ACCC v BAJV: Full Federal Court Decision allows ACCC Appeal and BAJV Cross-Appeal

The Full Court of the Federal Court of Australia has allowed an appeal by the Australian Competition and Consumer Commission (ACCC) from penalty orders made by Justice Marshall on 8 July 2013 against the former Tasmanian Europcar franchisee, BAJV Pty Ltd (BAJV), and BAJV director Brendon Ayers. The Full Court also allowed a cross-appeal by BAJV and Mr Ayers as to costs. See ACCC v BAJV Pty Ltd [2014] FCAFC 52 (2 May 2014).

Justice Marshall had ordered BAJV to pay civil pecuniary penalties totalling $200,000 for engaging in unconscionable conduct and making false or misleading misrepresentations in relation to overcharging customers for hire vehicle repair costs and failing to refund overcharged customers. Mr Ayers was also ordered to pay civil pecuniary penalties of $40,000 for being knowingly concerned in the conduct.

The ACCC appealed against the quantum of the penalties imposed by Justice Marshall on a number of grounds, including that the judge had made an error of law by discounting the penalties imposed on BAJV and Mr Ayers because he considered that the ACCC should have taken a more proactive role in responding to the respondents’ lawyers invitation to meet for discussions before instituting proceedings.

The Full Court held that Justice Marshall had erred by taking into account the ACCC’s failure to respond to a letter from the lawyers for BAJV and Mr Ayers before commencing the proceedings in the assessment of penalties. In this regard, the Full Court accepted the ACCC’s submission that in the circumstances of this case it was not open to the primary judge to reduce the penalty that would otherwise have been appropriate because the ACCC did not engage in negotiations with the respondents before commencing its proceeding.

Consequently, the Full Court increased the penalty ordered against BAJV from $200,000 to $220,000, and increased the penalty ordered against Mr Ayers from $40,000 to $44,000.

The ACCC’s other grounds of appeal were dismissed. The Full Court also allowed BAJV’s cross-appeal on costs, and reduced the costs that the ACCC is entitled to recover by 15 percent, to 85 percent of its costs.

The Full Court made no order as to the costs of the appeal or the cross-appeal.

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Media Release NR 103/14

ACCC v BAJV Pty Ltd [2014] FCAFC 52 (2 May 2014)