Justice Heerey of the Federal Court, recently handed down judgment in the seminal cartel case of the ACCC vs Visy Industries and others.
The case was the first major test of the ACCC's immunity policy. Amcor and its former directors and officers were granted immunity from action by the ACCC as a result of Amcor reporting the cartel to the ACCC and cooperating in the conduct of the proceeding. The proceedings were against several Visy companies, the chairman and owner of the Visy Group, Mr Richard Pratt, the CEO of the relevant Visy company, Mr Harry Debney and the former general manger of that company, Mr Rod Carroll.
Amcor was granted immunity notwithstanding that its CEO, Mr Russell Jones, was aware of and effectively authorised the cartel to operate for four years prior to it being reported to the ACCC. Moreover, on the ACCC's account of the contravening conduct, it was not clear whether Amcor or Visy was the 'ringleader'. The ACCC's immunity policy states that immunity will not be granted to a cartel ringleader.
During the interlocutory stages of the proceeding, Visy unsuccessfully sought access to documents provided to the ACCC by Amcor in connection with Amcor's immunity application and records of interview and other investigative material compiled by the ACCC. Justice Heerey held that the documents were either not relevant to the matters in issue between the ACCC and Visy or were privileged. This was because at the time they were brought into existence, proceedings by the ACCC against Visy were reasonably anticipated.
Ultimately Visy and the other respondents consented to Justice Heerey making declarations of contravention and making orders for pecuniary penalties, injunctions and compliance measures. The pecuniary penalty for the relevant Visy company of $36 million was an Australian record – more than double the highest pecuniary penalty previously imposed for cartel conduct of $15 million. The individual penalties for Messrs Debney and Carroll of $1.5 million and $500,000 were also multiples of the highest award previously made against an individual of $225,000. The level of the penalties reflected the clandestine nature of the cartel, the breadth of its operation and the period of its duration (four years).
No pecuniary penalty was imposed personally on Mr Pratt. Justice Heerey evidently accepted that no purpose was served by imposing a separate penalty on him, given that he owns, or at least partly owns, the relevant Visy company which is to pay the penalty of $36 million.
It remains to be seen to what extent the findings of Justice Heerey can be used against Amcor and Visy in the class action which has been taken against them on behalf of customers who spent more than $100,000 on corrugated fibreboard packaging products in the 2000 to 2005 period. Moreover, proceedings in similar form to those brought by the ACCC have been commenced in New Zealand by the Commerce Commission.
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