Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 (30 March 2004)

Last Updated: 14 April 2004

FEDERAL COURT OF AUSTRALIA

Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72

CORRIGENDUM

THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES v MOBIL OIL AUSTRALIA PTY LTD
N 1593 of 2003

BRANSON, SACKVILLE & GYLES JJ
SYDNEY
30 MARCH 2004

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		N 1593 OF 2003
BETWEEN:	THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES APPLICANT
AND:	MOBIL OIL AUSTRALIA PTY LTD RESPONDENT
JUDGES:	BRANSON, SACKVILLE & GYLES JJ
DATE OF ORDER:	30 MARCH 2004
WHERE MADE:	SYDNEY

CORRIGENDUM

1 The Appearances section in the Judgment handed down on 30 March 2004 is replaced with the following:

Counsel for the Applicant:	Ms M Painter
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Mr D Jackson QC with Mr M Speakman
Solicitor for the Respondent:	Blake Dawson Waldron
Counsel for the ACCC (intervening):	Mr A Robertson SC with Mr D Meltz
Solicitor for the ACCC (intervening):	Deacons
Counsel for PIAC (intervening):	Mr G Lindsay SC with Mr A Payne
Solicitor for PIAC (intervening):	Mr Simon Moran, Principal Solicitor, PIAC
Date of Hearing:	19 February 2004
Date of Judgment:	30 March 2004

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justices Branson, Sackville & Gyles.

Associate:

Dated: 13 April 2004

FEDERAL COURT OF AUSTRALIA

Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72

CORRIGENDUM

THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES v MOBIL OIL AUSTRALIA PTY LTD
N 1593 of 2003

BRANSON, SACKVILLE & GYLES JJ
SYDNEY
30 MARCH 2004

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		N 1593 OF 2003
BETWEEN:	THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES APPLICANT
AND:	MOBIL OIL AUSTRALIA PTY LTD RESPONDENT
JUDGES:	BRANSON, SACKVILLE & GYLES JJ
DATE OF ORDER:	30 MARCH 2004
WHERE MADE:	SYDNEY

CORRIGENDUM

2 Within the Court’s Orders and within paragraph [82] of the Reasons for Judgment, the word ‘discloses’ is replaced with ‘disclose’.

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justices Branson, Sackville & Gyles.

Associate:

Dated: 30 March 2004

FEDERAL COURT OF AUSTRALIA

Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72

TRADE PRACTICES – Civil penalty – contravention of s 10 of the Petroleum Retail Marketing Sites Act 1980 (Cth) – parties present joint submissions on the appropriate pecuniary penalty – direction under Federal Court of Australia Act 1976 (Cth) asking whether the Court must consider whether the proposed amount is within the permissible range and, if so, impose the "agreed" penalty – powers and responsibilities of Court faced with joint submission on penalty.




Petroleum Retail Marketing Sites Act 1980 (Cth) ss 3(1), 7, 11, 12, 13(1)(a)
Federal Court of Australia Act 1976 (Cth) s 20(1A)
Trade Practices Act 1976 (Cth), ss 45, 76
Evidence Act 1995 (Cth), Part 3.4
Commerce Act 1986 (NZ)
Petroleum Retail Marketing Sites Regulations 1981
Federal Court Rules O 6 r 17, O 18 r 4


NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285, followed and explained.
Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCA 1542, discussed.
Trade Practices Commission v Allied Mills Industries Pty Ltd (No 5) [1981] FCA 142; (1981) 60 FLR 38, discussed.
Commerce Commission v New Zealand Milk Corporation Ltd [1994] 2 NZLR 730, discussed.
Trade Practices Commission v Hymix Industries Pty Ltd [1995] ATPR 41-369, cited.
Trade Practices Commission v CC (New South Wales) Pty Ltd (No 2) [1995] ATPR 41-406, cited.
Trade Practices Commission v TNT Australia Pty Ltd [1995] ATPR 41-375, cited.
Australian Competition and Consumer Commission v Pioneer Concrete (Qld) Pty Ltd [1996] ATPR 41-457, cited.
Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2002] ATPR 41-851, followed.
Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 161 ALR 79, cited.
Australian Competition and Consumer Commission v Woolworths (South Australia) Pty Ltd [2003] FCA 530; (2003) 198 ALR 417, cited.
Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] FCA 383; [2001] ATPR 41-815, discussed.
Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, discussed.
Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1997] ATPR 41-562, cited.
McPhee & Son (Australia) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365; (2000) 172 ALR 532, cited.
Australian Competition and Consumer Commission v Rural Press Ltd [2001] FCA 1065; [2001] ATPR 41-833, cited.
Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; (2002) 201 ALR 618, cited.
Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; (2003) 201 ALR 636, cited.
Australian Competition and Consumer Commission v Colgate Palmolive Pty Ltd [2002] FCA 619, discussed.
Australian Competition and Consumer Commission v Roche Vitamins Australia Pty Ltd [2001] ATPR 41-809, discussed.
United States Tobacco Company v Minister for Consumer Affairs (1988) 20 FCR 520, cited.
Roe v Sheffield City Council [2003] 2 WLR 848, cited.
R v Gallagher (1991) 23 NSWLR 220, discussed.
R v Apostilides [1984] HCA 38; (1984) 154 CLR 563, cited.
Chow v Director of Public Prosecutions (1992) 28 NSWLR 593, cited.
Malvaso v The Queen [1989] HCA 58; (1989) 168 CLR 227, cited.


J Thorpe, "Determining the Appropriate Role for Charge Bargaining in Part IV of the Trade Practices Act" (1996) 4 Comp & Cons LJ 69
Australian Law Reform Commission, Principled Regulation: Federal Civil Administrative Remedies in Australia (ALRC 95, 2002)
Professor O M Fiss, "Against Settlement" 93 Yale LJ 1073 (1984)
G Fisher, "Plea Bargaining’s Triumph" 109 Yale LJ 857 (2000)
R D Seifman and A Freiberg, "Plea Bargaining in Victoria: The Role of Counsel" (2001) 25 Crim LJ 64
Review of the New South Wales Director of Public Prosecutions’ Policy and Guidelines for Charge Bargaining and Tendering of Agreed Facts (Report by the Hon Gordon Samuels, 2002)
K Yeung, "Quantifying Regulatory Penalties: Australian Competition Law Penalties in Perspective" (1999) 23 Melb Uni LR 440









THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES v MOBIL OIL AUSTRALIA PTY LTD
N 1593 of 2003

BRANSON, SACKVILLE & GYLES JJ
SYDNEY
30 MARCH 2004

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		N 1593 OF 2003
BETWEEN:	THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES APPLICANT
AND:	MOBIL OIL AUSTRALIA PTY LTD RESPONDENT
JUDGES:	BRANSON, SACKVILLE & GYLES JJ
DATE OF ORDER:	30 MARCH 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

The question identified in the Chief Justice’s direction given under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) be answered as follows:

"Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980 (Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?

Answer: No, but the reasons in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 discloses no error of principle.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1593 OF 2003

BETWEEN:	THE MINISTER FOR INDUSTRY, TOURISM AND RESOURCES APPLICANT
AND:	MOBIL OIL AUSTRALIA PTY LTD RESPONDENT

JUDGES:	BRANSON, SACKVILLE & GYLES JJ
DATE:	30 MARCH 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT

THE PROCEEDINGS

3 The applicant ("the Minister") seeks, among other relief, an order that the respondent ("Mobil") pay to the Commonwealth a pecuniary penalty by a reason of its contravention of s 10 of the Petroleum Retail Marketing Sites Act 1980 (Cth) (the "Sites Act"). The application has not yet been determined by the trial Judge, Gyles J.

4 On Gyles J’s recommendation, the Chief Justice has given a direction, pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act"), that the jurisdiction of the Court should be exercised by a Full Court in respect of the following question arising in the proceedings (the "Question"):

"Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980 (Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?"

It follows that this Court, in addressing the Question, is exercising original and not appellate jurisdiction.

5 The Minister and Mobil (together "the Parties") tendered at the hearing before Gyles J, a Statement of Agreed Facts ("Statement"). Mobil admitted in the Statement that it had contravened s 10(2) of the Sites Act. Specifically, Mobil admitted that during the period January 1998 to January 2000 ("the Relevant Period"), it operated retail sites exceeding the permitted number specified in the Petroleum Retail Marketing Sites Regulations 1981 ("Regulations"). The Parties agreed on the form of declaratory relief and the injunctions to be granted pursuant to s 12 of the Sites Act. His Honour expressed the view that the declaration and injunctions were appropriate and required no further consideration.

6 The Parties also put to Gyles J an agreed pecuniary penalty of $844,500 and submitted jointly that the Court should impose that penalty pursuant to s 13 of the Sites Act. The joint submission explained why this amount has been chosen, as follows:

"34. Section 13(1)(a) of the Sites Act relevantly provides that in the case of a contravention of subsection 10(2), the maximum pecuniary penalty is $10,000 for each retail site exceeding the number of retail sites specified in the Regulations. The maximum pecuniary penalty that can be imposed in respect of these proceedings is therefore $5,630,000 (being 563 contraventions at a maximum of $10,000 per contravention).

35. Having regard to the matters referred to [in the submission], and the Agreed Statement of Facts, the parties submit that a penalty in the amount of $844,500 should be imposed by the Court. This figure represents an 85% discount on the maximum penalty, which the parties submit takes into account all the matters relevant to penalty including:

(a) the inadvertence of Mobil’s conduct,
(b) the absence of any evidence of actual loss and damage to third persons,
(c) the level of cooperation provided by Mobil,
(d) Mobil’s subsequent compliance program,
(e) the ‘totality principle’, and
(f) the absence of previous contraventions of the Sites Act by Mobil."

7 Earlier in the submission, it was said that Mobil asserted and "the Department" (apparently the Department then known as the Department of Industry, Science and Resources) accepted

"that Mobil’s conduct giving rise to the contravention of the Sites Act was not in any way deliberate conduct, but occurred due to inadvertence. The contraventions were due to inadequate management oversight, poorly designed and maintained management information and compliance systems, at a relatively senior level, as well as changes in personnel responsible for preparing and lodging the relevant returns." (References omitted.)

This language in substance repeats that contained in the Statement.

8 The joint submission quoted the following passage from the judgment of Burchett and Kiefel JJ (with whom Carr J generally agreed) in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285, at 290-291:

"Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount.

There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the [regulatory authority] to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case...".

9 In NW Frozen Foods the ACCC sought an order for a pecuniary penalty under s 76(1) of the Trade Practices Act 1976 (Cth) ("TP Act") in respect of a contravention of Part IV of that Act. The joint submission in the present case contended that the principles stated in NW Frozen Foods apply equally to proceedings under the Sites Act seeking an order that an alleged contravenor pay a pecuniary penalty.

10 Gyles J did not think it appropriate to accede to the joint submission on penalty without further examination of the approach taken in NW Frozen Foods. His Honour delivered a judgment in which he noted that several Judges of the Court sitting at first instance had expressed reservations about that approach. He considered that these public reservations raised matters of principle which required the issue of agreed civil penalties to be revisited by a Full Court, particularly as Commonwealth regulators were becoming parties to agreements concerning civil penalties with increasing frequency. His Honour suggested that it is "inherently unlikely" that an agreed penalty will be so far outside the range as to entitle a single Judge to depart from it. In practice, therefore, the agreed penalty would be imposed and there would be no aggrieved party wishing to appeal to a Full Court.

11 Gyles J indicated to the Parties’ representatives that he was satisfied that the penalty was within the range. Nonetheless he thought it appropriate to refer the "threshold issue" to a Full Court. Although this course was opposed by the Parties, his Honour recommended to the then Acting Chief Justice that the Question be referred to a Full Court. The Chief Justice subsequently made the direction under s 20(1A) of the Federal Court Act.

THE LEGISLATION

12 The Sites Act and the Regulations are designed to control the number of retail outlets which the four major petroleum refiners (Mobil, The Shell Company of Australia Ltd, BP Australia Ltd and Caltex Oil (Australia) Pty Ltd) can operate. Each is a "prescribed oil company" for the purposes of the Sites Act: s 3(1).

13 Section 10 relevantly provides as follows:

"(1) A prescribed corporation may, subject to this section, operate a retail site during any month.
(2) A prescribed oil company (not being a member of a group of prescribed corporations) shall not operate, during a month, a number of retail sites exceeding the number of retail sites specified in the regulations to that company in relation to that month.
(3) A member of a group of prescribed corporations one of which is a prescribed oil company shall not operate a retail site during a month if the total number of retail sites (including that site) that would be operated during that month by the members of that group of corporations would exceed the number of retail sites specified in the regulations in relation to that prescribed oil company in relation to that month.
(4) In ascertaining for the purposes of this section the number of retail sites operated during a particular month, any diesel fuel sites operated, or any sites temporarily operated, during that month shall be disregarded."

Section 7 specifies circumstances in which a prescribed corporation is taken to operate a retail site. Section 11 imposes an obligation on a prescribed corporation to file monthly returns giving details of retail sites operated by it or which it has ceased to operate.

14 Section 13 of the Sites Act provides for the imposition of pecuniary penalties:

"(1) If the Court is satisfied that a prescribed corporation has contravened a provision of section 10..., the Court may order the corporation to pay to the Commonwealth such pecuniary penalty, not exceeding –

(a) in the case of a contravention of sub section 10(2) or (3) - $10,000 for each retail site exceeding the number of retail sites specified in the regulations in accordance with that sub-section;
...

as the Court determines to be appropriate having regard to all relevant matters, including the circumstances in which the contravention took place and whether the corporation has previously been found by the Court in proceedings under this section to have contravened that provision.

...

(2) The Minister may institute a proceeding in the Court for recovery on behalf of the Commonwealth of a pecuniary penalty referred to in sub-section (1).
...
(5) Criminal proceedings do not lie against a person in respect of a contravention of a provision of section 10...".

The "Court" is defined to mean the Federal Court: s 3(1).

INTERVENORS

15 The Parties have a common interest in the Question being answered in the affirmative. Obviously enough, if only the Parties had addressed argument to the Court on the Question, there would have been no contradictor.

16 The Public Interest Advocacy Centre ("PIAC"), having been made aware that the Question had been referred to this Court, applied pursuant to Federal Court Rules ("FCR"), O 6 r 17, for leave to intervene at the hearing of the Question. The Parties did not oppose leave being granted.

17 The Australian Competition and Consumer Commission ("ACCC") also sought leave to intervene at the hearing pursuant to FCR, O 6 r 17. Its interest in the matter stems from its responsibility for administering the TP Act and other legislation. We were told that proceedings alleging contravention of the TP Act are often resolved by the ACCC and the alleged contravener agreeing on a statement of facts in which the contravention is admitted and further agreeing that the Court should impose a particular pecuniary penalty under s 76 of the TP Act. Again, the Parties did not object to the ACCC being granted leave to intervene.

18 Accordingly, the Court made an order granting leave to PIAC and the ACCC leave to intervene in the hearing of the Question. The order provided for each intervenor to appear by legal representatives and to make written and oral submissions. Having regard to the terms of O 6 r 17(4), the order did not provide for the intervenors to lead evidence.

19 PIAC and the ACCC each filed written submissions. Both submissions proposed that the Question be answered "No". However, they took somewhat divergent paths as to the proper approach by the Court to be taken where a regulator and contravener propose that an agreed penalty be imposed. At the hearing of the Question, Mr Robertson SC, who appeared with Mr Meltz for the ACCC, supplemented the ACCC’s written submissions with oral argument. Mr Lindsay SC, who appeared with Mr Payne for PIAC, did the same in relation to PIAC’s written submissions.

SUBMISSIONS

THE PARTIES’ CONTENTIONS

20 The Parties filed joint written submissions on the Question. These submissions were developed in oral argument by Mr Jackson QC, who appeared with Mr Speakman for Mobil. Ms Painter for the Minister, in substance adopted Mr Jackson’s oral submissions.

21 The Parties submitted that it was apparent from the Statement that litigation to establish the contravention alleged by the Minister would be complex, time-consuming and costly. The public interest in enforcing the Sites Act and similar legislation such as the TP Act and in determining contravening conduct is served if regulatory bodies are able, in appropriate circumstances, to limit the extent to which contested litigation is required to establish contravention of the statute.

22 The Parties pointed out that an extensive body of authority has developed in this Court and State Supreme Courts holding that where a regulator (usually the ACCC) and a respondent negotiate a settlement and the agreed quantum is "demonstrably within the ‘permissible range’" the Court should adopt the agreed figure. While these are single Judge decisions, the Parties argued that the principles articulated in NW Frozen Foods were part of the ratio decidendi and therefore a Full Court should not depart from them unless principles were "clearly erroneous".

23 Mr Jackson acknowledged that there had been criticism in recent cases of the practice of accepting negotiated penalties where the proposed penalty is within the permissible range. He contended, however, that the criticism was not justified since fixing the quantum of a penalty is not an exact science. The Court always retains an ultimate discretion because it must be satisfied that the negotiated penalty is supportable having regard to the applicable principles. If not satisfied that the proposed penalty is within the range, the Court will reject the proposed penalty and substitute its own, as illustrated by Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCA 1542. Moreover, if not satisfied that the material before it is adequate to determine whether the proposed penalty is within the range, the Court may request the parties to provide more information. The Court is therefore not merely a "rubber stamp". On the contrary, it is performing the duty imposed on it by s 13 of the Sites Act.

24 The Parties submitted that the Question should be answered "Yes".

THE ACCC’S CONTENTIONS

25 The ACCC, as intervenor, took as its starting point the proposition that the decision in NW Frozen Foods should be followed unless it is thought to be clearly wrong. The ACCC, however, interpreted the reasoning in NW Frozen Foods as leaving the Court with a broader discretion than that implied by the Parties’ submissions. The ACCC submitted that the following principles were consistent with that reasoning:

(i) It is appropriate for a regulatory body such as the ACCC and for a respondent to civil penalty proceedings commenced by such a body to make a joint submission as to penalty, including the identification of an agreed amount that the parties consider to be the appropriate penalty to be imposed by the Court.
(ii) In considering the appropriate penalty, the Court is not confined to considering whether the proposed penalty is within the permissible range in all the circumstances.
(iii) NW Frozen Foods stands for this proposition (at 291):

"A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case".

(iv) It is for the Court to determine what is the permissible range in all the circumstances.
(v) It is appropriate for the Court to approach the exercise of its discretion on the basis that it would be disinclined to depart from the figure identified in a joint submission where that amount is within the permissible range in all the circumstances, "other than in a clear case requiring a different penalty to be imposed".

26 The ACCC contended that the practice of negotiating a resolution of the dispute between it and the alleged contravener is an efficient mechanism for concluding investigations. The benefits include encouraging alleged contraveners to make admissions; saving the time and resources of both the regulator and the Court; and advancing the public interest by enabling the TP Act to be enforced more effectively.

27 Mr Robertson emphasised that there should be no concern that the ACCC would present an agreed settlement on the basis of a "sanitised version" of the facts. The practice of putting an agreed penalty to the Court is consistent with complete transparency. Moreover, so he argued, the Court can always require further information if it forms the view that the material submitted to it on particular issues is inadequate.

28 On the basis of the ACCC’s view of the ratio of NW Frozen Foods, Mr Robertson submitted that the Question should be answered: "No".

PIAC’S CONTENTIONS

29 PIAC submitted that the "twin touchstones" of the jurisdiction exercised by the Court are the "constitutional imperative that the Court confine itself to an exercise of judicial power" and the existence and scope of the discretionary power conferred on the Court by provisions such as s 13 of the Sites Act. Mr Lindsay criticised the fact that the proceedings had apparently been instituted to obtain orders giving effect to an agreed outcome rather than compromise existing proceedings. Moreover, the only evidence in support of the application was an affidavit by a solicitor deposing to an agreement between the parties. Apart from admissions made by Mobil, there was no evidence verifying the assertions of fact made in the Statement. This, so Mr Lindsay argued, was less than satisfactory because the Court should have evidence of the facts necessary to found an exercise of jurisdiction and should have available a witness able to respond to factual inquiries.

30 PIAC submitted that NW Frozen Foods should not be interpreted as obliging the Court, in a civil penalty case, to give effect to an agreement between the parties as to the appropriate penalty. Rather, it should be understood as authority for the proposition that, where the Court is satisfied that it is appropriate to do so, the Court can

• accept and act upon admissions contained in an agreed statement of fact; and
• receive joint submissions as to a range of orders that might properly be made on the basis of those admissions.

Accordingly, a joint submission about penalty is a relevant matter for the Court to take into account, but not determinative.

31 Within this framework, so it was argued, the Court cannot act upon agreed facts and a joint submission if

• the Court has reason to believe that the parties’ conduct of the proceedings is tainted by collusion or improper purpose, rather than a bona fide compromise of a "real contest as to fact or law"; or
• the Court is called on to act at the dictate of the parties by the imposition of a particular penalty or a penalty within a confined range agreed between them.

Mr Lindsay submitted that the legitimacy of the procedure in NW Frozen Foods depends upon a recognition that the Court has power to insist upon evidence being adduced in support of an application for relief.

32 PIAC invited the Court, if it concluded that the appropriate answer to the Question is "No", to give guidance as to the practice to be adopted in future civil penalty hearings. The suggestions included the Court issuing a Practice Note; making it "publicly known" that any application to give effect to a compromise should put forward a range of orders; and endorsing a procedure whereby an application to give effect to a compromise would proceed by way of notice of motion supported by evidence, including evidence "justifying any compromise of rights".

MATERIAL BEFORE THE TRIAL JUDGE

33 As there was some criticism of the material provided to the trial Judge, it is convenient to describe briefly what was filed by the Parties.

34 The Statement runs for fourteen pages and appends 119 pages of documents. The Statement identifies Mobil’s contravening conduct during the Relevant Period and provides details of sites operated in excess of quota each month. The Statement asserts that Mobil’s failure to report the additional monthly quota sites were due inadequate management oversight and poor management information and compliance systems.

35 The longest section of the Statement provides an account of Mobil’s preparation of returns under the Sites Act. This explains the circumstances in which Mobil came to lodge inaccurate returns during the Relevant Period. In particular, the Statement explains that the manager responsible for preparing returns was not informed of changes in equity arrangements relating to a number of sites. These changes meant that the sites should have been re-classified as Mobil-controlled sites for the purposes of the legislation, whereas previously they had been correctly regarded as operated by franchisees. Furthermore, Chippen Holdings Pty Ltd, a company in which Mobil held a majority shareholding, but in respect of which it controlled only 50% of the votes in general meeting, was incorrectly classified by Mobil as an independent company. This error is said to have accounted for 295 of the unreported monthly quota sites.

36 The Statement also records Mobil’s cooperation with the Department’s investigation and details the steps taken by Mobil to ensure future compliance with the Sites Act.

37 The final section of the Statement deals with the "effect of breaches" and is as follows:

"It is implicit in the Sites Act that behaviour which increases vertical integration in the retail petroleum sector beyond the limits set in the legislation damages both consumers and small business. Mobil’s omissions constitute such behaviour. The purpose of the Sites Act is to ‘promote competition both in the long and short term’ (Second Reading Speech) in the retail petroleum market by restricting the effects of vertical integration. This is achieved by limiting the number of retail sites that vertically integrated oil companies may operate in Australia. The Sites Act reflects community concerns about the impact on consumers and small business of the oil companies directly operating increasing numbers of retail sites.

‘This trend has caused concern in the community because of its effect on independent small business in the industry, and has given rise to claims that it provides a means of unfair competition, and fears that, if this trend continues..., the increased vertical integration which results will have long term anti-competitive effects.’ (Second Reading Speech.)

In addition to the public effects of its conduct, Mobil may have gained an advantage from operating the 13 additional sites in its retail network and from its increased equity in its distributors. The potential advantage was that Mobil operated those sites on a commission agency basis rather than as franchises. Mobil may have obtained higher revenue from those sites than if they were franchised because while commission agents may at times obtain essentially the same retail margin on each litre of petrol sold, the franchisee theoretically can make a greater margin and has the additional advantage of being able directly to set retail prices.

Mobil may have also obtained an advantage by moving to 100% control of its equity distributors (other than Chippen Holdings) in that this enabled Mobil to directly control the retail pricing at sites operated by those distributors.

Importantly, contrary to the intention of the Sites Act, Mobil has been able to set retail prices at all of the additional sites it operated, an advantage not otherwise available in respect of these additional sites. Mobil does not have sufficient or sufficiently detailed information on sales volumes and retail margins at each site to enable the parties to quantify this advantage."

THE AUTHORITIES

DECISIONS PRIOR TO NW FROZEN FOODS

38 The practice of this Court receiving and acting upon joint submissions from regulator and contravenor in cases arising under s 76 of the TP Act originated in Trade Practices Commission v Allied Mills Industries Pty Ltd (No 5) [1981] FCA 142; (1981) 60 FLR 38. There the parties handed up consent orders after the trial Judge, Sheppard J, published a judgment in which his Honour found that each respondent had a case to answer on allegations of price fixing arrangements contrary to s 45 of the TP Act. One of the respondents (Manildra) withdrew its defence to the allegations. The consent orders provided for a pecuniary penalty of $50,000 to be imposed. Sheppard J made orders in accordance with the consent orders.

39 His Honour noted (at 40) that the circumstances of the breaches had been set out in the judgment holding that there was a case to answer. He considered the case "by no means in the class of the worst cases", because the public was little affected by what had been done and the arrangements had a short life. Accordingly, Sheppard J was satisfied that the penalty of $50,000 for Manildra was "proper and appropriate" (at 41).

40 Sheppard J, having noted that it was the parties who had suggested the penalty, continued as follows (at 41):

"Uninformed of their agreement, I may have selected a different figure, but I am satisfied that it would not have been very different from theirs. There is from time to time, amongst members of the profession and amongst the public, discussion concerning plea bargaining. Sometimes it is suggested that it involves disreputable conduct. It is my opinion that that is so if it at all implicates the court in private discussions as to what the court’s attitude will or would be likely to be if a particular course is taken. In this case nothing of that kind has occurred. The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be....
This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices."

41 It is plain that Sheppard J did not regard himself as bound by the figure suggested by the parties. His comments were directed to the appropriateness of the parties putting an agreed figure to the Court. His Honour satisfied himself, on the basis of the facts set out in the earlier judgment, that the penalty was appropriate, although acknowledging that uninformed by the agreement he might have selected a slightly different figure.

42 Sheppard J’s observations were cited with approval by the New Zealand High Court (Eichelbaum CJ and Greig J) in Commerce Commission v New Zealand Milk Corporation Ltd [1994] 2 NZLR 730. The defendants in that case admitted anti-competitive conduct in breach of the Commerce Act 1986 (NZ). The parties produced a "comprehensive agreed statement of facts" and the defendants consented to specified pecuniary penalties being imposed in respect of the breaches.

43 The Court pointed out that it had to determine the penalty. However, there could be no objection to the parties presenting joint submissions on penalty or to the fact that the joint view had been reached as the result of negotiations (at 733). The Court also accepted the Commission’s submission that the procedure adopted by the parties was consistent with the public interest in bringing litigation to a conclusion (at 733):

"Thus a procedure allowing for a negotiated settlement is in the interests of the parties; it is equally in the interests of the community in that it avoids clogging the Court lists with potentially complex and lengthy litigation, and the attendant expense. Subject to a reservation, discussed below, as to what may be understood by a ‘negotiated settlement’, we accept those submissions. Further, in considering the level of the penalty it would be proper for the Court to take into account the benefit to the community by the early disposal of proceedings in this manner."

44 The reservation referred to in this passage related to the Solicitor-General’s submission that the negotiated penalty could properly reflect the fact that prior to settlement liability had been disputed and that the Commission might have faced difficulties in proving its case. The Court considered that this submission was difficult to reconcile with the statute, which required a penalty to be determined "in respect of each act or omission". Moreover, as part of any agreement, the defendant had to admit clearly the alleged contravention, while any agreed penalty had to be proportionate to the evidence available and to the defendant’s conduct (at 734).

45 The Court went on to consider the facts and circumstances of the case in some detail before concluding that the proposed penalties (which were substantial) were appropriate. As in Allied Mills, the Court did not regard itself as bound by the agreed penalties and independently assessed their appropriateness on the basis of a detailed statement of facts, concluding that they were "within the appropriate range" (at 737).

46 A similar approach was taken in subsequent cases which referred with approval to the observations in Allied Mills and Milk Corporation: Trade Practices Commission v Hymix Industries Pty Ltd [1995] ATPR 41-369, at 40,103-104, per Lockhart J; Trade Practices Commission v CC (New South Wales) Pty Ltd (No 2) [1995] ATPR 41-406, at 40,498, per Lindgren J; Trade Practices Commission v TNT Australia Pty Ltd [1995] ATPR 41-375, at 40,165-40,166, per Burchett J; Australia Competition and Consumer Commission v Pioneer Concrete (Qld) Pty Ltd [1996] ATPR 41-457, at 41,582, per Lockhart J.

NW FROZEN FOODS

47 It is against this background that NW Frozen Foods was decided. In that case, the appellant admitted contraventions of s 45 of the TP Act and reached agreement with the ACCC on a statement of facts to be put before the Court and on the penalty regarded by the parties as appropriate to be imposed under s 76 of the TP Act. The trial Judge, however, rejected the proposed penalty of $900,000, substituting a penalty of $1,200,000. The appellant argued that the trial Judge had erred in deciding on this figure. The ACCC lent "broad support" to the appellant’s arguments. There was therefore no contradictor on the appeal. The Full Court did not address whether it was appropriate to invite assistance, for example from an amicus curiae, on the issues presented by the appeal.

48 Burchett and Kiefel JJ, with whom Carr J agreed, held that the trial Judge had erred. The error was not, however, the failure to adopt the penalty jointly suggested by the parties. Rather, the trial Judge had erroneously placed weight on certain considerations, thus vitiating the exercise of his discretion. Accordingly, it became necessary for the Full Court to redetermine the appropriate penalty.

49 Early in the judgment, Burchett and Kiefel JJ noted (at 290) that the TP Act placed responsibility "on the shoulders of the Court" to determine the appropriate penalty having regard to all relevant matters. Their Honours also noted that since Allied Mills it had been accepted that both the facts and the parties’ views as to the effect of the facts could be presented to the Court in agreed statements, together with joint submissions as to penalty. Their Honours then made the comments that have already been quoted at [6] above. The last two sentences of that passage should, however, be repeated (at 291):

"A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case...". (Emphasis added.)

50 Three points should be made about these comments in the context of the passage as a whole. First, Burchett and Kiefel JJ do not say that the Court is precluded from requesting further information in order to determine whether the agreed penalty is a proper one in the circumstances. In particular, their Honours do not suggest that the Court is bound to act without further inquiry on the statement of facts presented by the parties. Secondly, their Honours do not say that the Court is bound by the penalty proposed by the parties or relieved from the necessity of determining that it is appropriate. They say only that the Court will not depart from the agreed figure merely because it might have selected some other figure, or in a "clear case". Thirdly, as Mr Jackson observed in argument in the present case, it is not entirely clear what Burchett and Kiefel JJ mean by the reference to a "clear case". In context, it appears simply to mean a case where the proposed penalty is outside the range considered by the Court to be appropriate in all the circumstances.

51 In the latter part of their judgment, Burchett and Kiefel JJ, having found that the fixing of the penalty by the trial Judge was vitiated by error, addressed the appropriate penalty. Their Honours said this (at 298-299):

"There is no doubt that, when the Court considers this question, the view of the specialist Commission is a relevant matter. The appellant’s submission appeared to go further, suggesting that the Commission would have knowledge about the particular case and the markets involved not available to the Court, which should make the Court reluctant to interfere with its conclusions. Courts have learned to be suspicious of claims of secret knowledge; and justice should be done in the light, with the relevant facts exposed to view. It is the Court which bears the responsibility.... However, in discharging its responsibility, the Court gratefully accepts all proper help, and the views of the specialist body set up to protect the public interest in the maintenance of economically healthy competition are plainly relevant, for example, to the question whether a proposed penalty will be sufficient to deter anti-competitive behaviour in a particular market. On that issue, those views are likely to be persuasive; while ‘subjective’ matters, calling perhaps for a degree of mercy, may fall less within the specialist sphere, and more within those broad concepts of justice to which the Court must always have regard.

The cases we have discussed earlier in these reasons unite in affirming the public interest in the promotion of settlements, especially in this area where litigation is likely to be very lengthy. We agree with the statement made in several of the cases cited that it is not actually useful to investigate whether, unaided by the agreement of the parties, we would have arrived at the very figure they propose. The question is not that; it is simply whether, in the performance of the Court’s duty under s 76, this particular penalty, proposed with the consent of the corporation involved and of the Commission, is one that the Court should determine to be appropriate. In our opinion, it is appropriate." (Emphasis added.)

52 In reaching the conclusion that the proposed penalty was appropriate, the Court took into account the circumstances of the case as set out in the agreed statement of facts. That statement included clear admissions by the appellant that it had contravened the TP Act. (As to the Court acting on admissions, see FCR, O 18 r 4; Evidence Act 1995 (Cth), Part 3.4.) Their Honours characterised the contraventions as deliberate and serious (at 289). However, they also took into account that the contravenors had assisted the ACCC in its investigations and had agreed to establish trade practices compliance programs.

53 The following propositions emerge from the reasoning in NW Frozen Foods:

(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.
(ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
(iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.
(iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters.
(v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.
(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.

54 Five further points should be made.

55 First, the rationale for giving weight to a joint submission on penalty is said by the Court to be the savings in resources for the regulator and the Court, as well as the likelihood that a negotiated resolution will include measures designed to promote competition. As Jeremy Thorpe points out, a related advantage is that the savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence which is one of the principal justifications, if not the only justification for imposing civil penalties under the TP Act or the Sites Act: J Thorpe, "Determining the Appropriate Role for Charge Bargaining in Part IV of the Trade Practices Act" (1996) 4 Comp & Cons LJ 69, at 72-74. Of course the arguments in favour of negotiated settlements have to take account of the fact that it is the Court that bears the ultimate responsibility for determining the appropriate penalty.

56 Secondly, the sixth proposition drawn from the reasoning in NW Frozen Foods does not mean, in our opinion, that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties’ proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range.

57 Thirdly, as has been noted, the appellant in NW Frozen Foods admitted contravening the TP Act and had reached agreement with the ACCC upon the facts to be put before the Court. There was no suggestion that the admissions or statement had been tailored or modified to reflect the difficulties faced by the ACCC in proving its case. The Full Court therefore acted on the basis of clear admissions and a detailed statement of agreed facts setting out how the contraventions had occurred. Accordingly, the decision is consistent with the views expressed by the New Zealand High Court in Milk Corporation. Those views are, with respect, correct in principle.

58 Fourthly, as the Full Court in Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2002] ATPR 41-851, has pointed out, the regulator should always explain to the Court the process of reasoning that justifies a discounted penalty. In that case, the ACCC and two contravenors produced an agreed statement of facts, supplemented by affidavit evidence, but they disagreed as to the appropriate penalty. The trial Judge had previously imposed agreed penalties on other offenders, which the Full Court apparently thought were somewhat low (at 44,543 [51]), and had taken these penalties into account in determining the appropriate penalties to be imposed on the two remaining contravenors. The Full Court made the following observations (at 44,549 [56]):

"[w]here the Commission proposes to the Court an agreed penalty which is calculated taking into account a substantial discount from what would otherwise be considered the appropriate penalty so as to reflect a degree of co-operation, it would be desirable that the Commission disclose the process by which the discounted penalty has been arrived at. In particular, it would be of assistance to the Court, particularly where there are other proceedings pending, to hear submissions on the range of appropriate penalties and the discount which it is proposed should be allowed to take into account the level of co-operation afforded by the offender. Had that been done in the present case, the learned primary judge would have been able to form a view as to the appropriate range of penalty absent co-operation and have then been in the position to calculate an appropriate discount to take into account the exceptional level of co-operation afforded by QIS [one of the offenders]. It is only in this way that a comparison could properly be made between the penalty payable where the offender had offered a high level of co-operation and the penalty payable where the level of co-operation was of a lesser magnitude."

59 These observations are consistent with the approach in NW Frozen Foods. The Full Court in Ithaca Ice was plainly aware of the reasoning in NW Frozen Foods, since it considered the factors discussed in that case as relevant to the quantum of penalty. It follows that a court considering an "agreed" penalty is entitled to expect the regulator to explain the basis on which a discount from the otherwise appropriate penalty has been calculated having regard to the contravenor’s co-operation and, for that matter, other relevant factors. (For endorsement of this approach, see Australian Law Reform Commission, Principled Regulation: Federal Civil and Administrative Remedies in Australia (ALRC 95, 2002), pars 30.81 ff.)

60 Fifthly, there is nothing in NW Frozen Foods that is inconsistent with any of the following propositions:

(i) The Court, if it considers that the evidence or information before it is inadequate to form a view as to whether the proposed penalty is appropriate, may request the parties to provide additional evidence or information or verify the information provided. If they do not provide the information or verification requested, the Court may well not be satisfied that the proposed penalty is within the range.
(ii) If the absence of a contradictor inhibits the Court in the performance of its duties under s 76 of the TP Act, s 13 of the Sites Act, or similar legislation, it may seek the assistance of an amicus curiae or of an individual or body prepared to act as an intervenor under FCR, O 6 r 17.
(iii) If the Court is disposed not to impose the penalty proposed by the parties, it may be appropriate, depending on the circumstances, for each of them to be given the opportunity to withdraw consent to the proposed orders and for the matter to proceed as a contested hearing.

CRITICISMS OF NW FROZEN FOODS

61 Some judgments at first instance have followed NW Frozen Foods without making any adverse comment: see, for example, Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18; (1999) 161 ALR 79; Australian Competition and Consumer Commission v Woolworths (South Australia) Pty Ltd [2003] FCA 530; (2003) 198 ALR 417. Others have expressed reservations about the approach taken in NW Frozen Foods. It is useful to consider the nature of those reservations.

62 In Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] FCA 383; [2001] ATPR 41-815, Finkelstein J acted upon an agreed statement of facts outlining the contravening conduct of the respondent and imposed the penalties jointly submitted by the parties as appropriate under s 76 of the TP Act. His Honour noted (at 42,935) that the proposal was the product of "extensive negotiations" between the parties and that the penalties fell within the range the Court would consider appropriate (at 42,939). However, Finkelstein J prefaced his consideration of the facts of the case with two specific comments about the practice of receiving and acting on joint submissions as to penalty.

63 First, his Honour said that there are "very real problems" with the settlement of "quasi-criminal proceedings" (at 42,936). His Honour thought that consent might be coerced and the absence of a trial might lead to injustice. He cited in support of those propositions the well-known article by Professor O M Fiss, "Against Settlement" 93 Yale LJ 1073 (1984) and an historical study of the rise of plea bargaining in criminal cases in Massachusetts: G Fisher, "Plea Bargaining’s Triumph" 109 Yale LJ 857 (2000).

64 It must be said that it is difficult to see the relevance of either of these articles to the practice of parties making joint submissions on penalty in proceedings under the TP Act or similar legislation. Professor Fiss’s article was directed to what he perceived as the dangers posed by the then newly emerging Alternative Dispute Resolution movement. Whatever views one has about Professor Fiss’s general thesis, his concerns about power imbalance (at 1076-1078) would seem to have little application to the typical civil penalty case under the TP Act (or, a fortiori, the Sites Act), where the alleged contravenor is a legally represented corporation well able to assess its own interests. (The corporate respondent in ABB Transmission was a manufacturer and supplier of power transformers which generated sales of over $500 million annually. It and its executives were represented by senior counsel.)

65 That is not to deny that there may be civil penalty cases where an unrepresented or poorly resourced respondent is party to a joint submission to the Court on penalty. There may be good reason in such a case for the Court to scrutinise the joint submission and the supporting statement of facts with particular care to ensure, so far as possible, that the contravenor’s will has not been overborne and that the statement reflects the true position. But the possibility of cases of this kind is not a reason to discount the significant advantages that can flow from negotiated agreements in civil penalty cases.

66 Professor Fisher’s article traces the triumph of plea bargaining through a study of criminal prosecutions in Massachusetts. The practice of plea bargaining in the United States is different from the practice of charge bargaining in criminal matters in Australia: see R D Seifman and A Freiberg, "Plea Bargaining in Victoria: The Role of Counsel" (2001) 25 Crim LJ 64; Review of the New South Wales Director of Public Prosecutions’ Policy and Guidelines for Charge Bargaining and Tendering of Agreed Facts (Report by the Hon Gordon Samuels, 2002). In any event, its merits or demerits have little bearing on joint submissions in civil penalty cases where the contravenor admits the contraventions and the parties prepare a detailed agreed set of facts setting out the circumstances of the contraventions.

67 Secondly, Finkelstein J expressed concern (at 42,936) that "most" civil penalty proceedings under Part IV of the TP Act in recent years have been resolved without a full hearing on the merits. According to his Honour, this has made it more difficult for the Court to determine whether the "agreed" penalty was within the range. Moreover, decisions which sanction agreed penalties are not a good yardstick by which to measure whether later agreed penalties are within the range.

68 As to this concern, it may be said that there is no particular shortage of reported cases in which the question of penalties has been fully agitated in a contested hearing: Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 (French J) and cases cited there; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1997] ATPR 41-562 (Goldberg J); J McPhee & Son (Australia) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365; (2000) 172 ALR 532 (F Ct); Australian Competition and Consumer Commission v Rural Press Ltd [2001] FCA 1065; [2001] ATPR 41-833 (Mansfield J); Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; (2002) 201 ALR 618 (Hill J); Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; (2003) 201 ALR 636, at 700-703, per curiam. The principles to be applied in determining the quantum of pecuniary penalties are reasonably well settled, notwithstanding arguments about the relative merits of the deterrence and deserts models: K Yeung, "Quantifying Regulatory Penalties: Australian Competition Law Penalties in Perspective" (1999) 23 Melb Uni LR 440. Moreover, as NW Frozen Foods itself demonstrates, a trial judge is not bound by penalties imposed on an offender in a previous judgment. Each case must depend on its own circumstances. If a judge thinks that a previous decision provides little guidance for the case to be determined, he or she is free to act on that view.

69 In Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2002] FCA 619, Weinberg J imposed "agreed" penalties totalling $500,000 in respect of two admitted contraventions of s 48 of the TP Act (which prohibits the practice of resale price maintenance). His Honour interpreted NW Frozen Foods as holding that where the parties have reached a negotiated settlement in relation to an alleged contravention, and the amount proposed is "broadly speaking ... within the ‘permissible range’", the Court should not depart from that figure. He considered that the proposed figure was within the range even though he was "inclined to think" that pecuniary penalties totalling $500,000 out of a potential maximum of $20 million might fail to achieve the aim of deterrence.

70 Weinberg J then referred to what he described as the "somewhat undesirable practice" of the ACCC presenting to the Court an agreed pecuniary penalty. He said (at [33]) that it was

"difficult to imagine that the parties would propose a pecuniary penalty that is so clearly beyond the permissible range that the Court would depart from it."

This approach posed dangers (at [34])

"The Court may be seen, perhaps not altogether incorrectly, to act as a "rubber stamp" in simply approving a decision taken at an executive level by a body charged with investigating and prosecuting contraventions of the Act, but having no role in actually imposing particular sanctions for those contraventions. Negotiated settlements are an important vehicle for resolving complex matters such as those involved in the present case. It must also be borne in mind, however, that the public interest in ensuring that corporations that engage in behaviour of the kind that occurred in this case are dealt with appropriately, and that proper recognition is given to the need for specific and general deterrence. There are important parallels between the fixing of a pecuniary penalty under s 76, and the ordinary sentencing process which is quintessentially a matter for the courts...".

Weinberg J suggested it might be better for the parties to propose an appropriate range of penalties, rather than an agreed figure. Several points should be made about this analysis.

71 First, although Weinberg J found it difficult to imagine that the Court would depart from an agreed penalty, precisely that course was taken by Wilcox J in Australian Competition and Consumer Commission v FFE Building Services [2003] FCA 1542. There the corporate respondent admitted engaging in four acts of collusive tendering, in contravention of s 45 of the TP Act. The ACCC and the respondent agreed that the range of total penalty for the contraventions considered together was between $1 million and $1.5 million. Wilcox J took the view, on the basis of the agreed facts, that a penalty of $3.5 million was appropriate. His Honour expressed concern that if the Court simply adopted the agreed figure, it would involve an "abrogation of responsibility". Having regard to the seriousness of the contraventions and the available maximum penalty of $10 million per contravention, his Honour regarded it as appropriate to depart from the "agreed" figure. FFE Building Services illustrates the proposition that if an "agreed" penalty fails adequately to give effect to the value of deterrence the Court is free to (and perhaps bound to) impose a different penalty.

72 Secondly, it cannot be said that a Court properly applying the principles articulated in NW Frozen Foods is acting as a "rubber stamp". The Court must form its own view about the appropriate range of penalties, on the basis of the agreed facts or evidence. If the Court considers that the information supplied by the parties is inadequate, or requires elaboration or verification, it is free to request more detailed information or to ask that the information, or any aspect of it, be verified on oath or affirmation. In the unlikely event of the parties being unwilling to respond to the Court’s request, the Court might well take the view that it is not prepared to act on the agreed material in the manner sought by the parties.

73 The latter point can be illustrated by Australian Consumer and Competition Commission v Roche Vitamins Australia Pty Ltd [2001] ATPR 41-809, a price fixing case in which the ACCC and the contravenors presented an agreed statement of facts and a joint submission as to penalty. Lindgren J was troubled by the fact that neither document addressed the amount by which the contravenors were better off as a result of their conduct nor the additional amounts paid by their customers in consequence of the contravening conduct. His Honour directed the parties to supply a supplementary statement and submissions addressing these issues (see at 42,812). It is not clear whether the directions were made by consent. If not, it may be doubted whether his Honour had power to direct the parties to file a supplementary statement and further submissions. But there can be no doubt that his Honour was entitled to request the parties to provide further information or evidence on the issues troubling him. If the parties declined for some reason to do so, the Court could take that into account in determining the appropriate penalty.

74 There is also no reason in principle, where the Court considers that it requires further assistance to determine whether the proposed penalty is appropriate, to invite assistance from a person or body prepared to act as amicus curiae: United States Tobacco Company v Minister for Consumer Affairs (1988) 20 FCR 520, at 534-539, per curiam. Similarly, the Court can grant leave, of its own motion, to a person to intervene in the proceedings to "assist the Court in its task of resolving the issues raised by the parties": FCR, O 6 r 17. In a case where the parties have filed a joint submission as to penalty, FCR, O 6 r 17 would seem to be attracted, since the issues raised by the parties’ submissions necessarily include whether the proposed penalty is appropriate in the circumstances of the case. In short, if the Court has significant reservations about what the parties have put in joint submissions, there are steps it can take to ensure that it is more fully informed. Moreover, in some cases, there may be "victims" of the contravention who wish to intervene in the proceedings.

75 It is worthwhile bearing in mind the recent observations of Hale LJ in Roe v Sheffield City Council [2003] 2 WLR 848, at 877 [104]:

"There is always a risk that decisions on important points of law arising in individual cases will be affected by the way in which the individual parties, necessarily and quite properly for their own reasons, choose to present and conduct the case. That is in the nature of our system of case made law. Outsiders who are or may be faced with a similar dispute and simply wish to bolster the chances of one side or the other will not normally be permitted to intervene in someone else’s quarrel. But there are situations where outside intervention may be appropriate even in a private law case. For example, where there is likely to be a strong policy element in the decision, the perspective of bodies representative of the differing interests involved may be extremely helpful in enabling the court to strike the right balance between the various policy considerations." (Emphasis in original.)

76 Thirdly, just as joint submissions are sometimes made in civil penalty cases, there are circumstances in which a criminal court is faced with what amounts to a joint submission by prosecution and defence as to the appropriate sentence. Often these cases involve a convicted person who has rendered significant assistance to the authorities and seeks a reduced sentence on that account.

77 R v Gallagher (1991) 23 NSWLR 220 (NSW CCA) was such a case. There the Court of Criminal Appeal set aside the sentence imposed on an offender by the sentencing judge and thus had to re-sentence the offender. At trial, the Crown had accepted that the offender was entitled to a 50 per cent discount on his sentence by reason of the assistance he had rendered to the authorities. Gleeson CJ, with whom Meagher JA and Hunt J agreed, addressed (at 232) the role of the Court where the Crown supports a lenient sentence for an offender:

"In this State, as a general rule, justice, whether criminal or civil, is ordinarily administered in accordance with what is described as an adversary system. The rationale of that system is that the interests of justice will be best served if the result of a case is the outcome of a contest in which the opposing interests are fairly represented and forcefully advocated. Whatever might be the strengths and weaknesses of such a system, it gives rise to a special need for care in cases, which sometimes arise, where the court does not have before it two opposing interests and arguments. From time to time courts are confronted with situations in which both sides to the forensic contest are agreed upon a particular outcome, but where the parties do not between them necessarily represent all who have a concern with the result. In such a situation the adversary system does not work as it should, unless the court can find a contradictor. Judges ordinarily see this as calling for particular caution, because an important element of the procedure by which they are accustomed to administer justice is missing.

It is a common feature of cases where leniency is being sought on behalf of a person who has co-operated with the authorities that the argument in favour of such leniency comes from the Crown as well as the offender. The prosecuting authorities themselves have gained, or hope to gain, from the assistance in question, and it is understandable that they regard it as advancing the interests which they represent to see that such assistance is suitably and publicly rewarded. There is, however, usually no-one to put an opposing or qualifying point of view. This raises the need for special care on the part of the judge. The Court must be astute to ensure that it is being given accurate, reliable and complete information concerning the alleged assistance and the benefits said to flow from it. Public confidence in the administration of criminal justice would be diminished if courts were to give uncritical assent to arguments for leniency, which are being jointly urged by both the prosecution and the defence, in circumstances which may call for a close examination of the alleged assistance. Care must also be taken to ensure that the ultimate sentencing result that is produced is not one that is so far out of touch with the circumstances of the particular offence and the particular offender that, even understood in the light of the considerations of policy which support the principles set out above, it constitutes an affront to community standards. If sentencing principles are capable of producing an outcome of that kind, then that calls into question their legitimacy." (Emphasis added.)

78 Gleeson CJ expressed the view that the information available to the sentencing judge and the Court of Criminal Appeal as to the nature and extent of assistance provided by the offender was inadequate for the purpose of determining the appropriate degree of leniency that should be extended to him. His Honour listed the matter for further evidence and argument on the question of sentencing. It appears that the Court made no order requiring the parties, or either of them, to adduce further evidence, presumably reflecting the principle that, save in the most exceptional circumstances, it is for the prosecutor and the defence to decide whether a witness will be called: R v Apostilides [1984] HCA 38; (1984) 154 CLR 563, at 575, per curiam; Chow v Director of Public Prosecutions (1992) 28 NSWLR 593, at 605, per Kirby P, at 613, per Sheller JA. However, his Honour’s reasons clearly imply that if additional evidence were not forthcoming the Court would not necessarily be satisfied that the offender should receive the "agreed" discount: see, too, Chow v DPP, at 606, per Kirby P; Malvaso v The Queen [1989] HCA 58; (1989) 168 CLR 227, at 233, per Mason CJ, Brennan and Gaudron JJ (an agreement between the prosecutor and defence for the prosecutor to "stand mute" on sentence does not fetter the Court’s discretion to determine the appropriate punishment).

79 The position of the Court where prosecution and defence agree on the appropriate sentence, as laid down in R v Gallagher, has similarities to the position where regulator and contravenor jointly submit that a particular penalty should be imposed in a civil penalty case. Just as the criminal court will take into account the prosecution’s views on the appropriate sentence, so the court in the civil penalty case, as NW Frozen Foods explained, will take account of the regulator’s position. But in neither case is the court relieved from the responsibility of exercising its own judgment as to the appropriate sentence (in criminal cases), or whether the proposed penalty is within the appropriate range for the contravention (in civil penalty cases). In each case, the Court should be satisfied that it is being given accurate, reliable and complete information on critical questions. If not satisfied that it has sufficient information to support the "agreed" approach, the Court can request the parties to provide additional evidence or information. If that information or evidence is not provided, the Court might well decide that it should impose a different sentence or penalty from that proposed by the prosecution or regulator (as the case may be). And, whatever the position in criminal cases, in a civil penalty case where there is no contradictor, the Court may request assistance from an amicus curiae or a potential intervenor pursuant to FCR, O 6 r 17.

80 Finally, in our view, there would be little advantage to the parties in a civil penalty case limiting themselves to a joint submission on a range of pecuniary penalties, as distinct from a precise figure. The former is likely to be less helpful to the court than the latter. Weinberg J appears to have in mind that a range of penalties would allow for the "proper exercise of judicial discretion" (at [35]). A rather better way of reinforcing the Court’s responsibility to determine penalty is for the Court to scrutinise the material presented to it carefully, and satisfy itself that the information is sufficient to determine whether the proposed penalty is appropriate.

81 For these reasons, we do not think that the criticisms made of NW Frozen Foods warrant departing from the principles stated in that case, even if it were open to this Court to do so. Nor do we think that they warrant taking measures of the kind proposed in PIAC’s submissions. The Court has adequate powers to ensure that it discharges its statutory responsibilities appropriately.

CONCLUSION

82 Identifying separate questions for determination in proceedings often gives rise to doubts as to the precise meaning of the question. These are not always profitable to pursue.

83 An affirmative answer to the Question as framed may imply that a trial Judge is obliged to take the proposed penalty as the starting point for analysis and to limit himself or herself to inquiring whether that particular penalty is within the appropriate range. An affirmative answer to the Question may also imply that the trial Judge is bound to consider the proposed penalty simply on the basis of information provided by the parties. For the reasons we have given, neither of these propositions should be accepted.

84 In our view, the Question should be answered as follows:

"Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980 (Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?

Answer: No, but the reasons in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 discloses no error of principle.

85 It is appropriate to record the Court’s particular appreciation to the intervenors for their detailed and helpful submissions. Their submissions elucidated the issues and supplemented the submissions made on behalf of the Parties.

I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Branson, Sackville & Gyles.

Associate:

Dated: 30 March 2004

Counsel for the Applicant:	Ms M Painter
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Mr D Jackson QC with Mr M Speakman
Solicitor for the Respondent:	Blake Dawson Waldron
Counsel for the ACCC (intervening) Counsel for PIAC (intervening)	Mr A Robertson SC with Mr D Meltz Mr G Lindsay SC with Mr A Payne
Date of Hearing:	19 February 2004
Date of Judgment:	30 March 2004