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Roof tiling business fined as part of ACCC crackdown on cartel conduct
The Federal Court has ordered two Sydney suppliers of slate roofing services and the sole directors of each business to pay penalties totalling $420,000 for engaging in cartel conduct.
Jess Feyder
The court proceedings were brought by the Australian Competition and Consumer Commission (ACCC) and follow a recent announcement from ACCC chair Gina Cass-Gottlieb, that enforcing cartel laws remains an enduring priority.
The court declared that First Class Slate Roofing (First Class), RAD Roofing Specialists (trading as Mr Shingles), and their respective sole directors Scott Barton and Damian Hand, engaged in bid rigging of two slate roofing projects in Sydney in 2019.
The projects were for Wesley College at the University of Sydney and a residential project in Sydney’s Bellevue Hill.
The businesses admitted that the purpose of the Wesley College tender bid-rigging arrangement was to make First Class more likely than Mr Shingles to win the tender to supply and install slate roofing at Wesley College.
Mr Shingles and another competing business each agreed with First Class to submit higher prices in exchange for cash payment from First Class.
First Class and Mr Shingles were also found to have engaged in bid rigging for a residential building project in Sydney’s Bellevue Hill, where the purpose was to ensure that Mr Shingles would be more likely than First Class to be the successful tenderer.
First Class ultimately won the Wesley College tender, and Mr Shingles eventually won the tender for the residential Bellevue Hill project.
First Class accepted that, through Mr Barton, it initiated the bid-rigging conduct on each occasion.
“The court accepted that First Class, Mr Shingles and their respective sole directors engaged in deliberate conduct that involved aspects of falsification and concealment,” ACCC commissioner Liza Carver said.
“It was also accepted that these businesses and their directors benefited from the cartel conduct which had the effect of denying their customers the benefit of genuine competitive tender offers, including the opportunity to attempt to negotiate a lower contract price for the roofing services that were provided.
“Cartel conduct, including bid rigging as was engaged in by these firms and individuals, distorts and corrupts the competitive process and denies customers the benefits of fair competition.
“Cartel conduct is an enduring compliance and enforcement priority for the ACCC.”
First Class was ordered to pay penalties of $280,000, and Mr Barton was ordered to pay $60,000 in penalties.
Mr Shingles was ordered to pay penalties of $65,000, and Mr Hand was ordered to pay $15,000 in penalties.
The court considered that these penalties were appropriate after receiving submissions about the personal and financial circumstances of each of the parties, including the two individuals involved.
The companies and their directors are also subject to injunctions, restraining each of them for three years from engaging in bid rigging conduct for the supply, installation, maintenance, or repair of roofing.
The court also ordered Mr Barton and Mr Hand to publish an educative notice to members of the Roofing Industry Association of NSW Incorporated about their unlawful conduct and to participate in education or training programs on competition law.
First Class and Mr Barton, and Mr Shingles and Mr Hand, made joint submissions to the court on penalties and consented to the other orders made by the court.
