Australian Competition and Consumer Commission v Auspine Limited [2006] FCA 1215

Australian Competition and Consumer Commission v Auspine Limited [2006] FCA 1215

The Court refused to accept the undertakings proffered and to make the orders sought, as some proposed undertakings either went beyond power, failed to have a sufficient nexus to the alleged contravening conduct, were not in sufficiently clear or mandatory terms, or inappropriately delegated definition of substantive obligations to third parties. Undertakings to 'consider' compliance measures are only permissible if the obligation to consider is mandatory, and the major features of any compliance program must be defined rather than left to a third party. Parties were granted liberty to apply so that acceptable undertakings could be proposed.

Parties
Applicant: Australian Competition and Consumer Commission; First Respondent: Auspine Limited (ACN 004 289 730); Second Respondent: Francis Gerald McDonald; Third Respondent: Geo J Bone & Sons Pty Ltd (ACN 007 872 184); Fourth Respondent: Andrew Howard Bone; Fifth Respondent: JAG Timber Products Pty Ltd (ACN 007 264 717); Sixth Respondent: Gary Gordon Daniel
Jurisdiction
Australia
Judgment Date
07 September 2006
Procedural Posture
Civil Proceeding / Application to Accept Undertakings and Make Orders Following Settlement Negotiations
Outcome
Application for making of orders and acceptance of undertakings refused. Liberty to apply granted.
Legal Topics
Enforcement Remedies, Court's Power to Accept Undertakings, Injunctions Under Trade Practices Act, Trade Practices Compliance Program, Appropriate Nexus for Undertakings, External Audit in Compliance Programs
Competition Law Consumer Law Enforcement Remedies Court's Power to Accept Undertakings Injunctions Under Trade Practices Act Trade Practices Compliance Program Appropriate Nexus for Undertakings External Audit in Compliance Programs

Case Brief

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Parties

Australian Competition and Consumer Commission

Applicant

Auspine Limited (ACN 004 289 730)

First Respondent

Francis Gerald McDonald

Second Respondent

Geo J Bone & Sons Pty Ltd (ACN 007 872 184)

Third Respondent

Andrew Howard Bone

Fourth Respondent

JAG Timber Products Pty Ltd (ACN 007 264 717)

Fifth Respondent

Gary Gordon Daniel

Sixth Respondent

Procedural Posture

Civil Proceeding / Application to Accept Undertakings and Make Orders Following Settlement Negotiations

Legal Issues

  1. 1 Does the Federal Court have the power to accept the undertakings proffered by the respondents under the Trade Practices Act?
  2. 2 Are the proposed undertakings appropriate, having regard to the nexus with the alleged contravening conduct, the certainty and enforceability of their terms, and the limitations on Court power?
  3. 3 Is it permissible or appropriate to include obligations in undertakings to ‘consider’ a course of action or to delegate major compliance obligations to a third party?

Ratio Decidendi

The Court refused to accept the undertakings proffered and to make the orders sought, as some proposed undertakings either went beyond power, failed to have a sufficient nexus to the alleged contravening conduct, were not in sufficiently clear or mandatory terms, or inappropriately delegated definition of substantive obligations to third parties. Undertakings to 'consider' compliance measures are only permissible if the obligation to consider is mandatory, and the major features of any compliance program must be defined rather than left to a third party. Parties were granted liberty to apply so that acceptable undertakings could be proposed.

Court Disposition

Application for making of orders and acceptance of undertakings refused. Liberty to apply granted.

Orders

  • The application by the applicant and the respondents for the making of orders and the acceptance of undertakings be refused.
  • The applicant and the respondents have liberty to apply.