The Australian Competition and Consumer Commission today announced that it has discontinued proceedings against ABC Learning Centres for breach of court enforceable undertakings.
The ACCC filed proceedings against ABC in the Federal Court for breach of undertakings given by ABC to the ACCC under section 87B of the Trade Practices Act 1974, alleging failure to divest certain childcare centres, interference with an agent appointed to sell the centres and failure to manage and operate the centres in accordance with the terms of the undertaking.
Since the ACCC filed the proceedings, the child care centres that were the subject of the proceedings have been sold under the process set out in the undertaking to the satisfaction of the ACCC.
Following the divestiture of the centres, the ACCC and ABC sought to agree a negotiated settlement relating to the other remedies the ACCC sought in its proceedings. The objective of the negotiation was to ask the court to dispose of the remaining issues in the proceedings without the need for a contested hearing. ABC entered into voluntary administration before effect could be given to any negotiated agreement.
In light of the fact that the centres have been sold and the fact of ABC's administration, the ACCC sees no utility in pursuing ABC for further relief and has sought and been granted leave of the court to discontinue the proceedings. As the competition concerns relating to the matter have been satisfactorily dealt with, the state of the industry makes it unnecessary and unhelpful for the ACCC to pursue the proceedings, including any order as to costs.
"The ACCC is satisfied that the harm that arose as a consequence of ABC's failure to honour its undertaking obligations has been largely addressed by the fact that the centres concerned have now been sold," ACCC Chairman, Mr Graeme Samuel, said today.
"Negotiations with ABC to settle the proceedings sought to resolve the remaining issues in the proceedings to the ACCC's satisfaction. However, given the extraordinary circumstances of ABC's voluntary administration, the ACCC is of the view that further pursuit of litigation would not be to the benefit of competition in the child care industry."
"The ACCC's proceedings against ABC should be regarded as a signal to the business community that the ACCC takes the undertakings it receives extremely seriously and is prepared to vigorously prosecute any breaches of those undertakings. The ACCC remains disappointed that the institution of proceedings was required to ensure the sale of the child care centres ABC promised to sell," Mr Samuel said.
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