Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 16 January 2007
• Neutral Citation: [2007] FCA 11
• Date: 16 January 2007

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11

TRADE PRACTICES – penalty hearing – where union liable as an accessory under s 76(1) of Trade Practices Act 1974 (Cth) – relevant factors in determining level of penalty – whether union’s conduct in relation to contraventions of ss 45E(3) and 45EA constitutes same conduct for the purposes of imposing penalty – consideration of nature, extent and impact of contravening conduct – consideration of deterrence – penalty determined

Trade Practices Act 1974 (Cth) ss 45E, 45EA, 76(1), 76(3), 76(1A)(a)

Workplace Relations Act 1996 (Cth) ss 804, 807

Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd [2006] FCA 1777 referred to

Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 followed

NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 followed

Schneider Electric (Australia) Pty Ltd v Australian Competition and Consumer Commission (2003) 127 FCR 170 cited

J McPhee & Son (Australia) Pty Ltd v Australian Competition and Consumer Commission (2000) 172 ALR 532 applied

Australian Competition and Consumer Commission v Visy Paper Pty Ltd (No 2) (2004) 212 ALR 564 followed

Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 281 cited

Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301 followed

Australian Competition and Consumer Commission v NW Frozen Foods Pty Ltd (1996) ATPR 41-515 considered

Trade Practices Commission v CC (NSW) Pty Ltd (No 3) (1994) ATPR 41-363 cited

Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 40-091 cited

Trade Practices Commission v Mobil Oil Australia Ltd (1984) 4 FCR 296 cited

Trade Practices Commission v TNT Australia Pty Ltd (1995) ATPR 41-375 considered

Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd (2002) ATPR 41-851 cited

Minister for Environment and Heritage v Greentree (No 3) (2004) 136 LGERA 89 cited

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 cited

Trade Practices Commission v Advance Bank Australia Ltd (1993) ATPR 41-229 applied

Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2) (2002) 190 ALR 169 cited

Australian Competition and Consumer Commission v George Weston Foods Ltd (2000) ATPR 41-763 cited

Australian Competition and Consumer Commission v Rural Press Ltd (2001) ATPR 41-833 approved

Trade Practices Commission v Allied Mills Industries Pty Ltd (No 4) (1981) 37 ALR 256 applied

L Vogel & Son Pty Ltd v Anderson (Minister for Customs) (1968) 120 CLR 157 cited

Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd (No 2) (1980) 44 FLR 149 cited

Trade Practices Commission v Simpson Pope Ltd (1980) 30 ALR 544 cited

Australian Competition and Consumer Commission v Cromford Pty Ltd (1998) ATPR 41-618 cited

Australian Competition and Consumer Commission v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2004) ATPR 42-002 considered

Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993 cited

Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 applied

Australian Securities and Investments Commission v Vizard (2005) 145 FCR 57 cited

Australian Competition and Consumer Commission v Maritime Union of Australia (2001) 114 FCR 472 considered

Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 considered

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v IPM OPERATION AND MAINTENANCE LOY YANG PTY LTD (FORMERLY KNOWN AS EDISON MISSION OPERATION AND MAINTENANCE LOY YANG PTY LTD) (ACN 055 563 696) AND COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

VID 79 OF 2005

YOUNG J

16 JANUARY 2007

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 79 OF 2005

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	IPM OPERATION AND MAINTENANCE LOY YANG PTY LTD (FORMERLY KNOWN AS EDISON MISSION OPERATION AND MAINTENANCE LOY YANG PTY LTD) (ACN 055 563 696) First Respondent COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA Second Respondent

JUDGE:	YOUNG J
DATE:	16 JANUARY 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 In this proceeding, the applicant (‘ACCC’) alleged that the second respondent (‘CEPU’) was an accessory to conduct on the part of the first respondent (‘Edison’) that contravened ss 45E(3) and 45EA of Pt IV of the Trade Practices Act 1974 (Cth) (‘TPA’). The case between the ACCC and the CEPU proceeded to a contested hearing. Edison and the ACCC agreed on terms of settlement for the resolution of the proceedings between them and Edison has filed a defence admitting that it contravened ss 45E(3) and 45EA of the TPA.

2 On 19 December 2006, I delivered judgment in relation to the claims brought by the ACCC against the CEPU, except for the claims relating to penalty and costs: Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd [2006] FCA 1777. Amongst other relief, I said that I would grant the following declarations in relation to the CEPU’s accessorial conduct:

‘1. Prior to August 2001, the First Respondent was accustomed to acquire goods or services from certain Contractors, and in those circumstances, in August 2001, the Second Respondent:

(a) aided, abetted, counselled, procured and induced the First Respondent to make; and

(b) was knowingly concerned in and party to the First Respondent making,

a contract, arrangement or understanding with the Second Respondent which contained a provision that:

(c) the First Respondent would not engage a Contractor to perform work at the Loy Yang B power station in Victoria unless that Contractor had a current certified agreement with the Second Respondent; and

(d) was included in the contract, arrangement or understanding for the purpose of preventing or hindering the First Respondent from acquiring goods or services from Contractors who did not have a current certified agreement with the Second Respondent,

with the consequence that the First Respondent thereby contravened s 45E(3) of the Trade Practices Act 1974 (Cth).

2. Prior to August 2001, the First Respondent was accustomed to acquire goods or services from certain Contractors, and in those circumstances, in August 2001, the Second Respondent counselled, procured and induced the First Respondent to give effect to the provision of the contract, arrangement or understanding with the Second Respondent referred to in paragraph 1 of these declarations, with the consequence that the First Respondent thereby contravened s 45EA of the Trade Practices Act.’

I also held that the ACCC was entitled to injunctive relief against the CEPU.

3 For convenience, I will adopt the terms defined in my principal judgment for the purposes of these reasons for judgment.

4 The ACCC sought orders that a pecuniary penalty be imposed on the CEPU pursuant to s 76 of the TPA and that the CEPU pay the ACCC’s costs of the proceedings against the CEPU on an indemnity basis. The CEPU disputes that it should pay the ACCC’s costs of the proceedings on an indemnity basis. At the request of the parties, I heard submissions on penalty on 22 December 2006 and deferred the question of costs. I was informed by the parties that this course was necessary because both parties had made Calderbank offers during the course of the proceedings and that it was not possible to address the question of indemnity costs until the Court has determined what penalty should be imposed on the CEPU. These reasons for judgment are therefore confined to the question of penalty.

5 The proceeding between the ACCC and Edison has been fixed for hearing before another judge of this Court in February 2007. Subject to orders of the Court, the ACCC and Edison have agreed on proposed orders concerning declarations, pecuniary penalties and costs.

Section 76(1)

6 Section 76(1) of the TPA provides:

‘(1) If the Court is satisfied that a person:

(a) has contravened any of the following provisions:

(i) a provision of Part IV;

(ii) section 75AU or 75AYA;

(b) has attempted to contravene such a provision;

(c) has aided, abetted, counselled or procured a person to contravene such a provision;

(d) has induced, or attempted to induce, a person, whether by threats or promises or otherwise, to contravene such a provision;

(e) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

(f) has conspired with others to contravene such a provision;

the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part or Part XIB to have engaged in any similar conduct.’

7 Under s 76(1A)(a), the pecuniary penalty payable by a body corporate for each act or omission that relates to s 45E or s 45EA is not to exceed $750,000. Section 76(1) does not authorise the making of an order against an...