Australian Competition & Consumer Commission v Tyco Australia Pty Ltd ACN 008 399 004 [2001] FCA 22 (18 January 2001)

Last Updated: 24 January 2001

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v

Tyco Australia Pty Ltd ACN 008 399 004

[2001] FCA 22

TRADE PRACTICES - penalty and injunctive relief imposed for breach of s 45 Trade Practices Act 1974 (Cth) where breach acknowledged by respondents and joint submissions lodged

Trade Practices Act 1974 (Cth), s 45

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 AND ORS

Q 239 OF 1999

DRUMMOND J

18 JANUARY 2001

BRISBANE

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

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant

AND:

TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 First Respondent GRINNELL ASIA PACIFIC PTY LIMITED T/as O'Donnell Griffin ACN 003 905 093 Second Respondent FFE BUILDING SERVICES LTD (formerly Chubb Building Services Ltd) (formerly James Hardie Building Services P/L) T/as Fire Fighting Enterprises ACN 000 067 541 Third Respondent PATRICK FIRE PROTECTION PTY LTD ACN 010 592 999 Fourth Respondent INDEPENDENT FIRE SPRINKLERS PTY LTD ACN 009 976 854 Fifth Respondent INDEPENDENT FIRE ALARMS PTY LTD ACN 009 705 720 Sixth Respondent ALLFIRE SYSTEMS PTY LTD ACN 010 713 149 Seventh Respondent THE ASSET GROUP (BRISBANE) PTY LTD (formerly Asset Fire and Security Pty Ltd) ACN 061 327 786 Eighth Respondent ASSOCIATED FIRE SYSTEMS PTY LTD ACN 010 404 770 Ninth Respondent ENTERPRISE FIRE PROTECTION PTY LTD ACN 010 595 212 Tenth Respondent ENTERPRISE FIRE PROTECTION ELECTRICS PTY LTD ACN 069 159 744 Eleventh Respondent FIREVAC PTY LTD ACN 010 607 379 Twelfth Respondent IMPACT FIRE PROTECTION PTY LTD ACN 006 615 452 Thirteenth Respondent PREMIER FIRE PROTECTION (QLD) PTY LTD ACN 050 410 636 Fourteenth Respondent TRIDENT FIRE PROTECTION PTY LTD ACN 010 243 811 Fifteenth Respondent SENSOR SYSTEMS (AUST) PTY LTD ACN 065 444 368 Sixteenth Respondent F & H PTY LTD (formerly Matthews Fire Alarm Pty Ltd) ACN 009 659 410 Seventeenth Respondent BURMESS PTY LTD T/as BEI Services ACN 010 623 677 Eighteenth Respondent RICHARD McCORMACK Nineteenth Respondent KENNETH EDWIN WALLER Twentieth Respondent KEVIN FISHER Twenty-First Respondent MATTHEW SPROULE Twenty-Second Respondent TERENCE MICHAEL McDONALD Twenty-Third Respondent RAYMOND EDWARD KING Twenty-Fourth Respondent MICHAEL JOHN LEWIS Twenty-Fifth Respondent DAVID JAMES CROSBY Twenty-Sixth Respondent TREVOR PATRICK Twenty-Seventh Respondent DEREK COOPER Twenty-Eighth Respondent ALEXANDER ROBERT THOMSON Twenty-Ninth Respondent GORDON EDMUND DAY Thirtieth Respondent ALLAN GEOFFREY MURRELL Thirty-First Respondent KERRY JOHN MOULDS Thirty-Second Respondent KEVYN RAYMOND ALLEN Thirty-Third Respondent JOHN EDMUND BARNEY Thirty-Fourth Respondent BRIAN GEOFFREY DAVIES Thirty-Fifth Respondent DAVID WELLMAND DOUYERE Thirty-Sixth Respondent DAVID WILLIAM KEMP Thirty-Seventh Respondent LESLIE JOHN BAILEY Thirty-Eighth Respondent EDWARD PETER GOLEMBA Thirty-Ninth Respondent MICHAEL WILD Fortieth Respondent STEVEN WALTER SPURR Forty-First Respondent CLINT LAWRENCE PRICKETT Forty-Second Respondent IAN JAMES TAYLOR Forty-Third Respondent WILLIAM JOHN LYNCH Forty-Fourth Respondent BRIAN GRAHAM STARKEY Forty-Fifth Respondent KENNETH BRIAN THOMSON Forty-Sixth Respondent EON WILLIAM RADLEY Forty-Seventh Respondent GREGORY JOHN BOURKE Forty-Eighth Respondent JOHN FRANKLIN PREECE Forty-Ninth Respondent ROY ERNEST TESCH Fiftieth Respondent DENNIS BRETT Fifty-First Respondent NIGEL STEPHEN REHBOCK Fifty-Second Respondent KENNETH NORMAN ROSE Fifty-Third Respondent NOEL ANTHONY MEYER Fifty-Fourth Respondent WILLIAM FRANCIS SHEEHAN Fifty-Fifth Respondent ALAN JOHN BLUNDELL Fifty-Sixth Respondent CHUBB AUSTRALIA LIMITED Fifty-Seventh Respondent CHUBB AUSTRALIA LIMITED First Cross-Claimant DIETOOL (WA) PTY LIMITED First Cross-Respondent JAMES HARDIE INDUSTRIES LIMITED Second Cross-Respondent

JUDGE:	DRUMMOND J
DATE OF ORDER:	18 JANUARY 2001
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. In respect of its contraventions of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth), and of its ancillary involvement in contraventions of those sections, alleged in paragraph 124 of the statement of claim, a penalty in respect of all contraventions which occurred after 30 September 1993, of $5,000,000 be imposed upon the third respondent.

2. The penalty of the third respondent is to be paid to the Commonwealth of Australia within thirty days of the date of this order.

THE COURT ORDERS BY CONSENT OF THE APPLICANT AND THE THIRD RESPONDENT THAT:

3. The third respondent be restrained, in Queensland, for a period of three years, whether by its directors, servants, agents, or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a) has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the third respondent is a party, that:

(i) the third respondent will not compete with another provider of fire sprinkler system installation services for the provision of those services to a particular person or class of persons; or

(ii) the third respondent will allow another provider of fire sprinkler system installation services to win any tender let by a third person for the provision of such services; or

(iii) another provider of fire sprinkler system installation services will allow the third respondent to win any tender let by a third person for the provision of such services; or

(b) has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire sprinkler system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

4. The third respondent be restrained, in Queensland, for a period of three years, whether by its directors, servants, agents or otherwise howsoever, from making, arriving at or giving effect to any contract or arrangement or understanding (other than an agreement to jointly tender for the provision of the services referred to in subparagraph (a) hereof; an agreement with a related entity; or an agreement in so far as it relates to the licensing or assignment of a trademark, patent, registered design, copyright or EL rights within the meaning of the Circuits Layouts Act 1989 (Cth)) which contains a provision that:

(a) has the purpose or effect or likely effect, whether by itself or together with another provision of any contract, arrangement or understanding to which the third respondent is a party, that

(i) the third respondent will not compete with another provider of fire alarm system installation services for the provision of those services to a particular person or class of persons; or

(ii) the third respondent will allow another provider of fire alarm system installation services to win any tender let by a third person for the provision of such services; or

(iii) another provider of fire alarm system installation services will allow the third respondent to win any tender let by a third person for the provision of such services; or

(b) has the purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for fire alarm system installation services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with one another to other persons.

5. The third respondent pay the applicant's costs of and incidental to these proceedings in the agreed amount of $200,000 within thirty days of the date of this order.

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

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

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant

AND:

TYCO AUSTRALIA PTY LTD (formerly Wormald Australia Pty Ltd) T/as Wormald Fire Systems ACN 008 399 004 First Respondent GRINNELL ASIA PACIFIC PTY LIMITED T/as O'Donnell Griffin ACN 003 905 093 Second Respondent FFE BUILDING SERVICES LTD (formerly Chubb Building Services Ltd) (formerly James Hardie Building Services P/L) T/as Fire Fighting Enterprises ACN 000 067 541 Third Respondent PATRICK FIRE PROTECTION PTY LTD ACN 010 592 999 Fourth Respondent INDEPENDENT FIRE SPRINKLERS PTY LTD ACN 009 976 854 Fifth Respondent INDEPENDENT FIRE ALARMS PTY LTD ACN 009 705 720 Sixth Respondent ALLFIRE SYSTEMS PTY LTD ACN 010 713 149 Seventh Respondent THE ASSET GROUP (BRISBANE) PTY LTD (formerly Asset Fire and Security Pty Ltd) ACN 061 327 786 Eighth Respondent ASSOCIATED FIRE SYSTEMS PTY LTD ACN 010 404 770 Ninth Respondent ENTERPRISE FIRE PROTECTION PTY LTD ACN 010 595 212 Tenth Respondent ENTERPRISE FIRE PROTECTION ELECTRICS PTY LTD ACN 069 159 744 Eleventh Respondent FIREVAC PTY LTD ACN 010 607 379 Twelfth Respondent IMPACT FIRE PROTECTION PTY LTD ACN 006 615 452 Thirteenth Respondent PREMIER FIRE PROTECTION (QLD) PTY LTD ACN 050 410 636 Fourteenth Respondent TRIDENT FIRE PROTECTION PTY LTD ACN 010 243 811 Fifteenth Respondent SENSOR SYSTEMS (AUST) PTY LTD ACN 065 444 368 Sixteenth Respondent F & H PTY LTD (formerly Matthews Fire Alarm Pty Ltd) ACN 009 659 410 Seventeenth Respondent BURMESS PTY LTD T/as BEI Services ACN 010 623 677 Eighteenth Respondent RICHARD McCORMACK Nineteenth Respondent KENNETH EDWIN WALLER Twentieth Respondent KEVIN FISHER Twenty-First Respondent MATTHEW SPROULE Twenty-Second Respondent TERENCE MICHAEL McDONALD Twenty-Third Respondent RAYMOND EDWARD KING Twenty-Fourth Respondent MICHAEL JOHN LEWIS Twenty-Fifth Respondent DAVID JAMES CROSBY Twenty-Sixth Respondent TREVOR PATRICK Twenty-Seventh Respondent DEREK COOPER Twenty-Eighth Respondent ALEXANDER ROBERT THOMSON Twenty-Ninth Respondent GORDON EDMUND DAY Thirtieth Respondent ALLAN GEOFFREY MURRELL Thirty-First Respondent KERRY JOHN MOULDS Thirty-Second Respondent KEVYN RAYMOND ALLEN Thirty-Third Respondent JOHN EDMUND BARNEY Thirty-Fourth Respondent BRIAN GEOFFREY DAVIES Thirty-Fifth Respondent DAVID WELLMAND DOUYERE Thirty-Sixth Respondent DAVID WILLIAM KEMP Thirty-Seventh Respondent LESLIE JOHN BAILEY Thirty-Eighth Respondent EDWARD PETER GOLEMBA Thirty-Ninth Respondent MICHAEL WILD Fortieth Respondent STEVEN WALTER SPURR Forty-First Respondent CLINT LAWRENCE PRICKETT Forty-Second Respondent IAN JAMES TAYLOR Forty-Third Respondent WILLIAM JOHN LYNCH Forty-Fourth Respondent BRIAN GRAHAM STARKEY Forty-Fifth Respondent KENNETH BRIAN THOMSON Forty-Sixth Respondent EON WILLIAM RADLEY Forty-Seventh Respondent GREGORY JOHN BOURKE Forty-Eighth Respondent JOHN FRANKLIN PREECE Forty-Ninth Respondent ROY ERNEST TESCH Fiftieth Respondent DENNIS BRETT Fifty-First Respondent NIGEL STEPHEN REHBOCK Fifty-Second Respondent KENNETH NORMAN ROSE Fifty-Third Respondent NOEL ANTHONY MEYER Fifty-Fourth Respondent WILLIAM FRANCIS SHEEHAN Fifty-Fifth Respondent ALAN JOHN BLUNDELL Fifty-Sixth Respondent CHUBB AUSTRALIA LIMITED Fifty-Seventh Respondent CHUBB AUSTRALIA LIMITED First Cross-Claimant DIETOOL (WA) PTY LIMITED First Cross-Respondent JAMES HARDIE INDUSTRIES LIMITED Second Cross-Respondent

JUDGE:	DRUMMOND J
DATE:	18 JANUARY 2001
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1 The proceedings as between the applicant and the third respondent, FFE Building Services Limited ("FFE"), arise out of conduct in contravention of Part IV the Trade Practices Act 1974 (Cth) engaged in by the third respondent and by officers of that organisation in the fire sprinkler and fire alarm markets in the South-East Queensland area. I have dealt with the general circumstances out of which the contraventions arise in earlier proceedings between the Commission and other parties involved in the contravening conduct.

2 It is sufficient to say that FFE, by its officers, played a major part in making and implementing the contravening arrangements in both fire protection markets. Throughout most of the relevant period, ie, up until November 1996, FFE was a subsidiary of James Hardie Industries Limited, the second cross-respondent, and thereafter a subsidiary of Chubb Australia Limited, the first cross-claimant. In the fire sprinkler market, though not in the fire alarm market, officers of FFE continued for about six months after the change of ownership to engage in the contravening conduct.

3 FFE throughout the relevant period was a major participant in both markets, holding approximately 15% to 20% of the market in the first, and about 15% of the market in the second of the two markets I have referred to. Senior officers of FFE were involved throughout the period in respect of which the contraventions occurred in organising and in attending meetings. Most of those persons have already been dealt with in earlier proceedings.

4 The resolution of the Commission's claims against FFE has been complicated, at least for a time, by the change in ownership to which I have referred. However, it is apparent from the joint submissions that arrangements have now been agreed between James Hardie Industries Limited and Chubb Australia Limited in respect of the sharing of the pecuniary penalty and costs orders which it is proposed the Court should make against FFE. On the face of things, without being informed of the exact details of the arrangements, since I am told that James Hardie Industries Limited will be responsible for meeting a substantial part of the penalty and the costs, the proposal for a pecuniary penalty of $5,000,000 to be paid by FFE seems to me to be an appropriate order.

5 I will make, by consent, orders in terms of the draft which is annexure C to exhibit 1 before me today, orders which include the pecuniary penalty of $5,000,000, costs of $200,000 and the various injunctions set out therein.

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.

Associate:

Dated: 18 January 2001

Counsel for the Applicant:	Mr K Wilson
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Third Respondent:	Mr W Muddle
Solicitor for the Third Respondent:	Hunt & Hunt Lawyers
Date of Hearing:	18 January 2001
Date of Judgment:	18 January 2001