Australian Competition and Consumer Commission v; Tyco Australia Pty Ltd ACN 008 399 004

[2000] FCA 1445

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v
Tyco Australia Pty Ltd ACN 008 399 004
[2000] FCA 1445

TRADE PRACTICES - penalty and injunctive relief imposed for breach of s 45 Trade Practices Act 1974 (Cth) where breach acknowledged by respondents and joint submissions lodged

Trade Practices Act 1974 (Cth), s 45

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 AND ORS
Q 239 OF 1999

DRUMMOND J
5 OCTOBER 2000
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 239 OF 1999

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004
First Respondent

GRINNELL ASIA PACIFIC PTY LIMITED T/as O’Donnell Griffin ACN 003 905 093
Second Respondent

FFE BUILDING SERVICES LTD (formerly Chubb Building Services Ltd) (formerly James Hardie Building Services P/L) T/as Fire Fighting Enterprises ACN 000 067 541
Third Respondent

PATRICK FIRE PROTECTION PTY LTD ACN 010 592 999
Fourth Respondent

INDEPENDENT FIRE SPRINKLERS PTY LTD
ACN 009 976 854
Fifth Respondent

INDEPENDENT FIRE ALARMS PTY LTD ACN 009 705 720
Sixth Respondent

ALLFIRE SYSTEMS PTY LTD ACN 010 713 149
Seventh Respondent

THE ASSET GROUP (BRISBANE) PTY LTD (formerly Asset Fire and Security Pty Ltd) ACN 061 327 786
Eighth Respondent

ASSOCIATED FIRE SYSTEMS PTY LTD ACN 010 404 770
Ninth Respondent

ENTERPRISE FIRE PROTECTION PTY LTD ACN 010 595 212
Tenth Respondent

ENTERPRISE FIRE PROTECTION ELECTRICS PTY LTD
ACN 069 159 744
Eleventh Respondent

FIREVAC PTY LTD ACN 010 607 379
Twelfth Respondent

IMPACT FIRE PROTECTION PTY LTD ACN 006 615 452
Thirteenth Respondent

PREMIER FIRE PROTECTION (QLD) PTY LTD
ACN 050 410 636
Fourteenth Respondent

TRIDENT FIRE PROTECTION PTY LTD ACN 010 243 811
Fifteenth Respondent

SENSOR SYSTEMS (AUST) PTY LTD ACN 065 444 368
Sixteenth Respondent

F & H PTY LTD (formerly Matthews Fire Alarm Pty Ltd)
ACN 009 659 410
Seventeenth Respondent

BURMESS PTY LTD T/as BEI Services ACN 010 623 677
Eighteenth Respondent

RICHARD McCORMACK
Nineteenth Respondent

KENNETH EDWIN WALLER
Twentieth Respondent

KEVIN FISHER
Twenty-First Respondent

MATTHEW SPROULE
Twenty-Second Respondent

TERENCE MICHAEL McDONALD
Twenty-Third Respondent

RAYMOND EDWARD KING
Twenty-Fourth Respondent

MICHAEL JOHN LEWIS
Twenty-Fifth Respondent

DAVID JAMES CROSBY
Twenty-Sixth Respondent

TREVOR PATRICK
Twenty-Seventh Respondent

DEREK COOPER
Twenty-Eighth Respondent

ALEXANDER ROBERT THOMSON
Twenty-Ninth Respondent

GORDON EDMUND DAY
Thirtieth Respondent

ALLAN GEOFFREY MURRELL
Thirty-First Respondent

KERRY JOHN MOULDS
Thirty-Second Respondent

KEVYN RAYMOND ALLEN
Thirty-Third Respondent

JOHN EDMUND BARNEY
Thirty-Fourth Respondent

BRIAN GEOFFREY DAVIES
Thirty-Fifth Respondent

DAVID WELLMAND DOUYERE
Thirty-Sixth Respondent

DAVID WILLIAM KEMP
Thirty-Seventh Respondent

LESLIE JOHN BAILEY
Thirty-Eighth Respondent

EDWARD PETER GOLEMBA
Thirty-Ninth Respondent

MICHAEL WILD
Fortieth Respondent

STEVEN WALTER SPURR
Forty-First Respondent

CLINT LAWRENCE PRICKETT
Forty-Second Respondent

IAN JAMES TAYLOR
Forty-Third Respondent

WILLIAM JOHN LYNCH
Forty-Fourth Respondent

BRIAN GRAHAM STARKEY

Forty-Fifth Respondent

KENNETH BRIAN THOMSON
Forty-Sixth Respondent

EON WILLIAM RADLEY
Forty-Seventh Respondent

GREGORY JOHN BOURKE
Forty-Eighth Respondent

JOHN FRANKLIN PREECE
Forty-Ninth Respondent

ROY ERNEST TESCH
Fiftieth Respondent

DENNIS BRETT
Fifty-First Respondent

NIGEL STEPHEN REHBOCK
Fifty-Second Respondent

KENNETH NORMAN ROSE
Fifty-Third Respondent

NOEL ANTHONY MEYER
Fifty-Fourth Respondent

WILLIAM FRANCIS SHEEHAN
Fifty-Fifth Respondent

ALAN JOHN BLUNDELL
Fifty-Sixth Respondent

CHUBB AUSTRALIA LIMITED
Fifty-Seventh Respondent

CHUBB AUSTRALIA LIMITED
First Cross-Claimant

DIETOOL (WA) PTY LIMITED
First Cross-Respondent

JAMES HARDIE INDUSTRIES LIMITED
Second Cross-Respondent

JUDGE:	DRUMMOND J
DATE OF ORDER:	5 OCTOBER 2000
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1.In respect of its contraventions of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act1974 (Cth) and of its ancillary involvement in contraventions of those sections alleged in paragraph 133 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $235,000 be imposed upon the twelfth respondent.

2.In respect of his ancillary involvement in the contraventions by the twelfth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 165 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $50,000 be imposed upon the forty-fourth respondent.

3.The penalty of the twelfth respondent is to be paid to the Commonwealth of Australia as follows:

(a)the sum of $15,000 within seven days of the date of this order;

(b)the further sum of $45,000 on or before 1 May 2001;

(c)the further sum of $55,000 on or before 1 May 2002;  

(d)the further sum of $60,000 on or before 1 May 2003;

(e)the further sum of $60,000 on or before 1 May 2004;

(f)if any instalment is not paid on or before the due date then the entire balance of the penalty of $235,000 then unpaid becomes immediately due and payable.

4.The penalty of the forty-fourth respondent is to be paid to the Commonwealth of Australia as follows:

(a)the sum of $12,500 on or before 1 December 2000;

(b)the further sum of $12,500 on or before 1 December 2001;

(c)the further sum of $12,500 on or before 1 December 2002;

(d)the further sum of $12,500 on or before 1 December 2003;

(e)if any instalment is not paid on or before the due date then the entire balance of the penalty of $50,000 then unpaid becomes immediately due and payable.

THE COURT ORDERS BY CONSENT OF THE APPLICANT AND THE TWELFTH AND FORTY-FOURTH RESPONDENTS THAT:

5.The twelfth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents, or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the twelfth respondent is a party, that:

(i)the twelfth respondent will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)the twelfth respondent will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services;  or

(iii)another provider of fire sprinkler system installation services will allow the twelfth respondent to win any tender let by a third person for the provision of such services;  or

(b)has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

6.The twelfth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the twelfth respondent is a party, that:

(i)the twelfth respondent will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons;  or

(ii)the twelfth respondent will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services;  or

(iii)another provider of fire alarm system installation services will allow the twelfth respondent to win any tender let by a third person for the provision of such services;  or

(b)has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

7.The forty-fourth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)being directly or indirectly knowingly concerned in or party to;

(ii)inducing or attempting to induce; or

(iii)aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire sprinkler system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)has the purpose or effect or likely effect that:

(i)that corporation will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii)that corporation will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services;  or

(iii)another provider of fire sprinkler system installation services will allow that corporation to win any tender let by a third person for the provision of such services;  or

(b)has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

8.The forty-fourth respondent be restrained, in Queensland and the Northern Territory, for a period of three years, from:

(i)being directly or indirectly knowingly concerned in or party to;

(ii)inducing or attempting to induce; or

(iii)aiding, abetting, counselling or procuring;

the making of, or arriving at, or giving effect to, by a corporation providing fire alarm system installation services, of any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a)has the purpose or effect or likely effect that:

(i)that corporation will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or

(ii)that corporation will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services;  or

(iii)another provider of fire alarm system installation services will allow that corporation to win any tender let by a third person for the provision of such services; or

(b)has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

9.The twelfth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $14,000 within seven days of the date of this Order.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 239 OF 1999

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

TYCO AUSTRALIA PTY LTD (Formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004
First Respondent

GRINNELL ASIA PACIFIC PTY LIMITED T/as O’Donnell Griffin ACN 003 905 093
Second Respondent

FFE BUILDING SERVICES LTD (formerly Chubb Building Services Ltd) (formerly James Hardie Building Services P/L) T/as Fire Fighting Enterprises ACN 000 067 541
Third Respondent

PATRICK FIRE PROTECTION PTY LTD ACN 010 592 999
Fourth Respondent

INDEPENDENT FIRE SPRINKLERS PTY LTD
ACN 009 976 854
Fifth Respondent

INDEPENDENT FIRE ALARMS PTY LTD ACN 009 705 720
Sixth Respondent

ALLFIRE SYSTEMS PTY LTD ACN 010 713 149
Seventh Respondent

THE ASSET GROUP (BRISBANE) PTY LTD (formerly Asset Fire and Security Pty Ltd) ACN 061 327 786
Eighth Respondent

ASSOCIATED FIRE SYSTEMS PTY LTD ACN 010 404 770
Ninth Respondent

ENTERPRISE FIRE PROTECTION PTY LTD ACN 010 595 212
Tenth Respondent

ENTERPRISE FIRE PROTECTION ELECTRICS PTY LTD
ACN 069 159 744
Eleventh Respondent

FIREVAC PTY LTD ACN 010 607 379
Twelfth Respondent

IMPACT FIRE PROTECTION PTY LTD ACN 006 615 452
Thirteenth Respondent

PREMIER FIRE PROTECTION (QLD) PTY LTD
ACN 050 410 636
Fourteenth Respondent

TRIDENT FIRE PROTECTION PTY LTD ACN 010 243 811
Fifteenth Respondent

SENSOR SYSTEMS (AUST) PTY LTD ACN 065 444 368
Sixteenth Respondent

F & H PTY LTD (formerly Matthews Fire Alarm Pty Ltd)
ACN 009 659 410
Seventeenth Respondent

BURMESS PTY LTD T/as BEI Services ACN 010 623 677
Eighteenth Respondent

RICHARD McCORMACK
Nineteenth Respondent

KENNETH EDWIN WALLER
Twentieth Respondent

KEVIN FISHER
Twenty-First Respondent

MATTHEW SPROULE
Twenty-Second Respondent

TERENCE MICHAEL McDONALD
Twenty-Third Respondent

RAYMOND EDWARD KING
Twenty-Fourth Respondent

MICHAEL JOHN LEWIS
Twenty-Fifth Respondent

DAVID JAMES CROSBY
Twenty-Sixth Respondent

TREVOR PATRICK
Twenty-Seventh Respondent

DEREK COOPER
Twenty-Eighth Respondent

ALEXANDER ROBERT THOMSON
Twenty-Ninth Respondent

GORDON EDMUND DAY
Thirtieth Respondent

ALLAN GEOFFREY MURRELL
Thirty-First Respondent

KERRY JOHN MOULDS
Thirty-Second Respondent

KEVYN RAYMOND ALLEN
Thirty-Third Respondent

JOHN EDMUND BARNEY
Thirty-Fourth Respondent

BRIAN GEOFFREY DAVIES
Thirty-Fifth Respondent

DAVID WELLMAND DOUYERE
Thirty-Sixth Respondent

DAVID WILLIAM KEMP
Thirty-Seventh Respondent

LESLIE JOHN BAILEY
Thirty-Eighth Respondent

EDWARD PETER GOLEMBA
Thirty-Ninth Respondent

MICHAEL WILD
Fortieth Respondent

STEVEN WALTER SPURR
Forty-First Respondent

CLINT LAWRENCE PRICKETT
Forty-Second Respondent

IAN JAMES TAYLOR
Forty-Third Respondent

WILLIAM JOHN LYNCH
Forty-Fourth Respondent

BRIAN GRAHAM STARKEY
Forty-Fifth Respondent

KENNETH BRIAN THOMSON
Forty-Sixth Respondent

EON WILLIAM RADLEY
Forty-Seventh Respondent

GREGORY JOHN BOURKE
Forty-Eighth Respondent

JOHN FRANKLIN PREECE
Forty-Ninth Respondent

ROY ERNEST TESCH
Fiftieth Respondent

DENNIS BRETT
Fifty-First Respondent

NIGEL STEPHEN REHBOCK
Fifty-Second Respondent

KENNETH NORMAN ROSE
Fifty-Third Respondent

NOEL ANTHONY MEYER
Fifty-Fourth Respondent

WILLIAM FRANCIS SHEEHAN
Fifty-Fifth Respondent

ALAN JOHN BLUNDELL
Fifty-Sixth Respondent

CHUBB AUSTRALIA LIMITED
Fifty-Seventh Respondent

CHUBB AUSTRALIA LIMITED
First Cross-Claimant

DIETOOL (WA) PTY LIMITED
First Cross-Respondent

JAMES HARDIE INDUSTRIES LIMITED
Second Cross-Respondent

JUDGE:	DRUMMOND J
DATE:	5 OCTOBER 2000
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The twelfth respondent is an independently owned fire protection installation company.  The forty-fourth respondent, the other person with whom I have to deal today, is the Managing Director and principal shareholder of Firevac.  The forty-fifth respondent, Mr Starkey, a shareholder and employee of the twelfth respondent has earlier been dealt with and a $20,000 penalty imposed on him in respect of his involvement in the anti-competitive conduct, particularly in the sprinkler market.

2. The twelfth respondent, by the forty-fourth respondent or his delegates, attended meetings of the various organisations involved in the anti-competitive conduct at which price-fixing and market-sharing arrangements were made in the period 1989 to 1995 for about three years.  The twelfth respondent was a mid-sized participant in the alarm market, having an approximate 15 per cent share of that market.  The twelfth respondent was represented, as I say, either by the forty-fourth respondent or his delegates at very many of these meetings.  However, it appears that the forty-fourth respondent took action which resulted in the twelfth respondent not always adhering to the arrangements made at these meetings.  Nevertheless, by reason of its participation in the anti-competitive conduct in the alarm market, it won at least four alarm installation projects.

3. A similar position obtains in relation to the twelfth respondent’s involvement in the sprinkler market, an involvement that extended over about three years.  The twelfth respondent in that particular market was one of the smallest participants with an estimated market share of less than 5 per cent.  However, again, it was represented at many of the meetings held in connection with the implementation of the anti-competitive arrangements in question.  It was generally represented by the forty-fifth respondent to whom I have already made reference, at the meetings held in relation to the sprinkler market.  The twelfth respondent, as a result of its participation in the anti-competitive arrangements, was allocated at least four projects, of which it won at least two.

4. The conduct engaged in by the twelfth and forty-fourth respondents involved serious contraventions over an extended period of time of s 45 of the Trade Practices Act.  In their favour, the twelfth and forty-fourth, like the forty-fifth, respondents have co-operated in a significant way with the Australian Competition and Consumer Commission, co-operation which has not only simplified the proceedings as between the Commission and the twelfth, forty-fourth and forty-fifth respondents, but which has been of assistance to the Commission in the proceedings it has brought in respect of the same anti-competitive arrangements against other parties involved. 

1. I have considered the range of penalties which the parties have agreed should be imposed subject to the Court’s approval, and they are in my opinion within a proper range of penalty having regard to the size of the participating organisation in the form of the twelfth respondent, the nature of the conduct and other relevant aspects touching on culpability.

2. There will therefore be orders by consent in the terms of annexure “C” to the joint submissions.  The joint submission will be exhibit 3 in today’s proceeding.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.

Associate:

Dated:             13 October 2000

Counsel for the Applicant:	Mr S Couper QC and Mr KN Wilson
Solicitor for the Applicant:	Australian Government Solicitor
Solicitor for the Twelfth and Forty-Fourth Respondents:	Mr R Brideaux
Date of Hearing:	5 October 2000
Date of Judgment:	5 October 2000