Australian Competition and Consumer Commissioner v Telwater Pty Ltd [2009] FCA 263

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commissioner v Telwater Pty Ltd [2009] FCA 263

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TELWATER PTY LTD ACN 010 795 507 and PAUL MATTHEW PHELAN

QUD 26 of 2009

SPENDER J

5 MARCH 2009

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QUD 26 of 2009

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND: TELWATER PTY LTD ACN 010 795 507

First Respondent

PAUL MATTHEW PHELAN

Second Respondent

JUDGE: SPENDER J

DATE OF ORDER: 5 MARCH 2009

WHERE MADE: BRISBANE

THE COURT DECLARES THAT:

1. By providing to dealers of Quintrex-branded products (Quintrex dealers): (a) a price for each boat, trailer, and motor package supplied to Quintrex dealers (Quintrex package) that was described as a "brochure price" or "recommended retail price" or "RRP" (Brochure Price); and (b) a document entitled "Quintrex and Dealer Expectations" that required Quintrex dealers to advertise Quintrex packages at Brochure Price, from about June 2004, the first respondent (Telwater) contravened section 48 of the Trade Practices Act 1974 (Cth) by: (c) engaging in the act described in section 96(3)(b) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7)(a) of the Trade Practices Act 1974 (Cth) by attempting to induce Quintrex dealers not to advertise Quintrex packages at a price less than the Brochure Price; (d) engaging in the act described in section 96(3)(c) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7)(a) of the Trade Practices Act 1974 (Cth) by entering into an agreement with Quintrex dealers a term of which was that a Quintrex dealer could not advertise Quintrex packages at a price less than the Brochure Price; and (e) engaging in the act described in section 96(3)(f) of the Trade Practices Act 1974 (Cth) by the operation section of 96(7) of the Trade Practices Act 1974 (Cth) by using, in relation to Quintrex packages, a statement of price that was likely to be understood by Quintrex dealers as the price below which Quintrex packages were not to be advertised. 2 By: (a) providing to dealers of Stacer-branded products (Stacer dealers) a Brochure Price for each boat, trailer, and motor package supplied to Stacer dealers (Stacer package); and (b) requiring Stacer dealers to advertise Stacer packages at Brochure Price, from about June 2003 Telwater contravened section 48 of the Trade Practices Act 1974 (Cth) by: (c) engaging in the act described in section 96(3)(b) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7)(a) of the Trade Practices Act 1974 (Cth) by attempting to induce Stacer dealers not to advertise Stacer packages at a price less than the Brochure Price; (d) engaging in the act described in section 96(3)(c) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7)(a) of the Trade Practices Act 1974 (Cth) by entering into an agreement with Stacer dealers a term of which was that a Stacer dealer could not advertise Stacer packages at a price less than the Brochure Price; and (e) engaging in the act described in section 96(3)(f) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7) of the Trade Practices Act 1974 (Cth) by using, in relation to Stacer packages, a statement of price that was likely to be understood by Stacer dealers as the price below which Stacer packages were not to be advertised. 3 By making known to Quintrex dealers and Stacer dealers that Telwater would not subsidise the cost of a Quintrex dealer's or Stacer dealer's advertising if Quintrex packages or Stacer packages were advertised at a price below Brochure Price from about June 2005, Telwater contravened section 48 of the Trade Practices Act 1974 (Cth) by engaging in the act described in section 96(3)(b) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7)(a) of the Trade Practices Act 1974 (Cth) by attempting to induce Quintrex dealers and Stacer dealers not to advertise Quintrex packages and Stacer packages at a price less than the Brochure Price. 4 By contacting Quintrex dealers and Stacer dealers when they advertised at a price below Brochure Price, including: (a) Jet 1 Marine, a Stacer dealer, in about November 2006 and February 2007; (b) Pacific Powerboats, a Stacer dealer, in about December 2006; (c) Sugar City Marine, a Quintrex dealer, in about December 2006; (d) Sundown Marine, a Quintrex dealer, in about December 2006; (e) TR Marine, a Quintrex dealer, in about December 2006; (f) Hayway Marine, a Stacer dealer, in about November 2007; and (g) Cooloola Marine, a Stacer dealer, in about November 2007, Telwater contravened of section 48 of the Trade Practices Act 1974 (Cth) by: (h) engaging in the act described in section 96(3)(b) of the Trade Practices Act 1974 (Cth) by the operation of section 96(7)(a) of the Trade Practices Act 1974 (Cth) by attempting to induce Quintrex dealers and Stacer dealers not to advertise Quintrex packages and Stacer packages at a price less than the Brochure Price; and (i) engaging in the act described in section 96(3)(f) of the Trade Practices Act 1974 (Cth) by the operation section 96(7) of the Trade Practices Act 1974 (Cth) by using, in relation to Quintrex packages and Stacer packages, a statement of price that was likely to be understood by Quintrex dealers and Stacer dealers as the price below which Quintrex packages and Stacer packages were not to be advertised 5 The second respondent (Mr Phelan) was knowingly concerned in, or party to, Telwater's contraventions of section 48 of the Trade Practices Act 1974 (Cth) set out in paragraphs 1, 2, 3, and 4. THE COURT ORDERS THAT: 6 Telwater pay to the Commonwealth pursuant to section 76 of the Trade Practices Act 1974 (Cth) a pecuniary penalty of $210,000 in respect of the contraventions of section 48 of the Trade Practices Act 1974 (Cth) set out in paragraphs 1, 2, 3, and 4. 7 Mr Phelan pay to the Commonwealth pursuant to section 76 of the Trade Practices Act 1974 (Cth) a pecuniary penalty of $28,000 in respect of his involvement in Telwater's contraventions of section 48 of the Trade Practices Act 1974 (Cth) set out in paragraphs 1, 2, 3, and 4. THE COURT ORDERS BY CONSENT THAT: 8 Pursuant to section 80(1) of the Trade Practices Act 1974 (Cth), for a period of 5 years from the date of this order Telwater be restrained by itself, its servants or agents, or otherwise howsoever from: (a) making it known to a Quintrex dealer that it may not advertise Quintrex packages for a price less than a price specified by Telwater; (b) making it known to a Stacer dealer that it may not advertise Stacer packages for a price less than a price specified by Telwater; (c) refusing to subsidise the cost of a Quintrex dealer's advertising because a Quintrex package is being advertised for a price less than a price specified by Telwater; (d) refusing to subsidise the cost of a Stacer dealer's advertising because a Stacer package is being advertised for a price less than a price specified by Telwater; (e) inducing, or attempting to induce, a Quintrex dealer not to advertise Quintrex packages for a price less than a price specified by Telwater; (f) inducing, or attempting to induce, a Stacer dealer not to advertise Stacer packages for a price less than a price specified by Telwater. 9 Pursuant to section 80(1) of the Trade Practices Act 1974 (Cth), for a period of 5 years from the date of this order Mr Phelan be restrained by himself, his servants or agents, or otherwise howsoever from: (a) making it known to a Quintrex dealer that it may not advertise Quintrex packages for a price less than a price set by Telwater; (b) making it known to a Stacer dealer that it may not advertise Stacer packages for a price less than a price set by Telwater; (c) refusing to subsidise the cost of a Quintrex dealer's advertising because a Quintrex package is being advertised for a price less than a price set by Telwater; (d) refusing to subsidise the cost of a Stacer dealer's advertising because a Stacer package is being advertised for a price less than a price set by Telwater; (e) inducing, or attempting to induce, a Quintrex dealer not to advertise Quintrex packages for a price less than a price set by Telwater; (f) inducing, or attempting to induce, a Stacer dealer not to advertise Stacer packages for a price less than a price set by Telwater. 10 Pursuant to section 86C of the Trade Practices Act 1974 (Cth), Telwater establish and implement at its own expense a trade practices compliance program for its employees and other persons involved in its business that is designed to ensure their awareness of their responsibilities and obligations under section 48 of the Trade Practices Act 1974 (Cth). 11 Pursuant to section 86C of the Trade Practices Act 1974 (Cth), Telwater and Mr Phelan write to each Quintrex dealer and Stacer dealer in the form of annexure A at Telwater's expense. 12 Telwater and Mr Phelan pay the ACCC's costs of the proceeding fixed in the sum of $40,000.