FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Avitalb Pty Ltd [2014] FCA 222 Citation: Australian Competition and Consumer Commission v Avitalb Pty Ltd [2014] FCA 222 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AVITALB PTY LTD (ACN 152 309 503) File number(s): WAD 184 of 2013 Judge(s): GRIFFITHS J Date of judgment: 7 March 2014 Catchwords: CONSUMER LAW – misleading or deceptive conduct –consumer guarantee provisions – representations about the existence, exclusion or effect of a guarantee, right or remedy – admitted contraventions – agreed orders –whether proposed orders appropriate – whether proposed penalty within appropriate range – relevance of errors in statement of agreed facts Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 Federal Court of Australia Act 1976 (Cth) s 21 Cases cited: Australian Consumer and Competition Commission v Camavit Pty Ltd (2013) 275 FLR 171; [2013] FCA 1397 Australian Consumer and Competition Commission v HP Superstore Pty Ltd [2013] FCA 1317 Australian Consumer and Competition Commission v Launceston Superstore Pty Ltd [2013] ATPR 42-436; [2013] FCA 1315 Australian Consumer and Competition Commission v Moonah Superstore Pty Ltd [2013] FCA 1314 Australian Consumer and Competition Commission v Salecomp Pty Ltd [2013] FCA 1316 Australian Securities and Investments Commission v Ingleby (2013) 275 FLR 171; [2013] VSCA 49 Comcare v Commonwealth of Australia (2012) 132 ALD 480; [2012] FCA 1419 Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Limited [2004] ATPR 41-933; [2004] FCAFC 72 NW Frozen Foods Pty Limited v Australian Competition and Consumer Commission (1996) 71 FCR 285 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 45 Counsel for the Applicant: Ms K Banks-Smith SC Solicitor for the Applicant: Norton Rose Fulbright Counsel for the Respondent: Mr F P Carnovale Solicitor for the Respondent: Brown Wright Stein IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION WAD 184 of 2013 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AVITALB PTY LTD (ACN 152 309 503) Respondent JUDGE: GRIFFITHS J DATE OF ORDER: 7 MARCH 2014 WHERE MADE: PERTH THE COURT DECLARES THAT: 1. Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth), the respondent made the following oral statement to a consumer on about 17 February 2012 in the course of discussions about problems with a laptop computer supplied by the respondent to a consumer, and the consumer's attempts to obtain a refund or remedy: a) during a conversation about issues with the laptop culminating in a request for a refund or replacement, "… If it is a software issue, it wouldn't be covered. If it's a hardware issue, we can send it for repair", and, by doing so, the respondent has, in trade or commerce: b) made a representation in connection with the supply or possible supply of goods or services that was false or misleading and concerned the existence, exclusion or effect of any guarantee, right or remedy available under the consumer guarantee provisions in Division 1 of Part 3-2 of the Australian Consumer Law (ACL) found in Schedule 2 of the Competition and Consumer Act 2010 (Cth), and/ or other remedies relating to those guarantees in Part 5-4 of the ACL in contravention of s 29(1)(m) of the ACL; and c) thereby engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL. THE COURT ORDERS THAT: 1. Pursuant to s 232 of the ACL, for a period of three years from the date of these orders, the respondent is restrained (whether by itself, its servants, agents or otherwise howsoever) from making representations (whether oral or written) to any customer to the effect that the respondent does not have any obligation regardless of the circumstances and the consumer guarantee provisions of Division 1 of Part 3-2 and/or the remedies relating to those guarantees in Part 5-4 of the ACL to provide any remedies in relation to goods it supplies where any issues with the goods are caused by the software supplied with the goods. 2. Pursuant to ss 224(1)(a)(ii) and 228 of the ACL, within 28 days of the date of these orders, the respondent is to pay to the Commonwealth a pecuniary penalty in respect of the contravention of s 29(1)(m) of the ACL in the amount of $10,000.00. 3. Each party is to bear its own costs of the proceeding and all costs orders (if any) against either party in the proceeding are to be vacated. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION WAD 184 of 2013 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AVITALB PTY LTD (ACN 152 309 503) Respondent JUDGE: GRIFFITHS J DATE: 7 MARCH 2014 PLACE: PERTH REASONS FOR JUDGMENT 1 The proceedings were commenced on 11 June 2013 by way of an originating application. They concern allegations that the respondent had, on two occasions on the same day, on or about 17 February 2012, made three oral statements to a consumer who had purchased a laptop computer from the respondent. The statements were alleged to have been made by two of the respondent's sales representatives, who were referred to in the pleadings as Chev and Michael respectively. 2 The applicant alleged that the statements were made by those sale representatives to a consumer who had purchased a laptop computer from the respondent's store in Albany. The store was known as the Harvey Norman AV/IT Superstore, Albany. The statements related to the consumer's rights and remedies under consumer laws regarding the alleged faulty laptop. 3 The three statements were set out in the originating application in the following terms: (a) "… If it is a software issue, it wouldn't be covered. If it's a hardware issue, we can send it for repair"; (b) "There have been changes recently to computer warranties. If the product is bought after 1 January 2012, then customers can choose to get a refund or exchange for faulty products"; and (c) "That is not right. The dates are different because it is a laboratorium period." 4 The applicant alleged that the three statements constituted representations which were contrary to ss 18 and 29(1)(m) of the Australian Consumer Law (ACL), which is found in Schedule 2 of the Competition and Consumer Act 2010 (Cth). 5 The applicant sought declaratory and injunctive relief, a pecuniary penalty, orders requiring corrective advertising and an order that the respondent implement a compliance program. The applicant also sought costs. The originating application was accompanied by a statement of claim. The statement of claim pleaded material facts relating to each of the three statements identified in the originating application in the following terms: 7. On or about 17 February 2012, Mrs Rubinich returned to the Respondent's Premises and spoke to two sales representatives of the Respondent in that store who, in response to Mrs Rubinich's enquiries concerning problems with the Rubinich Laptop, made oral statements to the following effect: (a) "… If it is a software issue, it wouldn't be covered. If it's a hardware issue, we can send it for repair." (b) "There have been changes recently to computer warranties. If the product is bought after 1 January 2012, then customers can choose to get a refund or exchange for faulty products." Particulars The sales representative that made the statement at paragraph 7(a) above was named Chev. 8. Later on the same day, Mrs Rubinich returned to the Respondent's Premises and spoke to a sales representative of the Respondent who made an oral statement (in response to Mrs Rubinich's assertion that the provisions of the ACL relating to warranties were in force in 2011) to the effect of "That is not right. The dates are different because it is a laboratorium period." Particulars The sales representative that made the statement at paragraph 8 above was named Michael. Representations 9. By making the oral statement referred to in paragraph 7(a) above in the circumstances, the Respondent represented in effect to Mrs Rubinich that: (a) it would not, and did not have any obligation to, provide any remedies in relation to goods it supplied, including the Rubinich Laptop, where any issues with the goods were caused by the software supplied with the goods; (b) further and alternatively, it would not, and did not have any obligation to, provide a replacement or refund in relation to the Rubinich Laptop. 10. By making the oral statement referred to at paragraph 7(b) above in the circumstances, the Respondent represented in effect to Mr Rubinich that: (a) for purchases prior to 1 January 2012, the Respondent would not, and did not have any obligation to, provide any remedies, including refund or exchange, under the law in relation to computer warranties, including the Consumer Guarantees under the ACL, in relation to goods it supplied, including the Rubinich Laptop; (b) further and alternatively, the ACL, and the rights and remedies granted to consumers in respect of computers by the law in relation to warranties, including the Consumer Guarantees under the ACL, did not commence until 1 January 2012. 11. By making the oral statement referred to at paragraph 8 above in the circumstances, the Respondent represented in effect to Mrs Rubinich that: (a) it would not, and did not have any obligation to, provide any remedies in relation to the Rubinich Laptop under the ACL as she had purchased the Rubinich Laptop before 1 January 2012, when a "laboratorium" or moratorium period applied; (b) further and alternatively, the ACL, and the rights and remedies granted to consumers by the ACL, including the Consumer Guarantees, did not commence until 1 January 2012. 6 The substance of those pleadings is that the subject statements represented that: a) the respondent would not and did not have an obligation to provide any remedies in relation to goods it supplied, including the laptop, where the issue was a software issue; b) further or alternatively, it did not have an obligation to provide a replacement product or refund in relation to the alleged faulty laptop; c) further or alternatively, the rights and guarantees for consumers under the ACL did not commence until 1 January 2012; and d) further and in the alternative, that it would not and did not have any obligation to provide any remedy in relation to the laptop, because it had not been purchased before 1 January 2012, when it was said that a moratorium period applied. 7 The allegation in the pleadings was that these representations misrepresented the consumer guarantee provisions of the ACL. 8 The respondent filed a defence dated 3 September 2013. It pleaded that on 31 May 2013, it had ceased trading and had also ceased being a Harvey Norman franchisee. It denied that the sales representatives made the three alleged statements attributed to them, but the respondent admitted that, if those statements were made, they would have contravened the ACL. 9 On 30 July 2013, the docket judge, McKerracher J, made various orders and gave various directions to enable the issues of both liability and penalty to be heard by the Court. Those directions included directions for the parties to file and serve their evidence in chief and for the applicant to serve its evidence in reply. I was told from the bar table that both parties proceeded to prepare evidence in chief (although the evidence was served, it was never filed). 10 On 29 November 2013, the matter came back before McKerracher J for further directions. At that time, his Honour set aside his earlier direction for the filing of evidence in reply by the applicant by 26 November 2013 to provide a further four weeks for that to occur. His Honour otherwise made directions with a view to the issues of both liability and penalty being heard before the Court on two days, namely 7 March 2014 and 10 March 2014. It is evident that in making those orders, his Honour was apparently not aware that there were some discussions that were taking place about the possibility of settling the proceedings, to which I will return shortly. 11 It is convenient to note at this point, however, that it was common ground – and indeed, this is reflected in the statement of agreed facts which has been presented to the Court – that the relevant consumer did, in fact, receive a full refund on 17 February 2012. As noted above, that is the date on which the alleged statements were made. 12 It is also convenient to observe that these proceedings were brought by the applicant as one of a series of cases which have been brought against various Harvey Norman franchisees in various States of the Commonwealth. There have, in fact, been judgments in five earlier such matters. Those judgments are Australian Consumer and Competition Commission v Launceston Superstore Pty Ltd [2013] ATPR 42-436; [2013] FCA 1315 (ACCC v Launceston), Australian Consumer and Competition Commission v Moonah Superstore Pty Ltd [2013] FCA 1314, Australian Consumer and Competition Commission v HP Superstore Pty Ltd [2013] FCA 1317, Australian Consumer and Competition Commission v Salecomp Pty Ltd [2013] FCA 1316 and Australian Consumer and Competition Commission v Camavit Pty Ltd (2013) 275 FLR 171; [2013] FCA 1397. 13 I was also told from the bar table that there are other matters that are still on foot, apparently involving the applicant and other Harvey Norman franchisees, including: a) a proceeding which is before Edmonds J, in which his Honour has reserved judgment; b) a matter in the Federal Circuit Court before Burnett J, who apparently, has made orders but has not yet delivered reasons for judgment; and c) a matter to be heard by Dowsett J in Brisbane in the very near future in respect of another set of proceedings. I was also informed that McKerracher J has reserved his decision in a further set of proceedings here in Perth. 14 These proceedings have been brought against a background of what was described as "broad discussions" which took place some time in 2013 between the applicant and the franchisor, namely, Harvey Norman Holdings Ltd after the applicant had received various consumer complaints about statements made by a number of sales representatives of Harvey Norman franchisees. The discussions were apparently at a general level and did not identify any particular store, including the respondent's Albany store. There were, however, some other subsequent settlement discussions, specifically involving the respondent, about which I will have something to say in a moment. 15 On or about 3 February, 2014 the Court was informed that the parties had reached a settlement and that they proposed to present the Court with joint submissions in respect of the proposed relief, as well as a statement of agreed facts. I was told from the bar table today that the proceedings had been "settled", on 24 December 2013. The settlement discussions were initiated by the respondent in an email dated 7 August 2013. I was told that there was then an exchange of correspondence between the parties with a view to seeking to reach some sort of a compromise, and that a meeting had been held in October 2013 with a view to achieving a resolution of 10 matters involving Harvey Norman franchisees and the applicant, including the respondent. While a number of those disputes were able to be resolved at that meeting in October, the current dispute was unable to be resolved at that time. Agreement between the parties was not reached until 24 December 2013. 16 I have emphasised these matters because they do not sit comfortably with one aspect of the statement of agreed facts. A copy of the statement of agreed facts is annexed to the reasons for judgment, as Annexure A. The parties also filed joint submissions dated 4 March 2014, which are also attached as Annexure B to the reasons for judgment. Those materials were filed with the Court in support of the following orders which were proposed jointly by the parties: THE COURT DECLARES THAT: 1. Pursuant to section 21 of the Federal Court of Australia Act 1976, the Respondent made the following oral statement to a consumer on or about 17 February 2012 in the course of discussions about problems with a laptop computer (Laptop) supplied by the Respondent to a consumer, and the consumer's attempts to obtain a refund or remedy: (a) during a conversation about issues with the Laptop culminating in a request for a refund or replacement, "…If it is a software issue, it wouldn't be covered. If it's a hardware issue, we can send it for repair", and, by doing so, the Respondent has, in trade or commerce: (b) made a representation in connection with the supply or possible supply of goods or services that was false or misleading and concerned the existence, exclusion or effect of any guarantee, right or remedy available under the consumer guarantee provisions in Division 1 of Part 3-2 of Schedule 2 of the Competition and Consumer Act 2010 (ACL), and/or other remedies relating to those guarantees in Part 5-4 of the ACL in contravention of section 29(1)(m) of the ACL; and (c) thereby engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the ACL. THE COURT ORDERS THAT: Injunction 2. Pursuant to section 232 of the ACL, for a period of three years from the date of these Orders, the Respondent is restrained (whether by itself, its servants, agents or otherwise howsoever) from making representations (whether oral or written) to any customer to the effect that the Respondent does not have any obligation regardless of the circumstances and the consumer guarantee provisions of Division 1 of Part 3-2 and/or the remedies relating to those guarantees in Part 5-4 of the ACL to provide any remedies in relation to goods it supplies where any issues with the goods are caused by the software supplied with the goods. Pecuniary penalty 3. Pursuant to sections 224(1)(a)(ii) and 228 of the ACL, within 28 days of the date of these Orders, the Respondent is to pay to the Commonwealth a pecuniary penalty in respect of the contravention of section 29(1)(m) of the ACL in the amount of $10,000.00. Costs 4. Each party is to bear its own costs of the proceeding and all costs orders (if any) against either party in the proceeding are to be vacated. Some relevant principles 17 The relevant principles are established by a long series of decisions, perhaps the most important of which are two decisions of the Full Court in NW Frozen Foods Pty Limited v Australian Competition and Consumer Commission (1996) 71 FCR 285 and Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Limited [2004] ATPR 41-933; [2004] FCAFC 72. The principles have also been discussed and applied in a series of first instance decisions, including the five decisions referred to above in respect of other Harvey Norman franchisees. Other relevant recent first instance decisions which include a discussion of the relevant principles (not confined to penalties under the ACL but also penalties under other Commonwealth legislation) include my decision in respect of the Occupational Health and Safety Act 1991 (Cth) in Comcare v Commonwealth of Australia (2012) 132 ALD 480; [2012] FCA 1419 where the principles are set out in [101] and [102]: The principles may be summarised as follows (relying on what was stated in Mobil Oil at [51]-[60]). First, the following principles may be derived from NW Frozen Foods: (a) it is the responsibility of the Court to determine the appropriate penalty to be imposed in respect of a contravention of the relevant legislation; (b) determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another; (c) there is a public interest in promoting settlement of litigation, particularly where it is likely to sbe lengthy. Accordingly, when the regulator and contravener have reached agreement, they may present to the Court a statement of facts and opinions as to the effects of those facts, together with joint submissions as to the appropriate penalty to be imposed; (d) the view of the regulator, as a specialist body, is a relevant - but not determinative - consideration on the question of penalty; (e) in determining whether a proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so; and (f) where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It is appropriate if it is within the permissible range. Secondly, the Full Court in Mobil Oil added the following further five considerations: (a) the rationale for giving weight to a joint submission on penalty relates to the savings in resources for the regulator and the Court. The savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence. The arguments in favour of negotiated settlements have to take account of the fact that it is the Court which bears the ultimate responsibility for determining the appropriate penalty; (b) the sixth principle drawn from the reasoning in NW Frozen Foods set out in [101(f)] above does not mean that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties' proposed figure and then, having made that judgment, determine whether the proposed penalty falls within the range; (c) the appellant in NW Frozen Foods admitted contravening the TP Act and had reached agreement with the regulator upon the facts to be put before the Court. There was no suggestion that the admissions or statement had been tailored or modified to reflect the difficulties faced by the regulator in proving its case. The Full Court therefore acted on the basis of clear admissions and a detailed statement of agreed facts setting out how the contraventions had occurred; (d) as the Full Court indicated in Australian Competition & Consumer Commission v Ithaca Ice Works Pty Ltd [2001] FCA 1716; [2002] ATPR 41-851, the regulator should always explain to the Court the process of reasoning that justifies a discounted penalty; and (e) there is nothing in NW Frozen Foods which is inconsistent with any of the following propositions: (i) the Court, if it considers that the evidence or information before it is inadequate to form a view as to whether the proposed penalty is appropriate, may request the parties to provide additional evidence or information or verify the information provided. If they do not provide the information or verification requested, the Court may well not be satisfied that the proposed penalty is within the range; (ii) if the absence of a contradictor inhibits the Court in performance of its duties it may seek the assistance of an amicus curiae or of an individual body prepared to act as an intervenor under the relevant Federal Court Rules; and (iii) if the Court is disposed not to impose the penalty proposed by the parties, it may be appropriate, depending on the circumstances, for each of them to be given the opportunity to withdraw consent to the proposed orders and for the matters to proceed as a contested hearing. 18 Those principles have attracted some criticism in a recent decision of the Victorian Court of Appeal in Australian Securities and Investments Commission v Ingleby (2013) 275 FLR 171; [2013] VSCA 49 (Ingleby). In particular, I draw attention to the observations of Weinberg JA at [21] to [29], the observations of Harper JA at [99], and the observations of Hargrave AJA at [102], which, if I may say so respectfully, appear to have some force. I am, nevertheless, bound to apply the principles in the two Full Court decisions to which reference has been made above. As long as those principles are applied with a sufficient appreciation of the need for the Court to proceed in a fashion which does not fetter its discretion, then some of the difficulties which troubled their Honours in Ingleby can be either avoided or minimised. In particular, I emphasise that, in my view, it is important that in applying the established principles, the Court needs to be alert to avoid having its discretion fettered by any joint proposal or supporting materials that are put before the Court by the parties. 19 Ingleby highlights the importance of the Court being alert to the fundamental requirement that a statement of agreed facts must be adequate and accurate. That is one of the reasons why I have raised with the parties today a number of concerns about the statement of agreed facts. Those matters are as follows. 20 First, when viewed in isolation, an objective observer might read the statement of agreed facts as suggesting that the subject matter of the proceedings is simply one statement made by one sales representative on 17 February 2012 when, in fact, as noted above, the pleadings raised three statements made by two separate representatives on two occasions on 17 February 2012. Mr Carnovale, who appeared for the respondent, emphasised that paragraph 2 of the statement of agreed facts was carefully worded and that, as long as there was an appropriate appreciation of the significance of the phrase "inter alia" as appearing in that paragraph, the statement that the originating application sought "a declaration that inter alia the respondent by making an oral statement to a consumer in February 2012 had contravened ss 18 and 29(1)(m) of the Australian Consumer Law", did not suggest that the application raised only that allegation. (Emphasis added). 21 The second matter which I raised with the parties might appear on its face to be trivial. It relates to the fact that paragraph 7 of the statement of agreed facts (which dealt with the oral statement and its surrounding circumstances) contained a heading which referred to the "First Fridge" in circumstances where, of course, the relevant product the subject of these proceedings is a faulty laptop computer. It appears that the error may have resulted from the use of a pro forma or standard document that may have been used in other proceedings involving the applicant. But as I indicated in discussion with counsel, it simply serves to highlight the need for particular care to be taken not only by the parties but, of course, also by the Court itself in verifying and being satisfied that a statement of agreed facts adequately and accurately reflects the true facts. 22 The third and perhaps more troubling matter relates to the statement which appears in paragraph 15 of the statement of agreed facts: At an early stage of these Proceedings, the Respondent (through its solicitors) proposed a settlement meeting with the ACCC following which a settlement was reached by the parties. 23 I was troubled by the description which appeared in that paragraph which appeared to suggest that a settlement had been reached at an early stage in the proceedings and that this was a matter which should attract some sort of discount in favour of the quantum of the pecuniary penalty in the respondent's favour. That description did not appear to sit comfortably with the history of the proceeding, including the fact that, almost six months after the proceedings were commenced, McKerracher J was making directions and orders on 29 November 2013 for the matter to proceed to a hearing on both liability and penalty in March of this year. 24 It is well settled that a respondent's conduct in agreeing to an earlier resolution of adverse claims is a relevant matter to be considered in determining penalties. Accordingly, I sought the parties' explanation as to what in fact had occurred in terms of settlement. I have already set out above a brief history of those matters, including the fact that the respondent sought to initiate settlement discussions on 7 August 2013, that a meeting had been held in October 2013 at which these proceedings were not able to be resolved, that the parties proceeded to file evidence in support of their respective positions and that it was not until 24 December 2013 that an agreement was reached. 25 I should also indicate that I was informed from the bar table by Ms Banks-Smith who appeared for the applicant, that it was upon reviewing the evidence filed on behalf of the respondent that the applicant decided to proceed with the possibility of resolving the proceedings on the basis of simply one oral statement, that was made by the sales representative who was referred to as Chev, as opposed to proceeding with the other two statements which were pleaded in the statement of claim. 26 Having regard to what I have been told today following my questions about paragraph 15 of the statement of agreed facts, I am not satisfied that any significant weight should be given to the respondent's attitude in settling the proceedings. That is not to say, however, that the Court does not bring to account the fact that, even though an agreement was not reached at an early stage of the proceedings, the respondent was ultimately willing to settle the matter. The Court should take that into account by reference to the costs and resources that are saved by not having to have a hearing on liability. Material facts 27 Subject to the matters I have raised above, I am satisfied that the material facts and matters are established as set out in the statement of agreed facts. Some general observations 28 Before applying the relevant principles in all the relevant circumstances here, I should also make some further observations. First, I do not accept the submission which appears in paragraph 19 of the joint submissions that the Court should accept the statement of agreed facts here as a true record of the relevant events "or that the statement in its entirety is inherently credible and the narrative is coherent." I have already identified a matter which has troubled me about the accuracy of the statement in paragraph 15 of that document. Secondly, I should make it clear that I do not accept the submission which appears in paragraph 29 of the joint submissions that there is a "well established" "principle of judicial restraint" in cases such as this where "both parties are legally represented and able to understand and evaluate the desirability of the settlement." 29 In my view, within the framework of the relevant principles which bind me and which have been referred to above, I consider that the Court must bring to bear its own independent assessment of the appropriateness of the proposed relief, including any pecuniary penalty. The danger of importing a notion of judicial restraint into this context is that it may imply that the responsibility for determining a civil penalty shifts away from the Court to the regulator or to the respondent. That is not the case. 30 I do not mean to suggest by these words that the Court wishes to discourage parties from seeking to agree and settle proposed final orders or that the fact that they have come to an agreement about proposed final orders is irrelevant to the Court's determination. Those matters plainly are relevant matters to the discharge of the Court's function. But ultimately, the Court must bring to bear its own judgment and evaluation of what is the appropriate relief, having regard to all the relevant circumstances. 31 With those principles and observations in mind, I will now address the key salient points in determining appropriate final orders. 32 The first matter is the circumstances in which the conduct took place. I accept that the conduct comprised one oral statement made by a single sales representative, who was not a senior employee or part of the management team of the respondent, to one consumer in relation to one potentially faulty laptop that had been supplied by the respondent. I am also satisfied the conduct occurred on or around 17 February 2012 and that, on that same day, despite the statement having been made regarding the consumer's remedies, a full refund was, in fact, paid by the respondent. I am also satisfied that there is no evidence that the relevant statement was made with an intention to mislead or deceive the consumer. 33 I also accept that a great number of electrical appliances and products are bought by consumers from retailers, such as the respondent here, in Australia every day and that it is not unusual for consumers to return new electrical appliances to retailers on the basis of a fault in the good or out of a concern that the goods were not of acceptable quality when they were purchased. If goods are not of acceptable quality when sold to consumers, processes should be in place to ensure that consumers can obtain a remedy for faulty goods. These matters represent a cost on a retailer's business. Retailers may need to incur costs to maintain a culture of compliance with the ACL, including by appropriate supervision of staff and other compliance programs. An appropriate penalty should take into account the need to deter other retailers from encouraging, permitting or risking a similar contravention of the ACL. 34 On the issue of the amount of loss, I accept that there is no evidence of any loss or damage to the consumer in this proceeding. Indeed, a full refund was paid on the day that the statement complained of was made. I also accept that the respondent has not previously been found by a court to have contravened any provision of the ACL or to have engaged in conduct similar to that described in the statement of agreed facts. 35 On the issue of the size and financial position of the respondent, I accept the relevant material which is set out in the statement of agreed facts. I also accept the submission that was made by Ms Banks-Smith that, although the respondent's sales revenue for the 11 months ended 30 June 2013 was substantial (being a little less than $12 million), it is nevertheless a matter to be taken into account that, despite that significant turnover, the complaint here seems to be an isolated incident. 36 Insofar as matters of culture of compliance and corrective measures are concerned, I accept what is contained in the statement of agreed facts regarding the respondent's compliance training before and after the relevant conduct occurred and I accept that such training is important in assisting staff to keep abreast of changes to consumer protections under the ACL and to remind staff of their obligations under that and other consumer legislation. I am also mindful that the respondent ceased trading on or about 31 May 2013. I accept that the respondent does not intend to re-commence a business of any kind. 37 I note that Middleton J was faced with a similar situation in ACCC v Launceston, where his Honour said at [22]: The proposed penalty, together with the other proposed orders, sufficiently deter repetition of the conduct by Launceston Superstore (to the extent that deterrence is necessary having regard to the fact that it has ceased trading and does not intend to re-commence) and by retailers generally. 38 The fact that the respondent is no longer trading does not make it inappropriate to grant injunctive relief, having regard to the power vested in the Court under s 232(4)(a) of the ACL. I also consider that although the respondent is no longer trading and has indicated that it does not intend to re-commence business, this does not mean that specific deterrence is not a relevant factor in determining appropriate final relief, including pecuniary relief, because although there is no current intention to re-commence business, it may well be that that intention changes in the future. 39 On the issue of the maximum penalty, a contravention of s 29 of the ACL attracts a maximum penalty of $1.1 million. I accept that courts must pay careful attention to maximum penalties when imposing penalties because the legislature has so provided that maximum penalty and also because they invite comparisons between the worst possible case and the case which is immediately before the Court. In other words, they provide a yard stick which needs to be balanced with other relevant factors. 40 Turning to the short minutes of order and the proposed relief, I am satisfied that the case is an appropriate one to make a declaration in the terms sought. I am also satisfied that this is an appropriate case in which to grant injunctive relief in the terms sought, noting that the injunction will be for a period of three years, which is consistent with injunctive relief which has been ordered in other cases involving other breaches of the ACL by Harvey Norman franchisees. 41 That brings me then to the issue of pecuniary penalty. This is the matter which has given me most concern, not the least because of the issues I have raised above concerning the accuracy of the statement of agreed facts. 42 The parties very helpfully set out in their joint submissions a table which enabled the Court to compare, in broad terms, the facts and circumstances of these proceedings with the other Harvey Norman complaints which have been determined to date. The table is as follows: Table comparing certain facts Below is a table that provides, in summary form, a comparison of certain facts in the previous five cases and in the present proceeding. All contravening representations to a consumer were made orally with the exception of one made in a printed receipt issued by Launceston Superstore Pty Limited to the consumer. Launceston Camavit Moonah HP Salecomp Avitalb Superstore Pty Ltd Superstore Superstore Pty Ltd Pty Ltd Pty Ltd Pty Ltd Pty Ltd Penalty $32,000 $32,000 $28,000 $28,000 $28,000 $28,000 Number of 3 3 2 4 7 1 contraventions (1 by means of a printed receipt) Total number 1 4 2 2 or 3 3 or 4 1 of staff members who made contravening oral statements Senior management involved in contraventions none 1 staff member was a store manager none none 1 staff member was a store manager None Period over which contraventions occurred July 2011 March 2012 Dec 2011 Jan'y 2012 Nov 2011 17 Feb 2012 & to & to to Nov 2011 June 2012 Jan'y 2012 March 2012 July 2012 Sales turnover for last full financial year $31,266,612 $24,805,018 $17,551,068 $18,831,632 $5,625,065 $11,882,166 (1) Net profit for the last full financial year $409,625 $294,505 $181,253 $142,036 $60,000 $208,735 (1) Note: (1) Avitalb started trading during the 2011/12 year and ceased during the 2012/13 year, and therefore it did not have a full financial year's trading. The sales amount in the table is the amount for the 11 months to 31 May 2013 when it ceased trading. 43 After giving the matter close consideration, I am satisfied that, in circumstances where these proceedings involve only one statement made on one day to a consumer who received a full refund on the same day in respect of the faulty laptop and notwithstanding that the proceedings were not settled at an early stage, I consider that a pecuniary penalty of $10,000 is appropriate. 44 Insofar as compliance and disclosure is concerned, no order is sought in respect of those matters which reflects the fact that the respondent ceased trading on 31 May 2013, when it also ceased to be a franchisee of Harvey Norman. And, insofar as costs are concerned, the parties propose that each party bear its own costs. 45 Accordingly, orders will be made in accordance with the proposed short minutes of order. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths. Associate: Dated: 7 March 2014 'ANNEXURE A' No. WAD184 of 2013 Federal Court of Australia District Registry: Western Australia Division: General Division Australian Competition and Consumer Commission Applicant Avitalb Pty Ltd (ACN 152 309 503) Respondent STATEMENT OF AGREED FACTS INTRODUCTION 1 This Statement of Agreed Facts (Agreed Facts) is made jointly by the Applicant (ACCC) and the Respondent, Avitalb Pty Ltd (ACN 152 309 503) (Respondent or Avitalb) for the purposes of s191 of the Evidence Act 1995 (Cth). 2 The ACCC commenced proceedings WAD184 of 2013 on 11 June 2013 (Proceedings). In its Application filed on 11 June 2013, the ACCC sought a declaration that (inter alia) the Respondent, by making an oral statement to a consumer in February 2012, had contravened ss 18 and 29(1)(m) of the Australian Consumer Law (ACL), which is Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Act). The ACCC also sought other consequential orders. 3 The oral statement, which is in sub-paragraph 1(a) of the Application, is included in this Statement of Agreed Facts and, where it appears below, is cross-referenced to the Application. 4 For the purpose of the Proceedings only, the parties agree as follows. THE PARTIES 5 The ACCC is a body corporate established by section 6A of the Act and is entitled to sue in its corporate name. 6 The Respondent, trading as Harvey Norman AV/IT Superstore Albany, was at all material times: (a) a body corporate duly incorporated pursuant to the Corporations Act 2001 (Cth); (b) a trading corporation within the definition of "corporation" in section 4 of the Act; (c) capable of being sued in its corporate name; (d) engaged in trade or commerce within the meaning of ss 18 and 29(1)(m) of the ACL; (e) a franchisee of a subsidiary of Harvey Norman Holdings Ltd (HNHL); and (f) up to about 31 May 2013, operating as a single retail outlet or store in Albany, Western Australia, under the name of 'Harvey Norman AV/IT Superstore Albany, selling electronic products and after-sales services in respect of those products (Store). THE ORAL STATEMENT AND ITS CIRCUMSTANCES First Fridge 7 On about 24 December 2011, the Respondent supplied to Genevieve May May Rubinich (Mrs Rubinich) an ACER 5750F Aspire laptop including operating software (Rubinich Laptop). 8 On about 17 February 2012, Mrs Rubinich attended the Store and spoke to a sales representative of the Respondent about the problems she was having with the Rubinich Laptop, namely that it was freezing at times, shutting down without user direction at times, and failing to start upon user direction at times. In response to these enquiries, the sales representative made an oral statement to the effect of "… If it is a software issue, it wouldn't be covered. If it's a hardware issue, we can send it for repair" (Oral Statement) (Application, para. 1(a)). 9 Later on the same day, the Respondent provided a refund in respect of the Rubinich Laptop. THE REPRESENTATION CONSTITUTED BY THE ORAL STATEMENT 10 By the Oral Statement, the Respondent in trade or commerce: (a) represented in effect that: (i) it would not, and did not have any obligation to, provide any remedies in relation to goods it supplied, including the Rubinich Laptop, where any issues with the goods were caused by the software supplied with the goods; (ii) further and alternatively, it would not, and did not have any obligation to, provide a replacement or refund in relation to the Rubinich Laptop; and (b) thereby made a representation that was false or misleading under Parts 5-4 and 3-2 (the Consumer Guarantee Provisions) of the ACL in that a supplier such as the Respondent: (i) could be obliged to provide certain remedies for goods it supplied, including the Rubinich Laptop, where issues with the goods, such as where those goods were not of acceptable quality, were caused by software supplied with the goods; (ii) possibly had an obligation of the nature referred to in paragraph 10(b)(i) in relation to the Rubinich Laptop; (iii) could be obliged to provide a replacement or refund for goods it supplied, including the Rubinich Laptop, in certain circumstances such as where those goods were not of acceptable quality; and (iv) possibly had an obligation of the nature referred to in paragraph 10(b)(iii) in relation to the Rubinich Laptop. OTHER FACTS Whether conduct deliberate and period over which conduct extended 11 On the basis of the above facts, there is no evidence that the Oral Statement was made with an intention to mislead or deceive or with an intention to misrepresent the Consumer Guarantee Provisions. The Oral Statement was made on 17 February 2012 to one consumer by one sales representative. Whether loss to consumer 12 There is no evidence of loss or damage to the consumer in this proceeding, arising from the contravening conduct of the Respondent. Cooperation with the ACCC 13 Retail stores in Australia trading under the "Harvey Norman" banner do so under franchise arrangements between subsidiaries of HNHL and numerous companies unrelated to each other or to HNHL or its subsidiaries. The subsidiaries are the franchisors. Each franchisee company owns and operates a retail store. 14 On 11 June 2013, the ACCC commenced these Proceedings against the Respondent. These Proceedings were commenced by the ACCC following a period of broad discussions between the ACCC and HNHL in relation to complaints to the ACCC made by consumers about statements made by a number of sales representatives in a number of stores. The discussions were focussed on the potentially misleading nature of the statements and did not identify any particular store, including the Respondent's store, as being the subject of a complaint. Before commencing legal action against the Respondent in respect of the conduct that constitutes the contraventions the subject of these Proceedings, the ACCC did not inform the Respondent or HNHL about that conduct or any other specific conduct of the Respondent. 15 At an early stage in these Proceedings, the Respondent (through its solicitors) proposed a settlement meeting with the ACCC following which a settlement was reached by the parties. 16 The Respondent's co-operation has saved the ACCC and the Court (and ultimately the community) the cost and burden of litigating a fully contested hearing. Whether prior contravention of the ACL 17 The Respondent has not been previously found by a court to have contravened any provision of the ACL or to have engaged in similar conduct to that described in this Statement of Agreed Facts. Size and Financial Position of Respondent 18 At the time of the contravention, the Respondent operated a single retail store at Albany in Western Australia. The Respondent ceased trading on about 31 May 2013 and does not intend to recommence a business of any kind. 19 The Respondent has had no employees since it ceased trading on about 31 May 2013. 20 For the financial years ended 30 June 2012 and 2013 the Respondent's sales revenue and net profit were: Year Year ended 30 June 2012 Year ended 30 June 2013 Sales Revenue $9,012,740 $11,882,166 Net Profit $138,748 $208,735 21 As at 30 June 2013, the net assets (assets less liabilities) held by the Respondent (as trustee) were $10. 22 The Respondent conducted its business pursuant to a franchise agreement between it and a subsidiary of HNHL until the Respondent ceased to trade on about 31 May 2013. The Respondent and the Trust are not related entities of HNHL or its subsidiaries. Compliance Training 23 The Respondent was incorporated on 26 July 2011 and commenced business on about 1 November 2011. The compliance training, in relation to the consumer law provisions of the Trade Practices Act 1974 now known as the Competition and Consumer Act 2010 (consumer law), has comprised at least the following until the Respondent ceased trading on about 31 May 2013: (a) Staff have attended a face-to-face consumer law training session presented by an external professional trainer engaged by a subsidiary of HNHL. (b) Staff have watched DVDs received from the franchisor explaining the consumer law provisions. (c) Consumer law discussions are a fixed agenda item at weekly staff meetings where staff share their experiences with customers relating to consumer law. "ANNEXURE B" No. WAD184 of 2013 Federal Court of Australia District Registry: Western Australia Division: General Division Australian Competition and Consumer Commission Applicant Avitalb Pty Ltd (ACN 152 309 503) Respondent joint submissions INTRODUCTION 1. These submissions are made jointly on behalf of the Applicant (the ACCC) and the Respondent, Avitalb Pty Ltd (ACN 152 309 503) (Avitalb) (together the Parties). 2. For the purposes of these proceedings, Avitalb admits that on or around 17 February 2012 (the Relevant Period) it engaged in conduct that contravened sections 18 and 29(1)(m) of the Australian Consumer Law (ACL) (being Schedule 2 of the Competition and Consumer Act 2010 (CCA)). 3. Avitalb made 1 oral statement to a consumer, Mrs Rubinich, and by that statement made a representation "concerning the existence, exclusion or effect of any warranty, guarantee, right or remedy" within the meaning of those words in s.29(1)(m) of the ACL. The representation, the circumstances in which it was made and the respect in which it was false or misleading are set out in the Statement of Agreed Facts filed by the Parties and dated on the same date as these Joint Submissions (Agreed Facts). Avitalb admits that, in making the representation, it thereby contravened s.18 and s.29(1)(m) of the ACL. 4. While recognising that the question of relief remains at the discretion of the Court, the Parties respectfully ask that the Court: (a) make a declaration pursuant to section 21 of the Federal Court of Australia Act 1976 (Federal Court Act); (b) grant injunctive relief pursuant to section 232 of the ACL; and (c) order payment by Avitalb of a penalty in the amount of $10,000.00 pursuant to section 224 of the ACL. 5. The Parties have prepared Short Minutes of Order to this effect, dated on the same day as these Joint Submissions (the Short Minutes of Order). 6. The agreed factual basis for the orders sought by the Parties is set out in the Agreed Facts. THE REGULATORY FRAMEWORK Jurisdiction 7. Section 131 of the CCA establishes that the ACL applies as a law of the Commonwealth to the conduct of corporations and in relation to contraventions of Chapter 2, 3 or 4 of the ACL by corporations (other than in relation to financial services). Under section 138 of the CCA jurisdiction is conferred on the Federal Court in relation to any matter arising under the ACL in respect of which a civil proceeding has been instituted. Jurisdiction is also conferred as a result of section 39B(1A) of the Judiciary Act 1903 (Cth). Contravention 8. The alleged contravention concerns sections 18 and 29(1)(m) of the ACL. Section 18 of the ACL relevantly provides: (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 9. Section 29 of the ACL concerns false or misleading representations about goods and services. Section 29(1)(m) provides: (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: … (m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3 2); The consumer guarantee provisions 10. Part 3-2, Division 1, Subdivision A of the ACL provides a number of statutory guarantees in relation to supply of goods to consumers. Among these statutory consumer guarantees section 54 of the ACL provides a guarantee as to acceptable quality of goods. Section 54 relevantly states: (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. … 11. These proceedings concern a laptop computer supplied new to the consumer (Laptop). The consumer experienced problems with the operation of the Laptop so as to give rise to a question as to whether there was a breach of the above guarantee in relation to the Laptop. 12. A consumer can obtain relief for a breach of the consumer guarantees in under Part 5-4 of the ACL. Actions against suppliers of goods are dealt with under Division 1, Subdivision A. Section 259 of the ACL establishes the actions that the consumer may take and states: (1) A consumer may take action under this section if: (a) a person (the supplier) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3 2 (other than sections 58 and 59(1)) is not complied with. (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. (4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. (5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier. (6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3). (7) The consumer may take action under this section whether or not the goods are in their original packaging. 13. Section 260 of the ACL determines when a failure to comply with a guarantee is a major failure. In this case it is possible that the problems that the consumer experienced with the laptop were major failures. 14. Where the failure is not a major failure section 261 of the ACL outlines the measures that a supplier may take to rectify a failure to comply with a guarantee and relevantly states: If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the requirement: (a) if the failure relates to title—by curing any defect in title; or (b) if the failure does not relate to title—by repairing the goods; or (c) by replacing the goods with goods of an identical type; or (d) by refunding: (i) any money paid by the consumer for the goods; and (ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods. 15. Section 262 of the ACL provides limits on the consumer's ability to reject goods under section 259 of the ACL but none of those limits apply to the representation made by Avitalb. 16. Where the failure to comply with the guarantee cannot be remedied or is a major failure and the consumer rejects the goods, section 263 of the ACL sets out what the supplier must do to remedy the failure. Section 263 relevantly states: (4) The supplier must, in accordance with an election made by the consumer: (a) refund: (i) any money paid by the consumer for the goods; and (ii) an amount that is equal to the value of any other consideration provided by the consumer for the goods; or (b) replace the rejected goods with goods of the same type, and of similar value, if such goods are reasonably available to the supplier. THE USE OF AGREED FACTS 17. The Parties have agreed upon certain facts pursuant to section 191 of the Evidence Act 1995 (Cth). Section 191 provides that, where parties have agreed facts that are not to be disputed for the purposes of the proceeding, evidence is not required to prove the existence of such a fact, and unless the Court gives leave, evidence may not be adduced to contradict or qualify such a fact. 18. As Stone J explained in Minister for the Environment, Heritage and the Arts v PGP Developments Pty Ltd (2010) 183 FCR 10 at [35]: The effect of s 191 is to admit the agreed facts as evidence. It still remains for the Court to determine whether the facts are to be accepted as true and to determine what weight to attribute to that evidence. Whether the Court accepts the agreed facts, in whole or in part, may depend, among other things, on the coherence of the narrative created by the facts or their inherent credibility. If, for example, a statement contained mutually inconsistent facts the Court would be obliged to take account of the inconsistency. In attempting to resolve the problem it would not be entitled to require evidence although, as provided in s 191(2), it might give leave to the parties to adduce evidence to resolve the inconsistency. In the absence of further evidence, and taking the context provided by other evidence including other agreed facts, it might possibly accept one or other of those facts. Clearly, however, it could not accept both of the facts in question as true. 19. The Parties submit that such inconsistency as adverted to by Stone J does not exist in the Agreed Facts. The Parties submit that the Agreed Facts are inherently credible and the narrative is coherent. Accordingly, the Court can accept the Agreed Facts as a true record of the relevant events. ADMITTED CONTRAVENTION 20. As set out in the Agreed Facts, Avitalb has admitted to 1 oral statement made by a sales representative. Avitalb admits that the relevant sales representative was in its employ and that the conduct engaged in by that employee was on Avitalb's behalf, within the apparent authority of that employee, and is therefore to be taken to be the conduct of Avitalb for the purposes of the ACL pursuant to section 139B(2) of the CCA. 21. On that basis, as set out in the Agreed Facts, Avitalb made the following oral statement to a consumer "… If it is a software issue, it wouldn't be covered. If it's a hardware issue, we can send it for repair" (Oral Statement)1. 22. As set out in the Agreed Facts, by making the Oral Statement Avitalb represented that: (a) it would not, and did not have any obligation to, provide any remedies in relation to goods it supplied, including the Laptop (as defined in the Statement of Agreed Facts), where any issues with the goods were caused by the software supplied with the goods; and (b) further and alternatively, it would not, and did not have any obligation to, provide a replacement or refund in relation to the Laptop. 23. The representation was false or misleading under the Consumer Guarantee Provisions of the ACL because a supplier such as Avitalb: (a) could be obliged to provide certain remedies for goods it supplied, including the Laptop, where issues with the goods, such as where those goods were not of acceptable quality, were caused by software supplied with the goods; (b) possibly had an obligation of the nature referred to in paragraph (a) in relation to the Laptop; (c) could be obliged to provide a replacement or refund for goods it supplied, including the Laptop, in certain circumstances such as where those goods were not of acceptable quality; and (d) possibly had an obligation of the nature referred to in paragraph (c) in relation to the Laptop. 24. By reason of these matters, Avitalb admits 1 contravention, namely that it: (a) made a representation in connection with the supply or possible supply of goods or services that was false or misleading and concerned the existence, exclusion or effect of any guarantee, right or remedy available under the Consumer Guarantee Provisions of the ACL in contravention of section 29(1)(m) of the ACL; and (b) in doing so, engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the ACL. ORDERS PROPOSED BY AGREEMENT: PRINCIPLES 25. There is a well-recognised public interest in the settlement of cases under the CCA.2 26. In considering orders as to penalties agreed between the ACCC and respondents: The Court has a responsibility to be satisfied that what is proposed is not contrary to the public interest and is at least consistent with it… Consideration of the public interest, however, must also weigh the desirability of non-litigious resolution of enforcement proceedings.3 27. When deciding whether to make orders proposed by agreement between the parties, the Court must be satisfied that it has the power to make the orders and that the orders are appropriate.4 Parties cannot by consent confer power to make orders that the Court otherwise lacks the power to make.5 28. Once the Court is satisfied that orders proposed by the Parties are within power and appropriate, it should exercise restraint in scrutinising proposed settlements.6 29. This principle of judicial restraint is well established, particularly in matters such as the present, where both parties are legally represented and able to understand and evaluate the desirability of the settlement.7 30. In deciding whether orders proposed by the Parties conform with legal principle, the Court is entitled to treat the agreement of Avitalb as an admission of all facts necessary or appropriate to the granting of the relief sought as against it.8 31. Litigation to establish contraventions of the ACL can be complex, time consuming and costly. It is in the public interest for litigation under the ACL (as with other litigation) to be concluded in the shortest timeframe that is consistent with justice being done between the parties, freeing the Court and the regulator to deal with other matters. To that end, the Court has looked with favour upon negotiated settlements, provided that their terms recognise that the ultimate responsibility for the terms and making of the orders that resolve the proceedings lies with the Court.9 32. Provided that the Court is satisfied that the terms of the orders are appropriate, the Parties submit that it is in the public interest for the Court to make orders on the terms that are proposed to by the Parties so as to encourage parties to assist the ACCC in its investigations and achieve negotiated settlements. The Court has recognised that, in addition to savings in time and costs, there is a public benefit in imposing pecuniary penalties sought by agreement between the Parties where appropriate, as parties would not be disposed to reach such agreements where there are unpredictable risks involved.10 RELIEF SOUGHT: DECLARATION Applicable principles 33. The Court has a wide discretionary power to make declarations under section 21 of the Federal Court Act.11 Where a declaration is sought by agreement between the parties, the Court's discretion is not supplanted, but nor will the Court refuse to give effect to terms of settlement by refusing to make orders where they are within the Court's jurisdiction and are otherwise unobjectionable. There is a general principle of judicial restraint in such circumstances.12 34. In Forster,13 the High Court held that before making declarations three requirements should be satisfied: (a) the question must be a real and not a hypothetical or theoretical one; (b) the applicant must have a real interest in raising it; and (c) there must be a proper contradictor. 35. Each of these requirements is satisfied in this case: (a) the proposed declaration relates to conduct that contravenes the ACL and the matters in issue have been identified and particularised by the Parties with precision;14 (b) it is in the public interest for the ACCC to seek to have the declaration made and for the declaration to be made.15 There is a real, and not theoretical legal controversy in this case which is being resolved. The ACCC as a public regulator under the ACL has a genuine interest in seeking the declaratory relief; and (c) Avitalb is a proper contradictor because it has made an admission for the purposes of these proceedings that it has contravened the ACL and is the subject of the proposed declaration. Avitalb therefore has an interest in opposing the making of them.16 36. In addition, it is submitted that, having regard to the reasoning in ACCC v Construction, Forestry, Mining and Energy Union,17 the declaration sought is appropriate because it serves to: (a) record the Court's disapproval of the contravening conduct; (b) vindicate the ACCC's claim that Avitalb has contravened the ACL; (c) assist the ACCC to carry out the duties conferred upon it by the CCA; (d) inform consumers of the dangers arising from Avitalb's contravening conduct; and (e) deter other corporations from contravening the ACL. 37. The proposed declaration contains sufficient indication of how and why the conduct complained of is a contravention of the ACL.18 Factual basis for the declaration 38. To the extent that this Court requires evidence in support of a declaration, the Parties submit that the Agreed Facts provides such evidence.19 39. It is not necessary for parties to tender evidence in support of a declaration.20 It has become the common practice of this Court to grant declaratory relief on the basis of agreed facts and admissions in areas of public interest.21 RELIEF SOUGHT: INJUNCTION 40. The Court is empowered by section 232 of the ACL to grant injunctive relief. 41. The Parties jointly submit: (a) the Court has power under section 232 of the ACL to make the orders sought; (b) the injunctive relief is not vague or imprecise, nor does it require continuing supervision by the Court; (c) there is no multiplicity of overlapping injunctions that may give rise to confusion about the scope of the obligations being imposed;22 and (d) the injunction is appropriate to deter a repetition of the conduct.23 42. The Parties therefore submit that the injunction in the form set out in the Short Minutes of Order should be made. RELIEF SOUGHT: PECUNIARY PENALTIES 43. The Parties jointly submit that the Court should make orders imposing a pecuniary penalty pursuant to section 224 of the ACL on Avitalb in the sum of $10,000. Section 224 of the ACL 44. Section 224 of the ACL came in to force on 1 January 2011. 45. Section 224(1)(a)(ii) of the ACL relevantly empowers the Court, in respect of contraventions of provisions of Division 1 of Part 3-1 of the ACL (which includes section 29) to order the contravener to pay such pecuniary penalty in respect of "each act or omission" as the Court determines to be appropriate. No penalties are provided for in the ACL for contraventions of section 18. 46. Section 224 of the ACL was preceded by section 76E of the Trade Practices Act 1974 (Cth) (TPA). The principles applicable to determining pecuniary penalties under section 76E are the principles that have been applied to determining pecuniary penalties under section 76 of the TPA (now section 76 of the CCA) for contraventions of the restrictive trade practices provisions, unless the context of the infringements makes it plain that that cannot be so.24 STATUTORY CONSIDERATIONS 47. Section 224(2) of the ACL provides that, in determining the appropriate pecuniary penalty, the Court must have regard to all relevant matters including: (a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and (b) the circumstances in which the act or omission took place; and (c) whether the person has previously been found by a Court in proceedings under Chapter 4 or Part 5-2 of the ACL to have engaged in any similar conduct. The primary purpose of penalty: Deterrence 48. The principal object of a penalty under section 224 of the ACL is deterrence, as was made clear by the Full Court in Singtel Optus Pty Ltd v ACCC25 in considering a penalty under section 76E of the TPA: There may be room for debate as to the proper place of deterrence in the punishment of some kinds of offences, such as crimes of passion; but in relation to offences of calculation by a corporation where the only punishment is a fine, the punishment must be fixed with a view to ensuring that the penalty is not such as to be regarded by that offender or others as an acceptable cost of doing business. 26 49. Deterrence has two aspects: specific deterrence in respect of the actual contravener and general deterrence of others who may be disposed to engage in prohibited conduct of a similar kind.27 50. In relation to general deterrence, the Court observed in ACCC v ABB Transmission and Distribution Limited28 at 42,938 [13] that: For a penalty to have the desired effect, it must be imposed at...a level that a potentially-offending corporation will see as eliminating any prospect of gain. 51. In TPC v CSR Ltd (1991) ATPR 41-076 at 52,152 French J (as he then was) stated: The principal, and I think probably the only, object of the penalties imposed by s.76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the [Trade Practices] Act. 52. The Full Court in NW Frozen Foods Pty Ltd v ACCC made it clear (at 294-295) that: The Court should leave no room for any impression of weakness in its resolve to impose penalties sufficient to ensure the deterrence, not only of the parties actually before it, but also of others who might be tempted to think that contravention would pay … 53. See also ACCC v McMahon Services Pty Ltd (2004) ATPR 42-031 at 49,228 [15] which was cited with approval by Merkel J in ACCC v Leahy Petroleum Pty Ltd (No2) (2005) 215 ALR 281 and ACCC v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301, Goldberg J at [39]. Relevant factors 54. The factors that the Court is to take into account when assessing penalty were recently summarised by Middleton J in ACCC v AGL29 as follows: [51] The ACL requires me to consider the nature and extent of the breaches of the law and any loss or damage suffered as a result of the breach, the circumstances of the breaches of the law, and whether there has been any similar previous conduct: s 224(2). [52] Furthermore, the case law concerning s 76E of the TPA which preceded s 224 of the ACL established a number of further factors which should be considered (relevant to this proceeding): (1) The size of the contravening company; (2) The deliberateness of the contravention and the period over which it extended; (3) Whether the contravention arose out of the conduct of senior management of the contravener or at a lower level; (4) Whether the contravener has a corporate culture conducive to compliance with the legislation as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; (5) Whether the contravener has shown a disposition to cooperate with the authorities responsible for the enforcement of the applicable legislation in relation to the contravention; (6) Whether the contravener has engaged in similar conduct in the past; (7) The financial position of the contravener; and (8) Whether the contravening conduct was systematic, deliberate or covert. (See eg TPC v CSR Ltd (1991) ATPR ¶41-076 per French J at 52, 152–153, NW Frozen Foods at 292–4 and J McPhee & Son (Aust) Pty Ltd v ACCC (2000) 172 ALR 532, [150] ff (Black CJ, Goldberg and Lee JJ)) Approach to penalties sought by agreement between the Parties 55. The Parties respectfully submit that correct approach to penalties sought by agreement was outlined by the Full Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993, [56] (Mobil Oil) at [51] as follows: The following propositions emerge from the reasoning in NW Frozen Foods: (i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act. (ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. (iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed. (iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters. (v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so. (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range. 56. The Full Court in Mobil Oil made some additional observations, including: [53] First, the rationale for giving weight to a joint submission on penalty is said by the Court to be the savings in resources for the regulator and the Court, as well as the likelihood that a negotiated resolution will include measures designed to promote competition. As Jeremy Thorpe points out, a related advantage is that the savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence which is one of the principal justifications, if not the only justification for imposing civil penalties under the TP Act or the Sites Act: J Thorpe, "Determining the Appropriate Role for Charge Bargaining in Part IV of the Trade Practices Act" (1996) 4 Comp & Cons LJ 69, at 72-74. Of course the arguments in favour of negotiated settlements have to take account of the fact that it is the Court that bears the ultimate responsibility for determining the appropriate penalty. [54] Secondly, the sixth proposition drawn from the reasoning in NW Frozen Foods does not mean, in our opinion, that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties' proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range. … [58] Fifthly, there is nothing in NW Frozen Foods that is inconsistent with any of the following propositions: (i) The Court, if it considers that the evidence or information before it is inadequate to form a view as to whether the proposed penalty is appropriate, may request the parties to provide additional evidence or information or verify the information provided. If they do not provide the information or verification requested, the Court may well not be satisfied that the proposed penalty is within the range. (ii) If the absence of a contradictor inhibits the Court in the performance of its duties under s 76 of the TP Act, s 13 of the Sites Act, or similar legislation, it may seek the assistance of an amicus curiae or of an individual or body prepared to act as an intervenor under FCR, O 6 r 17. (iii) If the Court is disposed not to impose the penalty proposed by the parties, it may be appropriate, depending on the circumstances, for each of them to be given the opportunity to withdraw consent to the proposed orders and for the matter to proceed as a contested hearing. 57. Applying this approach, in many cases involving penalties sought by consent or agreement between the Parties the Court has decided that the penalty proposed by the parties is an appropriate penalty. In some cases, the Court has decided that a different penalty should be imposed.30 58. Mobil Oil followed the observations that were made in TPC v Allied Mills (No 4) that: It is, of course, true that the penalty has been suggested to me by the agreement of the parties. Uninformed of their agreement, I may have selected a different figure, but I am satisfied that it would not have been very different from theirs. There is from time to time, amongst members of the profession and amongst the public, discussion concerning plea bargaining. Sometimes it is suggested that it involves disreputable conduct. It is my opinion that that is so if it at all implicates the court in private discussions as to what the court's attitude will or would be likely to be if a particular course is taken. In this case nothing of that kind has occurred. The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be. ... This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices.31 59. The approach in Allied Mills was considered and approved by the Full Court in NW Frozen Foods, which in turn was upheld by the Full Court in Mobil Oil. The Full Court held that the decision in NW Frozen Foods disclosed no error of principle. 60. In Mobil Oil,32 the Full Court of the Federal Court also considered that the following proposition emerged from NW Frozen Foods: [T]he views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more 'subjective' matters.33 61. This principle was relied on by the Court in ACCC v April International Marketing Services Australia Pty Ltd (No 5) [2010] FCA 17 at [39] (Bennett J). 62. The approach in Mobil Oil and NW Frozen Foods has recently been applied by this Court: Fair Work Ombudsman v A Dalley Holdings Pty Ltd [2013] FCA 509; Director of the Fair Work Building Industry Inspectorate v CFMEU [2013] FCA 515; ACCC v Hewlett-Packard Australia Pty Ltd [2013] FCA 653; ACCC v AGL Sales Pty Ltd [2013] FCA 1030. In ACCC v AGL Sales Pty Ltd, Middleton J stated that, notwithstanding some criticism of Mobil Oil and NW Frozen Foods by the Victorian Court of Appeal, those decisions of the Full Federal Court remain binding on the Federal Court.34 Determining penalty 63. The process to be applied in arriving at a particular penalty figure was considered in the context of criminal sentencing by the High Court in Markarian.35 That process is also applicable to the assessment of pecuniary penalties under section 224 of the ACL.36 64. In Markarian v The Queen (2005) 228 CLR 357 (Markarian), Gleeson CJ, Gummow, Hayne and Callinan JJ held: (a) assessment of the appropriate penalty is a discretionary judgment based on all relevant factors;37 (b) careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick;38 (c) it will rarely be appropriate for a Court to start with the maximum penalty and proceed by making a proportional deduction from that maximum;39 (d) the Court should not adopt a mathematical approach of increments or decrements from a predetermined range, or assign specific numerical or proportionate value to the various relevant factors;40 (e) it is not appropriate to determine an 'objective' sentence and then adjust it by some mathematical value given to one or more factors such as a plea of guilty or assistance to authorities; 41 (f) the Court may not add and subtract item by item from some apparently subliminally derived figure to determine the penalty to be imposed;42 and (g) since the law strongly favours transparency, accessible reasoning is necessary in the interests of all, and, while there may be occasions where some indulgence in an arithmetical process will better serve the end, it does not apply where there are numerous and complex considerations that must be weighed.43 APPLICATION TO THE FACTS 65. The facts and admissions establishing the particular conduct that Avitalb admits gave rise to a contravention of the ACL, together with other matters relevant to penalty, are set out in the Agreed Facts. In support of the proposed penalty, the Parties rely on those facts and admissions by Avitalb (for the purposes of these proceedings). 66. Each of the principles set out above is considered in the context of this proceeding. Nature, extent and duration of conduct – circumstances in which conduct took place – whether conduct deliberate 67. The conduct comprised 1 oral statement made by a sales representative to Mrs Rubinich in relation to 1 potentially faulty laptop that had been supplied to Mrs Rubinich. The conduct occurred on or around 17 February 2012. 68. On the basis of the Agreed Facts, there is no evidence that the Oral Statement was made with an intention to mislead or deceive the consumer or to misrepresent the existence, exclusion or effect of any warranty, guarantee, right or remedy. 69. A great number of electrical appliances are bought by consumers from retailers such as Avitalb in Australia every day. It is not unusual for consumers to return new electrical appliances to retailers on the basis of a fault in the goods or out of a concern that the goods were not of acceptable quality when they purchased them. 70. Processes to ensure that, if goods were not of acceptable quality when sold to consumers, consumers can obtain a remedy for faulty goods represent a cost on the retailer's business. Retailers may need to incur costs to maintain a culture of compliance with the ACL, including by supervision of staff. An appropriate penalty will take into account the need to deter other retailers from encouraging, permitting or risking similar a contravention of the ACL. Amount of loss caused 71. There is no evidence of loss or damage to the consumer in this proceeding, arising from the contravening conduct of Avitalb. Whether similar prior conduct 72. Avitalb has not been previously found by a court to have contravened any provision of the ACL or to have engaged in conduct similar to that described in the Agreed Facts. Involvement of senior employees or management 73. There is no evidence that senior employees or management of Avitalb were involved in the conduct. Size and financial position 74. The Agreed Facts shows the size and financial position of Avitalb. The Parties submit that the penalty of $10,000 which they are putting to the Court as an appropriate penalty takes proper account, inter alia, of Avitalb's size and financial position. Culture of compliance and corrective measures in response to contravention 75. The Agreed Facts sets out ACL compliance training engaged in by Avitalb both before and after the relevant conduct. 76. Regular compliance training assists ongoing staff to keep abreast of changes to the protections offered under the ACL and remind those staff of their obligations under that and other legislation. New staff will always need to be trained. 77. Avitalb ceased trading on about 31 May 2013 and does not intend to re-commence a business of any kind. Accordingly, the ACCC does not seek an order for compulsory compliance training in this proceeding. 78. In the circumstances, the Court can take into account the compliance measures that Avitalb had taken until it ceased trading on about 31 May 2013 and the admitted failure in relation to these proceedings. Co-operation and contrition/discount 79. The Agreed Facts sets out Avitalb's co-operation with the ACCC. It is a mitigating factor that Avitalb is admitting liability for the contravention set out in this document without a contested hearing. As a result of this cooperation by Avitalb, a more complex trial has been avoided. A fully contested trial would have required more days in hearing and, with the potential for appeals, consume large amounts of the Court's and the ACCC's time and resources. 80. The Parties have not sought to state a specified percentage discount for Avitalb's co-operation and acknowledgement of liability. Avitalb is entitled to a discount for voluntary acknowledgement of liability and co-operation. 81. The Parties submit that the relief as set out in the Short Minutes of Order adequately represents the discount for Avitalb's cooperation in these proceedings. Deterrence 82. A factor relevant to penalty is whether the penalty is of a sufficient magnitude for general deterrence among corporations making representations to consumers about their rights under the consumer guarantee legislation generally, and corporations supplying computer products to consumers specifically. 83. The Parties submit that the proposed penalty, together with the other proposed orders, sufficiently deter repetition of the conduct by both Avitalb and retailers generally. 84. A penalty should not be so high as to be oppressive.44 In considering what may constitute oppression, the Court in ACCC v Leahy Petroleum Pty Ltd (No 2) held that: a penalty that is no greater than is necessary to achieve the object of general deterrence, will not be oppressive.45 Maximum penalties 85. The maximum penalty for a body corporate for each act or omission that contravenes a provision of Division 1 of Part 3-1 of the ACL, which includes section 29, is $1.1 million.46 86. Courts are required to pay careful attention to maximum penalties when imposing penalties. This is because, firstly, the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide a yardstick, taken and balanced with all of the other relevant factors.47 Conclusion on appropriate penalty 87. The Parties submit that a pecuniary penalty pursuant to section 224 of the ACL in the sum of $10,000 is appropriate (and within the permissible range) for the contravention admitted by Avitalb. 88. The Parties submit that this penalty is appropriate (and within the permissible range), taking into account all relevant factors and in particular noting that: The penalty imposed must be substantial enough that the party realises the seriousness of its conduct and is not inclined to repeat such conduct. Obviously the sum required to achieve this object will be larger where the Court is setting a penalty for a company with vast resources. However, as specific deterrence is only one element and general deterrence must also be achieved, consideration of the party's capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention.48 IN STORE NOTICE 89. As Avitalb ceased trading on about 31 May 2013 and does not intend to re-commence a business of any kind, the ACCC does not seek an order against Avitalb to display an in-store notice of consumers' rights under the Consumer Guarantee Provisions of the ACL in this proceeding. COSTS 90. The Court has power to award costs under section 43 of the Federal Court Act. 91. The Parties respectfully submit that the Court should order that each of the parties is to pay their own costs. ORDERS IN COMPARABLE CASES 92. The orders sought by the parties in this proceeding are comparable with orders which have been made by the Federal Court of Australia recently in five other cases where, as occurred here, false or misleading representations were made to a consumer by a retailer concerning the existence, exclusion or effect of a right or remedy under the ACL in relation to a purchase of a product and/or its replacement. These five cases (all of which proceeded by way of agreed facts and joint submissions) involved the following respondents: Launceston Superstore Pty Ltd49, Moonah Superstore Pty Ltd50, HP Superstore Pty Ltd51, Salecomp Pty Ltd52; and Camavit Pty Ltd.53 Declarations – Injunctions 93. In all five cases the court accepted that it was appropriate to make, and did make, declarations as to the contraventions and orders restraining similar contravening conduct for a period of three years (the same period that is sought in the present proceeding). Penalty 94. In all five cases the Court imposed the penalty that was proposed by the parties, namely: Launceston Superstore Pty Ltd - $32,000 Moonah Superstore Pty Ltd - $28,000 HP Superstore Pty Ltd - $28,000 Salecomp Pty Ltd - $28,000 Camavit Pty Ltd - $32,000 Costs 95. In all five cases the Court made an order, as proposed by the parties, requiring each party to bear its own costs. Table comparing certain facts 96. Below is a table that provides, in summary form, a comparison of certain facts in the previous five cases and in the present proceeding. All contravening representations to a consumer were made orally with the exception of one made in a printed receipt issued by Launceston Superstore Pty Limited to the consumer. Launceston Superstore Pty Ltd Camavit Pty Ltd Moonah Superstore Pty Ltd HP Superstore Pty Ltd Salecomp Pty Ltd Avitalb Pty Ltd Penalty $32,000 $32,000 $28,000 $28,000 $28,000 $10,000 Number of contraventions 3 (1 by means of a printed receipt) 3 2 4 7 1 Total number of staff members who made contravening oral statements 1 4 2 2 or 3 3 or 4 1 Senior management involved in contraventions none 1 staff member was a store manager none none 1 staff member was a store manager none Period over which contraventions occurred July 2011 & Nov 2011 March 2012 to June 2012 Dec 2011 & Jan'y 2012 Jan'y 2012 to March 2012 Nov 2011 to July 2012 17 Feb 2012 Sales turnover for last full financial year $31,266,612 $24,805,018 $17,551,068 $18,831,632 $5,625,065 $11,882,166(1) Net profit for the last full financial year $409,825 $294,505 $181,253 $142,036 $60,000 $208,735 (1) Note: (1) Avitalb started trading during the 2011/12 year and ceased during the 2012/13 year, and therefore it did not have a full financial year's trading. The sales amount in the table is the amount for the 11 months to 31 May 2013 when it ceased trading. 97. These proceedings involve only one statement made on one day to a consumer who was offered a refund on the same day in respect to the goods purchased. In these circumstances the parties submit that a pecuniary penalty of $10,000 is appropriate. Date: 4 March 2014 1. Paragraph 1(a) of the Originating Application in these Proceedings dated 11 June 2013 2. See NW Frozen Foods Pty Ltd v ACCC (1996) 71 FCR 285, 291 (NW Frozen Foods), per Burchett and Kiefel JJ: "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 ACCC to turn to other areas of the economy that await their attention." 3. ACCC v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 (REIWA) at 86 [18] (French J) (citations omitted). 4. REIWA (1999) 161 ALR 79, 86 [20]; ACCC v Virgin Mobile Australia Pty Ltd (No.2) [2002] FCA 1548, [1]. 5. Thomson Holdings Pty Ltd v TPC (1981) 148 CLR 150, 163; See also ACCC v Alvaton Holdings Pty Ltd [2010] FCA 760, [23] (Gilmour J). 6. See ACCC v Target [2001] FCA 1326, [24] (Lee J): "It is the Court's duty in receiving consent orders in any matter to scrutinise such orders as to their appropriateness. However, after being satisfied as to the appropriateness of the orders, the Court should be slow to impede final settlement of such matters, particularly those involving public interest considerations. Moreover, the public has an interest in the mutual resolution of litigation, and subject to the foregoing the Court should be careful not to refuse to make orders simply because the orders may have been different had it been the Court's task to formulate them." 7. See, for example, REIWA (1999) 161 ALR 79, 87 [20]-[21] (French J); ACCC v Econovite Pty Ltd (2003) ATPR 41-959, [11], [22]; ACCC v Woolworths (South Australia) Pty Ltd (Trading as Mac's Liquor) (2003) 198 ALR 417, 424 [21]; ACCC v CFMEU [2007] ATPR 42-140, [4]. 8. Thomson Australian Holdings Proprietary Limited v TPC; (1981) 148 CLR 150, 164 (Gibbs CJ, Stephen, Mason and Wilson JJ). 9. NW Frozen Foods (1996) 71 FCR 285. 10. NW Frozen Foods (1996) 71 FCR 285, 291. 11. See Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, 437-8 (Gibbs J) (Forster); Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 581-2 (Mason CJ, Dawson, Toohey and Gaudron JJ); Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89, 99 (Sheppard J). 12. See REIWA(1999) 161 ALR 79, 87 [20]-[21] (French J) and the cases there cited. 13. Forster (1972) 127 CLR 421 at 437-8. 14. ACCC v MSY Technology Pty Ltd (2012) 201 FCR 378, [35] (Greenwood, Logan and Yates JJ) (MSY). 15. See cases referred to at: ACCC v CFMEU [2007] ATPR 42-140, [6]. 16. MSY (2012) 201 FCR 378, [30]. 17. [2007] ATPR 42-140, [5] (Nicholson J). 18. BMW Australia Ltd v ACCC (2004) 207 ALR 452, [35], quoting the High Court in Rural Press Ltd v ACCC (2003) 216 CLR 53, 91 [90]. 19. Section 191 of the Evidence Act 1995 (Cth). 20. See, for example, ACCC v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665, 680-1 [57]-[59], endorsed by the Full Court in ACCC v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513, [92]; Hadgkiss v Aldin (No 2) [2007] FCA 2069, [21]-[22]; Pagasa Australia Pty Ltd [2008] FCA 1545, [75]-[76] (Pagasa). 21. See, for example, Ponzio v B & P Caeli Constructions Pty Ltd (2007) 158 FCR 543 (where the Full Federal Court made declarations on the basis of a facts established by a statement of agreed facts); Hadgkiss v Aldin [2007] 169 IR 76, 79 [10], [114]-[116]; Secretary, Department of Health & Ageing v Pagasa, [78]; ACCC v Skins Compression Garments Pty Ltd [2009] FCA 710; ACCC v Cosic Holdings Pty Ltd [2009] ATPR 42-304; ACCC v The Australian Medical Association Western Branch Inc (2001) 114 FCR 91, 99 [38]; ACCC v Wilson Parking 1992 Pty Ltd [2009] FCA 1580; Minister for the Environment, Heritage and the Arts v PGP Developments Pty Ltd (2009) 183 FCR 10, 20 [37]-[38]; ACCC v MSY Technology Pty Ltd (No 2) (2011) 279 ALR 609; ACCC v Hewlett-Packard Australia Pty Ltd [2013] FCA 653. The NSW Supreme Court has adopted a similar practice: see, for example, ASIC v Rich (2004) 50 ACSR 500. 22. See ACCC v Econovite Pty Ltd (2003) ATPR ¶41-959 at 47,532 [12] per French J; [2003] FCA 964. 23. Section 232(4)(a) gives the Court power to grant an injunction whether or not it appears to the Court that the person intends to again engage in conduct of that kind. 24. ACCC v MSY Technology Pty Ltd (No 2) (2011) 279 ALR 609, 624 [69] (Perram J). His Honour's reasoning in this regard was not disturbed by the Full Court on Appeal: MSY and was cited with approval by the Full Court in Global One Mobile Entertainment Pty Ltd v ACCC [2012] FCAFC 134, [119]. 25. See Singtel Optus Pty Ltd v ACCC (2012) 287 ALR 249, 265 [62]. 26. (2012) 287 ALR 249 265 [62] (Keane CJ, Finn & Gilmour JJ). At [66], the Full Court, when exercising afresh the discretion to fix the proper penalty, inquiries whether the contraventions were "…so serious as to warrant a penalty sufficiently large to deter Optus from a repetition of conduct of this kind and to deter others in the market place from like conduct." 27. NW Frozen Foods (1996) 71 FCR 285, 294-5. 28. (2001) ATPR 41-815, 42,938 [13] (Finkelstein J). 29. Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] FCA 1030, 51-52. 30. See ACCC v NW Frozen Foods Pty Ltd (1996) ATPR 41-515 which was reversed on appeal in NW Frozen Foods (1996) 71 FCR 285; ACCC v FFE Building Services Ltd (2003) ATPR 41-969; ACCC v Midland Brick Co Pty Ltd (2004) 207 ALR 329 re the individual; ACCC v Australian Safeway Stores Pty Limited (No 4) (2006) ATPR 42-101, [91] re the individual; and ACCC v Australian Abalone Pty Ltd [2007] FCA 1834 where penalties with regards to two respondents were outside the range that would have been appropriate and different penalties were imposed. 31. (1981) 37 ALR 256, 259 (Sheppard J) (Allied Mills). 32. (2004) ATPR 41-993. 33. Mobil Oil (2004) ATPR 41-993, 48,626. 34. ACCC v AGL Sales Pty Ltd [2013] FCA 1030 at [32] to [44]. 35. (2005) 228 CLR 357. 36. ACCC v Singtel Optus Pty Ltd (No 4) [2011] FCA 761 per Perram J at [78]. While his Honour was then dealing with section 76E of the TPA, as noted above, the reasoning equally applies to section 224 of the ACL. 37. Markarian at, 371 [27]. 38. Markarian at 372 [31]. 39. Markarian at 372 [31]. 40. Markarian at, 373-5 [37] citing Wong v The Queen (2001) 207 CLR 584, 611-12 [74] - [76] (Gaudron, Gummow and Hayne JJ). 41. See Markarian at 373-5 [37] citing Wong v The Queen (2001) 207 CLR 584, 611-12 [74] - [76] (Gaudron, Gummow and Hayne JJ). 42. Markarian,at 375 [39]. 43. See Markarian at 375 [39]. 44. NW Frozen Foods (1996) 71 FCR 285, 293, referring to TPC v Stihl Chain Saws (Aust) Pty Ltd [1978] ATPR 40-091, 17,896. 45. (2005) 215 ALR 281, 284 [9] (Merkel J). 46. Item 5 of s 224(3) of the ACL. 47. Markarian at [31]. 48. ACCC v Leahy Petroleum Pty Ltd (No 3) [2005] FCA 265; (2005) 215 ALR 301, 309 [39] (Goldberg J). 49. ACCC v Launceston Superstore Pty Ltd [2013] FCA 1315 (Middleton J, 6 December 2013). 50. ACCC v Moonah Superstore Pty Ltd [2013] FCA 1314 (Middleton J, 6 December 2013). 51. ACCC v HP Superstore Pty Ltd [2013] FCA 1317 (Middleton J, 6 December 2013). 52. ACCC v Salecomp Pty Ltd [2013] FCA 1316 (Middleton J, 6 December 2013) 53. ACCC v Camavit Pty Ltd [2013] FCA 1397 (Katzmann J, 13 December 2013).