Australian Competition and Consumer Commission v Leahy Petroleum

[2005] FCA 304

FEDERAL COURT OF AUSTRALIA

ACCC v Leahy Petroleum [2005] FCA 304

CORPORATIONS – company in liquidation – application for leave to proceed with a hearing in relation to a civil penalty – whether proceeding is futile

Corporations Act 2001 (Cth) s 500(2)

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v  LEAHY PETROLEUM PTY LTD AND OTHERS
V 315 OF 2002

MERKEL J
7 MARCH 2005
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 315 OF 2002

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

LEAHY PETROLEUM PTY LTD
FIRST RESPONDENT

LEAHY PETROLEUM - RETAIL PTY LTD
SECOND RESPONDENT

TRITON 2001 PTY LTD
THIRD RESPONDENT

J. CHISHOLM PTY LTD
FOURTH RESPONDENT

JUSTCO PTY LTD
FIFTH RESPONDENT

APCO SERVICE STATIONS PTY LTD
SIXTH RESPONDENT

BRUMAR (VIC) PTY LTD (IN LIQUIDATION)
SEVENTH RESPONDENT

JOHN ROBERT GOURLEY
EIGHTH RESPONDENT

ROBERT ANDREW LEVICK
NINTH RESPONDENT

ROBIN HERBERT PALMER
TENTH RESPONDENT

ANTHONY BRIAN ROSENOW
ELEVENTH RESPONDENT

JUSTIN MATTHEW BENTLEY
TWELFTH RESPONDENT

PETER JOSEPH ANDERSON
THIRTEENTH RESPONDENT

GARRY VICTOR DALTON
FOURTEENTH RESPONDENT

CAVALLO VOLANTE PTY LTD (FORMERLY KNOWN AS BALGEE OIL PTY LTD) (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
FIFTEENTH RESPONDENT

PETER ROBERT MULLER
SIXTEENTH RESPONDENT

JUDGE:

MERKEL J

DATE OF ORDER:

7 MARCH 2005

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT leave be granted to the ACCC to proceed against Brumar (Vic) Pty Ltd (In Liquidation).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 315 OF 2002

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

LEAHY PETROLEUM PTY LTD
FIRST RESPONDENT

LEAHY PETROLEUM - RETAIL PTY LTD
SECOND RESPONDENT

TRITON 2001 PTY LTD
THIRD RESPONDENT

J. CHISHOLM PTY LTD
FOURTH RESPONDENT

JUSTCO PTY LTD
FIFTH RESPONDENT

APCO SERVICE STATIONS PTY LTD
SIXTH RESPONDENT

BRUMAR (VIC) PTY LTD (IN LIQUIDATION)
SEVENTH RESPONDENT

JOHN ROBERT GOURLEY
EIGHTH RESPONDENT

ROBERT ANDREW LEVICK
NINTH RESPONDENT

ROBIN HERBERT PALMER
TENTH RESPONDENT

ANTHONY BRIAN ROSENOW
ELEVENTH RESPONDENT

JUSTIN MATTHEW BENTLEY
TWELFTH RESPONDENT

PETER JOSEPH ANDERSON
THIRTEENTH RESPONDENT

GARRY VICTOR DALTON
FOURTEENTH RESPONDENT

CAVALLO VOLANTE PTY LTD (FORMERLY KNOWN AS BALGEE OIL PTY LTD) (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
FIFTEENTH RESPONDENT

PETER ROBERT MULLER
SIXTEENTH RESPONDENT

JUDGE:

MERKEL J

DATE:

17 MARCH 2005

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

1. Since the hearing and publication of reasons for judgment in relation to liability in this matter one of the respondents, Brumar (Vic) Pty Ltd (“Brumar”), has gone into voluntary liquidation.  In those reasons I found that Brumar contravened Pt IV of the Trade Practices Act 1974 (Cth) (“the Act”). The ACCC has applied under s 500(2) of the Corporations Act 2001 (Cth) for leave to proceed to enable the hearing in relation to a penalty in respect of Brumar, to continue.

2. The liquidator opposes leave to proceed on the ground that the further continuance of the proceeding against the company in liquidation is futile as it will have no assets to pay any penalty and no purpose would be served by granting any of the other relief sought by the ACCC.

3. I am not satisfied that a hearing in relation to penalty would be futile.  There is sufficient evidence before me to disclose that Brumar and an associated company recently received a very substantial payment in respect of the sale of their assets.  The liquidator seems to be uncertain as to what the net asset position of the company actually is.  The current state of the evidence before me is such that there may well be cause for concern in respect of the asset position of Brumar and I do not accept that proceeding with the penalty hearing would be futile.

4. In any event, a penalty hearing concerns the appropriate penalty to be imposed on Brumar having regard to all the relevant circumstances, including the company’s capacity to pay and general deterrence principles. It would be an odd result if a company could go into voluntary liquidation on the ground of an alleged inability to pay its debts and thereby seek to prevent a penalty from being imposed on it by opposing leave to proceed. That is particularly so when it has been found that the company has committed serious contraventions of the Act.

5. Accordingly, I grant leave to the ACCC to proceed against Brumar (Vic) Pty Ltd (In Liquidation). 

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate:

Dated:             

Counsel for the Applicant:

Mr JWK Burnside QC with

Ms EA Strong SC

Solicitor for the Applicant:

Australian Government Solicitor

Counsel for the Seventh Respondent:

Mr PJ Cosgrave

Solicitor for the Seventh Respondent:

Griffith Hack

Date of Hearing:

7 March 2005

Date of Judgment:

7 March 2005