Australian Competition and Consumer Commission v Alice Car & Truck Rentals Pty ltd & ors

[1997] FCA 624

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )

)

NORTHERN TERRITORY DISTRICT REGISTRY ) DG 9 OF 1996

)

GENERAL DIVISION )

BETWEEN: AUSTRALIAN COMPETITION AND

CONSUMER COMMISSION

Applicant

AND: ALICE CAR & TRUCK RENTALS

PTY LTD (ACN 009 596 561)

(trading as Territory Rent-A-Car)

First Respondent

STAFFTOY PTY LTD

(ACN 053 884 736)

(trading as Thrifty Car Rental)

Second Respondent

NORTHAUST AUTO HIRE PTY LTD

(ACN 009 639 490)

(trading as Avis Northern Territory)

Third Respondent

N.T. OUTBACK ADVENTURE

RENTALS PTY LTD (ACN 009 631 270)

(trading as Hertz Northern Territory)

Fourth Respondent

ROBERT JAMES HUNTER

Fifth Respondent

NATHALIE JUNE KELLER

Sixth Respondent

NEVILLE CHARLES IVEY

Seventh Respondent

DAVID GEOFFREY BENNETT

Eighth Respondent

BRIAN HAROLD MEASEY

Ninth Respondent

JUDGE: MANSFIELD J

PLACE: DARWIN

DATED: 30 JUNE 1997

REASONS FOR DECISION

In this matter, I have today given the applicant leave to further amend its statement of claim in certain respects and in the light of that proposed amendment and in anticipation of that leave the applicant, the third respondent, and the seventh respondent, have come to an agreement as to the final disposition of the proceedings against the third and the seventh respondents. They do so by presenting to me short minutes of order, a joint submission, and an undertaking to which is annexed both the now further amended statement of claim and a form of letter to be sent to customers of the third respondent by it. The effect of that undertaking includes, but is not limited to, steps to be taken in relation to those clients of the third respondent who were victims of the conduct about which the applicant makes complaint, to ensure that they will be compensated to the extent to which they would otherwise have been able, but for that conduct, to have hired a vehicle from the third respondent in the period between December 1994 and April 1995 for a lesser amount than the amount paid.

The procedure which has been adopted by the applicant with the third and seventh respondents is a procedure which the Court has entertained on a number of occasions in relation to matters such as this, as amply illustrated by the decision of the Full Court in NW Frozen Foods Proprietary Limited v Australian Competition and Consumer Commission (1997) ATPR 41-546, and by the many authorities referred to in the joint judgment of Burchett and Kiefel JJ (at 43-580).

I was somewhat cautious about whether it was appropriate for the Court to proceed as requested at this point in the conduct of the proceedings generally in which there are now seven other respondents. It is plain that some, and possibly all of the other respondents, intend to maintain the defences which have been filed in this proceeding disputing the allegations of conduct made against them, which conduct involves, to use the shorthand expression, unlawful price fixing to which the third respondent was a party. However, I have decided that I should hear and accept the submissions at this point before those other matters have been heard.

I note that Sheppard J in Trade Practices Commission v Allied Mills Industries Proprietary Limited (No 4) (1981) 37 ALR 256 adopted such a course of action, albeit in circumstances where the other parties to that proceeding did not oppose that course of action. Not all parties otherwise remaining in these proceedings have had the opportunity to express a view to me as to whether they do or do not oppose that course of action. The consequence of my entertaining the submissions which I have been asked to entertain may be that some other party will, at a later stage in the conduct of these proceedings, object to me continuing to hear and determine the proceedings. If that arises, I will consider the issue at that time. I have fixed 21 July 1997 as the date for the next directions hearing. I expect that any party which has such an application to make in the light of what I am determining to do today will make such application at that time.

In entertaining the application today, as I do, it does not in any way, in my view, inhibit the Court generally from hearing and determining any other issues relating to these proceedings at a later time. It is no more than as if one or more of the parties to the proceedings had not filed a defence and the applicant had moved for judgment in default of defence and for the imposition of penalties and other orders. Similarly, it is no more than if at the commencement of the hearing one or more of the respondents had announced admissions upon which orders were then sought, without other parties being involved in the making of those admissions. Indeed, such a course of action could be followed at any time in the course of the trial of the proceedings or prior to the hearing.

I have considered the joint submissions, the undertaking which is proffered which involves both providing compensation to clients of the third respondent who may have suffered by reason of the conduct admitted by virtue of the withdrawal of the defences, and instituting a program called a 'compliance program' to ensure for a significant period of time that the third respondent will undertake a program to ensure that its officers are aware of, and have procedures in place to ensure, compliance with the requirements of the Trade Practices Act 1974. I am satisfied that the terms of the undertaking and of the letter which is to be sent to clients of the third respondent, who may have suffered by reason of the conduct complained of, which conduct is now admitted by the third respondent following the withdrawal of its defence, will thereby be identified and properly compensated. I am also satisfied that the compliance program proposed is a sensible one.

The balance of the orders which I am asked to make by reason of the shared submissions involves, after the withdrawal of the defences, the imposition of monetary penalties under s 76 of the Act upon the third respondent and upon the seventh respondent as a person knowingly concerned in or party to the third respondent's contraventions. The Court is also asked by consent to make injunctive orders for a period of four years against the third respondent and against the seventh respondent in terms which are reflected in the minutes - or the short minutes of order, and to make an order that the third respondent pay the applicant's costs of and incidental to the proceedings against the third respondent which are in an agreed amount.

The contraventions in respect of which the penalty and injunctions are proposed to be imposed are separately identified as contraventions of s 45(2)(a)(ii) of the Trade Practices Act 1974 and of s 45(2)(b)(ii) of that Act, and separately against each of those respondents.

In terms of the range of remedies proposed, and in the light of the objectives of the Act as identified and recognised in a number of cases, it seems to me that that range of remedies appropriately covers what the Court should consider. It is, of course, as counsel have acknowledged, up to the Court to determine the appropriate penalty for a contravention once proven or admitted. The common position of the parties is not, however, something which the Court should simply ignore. In deciding what is appropriate, I have been guided by the joint judgment of Burchett and Kiefel JJ in the NW Frozen Foods case to which I have referred, and to the factors relevant to the determination of penalty which are discussed at some length at 43,581 and 43,582 of that decision.

I bear in mind that the penalty is to be imposed for factors, both objective in relation to the conduct now admitted and for factors personal to the particular respondents, and I also bear in mind that the basis of the identification of the facts now admitted in relation to the conduct constituting the contraventions is the withdrawal of the defences and not other material. In those circumstances, it is probably better for me to say little rather than too much as to the nature of that conduct or its significance. It is sufficient to note, as the joint submissions record, that the conduct was engaged in the period December 1994 to April 1995 or thereabouts, and involved the third respondent and others, according to the allegations against the third and seventh respondents now admitted by those two respondents by withdrawal of their defences. In relation to the category of customers called 'walk-up customers' in Alice Springs who were proposing to travel to Ayers Rock or other places in circumstances where they might otherwise have been eligible for what was called 'the Ayers Rock special' in that period of time, the contravention involved entering into an agreement not to offer that special and further then to give effect to that agreement. That conduct meant that a significant number of clients of the third respondent did not have the benefit of that special, and paid a significantly greater sum for the hire of a motor vehicle from the third respondent than would otherwise have been the case. On the other hand, as those joint submissions acknowledge, there are now factors relevant in a personal sense to the third and seventh respondents, in particular, their withdrawal of their defences and the consequences of them having done so. The significance of that conduct has been discussed in other cases. The undertakings now offered to compensate victims of the conduct, and to participate in a compliance program, are also factors which the authorities indicate should operate in a not insignificant way favourably to those respondents in determining the appropriate level of penalty. It is also not for the Court to say that the penalty proposed in the joint submissions is the penalty which the Court would otherwise have determined. It is sufficient for the Court to say that, as expressed in the NW Frozen Foods case (above) and in other cases referred to in that decision, the penalty proposed is an appropriate one. I am satisfied that it is.

Accordingly, in the light of the material which the applicant and the third and seventh respondents have filed in Court this day, and in the light of the withdrawal of the defences of the third and seventh respondents giving rise to admissions as to the facts alleged in the now further amended statement of claim, I am prepared to impose the penalties and to order the injunctions and to accept the undertakings proffered in accordance with that which the parties have suggested in the joint submission.

It is necessary, formally, to give the third and seventh respondents leave to withdraw their defences to the statement of claim and I so order. I note that that is done today by Mr Reid.

I have been handed short minutes of order. In respect of penalty, I order that the third respondent, pursuant to s 76 in respect of its contravention of s 45(2)(a)(ii) of the Act, pay to the Commonwealth a pecuniary penalty in the sum of $75000 within sixty days of the date of this order and in respect of its contravention of s 45(2)(b)(ii) of the Act pay to the Commonwealth of Australia a pecuniary penalty in the sum of $125000 within sixty days of the date of this order.

As against the seventh respondent, again pursuant to s 76 of the Act, in respect of his contravention of subs 76(1)(e) of the Act in being knowingly concerned in or party to the third respondent's contravention of s 45(2)(a)(ii) of the Act, I order that he pay to the Commonwealth of Australia a pecuniary penalty in the sum of $20000 within sixty days of the date of this order and in respect of his contravention of subs 76(1)(e) of the Act in being knowingly concerned in or party to the third respondent's contravention of s 45(2)(b)(ii) of the Act, I order that he pay to the Commonwealth of Australia a pecuniary penalty in the sum of $30000 within sixty days of the date of this order.

I make injunctive orders for the period of four years against the third respondent and against the seventh respondent in terms of the short minutes of order initialled by me this day. I order that the third respondent pay the applicant's costs of and incidental to these proceedings against the third respondent, which are agreed between those parties in the sum of $35000, such amount also to be paid within sixty days of the date of this order.

There will, accordingly, be an order in terms of the short minutes of order handed up to me this day as altered in par 8 by adding the words 'against the third respondent' after the word 'proceedings', reflecting those orders which I have made.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:

Dated: 15 July 1997

Counsel for the Applicant: Mr T J Riley QC

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the First, Second and Ninth Respondents: Mr A Wyvill

Solicitors for the First, Second and Ninth Respondents: David de L. Winter

Counsel for the Third and Seventh Respondents: Mr W Reid

Solicitors for the Third and Seventh Respondents: Blake Dawson Waldron

Counsel for the Fourth Respondent: Mr P Slattery

Solicitors for the Fourth Respondent: Turner & Deane

Counsel for the Fifth Respondent: Mr S R Southwood

Solicitors for the Fifth Respondent: Morgan Buckley

Counsel for the Sixth Respondent: Mr B Johns

Solicitors for the Sixth Respondent: Brian L Johns

No appearance by or on behalf of the Eighth Respondent