FEDERAL COURT OF AUSTRALIA Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd (No 2) [2016] FCA 1435 File number: VID 946 of 2015 Judge: MIDDLETON J Date of judgment: 2 December 2016 Catchwords: CONSUMER LAW – admitted contraventions – estate agents – underquoting of price to potential purchasers – pecuniary penalties – compliance program – publication order – declaratory relief – costs – form of orders – appropriateness of proposed instalment regime Legislation: Australian Consumer Law and Fair Trading Act 2012 (Vic) Competition and Consumer Act 2010 (Cth) Estate Agents Act 1980 (Vic) Cases cited: Australian Competition and Consumer Commission v EDirect Pty Ltd (in liq) (2012) 206 FCR 160 Australian Competition and Consumer Commission v High Adventure Pty Ltd [2006] ATPR 42-091 Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 281 Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] ATPR 41-937 Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd [2016] FCA 1184 Date of hearing: Determined on the papers Date of last submissions: 21 October 2016 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 22 Counsel for the Applicant: Mr S Bhojani Solicitor for the Applicant: Consumer Affairs Victoria Counsel for the Respondent: Mr A Nolan QC Solicitor for the Respondent: Mills Oakley ORDERS VID 946 of 2015 BETWEEN: DIRECTOR OF CONSUMER AFFAIRS VICTORIA Applicant AND: HOCKING STUART (RICHMOND) PTY LTD Respondent JUDGE: MIDDLETON J DATE OF ORDER: 2 December 2016 THE COURT DECLARES THAT: 1. Hocking Stuart (Richmond) Pty Ltd ACN 080 596 603 ('Hocking Stuart Richmond'), an estate agent licensed under the Estate Agents Act 1980 (Vic) while carrying on the business of an estate agent in trade or commerce, by representing through the Redbook Magazine, Newspaper and Online advertisements and email messages ('the advertisements') it published, or caused to be published, at various times between 1 January 2014 and 30 June 2015 that: (a) The vendors of the Victorian real estate, identified in Annexure A below ('the properties'), would sell those properties for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (b) The vendors were prepared to sell the properties for a price that was in the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (c) The vendors had instructed the Respondent to sell the properties for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (d) The Respondent in fact believed and held the opinion that the properties would be sold at a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the range in the advertisements relating to those properties; (e) The Respondent had reasonable grounds for believing and holding the opinion that the properties would be sold at a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range in the advertisements relating to the properties; and (f) The likely selling price for the properties was within the price range in the advertisements, or not substantially more than the highest figure in the price range in the advertisements relating to the properties– whereas in fact, at the time of the advertisements: (g) The Respondent knew that the vendors of the properties would not sell their property for a price that was within the price range in the advertisements or was not substantially more than the highest figure in the price range in the advertisements relating to those properties; (h) Alternatively to (g) above, the Respondent did not have any or any reasonable grounds for believing that the vendors of the properties would sell them for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to the properties; (i) The Respondent knew that the vendors of the properties were not prepared to sell them for a price that was in the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (j) The vendors had not instructed the Respondent to sell the properties for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range in the advertisements relating to the properties; (k) The Respondent in fact did not believe or hold the opinion that the relevant property would be sold at a price that was within the range provided, or was not substantially more than the highest figure in the range in the advertisements relating to the properties; (l) The Respondent did not have any or any reasonable grounds for believing or holding the opinion that the properties would be sold at a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range in the advertisements relating to those properties; and (m) The likely selling price for the properties was not within the price range in the advertisements, and was substantially more than the highest figure in the price range in the advertisements relating to those properties– has, in trade or commerce, engaged in conduct that was misleading and deceptive or likely to mislead and deceive contrary to s 18 of sch 2 to the Competition and Consumer Act 2010 (Cth) ('ACL') and s 18 of the ACL text as it applies as a law of Victoria ('ACL (Vic)') by virtue of s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic). 2. Hocking Stuart Richmond, in trade or commerce in connection with the sale or grant, or the possible sale or grant, of an interest in land, or in connection with the promotion by any means of the sale or grant of an interest in land, by making the following representations, through the advertisements it published, or caused to be published, at various times between 1 January 2014 and 30 June 2015, that: (a) The vendors of the properties, identified in Annexure A below, would sell those properties for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (b) The vendors were prepared to sell those properties for a price that was in the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (c) The vendors had instructed the Respondent to sell the properties for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (d) The Respondent in fact believed and held the opinion that the properties would be sold at a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the range in the advertisements relating to those properties; (e) The Respondent had reasonable grounds for believing and holding the opinion that the properties would be sold at a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range in the advertisements relating to the properties; and (f) The likely selling price for the properties was within the price range in the advertisements, or not substantially more than the highest figure in the price range in the advertisements relating to the properties– whereas in fact, at the time of the advertisements: (g) The Respondent knew that the vendors of the properties would not sell their property for a price that was within the price range in the advertisements or was not substantially more than the highest figure in the price range in the advertisements relating to those properties; (h) Alternatively to (g) above, the Respondent did not have any or any reasonable grounds for believing that the vendors of the properties would sell them for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to the properties; (i) The Respondent knew that the vendors of the properties were not prepared to sell them for a price that was in the price range in the advertisements, or was not substantially more than the highest figure in the price range, in the advertisements relating to those properties; (j) The vendors had not instructed the Respondent to sell the properties for a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range in the advertisements relating to the properties; (k) The Respondent in fact did not believe or hold the opinion that the relevant property would be sold at a price that was within the range provided, or was not substantially more than the highest figure in the range in the advertisements relating to the properties; (l) The Respondent did not have any or any reasonable grounds for believing or holding the opinion that the properties would be sold at a price that was within the price range in the advertisements, or was not substantially more than the highest figure in the price range in the advertisements relating to those properties; and (m) The likely selling price for the properties was not within the price range in the advertisements, and was substantially more than the highest figure in the price range in the advertisements relating to those properties– has made false or misleading representations, in connection with the sale or the possible sale of an interest in land or in connection with the promotion by any means of the sale of an interest in land concerning the price payable for the land identified in Annexure A below contrary to s 30(1)(c) of the ACL and the ACL (Vic). 3. Hocking Stuart Richmond, having contravened a provision of Ch 3 of the ACL (Vic), within 10 days of the date of the Order: (a) take all reasonable steps to cause to be published: (i) within the first 10 pages of The Weekly Review – Melbourne Times newspaper; and (ii) within the Domain lift-out section of The Age weekend newspaper; and (b) cause to be displayed, prominently, conspicuously and continuously, for a period of six months, in the public area at each of the premises from which it carries on the business of an estate agent– a Public Notice in the form and with the content of Annexure B to the Order. Each of the Notices must: (i) be at least 28 centimetres by five columns in size or a size of no less than one third of a page in the newspaper; (ii) use a minimum type size of 12-point Times New Roman or equivalent; and (iii) be in full colour. 4. Hocking Stuart Richmond take all reasonable steps to cause the Public Notice to be published on: (a) The website accessible at the URL www.realestate.com.au; and (b) The internet at the homepage of all websites which are presently owned, operated or maintained by or on behalf of Hocking Stuart Richmond, or if any such URL is replaced or changed, the internet home page of the corresponding website, for a period of six months from the date of the Order, and use its best endeavours to ensure that: (i) the Public Notice is to be viewable by clicking through a "click-through" icon located on the Hocking Stuart Richmond website; (ii) the "click-through" icon referred to in the sub-paragraph (i) above is located in a central position on the page first accessed when the user searches for real estate in Richmond, Victoria, on the realestate.com.au website; (iii) the "click-through" icon referred to in the sub-paragraph (i) above is located in a central position on the page first accessed when the user opens to the home page of any Hocking Stuart Richmond website; (iv) the "click-through" icon must contain the words "FALSE, MISLEADING AND DECEPTIVE CONDUCT – IMPORTANT NOTICE ORDERED BY FEDERAL COURT OF AUSTRALIA" (in capital letters and use a minimum type size of 16-point Times New Roman or equivalent), clearly and prominently in red on a contrasting background and the words "Click Here"; and (v) the Public Notice occupies the entire webpage which is accessed via the "click-through" icon referred to above. 5. Hocking Stuart Richmond pay to the State of Victoria pecuniary penalties in the sum of $30,000 for each contravention in the total sum of $330,000 in respect of the 11 contraventions of s 30 of the ACL (Vic) found by the Court. 6. The $330,000 is to be paid by Hocking Stuart Richmond in accordance with the following instalment arrangement: (a) a payment of $90,000 on or before 30 December 2016; (b) a payment of $80,000 on or before 31 May 2017; (c) a payment of $80,000 on or before 30 November 2017; (d) a payment of $80,000 on or before 31 May 2018. 7. If Hocking Stuart Richmond fails to pay any of the instalment amounts by the due date, the full amount of the penalty outstanding (not just the instalment amount) becomes immediately due and payable and must be paid by Hocking Stuart Richmond within 30 days of receiving a letter from the Applicant requesting or demanding the amount outstanding. 8. Hocking Stuart Richmond at its own expense: (a) establish, within three months of the date of the Order, a compliance program which meets the requirements set out in Annexure C to the Order and maintain the compliance program for three years from the date on which it is established; or (b) if it already maintains an existing trade practices compliance program: (i) within three months of the date of the Order, review the existing compliance program and make any amendments necessary to ensure that it meets the requirements set out in Annexure C to the Order; and (ii) maintain this compliance program for at least three years from the date on which the amendments, referred to in paragraph 8(b)(i) above, are made. 9. Hocking Stuart Richmond file and serve on the Applicant, within three months of the date of the Order, an affidavit of its proper officer verifying that it has carried out its obligations under the Orders of the Court sought under paragraphs 3, 4 and 8 above, detailing what it has done, including: (a) in respect of paragraph 3 above, by providing a copy of the corrective advertisement as published in the newspapers; and (b) in respect of both paragraphs 4(a) and 4(b) above, by providing a copy of: (i) a date-stamped screen capture of each website showing the click-through link; and (ii) a date-stamped screen capture of the stand-alone web page containing the notice. 10. The Respondent pay the Applicant $80,000 as a contribution to the Applicant's costs of the proceeding. 11. If Hocking Stuart Richmond is complying with and making penalty payments in accordance with the instalment arrangement as required in paragraph 6 of the Order, then Hocking Stuart Richmond pay the costs contribution of $80,000 on or before 31 December 2018. 12. If Hocking Stuart Richmond fails to comply with any of the penalty instalment arrangements as required in paragraph 6 of the Order, then Hocking Stuart Richmond pay the costs contribution of $80,000 within 30 days of receiving a letter from the Applicant requesting or demanding immediate payment of the costs contribution. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ANNEXURE "A" ('the properties') (a) 108/28 Tanner Street, Richmond; (b) 1/9 Goodwood Street, Richmond; (c) 278 Mary Street, Richmond; (d) 39 Barkers Road, Kew; (e) 310/59 Coppin Street, Richmond; (f) 17 King Street, Richmond; (g) 14 Lyndhurst Street, Richmond; (h) 204/120 Palmer Street, Richmond; (i) 7/8 Hull Street, Richmond; (j) 1/54 Stawell Street, Richmond; and (k) 10/2 Docker Street, Richmond. ANNEXURE "B" (Newspaper and Website Notice) ANNEXURE "C" COMPLIANCE PROGRAM Hocking Stuart Richmond will establish a Compliance Program ('Compliance Program') that complies with each of the following requirements: Appointments 1. Within 30 days of the date of the Order of the Court ('Court Order') coming into effect Hocking Stuart Richmond will appoint a Director or a Senior Manager with suitable qualifications or experience in corporate compliance as Compliance Officer with responsibility for ensuring the Compliance Program is effectively designed, implemented and maintained. 2. Within two months of the date of the Court Order coming into effect Hocking Stuart Richmond shall appoint a qualified, internal or external, compliance professional with expertise in the Australian Consumer Law (Victoria) ('the Compliance Advisor'). Hocking Stuart Richmond shall instruct the Compliance Advisor to conduct a risk assessment ('Risk Assessment') in accordance with 2(a) – 2(d) below: (a) Identify the areas where Hocking Stuart Richmond is at risk of breaching: (i) section 18 of Part 2-1 (Misleading or deceptive conduct); and (ii) section 30 of Part 3-1, Division 1 (False or misleading representations etc) — of the ACL (Vic); (b) assess the likelihood of these risks occurring and the consequences of the risks to the estate agent business operations of Hocking Stuart Richmond should they occur; (c) identify where there may be gaps in Hocking Stuart Richmond's existing procedures for managing these risks; and (d) provide recommendations for action having regard to the assessment. Compliance Policy 3. Hocking Stuart Richmond will, within 30 days of the Court Order coming into effect, issue a policy statement outlining Hocking Stuart Richmond's commitment to trade practices compliance ('the Compliance Policy'). Hocking Stuart Richmond will ensure that the Compliance Policy: (a) is written in plain language; (b) contains a statement of commitment to compliance with the Act (including the ACL (Vic)); (c) contains a strategic outline of how commitment to compliance will be realised within Hocking Stuart Richmond; (d) contains a requirement for all staff to report any Compliance Program related issues concerns to the Compliance Officer; (e) contains a guarantee that whistleblowers will not be prosecuted or disadvantaged in any way for making a genuine report and that their reports will be kept confidential and secure; and (f) contains a clear statement that Hocking Stuart Richmond will take action internally against any persons who are knowingly or recklessly concerned in a contravention of the applicable legislation administered by the Applicant (including the ACL (Vic)) and will not indemnify them. Complaints Handling System 4. Hocking Stuart Richmond will ensure that the Compliance Program includes a complaints handling system. Hocking Stuart Richmond shall use its best endeavours to ensure this system is consistent with AS/ISO 10002:2006 Customer satisfaction - Guidelines for complaints handling in organizations, though tailored to Hocking Stuart Richmond's circumstances. Hocking Stuart Richmond will ensure that staff and customers are made aware of the complaints handling system. 5. Hocking Stuart Richmond will ensure that the Compliance Program includes whistleblower protection mechanisms to protect those coming forward with complaints. Hocking Stuart Richmond shall use its best endeavours to ensure that these mechanisms are consistent with Australian Standard 8004:2003 Whistleblower protection programs for entities, though tailored to Hocking Stuart Richmond's circumstances. Reports to Board/Senior Management 6. Hocking Stuart Richmond will ensure that the Compliance Officer reports to its senior management meetings every 12 months on the continuing effectiveness of the Compliance Program and any recommendations for improvement of the Compliance Program. Training 7. Hocking Stuart Richmond will ensure that the Compliance Program provides for regular (at least once a year) and practical training for all directors, officers, employees, representatives and agents of Hocking Stuart Richmond, whose duties could result in them being concerned with conduct that may contravene: (a) section 18 of Part 2-1 (Misleading or deceptive conduct); and (b) section 30 of Part 3-1, Division 1 (False or misleading representations etc)— of the ACL (Vic). 8. Hocking Stuart Richmond must ensure that the training is conducted by a suitably qualified compliance professional or legal practitioner with expertise in the ACL (Vic). 9. Hocking Stuart Richmond will ensure that the Compliance Program includes a requirement that awareness of ACL (Vic) compliance issues forms part of the induction of all new directors, officers, employees, representatives and agents, whose duties could result in them being concerned with conduct that may contravene: (a) section 18 of Part 2-1(Misleading or deceptive conduct); and (b) section 30 of Part 3-1, Division 1 (False or misleading representations etc)— of the ACL (Vic). Supply of Compliance Program Documents to the Applicant 10. Hocking Stuart Richmond shall, at its own expense, within three months of the date of the Court Order coming into effect, cause to be produced and provided to the Applicant copies of each of the documents constituting the Compliance Program and implement promptly and with due diligence any recommendations that the Applicant may make that are reasonably necessary to ensure that Hocking Stuart Richmond maintains and continues to implement the Compliance Program in accordance with the requirements of the Court Order. Recommendations 11. Hocking Stuart Richmond shall implement promptly and with due diligence any recommendations made in the report referred to in paragraph 6 above. REASONS FOR JUDGMENT MIDDLETON J: 1 I delivered reasons for judgment in this proceeding on 6 October 2016 (Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd [2016] FCA 1184). I will refer to those reasons as the principal reasons. These reasons should be read with the principal reasons and I adopt the descriptions of the parties and documents in the principal reasons. 2 As suggested by the Court in the principal reasons, the parties have conferred in relation to the appropriate instalment regime to apply for the payment of the penalties ordered by the Court and the payment of costs agreed to by the parties. The parties have been unable to agree as to the appropriate regime. 3 At the outset it can be accepted that for a company the size of Hocking Stuart Richmond, the penalty imposed by the Court of $330,000.00 is a substantial penalty. It was on this basis that the Court indicated that Hocking Stuart Richmond should have the opportunity to pay the pecuniary penalty by instalments (see principal reasons at [86]). 4 Hocking Stuart Richmond is a corporation, although this description should not obscure the fact that Hocking Stuart Richmond is a small, local real estate agency run by Mr Peter Perrignon. The Court should take into account the nature, size and financial resources of Hocking Stuart Richmond when making an order regarding an instalment plan for the payment of the penalty. An instalment order that Hocking Stuart Richmond is unable to satisfy will have significant consequences for the employees of Hocking Stuart Richmond, particularly if the order has the consequence that Hocking Stuart Richmond becomes insolvent. 5 Hocking Stuart Richmond has consulted with its accountants as to its ability to pay the penalty and the agreed contribution to costs in the amount of $80,000.00. It is on the basis of the advice from its accountants that the submissions as to an instalment regime of Hocking Stuart Richmond were made to the Court. 6 Consumer Affairs seeks payment of the penalty imposed by the Court over a 24-month period. Hocking Stuart Richmond submits that an order that the penalty and costs be required to be paid within this timeframe is beyond its means and that it does not have prospects of making those payments within that timeframe. It submits that an order to this effect would render Hocking Stuart Richmond insolvent, and would be oppressive. 7 Hocking Stuart Richmond has filed evidence of its financial position. In addition to the matters mentioned in the principal reasons, the following matters can be observed. 8 Hocking Stuart Richmond's legal costs to date were mostly financed through an external funding arrangement, which requires ongoing repayments to be made. The matrimonial home of Mr Perrignon has been sold in order to keep the business solvent. A substantial amount of the proceeds of sale have been loaned to Hocking Stuart Richmond's business to ensure its viability. If these loans had not been made to Hocking Stuart Richmond's business, then the business would have probably not been able to continue to operate. Hocking Stuart Richmond submits that the ability of Hocking Stuart Richmond to obtain further loan funds for the business has been exhausted, although this has not been substantiated. 9 On the basis of Hocking Stuart Richmond's precarious financial position, Hocking Stuart Richmond seeks that the penalty of $330,000.00 and costs of $80,000.00 be paid by Hocking Stuart Richmond in accordance with the following instalment arrangement: Penalty: (1) A payment of $50,000 on or before 30 December 2016. (2) A payment of $50,000 on or before 1 August 2017. (3) A payment of $50,000 on or before 31 January 2018. (4) A payment of $50,000 on or before 1 August 2018. (5) A payment of $50,000 on or before 31 January 2019. (6) A payment of $50,000 on or before 1 August 2019. (7) A payment of $30,000 on or before 31 January 2020. Costs: (8) A payment of $50,000 on or before 1 August 2020. (9) A payment of $30,000 on or before 31 January 2021. 10 Consumer Affairs submits that instalments of the penalty should be as follows: (1) A payment of $90,000 on or before 30 December 2016. (2) A payment of $80,000 on or before 31 May 2017. (3) A payment of $80,000 on or before 30 November 2017. (4) A payment of $80,000 on or before 31 May 2018. 11 Further, Consumer Affairs has agreed, provided that Hocking Stuart Richmond is making the penalty payments in accordance with its proposed instalment arrangement, that Hocking Stuart Richmond should be allowed extended time to pay the costs contribution until 30 December 2018. 12 Whilst mindful of the position of Hocking Stuart Richmond, as a matter of general principle, the potential incapacity of a contravener to pay a pecuniary penalty should not limit the principal objective of general deterrence. I discussed the importance of general deterrence relevant to this proceeding in the principal reasons. 13 It is also important to recall the nature and extent of the contravening conduct as I observed in the principal reasons at paragraphs [57]-[58]: The contravening conduct was serious. Price is an essential piece of information about the property being offered for sale for prospective buyers. Buyers should be able to rely on correct information to make an informed decision. Failure to provide the correct range of price by engaging in underquoting is misleading. The conduct involved the creation of an enticing (but illusory and fictitious) marketing web for the sale of 11 different residential homes over an 18 month period from approximately 1 January 2014 to 30 June 2015. The price representations made by Hocking Stuart Richmond in respect of each of the properties were intended to and apt to create a particular mental impression in the representee, namely the "illusion of a bargain". Hocking Stuart Richmond's business stood to benefit from creating such an impression, although the exact calculation of such a benefit in monetary terms is difficult. 14 In Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 281 at [9], Merkel J observed: The size of the contravening companies and their respective capacities to pay a penalty were relied upon as factors in mitigation in the present case. Plainly, such factors can be relevant to the penalty that is necessary to deter the company from contravening the Act in the future. Size may also be relevant to general deterrence because other potential contraveners are likely to take notice of penalties imposed on companies of a similar size. However, a contravening company's capacity to pay a penalty is of less relevance to the objective of general deterrence because that objective is not concerned with whether the penalties imposed have been paid. Rather, it involves a penalty being fixed that will deter others from engaging in similar contravening conduct in the future. Thus, general deterrence will depend more on the expected quantum of the penalty for the offending conduct, rather than on a past offender's capacity to pay a previous penalty. I therefore respectfully agree with the observation of Smithers J, referred to by Burchett and Kiefel JJ in NW Frozen Foods, to the effect that, a penalty that is no greater than is necessary to achieve the object of general deterrence, will not be oppressive. 15 In Australian Competition and Consumer Commission v High Adventure Pty Ltd [2006] ATPR 42-091 at 44,564, the Full Court observed: The second observation is that by focusing on the detriment to the respondents the judge ignored both the seriousness of the contravention as well as the need to fix upon an appropriate penalty by reference to the need to deter future contraventions. As the cases to which the judge was referred show, the principal, if not the sole, purpose for the imposition of penalties for a contravention of the antitrust provisions in Part IV is deterrence, both specific and general. This rule is so well entrenched that citation of authority is unnecessary. Moreover, as deterrence (especially general deterrence) is the primary purpose lying behind the penalty regime, there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender. In some cases the penalty may be so high that the offender will become insolvent. That possibility must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined. 16 Justice Goldberg in Australian Competition and Consumer Commission v SIP Australia Pty Limited [2003] ATPR 41-937 at 47,077-47,078 said: The fact that SIP is in liquidation and that an order has been made for its winding up is no bar to an order being made against it for the payment of penalties. However consistently with the order I made on 10 July 2002, no proceeding can be taken for the recovery of that penalty without further order of the Court. Even though SIP is in liquidation, it is still appropriate to order that it pay penalties for its contraventions of the Act as a measure of the Court's disapproval of the contraventions established and as a measure of the seriousness with which the Court regards those contraventions. If the principal object of the imposition of penalties is deterrence, not only of the participants, but also others who might be influenced to contravene the Act, then it is quite appropriate to order that a company in liquidation pay pecuniary penalties for contraventions of the Act. If general deterrence is to have any meaning, a company in liquidation which has contravened the Act must be ordered to pay an appropriate pecuniary penalty as a deterrent to others who might be tempted to engage in similar conduct: Australian Competition and Consumer Commission v The Vales Wine Company Pty Ltd (1996) ATPR 41-528 at 42,776. 17 In Australian Competition and Consumer Commission v EDirect Pty Ltd (in liq) (2012) 206 FCR 160, Reeves J imposed a total penalty of $2.5 million on a contravener notwithstanding his Honour's satisfaction that the contravener was unlikely to have any capacity to pay such a penalty. His Honour said at [70]: I consider that while EDirect is unlikely to have any capacity to pay the pecuniary penalty that is imposed upon it, general deterrence requires that a sufficiently high level of penalty should be imposed to deter others from even contemplating taking a risk of contraventions of a similar kind. 18 Justice Yates in Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 referred to these authorities and applied them in the circumstances before him. 19 Hocking Stuart Richmond seeks an instalment plan as to the penalty extending to 31 January 2020. This is an excessively long period of time. In my view, an instalment arrangement over such a long period risks diminishing the general deterrent effect of the imposition of a penalty. Further, it is undesirable to impose substantial penalties over a lengthy period because this imposes a continuing hardship on the contravener, which is generally undesirable. In addition, in the case of a company in the nature of Hocking Stuart Richmond, if the payment of instalments spans a lengthy period, there is always the possibility of the company avoiding payment by restructuring or being wound up. 20 In this proceeding, it is important for the Court to impose a penalty that has a general deterrent consequence. Allowing the instalment plan sought by Hocking Stuart Richmond would not impose a sufficient penalty having particular regard to this important consideration. Whilst it is proper to focus on the detriment to Hocking Stuart Richmond in the imposition of a penalty, the Court must not overlook the seriousness of the contravention, as well as the need to fix upon an appropriate penalty by reference to the need to deter future contraventions. The instalment plan prepared by Consumer Affairs seems reasonable and achieves a proper balance, taking into account the financial position of Hocking Stuart Richmond and the need for general deterrence. 21 As to the date for the payment of costs, I am not prepared to allow any further period than that sought by Consumer Affairs, which is not until 30 December 2018 in any event. If Consumer Affairs is persuaded hereafter that, in all the circumstances, payment of the costs be waived or the time for payment be extended further, this can be agreed between the parties without referral back to the Court. 22 I will make those orders agreed to by the parties, and orders otherwise in accordance with the principal reasons and the above reasons. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate: Dated: 2 December 2016