Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd

[2006] FCA 1034

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2006] FCA 1034

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v LIQUORLAND (AUSTRALIA) PTY LTD ACN 007 512 414 AND WOOLWORTHS LTD ACN 000 014 675
NSD 769 OF 2003

ALLSOP J
11 AUGUST 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 769  OF 2003

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

LIQUORLAND (AUSTRALIA) PTY LTD ACN 007 512 414
First Respondent

WOOLWORTHS LTD ACN 000 014 675
Second Respondent

JUDGE:	ALLSOP J
DATE OF ORDER:	11 AUGUST 2006
WHERE MADE:	SYDNEY

ORDERS

THE COURT DECLARES

Jin Ro

1.That on or about 18 August 1997, the Second Respondent, in trade or commerce, by entering into a deed with Jin Ro Australia Pty Ltd and Deannah Jang (“the Jin Ro Parties”) and the First Respondent (“the Jin Ro deed”), made a contract or arrangement, or arrived at an understanding containing the provision set out in Part 1 of the Schedule hereto (“the Jin Ro provision”), which had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Rockdale area by seeking to ensure that the Off-Licence (Retail) licence granted under the Liquor Act 1982 (NSW) (“Off-Licence”) to the Jin Ro parties could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(a)(ii) of the Trade Practices Act 1974 (Cth) (“the Act”).

2.That the Second Respondent, by not pressing its objection to the Jin Ro application referred to in Part 1 of the Schedule hereto, gave effect to a provision of a contract, arrangement or understanding, namely the Jin Ro provision, which had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Rockdale area by seeking to ensure that the Off-Licence granted to the Jin Ro parties could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(b)(ii) of the Act.

Ettamogah

3.That on or about 26 November 1998, the Second Respondent, in trade or commerce, by entering into a deed with Ettamogah Darling Harbour Pty Ltd, Leigh Christopher O’Brien and Ralph Joseph Patterson  (“the Ettamogah parties”) and the First Respondent (“the Ettamogah deed”), made a contract or arrangement, or arrived at an understanding containing the provision set out in Part 2 of the Schedule hereto (“the Ettamogah provision”) which:

3.1was an exclusionary provision within the meaning of section 4D of the Act, and thereby engaged in conduct in contravention of s 45(2)(a)(i) of the Act; and

3.2had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Campbelltown area by seeking to ensure that the Hotelier’s licence granted under the Liquor Act 1982 (NSW) (“Hotelier’s Licence”) to the Ettamogah parties could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(a)(ii) of the Act.

4.That the Second Respondent, by withdrawing its objection to the Ettamogah application referred to in Part 2 of the Schedule hereto, gave effect to a provision of a contract, arrangement or understanding, namely the Ettamogah provision, which:

4.1was an exclusionary provision within the meaning of section 4D of the Act, and thereby engaged in conduct in contravention of s 45(2)(b)(i) of the Act; and

4.2had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Campbelltown area by seeking to ensure that the Hotelier's licence granted to the Ettamogah parties could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(b)(ii) of the Act.

Palms Village

5.That in or about March 2000, the Second Respondent, in trade or commerce, by entering into a deed with Sandra May Hopkins, The Palms Shopping Village Pty Ltd, John Saunders, Malcolm Logan, Thomas Cahill (“the Palms Village Parties”) and D&D Haslam Pty Ltd and the First Respondent (“the Palms Village deed”), made a contract or arrangement, or arrived at an understanding which contained the provision set out in Part 3 of the Schedule hereto (“the Palms Village provision”) which had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Tweed Heads area by seeking to ensure that the Off-Licence granted to the Palms Village parties could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(a)(ii) of the Act.

6.That the Second Respondent, by withdrawing its objection to the Palms Village application referred to in Part 3 of the Schedule hereto, gave effect to a provision of a contract, arrangement or understanding, namely the Palms Village provision, which had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Tweed Heads area by seeking to ensure that the Off-Licence granted to the Palms Village parties could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(b)(ii) of the Act.

Global Beer

7.That in or about November 2000, the Second Respondent, in trade or commerce, by entering into a deed with David John Dixon and Donna-Marie Dixon (“the Dixons”),  and the First Respondent (“the Global Beer deed”), made a contract or arrangement, or arrived at an understanding containing the provision set out in Part 4 of the Schedule hereto (“the Global Beer provision”) which:

7.1was an exclusionary provision within the meaning of section 4D of the Act, and thereby engaged in conduct in contravention of s 45(2)(a)(i) of the Act; and

7.2had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Tweed Heads area by seeking to ensure that the Off-Licence granted to the Dixons could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(a)(ii) of the Act.

8.That the Second Respondent, by withdrawing its objection to the Global Beer application referred to in Part 4 of the Schedule hereto, gave effect to a provision of a contract, arrangement or understanding, namely the Global Beer provision, which:

8.1was an exclusionary provision within the meaning of section 4D of the Act, and thereby engaged in conduct in contravention of s 45(2)(b)(i) of the Act; and

8.2had a substantial purpose of substantially lessening, preventing or hindering competition in the retail market for the sale of takeaway liquor in the Tweed Heads area by seeking to ensure that the Off-Licence granted to the Dixons could not be used to facilitate any unrestricted market entry at that time or thereafter, and thereby engaged in conduct in contravention of s 45(2)(b)(ii) of the Act.

THE COURT ORDERS THAT:-

9.Pursuant to Order 29 Rule 2 that penalty and any other relief be determined separately from all other issues in the proceedings.

10.Pursuant Order 52 Rule 15(1)(b) that the time for filing of a notice of appeal from these declarations and orders be extended until 21 days after the Court makes orders consequent upon the hearing relating to penalty and other relief.

11.That the seal of the Court be affixed to the reasons for judgment given in the proceeding for the purpose of section 83 of the Act.

12.That the Second Respondent pay the Applicant’s costs of the proceeding to date.

13.The hearing on penalty and any other relief be determined on the basis of the evidence led to date, any further evidence adduced for the purposes of the penalty hearing and on the basis of the findings and reasons contained within the reasons for judgment first published on 30 June 2006 and to which corrected reasons for judgment the Court seal was affixed for the purposes of s 83 of the Act.

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

SCHEDULE

Part 1 - The Jin Ro Provision

1. The Second Respondent agreed not to press its objection to an application made by the Jin Ro parties to the Licensing Court of New South Wales (“the Licensing Court”) for the grant of an Off-Licence in respect of premises situated at 7 Willis Street, Arncliffe (“the Willis premises”) to enable the Jin Ro parties to operate a business from the Willis premises, including the supply of takeaway liquor (“the Jin Ro application”), on the basis that each of the Jin Ro parties jointly and severally agreed:

(a)     to conduct business from the Willis premises, or any other premises to which the licence may be removed from time to time, in conformity with the conditions contained in clause 1 of the Jin Ro deed, which provided, amongst other things, that the licensee would not:

i.maintain a display of, or display, liquor available for sale on the Willis premises;

ii.permit any customer to attend on the Willis premises to make purchases of, place orders for the purchase of, any liquor or to collect any such liquor;

iii.accept any order for the sale of liquor, other than orders received by telephone, post, facsimile, telex or electronic mail;

iv.deliver, or cause to be delivered, liquor to any customer on the Willis premises or any other premises (whether licensed or not) within 100 metres of the Willis premises; and

v.sell on or from the Willis premises any liquor whatsoever, other than traditional Korean liquor products made and packaged in Korea and imported into Australia from Korea;

(b) to request that the Licensing Court impose those conditions on the Off-Licence granted in respect of the Willis premises;

(c)            not to apply to amend, revoke or vary such conditions; and

(d)            that in the event that the liquor licence was transferred to any other party, they would procure that that party enter into a deed with the second respondent containing like stipulations and conditions to those contained in the Jin Ro deed.

Part 2 - The Ettamogah Provision

2. The Second Respondent agreed to not press its objection to an application made by the Ettamogah parties to the Licensing Court for the grant of a Hotelier’s licence in respect of premises situated in the Macarthur Square Shopping Centre, Campbelltown (“the Campbelltown premises”) to enable the Ettamogah parties to operate a bar and restaurant at those premises, such an operation to include the supply of takeaway liquor (“the Ettamogah application”), on the basis that each of the Ettamogah parties jointly and severally agreed:

(a) to conduct business from the Campbelltown premises in conformity with the conditions contained in clauses 1.1, 1.2 and 1.3 of the Ettamogah deed, which provided that the licensee would:

i.not construct or maintain a bottle shop or driveway facility on the Campbelltown premises for the supply or sale of takeaway Liquor;

ii.restrict the sale of takeaway liquor to a single place within the Campbelltown premises;

iii.not sell, advertise for sale, or conduct promotions for the sale of, any takeaway liquor other than that which specifically referred to the thematic concept of the Ettamogah Pub Mob cartoon and its characters, and are sold under an Ettamogah Pub Mob cartoon label which is owned by the licensee or his employer; and

iv.not deliver, or cause to be delivered, liquor at a place other than at the Campbelltown premises;

(b) to request that the Licensing Court impose those conditions on the Hotelier’s Licence granted in respect of the Campbelltown premises;

(c) not to apply to amend, revoke or vary such conditions; and

(d) that in the event that the Hotelier’s licence was transferred to any other party, they would procure that that party enter into a deed with the Second Respondent containing like stipulations and conditions to those contained in the Ettamogah deed.

Part 3 - The Palms Village Provision

3. The Second Respondent agreed to withdraw its objection to an application made by the Palms Village parties to the Licensing Court for the grant of an Off-Licence in respect of premises situated at Shop 4, 122 Dry Dock Road, Tweed Heads South (“the Dry Dock premises”) to enable the Palms Village parties to operate a retail bottle shop from those premises, such an operation to include the supply of takeaway liquor (“the Palms Village application”), on the basis that each of the Palms Village parties jointly and severally agreed:

(a) to conduct business from the Dry Dock premises in conformity with the conditions contained in Annexure “A” to the Palms Village deed, which provided, amongst other things, that for a period of 10 years from the date of the final order granting the licence:

i.the area of the Dry Dock premises and any associated stock room(s) would be that area depicted in plan No. 9512 annexed to the Palms Village application;

ii.no application would be made to redefine the boundaries of the Dry Dock premises; and

iii.liquor would not be kept on the Dry Dock premises and/or in any nearby associated stockrooms which (in the aggregate) was of a greater wholesale value than $55,000;

(b)to request that the Licensing Court impose those conditions on the Off-Licence granted in respect of the Dry Dock premises;

(c)not to apply to amend, revoke or vary such conditions; and

(d) that in the event that the Off-Licence was transferred to another party, they would procure that that party enter into a deed with the Second Respondent containing like stipulations and conditions to those contained in the Palms Village deed.

Part 4 - The Global Beer Provision

4. The Second Respondent agreed not to press its objection to an application made by the Dixons to the Licensing Court for the grant of an Off-Licence in respect of premises situated at Unit 6, 44 - 46 Ourimbah Road, Tweed Heads South (“the Ourimbah premises”) to enable the Dixons to operate a business from those premises, to be known as Global Beer Importers, such an operation to include the supply of takeaway liquor (“the Global Beer application”), on the basis that each of the Dixons jointly and severally agreed:

(a) to conduct business from the Ourimbah premises in conformity with the conditions contained in Clause 1.1 of the Global Beer Importers deed, which provided, amongst other things, that:

i.no sales, other than sales of boutique imported beers which were not generally available in the Second Respondent’s retail liquor stores in the Tweed Heads area, would be made from the Ourimbah premises pursuant to the licence; 

ii.no sales would be made to the public attending at the  Ourimbah premises and no deliveries would be made within 200 metres of the Ourimbah premises;

iii.no display area would be erected at the Ourimbah premises for the viewing of the public and no signage other than that required by law and for identification purposes would be erected at the Ourimbah premises; and

iv.the licensee would conduct the business pursuant to the licence as a direct marketing business and orders would be accepted only via mail, internet, fax or phone order,

(b)to request that the Licensing Court impose those conditions on the Off-Licence granted in respect of the Ourimbah premises;

(c)not to apply to amend, revoke or vary such conditions without first giving 14 days notice to the Second Respondent; and

(d)that in the event that the Off-Licence was transferred to any other party, they would procure that that party enter into a deed with the Second Respondent containing like stipulations and conditions to those contained in the Global Beer deed and give notice of any sale to the Second Respondent.

DIRECTIONS

1.The Second Respondent file and serve any evidence relevant to penalty on or before 4.00 pm on 8 September 2006.

2.The Applicant file and serve any evidence in reply on or before 4.00 pm on  29 September 2006.

3.The Applicant file and serve its submissions relevant to  penalty on or before 4.00 pm on 13 October 2006.

4.The Second Respondent file and serve its submissions relevant to penalty on or before 4.00 pm on  27 October 2006.

3.Subject to order 4, below, a hearing on penalty be set down for an estimated one day on 15 December 2006

4.The Second Respondent have liberty to relist the matter before the end of November 2006 to seek to vacate the date on the basis of the unavailability of senior counsel who ran the trial.

5.The parties otherwise have liberty to apply on 3 day’s notice.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 769 OF 2003

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

LIQUORLAND (AUSTRALIA) PTY LTD ACN 007 512 414
First Respondent

WOOLWORTHS LTD ACN 000 014 675
Second Respondent

JUDGE:	ALLSOP J
DATE:	11 AUGUST 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. The parties have provided draft orders and draft directions for the finalisation of orders in this matter reflecting my reasons published on 30 June 2006.

2. The draft orders and draft directions were in two documents so headed.

3. As to the draft orders I have made two changes.  The first is to remove the provision dealing with the adjourned hearing date on penalty.  That will be dealt with in the document entitled directions.  The second change was to make clear the basis on which the penalty hearing would take place.  I have made an order that the hearing on penalty and any other relief be determined on the basis of the evidence led to date, any further evidence adduced for the purposes of the penalty hearing and on the basis of the findings and reasons contained within my reasons for judgment.

4. I should add at this point that there were unfortunately, a number of typographical errors in the reasons handed down on 30 June. I made corrections known to the parties shortly thereafter. The parties have assisted me with the identification of some other corrections. I propose to circulate to the parties and to any interested third party the unredacted and corrected version which will be the reasons upon which the Court seal is affixed for the purposes of s 83 of the Trade Practices Act 1974 (Cth).  This will stand as the recognisable final corrected version of my reasons first published on 30 June.  As to the directions there was debate before me on 9 August as to the timing of the hearing.  Both sides were of the view that the penalty hearing should take place before any appeal.  That is an appropriate course.  Agreed directions were handed up for the filing and service of any additional evidence and submissions on penalty.  The parties were agreed that the penalty hearing would take approximately one day. 

5. The parties could not agree upon a date to have the hearing.  The Commission submitted that the matter was one of public interest and that the matter should be fixed for the earliest possible date.  Woolworths sought a hearing in the first week of term in 2007.  The reason for this request was the unavailability of counsel.  Mr Jones who was junior counsel involved in the hearing is available.  Mr Smith, senior counsel for Woolworths who ran the hearing has a commitment in Perth that should take the whole of November.  He has indicated that to those instructing him that there is a real risk that the hearing in Perth may run into December.  However, I was also informed that Woolworths wish to have available the services of Mr Bathurst QC to put the submissions on penalty.  Mr Bathurst did not appear at the hearing of the matter.

1. The matter is one of some importance both as to the intrinsic subject matter of the hearing and to the public.  In saying that, I do not intend that that should be taken as any prejudgment of the matter.  However, I think it is common ground amongst the parties that the issues litigated and to be litigated, are substantial ones concerned with important provisions of a law of the Parliament dealing with commercial life in this country.  For those reasons, it is not merely a matter between the parties.  There is a public interest in the resolution of the matter as soon as possible.

2. Also is important by way of consideration is not depriving Woolworths of the opportunity to put what it wishes to put through counsel who are intimately familiar with the matter. 

3. Taking all these considerations into account I propose to fix the hearing on penalty and other relief for Friday 15 December 2006.  I also propose to give Woolworths liberty to relist the matter by the end of November to raise the question of Mr Smith’s availability should matters have developed to that point which throw a sufficient doubt upon his ability to prepare submissions and attend the Court on that day.  I do not think that Mr Bathurst’s unavailability until next year should prevent the matter being resolved in December.  Mr Bathurst was not involved in the hearing.  Giving due weight to Woolworths desire to have senior counsel of their choice orally put submission to me, I do not think that that outweighs the public interest in having the matter resolved this year if that is possible, as it appears to be.  This last conclusion assumes the availability of senior and junior counsel who were intimately involved in the preparation and running of the trial.

4. One matter that I have not raised with the parties but which could affect the nature of any application at the end of November is the appropriateness of the parties putting in their submissions before me a joint submission as to the appropriate range of any penalties.  It may be that after the parties have given due consideration to the evidence and the submissions that they are able to put to the Court such a suggested range.  If that is not possible, then so be it.  However, it may be that the parties can reach agreement on that matter, which of course would not bind the Court in coming to its own view as to what is appropriate if penal relief is to be given.  If the parties were able to reach some sort of agreement in that way any difficulty which is perceived in late November depending upon the state of Mr Smith’s case in Western Australia may be less acute than otherwise it might be.

5. I have therefore amended the Draft Directions to fix the matter for hearing on 15 December 2006 with liberty in Woolworths to relist the matter to deal with the question of Senior Counsel’s availability.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated:        11 August 2006

Counsel for the Applicant:	Mr D M Yates SC with Mr D Godwin
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Mr M A Jones
Solicitor for the Respondent:	Clayton Utz
Date of Hearing:	9 August 2006
Date of Judgment:	11 August 2006