Australian Competition & Consumer Commission v Vanderfield Pty Ltd (ACN 060 286 759) [2009] FCA 1535

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Vanderfield Pty Ltd (ACN 060 286 759) [2009] FCA 1535

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v VANDERFIELD PTY LTD (ACN 060 286 759), SCI-FLEET MOTORS PTY LTD (ABN 25 057 783 749), BAVIN LUDWIG CHERRY, JOHN KEVIN MCGUINN and ROSS CAMPBELL GOODWIN

QUD 163 of 2009

DOWSETT J

3 NOVEMBER 2009

BRISBANE IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

general division QUD 163 of 2009

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND: VANDERFIELD PTY LTD (ACN 060 286 759)

First Respondent

SCI-FLEET MOTORS PTY LTD (ABN 25 057 783 749)

Second Respondent

BAVIN LUDWIG CHERRY

Third Respondent

JOHN KEVIN MCGUINN

Fourth Respondent

ROSS CAMPBELL GOODWIN

Fifth Respondent

JUDGE: DOWSETT J

DATE OF ORDER: 3 NOVEMBER 2009

WHERE MADE: BRISBANE

THE COURT DECLARES THAT:

1. The first respondent ("Vanderfield") and the second respondent ("Sci-Fleet"): 1.1. were and are Hino Truck dealers operating pursuant to dealership agreements with the Hino master franchisor pursuant to which each had a non exclusive prime marketing area ("PMA") which areas were contiguous (but not over lapping) and were and are competitors for the supply of Hino trucks in South East Queensland ("SEQ"); 1.2. in February 2005 made an arrangement (the "February Arrangement") by which they agreed not to compete with each other for the supply of the Hino truck to a particular customer located in Vanderfield's PMA; 1.3. in June 2005 made an arrangement (the "June Arrangement") by which they agreed not to compete with each other for the supply of Hino trucks to customers located in Brisbane and in Toowoomba by allocating customers and potential customers to the dealer in whose PMA the customer or potential customer was located; and 1.4. in November 2005 made an arrangement (the "November Arrangement") by which they agreed not to compete with each other for the supply of Hino trucks to customers located in Brisbane, Toowoomba and the Gold Coast by allocating customers and potential customers to the dealer in whose PMA the customer or potential customer was located; 1.5. by the making of each of the February Arrangement, the June Arrangement and the November Arrangement, made an arrangement that contained provisions that: 1.5.1. had the purpose or a substantial purpose, or had the effect or was likely to have the effect, of providing for the fixing, controlling or maintaining of the price for trucks supplied or to be supplied by Vanderfield or Sci-Fleet and each provision is therefore deemed, by operation of section 45A of the Trade Practices Act 1974 (Cth) (the "Act"), to have the purpose, or to have had or be likely to have the effect, of substantially lessening competition for the supply of trucks in the SEQ light and medium truck market, and thereby contravened section 45(2)(a)(ii) of the Act on each occasion; 1.5.2. had the purpose of preventing or limiting the supply of trucks by Sci-Fleet and Vanderfield to a particular person or particular class of persons, being persons located in an area defined as the prime marketing area of the other corporate respondent, which provisions were therefore exclusionary provisions, and thereby contravened section 45(2)(a)(i) of the Act on each occasion. 2. Sci-Fleet by the fifth respondent ("Mr Goodwin") gave effect to the provisions of the February Arrangement, the June Arrangement and the November Arrangement on a total of 21 occasions between February 2005 and September 2006, and thereby on each occasion contravened sections 45(2)(b)(i) and 45(2)(b)(ii) of the Act. 3. Mr Goodwin being an employee of Sci-Fleet acting within the actual or apparent scope of his authority and being the person: 3.1. who entered into February Arrangement, the June Arrangement and November Arrangement, on behalf of Sci-Fleet; and 3.2. who caused Sci-Fleet to give effect to those arrangements, as set out in paragraph 2, on 21 occasions; has aided, abetted and procured, and been directly knowingly concerned in or party to each contravention of Sci-Fleet referred to in paragraphs 1 and 2. 4. Vanderfield gave effect to the provisions of the February Arrangement and the November Arrangement, on a total of 16 occasions between February 2005 and September 2006, and thereby on each occasion contravened sections 45(2)(b)(i) and 45(2)(b)(ii) of the Act. 5. The third respondent ("Mr Cherry") being an employee of Vanderfield acting within the actual or apparent scope of his authority and being the person: 5.1. who entered into February Arrangement, the June Arrangement and November Arrangement, on behalf of Vanderfield; and 5.2. who caused Vanderfield to give effect to those arrangements, as set out in para 4, on 4 occasions; has aided, abetted and procured, and been directly knowingly concerned in or party to the relevant contraventions of Vanderfield referred to in paras 1 and 4. 6. The fourth respondent ("Mr McGuinn") being an employee of Vanderfield acting within the actual or apparent scope of his authority and being the person: 6.1. who entered into the November Arrangement, on behalf of Vanderfield; and 6.2. who caused Vanderfield to give effect to those arrangements, as set out in para 4, on 12 occasions; has aided, abetted and procured, and been directly knowingly concerned in or party to the relevant contraventions of Vanderfield referred to in paragraphs 1 and 4. THE COURT ORDERS THAT: 7. Sci-Fleet pay the Commonwealth of Australia within 14 days of this order a total pecuniary penalty in the sum of $500,000 in respect of its contraventions of sections 45(2)(a)(i), 45(2)(b)(i), 45(2)(a)(ii) and 45(2)(b)(ii) of the Act. 8. Vanderfield pay the Commonwealth of Australia a total pecuniary penalty in the sum of $500,000 in respect of its contraventions of sections 45(2)(a)(i), 45(2)(b)(i), 45(2)(a)(ii) and 45(2)(b)(ii) of the Act, payable in instalments of: 8.1. $125,000 within 3 months of this order; 8.2. $125,000 within 10 months of this order; 8.3. $125,000 within 17 months of this order; 8.4. $125,000 within 24 months of this order; provided that the total penalty then unpaid shall become immediately payable if any instalment is not paid by the due date. 9. Mr Goodwin pay the Commonwealth of Australia a total pecuniary penalty in the sum of $30,000 in respect of his contraventions of sections 45(2)(a)(i), 45(2)(b)(i), 45(2)(a)(ii) and 45(2)(b)(ii) of the Act payable in instalments of: 9.1. $10,000 within 14 days of this order; 9.2. $5,000 within 6 months of this order; 9.3. $5,000 within 12 months of this order; 9.4. $5,000 within 18 months of this order; 9.5. $5,000 within 24 months of this order; provided that the total penalty then unpaid shall become immediately payable if any instalment is not paid by the due date. 10. Mr Cherry pay the Commonwealth of Australia within 14 days of this order a total pecuniary penalty in the sum of $30,000 in respect of his contraventions of ss 45(2)(a)(i), 45(2)(b)(i), 45(2)(a)(ii) and 45(2)(b)(ii) of the Act. 11. Mr McGuinn pay the Commonwealth of Australia within 14 days of this order a total pecuniary penalty in the sum of $30,000 in respect of his contraventions of ss 45(2)(a)(i), 45(2)(b)(i), 45(2)(a)(ii) and 45(2)(b)(ii) of the Act. 12. Sci-Fleet pay the applicant within 14 days of this order a contribution to its costs agreed in the sum of $50,000. 13. Vanderfield pay the applicant within 14 days of this order a contribution to its costs agreed in the sum of $50,000. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA