Australian Competition and Consumer Commission v ACM Group Limited

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Counsel for the Applicants: Ms K Richardson SC with Ms V R Brigden

Solicitor for the Applicants: Corrs Chambers Westgarth

Counsel for the Respondent: Mr S G Finch SC with Mr A R Zahra

Solicitor for the Respondent: Sparke Helmore Lawyers

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION First Applicant

JUDGE: GRIFFITHS J DATE OF ORDER: 21 DECEMBER 2018

PENAL NOTICE TO: ACM GROUP LIMITED IF YOU (BEING THE PERSON BOUND BY THESE ORDERS): (A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR (B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO, YOU OR YOUR PROPER OFFICER, AS THE CASE MAY REQUIRE, WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR PUNISHMENT FOR CONTEMPT. ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. THE COURT ORDERS THAT: Injunctions

1. Pursuant to s 232 of the Australian Consumer Law the respondent is restrained, whether by itself, its servants, agents or otherwise howsoever, from engaging in the misleading and deceptive conduct of the nature described in declaration 1 of the declarations made 21 August 2018 in the future.
2. Pursuant to s 232 of the Australian Consumer Law the respondent is restrained, whether by itself, its servants, agents or otherwise howsoever, from using undue harassment of debtors of the nature described in declaration 2 of the declarations made 21 August 2018 in the future.
3. Pursuant to s 232 of the Australian Consumer Law the respondent is restrained, whether by itself, its servants, agents or otherwise howsoever, from using coercion of debtors of the nature described in declaration 3 of the declarations made 21 August 2018 in the future.
4. Pursuant to s 232 of the Australian Consumer Law the respondent is restrained, whether by itself, its servants, agents or otherwise howsoever, from engaging in conduct that is in all the circumstances unconscionable of the nature described in declaration 4 of the declarations made 21 August 2018 in the future. Publication order
5. Pursuant to s 246(2)(a), (b), (c) and/or (d) of the Australian Consumer Law, the respondent is directed to prominently publish the notice in the form of Annexure A on its internet homepage for a period of six months. Pecuniary penalties
6. Pursuant to s 224(1)(a)(i) and s 224(1)(a)(ii) of the Australian Consumer Law, within 30 days of the date of this order, the respondent pay to The Australian Competition and Consumer Commission for and on behalf of the Commonwealth of Australia (s 6A(4) of the Competition and Consumer Act 2010 (Cth)) a pecuniary penalty in the amount of $750,000. Compliance Program orders
7. Within 90 days of the date of this order, the respondent establish the Compliance Program set out in Annexure B to these Orders for its employees, its agents or other persons involved in its business, being a program designed to: (a) ensure their awareness of the responsibilities and obligations in relation to the conduct declared by the Court in this proceeding to be in contravention of ss 18, 21 and 50 of the Australian Consumer Law and any similar or related conduct; and (b) revise the internal operations of its business which led to it engaging in the conduct declared by the Court in this proceeding to be in contravention of ss 18, 21 and 50 of the Australian Consumer Law.
8. The respondent: (a) maintain and administer, at its own expense, the Compliance Program set out in Annexure B to this Application for a period of five years; and (b) provide, at its own expense, a copy of any documents to be provided to the ACCC pursuant to Annexure B. Costs
9. The respondent pay the first applicant's costs. Further Order
10. A copy of the reasons for judgment dated 30 July 2018 and these reasons for judgment, with the seal of the Court affixed thereon, is retained on the Court file for the purposes of s 137H(3) of the Competition and Consumer Act 2010 (Cth). Date: 21 December 2018 Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. Annexure A ORDER 5: FORM OF NOTICE CORRECTIVE NOTICE ORDERED BY THE FEDERAL COURT OF AUSTRALIA [insert ACM logo] Following action by the Australian Competition and Consumer Commission, the Federal Court of Australia has declared that ACM Group Ltd (ACM) engaged in undue harassment and coercion and misleading or deceptive and unconscionable conduct in its dealings with two consumers in the course of its business of debt collection. The Federal Court has ordered ACM to pay pecuniary penalties in the amount of $750,000, establish a compliance program and publish this notice. Between 29 April 2011 and 12 June 2015, ACM made the following representations to one consumer: (a) that ACM intended shortly to commence legal proceedings against a debtor to recover its debt it if was not paid within 48 hours, when it did not intend to do so; and (b) that ACM intended shortly to commence legal proceedings against a debtor to recover its debt it if was not paid within 7 days, when it did not intend to do so. On 3 September 2014, ACM made the following representations to one consumer: (c) that ACM had commenced preparing the documents that would be used for potential legal action against a debtor, when at the time of making the representation on 3 September 2014 it had not; (d) that ACM was planning for a summons to be drawn, issued and served upon a debtor soon to recover the debt in full, when it was not planning to do so and/or did not have reasonable grounds for saying that; and (e) that if a default was listed upon a debtor's credit file, the debtor would not be able to obtain credit for the next five to seven years, where ACM did not have reasonable grounds for saying that. The Court found that these representations were misleading and deceptive. The Court also found that on 3 September 2014 ACM had engaged in coercion by making the representations at (c), (d) and (e) to one consumer. In that same period, ACM sent repeated letters demanding payment and threatening legal proceedings to one consumer, who was suffering from a serious medical condition, was unable to pay, and had difficulty communicating. ACM also made repeated telephone calls to the care facility where the debtor resided, in an attempt to recover the debt. The Court found that ACM's conduct towards this consumer constituted undue harassment. The Court found that ACM acted unconscionably by reason of its conduct towards the two consumers. The Federal Court of Australia also permanently restrained ACM from making the misleading representations described above, from using undue harassment and coercion of debtors in the nature described above and from engaging in unconscionable conduct of the nature described above. If you have been affected by this type of conduct, and you wish make a complaint to ACM, details of how to do so can be found here:

Annexure B ORDERS 7 & 8: REQUIREMENTS FOR COMPLIANCE PROGRAM ACM GROUP LIMITED (ACM) will (to the extent that it has not already done so as at the date of the making of these orders) establish a Compliance Program (Compliance Program) that complies with each of the following requirements: Appointments 1 Within one month of the Court's order (if not already done), ACM will appoint a director or a senior manager with suitable qualifications or experience in corporate compliance as a Compliance Officer with responsibility for ensuring the Compliance Program is effectively designed, implemented and maintained (the Compliance Officer). 2 Within two months of 1 February 2019 or the Court's order (whichever is later), ACM will appoint a suitably qualified, external, compliance professional with expertise in consumer law (the Compliance Advisor). 3 ACM will instruct the Compliance Advisor to conduct a consumer law risk assessment within two months of being appointed as the Compliance Advisor (Risk Assessment). 4 ACM will use its best endeavours to ensure that the Risk Assessment covers the following matters, to be recorded in a written report (Risk Assessment Report): 4.1 identifies the areas where ACM is at risk of breaching ss 18, 21 and 50 of the Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA); 4.2 assesses the likelihood of these risks occurring; 4.3 identifies where there may be gaps in ACM's existing procedures for managing these risks; and 4.4 provides recommendations for any action to be taken by ACM having regard to the above assessment. Compliance Policy 5 ACM will, within 90 days of the date of appointment of the Compliance Advisor, issue a policy statement outlining ACM's commitment to compliance with the CCA (the Compliance Policy), to the extent that ACM has not already done so in ACM's Regulatory Compliance Policy (ACM Company Policy: CPO-303, Version 2.0 (April 2018)). 6 ACM will ensure that the Compliance Policy: 6.1 contains a statement of commitment to compliance with the CCA; 6.2 contains an outline of how commitment to CCA compliance will be realised within ACM; 6.3 adheres to the guidelines for debt collectors set out in the document jointly produced by the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission entitled "Debt collection guideline: for collectors and creditors" dated July 2015, and ACM's Customer Contact Policy (ACM Company Policy: CPO-207, Version 2.0 (September 2018)); 6.4 contains a requirement for accurate, complete and up-to-date records of all communications with debtors be kept, including the time, date and nature of calls about the debt, records of any visits in person and records of all correspondence sent (including copies thereof) and that audio recordings of all phone calls be made, with such records to be kept for a period of two years; 6.5 contains a requirement for all staff to report any Compliance Program related issues and CCA compliance concerns to the Compliance Officer; 6.6 contains a guarantee that whistle blowers with consumer law compliance concerns will not be prosecuted or disadvantaged in any way and that their reports will be kept confidential and secure; and 6.7 contains a clear statement that ACM will take action internally against any persons who are knowingly or recklessly concerned in a contravention of the CCA and will not indemnify them in the event of any court proceedings in respect of that contravention. Complaints Handling System 7 ACM will ensure that the Compliance Program includes a consumer law complaints handling system capable of identifying, classifying, storing and responding to consumer law complaints (the Complaints Handling System). 8 ACM will use its best endeavours to ensure this system is consistent with AS/ISO 10002:2006 Customer satisfaction - Guidelines for complaints handling in organizations, tailored as required to ACM's circumstances. 9 ACM will ensure that staff and customers are made aware of the Complaints Handling System. Whistle blower Protection 10 ACM will ensure that the Compliance Program includes whistle blower protection mechanisms to protect those coming forward with consumer law complaints. 11 ACM will use its best endeavours to ensure that these mechanisms are consistent with AS 8004:2003 Whistleblower protection programs for entities, tailored as required to ACM's circumstances. Staff and Agent Training 12 ACM will ensure that the Compliance Program provides for regular (at least once a year) training for all directors, officers, employees, representatives and agents of ACM, whose duties could result in them being concerned with conduct that may contravene ss18, 21 and 50 of the CCA. 13 ACM must ensure that the training is conducted by a suitably qualified compliance professional or legal practitioner with expertise in consumer law. 14 ACM will ensure that the Compliance Program includes a requirement that awareness of consumer compliance issues forms part of the induction of all new directors, officers, employees, representatives and agents, whose duties could result in them being concerned with conduct that may contravene ss 18, 21 and 50 of the CCA. Reports to Board/Senior Management 15 ACM will ensure that the Compliance Officer reports to the Board and/or senior management every six months on the continuing effectiveness of the Compliance Program. Compliance Review 16 ACM will, at its own expense, either: (a) cause an annual review of the Compliance Program (the Review) to be carried out in accordance with clauses 16.1, 16.2, 16.3 and 16.4 below; or (b) implement its own annual internal audit program (Internal Audit): (i) each year for five years after the Court's order; (ii) to be carried out by an auditor who is not the Compliance Officer; (iii) which satisfies the ISO9001:2015 certification; and (iv) allows for the production of Compliance Reports detailed at paragraph 17 below. 16.1 Scope of Review- the Review should be broad and rigorous enough to provide ACM and the ACCC with: (a) a verification that ACM has in place a Compliance Program that complies with each of the requirements detailed in paragraphs 1 - 15 above; and (b) the Compliance Reports detailed at paragraph 17 below. 16.2 Independent Reviewer - ACM will ensure that each Review is carried out by a suitably qualified, independent compliance professional with expertise in consumer law (the Reviewer). ACM is to provide the name of the Reviewer to the ACCC at least thirty days prior to the commencement of each Review. The Reviewer will qualify as independent on the basis that he or she: (a) did not design or implement the Compliance Program; (b) is not the Compliance Advisor; (c) is not a present or past staff member or director of ACM; (d) has not acted and does not act for, and does not consult and has not consulted to, ACM in any consumer law related matters, other than performing Reviews under this Order; and (e) has no significant shareholding or other interests in ACM. 16.3 Evidence - ACM will use its best endeavours to ensure that each Review is conducted on the basis that the Reviewer has access to all relevant sources of information in ACM's possession or control, including without limitation: (a) a random sample of debtors' files and phone calls, such sampling to be conducted by the Reviewer; (b) the ability to make enquiries of any officers, employees, representatives and agents of ACM; (c) documents relating to the Risk Assessment, including the Risk Assessment Report; (d) documents relating to ACM's Compliance Program, including documents relevant to ACM's Compliance Policy, Complaints Handling System, Staff Training and induction program; and (e) any reports made by the Compliance Officer to the Board or senior management regarding ACM's Compliance Program. 16.4 ACM will ensure that a Review is completed within one year of the Court's order, and that subsequent Reviews are completed within two years, three years, four years and five years of the Court's order respectively. Compliance Reports 17 ACM will use its best endeavours to ensure that within 30 days of the completion of a Review, or the Internal Audit, as ACM elects, the Reviewer or Internal Auditor includes the following findings of the Review or Internal Audit in a report provided to ACM, (the Compliance Report): 17.1 whether the Compliance Program of ACM includes all the elements detailed in paragraphs 1 - 14 above, and if not, what elements need to be included or further developed; 17.2 whether ACM representatives have been adequately identifying vulnerable and disadvantaged debtors; 17.3 the degree to which ACM representatives have been appropriately dealing with vulnerable and disadvantaged debtors; 17.4 whether any references made to proposed legal action in communications with debtors have a factual basis, by reference to what ACM has done, or actually plans to do; 17.5 whether the Compliance Program adequately covers the parties and areas identified in the Risk Assessment, and if not, what needs to be further addressed; 17.6 whether the Staff Training and induction is effective and if not, what aspects need to be further developed; 17.7 whether ACM's Complaints Handling System is effective and if not, what aspects need to be further developed; 17.8 whether ACM is able to provide confidentiality and security to consumer law whistle blowers, and whether staff are aware of the whistle blower protection mechanisms; 17.9 whether there are any material deficiencies in ACM's Compliance Program, or whether there are or have been any instances of material non-compliance with the Compliance Program, (Material Failure), and if so, recommendations for rectifying the Material Failure/s1. ACM response to Compliance Reports 18 ACM will ensure that the Compliance Officer, within 14 days of receiving any Compliance Report: 18.1 provides the Compliance Report to the Board or relevant governing body; 18.2 where a Material Failure1 has been identified in the Compliance Report, provides a report to the Board or relevant governing body identifying how ACM can implement any recommendations made by the Reviewer or Internal Auditor in the Compliance Report to rectify the Material Failure. 19 ACM will implement promptly and with due diligence any recommendations made by the Reviewer or Internal Auditor in the Compliance Report. 20 Steps [18] to [19] will be incorporated into the Compliance Policy. Reporting Material Failures to the ACCC 21 Where a Material Failure has been identified by the Reviewer or Internal Auditor in the Compliance Report, ACM will: 21.1 provide a copy of that Compliance Report to the ACCC within 30 days of the Board or relevant governing body receiving the Compliance Report; and 21.2 inform the ACCC of any steps that have been taken to implement the recommendations made by the Reviewer or Internal Auditor in the Compliance Report; or 21.3 otherwise outline the steps ACM proposes to take to implement the recommendations and will then inform the ACCC once those steps have been implemented. Provision of Compliance Program documents to the ACCC 22 ACM will maintain a record of and store all documents relating to and constituting the Compliance Program for a period not less than 5 years. 23 If requested by the ACCC during the period of 5 years following the Court's order, ACM will, at its own expense, cause to be produced and provided to the ACCC copies of all documents constituting the Compliance Program, including: 23.1 the Compliance Policy; 23.2 the Risk Assessment Report; 23.3 an outline of the Complaints Handling System; 23.4 Staff Training materials and induction materials; 23.5 all Compliance Reports that have been completed at the time of the request; 23.6 copies of the reports to the Board and/or senior management referred to in paragraphs 15 and 17. ACCC Recommendations 24 ACM will implement promptly any reasonable recommendations that the ACCC may make to ensure that ACM maintains and continues to implement the Compliance Program in accordance with the requirements of this Order. Administering the Compliance Program 25 If any aspect of the Compliance Program becomes the subject of a need for change or amendment (for example, due to difficulties in the course of administering the Compliance Program), the parties have liberty to approach each other to seek to agree any necessary changes. If the parties cannot agree, the parties have liberty to approach the Court for an amendment to the Compliance Program.

GRIFFITHS J: ACM'S CONTRAVENING CONDUCT [3] A INJUNCTIONS [7] (a) Summary of the parties' submissions on injunctive relief [13] (b) Consideration and determination on injunctive relief [17] B PECUNIARY PENALTIES [18] (a) Summary of the parties' submissions on pecuniary penalties [42] (i) The ACCC [42] (ii) ACM [53] (b) Consideration and determination of pecuniary penalties [84] (i) The nature and extent of the contravening conduct and of any loss or damage suffered as a result of that conduct (ACL s 224(2)(a)) [85] (ii) The circumstances in which the contravening conduct took place (ACL s 224(2)(b)) [92] (iii) Previous adverse findings (ACL s 224(2)(c)) [93] (iv) The size of ACM and its financial position [95] (v) The deliberateness of the contraventions and the period over which they extended [97] (vi) Whether the contraventions arose out of the conduct of senior management of the company or at some lower level [99] (vii) Whether ACM has a corporate culture conducive to compliance with the ACL, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention [100] (viii) Whether the contravener has shown a disposition to co-operate with the authorities responsible for enforcing the ACL in relation to the contraventions [103] (ix) Whether ACM has engaged in similar conduct in the past [105] (x) The injunctive relief and compliance program [106] (xi) Applicable pecuniary penalty in all the relevant circumstances [108] C COMPLIANCE PROGRAM [115] D CORRECTIVE ADVERTISING AND ADVERSE PUBLICITY ORDER [122] E FINDINGS OF FACT ORDER [125] F COSTS [127] CONCLUSION [128]

1 On 30 July 2018, the Court published its reasons for judgment on liability. They are reported as Australian Competition and Consumer Commission v ACM Group Limited (No 2) [2018] FCA 1115 (Primary Judgment). After hearing further from the parties, the Court made orders on 21 August 2018 concerning ACM's contraventions of ss 18, 21(1)(a) and 50(1)(b) of the Australian Consumer Law (ACL) (being Sch 2 to the Competition and Consumer Act 2010 (Cth) (CCA)). Declaratory orders were made at that time which identified ACM's contravening conduct (see [3] below). 2 The first applicant, the Australian Competition and Consumer Commission (the ACCC), now seeks injunctions, publication orders, pecuniary penalties (in the range of $1.54m to $1.65m), compliance program orders, costs, and an order that the reasons for the Primary Judgment and this judgment be retained on the Court file.

ACM's contravening conduct 3 The conduct of ACM which was found in the Primary Judgment to contravene relevant provisions of the ACL is reflected in the terms of the declaratory orders which were made by the Court on 21 August 2018: 1 During the period 29 April 2011 to 12 June 2015 the respondent, by the conduct of its representatives, in trade or commerce engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s18 of the Australian Consumer Law by making the following representations to two debtors: (a) that the respondent intended shortly to commence legal proceedings against a debtor to recover its debt if it was not paid within 48 hours, when it did not intend to do so; (b) that the respondent intended shortly to commence legal proceedings against a debtor to recover its debt if it was not paid within seven days, when it did not intend to do so; (c) that the respondent had commenced preparing the documents that would be used for potential legal action against a debtor, when at the time of making the representation on 3 September 2014 it had not; (d) that the respondent was planning for a summons to be drawn, issued and served upon a debtor soon to recover the debt in full, when it was not planning to do so and/or did not have reasonable grounds for so stating; (e) that if a default was listed upon a debtor's credit file, the debtor would not be able to obtain credit for the next five to seven years, when the respondent did not have reasonable grounds for so stating. 2 During the period 29 April 2011 to 12 June 2015, the respondent, by the conduct of its representatives by: (a) sending repeated letters to a debtor which demanded payment and threatened legal proceedings, and (b) making repeated telephone calls to a care facility where the debtor resided in the course of attempting to obtain payment of the debt, in circumstances where the debtor was unable to pay the debt, had difficulty communicating verbally and was suffering from a serious medical condition, used undue harassment in connection with the supply of services or the payment for those services in contravention of s50(1)(b) of the Australian Consumer Law. 3 On or about 3 September 2014, the respondent, by the conduct of its representatives, by stating to a debtor: (a) that the respondent had commenced preparing the documents that would be used for potential legal action against the debtor, when it had not; (b) that the respondent was planning for a summons to be drawn, issued and served upon the debtor soon to recover the debt in full, when it was not planning to do so and did not have reasonable grounds for so stating; and (c) that if a default was listed upon the debtor's credit file, the debtor would not be able to obtain credit for the next five to seven years, when the respondent did not have reasonable grounds for so stating, used coercion in connection with the supply or possible supply of services, or the payment for those services, in contravention of s 50(1)(b) of the Australian Consumer Law. 4 During the period 3 May 2011 to 3 February 2015, the respondent, by the conduct of its representatives, in trade or commerce engaged in conduct that was in all the circumstances unconscionable in connection with the supply or possible supply of services in contravention of s21(1)(a) of the Australian Consumer Law by reason of the conduct the subject of declarations 1, 2 and 3 above. 4 The declaratory orders which were made on 21 August 2018 were intended to identify the gist of the Court's findings which underpinned ACM's various contraventions, without indulging in what has been described in "an impermissible summary" (see Warramunda Village Inc v Pryde [2001] FCA 61; 105 FCR 437 at [8] and Australian Competition and Consumer Commission v Unique International College (No 7) [2017] FCA 1289 at [19]-[22] per Perram J). 5 These reasons for judgment should be read in conjunction with the Primary Judgment. The abbreviations used in the Primary Judgment are also used here. 6 It is convenient to address each of the forms of relief sought by the ACCC, while noting that the only matters in dispute between the parties are the amount of the pecuniary penalty and one aspect of the compliance program. I will summarise the relevant legal principles (which are largely undisputed), summarise the parties' submissions and evidence and give my reasons in respect of each form of relief.

A Injunctions 7 The Court is empowered by s 232(1) of the ACL to grant an injunction, in such terms as the Court considers appropriate, if the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute a contravention of, relevantly, a provision of Ch 2 or 3 of the ACL (ss 18 and 20 are located in Ch 2, while s 50 is located in Ch 3). 8 It is relevant to note the terms of s 232(4) of the ACL: (4) The power of the court to grant an injunction under subsection (1) restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of a kind referred to in that subsection; and (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is an imminent danger of substantial damage to any other person if the person engages in conduct of that kind. 9 In Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2012] FCA 629 at [17]-[18], Murphy J said (emphasis added): Section 232 of the ACL provides broad powers to the Court subject to at least three limitations: (a) the relief should be designed to prevent a repetition of the contravening conduct; (b) there must be a sufficient nexus or relationship between the contravention and the injunction; and (c) the injunction must relate to the case or controversy: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 203 to 204. The Court must also consider whether an injunction is appropriate as a matter of discretion. Relevant factors include matters such as: (a) whether the [ACL] needs to be supplemented by the availability of sanctions applicable to contempt of court; (b) the contraventions found; (c) the risk of similar contraventions in the future and the utility of an injunction in minimising that risk; (d) whether the conduct was intended, isolated and/or occurred many years before the enforcement proceedings; (e) the clarity and specificity of the injunction; and (f) the intended methods of enforcement of the injunction. … 10 It is also relevant to note that injunctive relief was granted against ACM in proceedings which were brought against it by ASIC in 2012. That judgment is reported as Australian Securities and Investments Commission v Accounts Control Management Services Pty Ltd [2012] FCA 1164 (ACM 2012). The Court found there that ACM engaged in misleading and deceptive conduct, and undue harassment or coercion, in contravention of ss 12DA(1) and 12DJ(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) in connection with its conduct in attempting to collect debts from eight debtors. The conduct included representations being made to the debtors by ACM's representatives about, inter alia, the likelihood, imminence and possible impacts of court proceedings to recover the debt. The case concerned conduct that occurred during the period 24 November 2008 to 21 June 2010 in circumstances where the subject debt collecting business was transferred to ACM in or about July 2009. Around 62 percent of the relevant telephone calls the subject of ACM 2012 had been made prior to ACM's acquisition of the business. Justice Perram considered that it was an appropriate case to order injunctive relief. His reasons for so finding are set out at [327]: 327. ASIC also sought injunctive relief. In the case of the unduly harassing and coercive conduct I think such relief should be granted. Its occurrence is more the result of a certain mindset amongst some of its employees. The only way that sort of bullying will stop is if the second defendant makes it stop. I do not think a declaration by itself will serve that end sufficiently. Without expressing a concluded view, the appropriate form of that injunctive relief is likely to be directed to the second defendant's procedures, such as call monitoring, rather than a bare order not unduly to harass or coerce. I will hear the parties on this question, however, if necessary. The situation with the misleading and deceptive conduct case is less clear. That conduct was the result of the earlier manual and that manual has now been revised. ASIC did not point to any contraventions since that revision. Notwithstanding, I have concluded that injunctive relief should be granted. It will ensure that the second defendant gives effect to its manual. I see no utility in granting injective relief against the first defendant. ASIC's vindication in relation to it will be properly served by the declaratory relief I have indicated. 11 The following additional principles are relevant, as identified by Beach J in Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698 at [88] and as adopted by Middleton J in Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 (CFMEU (No 4)) at [83]: … (1) First, injunctive relief will not automatically follow in the event of contravening conduct, and is only one weapon in the discretionary armoury; (2) Second, the likelihood of future contravention is an important relevant factor to be taken into account; (3) Third, many contraventions will simply not justify injunctive relief, and it is for the applicant to demonstrate that the injunction sought will serve a purpose; and (4) Fourth, a declaration may achieve the same result sought to be achieved by an injunction, being the marking of the Court's disapproval of a respondent's conduct. 12 The Full Court's observations in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [111] are also apposite: 111. Many contraventions simply will not justify injunctive relief. We doubt whether unintentional misconduct in contravention of s 52 would lead to such relief. An isolated intentional breach may also not warrant it. Conduct which occurred many years before the enforcement proceedings may not do so, especially if the offender has not recently infringed the law, or is no longer in a position where contravention is likely. These are obvious cases, but they raise questions as to the relevant factors in considering whether to grant such relief. The discretion is at large. It is for the relevant applicant to demonstrate that the injunction will serve a purpose. That purpose may involve the protection of the public interest or private rights.

(a) Summary of the parties' submissions on injunctive relief 13 The ACCC sought several injunctive orders under s 232 of the ACL. In brief, if made, the orders would have the effect of restraining ACM (and its servants or agents) from: (1) engaging in the future in the misleading and deceptive conduct of the nature described in declaration 1 of the Court's orders dated 21 August 2018; (1) using in the future undue harassment of debtors of the nature described in declaration 2 of the Court's orders dated 21 August 2018; (2) using in the future coercion of debtors of the nature described in declaration 3 of the Court's orders dated 21 August 2018; and (3) engaging in the future in conduct that is in all the circumstances unconscionable of the nature described in declaration 4 of the Court's orders dated 21 August 2018. 14 The ACCC submitted that injunctive relief was both necessary and appropriate because ACM has engaged in similar previous conduct and the relief it seeks is designed to prevent ACM from engaging in further contraventions of the ACL, thereby protecting the public. 15 The ACCC clarified in oral address that its reference to "similar previous conduct" is a reference to the conduct which is the subject of the adverse findings against it by Perram J in ACM 2012. 16 In response, ACM did not oppose the injunctions sought by the ACCC.

(b) Consideration and determination on injunctive relief 17 I accept the ACCC's submissions and I am satisfied that it is appropriate to grant injunctive relief in the terms sought by the ACCC and which is not opposed by ACM. The injunctions correspond with the terms of the declarations of contravention which were made on 21 August 2018. Thus, the injunctions operate to restrain ACM from repeating the conduct which has been found to be in contravention of relevant provisions of the ACL. As is made explicit in the terms of the Penal Notice at the beginning of the Court's orders, breach of the injunctions could give rise to very serious consequences for ACM.

B Pecuniary penalties 18 The Court is empowered by s 224 of the ACL to impose a pecuniary penalty on a person who has contravened a provision of, relevantly, Pt 2-2 (unconscionable conduct) or Pt 3-1 (unfair practices, including harassment and coercion under s 50). It may be noted that the Court does not have power to impose a pecuniary penalty for contravention of Pt 2-1 (misleading or deceptive conduct). 19 The Court may order the person to pay such pecuniary penalties in respect of each act or omission as the Court determines to be appropriate. 20 The maximum penalty for a contravention of a provision of Pt 2-2 by ACM as a body corporate at the relevant time was $1.1m in respect of each act or omission (see item 1 of the table in s 224(3) of the ACL which was then operative). The maximum penalty at the relevant time for a contravention of a provision of Pt 3-1 of the ACL by ACM as a body corporate was also $1.1m (see item 2 of the table in s 224(3) of the ACL which was then operative). 21 The relevant principles which guide the determination of an appropriate pecuniary penalty are relatively well settled. ACM did not dispute the ACCC's outline of those principles, which are largely reflected in the analysis below. 22 Unlike some other statutory contexts, clearer focus as to the matters to be taken into account in determining the amount of pecuniary penalty is provided in the ACL itself. The Court is required by s 224(2) of the ACL to have regard to "all relevant matters". Some relevant matters are then identified (non-exhaustively) in s 224(2) as follows: (a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; (b) the circumstances in which the act or omission took place; and (c) whether the person has previously been found by a Court in proceedings under Ch 4 or Pt 5-2 of the ACL to have engaged in any similar conduct. 23 Other matters and considerations may be relevant. Many of them are identified in cases such as Australian Competition and Consumer Commission v Australian and New Zealand Banking Group Limited [2016] FCA 1516 (ACCC v ANZ) at [78]-[91] per Wigney J; Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (Civil Penalties Case on Remitter) at [98]-[107] per Dowsett, Greenwood and Wigney JJ and, more recently, in Australian Competition and Consumer Commission v We Buy Houses Pty Ltd (No 2) [2018] FCA 1748 (We Buy Houses) at [34]-[56] per Gleeson J. Drawing on those and other relevant authorities, the relevant principles may be summarised as follows. 24 The principal object of a pecuniary penalty is deterrence, both the need to deter repetition of the contravening conduct by the contravener (specific deterrence) and to deter others who might be tempted to engage in similar contraventions (general deterrence). While there is some overlap with the approach taken in criminal sentencing, it is important not to lose sight of the fact that a pecuniary or civil penalty is largely a protective measure to promote the public interest in securing compliance with statutory requirements. Thus, in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (Civil Penalties Case), the plurality explained (at [55]): [W]hereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance. 25 A pecuniary penalty should attempt to put a price on contravention that is sufficiently high to ensure that the penalty is not regarded by the contravener or others as an acceptable cost of doing business. "[T]hose engaged in trade and commerce must be deterred from the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention": Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 at [63] (Singtel Optus), as endorsed by the High Court in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [64] and [66]. 26 In relation to general deterrence, it is important to send a message to the marketplace that contraventions of the sort which are the subject of the pecuniary penalty are serious and not acceptable. 27 The question whether a pecuniary penalty also involves an element of punishment may be controversial and need not be determined here. As the Full Court observed in the Civil Penalties Case on Remitter at [99], it is sufficient to say that, acknowledging that the primary purpose of imposing a pecuniary penalty is to protect and deter, that purpose is itself achieved by imposing a punishment in the form of a pecuniary penalty. 28 Although there are differences between criminal sentencing and fixing a pecuniary penalty, there are also some similarities. For example, the "instinctive synthesis" which is involved in criminal sentencing also arises in fixing a pecuniary penalty. As Allsop CJ stated in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; 327 ALR 540 (Coles) at [6]: The process of arriving at the appropriate sentence for a criminal offence involves an intuitive or instinctive synthesis of all relevant factors: Markarian v The Queen [2005] HCA 25; 228 CLR 357. The approach set out by the High Court in Markarian can be taken to be applicable to civil penalty proceedings of this nature…The setting of the penalty is a discretionary judgment that does not involve assessing with any precision the "range" within which the conduct falls or by applying incremental deductions from the maximum penalty. Nonetheless, the maximum penalty must be given due regard because it is an expression of the legislature's policy concerning the seriousness of the proscribed conduct. It also permits comparison between the worst possible case and the case the court is being asked to address and thus provides a yardstick: Markarian at 372 [31]. 29 In other words, the Court's task is to determine the penalty which is proportionate to the contravening conduct and take into account the contravener's circumstances by a process of instinctive synthesis after taking into account all relevant factors (see CFMEU (No 4) at [35] per Middleton J). 30 In TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190; 210 FCR 277 (TPG Internet) at [145]-[146], the Full Court summarised the process for assessing a pecuniary penalty in the following terms, including by reference to some analogies with criminal sentencing: [145] The process to be applied in arriving at a particular penalty figure was considered in the context of criminal sentencing by the High Court in Markarian v The Queen (2005) 228 CLR 357. That process is also applicable to the assessment of pecuniary penalties under s 76 of the Act: see Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd (2005) 27 ATPR 42-070 at [68]. [146] In Markarian, Gleeson CJ, Gummow, Hayne and Callinan JJ held: (a) the Court's assessment of the appropriate penalty is a discretionary judgment based on all relevant factors (at [27]); (b) "... careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick." (at [31]); (c) it will rarely be appropriate for a Court to start with the maximum penalty and proceed by making a proportional deduction from that maximum (at [31]); (d) the Court should not adopt a mathematical approach of increments or decrements from a pre-determined range, or assign specific numerical or proportionate value to the various relevant factors (at [37] citing Wong v The Queen (2001) 207 CLR 584 at [74]-[76] per Gaudron, Gummow and Hayne JJ); (e) it is not appropriate to determine an "objective" sentence and then adjust it by some mathematical value given to one or more factors such as a plea of guilty or assistance to authorities (at [37]); (f) the Court "may not add and subtract item by item from some apparently subliminally derived figure" to determine the penalty to be imposed (at [39]); and (g) since the law strongly favours transparency, accessible reasoning is necessary in the interests of all, and, while there may be occasions where some indulgence in an arithmetical process will better serve the end, it does not apply where there are numerous and complex considerations that must be weighed (at [39]). 31 As noted above, three relevant matters to which the Court must have regard in fixing a pecuniary penalty are specified in s 224(2) of the ACL. That list is not, however, exhaustive. Other relevant matters or considerations have been identified in the caselaw. In this context, reference is frequently made to the list of factors or considerations in Australian Securities and Investments Commission v Adler [2002] NSWSC 483; 42 ACSR 80 (Adler) at [126] per Santow J and in Australian Securities and Investments Commission, in the Matter of Chemeq Limited (ACN 009 135 264) v Chemeq Limited (ACN 009 135 264) [2006] FCA 936; 234 ALR 511 (Chemeq) at [99] per French J. Those lists are not exhaustive, nor is every matter identified therein necessarily relevant in every case, but they provide useful guidance. It must not be overlooked that the Court's statutory duty under s 224(2) is to consider and weigh all relevant matters. 32 It is desirable to set out the Full Court's observations in the Civil Penalties Case on Remitter at [101]-[107], which provide further helpful guidance: 101 In fixing the amount of a civil penalty, reference is frequently made to the lists of factors or considerations identified by Santow J in Australian Securities and Investments Commission v Adler (No 5) [2002] NSWSC 483; (2002) 42 ACSR 80 at 114-115 [126] and French J in Chemeq at 534 [99]. Those lists of relevant considerations, which have been approved and elaborated on by many subsequent decisions of this Court, were not, and plainly were not intended to be, exhaustive. Nor was it suggested that each of the factors referred to in the respective lists was necessarily relevant or important in every case. These lists of factors should not be treated as a rigid catalogue or checklist of matters to be applied in each case; the overriding principle is that the Court should weigh all relevant circumstances: Australian Securities and Investments Commission v GE Capital Finance Australia [2014] FCA 701 at [72]. 102 In general terms, the factors that may be relevant when fixing a pecuniary penalty may conveniently be categorised according to whether they relate to the objective nature and seriousness of the offending conduct, or concern the particular circumstances of the defendant in question. 103 The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention. 104 The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law. 105 Where the defendant is a body corporate, the size of the body does not of itself justify a higher penalty than might otherwise be imposed: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; (2015) 327 ALR 540 at 559-561 [89]-[92]. The size of the corporation may, however, be particularly relevant in determining the size of the pecuniary penalty that would operate as an effective deterrent. The sum required to achieve that object will generally be larger where the company has vast resources: Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) [2005] FCA 265; (2005) 215 ALR 301 at 309 [39]; Australian Competition and Consumer Commission v Apple Pty Limited [2012] FCA 646 at [38]. 106 Careful attention must also be given to the maximum penalty for the contravention. That is so for at least three reasons: first, because the legislature has legislated for the maximum penalty and it is therefore an expression of the legislature's policy concerning the seriousness of the prescribed conduct; second, because it permits comparison between the worst possible case and the case that the Court is being asked to address; and third, because the maximum penalty provides a "yardstick" which should be taken and balanced with all the other relevant factors: Markarian at 372 [31] (per Gleeson CJ, Gummow, Hayne and Callinan JJ). 107 Even where the maximum penalty for the contravention is high, and the amount necessary to provide effective deterrence is large, the amount of the penalty should be proportionate to the contravention and should not be so high as to be oppressive: Stihl Chainsaws at 17,896; NW Frozen Foods at 293. 33 In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 295, Burchett and Kiefel JJ noted that: [T]he facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. 34 As noted above, one of the relevant matters to which the Court must have regard under s 224(2) is whether the person has previously been found by a court in proceedings under Ch 4 or Pt 5-2 to have engaged in any similar conduct. There is no such previous finding by a court here. That does not preclude, however, the Court taking into account as a relevant matter previous conduct of ACM which has been found to contravene other provisions, not only in the ACL, but also in comparable legislation, such as the ASIC Act. 35 That is not to suggest that all prior contraventions will necessarily be relevant. As Middleton J observed in CFMEU (No 4) at [37]-[38], much depends on the nature of the prior offending, the time when it occurred and the circumstances in which it occurred. Thus, previous contraventions of a substantially similar kind will be particularly relevant, but even conduct of that kind may wane in significance if it occurred a long time ago. Similarly, previous contraventions of a different character to those in the present proceeding may still be relevant if, depending upon the circumstances, they demonstrate that the contravener has an attitude of defiance of, or indifference to, compliance with the law. 36 I consider that the conduct which gave rise to the contraventions as found by Perram J in ACM 2012 is substantially similar to the conduct here. I also consider that the conduct occurred relatively recently and that it should be taken into account in assessing the appropriate pecuniary penalty (see further [93] and [94] below). 37 The totality principle is another important consideration. It requires that the total penalty for multiple contraventions should not exceed what is proper for the conduct when it is viewed as a whole (see Australian Competition and Consumer Commission v Safeway Stores Pty Ltd [1997] FCA 450; 145 ALR 36 at 53 per Goldberg J). As the ACCC pointed out, the totality principle operates as a final check to ensure that the penalties imposed on a wrongdoer, considered as a whole, are appropriate. Comparison of penalties or remedies imposed in other cases is of limited utility. 38 During the course of the hearing, the Court raised with the parties the question whether, under the totality principle, the Court should take into account the protective and deterrent effect of the injunctive relief and compliance program in assessing the appropriate level of pecuniary penalty. The parties availed themselves of the opportunity to file brief supplementary submissions after the hearing. Those submissions may be summarised as follows. 39 The ACCC submitted that the proposed injunctions and compliance program did not arise for consideration under the totality principle, but it accepted that the Court could have regard to those matters as falling within the rubric of "all relevant matters" under s 224(2) of the ACL. The ACCC submitted that the weight to be given to those other remedies in assessing the appropriateness of a pecuniary penalty turns very much on the particular circumstances of the case. 40 ACM submitted that those other remedies should be considered under the umbrella of the totality principle. 41 I consider that it is unnecessary to determine for the purpose of these proceedings whether or not the totality principle requires that consideration be given to the terms of the injunctive relief and compliance program in assessing the appropriate penalty. That is because I accept the ACCC's submission that those matters are relevant under s 224(2) of the ACL.

(a) Summary of the parties' submissions on pecuniary penalties

(i) The ACCC 42 The ACCC acknowledged that, in light of s 224(4) of the ACL, one penalty should be imposed upon ACM in respect of each of the two relevant consumers (who were given the pseudonyms CT and JR), resulting in two penalties in total. The Court found that ACM had engaged in undue harassment towards CT in contravention of s 50(1)(b) of the ACL; that it engaged in unconscionable conduct towards CT in contravention of s 21(1)(a), that it engaged in coercion towards JR in contravention of s 50(1)(b) and that it engaged in unconscionable conduct towards JR in contravention of s 21(1)(a). Having regard to the fact that the Court found that the same conduct of ACM towards CT contravened both ss 21(1)(a) and 50(1)(b) and that the same conduct of ACM towards JR contravened both ss 21(1)(a) and 50(1)(b), the application of s 224(4) should result in the imposition of one penalty upon ACM in respect of each consumer, resulting in two penalties in total, so the ACCC submitted. 43 The ACCC submitted that the "course of conduct principle" had no application here because ACM's conduct in respect of both CT and JR did not arise out of a single, multi-faceted course of conduct. 44 As to other relevant considerations relating to the assessment of a pecuniary penalty, the ACCC's primary submissions may be summarised as follows. I will seek to avoid undue duplication by leaving some matters raised by the ACCC to later sections of these reasons for judgment. 45 The nature and extent of the act or omission and any resulting loss or damage: The ACCC noted that although no pecuniary penalty could be imposed in respect of the finding that ACM had breached s 18 of the ACL, it was nevertheless relevant to note that the Court's finding of unconscionable conduct in respect of both consumers took into account the findings of misleading or deceptive conduct, as well as the findings of undue harassment of coercion. 46 The ACCC submitted that ACM's conduct towards CT was "egregious", noting that it was described by the Court as "reprehensible and unreasonable". The ACCC submitted that ACM's conduct was among the worst kind of contravention having regard to: its length (occurring over a four year period); its nature (the sending of 20 letters of demand in various forms, which contained misleading or deceptive representations); the making of approximately 40 telephone calls to CT's care facility and actually speaking to CT on six occasions; CT's circumstances of special disadvantage, by reference to his permanent disability, near inability to speak and his residence in a care facility, as well as the strong disparity in the relative strength of bargaining positions of CT and ACM, of which ACM was aware; its deliberateness (i.e. ACM bombarded CT with telephone calls and letters); its effect on CT, as found by the Court, which was that the conduct was distressing and CT felt angry and frustrated as a result; and its occurrence as a result of ACM being driven towards debt recovery and ACM overriding information in its possession regarding CT's serious medical condition and personal circumstances. 47 The ACCC submitted that ACM's contravening conduct towards JR was "serious" notwithstanding that it was limited to one phone call. It emphasised that there was a clear disparity in the strength of bargaining positions between JR and ACM. The ACCC also emphasised that Mr Rolf Francisco, who spoke with JR, knew that she was a single mother with three children, who worked only part-time, was receiving Centrelink benefits and that she was concerned to protect lines of credit in the interests of her children and herself. The ACCC also drew attention to the Court's finding at [281]-[283] of the Primary Judgment that Mr Francisco's conduct was inconsistent with ACM's own policies and procedures. 48 The ACCC submitted that the significant effect on JR of ACM's conduct was also relevant, noting that the Court accepted her evidence that she felt stunned, physically sick, "pinned to the wall", flustered, anxious and "rail-roaded" into agreeing to pay a substantial amount to avoid legal proceedings (Primary Judgment at [272]). 49 The ACCC submitted that, even in the absence of any financial loss having been suffered by either CT or JR, the assessment of the appropriate pecuniary penalty should take into account the inconvenience, stress, feelings of discomfort and intimidation which both consumers felt. 50 The ACCC submitted that, in the particular circumstances, deterrence required a substantial penalty even though there was no evidence of financial loss to either consumer. 51 The circumstances in which the act or omission took place: The ACCC repeated the circumstances appertaining to both CT and JR in which ACM's contravening conduct occurred and added that ACM's knowledge of those circumstances was relevant to an assessment of penalty. 52 Whether ACM has previously been found by a court in proceedings under Ch 4 or Pt 5-2 to have engaged in any similar conduct: The ACCC drew attention to Perram J's judgment in ACM 2012. The ACCC submitted that the adverse findings made by Perram J which underpinned his findings that ACM had contravened various provisions in the ASIC Act were relevant to the assessment of penalties in this proceeding, albeit as a non-mandatory, rather than statutory, factor. The ACCC noted that, in ACM 2012, orders were made which permanently restrained ACM from, inter alia, representing that it had decided to commence legal proceedings against a debtor, when it had not, and that it would commence legal proceedings immediately against a debtor, when this was not true. The ACCC submitted that it was a significant matter requiring the setting of a higher penalty that the current proceedings concerned similar conduct, which took place years after ACM 2012 was decided. This highlighted the importance of specific deterrence and the seriousness of ACM's conduct.

(ii) ACM 53 ACM submitted that pecuniary penalties should be in a lower amount than the range of $1.54 to $1.65 million sought by the ACCC. ACM submitted that a penalty in the order of $350,000 to $400,000 is appropriate. ACM agreed with the ACCC that, by reason of s 224(4) of the ACL, only one penalty should be imposed on ACM in respect of each consumer. 54 ACM submitted that it was relevant to take into account the effects on it of both these proceedings and the ACM 2012 judgment. First, it said that it had undertaken a significant restructuring of its business operations to ensure consistency and compliance with industry and regulatory guidelines. It implemented significant changes to improve its culture, business systems, training processes, compliance and the way in which it dealt with whom it now calls "customers". It submitted that these steps demonstrated that it viewed the ACM 2012 decision very seriously and took steps to avoid any repetition of the conduct that gave rise to that proceeding. 55 Secondly, ACM submitted that both proceedings had had a significantly negative impact on its business, revenue and profitability. It submitted that its debt book had been in steady decline since 2012: as at 30 June 2018 it had about 62 percent fewer customer accounts than it did in 2012. It said that it had not purchased a bank debt book since January 2013 and had purchased only one Telco debt book since May 2015. ACM drew attention to the contrast between the financial losses it had incurred since 30 June 2015, as opposed to the significant profits it earned between 2011 and 2013. 56 ACM submitted that the changes it made following ACM 2012 were time consuming, costly and required significant work. It said that some of the improvements took time to develop and implement, such as the automated sensitive word report audit system which only went live in May 2016. 57 ACM drew attention to the fact that in around October 2015, it engaged Kildonan Uniting Care to assist in the review and rewriting of all customer letters. Well before the hearing of the present proceeding, ACM had stopped using the pro forma of letters of demand which were the subject of these proceedings and had, instead, implemented revised letters which had been drafted with the assistance of Kildonan Uniting Care. 58 Reliance was also placed on the Anteris Report dated September 2016. ACM said that it had implemented many of the recommendations in that Report, including updating many of its policies. It should be noted that the Anteris Report was admitted into evidence as evidence of statements made by Anteris in the Report but not as to the truth of those statements. 59 Another reform emphasised by ACM was the appointment in March 2018 of Mr Maxim Alves as Head of Compliance. He is assisted by 15 employees who comprise the Compliance and Ethics team which is responsible for ensuring that ACM and its employees meet all relevant regulatory obligations and consumer expectations. 60 ACM acknowledged that not all the reforms implemented by it after ACM 2012 were finalised in sufficient time to prevent the inappropriate and unlawful conduct which gave rise to the Court's findings with respect to CT and JR. ACM said that it "accepts unreservedly" the findings made in the Primary Judgment. Although ACM said that it regretted the delay, it emphasised that it had undertaken substantial work since 2012 with a view to preventing conduct such as that which occurred with CT and JR and that it did not sanction, condone or desire such conduct. 61 ACM acknowledged that the Court was entitled to take into account the similarity of the contravening conduct as found by Perram J in ACM 2012. It emphasised, however, that there were two aspects which distinguished the conduct which gave rise to the contraventions in ACM 2012 from the conduct here. First, the earlier conduct was found by Perram J to be consistent with ACM's policies at that time, whereas the conduct here was found to be inconsistent with the relevant policies. Secondly, it submitted that almost two-thirds of the calls which gave rise to contraventions as found in ACM 2012 were calls which were made prior to ACM's acquisition of the relevant business in July 2009. 62 As to the conduct relating to CT, which took place between 2011 and 12 June 2015, ACM submitted that part of the conduct occurred prior to delivery of the judgment in ACM 2012 and that the remaining conduct occurred at a time when ACM was in the process of implementing its reforms, including changing its Debt Smart system to automatically prevent excessive contact with a customer. This was done by inserting key word searches to flag and refer accounts to the Compliance Team, where sensitive words such as "hospital", "nursing home", "care facility" and "stroke" are identified. This system only went live in May 2016 which was too late for CT but ACM submitted that it demonstrated that it was taking steps to prevent the conduct which occurred with CT in respect of both red-flagging calls and changing the form of letters. 63 ACM submitted that the contact or attempted contact of CT resulted from: (a) low level telephone operators failing properly to review the CT notes; and (b) a failure of ACM's systems at the time to automatically flag CT's file for higher management review. It acknowledged that its policies required ACM to cease contact with someone like CT and to process him as a candidate for hardship. 64 ACM submitted that, having regard to the contents of the CT Notes and the brevity of the contact it established with CT on six occasions, this demonstrated that ACM's activities towards CT did not involve any deliberate, systematic or covert attempt to harass or act unconscionably towards him, or that it had any awareness of the conduct. ACM submitted that "contact was made at discrete times by different low level operators based in the Philippines who were apparently ignorant of what previous operators had experienced and who were merely seeking to confirm CT's identity and open a discussion". ACM added that the letters which were sent to CT were system-generated and sent automatically, as opposed to being ordered by someone who was fully appraised of CT's circumstances. ACM submitted that it did not deliberately attempt or design to harass or act unconscionably towards CT. 65 ACM submitted that, putting to one side CT's particular personal circumstances, the frequency and timing of its contact with CT was "significantly less than the level of contact recommended by the Guidelines". 66 For all these reasons, ACM submitted that its conduct towards CT could not appropriately be characterised as "among the worst kind of contravention" and should not attract the maximum penalty of $1.1m. 67 As to JR, ACM emphasised that the contravening conduct took place on a single occasion on one day in September 2014 and involved a lower level employee who acted contrary to ACM's policies and training. ACM emphasised, however, that Mr Francisco had not previously been identified as a problematic employee. He had attended all required training sessions and passed all relevant examinations. ACM emphasised that the additional compliance, training and audit/monitoring regimes it had implemented should substantially reduce the risk of an individual employee engaging in such conduct in the future. 68 ACM said that it accepted the Court's findings that Mr Francisco acted inappropriately, but it submitted that his conduct was isolated and limited to one call centre operator who was a low level employee. It also mentioned that Mr Francisco had resigned from ACM Philippines in January 2018, before the Primary Judgment was published. 69 ACM emphasised that Mr Francisco's branch manager, Mr Clarke (whose evidence the Court accepted and preferred) did not authorise or direct him to act as he did. 70 ACM also asked the Court to take into account that Mr Brabazon was no longer employed by it, having resigned in January 2018. 71 In all these circumstances, ACM submitted that its conduct concerning JR did not require "a substantial penalty" as sought by the ACCC. 72 ACM submitted that it was common ground that neither CT nor JR had suffered any financial loss or damage, nor was there any evidence that ACM had profited from its employees' conduct. 73 ACM submitted that a penalty in the range of $270,000 to $300,000 should be imposed with respect to its conduct towards CT, and a penalty in the range of $80,000 to $100,000 should be imposed with respect to JR. This would give a total penalty of about $350,000 to $400,000. It emphasised that a penalty in that range would constitute about 23 percent of its cash available as at 30 June 2018 and that the Court should also take into account the likelihood that ACM would have to pay an even larger amount in respect of the ACCC's costs of the proceeding. This would leave ACM with limited resources to fund its continued operations, compliance regime, wages and other expenses. 74 Additional matters which ACM asked the Court to take into account in assessing the level of pecuniary penalties may be summarised as follows. 75 ACM has a large call centre operated by a related entity in the Philippines which (as at September 2014) had in the order of 200 staff. It also has an office in Sydney where most of its management is based, including the joint CEOs and the Head of Compliance and Risk. 76 ACM made losses for each of the financial years ended 30 June 2016, 2017 and 2018. The audited financial statements for the year ended 30 June 2018 were only recently completed on 31 October 2018. The accounts paint a bleak picture with a net loss for the year of $145,000 and net assets of $32.348 million of which $31.133 million comprises the value of ACM's debt book (which cannot immediately be realised, if ever). In other words, ACM's total net assets other than the debt book are $1.215 million. ACM's debt book has been in steady decline and ACM has had difficulty purchasing any new debts. As at 30 June 2018, ACM's total cash and cash equivalents was $1.743 million, but its current liabilities were reported at $1.674 million. 77 Taking into account all of these matters, ACM submitted that the pecuniary penalty of $1.54 to $1.65 million sought by the ACCC (plus costs) may result in ACM's insolvency. Whilst that alone may not be a reason for the Court to decline to order a large penalty if the question of deterrence otherwise warrants it, ACM added that is not appropriate in the circumstances of this case for reasons which include the following. First, ACM was already in the process of reform at the time the CT and JR conduct occurred. The significant improvements it was implementing would likely have prevented any such conduct recurring. These proceedings did not cause ACM to implement those reforms; it was already doing that. In short, ACM learnt its lesson from ACM 2012 and was making significant changes and improvements although not all of the changes had been implemented by the time of the conduct relating to CT and JR. In those circumstances, the deterrent value of a significant penalty is low. The Court should be hesitant to impose significant penalties on a company that was already in the process of reforming and improving, but was then subjected to further proceedings by the regulator before the reform processes had been able to be completed. In oral address, ACM also emphasised that its conduct which underpinned the findings of contravention in the Primary Judgment was conduct which was directed at only two consumers and that its position was different from companies who engage in contravening conduct which affects a wide class of consumers, as sometimes occurs with advertising and marketing campaigns. Moreover, it emphasised that, without detracting from the seriousness of its conduct towards CT and JR, that conduct was relatively isolated and confined, taking into account that in 2012 it had approximately 460,000 debtor accounts and, in 2015, approximately half that number. 78 Secondly, ACM said that it is now operating as a model debt collection business with comprehensive policies and processes, regular and detailed training for staff and a large internal compliance team, headed by an experienced Head of Compliance, Mr Alves, who oversees the regular review and improvement of ACM's policies and procedures. ACM has also retained experienced external consultants to review and critique its processes and conduct. It has recently received independent certification from BSI Group Australia that it operates a quality management system which complies with the requirements of ISO 9001. The ACCC does not suggest that there are any deficiencies or failings in ACM's policies. Even during the trial, the ACCC sought to establish contravening conduct by, inter alia, highlighting ACM's policies and seeking to establish non-compliance with those policies. 79 Thirdly, ACM submitted that the imposition of a penalty in an amount that may result in its insolvency or the cessation of its operations will likely have a negative impact on debtors and the collections industry as a whole, by removing a significant debt collector who is operating compliantly, is customer focused and has invested significantly in training and compliance. The objects of the ACL are best served by framing relief in such a way that it allows and encourages reformed companies such as ACM (who have learned from previous failings) to continue to operate as a model debt collector and set an example, rather than removing such reformed and improved companies from the market. 80 Fourthly, ACM did not act deliberately in contravening the ACL in respect of its dealings with CT and JR. 81 Fifthly, ACM's improvements were extensive and could not be completed immediately. They involved the use of external reviews, advice and recommendations. It is unsurprising that the process took some time given the extensive work undertaken. The ACCC appears to concede the appropriateness of ACM's policies and procedures. If there can be any criticism, it would be that the reforms should somehow have been implemented more quickly, but there is no evidence to demonstrate that all of the reforms could have been completed in a materially shorter time period. There is no useful deterrence value in penalising a reformer who strives to be a compliant model player on the basis that its own reforms were not completed more rapidly. 82 Sixthly, the CT and JR issues which arose during the reform process represent less than 0.0005 percent of the debtors ACM were dealing with at the time. They were isolated incidents and did not involve systemic, planned or widespread conduct. 83 Seventhly, ACM did seek to co-operate with the ACCC in a number of respects. Although ACM did not concede liability, that question was arguable. The email and attachment from Mr Vieira referred to by the ACCC is not an admission that ACM defended these proceedings believing the defence would fail. The statement refers to the continuing improvements ACM had been making since ACM 2012. The entire paragraph from ACM's document reads: "Well before the judgment was handed down last month, we knew that we needed to do better, and for the last four years, we have been undergoing a dramatic transformation of the business". The document speaks to the lengthy reform process that had been underway since 2012 and should be read in its entirety, so submitted ACM.

(b) Consideration and determination of pecuniary penalties 84 It is convenient to address each of the relevant considerations in turn.

(i) The nature and extent of the contravening conduct and of any loss or damage suffered as a result of that conduct (ACL s 224(2)(a)) 85 The conduct which has given rise to the contraventions is summarised in the declarations dated 21 August 2018, which are set out in full in [3] above. As found in the Primary Judgment, ACM's conduct towards CT was "reprehensible and unreasonable". CT was in a position of special disadvantage having regard to the effects of his stroke and his long term residence in a care facility, matters which ought reasonably to have been known to ACM. Yet ACM's representatives persisted over a lengthy period in making approximately 40 telephone calls to CT's care facility. They managed to speak with him personally on six occasions, during which time his parlous health status ought to have been readily apparent to ACM's representatives. In addition, the representatives were repeatedly told by nurses or carers at the facility that CT had suffered a stroke and had difficulty in communicating. Moreover, ACM persisted in sending approximately 20 letters of demand in various forms, which contained misleading or deceptive representations as to its intentions of initiating legal proceedings against CT. Those representations were substantially similar to the oral representations which were found by Perram J in ACM 2012 to be unlawful. 86 Understandably, ACM's conduct caused CT considerable distress and made him feel angry and frustrated. 87 I also accept the ACCC's submission that ACM's conduct was driven by an overwhelming objective to recover the debt from CT and without paying appropriate regard to his individual circumstances. This is reflected, in part, by ACM's failure to acknowledge and take appropriate steps to have CT considered for its hardship program. 88 I accept the ACCC's submission that ACM's conduct towards JR was serious, even though it focused on a single phone call from Mr Francisco. There was a clear disparity in their respective bargaining positions. Mr Francisco took full advantage of his advantageous position, in circumstances where he knew that JR was a single mother with three children, that she worked only part-time, was receiving Centrelink benefits and that she wanted to protect her credit status in her family's interest. It is also noteworthy that some of Mr Francisco's representations concerning ACM's legal processes strongly echoed the oral representations which were found in ACM 2012 to involve regulatory contraventions. 89 On the other hand, Mr Francisco was a lower level employee and there was no evidence that he was authorised or directed by any more senior ACM employee to do what he did. Having regard to Mr Francisco's otherwise relatively unblemished record, together with the training and examinations he had successfully undertaken, I accept that his conduct with regard to JR appears to be isolated and unexpected. Moreover, it is relevant to take into account that Mr Francisco's conduct was inconsistent with ACM's own policies and procedures. 90 On the issue of whether CT or JR suffered any financial loss or damage, and whether ACM profited from its conduct, it is important to bear in mind the rather unusual nature of ACM's business. That business involves it acquiring debts from other entitles at a heavily discounted price and then seeking to recover all or part of a debt so as to make a profit from the cost of its acquisition of individual debts. Thus, as Perram J noted in ACM 2012 at [1], because ACM "buys the debts at a steep discount to their face value… it does not need to recover very much before it is making a profit". 91 It is common ground that neither CT nor JR suffered any financial loss of damage personally. As the ACCC pointed out, there is no evidence that ACM in fact profited from its contravening conduct. It may be accepted that ACM's representatives who were involved in the relevant conduct which affected CT and JR were seeking to advance ACM's goal of earning profits by recovering outstanding debts. That is presumably true of all debt recovery actions taken by ACM. I do not regard that conduct as falling within the type of conduct described by Edelman J in Australian Competition and Consumer Commission v RL Adams Pty Ltd [2015] FCA 1016 (RL Adams) at [42] and [43].

(ii) The circumstances in which the contravening conduct took place (ACL s 224(2)(b)) 92 I accept the ACCC's submissions that the relevant circumstances include circumstances which precede the actual conduct as well as circumstances which are contemporaneous with it (see RL Adams at [40] per Edelman J). Accordingly, it is relevant to take into account the personal circumstances of CT and JR and ACM's knowledge of those circumstances (see [46] and [47] above respectively). Another relevant matter is the fact that the contravening conduct was targeted at CT and JR only. The conduct was very serious but its effects were primarily confined to those two consumers. Different issues might arise if the contravening conduct had an effect on a wider class of consumers, as can be the case in contraventions relating to advertising and marketing.

(iii) Previous adverse findings (ACL s 224(2)(c)) 93 The adverse findings made against ACM in ACM 2012 are relevant matters, not because of s 224(2)(c), but because they fall for determination under the rubric of "all relevant matters". I accept the ACCC's submission that the proceedings here concern substantially similar conduct to that which gave rise to the findings of contravention by Perram J, and that this has an important bearing on the setting of a pecuniary penalty which will specifically deter ACM from engaging in such conduct in the future. It is matter of particular concern that, although the contravening conduct in ACM 2012 did not involve the use of pro forma letters of demand, letters of demand which gave rise to contravening conduct in the present proceeding involve the making of representations about legal processes which are substantially similar to the oral representations which were found to be unlawful in ACM 2012. Of particular concern is the fact that ACM continued to condone the use of pro forma letters in that form notwithstanding that it should have appreciated from Perram J's judgment that such representations were unlawful. Moreover, as noted above, Mr Francisco's representations to JR regarding ACM's legal processes strongly echo the oral representations which were found to be misleading or deceptive in ACM 2012. 94 There are some differences between the conduct here and ACM's earlier contravening conduct. I accept ACM's submission that, unlike the earlier position, its contravening conduct in respect of JR was inconsistent with ACM's formal policies in operation at that time. That is to be contrasted with the position in ACM 2012, where it was found that ACM's policy promoted the use of offending transcripts which threatened litigation. In ACM 2012 at [315], Perram J concluded that ACM's misleading and deceptive conduct was "widespread" and that the "constant references to litigation were not an accident". His Honour described them as "the intended outcome of a house manual which promoted threatening litigation as a means to achieving recoveries. The operators were told to make references to legal proceedings and lawyers and it is only natural that this is what they did". ACM's conduct there was described as being not only widespread, but also as "systemic". I also accept ACM's submission that, although very serious, its contravening conduct towards CT and JR is relatively isolated and confined and contrasts with the widespread and systemic conduct which gave rise to the adverse findings in ACM 2012.

(iv) The size of ACM and its financial position 95 It may be accepted that ACM operates from an office in Sydney where most of its management is based, including its Head of Compliance. It also has a large call centre which is operated by a related entity in the Philippines which, as at September 2014, had in the order of 200 staff. It is regrettable that ACM did not provide more up to date information concerning its staff levels. 96 The financial information provided by ACM, as summarised in [55] and [76] above is accepted. As the ACCC pointed out, ACM made substantial net profits except for the last 3 financial years. I accept ACM's submission that if a pecuniary penalty in the range sought by the ACCC was imposed, it may result in ACM's insolvency, particularly taking into account the additional liability which it will have in bearing the ACCC's reasonable costs of the proceeding. I do not consider, however, that these matters attract much weight. As the ACCC correctly pointed out, ACM's capacity to pay is of limited relevance. In some cases the imposition of a penalty the appropriateness of which has been arrived at by reference to all relevant factors may have the likely consequence that the contravener will become insolvent. This possibility should not prevent the Court from doing its duty. Otherwise, the important object of general deterrence will be undermined, as identified by the Full Court in Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 at [11] per Heerey, Finkelstein and Allsop JJ.

(v) The deliberateness of the contraventions and the period over which they extended 97 There can be no doubt that, as the ACCC pointed out, ACM's conduct towards both CT and JR was deliberate in the sense that it was used with a view to causing both those consumers to agree to pay their debts. I accept ACM's submission that, neither it nor any of its representatives, set out deliberately or intentionally to contravene the ACL in respect of the conduct which affected both CT and JR. Rather, in the case of CT, the relevant conduct, which extended over many years, seems to have occurred because ACM's representatives were apparently unaware of previous dealings and contact or attempted contact with CT. Likewise, I accept that the numerous letters of demand were generated and sent automatically, rather than dispatched by a conscious and deliberate act. That does not mean that automation excuses the conduct. Rather it is relevant to the Court's assessment of the deliberateness of the contraventions in the sense described by Edelman J in RL Adams at [73]. 98 As noted above, the course of conduct which affected CT extended over a period of approximately four years, which is lengthy. This is to be contrasted with the contravening conduct which affected JR, which involved a telephone call on one day.

(vi) Whether the contraventions arose out of the conduct of senior management of the company or at some lower level 99 The conduct giving rise to the contraventions arose from the conduct of relatively junior ACM employees in the case of both CT and JR. It may reasonably be inferred, however, that ACM management must have been aware of the contents of the pro forma letters of demand and, in particular, that some of the representations they contain were potentially misleading or deceptive, having regard to Perram J's findings in respect of similar oral representations in ACM 2012. I accept the ACCC's submission that ACM's failure to ensure that its systems were adequate to promote compliance must have stemmed from omissions or commissions by its senior management.

(vii) Whether ACM has a corporate culture conducive to compliance with the ACL, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention 100 I accept that, when the relevant conduct occurred in relation to CT and JR, ACM had embarked on a necessary program of reform, largely in response to the adverse findings in ACM 2012. The changes are summarised in [54] to [59] above. They may be further particularised as follows: (a) From 2012, ACM worked to bring about cultural change within ACM including, by way of example only, changing position titles from "collectors" to "relationship managers". (b) From 2012, ACM focused on its conduct and culture with, and the addressing of, its customers. For instance, "debtors" are now referred to as "customers" and this has also been imbedded in ACM's training, documentation and IT systems. (c) From August 2013, representatives of ACM have regularly met with the Credit and Investments Ombudsman (CIO), to discuss discrete issues and obtain comments, early input and improve the turnaround timeframe from the CIO on disputed customer debts. (d) From November 2013, ACM set up a centralised department for Financial Counsellors, Hardship Customers and Public Trustees who interact with ACM. (e) From February 2014, ACM developed greater, in-depth, compliance examinations which test employees on ACM's internal policies and legal requirements at the end of their training program, requiring an 80 percent pass rate. (f) In April 2014, ACM implemented an IT Privacy Compliance Screen which relationship managers are required to complete on every contact, complying with Office of the Australian Information Commissioner requirements. In other words, employees are required to confirm personal information (at least full name and date of birth, then, if possible, address) to ensure they are speaking with the correct person, before even allowing the employee into the debtor's ledger card. (g) In late 2014, ACM established a relationship and (from January 2015) retained the services of Kildonan Uniting Care, an independent consultant and community service organisation within the Uniting Church, to review and amend ACM's debt collection practices, including providing instruction on respectful communications with customers. As a result, ACM's training program was updated, which assisted in changing ACM's culture and values. (h) In February 2015, ACM implemented regular auditing and monitoring of its employees' interactions with customers to ensure that customers are responsibly, respectfully and courteously dealt with and that ACM complies with the Guidelines. ACM's 10 quality analysts each listen to approximately 150 random calls per day. The quality analysts then grade the calls based on their compliance with legislative and regulatory guidelines, and ACM's policies. If the call has been identified with potential compliance implications, then it is sent to management for review. (i) From February 2015, ACM added 10 compliance staff to monitor calls, identify any compliance issues, and provide feedback to management. ACM now has 15 compliance staff plus Maxim Alves (Head of Compliance), who was hired by ACM in March 2018 as an experienced compliance officer having previously worked at American Express. (j) From May 2015, ACM implemented an IT automated sensitive word report audit system that reviews all customer notes overnight, and automatically flags sensitive accounts, pulls them out of the main stream collections and refers the accounts to the Compliance Team where sensitive words are identified, such as "hospital", "cancer", "dementia", etc (noting however that the system only went live in May 2016: cf [56] and [62] above). The Leadership Team are then required to review the relevant notes to ensure that customers are being handled appropriately and consistently with the Guidelines. The implementation of this system was complicated and took some time to develop and test. (k) In June 2015, ACM implemented Contact Counter IT system automation regarding the "number of contacts" process to ensure compliance with the relevant regulatory Guidelines in respect of the frequency and number of contacts allowed to be made to customers and third parties. 101 As ACM candidly acknowledged, not all the changes had been implemented when the conduct affecting CT and JR occurred. I accept, however, that this was principally because of the inherent delay in implementing complex reforms, such as the introduction of the sensitive word report audit system, which took approximately 12 months to install. 102 The Court accepts that ACM has updated its policies and processes and strengthened its compliance supervision by appointing Mr Alves as Head of Compliance and Ethics and increasing the number of employees in its Compliance and Ethics Team. Moreover, ACM has taken positive steps to address some of its deficiencies by engaging Kildonan Uniting Care and Anteris Consulting, who conducted an independent review of ACM's operations to determine the extent of ACM's compliance with relevant regulatory guidelines. This has led in turn to ACM updating its various policies and amending its letters of demand. I accept that BSI Group Australia recently certified that ACM operated a quality management system which complies with the requirements of ISO 9001. The ACCC did not identify any deficiency or shortcoming in ACM's revised and updated policies. These are all relevant matters.

(viii) Whether the contravener has shown a disposition to co-operate with the authorities responsible for enforcing the ACL in relation to the contraventions 103 ACM has shown what the ACCC accurately describes as "some limited disposition of co-operation" with it, by entering into an agreed statement of issues and an agreed statement of facts (which still left some important facts in dispute) and in not requiring CT and his GP to attend for cross-examination. ACM defended its decision not to concede liability and described the issue as "arguable". This was presumably done on legal advice. 104 I consider that some caution needs to be taken on this matter. The fact that a party decides to defend proceedings should not result in any increased penalty beyond that which would otherwise be appropriate, but its conduct overall may be relevant in determining whether any discount should apply (see Australian Competition and Consumer Commission v Westminster Retail Pty Ltd [2005] FCA 1299). It is also well to bear in mind that co-operation in the conduct of a trial is not a relevant matter in assessing penalty, although it may be relevant to the issue of costs (see Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; 118 FCR 236 at [166]).

(ix) Whether ACM has engaged in similar conduct in the past 105 For the reasons given in [93] above, it is relevant to take into account that ACM has engaged in substantially similar conduct in the past, as found in ACM 2012. Some weight should also be given to some differences between the proceedings, as highlighted in [94] above.

(x) The injunctive relief and compliance program 106 In circumstances where it is established that the primary object of a pecuniary penalty is deterrence (both specific and general), I consider that it is a relevant matter for the purposes of s 224(2) of the ACL to have regard to the specific and general deterrent effect of both the injunctive relief referred to above and the compliance program which is referred to below. I consider that the injunctive relief has both those effects here. I accept the ACCC's submission that the scope of the specific deterrence is confined to a repetition of the same conduct which has been found to be contravening conduct under particular provisions of the ACL. As noted above, the ACCC sought injunctive relief in this proceeding because it is designed to prevent ACM from repeating that conduct. Thus, specific deterrence is an important element underpinning the injunctive relief. The relief also produces general deterrence because it sends a signal to other corporations who are engaged in debt collecting that contraventions may give rise to injunctive relief and that serious consequences may ensue if the injunctions are breached. 107 The compliance program also has specific and general deterrent effects. It provides a comprehensive framework within which ACM is to conduct and regulate its future business. It also has general deterrence effects because it sends a message to other debt collectors that they are at risk of having to bear the cost and resources of having to implement and adhere to an externally imposed compliance regime.

(xi) Applicable pecuniary penalty in all the relevant circumstances 108 The ACCC sought pecuniary penalties in a total range of $1.54m to $1.65m, representing the maximum penalty of $1.1m with respect to ACM's conduct towards CT and a range of $440,000 to $550,000 with respect to its conduct towards JR. ACM submitted that total penalties in the order of $350,000 to $400,000 was appropriate, representing a penalty in the order of $270,000 to $300,000 in respect of its conduct towards CT and a penalty in the order of $80,000 to $100,000 in respect of its conduct towards JR. 109 ACM's contravening conduct in respect of CT is substantial and very serious. It occurred over several years and involved the sending of multiple letters of demand (which have been found to contain misleading or deceptive misrepresentations) and the making of approximately 40 telephone calls to CT's care facility. As ACM ought reasonably to have known, CT was in a position of special disadvantage because of his permanent disability, his residence in a care facility and the obvious difficulties he had in communication. Despite these matters, ACM persisted with its intimidating and overbearing attempts to recover some or all of its debt from CT. Although ACM's conduct was reprehensible, I do not accept the ACCC's description of it as "among the worst kind of contravention" which warrants the maximum pecuniary penalty. 110 The seriousness of ACM's conduct towards CT is underlined by the fact that the multiple letters of demand contained substantially similar representations to those which Perram J found to be misleading or deceptive in ACM 2012. There, the representations were made orally rather than in writing. Appropriate steps should have been taken by ACM to review and revise its pro forma letters of demand in the light of Perram J's reasons for judgment. It is to be acknowledged that some of the letters of demand were sent before those reasons were published. 111 ACM's conduct towards JR was also serious. It involved Mr Francisco employing substantially similar tactics to those which were found to be unlawful in ACM 2012. Those tactics were used in circumstances where Mr Francisco knew that JR was particularly vulnerable, given her status as a single parent with three dependent children, worked part-time and was receiving Centrelink payments. 112 Although there is no evidence that either CT or JR suffered any financial loss as a result of ACM's conduct, due regard must be paid to the significant effects which that conduct had on both consumers personally as described above. 113 I consider that the case for strong specific and general deterrence has plainly been made out. That is particularly so in circumstances where some of the contravening conduct bears such close similarity to the conduct which was found to be unlawful in ACM 2012. That is a highly relevant matter. For the reasons explained above, however, some weight has to be given to the steps which ACM has taken to strengthen its compliance processes, as described in [100]-[102] above. Some weight should also be given to the fact that the injunctive relief and compliance program which will be imposed by the Court should also serve the objectives of specific and general deterrence as explained in [106] and [107] above. 114 Weighing up all these matters, together with all the other relevant matters referred to above, I consider the appropriate pecuniary penalty in respect of ACM's conduct towards CT is $500,000 and in respect of JR is $250,000, i.e. a total of $750,000.

C Compliance program 115 Under s 246 of the ACL, the Court is empowered to order that a respondent establish and implement a compliance program to assist in ensuring that it avoids future contraventions of the CCA and the ACL. 116 As Middleton J pointed out recently in CFMEU (No 4) at [89], while the Court has a discretion under a provision such as s 246 of the ACL (in that case s 86C of the CCA), the discretion is subject to some limitations: 89. Therefore, there are some limits on what a court will order in considering a compliance program, including: (1) a court will be reluctant to order that a respondent undertake a compliance program where there is no clear benefit that might be delivered in terms of future behaviour by the respondent because this would amount to a punitive order; (2) the scope of any compliance program must be relevant to the contravention. That there must be a sufficient nexus between the conduct and the proposed order. 117 In that case, his Honour found that there was utility in requiring a compliance program, if only to "keep in the minds of shop stewards the basic requirements of the law". He stated that a compliance program would serve a useful purpose in the particular circumstances of that case. 118 Subject to one matter, the parties agreed on the form of publication and compliance program orders. They disagreed on one aspect of the compliance program, namely, whether the period for which ACM should retain records as required by paragraph 6.4 of Annexure B should be two years (as sought by the ACCC) or six months, save that where any audit reveals a Material Failure as there defined, the documents relevant to the matter should be retained for a period of a further six months (as sought by ACM). In support of its position, ACM said that there was no adverse finding or evidence that it had failed in the past to keep relevant records and thus it was purely speculative as to whether the period sought by the ACCC was appropriate. It also submitted that it can be assumed that the record-keeping requirement would involve costs. 119 In support of its position, the ACCC pointed out the interrelationship between paragraph 6 and paragraphs 16 and 17 of the compliance program. In particular, it submitted that if ACM's position was accepted, there was a risk that some documents might not be retained, which would undermine the effectiveness of the Compliance Program by, for example, potentially not having available relevant information and records which would inform the Compliance Review and the Compliance Report as required by paragraphs 16 and 17 respectively. Consequently, relevant information may not be available to inform the Board or a relevant governing body such as the ACCC of a Material Failure. 120 I accept the ACCC's position, for the reasons given by it. The relevant period should be two years and not the alternative position advanced by ACM. 121 Otherwise, I am satisfied that it is appropriate to make orders as agreed by the parties.

D Corrective advertising and adverse publicity order 122 Under s 246 of the ACL, the Court is empowered to order the publication of corrective advertising and, under s 247, it is empowered to make an adverse publicity order. 123 The parties were able to reach agreement on the form of publication of a corrective advertising notice. 124 I am satisfied that it is appropriate to make orders which reflect that agreement.

E Findings of fact order 125 Under s 137H of the CCA, the Court may make an order which has the effect that findings of fact made against a respondent in earlier proceedings will be prima facie evidence of those facts in any later proceedings brought by any person for damages under ss 236(1) or 237(1) of the ACL or compensation pursuant to s 239(1) of the ACL. Such an order was made in We Buy Houses and in previous decisions as referred to there by Gleeson J in [180]. The ACCC clarified in oral address that the order should apply to both the Primary Judgment and the reasons for judgment here. 126 ACM did not oppose the making of such an order. I am satisfied that it is appropriate to make the order sought by ACCC.

F Costs 127 ACM agreed that it should be ordered to pay the ACCC's costs of the proceedings.

Conclusion 128 For these reasons, orders will be made which are substantially in the form as agreed by the parties, subject to the determinations I have made on the amount of pecuniary penalty and paragraph 6.4 of the compliance program. I certify that the preceding one hundred and twenty-eight (128) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.

Associate: Dated: 21 December 2018 Schedule No. NSD 851 of 2016 Federal Court of Australia District Registry: New South Wales Division: General Applicants Second Applicant: Scott Gregson, the holder of a delegation dated 23 September 2014 from the Australian Securities and Investments Commission pursuant to section 102 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) in relation to alleged contraventions of the ASIC Act.

1. Material Failure means a failure, that is non-trivial and which is ongoing or continued for a significant period of time, to:
   • incorporate a requirement of this Order in the design of the Compliance Program, for example if the Complaints Handling System did not provide any mechanism for responding to complaints; or
   • comply with a fundamental obligation in the implementation of the Compliance Program, for example, if no Staff Training has been conducted within the Annual Review period.