The Federal Court has today 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, following court proceedings brought by the ACCC.
The Court declared that First Class Slate Roofing Pty Ltd (First Class), RAD Roofing Specialists Pty Ltd (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, one at the Wesley College at the University of Sydney and the other 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 a cash payment from First Class.
First Class and Mr Shingles were found to have also engaged in bid rigging in relation to a tender 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 its director Scott 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,” Ms Carver said.
“For this reason, cartel conduct is an enduring compliance and enforcement priority for the ACCC.”
First Class was ordered to pay penalties of $280,000, and its director Scott Barton was ordered to pay $60,000 in penalties. Mr Shingles was ordered to pay penalties of $65,000, and its director Damian 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 as well as participate in education or training programs in 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.
Note
Bid rigging occurs when two or more competitors agree they will not compete genuinely with each other for tenders, making it more likely that one of the cartel members will ‘win’ the tender over the others. Participants in a bid rigging cartel may take turns to be the ‘winner’ by agreeing about the way they submit tenders, including some competitors agreeing not to tender.
More information on bid rigging can be found on the ACCC’s website at Bid rigging
The ACCC investigates cartel conduct and takes civil cartel proceedings in the Federal Court.
Anyone with information about cartel conduct, including in the construction industry, is urged to call the ACCC Cartel Hotline on (02) 9230 3894. You can also report cartel conduct anonymously.
Background
First Class provides construction, replacement and repair of slate roofs for residential, commercial and heritage buildings. It is based in Sydney and provides these services to customers including universities and schools.
Mr Shingles provides construction, replacement and repair of slate roofs for residential, commercial and heritage buildings. It is based in Sydney.
The project at Wesley College involved the re-roofing of the Wesley College’s main roof.
The Bellevue Hill project involved slate roofing works on a residential building in Bellevue Hill in Sydney in around September 2019.
Slate roofing is common in older buildings, such as universities, schools and church buildings. The installation and repair of slate roofing requires specialised skill and labour.
