Australian Competition & Consumer Commission v Tyco Australia Pty Ltd ACN 008 399 004 - [2001] FCA 176

FEDERAL COURT OF AUSTRALIA
Australian Competition & Consumer Commission v
Tyco Australia Pty Ltd ACN 008 399 004
[2001] FCA 176
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
28 FEBRUARY 2001
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:

28 FEBRUARY 2001

WHERE MADE:

BRISBANE

THE COURT NOTES THAT:
A.The fourteenth and forty-eighth respondents have given, and the applicant has accepted, an undertaking pursuant to s 87B of the Trade Practices Act 1974 (Cth) to implement a trade practices compliance program 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 135 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $420,000 be imposed upon the fourteenth respondent.
2.In respect of his ancillary involvement in the contraventions by the fourteenth respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 169 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993 of $65,000 be imposed upon the forty-eighth respondent.
3.The penalty of the fourteenth respondent is to be paid to the Commonwealth of Australia as follows:
(a)the sum of $90,000 on or before 6 February 2002;
(b)the further sum of $45,000 on or before 6 August 2002;
(c)the further sum of $45,000 on or before 6 February 2003;
(d)the further sum of $45,000 on or before 6 August 2003;
(e)the further sum of $45,000 on or before 6 February 2004;
(f)the further sum of $45,000 on or before 6 August 2004;
(g)the further sum of $45,000 on or before 6 February 2005;
(h)the further sum of $45,000 on or before 6 August 2005;
(i)the further sum of $15,000 on or before 6 February 2006;
(j)if any instalment is not paid on or before the due date then the entire balance of the penalty of $420,000 then unpaid becomes immediately due and payable.

4.The penalty of the forty-eighth respondent is to be paid to the Commonwealth of Australia as follows:
(a)the sum of $7,000 on or before 6 February 2002;
(b)the further sum of $3,500 on or before 6 August 2002;
(c)the further sum of $3,500 on or before 6 February 2003;
(d)the further sum of $3,500 on or before 6 August 2003;
(e)the further sum of $3,500 on or before 6 February 2004;
(f)the further sum of $3,500 on or before 6 August 2004;
(g)the further sum of $3,500 on or before 6 February 2005;
(h)the further sum of $3,500 on or before 6 August 2005;
(i)the further sum of $33,500 on or before 6 February 2006;
(j)if any instalment is not paid on or before the due date then the entire balance of the penalty of $65,000 then unpaid becomes immediately due and payable.

AND THE COURT ORDERS BY CONSENT OF THE APPLICANT, FOURTEENTH RESPONDENT AND FORTY-EIGHTH RESPONDENT THAT:
5.The fourteenth 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 Circuit 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 fourteenth respondent is a party, that:
(i)the fourteenth 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 fourteenth 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 fourteenth 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 fourteenth 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 Circuit 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 fourteenth respondent is a party, that
(i)the fourteenth 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 fourteenth 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 fourteenth 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-eighth 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 Circuit 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-eighth 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 Circuit 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 fourteenth respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $35,000 within fourteen days of the date of this order.
10.The affidavit of Gregory John Bourke filed 19 January 2001 be placed in a sealed envelope and not be opened without the leave of a judge of the Court.

THE COURT FURTHER ORDERS THAT:
11.In respect of his ancillary involvement in the contraventions by the third respondent of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) alleged in paragraph 144 of the statement of claim, a penalty in respect of all contraventions of $50,000 be imposed upon the twenty-thirdrespondent.
12.The penalty of the twenty-third respondent is to be paid to the Commonwealth of Australia as follows:
(a)the sum of $1,000 within twenty-eight days of the date of this order;
(b)the further sum of $7,000 on or before 26 February 2002;
(c)the further sum of $7,000 on or before 26 August 2002;
(d)the further sum of $7,000 on or before 26 February 2003;
(e)the further sum of $7,000 on or before 26 August 2003;
(f)the further sum of $7,000 on or before 26 February 2004;
(g)the further sum of $7,000 on or before 26 August 2004;
(h)the further sum of $7,000 on or before 26 February 2005;

provided that 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 TWENTY-THIRD RESPONDENT THAT:
13.The twenty-third respondent be restrained, in New South Wales and Queensland, 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 Circuit 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.

14.The twenty-third respondent be restrained, in New South Wales and Queensland, 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 Circuit 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.

15.The twenty-third respondent pay the applicant’s costs of and incidental to these proceedings in the agreed amount of $20,000, to be paid within twenty-eight 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:

28 FEBRUARY 2001

PLACE:

BRISBANE

REASONS FOR JUDGMENT

The background to the applications involving the fourteenth and forty-eighth respondents, Premier Fire Protection (Qld) Pty Ltd (“Premier”), and its director, Mr Bourke, have been dealt with at some length in the judgment that I gave on 22 March 2000 in these proceedings as between the Australian Competition and Consumer Commission (“the Commission”) and Tyco Australia Pty Ltd. Premier was a participant in both the sprinkler market in South East Queensland and Northern New South Wales and the fire alarm market in South East Queensland, in the first case in the period October 1993 to May 1997, and in the second case the period June 1992 to December 1995. Mr Bourke is the Managing Director and a shareholder of Premier.
Mr Bourke, on Premier’s behalf, attended many meetings held in relation to the competitive arrangements that were put in place in both markets. In the sprinkler market, Premier was allocated and won at least eight projects as a result of its involvement in the arrangements in question. In the alarm market, it was allocated and won at least eleven projects as a result of its involvement in the anti-competitive arrangements in that market. Premier is described as a mid-size competitor in both markets, having about 6 per cent of the sprinkler market and about 10 per cent of the alarm market. The penalties proposed for Premier, $420,000, and for Mr Bourke, $65,000, are, as I say, within the proper range.
I have looked at the minutes of orders proposed and I am prepared to make orders in terms of annexure 1 to the supplementary joint submissions, which I will make exhibit 1 in the proceedings between the Commission and the fourteenth and forty-eighth respondents.
Mr McDonald, the twenty-third respondent, is the last of the respondents in proceedings brought by the Commission last year against all the major participants in the fire alarm and sprinkler markets in South East Queensland and Northern New South Wales. Those participants and a large number of senior executives of each have been dealt with in the course of the past twelve months.
Mr McDonald, very recently, entered into negotiations with the Commission that have led to him agreeing to withdraw his defence; the hearing was set down some time ago and was due to start today.
Mr McDonald was the National General Manager, Fire and Safety Products of FFE Building Services Ltd (“FFE Building Services”). FFE Building Services was the largest participant in both markets. It attracted the heaviest fine imposed of any of the respondents, $5,000,000. Mr McDonald held this position, however, only for a short period, approximately nine months from January 1995 to mid-October 1995.
In this period his subordinates, Mr Lewis, the twenty-fifth respondent, Mr King, the twenty-fourth respondent, and Mr Crosby, the twenty-sixth respondent, were active participants in meetings between those engaged in the anti-competitive arrangements. They had, for some considerable time prior to Mr McDonald taking up his position as National General Manager, been engaged in that conduct. I should say that Mr Crosby was very much a subordinate player in the arrangements, acting under the directions of Mr King and Mr Lewis.
Mr McDonald soon became aware of what was going on in the sense that he soon learned that Mr Lewis and Mr King were engaged in these anti-competitive meetings which were productive of considerable financial benefits to their employing company, FFE Building Services. On the material before me, Mr McDonald informed Mr Lewis and Mr King of his disapproval of what they were doing. But that is as far as he went.
He was in a position of such seniority and such authority that he could readily have brought their activities to an end. But he allowed them to continue notwithstanding expressing disapproval to Mr Lewis and Mr King. The inference is that he must have perceived that there was likely to be some personal benefit to him as National General Manager in his career with FFE Building Services from allowing the activities to continue and to generate profits for FFE Building Services that it might well not have made but for its anti-competitive conduct.
His expression of disapproval really reveals little more in the circumstances than an awareness of the illegality of what was going on by his subordinates.
It is proposed now at this late stage that Mr McDonald be visited with a penalty of $50,000 in respect of his involvement in the anti-competitive arrangements, to be paid by a series of payments, the last to be made in February 2005. In addition, he is, by agreement, to pay the Commission’s costs of the proceedings involving him to be fixed at $20,000 and that amount is to be paid practically straight away.
Mr Lewis received a penalty of $70,000 and Mr King a penalty of $35,000. As I have said, FFE Building Services attracted the largest penalty imposed of $5,000,000. In my opinion, notwithstanding the weight that I must attach to the fact that the Commission, as the responsible regulator, has decided to agree a penalty at a particular level, the penalty proposed for Mr McDonald would be too light, but for the one circumstance of his own personal financial position.
I have what is described as a confidential affidavit by Mr McDonald. It deals at some considerable length with his financial position, the position of his wife and also his own state of health. I have refused to make a confidentiality order in respect of this affidavit. It will be open to public inspection. I think it is important that this material be available to the public so that they will understand why the Court has departed, to an extent, from the scale of penalties imposed on other less senior executives involved in this conduct and has let Mr McDonald off in a way which might be thought to be rather light.
The information as to Mr McDonald’s state of health, which is bound up with what seems to be his very diminished earning capacity and generally his far from affluent financial circumstances, is one consideration sufficient to persuade me that I should make the orders proposed by consent. I will therefore make orders in terms of pars 1 to 4 of annexure A to the joint submissions, which I will mark in the proceedings between the Commission and Mr McDonald as exhibit 2.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.
Associate:
Dated: 6 March 2001

Counsel for the Applicant: Mr S Couper QC and Mr KN Wilson

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Fourteenth and Forty-Eighth Respondents: Mr J Logan SC

Solicitor for the Fourteenth and Forty-Eighth Respondents: O’Reilly & Lillicrap

Counsel for the Twenty-Third Respondent: Mr JV Nicholas

Solicitor for the Twenty-Third Respondent: Tress Cocks & Maddox, Lawyers

Date of Hearing: 28 February 2001

Date of Judgment: 28 February 2001

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

JUDGE:	DRUMMOND J
DATE OF ORDER:	28 FEBRUARY 2001
WHERE MADE:	BRISBANE

JUDGE:	DRUMMOND J
DATE:	28 FEBRUARY 2001
PLACE:	BRISBANE

Counsel for the Applicant:	Mr S Couper QC and Mr KN Wilson
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Fourteenth and Forty-Eighth Respondents:	Mr J Logan SC
Solicitor for the Fourteenth and Forty-Eighth Respondents:	O’Reilly & Lillicrap
Counsel for the Twenty-Third Respondent:	Mr JV Nicholas
Solicitor for the Twenty-Third Respondent:	Tress Cocks & Maddox, Lawyers
Date of Hearing:	28 February 2001
Date of Judgment:	28 February 2001