PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (Penalty Stay Application)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judge: PERRAM J
• Judgment Date: 09 August 2019
• Neutral Citation: [2019] FCA 1317
• Date: 09 August 2019

FEDERAL COURT OF AUSTRALIA

PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (Penalty Stay Application) [2019] FCA 1317

Appeal from:	Australian Competition and Consumer Commission v PT Garuda Indonesia Ltd (Remedies) [2019] FCA 786
File number:	NSD 1011 of 2019
Judge:	PERRAM J
Date of judgment:	9 August 2019
Date of publication of reasons:	20 August 2019
Catchwords:	PRACTICE AND PROCEDURE – interlocutory application for stay of penalty order – where primary judge ordered pecuniary penalty of $19 million – where appeal filed against penalty judgment – where Appellant alleging inability to pay – where Respondent willing to consent to further extension to pay ; PRACTICE AND PROCEDURE – application for suppression order under Federal Court of Australia Act 1976 (Cth) s 37AF – where affidavit evidence concerning financial position of Appellant – consideration of relevant principles
Legislation:	Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AG Trade Practices Act 1974 (Cth) s 45 Federal Court Rules 2011 (Cth) r 41.06
Cases cited:	Australian Broadcasting Corporation v Parish [1980] FCA 40; 29 ALR 228 Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651
Date of hearing:	9 August 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Economic Regulator, Competition and Access
Category:	Catchwords
Number of paragraphs:	10
Counsel for the Appellant:	Mr T Brennan
Solicitor for the Appellant:	Norton White
Counsel for the Respondent:	Mr J A Halley SC with Ms H Younan
Solicitor for the Respondent:	Australian Government Solicitor

ORDERS

		NSD 1011 of 2019
BETWEEN:	PT GARUDA INDONESIA LTD ARBN 000 861 165 Appellant
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	9 AUGUST 2019

THE COURT ORDERS THAT:

1. The interlocutory application filed on 8 August 2019 be stood over generally.

2. The Appellant pay the Respondent’s costs of and incidental to the interlocutory hearing on 9 August 2019 on an indemnity basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

		NSD 955 of 2009
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	PT GARUDA INDONESIA LTD ARBN 000 861 165 Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	9 AUGUST 2019

THE COURT ORDERS THAT:

1. The time and date for compliance with Order 1 made on 30 May 2019 and varied on 12 July 2019 be further varied to 5 pm on 23 August 2019.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from transcript)

PERRAM J:

1. On 30 May 2019, I gave judgment on the Australian Competition and Consumer Commission (‘the Commission)’s claim for remedies in this litigation in respect of contraventions of s 45 of the Trade Practices Act 1974 (Cth). One of those orders, order 1, was that PT Garuda Indonesia Ltd (‘Garuda’) pay the Commonwealth of Australia pecuniary penalties of $19 million within 28 days. On 12 July 2019, that order was varied so that the payment had to be made by 4 pm on 9 August 2019, which is today. At the same time, there was engrossed on the varied orders the penal notice as stipulated by r 41.06 of the Federal Court Rules 2011 (Cth).

2. Prior to those variations, on 25 June 2019, Garuda appealed to the Full Court. Yesterday, it filed an interlocutory application in the appeal proceeding (NSD 1011 of 2019) seeking a stay of the order in the original proceeding (NSD 955 of 2009) requiring it to pay the pecuniary penalty by 4 pm today. That application came before the duty judge this morning and before me this afternoon. Following argument, it became clear that the Commission would be content to permit Garuda some time to make good the matters which it was otherwise required to make good this afternoon. Without dwelling on it in too much detail, Garuda sought to advance a case on the stay that, effectively, it was unable to pay the $19 million penalty without significant disruption to its internal affairs.

3. I am minded to vary the previous order I made on 12 July so that another 14 days is provided within which Garuda may pay the penalty. I will make that order in the original proceedings, and order that Garuda’s stay application in the appeal proceeding be stood over generally.

4. Garuda’s application was supported by an affidavit of Mr Fuad Rizal, who is its Director of Finance and Risk Management. That affidavit was sworn on 7 August 2019. There are some ancillary matters I should note. The affidavit of Mr Rizal is, on any view, an extraordinary document. It is couched at a level of generality which, having regard to the seriousness of the situation that Garuda currently confronts (which I would rate as extremely serious), is striking in its lack of detail. For a significant entity, and particularly a significant state-owned entity such as Garuda, to put this kind of material before this Court is not something I have encountered before.

5. Over the next 14 days which have been provided, Garuda may think it appropriate to renew its application for a stay. If that application is to have any prospects of success, it will need to be accompanied by an affidavit which does a good deal more than what Mr Rizal’s affidavit presently does. For example, apart from its generality, another deficiency in Mr Rizal’s affidavit is the absence of any explanation as to why it is that the $19 million cannot be funded by the Republic of Indonesia which, as Garuda has consistently pointed out when it suits it, stands behind Garuda. Then there is the question of why Garuda waited until the last day for payment before seeking a stay when the fact that that moment was coming must have been known for several months.

6. Garuda’s application for a stay raises so many unusual questions that one can only hope that if the application is renewed (in the event that the penalty is not paid), these matters receive the most serious attention within Garuda. In that regard, it is not evident to me from the way the application has been conducted—and I do not mean in saying this any criticism of counsel or his instructing solicitors—that the seriousness of the situation which currently exists has been grasped by the people who are providing their instructions. I will say no more about that.

7. Mr Brennan for Garuda very properly drew my attention to the nature of certain paragraphs of Mr Rizal’s affidavit and sought a non-publication order in respect of them. That application was not supported by any additional affidavit material. Paragraphs 6 and 7 of Mr Rizal’s affidavit might on one view—and there may be other views—tend to suggest that Garuda is insolvent. It may be that that fact, if disclosed in the course of negotiations with Garuda’s creditors, would be helpful, or it may be that it would be unhelpful. It is certainly an unpleasant fact. But there is no evidence before me of what the exact difficulty to Garuda would be if this information were publicly released. It is another one of the mysteries of this case that no such affidavit evidence is before me today.

8. The power to make a non-publication order in respect of a document filed with the Court is conferred by s 37AF(1)(b)(iv) of the Federal Court of Australia Act 1976 (Cth). The grounds upon which such an order may be made...