however is not such a case. The respondents have each continued to appear in the proceedings. At the hearing, each respondent in conjunction with the applicant has filed in Court joint submissions which each included admissions by the several respondents of the matters alleged in the further amended statement of claim. Thus, for the purposes of this proceeding only, I proceed on the basis that the allegations with respect to each respondent in the further amended statement of claim are admitted: see O 18 r 1 of the Rules. Under O 18 r 4, I am entitled to make such orders as are appropriate on the basis of those admissions. The practice of proceeding in that manner, and including by agreed statements of fact contained in joint submissions of the Commission and the party or parties alleged to have breached the Act, and also including submissions as to the appropriate orders which the parties think the Court should make is well recognised: see Trade Practices Commission v Allied Mills Industries Proprietary Limited (No.4) (1981) 37 ALR 256 and most recently the decision of the Full Court in Northwestern Frozen Foods Proprietary Limited v The Australian Competition and Consumer Commission (1996) 141 ALR 640 and in the many cases therein cited. Each of the respondents has asked the Court jointly with the Commission to impose penalties and to make orders by way of injunction and otherwise against them. The further amended statement of claim and the facts put in the joint submissions by the several respondents with the Commission now constitute the basis of the Court making findings as to the nature of the conduct which is admitted. I need not refer to them other than briefly. At material times there was a demand by members of the public in Alice Springs for the rental of vehicles, without prior booking or reservation, to travel from Alice Springs to places including Ayers Rock (walk-up customers). The first respondent Alice Car & Truck Rentals Pty Ltd ("Territory"), the second respondent Stafftoy Pty Ltd ("Thrifty"), the third respondent Northaust Auto Hire Pty Ltd ("Avis"), and the fourth respondent NT Outback Adventure Rentals Pty Ltd ("Hertz"), which I sometimes hereafter together call the corporate respondents, and a non-party to these proceedings Louang (N.T.) Pty Ltd ("Budget") each operated a motor vehicle rental business in Alice Springs from two locations, namely a town office in Alice Springs and a counter or desk at the Alice Springs Airport. Each of those entities were in competition with the others in Alice Springs for the supply of rental vehicles to walk-up customers and to other customers, and together the five companies supplied almost all the market. It is convenient to note that the ninth respondent Brian Harold Measey ("Mr Measey"), was a director and one of the two shareholders of Territory, and together with Mr Hunter, who was at material times the manager of the Alice Springs business of Territory, acted at material times for Territory in the transaction complained of. Similarly, the sixth respondent Nathalie June Keller ("Ms Keller") as manager in Alice Springs for Thrifty, the seventh respondent Neville Charles Ivey ("Mr Ivey") as manager in Alice Springs for Avis and the eighth respondent David Geoffrey Bennett ("Mr Bennett") as a managing director for Alice Springs of Hertz each acted for their respective corporate entities in these transactions. Mr Measey, was also the father of at least one of the shareholders of Thrifty. The practice of the corporate respondents, at least in November to April of each year, was frequently to rent vehicles to walk-up customers wishing to travel long distances, such as to Ayers Rock, on terms which differed from those advertised in their brochures and in particular on terms which allowed daily kilometre allowances substantially greater than those advertised in their brochures, with a twenty five cent kilometre rate when the daily kilometre limit fixed was exceeded, and which also included daily rental rates substantially different from those advertised in their respective brochures. Thus, in a competitive market, consumers were able to get vehicular hiring with daily kilometre allowances of up to six hundred kilometres a day rather than the one hundred kilometres a day advertised as available in the brochures and which, with daily rental adjustments, represented a saving to consumers of up to $300 on rental compared to the terms offered in the brochures. Those sorts of deals were commonly called Ayers Rock Specials. In late November 1994 Mr Measey, for Territory, instructed Mr Hunter, his manager in Alice Springs, to endeavour to arrange with Hertz, Avis and Budget not to offer Ayers Rock Specials to walk-up customers. As a result Mr Hunter made contact with Mr Ivey, Mr Bennett and an officer of Budget and an agreement was entered into at least between the corporate respondents, that they would not offer Ayers Rock Specials, but only offer vehicle rentals to walk-up customers at the one hundred kilometre per day allowance identified in their respective brochures and at around the same daily rental rates. It is not clear on the material before me how Thrifty came to be a party to that agreement but it clearly did so, and Ms Keller, as its manager played some role in Thrifty becoming a party to it. I accept that her role was less significant in the making of the agreement than that of Mr Ivey for Avis, or Mr Bennett for Hertz. For reasons which appear below I think Mr Hunter's special circumstances also warrant particular consideration. I note from the material before me that Mr Measey is properly described as the instigator or the prime mover in the transaction which came to be entered into. Plainly, as is acknowledged, the effect of that arrangement was to substantially lessen competition in the Alice Springs market for walk-up rentals. The various respondents then gave effect to that agreement between December 1994 and April 1995. In the case of Territory, this included Mr Hunter instructing its employees not to offer Ayers Rock Specials but to adhere to its rates as prescribed in its brochure; similar instructions were given to employees of Thrifty by Miss Keller, to employees of Avis by Mr Ivey and to employees of Hertz by Mr Bennett and each monitored the conduct of the other. There was a luncheon arranged in March 1995 at which at least Mr Hunter, Mr Ivey and Mr Bennett attended with a view to reaffirming the arrangement and ensuring its continuance. Ms Keller was not, on the material before me, involved in that meeting. The contraventions which I find on the basis of the material so presented involve contraventions by each of the respondents other than the third and seventh respondents (I interpose that I have already made findings adverse to the third and seventh respondents, Avis and Mr Ivey) of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Act, as each operates with the deeming provisions of s 45A of the Act in terms of its effect. I am now asked to fix penalties for that conduct under s 76(1) of the Act and to impose the other orders referred to. As the conduct engaged in was after 21 January 1993 the maximum penalty for a corporation for infringing those provisions of the Act is $10,000,000 for each act or omission to which s 76 applies and the maximum penalty for each individual for infringing those provisions of the Act for each act or omission to which s 76 applies is $500,000: see ss 76(1A) and 76(1B). The joint submissions put to the Court include the penalties which the parties consider appropriate in these matters. The Act places on the Court the responsibility to determine the appropriate penalty in all the circumstances of each case and having regard to "all relevant matters". In circumstances like the present, as the Full Court in the Northwestern Frozen Food case (above) has laid down, the role of the Court is to determine whether the proposal by the parties can be accepted by the Court as fixing an appropriate amount by way of penalty. I refer in particular to a passage in the joint judgment of Burchett and Kiefel JJ (at 644): "There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case." I approach the matter in that way. The assessment of penalty under s 76 involves determining what is appropriate "having regard to all relevant matters". Section 76 itself specifies some relevant considerations, but as French J in Trade Practices Commission v CSR Limited (1991) ATPR 41-076 made clear (at 52152 - 52153) in a passage which has been adopted in many subsequent cases, there are a number of other circumstances which generally speaking will be relevant. I will not repeat that list here, but I note that each of the joint submissions addresses each of the considerations so identified as potentially relevant. In assessing whether the penalty to be imposed is appropriate I consider that the authorities, and most recently the Northwestern Frozen Foods case (above), indicate that the principal and probably the only object of penalties is deterrence. I am aware of the observations of Goldberg J recently in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36, where his Honour suggested punishment of itself may in certain circumstances be an appropriate consideration, and that the Full Court of this Court might review that question at some time in the future. For present purposes I approach the question of penalty only with the purpose of ensuring that it reflects in the circumstances considerations relevant to achieving the object of deterrence. There is one other general consideration which I address. The joint submission discriminates between the various respondents as to the amount of the proposed penalty. As the Full Court in the Northwestern Frozen Foods case (above, at 648) said: "A hallmark of justice is equality before the law and other things being equal corporations guilty of similar contraventions should incur similar penalties." It will be rare that the circumstances from one case to another will be so similar that such considerations will require equal penalties for different conduct on different occasions by different respondents. But here the position of the respondents is equal, but only in the sense that each engaged in the same general conduct. It is thus only by reference to the individual roles of each respondent in that conduct, for example that Mr Measey instigated the conduct himself, or by reference to the individual circumstances of each respondent, for example the respective sizes or market shares of the corporate respondents, that it seems to me that it would be permissible to impose significantly different penalties upon each of them. In the case of the personal respondents no information as to the respective assets or liabilities of them has been provided other than in the case of Mr Hunter and Mr Bennett. Any discrimination in penalty between them will therefore have to reflect the role that each took in procuring the arrangement or ensuring that it was given effect to during the period December 1994 to April 1995. I note also that there are additional factors peculiar to Mr Hunter, by reason of his cooperation with the Commission, to which I shall briefly refer below. In the light of those general observations, I should also note that on 30 June 1997 I imposed monetary penalties on the third respondent Avis totalling $200,000 ($75,000 in respect of the breach of s 45(2)(a)(ii) of the Act and $125,000 in respect of the breach of s 45(2)(b)(ii) of the Act) and on Mr Ivey totalling $50,000 (separated as to $20,000 and $30,000 respectively for those two breaches). I imposed injunctive orders for a term of four years in effectively the same terms as I am now asked to impose on the corporate respondents and the individual respondents. I also received from Avis undertakings in terms similar to those now proposed by each of the corporate respondents and I required Avis to pay the costs of the proceedings against it. Accordingly, I have regard to the nature and extent of the conduct which constitutes the contraventions separately with respect to each respondent. The conduct occurred in an important service industry to the tourism industry in the Northern Territory, in particular in Alice Springs, and the corporate respondents represent a very significant proportion of the market for walk-up customers for rental vehicles in Alice Springs. They represent four of the five companies which were allowed to operate from the Alice Springs Airport. The conduct further occurred at a time when competition for the benefit of consumers was, or should have been, fierce. Importantly, but for the proceedings brought by the Commission, there was a potential for that conduct to continue year by year. Although the precise consequences are presently not absolutely clear I am satisfied, by virtue of the undertakings which are offered to the Court as part of the joint submissions and which have now been filed in Court, that each of the individual persons who entered into a lease or hire arrangement in the period in question and who suffered by reason of the agreement or arrangement will be compensated by the respective corporate respondent giving effect to the undertakings proffered. The cost to those individual clients affected was up to about $300 per rental. In the case of the first respondent there were some hundreds of customers so affected; in the case of the second respondent there were up to one hundred customers so affected, that number being a little more than those affected by Avis; and in the case of the fourth respondent some one hundred and sixty customers so affected, at a cost to those one hundred and sixty odd customers estimated at about $28,700. I am satisfied that the undertakings proffered will result in each of the customers adversely affected by the conduct being properly compensated for the loss. I turn to note briefly some features of the individual respondents. As I have said, these features largely indicate why I am satisfied that the proposed orders against the various respondents are appropriate, despite them differentiating in some respects between the respondents. Territory's principal office was in Alice Springs. In the 1994/95 financial year its gross income in the Northern Territory was some $6.4 million and its operating profit before tax some $725,000. Its share of the walk-up market at the Alice Springs Airport was 31.4 per cent. It was, if not the largest, one of the two largest rental car operators in Alice Springs and much of its custom was for walk-up business. It, through Mr Measey, initiated the proposal and its participation was necessary for the arrangement to be effective. The second respondent, Thrifty, in the 1994/95 financial year was relatively smaller in all respects. Its gross income in the Northern Territory for that year was about $2 million and its operating profit before tax some $224,000. Its share of the walk-up market at Alice Springs Airport was 6.7 per cent. Its position was not dissimilar to that of Avis although the Avis share of the market at the Alice Springs Airport was somewhat greater at about 18.9 per cent. The fourth respondent Hertz also had its principal office in the Northern Territory in Alice Springs and in 1994/95 its gross income for the Northern Territory was $6,971,627 and its operating profit before tax some $703,544. Of the gross income about 36 per cent or $2,509,785 was attributable to its Alice Springs office and it had the largest share of the Alice Springs Airport car rental market at 38.4 per cent. It had the second largest fleet of vehicles at Alice Springs in the period in question. As I have said, I am not aware of the personal affairs of the individual respondents except as to Mr Hunter, who is a person of limited resources, and Mr Bennett. Despite that, in the circumstances the amount of penalty proposed is sufficient in my view to reflect the proper balance between the corporations and the individual respondents, having regard to the provisions of ss 76(1A) and 76(1B) of the Act, and is also sufficient in itself, whatever the personal circumstances of the individual respondents, to deter those who have been or might be involved in such conduct. In the case of the Mr Bennett I have reached that view having regard to the information as to his personal affairs provided. It is apparent therefore that I have accepted the submissions put and that I should so act in accordance with them. As I have said, much of the differences in penalty as suggested reflects the different roles of the respondents in the offending conduct itself. It is sufficient to say, from that brief recital of the more important facts and from the material in the various joint submissions, that in my view the differences in the penalties proposed as between the corporate respondents and as between the individual respondents are appropriate. The absence in any of the corporate respondents of a program to secure compliance with the Act up to the time of this conduct is surprising, and a factor adverse to each in penalty. However, the undertakings now offered to the Court by each of them will involve each establishing and maintaining a significant compliance program to the satisfaction of the Commission in the future. That of itself is a significant mitigating factor in penalty. I am satisfied from the undertakings that each proposed compliance program reflects a genuine endeavour to ensure that this sort of conduct does not occur again. That will be reinforced in the shorter term by the injunctive orders which I propose to make for the period specified in the minutes of order handed up. Although somewhat belatedly, the withdrawal of the defences and the admissions of liability also require special consideration by the Court in reduction of the amount which would otherwise have been assessed for penalties against the respondents. The stage at which those steps were taken does not disentitle the respondents from being given credit for having done so: Trade Practices Commission v TNT Australia Limited (1995) ATPR 41-375. The significance of those two particular matters is referred to in a number of authorities which are conveniently gathered in the joint judgment of Burchett and Kiefel JJ in the Northwestern Frozen Food case, who said (above, at 651): "Particularly in the case of a proceeding under section 76, where the object is to secure compliance with the Act by deterring contravention, a corporation which gives a court a reason to believe that this object has been achieved, so far as it is concerned, by its cooperation with the Commission and its entry into a compliance programme the form of which has been agreed with the Commission, should be entitled to full credit, whether or not it receives incidental advantages from the amendment of its conduct." Those considerations also include the "public interest in the promotion of settlements". In addition, as I have mentioned, the steps by which each of the consumers affected by the conduct will be identified will receive a letter of apology from the company with which that consumer did business and each will be compensated for the loss suffered. In the case of Mr Hunter, I should note the following. In May 1997 after the trial date had been set, Mr Hunter approached the Commission and admitted being knowingly concerned in making the arrangement and putting it into effect. He then had a number of lengthy meetings with the Commission, during which he fully and frankly detailed his role in the contravening conduct and that of the other respondents to his knowledge. I accept that his evidence was then the basis upon which the Commission subsequently joined the eighth and ninth respondents to the proceedings. They have each subsequently admitted that conduct. Accordingly, since May 1997 he has fully cooperated with and assisted the Commission and its legal advisers in relation to these proceedings and it was proposed that he would give evidence for the Commission at any trial. The Commission's view is that his information and his assistance and cooperation were substantial factors in the decisions of all the other respondents not to contest these proceedings and to admit the contraventions set out in the further amended statement of claim. I accept the view put by the Commission, with the support of Mr Hunter, that there is a considerable public benefit in recognising and encouraging persons with relevant information to approach and assist the applicant in enforcing the Act. Mr Hunter's actions are properly so characterised. The joint submission of the Commission and Mr Hunter proposes that no penalty be imposed on him. It will not be common for the Court to be satisfied that that is an appropriate order but in the particular circumstances and for the reasons identified in the joint submission which I accept, and which I have briefly referred to above, I am prepared to so conclude in this instance. In particular in my view there is considerable public benefit in persons with relevant information concerning breaches of the Act to provide that information to the Commission. I have also had regard to Mr Hunter's personal circumstances in reaching that view. Having regard to those various matters I am satisfied that, in the performance of the Court's duty under s 76, the particular penalties proposed in the joint submission of the Commission and of each of the respondents severally involved are penalties which the Court should determine to be appropriate. The orders which I am asked to make also prescribe or lay down a timetable for payment of the penalties to be fixed. I accept the Commission's assurance that those orders have been agreed upon after access to the detailed financial information concerning the several respondents and are, in the view of the Commission, reasonable. I propose to adopt them. Accordingly, in the light of the undertakings provided by the respondents now before me I note the various matters in the short minutes of order provided by and on behalf of the first, second, fourth, fifth, sixth, eighth and ninth respondents. In noting those matters I will note, without identifying it, that another corporate entity is agreed by the respondents to have been engaged in the conduct of entering into the understanding in late November or early December 1994. I do not consider it appropriate to identify that entity. It is not a respondent to these proceedings and has not on the material before the Court, acknowledged its alleged role in the transactions. I do not think it is for the parties in those circumstances by agreed declaratory orders to request the Court to record adverse findings against such an entity. To that limited extent, I do not fully reflect in my orders the proposed orders of the respondents. In particular, I note that each of the first, second, fourth and ninth respondents have provided undertakings in the form recorded at the conclusion of these reasons. I also make the declaratory orders as follows: (1) The first respondent, in making an arrangement or arriving at an understanding in late November or early December 1994 with the second, third and fourth respondents and with another corporate entity, which contained provisions which had the purpose and effect of: (a) not offering a car rental rate known as an "Ayers Rock Special" (being a combination of a daily kilometre allowance of up to six hundred kilometres a day, a twenty five cents per kilometre charge for kilometres travelled after the daily kilometre allowance had been used, and a daily rate of rental different to the daily rates advertised by the first, second, third and fourth respondents and another corporate entity) to walk-up customers in Alice Springs (being customers in Alice Springs who had no booking, reservation or other arrangement with a car rental company immediately prior to the supply of the rental vehicle to them in Alice Springs); (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates, made an arrangement or arrived at an understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of cars for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(a)(ii) of the Act. (2) The first respondent, in: (a) not offering Ayers Rock Specials to walk-up customers in Alice Springs; (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the second, third and fourth respondents and another corporate entity, between early December 1994 and the end of April 1995, gave effect to an arrangement or understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of vehicles for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(b)(ii) of the Act. (3) The second respondent, in making an arrangement or arriving at an understanding in late November or early December 1994 with the first, third and fourth respondents and another corporate entity, which contained provisions which had the purpose and effect of: (a) not offering Ayers Rock Specials to walk-up customers in Alice Springs; (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates, made an arrangement or arrived at an understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of cars for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(a)(ii) of the Act. (4) The second respondent, in: (a) not offering Ayers Rock Specials to walk-up customers in Alice Springs; (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the first, third and fourth respondents and another corporate entity, between early December 1994 and the end of April 1995, gave effect to an arrangement or understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of vehicles for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(b)(ii) of the Act. (5) The fourth respondent, in making an arrangement or arriving at an understanding in late November or early December 1994 with the first, second and third respondents and another corporate entity which contained provisions which had the purpose and effect of: (a) not offering a car rental rate known as an "Ayers Rock Special" (being a combination of a daily kilometre allowance of up to six hundred kilometres a day, a twenty five cents per kilometre charge for kilometres travelled after the daily kilometre allowance had been used, and a daily rate of rental different to the daily rates advertised by the first, second, third, and fourth respondents and another corporate entity) to walk-up customers in Alice Springs (being customers in Alice Springs who had no booking, reservation or other arrangement with a car rental company immediately prior to the supply of the rental vehicle to them in Alice Springs); (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates, made an arrangement or arrived at an understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of cars for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(a)(ii) of the Act. (6) The fourth respondent, in: (a) not offering Ayers Rock Specials to walk-up customers in Alice Springs; (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the first, second and third respondents and another corporate entity, between early December 1994 and the end of April 1995, gave effect to an arrangement or understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of vehicles for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(b)(ii) of the Act. (7) The fifth respondent, as the manager of the first respondent's car rental business in Alice Springs, in being knowingly concerned in, and party to, the first respondent making an arrangement, or arriving at an understanding with the second, third and fourth respondents and another corporate entity in late November or early December 1994, which contained provisions which had the purpose and effect of: (a) not offering a car rental rate known as an "Ayers Rock Special" (being a combination of a daily kilometre allowance of up to six hundred kilometres a day, a twenty five cents per kilometre charge for kilometres travelled after the daily kilometre allowance had been used, and a daily rate of rental different to the daily rates advertised by the first, second, third and fourth respondents and another corporate entity) to walk-up customers in Alice Springs (being customers in Alice Springs who had no booking, reservation or other arrangement with a car rental company immediately prior to the supply of the rental vehicle to them in Alice Springs); (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates, was knowingly concerned in, and party to, the first respondent making an arrangement or arriving at an understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of cars for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(a)(ii) of the Act, such conduct by the fifth respondent being conduct of the kind described in s 76(1)(e) of the Act. (8) The fifth respondent, as manager of the first respondent's car rental business in Alice Springs: (a) in instructing staff of the first respondent between around December 1994 to April 1995 to: (i) not offer Ayers Rock Specials to walk-up customers in Alice Springs; (ii) only rent vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (iii) rent vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the second, third and fourth respondents and another corporate entity; and (b) in attending a meeting in March 1995 with the seventh and eighth respondents to discuss the arrangement or understanding between the first, second, third and fourth respondents and another corporate entity to stop offering Ayers Rock Specials to walk-up customers in Alice Springs, was knowingly concerned in, and party to, the first respondent giving effect to an arrangement or understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of vehicles for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(b)(ii) of the Act, such conduct of the fifth respondent being conduct of the kind described in s 76(1)(e) of the Act. (9) The sixth respondent, as the manager of the second respondent's car rental business in Alice Springs, in being knowingly concerned in, and party to, the second respondent making an arrangement, or arriving at an understanding with the first, third and fourth respondents and another corporate entity in late November or early December 1994, which contained provisions which had the purpose and effect of: (a) not offering a car rental rate known as an "Ayers Rock Special" (being a combination of a daily kilometre allowance of up to six hundred kilometres a day, a twenty five cents per kilometre charge for kilometres travelled after the daily kilometre allowance had been used, and a daily rate of rental different to the daily rates advertised by the first, second, third and fourth respondents and another corporate entity) to walk-up customers in Alice Springs (being customers in Alice Springs who had no booking, reservation or other arrangement with a car rental company immediately prior to the supply of the rental vehicle to them in Alice Springs); (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk-up customers in Alice Springs at around the same daily rental rates, was knowingly concerned in, and party to, the second respondent making an arrangement or arriving at an understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of cars for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(a)(ii) of the Act, such conduct by the sixth respondent being conduct of the kind described in s 76(1)(e) of the Act. (10) The sixth respondent, as manager of the second respondent's car rental business in Alice Springs, in instructing staff of the second respondent between around December 1994 to April 1995 to: (a) not offer Ayers Rock Specials to walk-up customers in Alice Springs; (b) only rent vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) rent vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the first, third and fourth respondents and another corporate entity; was knowingly concerned in, and party to, the second respondent giving effect to an arrangement or understanding which had the purpose, effect and likely effect of substantially lessening competition in the market for the supply of vehicles for rental to walk-up customers in Alice Springs, in contravention of s 45(2)(b)(ii) of the Act, such conduct of the sixth respondent being conduct of the kind described in s 76(1)(e) of the Act. (11) The eighth respondent, as managing director of the fourth respondent, in advising the first respondent in late November or early December 1994 that the fourth respondent: (a) would not offer Ayers Rock Specials to walk-up customers in Alice Springs; (b) would only rent vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) would rent vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the first, second and third respondents and another corporate entity; was knowingly concerned in, and party to, the fourth respondent's contravention of s 45(2)(a)(ii) of the Act referred to in par (5) hereof, being conduct of the kind described in s 76(1)(e) of the Act. (12) The eighth respondent, as managing director of the fourth respondent: (a) in instructing staff of the fourth respondent in late December 1994 and early 1995 to: (i) not offer Ayers Rock Specials to walk-up customers in Alice Springs; (ii) only rent vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (iii) rent vehicles to walk-up customers in Alice Springs at around the same daily rental rates as the first, second and third respondents and another corporate entity; and (b) in attending a meeting in March 1995 with the fifth and seventh respondents to discuss the arrangement or understanding between the first, second, third and fourth respondents and another corporate entity to stop offering Ayers Rock Specials to walk-up customers in Alice Springs, was knowingly concerned in, and party to, the fourth respondent's contravention of s 45(2)(b)(ii) of the Act referred to in par (6) hereof, being conduct of the kind described in s 76(1)(e) of the Act. (13) The ninth respondent, as a director of and holder of half of the shares in the first respondent, in instructing the first respondent in November 1994 to make an arrangement, or arrive at an understanding with the third and fourth respondents and another corporate entity which contained provisions which had the purpose and effect of: (a) not offering Ayers Rock specials to walk-up customers in Alice Springs; and (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day, was knowingly concerned in, and party to, the first respondent's contravention of s 45(2)(a)(ii) of the Act, such conduct by the ninth respondent being conduct of the kind described in s 76(1)(e) of the Act. (14) The ninth respondent, through his directorship of and holding of half of the shares in the first respondent, and his knowledge of and consent to the first respondent's conduct in: (a) not offering Ayers Rock specials to walk-up customers in Alice Springs; (b) only renting vehicles to walk-up customers in Alice Springs with a kilometre allowance of one hundred kilometres per day; and (c) renting vehicles to walk up customers in Alice Springs at around the same daily rental rates as the first, second, third and fourth respondents and another corporate entity, between early December 1994 and the end of April 1995, was knowingly concerned in, and party to, the first respondent's contravention of s 45(2)(b)(ii) of the Act, such conduct by the ninth respondent being conduct of the kind described in s 76(1)(e) of the Act. I make the following orders against the various respondents under s 76 of the Act. The first respondent, Territory, in respect of its contravention of s 45(2)(a)(ii) of the Act pay to the Commonwealth of Australia a pecuniary penalty in sum of $200,000 and in respect of its contravention of s 45(2)(b)(ii) of the Act pay to the Commonwealth a pecuniary penalty in the sum of $300,000. The total of those three amounts is to be paid as to $168,000 on or before 7 November 1997; $166,000 on or before 6 February 1998 and $166,000 the final payment on or before 8 May 1998. In respect of the second respondent, Thrifty, in respect of its contravention of s 45(2)(a)(ii) of the Act I order that it pay to the Commonwealth of Australia a pecuniary penalty in the sum of $75,000 and in respect of its contravention of s 45(2)(b)(ii) of the Act I order that it pay to the Commonwealth of Australia a pecuniary penalty in the sum of $125,000. As to the total of those sums I further order that it pay those amounts in the following manner: $68,000 on or before 7 November 1997; $66,000 on or before 6 February 1998 and $66,000 on or before 8 May 1998. I also order that the first, second and ninth respondents together pay the Commission's costs of and incidental to these proceedings against the first, second and ninth respondents which are agreed in the sum of $80,000 and which are to be paid within sixty days of today's date. As against the fourth respondent, Hertz, in respect of its contravention of s 45(2)(a)(ii) of the Act that it pay to the Commonwealth of Australia a pecuniary penalty in the sum of $125,000 and in respect of its contravention of s 45(2)(b)(ii) of the Act that it pay to the Commonwealth of Australia a pecuniary penalty in the sum of $200,000. I order that it pay the total of those two sums in accordance with the following: $82,000 to be paid on or before 7 November 1997; $81,000 to be paid on or before 6 February 1998; $81,000 to be paid on or before 8 May 1998 and $81,000 to be paid on or before 7 August 1998. I further order that the fourth respondent pay the Commission's costs of and incidental to these proceedings against it which are agreed in the sum of $50,000 and to be paid in four instalments of $12,500 each on or before 7 November 1997, 6 February 1998, 8 May 1998 and 7 August 1998. As against the sixth respondent, Ms Keller, I order pursuant to s 76 of the Act that in respect of her being knowingly concerned in and party to the second respondent's contravention of s 45(2)(a)(ii) of the Act she pay to the Commonwealth of Australia a pecuniary penalty of $10,000. And in respect of her being knowingly concerned in and party to the second respondent, Thrifty's contravention of s 45(2)(b)(ii) of the Act she pay to the Commonwealth of Australia a pecuniary penalty in the sum of $25,000. I order that she pay the total of those two sums as to $12,000 on or before 7 November 1997, as to $12,000 on or before 6 February 1998 and as to $11,000 on or before 8 May 1998. I further order that she pay the Commission's costs of and incidental to the proceedings against her in the sum of $5000 to be paid within ninety days of today's date. As against the eighth respondent, Mr Bennett, pursuant to s 76 of the Act by reason of him being knowingly concerned in or party to the fourth respondent's contravention of s 45(2)(a)(ii) of the Act I order that he pay to the Commonwealth of Australia a pecuniary penalty in the sum of $30,000 and in respect of him being knowingly concerned in or party to the fourth respondent's contravention of s 45(2)(a)(ii) of the Act I order that he pay to the Commonwealth of Australia a pecuniary penalty in the sum of $50,000. I order that the total of the sums which he is ordered to pay by way of the pecuniary penalties be paid as follows: $3000 on or before 7 November 1997; $8000 on or before 6 February 1998; $8000 on or before 8 May 1998; $8000 on or before 7 August 1988; $8000 on or before 6 November 1998 and $45,000 on or before 8 February 1999. I also order that the eighth respondent pay the Commission's costs of and incidental to these proceedings against the eighth respondent which are agreed in the sum of $5000 and are to be paid on or before 7 November 1997. In respect of the ninth respondent, Mr Measey, pursuant to s 76 of the Act and for his role in being knowingly concerned in or party to Territory's contravention of s 45(2)(a)(ii) of the Act I order that he pay to the Commonwealth of Australia a pecuniary penalty of $100,000 and in respect of his being knowingly concerned in or party to the first respondent, Territory's contravention of s 45(2)(b)(ii) of the Act that he pay to the Commonwealth of Australia a pecuniary penalty in the sum of $50,000. I order that the amount of those penalties be paid by him in three instalments of $50,000 each on or before 7 November 1997, 6 February 1998 and 8 May 1998. In respect of the fifth respondent, Mr Hunter, as manager of Territory, for the reasons given, apart from making the declarations referred to, I consider it appropriate in the particular circumstances that there be no pecuniary penalty imposed upon him. It is agreed between the Commission and the fifth respondent that there be no order as to costs against him. I make the following injunctive orders: (1) The first respondent be restrained, for a period of four years, whether by its directors, servants, agents, or otherwise howsoever, from: (a) making or arriving at; (b) giving effect to; (c) inducing, or attempting to induce, any person to make or arrive at, or give effect to; (d) aiding, abetting, counselling or procuring any person to make or arrive at, or give effect to; or (e) being directly or indirectly, knowingly concerned in, or party to, a person making or arriving at or giving effect to: any contract, arrangement or understanding which contains a provision that: