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

[2000] FCA 1444

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v
Tyco Australia Pty Ltd ACN 008 399 004
[2000] FCA 1444

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 NOTES THAT:

1.The thirty-fourth, thirty-fifth, thirty-sixth and thirty-seventh respondents have given, and the applicant has accepted, an undertaking pursuant to s 87B of the Trade Practices Act 1974 (Cth) to participate in trade practices compliance training in a form acceptable to the applicant.

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 Act 1974 (Cth) and of its ancillary involvement in contraventions of those sections alleged in paragraph 129 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $245,000 be imposed upon the eighth respondent.

2.In respect of his ancillary involvement in the contraventions by the eighth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 155 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 thirty-fourth respondent.

3.In respect of his ancillary involvement in the contraventions by the eighth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 156 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 thirty-fifth respondent.

4.In respect of his ancillary involvement in the contraventions by the eighth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 157 of the statement of claim, a penalty in respect of all contraventions of $30,000 be imposed upon the thirty-sixth respondent.

5.In respect of his ancillary involvement in the contraventions by the eighth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 158 of the statement of claim, a penalty in respect of all contraventions of $25,000 be imposed upon the thirty-seventh respondent.

6.The penalty of the eighth respondent, and the penalties of each of the thirty-fourth, thirty-fifth, thirty-sixth and thirty-seventh respondents, are to be paid to the Commonwealth of Australia within sixty days of the date of this order.

THE COURT ORDERS BY CONSENT OF THE APPLICANT AND THE EIGHTH, THIRTY-FOURTH, THIRTY-FIFTH, THIRTY-SIXTH AND THIRTY-SEVENTH RESPONDENTS THAT:

7.The eighth 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 eighth respondent is a party, that:

(i)the eighth 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 eighth 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 eighth 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.

8.The eighth 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 eighth respondent is a party, that:

(i)the eighth 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 eighth 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 eighth 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.

9.Each of the thirty-fourth, thirty-fifth, thirty-sixth and thirty-seventh respondents 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.

10.Each of the thirty-fourth, thirty-fifth, thirty-sixth and thirty-seventh respondents 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.

11.The eighth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $20,000 within twenty-one 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 Australian Competition and Consumer Commission has brought proceedings against eighteen companies and thirty-eight persons employed or involved in the business of those companies for contraventions of s 45 the Trade Practices Act 1974 (Cth) in respect of anti-competitive conduct engaged in by the companies in which the thirty-eight persons are said also to have been involved. The proceedings, as between the Commission and the eighth and thirty-fourth to thirty-seventh respondents, ie, persons associated with the eighth respondent, are to be disposed of today.

2. I have dealt with the factual circumstances out of which the proceedings brought by the Commission against all respondents, including the eighth and thirty-fourth to thirty-seventh, arise in the reasons I published on 14 December 1999 when I dealt with certain of the other respondents.  The eighth respondent was, between August 1993 and February 2000, an independently owned fire protection installation company.  It has recently sold its business.  During the relevant period when the contravening conduct took place, the eighth respondent, via its officers who are the other respondents to be dealt with today, the thirty-fourth to thirty-seventh respondents, participated in price fixing and market sharing arrangements with competitors in the Queensland sprinkler market for a period of at least two and a half years and in the Queensland fire alarm market for a period of at least one and a half years.

3. The eighth respondent was a relatively small participant in the first of those markets and a mid-sized participant in the second of those markets.  Its participation in the ant-competitive conduct in both resulted in its obtaining a total of fifteen projects in both markets.  Mr Barney, the thirty-fourth respondent, appears to have taken a particularly active role in the price fixing arrangements in so far as not only attending numerous of the meetings between the persons involved in the anti-competitive conduct; he took a leading role in reorganising meetings after a breakdown of the arrangements in the fire alarm market.

1. The conduct of both the eighth respondent and its associated respondents thus involved serious contraventions of s 45 the Trade Practices Act.  In favour of the respondents, it needs to be noted that all have provided significant co-operation to the Commission in its investigations which have led to the institution of these proceedings.  Their co-operation will be of assistance to the Commission in the proceedings yet to be determined, as well as having been of assistance in proceedings to date.  Moreover, none of the respondents now to be dealt with has been the subject of previous proceedings under Part IV the Trade Practices Act.

2. I am satisfied that the pecuniary penalties agreed between the parties as those to be imposed if the Court is in agreement are within a proper range of penalties.  There will, accordingly, be orders in terms of annexure “C” to exhibit 2, which include pecuniary penalties in relation to the eighth respondent of $245,000, in relation to the thirty-fourth respondent and thirty-fifth respondent of $50,000 each, in relation to the thirty-sixth respondent of $30,000 and in relation to the thirty-seventh respondent of $25,000.

I certify that the preceding five (5) 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 Eighth, Thirty-Fourth, Thirty-Fifth and Thirty-Sixth Respondents:	H Drakos & Co
Date of Hearing:	5 October 2000
Date of Judgment:	5 October 2000