Federal Court declares WA commercial air conditioning companies engaged in cartel conduct
The Federal Court in Perth has declared by consent that Admiral Mechanical Services Pty Ltd, Direct Engineering Pty Ltd, Envar Engineers and Contractors Pty Ltd, and Scott Mechanical Services Pty Ltd contravened section 45 of the Trade Practices Act 1974.
The court found the companies had engaged in price-fixing and other cartel conduct with competing commercial and industrial air-conditioning and mechanical services contractors with respect to tender prices to be submitted by them for the supply of those services in relation to particular projects in Western Australia. The court also declared that six individuals were directly or indirectly knowingly concerned in, or party to, the contraventions.
The court also made orders restraining the companies and individuals involved from engaging in similar conduct in the future and requiring them to implement appropriate compliance measures.
Justice Nicholson has reserved his decision on the appropriate pecuniary penalties to impose on three companies and four individuals. The ACCC did not seek pecuniary penalties against Envar Engineers and Contractors Pty Ltd and two individuals.
Similar allegations against 13 other companies and 16 individuals have yet to be heard. The court has scheduled further hearings in December 2005.
The Australian Competition and Consumer Commission began proceedings in the Federal Court in Perth on 17 December 2004 against 17 companies and 22 individuals for alleged cartel activity in the commercial and industrial air conditioning and mechanical services industry in Western Australia.
Amongst other things, the ACCC alleged that the companies breached s45 of the Trade Practices Act 1974 by entering into arrangements or understandings which involved some or all of the various parties agreeing which company amongst them would submit the lowest tender price for particular commercial projects let for tender. It is further alleged that the companies gave effect to the agreements by way of the provision and acceptance of 'cover' prices. It is alleged the conduct generally involved the supply and installation of air conditioning and mechanical services on major construction projects, both private and public. It is also alleged that the conduct took place up until around 2003 and that some of the companies had been engaging in the conduct since the early nineties.
