Australian Competition and Consumer Commission v Bupa Aged Care Australia Pty Ltd

Annexure C METHODOLOGY FOR REMEDIATION PROGRAM 1 Calculate the amount of extra service fees paid by, or on behalf of, the Eligible Resident to the Respondent during the period the Eligible Resident was residing at an ESS Home, including by making any adjustments that are from time to time determined by Bupa Aged Care to apply to that Eligible Resident's particular circumstances (for example, adjustments to account for residents in single rooms) (Total Extra Service Fees Paid); 2 Identify the extra services that have been, from time to time, determined by Bupa Aged Care to be the subject of this remediation program in respect of the ESS Home at which the Eligible Resident was located (Disputed Services); 3 Determine the "points value" for the Disputed Services by reference to the points allocated to those services pursuant to the Department of Health's benchmarking points scale (Disputed Services Points Value); 4 Determine the "points value" of all of the extra services (including the Disputed Services) required to be provided at the ESS Home at which the Eligible Resident was located, by reference to the total points allocated to those services pursuant to the Department of Health's benchmarking points scale (Overall Points Value); 5 Calculate the percentage value of the Disputed Services Points Value as against the Overall Points Value (Disputed ES%) as follows: 6 Calculate the dollar value of the Disputed Extra Services for the Eligible Resident (Base Amount), pursuant to the following calculation: 7 The Base Amount is the amount for the purposes of order 5(a)(i). Annexure D [BUPA LOGO TO BE INSERTED BY BUPA PRIOR TO PUBLICATION OF THE CORRECTIVE NOTICE] Bupa Aged Care ordered to pay penalties and compensation for breaching the Australian Consumer Law Following action from the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has declared that Bupa Aged Care Australia Pty Ltd (Bupa) breached the Australian Consumer Law from at least 15 April 2013 to June 2018. If you or a family member lived in one of the affected Bupa aged care homes during these dates, please take the time to read about Bupa's compensation program, available on Bupa's website. Bupa has already compensated a number of residents affected by its conduct. From at least 15 April 2013 to June 2018, residents at Bupa's aged care homes who entered into 'Extra Service Agreements' were promised access to various extra services (Extra Services), and were charged a fee for those Extra Services. The Extra Services included items such as gardens or rooms specifically designed to assist those living with dementia, separate external buildings for residents' leisure activities, and individually controllable heating and cooling systems. Extra Services are additional 'hotel type' services, including a higher standard of accommodation and hospitality services, but are not clinical or health services. The Federal Court declared Bupa breached the Australian Consumer Law by: • making false or misleading representations that all of the Extra Services would be available to residents, when a portion of the Extra Services were not available (either in whole or in part) in Bupa's aged care homes; • accepting payment for Extra Services when there were reasonable grounds to believe Bupa would not be able to supply a portion of those Extra Services (either in whole or in part) within the period specified or within a reasonable time, and Bupa ought reasonably to have been aware of those grounds; and • not supplying a portion of the Extra Services (either in whole or in part) to residents who paid Bupa for those services within the period specified by Bupa, or within a reasonable time, having accepted payment for those services. The Court ordered that Bupa pay penalties of $6 million and that it continue to undertake the compensation scheme to affected residents or their representatives which Bupa voluntarily commenced implementing in 2018. Bupa estimates that the total compensation it will pay will amount to $18.3 million and, as at 31 January 2020, Bupa had made payments of approximately $14.1 million (including interest). The Court also ordered Bupa to publish this corrective notice and to implement an Australian Consumer Law compliance program. The ACCC media release can be found here: [to be inserted by Bupa after the ACCC publishes its media release and prior to publication of the corrective notice] This corrective notice has been published by Bupa Aged Care Australia Pty Ltd pursuant to an order of the Federal Court of Australia in an action commenced by the Australian Competition and Consumer Commission. Annexure E COMPETITION AND CONSUMER COMPLIANCE PROGRAM Bupa will establish a Competition and Consumer Compliance Program (Compliance Program) that complies with each of the following requirements: Appointments 1 Within three months of the date of the Orders, Bupa 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 three months of the date of the Orders, Bupa will appoint a suitably qualified, internal or external, compliance professional with expertise in competition and consumer law (the Compliance Advisor). 3 Bupa will instruct the Compliance Advisor to conduct a competition and consumer law risk assessment within three months of being appointed as the Compliance Advisor (Risk Assessment). 4 Bupa 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): a. identifies the areas where Bupa is at risk of breaching sections of the Australian Consumer Law (ACL) which is Schedule 2 of the Competition and Consumer Act 2010 (Cth); b. assesses the likelihood of these risks occurring; c. identifies where there may be gaps in Bupa's existing procedures for managing these risks; and d. provides recommendations for any action to be taken by Bupa having regard to the above assessment. Compliance Policy 5 Bupa will, within 30 days of the date of the Orders, issue a policy statement outlining Bupa's commitment to compliance with the ACL (the Compliance Policy). 6 Bupa will ensure that the Compliance Policy: a. contains a statement of commitment to compliance with the ACL; b. contains an outline of how commitment to ACL compliance will be realised within Bupa; c. contains a requirement for all staff to report any Compliance Program related issues and ACL compliance concerns to the Compliance Officer; d. contains a guarantee that whistleblowers with competition and consumer law compliance concerns will not be prosecuted or disadvantaged in any way and that their reports will be kept confidential and secure; and e. contains a clear statement that Bupa will take action internally against any persons who are knowingly or recklessly concerned in a contravention of the ACL and will not indemnify them in the event of any court proceedings in respect of that contravention. Complaints Handling System 7 Bupa will ensure that the Compliance Program includes a competition and consumer law complaints handling system (the Complaints Handling System). 8 Bupa 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 Bupa's circumstances. 9 Bupa will ensure that staff and customers are made aware of the Complaints Handling System. Whistleblower Protection 10 Bupa will ensure that the Compliance Program includes whistleblower protection mechanisms to protect those coming forward with competition and consumer law complaints. 11 Bupa 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 Bupa's circumstances. Staff Training 12 Bupa will ensure that the Compliance Program provides for regular (at least once a year) training for all directors, officers, employees, representatives and agents of Bupa, whose duties could result in them being concerned with conduct that may contravene sections 18, 29 or 36 of the ACL. 13 Bupa must ensure that the training is conducted by a suitably qualified compliance professional or legal practitioner with expertise in competition and consumer law. 14 Bupa will ensure that the Compliance Program includes a requirement that awareness of competition and 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 sections 18, 29 or 36 of the ACL. Reports to Board/Senior Management 15 Bupa 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 Bupa will, at its own expense, cause an annual review of the Compliance Program (the Review) to be carried out in accordance with each of the following requirements: a. Scope of Review - the Review should be broad and rigorous enough to provide Bupa and the ACCC with: i. a verification that Bupa has in place a Compliance Program that complies with each of the requirements detailed in paragraphs 1 - 15 above; and ii. Compliance Reports detailed at paragraph 17 below. b. Independent Reviewer - Bupa will ensure that each Review is carried out by a suitably qualified, independent compliance professional with expertise in competition and consumer law (the Reviewer). The Reviewer will qualify as independent on the basis that he or she: i. did not design or implement the Compliance Program; ii. is not a present or past staff member or director of Bupa; iii. has not acted and does not act for, and does not consult and has not consulted to, Bupa in any competition and consumer law related matters, other than performing Reviews under this Compliance Program; and iv. has no significant shareholding or other interests in Bupa. c. Evidence - Bupa 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 Bupa's possession or control, including without limitation: i. the ability to make enquiries of any officers, employees, representatives and agents of Bupa; ii. documents relating to the Risk Assessment, including the Risk Assessment Report; iii. documents relating to Bupa's Compliance Program, including documents relevant to Bupa's Compliance Policy, Complaints Handling System, Staff Training and induction program; and iv. any reports made by the Compliance Officer to the Board or senior management regarding Bupa's Compliance Program. d. Bupa will ensure that a Review is completed within one year of this Compliance Program coming into effect, and that a subsequent Review is completed within each year for three years. Compliance Reports 17 Bupa will use its best endeavours to ensure that within 30 days of the completion of a Review, the Reviewer includes the following findings of the Review in a report provided to Bupa, (the Compliance Report): a. whether the Compliance Program of Bupa includes all the elements detailed in paragraphs 1 - 16 above, and if not, what elements need to be included or further developed; b. whether the Compliance Program adequately covers the parties and areas identified in the Risk Assessment, and if not, what needs to be further addressed; c. whether the Staff Training and induction is effective and if not, what aspects need to be further developed; d. whether Bupa's Complaints Handling System is effective and if not, what aspects need to be further developed; e. whether Bupa is able to provide confidentiality and security to competition and consumer law whistleblowers, and whether staff are aware of the whistleblower protection mechanisms; and f. whether there are any material deficiencies in Bupa'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/s.17 Bupa response to Compliance Reports 18 Bupa will ensure that the Compliance Officer, within 30 days of receiving the Compliance Report: a. provides the Compliance Report to the Board or relevant governing body; b. where a Material Failure has been identified by the Reviewer in the Compliance Report, provides a report to the Board or relevant governing body identifying how Bupa can implement any recommendations made by the Reviewer in the Compliance Report to rectify the Material Failure. 19 Bupa will implement promptly and with due diligence any recommendations made by the Reviewer in the Compliance Report to address a Material Failure. Reporting Material Failures to the ACCC 20 Where a Material Failure has been identified by the Reviewer in the Compliance Report, Bupa will: a. provide a copy of that Compliance Report to the ACCC within 21 days of the Board or relevant governing body receiving the Compliance Report; and b. inform the ACCC of any steps that have been taken to implement the recommendations made by the Reviewer in the Compliance Report; or c. otherwise outline the steps Bupa 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 21 Bupa will maintain a record of and store all documents relating to and constituting the Compliance Program for a period not less than five years - being the number of years compliance training is required and an additional two years following that period. 22 If requested by the ACCC during the period of five years - being the number of years compliance training is required and an additional two years following that period, Bupa will, at its own expense, cause to be produced and provided to the ACCC copies of all documents constituting the Compliance Program, including: a. the Compliance Policy; b. the Risk Assessment Report; c. an outline of the Complaints Handling System; d. Staff Training materials and induction materials; e. all Compliance Reports that have been completed at the time of the request; f. copies of the reports to the Board and/or senior management referred to in paragraph 15 and paragraph 18. ACCC Recommendations 23 Bupa will implement promptly and with due diligence any recommendations that the ACCC may make that the ACCC deems reasonably necessary to ensure that Bupa maintains and continues to implement the Compliance Program in accordance with the requirements of this Compliance Program.

INTRODUCTION AND SUMMARY 1 The respondent, Bupa, is a leading provider of residential aged care services in Australia. It cares for more than 6,700 people in 72 residential aged care facilities. Its activities are regulated under the Aged Care Act 1997 (Cth). By orders made today, and as a result of contraventions of the Competition and Consumer Act 2010 (Cth), which Bupa has admitted, the Court has imposed significant penalties on Bupa, as well as making a number of other orders which will have an impact on its future revenue and operations. The contraventions revolve around charges Bupa levied on a large number of its residents, for what are known as "extra services", as part of the care provided to residents across its aged care facilities.

BACKGROUND 2 Under s 32-1 of the Aged Care Act, providers of residential aged care services may apply to the Secretary of the Department of Health for "extra service status" in respect of a residential care service. The Secretary may grant extra service status if satisfied that, among other matters, "the proposed standard of accommodation, services and food in respect of each place that would be covered by the extra service status is … significantly higher than the average standard in residential care services that do not have extra service status": s 32-4(1)(b). Providers of residential aged care services, with the approval of the Aged Care Pricing Commissioner, are permitted to charge extra fees for places in residential care services in respect of which extra service status has been granted: Pt 2.5 Div 35. 3 On 17 April 2019, the Australian Competition and Consumer Commissioner (ACCC) commenced proceedings in this Court against Bupa in respect of 21 of Bupa's residential aged care facilities which, from April 2013 to June 2018, had been granted extra service status. In summary, the ACCC alleged that Bupa had represented that certain extra services would be provided to residents at its care facilities, received payment for those extra services, and then, either wholly, in part, or for only part of the relevant period, failed to provide the extra services. The ACCC sought relief including: (a) declarations that Bupa had contravened various prohibitions contained in the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act; (b) an injunction restraining Bupa from: (i) making representations that services will be available at their residential aged care facilities when the services will not be available; (ii) accepting payment for services to be provided at its residential aged care facilities when it ought reasonably to be aware that the services will not be provided; and (iii) where it has accepted payment for services to be provided at its residential aged care facilities, failing to provide the services; (c) pecuniary penalties in respect of the alleged contraventions of the ACL; and (d) orders that Bupa: (i) provide redress to consumers who suffered loss or damage as a result of the contraventions; (ii) publish a notice regarding the contraventions; and (iii) establish a compliance program meeting stipulated requirements. 4 On 29 July 2019, the Court ordered by consent that the proceeding be referred to mediation by a Registrar of the Court. On 4 October 2019, the Court was informed that, following mediation, the ACCC and Bupa had reached an in-principle settlement. 5 On 19 December 2019, the parties filed joint submissions on liability and relief and a statement of agreed facts and admissions. The submissions and statement of agreed facts relate to 20 of the 21 residential care facilities in respect of which the ACCC commenced proceedings against Bupa. It is Bupa's contraventions in relation to those 20 facilities which are the subject of the Court's orders. 6 In summary, Bupa has admitted, for the purposes of this proceeding, that it contravened various prohibitions contained in the ACL. It and the ACCC submitted that it was appropriate that the Court impose a penalty of $6 million and make various orders in relation to redress of consumers, publication of a corrective notice and establishment of a compliance program. 7 A short addendum to the statement of agreed facts and admissions was filed on 12 February 2020. On 13 February 2020, the Court heard the parties on the proposed orders.

THE FACTUAL SETTING FOR THE ADMITTED CONTRAVENTIONS 8 The admitted contraventions occurred over a period of five years, from 2013 to 2018, and in 20 of Bupa's residential aged care facilities. Those facilities are spread out across the country, including locations such as Berry and Mosman in New South Wales; Coburg and Greensborough in Victoria; Glenvale and New Farm in Queensland; and South Hobart in Tasmania. Although there are 692 residents whose individual contracts with Bupa are the subject of the admitted contraventions, an inference from the agreed facts is that more than 3,000 people who have been residents in Bupa's facilities during the relevant period have been affected by the contravening conduct. In that sense, the 692 residents are but a subset of the residents affected by Bupa's conduct. However, the penalty imposed by the Court is confined to what happened in relation to those 692 residents. 9 The services that Bupa said it would provide, accepted payment for, and failed to provide are diverse. A full list of the services that Bupa failed to provide is annexed to the Court's orders, and these reasons should be read with those orders. It is sufficient here to provide some examples of the extra services residents paid for: (a) provision of telephone handset in each resident's room; (b) colour-coordinated décor and quality fittings, including quality furniture maintained to a high standard and comparable to furniture found in people's homes; (c) individually controlled heating and cooling in residents' rooms; (d) recognised superior brand name toiletries; (e) separate external buildings available for residents' leisure activities (eg workshop, garden shed, gazebo); (f) provision of maximum intellectual stimulation within residents' individual capacity (eg University of the Third Age meetings and computer and internet education); (g) provision of escort to outside appointments as requested by residents or their families; (h) courtyards with children's play areas and raised gardens for resident gardening; (i) choice of three hot dishes, excluding porridge, at each breakfast; (j) availability for each resident of their favourite meal at least twice a week; (k) personalised printed menus available on dining tables; (l) dedicated harmony room available on site with Snoezelen equipment to assist in the management of dementia behaviours; (m) dedicated massage room with massage chair; (n) dedicated equipped physiotherapy room; and (o) cocktail hour at least three times a week. 10 The value the residents and families placed on these services no doubt differed as between individuals and families. Nonetheless, while some of the services might fairly be thought to be more peripheral to the experience of residents in Bupa's residential aged care facilities, others would clearly have been important for residents' self-confidence, and physical and emotional wellbeing. Of the examples just given, in some of the relevant facilities, the services were not provided at all (eg separate external buildings available for resident leisure, dedicated equipped physiotherapy room); others were provided in part (eg there were courtyards with raised gardens for resident gardening but without children's play areas); others were provided for only part of the relevant period (eg colour-coordinated décor and quality fittings, including quality furniture maintained to a high standard and comparable to furniture found in people's homes).

BUPA'S ADMISSIONS AND THE PROPOSED RELEIF 11 Bupa has admitted the following essential matters: (a) Between 12 December 2007 and 22 February 2018, Bupa entered into resident agreements in respect of more than 4,000 residents at the relevant facilities. (b) In nearly all cases, the resident agreements promised, in substance, that, in return for extra service fees, the resident would receive various specified extra services. (c) Bupa issued monthly invoices in respect of, and received payment for, the extra services. (d) Bupa failed to provide some of the extra services either in whole, in part, or for only part of the relevant period. (e) Bupa did not have sufficient compliance systems and controls in place during the relevant period to ensure that the extra services would be provided. It therefore did not have reasonable grounds for believing that it would provide those services. 12 Consequently, Bupa has admitted contravening the following provisions of the ACL: (a) s 18(1), which provides: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (b) s 29(1)(b) and (g), which provide: A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of good or services: (b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or … (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits … (c) s 36(3), which provides: A person must not, in trade or commerce, accept payment or other consideration for goods or services if, at the time of the acceptance: (a) there are reasonable grounds for believing that the person will not be able to supply the goods or services: (i) within the period specified by or on behalf of the person at or before the time the payment or other consideration was accepted; or (ii) if no period is specified at or before that time - within a reasonable time; and (b) the person is aware or ought reasonably to be aware of those grounds. (d) s 36(4), which provides: A person who, in trade or commerce, accepts payment or other consideration for goods or services must supply all the goods or services: (a) within the period specified by or on behalf of the person at or before the time the payment or other consideration was accepted; or (b) if no period is specified at or before that time - within a reasonable time. 13 The parties have submitted joint proposed orders. The principal components of the relief proposed are: (a) declarations that Bupa contravened the sections of the ACL referred to at [12] above; (b) an order that Bupa pay to the Commonwealth a pecuniary penalty in the amount of $6 million; (c) an order that Bupa undertake a redress scheme for affected residents; (d) an order that Bupa publish a notice about this proceeding and its resolution, in agreed form; and (e) an order that Bupa establish and maintain a compliance program. 14 As to the penalty amount, in response to questions from the Court about whether $6 million was an appropriate sum in circumstances where the total revenue for extra services payments was $55 million (accepting that figure includes revenue for services which were in fact delivered), senior counsel for the ACCC responded that, in addition to the pecuniary penalty, and after identifying the contraventions which may have occurred, Bupa established a remediation process pursuant to which it expects to pay approximately $18 million to affected residents. He also informed the Court that the ACCC had applied a 50% discount to the penalty it sought because of Bupa's admissions and early cooperation.

The appropriate penalty is a matter for the Court 15 Although the parties have jointly submitted that $6 million is an appropriate penalty, the Court is not bound to give effect to that submission. In Australian Competition and Consumer Commission v Volkswagen Aktiengesellschaft [2019] FCA 2166, Foster J said at [164]-[165]: First, it is the responsibility of the Court, and the Court alone, to determine the appropriate pecuniary penalty under s 224 of the ACL once the Court is satisfied that the person upon whom it proposes to impose that penalty has contravened one or more relevant provisions of the ACL. In order to discharge that responsibility, the Court must examine all of the circumstances of the case. Where the parties have put forward a statement of agreed facts, the Court may act upon that statement if it considers that it is appropriate to do so. The Court may also act upon such other evidence as may be admitted for the purpose of its determination of an appropriate pecuniary penalty. Second, where, as here, a specialist regulator and the contravener reach an agreement as to the amount of the pecuniary penalty which they suggest the Court should impose, the Court is not bound to give effect to that agreement and impose the agreed penalty. The responsibility to fix "… such pecuniary penalty … as the court determines to be appropriate" (s 224(1)) remains with the Court at all times. The Court must not act as a mere "rubber stamp". As Wilcox J said in Australian Competition and Consumer Commission v FFE Building Services Limited (2003) ATPR ¶41-969 (FFE) at 47,805 [34]-[36]: There is a danger in judges of this Court being overly influenced by the view as to penalty taken by the ACCC. In Australian Competition and Consumer Commission v Colgate Palmolive Pty Ltd (2002) ATPR ¶41-880; [2002] FCA 619, Weinberg J was confronted with a case where the ACCC and the respondent had agreed upon a particular penalty figure. Although he eventually decided to adopt the agreed figure, his Honour made it clear at [29] that he thought it too low. His Honour went on to make some comments that apply equally to a situation where the Court is presented with an agreed narrow range of penalties. His Honour said, at [34]: "There are dangers associated with this approach. The Court may be seen, perhaps not altogether incorrectly, to act as a 'rubber stamp' in simply approving a decision taken at an executive level by a body charged with investigating and prosecuting contraventions of the Act, but having no role in actually imposing particular sanctions for those contraventions. Negotiated settlements are an important vehicle for resolving complex matters such as those involved in the present case. It must be borne in mind, however, that there is a public interest in ensuring that corporations that engage in behaviour of the kind that occurred in this case are dealt with appropriately, and that proper recognition is given to the need for specific and general deterrence. There are important parallels between the fixing of a pecuniary penalty under s 76, and the ordinary sentencing process which is quintessentially a matter for the courts." Weinberg J noted the tendency of the Court simply to adopt the agreed figure. He said at [32]: "I acknowledge that both the ACCC and Colgate have accepted that the figure proposed is in no way binding upon the Court. However, when pressed to point to a single instance when the Court has not, in the past, endorsed such a figure, counsel found it difficult to do so." This seems to me a most unsatisfactory position. It involves an abrogation of responsibility by the Court. My concern is exacerbated by the level of penalties often accepted by ACCC. In 1992, Parliament made a dramatic revision of the scale of penalties available for breaches of Part IV of the Act. The maximum penalty for a corporate respondent was increased from $250,000 to $10,000,000. Parliament obviously intended to achieve a quantum leap in the size of penalties imposed for breaches of Part IV. Yet, as the cases cited to me demonstrate, ACCC has continued to negotiate penalties that are but a small fraction of the new maximum. In FFE, his Honour more than doubled the agreed penalty submitted to the Court by the parties. I agree with these observations made by Wilcox J and propose to keep them in mind when determining the appropriate pecuniary penalty in the present case. 16 That case concerned a car manufacturer's fraudulent attempts to make it seem that its cars emitted less nitrogen oxide than they did by installing software which caused the cars to emit less nitrogen oxide when they were being tested than in normal driving. It is, admittedly, far from this case. The essential point is that it is a matter for this Court to determine what is the appropriate penalty, on the facts before it. 17 Nonetheless, as the High Court held in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482, the Court can receive and, if appropriate, accept an agreed submission as to the amount of the pecuniary penalty to be imposed. The plurality said at [57]: [I]n civil proceedings there is generally very considerable scope for the parties to agree on the facts and upon consequences. There is also very considerable scope for them to agree upon the appropriate remedy and for the court to be persuaded that it is an appropriate remedy. Accordingly, settlements of civil proceedings are commonplace and orders by consent for the payment of damages and other relief are unremarkable. So are court-approved compromises of proceedings on behalf of infants and persons otherwise lacking capacity, court-approved custody and property settlements, court-approved compromises in group proceedings and court-approved schemes of arrangement. More generally, it is entirely consistent with the nature of civil proceedings for a court to make orders by consent and to approve a compromise of proceedings on terms proposed by the parties, provided the court is persuaded that what is proposed is appropriate. 18 Wigney J made a different but consistent observation in Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Limited [2016] FCA 1516; 118 ACSR 124 at [104]: In considering whether the proposed agreed penalty is an appropriate penalty, the Court should … generally recognise that there is no single appropriate penalty and that an agreed penalty may be an appropriate penalty if it falls within a range within which any of the figures could be considered to be appropriate having regard to all relevant circumstances. The Court should also recognise that the agreed penalty is most likely the result of compromise and pragmatism on the part of the Commission, and to reflect, amongst other things, the Commission's considered estimation of the risks and expense of the litigation had it not been settled. 19 I respectfully agree with Wigney J's observations, although it is important to emphasise that considerations of pragmatism and compromise on the part of the regulator do not absolve the Court from forming its own opinion that the proposed penalty is, on the evidence, within an appropriate range and proportionate to the conduct constituting the contraventions.

Matters relevant to the quantum of a civil penalty 20 The principles governing the imposition of a penalty are well settled. Section 224(2) of the ACL states: In determine the appropriate pecuniary penalty, the court must have regard to all relevant matters including: (a) the nature and extent of the act or omission and any loss or damage suffered as a result of the act or omission; and (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 Chapter 4 or this Part to have engaged in any similar conduct. 21 In Trade Practices Commission v CSR Limited [1991] ATPR 41-076 at 52,152-52,153, French J (as his Honour then was) listed a number of factors that will usually be relevant. The factors, which were conveniently summarised by Perram J in Australian Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761; 282 ALR 246 at [11], are as follows: (1) The size of the contravening company. (2) The deliberateness of the contravention and the period over which it extended. (3) Whether the contravention arose out of the conduct of senior management of the contravenor or at some lower level. (4) Whether the contravener has a corporate culture conducive to compliance with the Act (or the new Australian Competition and Consumer Law) as evidenced by educational programmes and disciplinary or other corrective measures in response to an acknowledged contravention. (5) Whether the contravener has shown a disposition to cooperate with the authorities responsible for the enforcement of the Act in relation to the contravention. (6) Whether the contravener has engaged in similar conduct in the past. (7) The financial position of the contravener. (8) Whether the contravening conduct was systematic, deliberate or covert. 22 In addition, in Director of Consumer Affairs Victoria v Gibson (No 3) [2017] FCA 1148 at [50] I said: Factors which focus on the acceptance of responsibility, admission of liability and cooperation in a proceeding by a respondent, are also taken into account: see Mornington Inn at [72]-[78] (Stone and Buchanan JJ); NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 293-294 (Burchett and Kiefel JJ; Carr J agreeing) and Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 at [148] (Yates J). These factors may mean, for example, that because of the respondent's cooperation, less public resources (both in terms of the Court's resources and those of the regulator) have been used than would otherwise have been the case, and the respondent should have this cooperation recognised in the determination of an appropriate penalty. Similarly, where a respondent accepts responsibility for the contravention, adduces evidence of steps taken to ensure such a contravention will not occur in the future, expresses remorse or contrition or otherwise indicates consciousness about the seriousness of the contravening conduct, these attitudes may persuade a court in a given circumstance that it is appropriate to impose a lower penalty than might otherwise be the case. Such attitudes might, for example, persuade a court that a greater penalty is not necessary for purposes of specific deterrence because a respondent has accepted her, his or its conduct was unlawful and should not be repeated. 23 As Allsop CJ observed in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; 327 ALR 540 at [9], and as I noted in Gibson (No 3) at [49], the factors are, of course, not a substitute for the statutory text. They are not a checklist. But they will often be relevant and may usefully be adverted to when the Court is considering the appropriate penalty in a given case.

THE APPROPRIATENESS OF THE PENALTY 24 Among the factors I have referred to above, those I consider to be of particular weight here are as follows: (a) Bupa made no deliberate attempts to mislead or deceive the affected residents. Rather, the contravening conduct occurred because Bupa had insufficient compliance systems and controls in place to detect when extra services were not being wholly or partially provided, despite residents paying for them; (b) Bupa self-reported and has shown contrition (both publically and privately to affected residents and their families); (c) Bupa has not been the subject of any previous orders under consumer law provisions; (d) the conduct extended over a long period and is properly described as serious; (e) those affected by the contravening conduct are part of a vulnerable sub-set of Australian consumers; and (f) Bupa has cooperated with the ACCC and the Court. I expand on some of these below, by reference to the agreed statement of facts.

No deliberate attempts to mislead or deceive 25 The parties have agreed and I accept that the contraventions were not the result of any deliberate intention to breach the ACL, or any deliberate attempt to mislead affected residents. The parties agree, and I accept, that at the time of accepting fees for extra services Bupa intended to provide a higher standard of accommodation, food and non-clinical services to the affected residents, including by providing the extra services. What let it - and the affected residents - down was that it had "insufficient" compliance systems in place to monitor the delivery of the extra services for which residents had paid. The term "insufficient" is the agreed term, but I infer from the facts describing the nature and extent of the non-delivery of extra services that Bupa's systems must have been highly inadequate.

Self-reporting, contrition and co-operation 26 In or about June 2018, Bupa voluntarily disclosed the matters the subject of this proceeding to the ACCC. This is said to have been shortly after Bupa's board and senior management became aware of the matters after an internal audit undertaken between March and May 2018 in response to a resident complaint made in November 2017. 27 At [37]-[39], the statement of agreed facts and admissions states: Thereafter, Bupa provided a significant amount of further information and documents, including in response to requests by the ACCC, regarding the nature and extent of the conduct, which assisted the ACCC's investigation of the matter. Further, during the period June 2018 to April 2019, at which point the Proceeding was commenced, Bupa Aged Care also: (a) publicly and privately (to residents, including in one-on-one meetings carried out by staff known to the affected individuals) expressed its contrition and regret in respect of the matters the subject of the Proceeding in terms that did not seek to downplay or excuse its conduct; (b) provided regular and transparent updates to the ACCC regarding its voluntary remediation process (being the process described in paragraphs 40 to 44 below); (c) consulted with the ACCC regarding its voluntary remediation process; and (d) consulted with more than 3,200 potentially affected residents and their families regarding its voluntary remediation process, including by: (i) informing potentially affected residents as to how they could seek payments pursuant to the voluntary remediation process; (ii) making appropriate changes to that process in light of resident and family feedback; and (iii) reassessing and revising payments to more than 140 residents in light of resident and family feedback. Further, since the commencement of the Proceeding, Bupa Aged Care: (a) has continued to work cooperatively with the ACCC in relation to the matters the subject of the Proceeding; (b) has continued to work closely with potentially affected residents and their families in the manner described in paragraph 38(d) above; and (c) entered admissions at the earliest available opportunity. 28 In addition, Bupa has implemented new systems designed to prevent a repeat of the conduct the subject of this proceeding (described at [34] below), and Bupa has established a remediation process (described at [47] below).

Nature of the conduct 29 The ACCC and Bupa submitted that some of the failures to deliver services were more serious than others. I agree. Some services were not provided at all; some were not provided in full; some were provided for only part of the relevant period. Further, as I have said, the services themselves were diverse. 30 At [9] above, I have given examples of the services that were not provided. Although the precise circumstances of residents affected by the non-provision of these services are not before the Court, one may infer, as I do, that some of the services would have been extremely important to residents. For example, it is likely that many residents would have wanted to retain a measure of independence upon entering Bupa's residential care facilities. It is obvious that Bupa's failure to provide telephones and escorts to outside appointments, when those services were requested and paid for, would have diminished residents' independence. 31 Bupa acknowledged that, as a result of its conduct: (a) Applicable Residents were likely to be misled about the precise extra services that were to be provided to them at the ESS Home in which they resided; (b) the failure to provide the Relevant Extra Services meant that the level of comfort and quality of life of the Applicable Residents was less than represented; (c) some of the Applicable Residents may not have been in a position to complain about the absence of particular Relevant Extra Services because of their frailty, condition and/or capacity; and (d) in some circumstances, Applicable Residents either suffered or are likely to have suffered loss where they paid extra service fees in circumstances where not all of the Relevant Extra Services promised in return were provided as required. 32 The ACCC and Bupa made further submissions about the loss or damage suffered by residents which I discuss at [36] below. 33 Bupa's explanation for why it failed to provide the services it was meant to provide is, in effect, that there was a systems error. At [30]-[31] of the statement of agreed facts and admissions, the ACCC and Bupa said the following: The systems and processes that Bupa Aged Care did have in place at the time included the following: (a) Business policies and procedures (in documents called "work instructions"), which related to all aspects of residential care and administration (including consumer contracting) and were provided to each of the ESS Homes. Each of the ESS Homes was required to self-assess its compliance with the Bupa Aged Care work instructions. (b) Processes for undertaking internal self-assessments, audits and reviews in respect of individual ESS Homes, and for addressing and remediating any areas identified as requiring improvement. The ESS Homes were also from time-to-time subject to external audits from Bupa Aged Care's regulators. However, notwithstanding the existence of those systems and controls, Bupa Aged Care accepts that they were not sufficient to enable Bupa Aged Care to ensure that the Relevant Extra Services were in fact provided to the Applicable Residents on a consistent basis and were therefore inadequate. In particular: (a) Bupa Aged Care did not have in place sufficient processes to ensure that: (i) its standard form resident agreements at the ESS Homes were updated as and when the Relevant Extra Services ceased being provided or were replaced; (ii) the Applicable Residents' resident agreements were updated as and when the Relevant Extra Services ceased being provided or were replaced; and (iii) legacy resident agreements, which had previously been used by other aged care providers, were not used at those of the ESS Homes that were acquired by Bupa Aged Care from other providers (for example, Bupa South Hobart and Bupa Glenvale); (b) Bupa Aged Care's library of work instructions was large and complex, which impacted upon the accessibility of those documents to staff within the ESS Homes and therefore the effectiveness of those documents as a control; (c) further, while processes were in place to require the ESS Homes to self-assess their compliance with work instructions, there were insufficient centralised processes to assess the level of that compliance; (d) the availability of extra services was not incorporated into Bupa Aged Care's register of compliance obligations, which impacted upon Bupa Aged Care's ability to identify and address areas of dissatisfaction in respect of non-clinical matters at an early stage and therefore the effectiveness of Bupa Aged Care's internal self-assessment, audit and review as a control; (e) Bupa Aged Care's Strategy and Portfolio Development team did not consistently take into account the impact of refurbishments or upgrades to facilities at the ESS Homes on Relevant Extra Services that had been promised. For example, the decision to undertake a refurbishment at Bupa Caulfield resulted in the removal of certain of the Relevant Extra Services, namely hydro baths (items 26 and 27), antique frosted lights (item 28) and mirror sliding doors (item 29). 34 It is agreed that Bupa has taken steps to improve its governance systems and processes. In particular, the statement of agreed facts and admissions states, at [46], that Bupa has: (a) created a new compliance, assurance and customer experience function, which is proposed to include a Line 1 Head of Risk and a Director of Resident Experience and Community Engagement. Bupa Aged Care is in the process of recruiting for these roles, although there is currently someone acting in the role of Director of Resident Experience and Community Engagement. The remit of the new role of Director of Resident Experience and Community Engagement includes reviewing the resident journey at Bupa Aged Care, which includes onboarding processes such as entering into resident agreements; (b) designed an assurance program, which is in the process of being implemented and which is intended to ensure greater monitoring of compliance with obligations under resident agreements (including to take account of any variance between homes); (c) commenced work to review and, where possible, simplify Bupa Aged Care's library of work instructions, for the purpose of enabling them to be more accessible to staff and therefore improving their overall effectiveness as a control; (d) created a new Customer Feedback and Complaints team (consisting of 6 members), whose role is to deal with all customer complaints made to Bupa Aged Care on any matter including in respect of consumer law compliance; (e) improved consumer complaints collation and management through measures such as: (i) the development and implementation of a new complaints management framework and complaints management policy, which is intended to strengthen consumer engagement across the business and ultimately ensure a consistent approach to the collation and management of complaints and feedback from residents and their representatives; (ii) the development of a training program in respect of complaints and complaints management (including in relation to ACL compliance) for all staff, including senior management and those involved in the resident "onboarding" process. Bupa Aged Care will commence rolling this out from early 2020; (iii) the development of a monitoring plan to ensure that Bupa Aged Care's complaints management framework is operating as intended, key controls are functioning correctly and potential areas for improvement are identified at an early stage. Bupa Aged Care anticipates that this plan will be fully operational in early 2020; and (f) the implementation of improved complaints and feedback reporting to management and Board. 35 There is no evidence before the Court about how, in a practical sense, residents came to pay for extra services, and yet either did not receive them at all, or received them for some period of time and then not others, or received part of a service only. The evidence to which I have referred may go some way to explaining how, at a systemic level, the failure to provide such services was not detected, whether at each facility or in some wider way. Although there is evidence that one resident complained, in November 2017, and that Bupa responded by conducting an internal audit, there is no evidence about whether there were other complaints and, if so, what Bupa did about them. Evidence of that kind might have cast a different light on Bupa's conduct. However, the Court must consider the relief sought only on the basis of the evidence before it, and any inferences which properly arise from that evidence. Accordingly, I am compelled to accept the way the parties put this characterisation of Bupa's conduct to the Court.

Loss or damage suffered (s 224(2)(a)) 36 The Court is unable to quantify in monetary terms the loss suffered by residents affected by the conduct the subject of this proceeding. A factor relevant to that calculation would have been the amount that residents paid for services that they were told would be provided and were not provided. The parties contend that they do not know what this amount is. 37 It is, however, not necessary to know exactly how much residents paid for services that they did not receive to conclude that the loss or damaged suffered by residents was serious. The statement of agreement facts lists the following matters: (a) The 692 Applicable Residents who were affected by the admitted contravening conduct were a particularly vulnerable subset of consumers, being residents of aged care homes. (b) In some cases, particular Relevant Extra Services were not provided to the Applicable Residents at all for the entirety of the Relevant Period. (c) Most if not all of the contraventions might have been avoided altogether had sufficient systems and controls been implemented, as referred to in paragraph 20(b) above. 38 In addition, as noted above, the parties' joint submissions observe that residents were likely to have been misled by Bupa's conduct and were likely to have experienced a lower quality of life than they had been led to expect. 39 The loss is therefore more than a financial loss. It is a loss of services that affected residents (or their families) deliberately sought out, to improve their quality of life, to assist them in finding interest and satisfaction in their residential circumstances, and to make the later parts of their lives more comfortable and enjoyable. Bupa's contraventions denied affected residents such things. To what extent, it is not possible to say, on the evidence. However, I infer it was to more than a trifling extent, and certainly sufficient to describe Bupa's conduct as having serious effects.

Circumstances of the contraventions (s 224(2)(b)) 40 The facts relevant to this factor are in some sense common to the last factor. In addition, however, the Court emphasises that Bupa is in a position of contracting for the provision of services with people and their families at a difficult stage of their lives, where their bargaining power and their attention to detail may be impaired, and where they may have been less able to insist on being provided for what they paid for.

Capacity to pay and specific deterrence 41 Bupa clearly has a financial capacity to pay a significant penalty, and the contravening conduct was responsible for considerable revenue received by it. 42 The statement of agreed facts and admissions states that extra service fees received in respect of the relevant facilities generated revenue of approximately $55 million. I have already observed that precisely how much of this is attributable to services that were not provided cannot be identified on the evidence before the Court, though it is said to be "a minority" of the total revenue. Some indication is that Bupa expects to pay approximately $18 million under the remediation scheme. 43 As to Bupa's overall financial position, the Court was provided with the following revenue and profit/loss figures for Bupa for FY16-19: Period Revenue Profit / (Loss) FY16 $639.2 million $38.7 million FY17 $663.4 million $22.3 million FY18 $629.1 million $10.3 million FY19 $605.3 million ($62.4 million)

44 The relevance of a contravener's financial position was explained by Wigney J in ACCC v ANZ at [89]: The size of the contravening corporation 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]. 45 On that basis, I find that a penalty of $6 million, while an objectively large sum, is unlikely to have a significant impact on Bupa's financial positon. That is not to say that the sum should be seen as no more than "the cost of doing business", especially when combined with the other financial consequences for Bupa of these contraventions, such as the remediation scheme, and the compliance program. 46 Uninformed by the parties' statement of agreed facts and joint submissions, I would have been inclined to see $6 million as an inadequate financial penalty for the contravening conduct, in light of the seriousness of the conduct and the vulnerability of the affected consumers. Measured against overall revenues generated for Bupa from extra service fees, and in light of its financial position, I would have been inclined to the view that it may be an insufficient deterrent for a corporation the size of Bupa. However, with some reluctance, I have accepted the parties' submissions that this is not the case, in particular when one stands back and looks at the overall effect of all the orders to which Bupa has agreed, together with the remediation scheme.

The corrective measures taken by Bupa 47 I have set out the agreed facts concerning steps Bupa has taken to improve its systems. Separate to this is a remediation process that Bupa has established to compensate residents who have been affected by Bupa's failure to provide services. This is described at [40]-[44] of the statement of agreed facts and admissions: After identifying the matters the subject of the Proceeding, from in or about July 2018, Bupa Aged Care devised and implemented a remediation process in respect of the matters the subject of the Proceeding. As noted in paragraph 38 above, it consulted with the ACCC in doing so. The remediation process involved Bupa Aged Care making payments to residents who had potentially been affected by the matters the subject of the Proceeding, including the Applicable Residents. Those payments were calculated by: (a) undertaking a "point in time" analysis, pursuant to which Bupa Aged Care compared a list of assumed extra services for each ESS Home (Assumed Extra Services) with the extra services that were (subject to the application of the assumptions set out in paragraph 41(b) below) in fact available at that ESS Home at the time of the review; and (b) applying various remediation assumptions that were designed to favour the resident and best promote the ability to make payments promptly, namely assuming that: (i) the list of Assumed Extra Services was accurate for each ESS Home at all times during which extra services were required to be provided; (ii) the list of Assumed Extra Services for each ESS Home reflected the individual resident's agreement with Bupa Aged Care, regardless of that resident's precise contractual arrangements; (iii) the services identified by Bupa Aged Care as not available to residents at the time of the "point in time" analysis (Assumed Missing Extra Services) at each ESS Home were not provided at that ESS Home at any time, even where evidence existed that they may have been provided historically; (iv) in some instances where the description of an Assumed Missing Extra Service had a subjective element, the service was not available at that ESS Home even where there was some evidence to support a view to the contrary; (v) where the description of an Assumed Missing Extra Service consisted of multiple elements, one or more of which was not available at that ESS Home on the date(s) of the relevant "point in time" analysis, the service as a whole was not provided at any time; and (vi) where an outdated or underutilised Assumed Missing Extra Service had been replaced by a different service, the discontinued service was not provided at that ESS Home at any time (and no credit was given for the replacement service). Bupa Aged Care devised and implemented its remediation process with the assistance of PPB Advisory forensic accountants (subsequently acquired by PwC). By reason of the remediation assumptions set out in paragraph 41 above: (a) Bupa Aged Care's methodology was favourable to residents potentially affected by the matters the subject of the Proceeding, and unfavourable to Bupa Aged Care; (b) the assumptions set out in paragraph 41(b) did not, in every case, reflect the legal and factual position in respect of each resident; (c) Bupa Aged Care made payments to residents without regard to any applicable limitation periods; and (d) as a result, in some cases, Bupa Aged Care has made payments to residents which Bupa Aged Care considers likely to have exceeded potentially affected residents' lawful entitlement to repayment had they have commenced proceedings seeking recovery in their own right. In FY18, Bupa Aged Care made a provision in the order of $16.4 million in respect of future payments under its voluntary remediation process and estimates that it will pay out approximately $18.3 million in total under this process. As at 30 November 2019, Bupa Aged Care had made payments totalling approximately $11.52 million (including interest) to residents (including the Applicable Residents) pursuant to its voluntary remediation process. 48 In the addendum to the statement of agreed facts and admissions that was filed on 12 February 2020, the ACCC and Bupa stated: Paragraph 44 of the SAFA sets out the amount Bupa Aged Care had paid to residents under its voluntary remediation process up to 30 November 2019. Since that time, by 31 January 2020, Bupa Aged Care had made payments totalling approximately $14.1 million (including interest) to residents (including the Applicable Residents) pursuant to its voluntary remediation process. 49 As I note at [46], the extent of the remediation scheme is one of the factors which has persuaded me that the pecuniary penalty sought is not too low.

The abandonment of extra service status 50 The fact that Bupa has, since discovering the contraventions and cooperating with the ACCC, decided not to continue to seek extra service status under the Aged Care Act was relied on by the parties as another burden assumed by Bupa as a consequence of the contraventions. I am not persuaded there is sufficient evidence to find this factor weighs in favour of Bupa, and in particular in favour of the proposed penalty amount. There is no evidence about the cost/benefit analysis of a facility having extra service status. There is no evidence whether it affects how many people seek to become residents of its facilities, or not. In short there is no evidence of what impact, if any, the decision not to seek such status has had on Bupa's financial position, or any other aspect of its business. Obviously, the decision may avoid the likelihood of further contraventions of the same kind; but there is no evidence that the election not to seek extra service status in any of its facilities going forward is necessarily a burden or disadvantage to Bupa. Accordingly, it is not a factor which should weigh in its favour in the consideration of penalty. Nor, of course, does it weigh against Bupa. The absence of evidence makes it of little relevance.

Costs 51 Bupa has agreed to contribute to the ACCC's legal costs, in the sum of $80,000. That is a matter weighing in its favour. It also plainly has to bear its own legal costs.

Maximum penalty and course of conduct 52 During the relevant period, s 224(3) of the ACL relevantly limited the maximum pecuniary penalty payable by a body corporate in respect of a contravention of s 29 and s 36 of the ACL to $1.1 million per contravention. Contraventions of s 18 of the ACL are not (and were not, during the relevant period) subject to a pecuniary penalty. 53 The ACCC does not contend for anywhere near the maximum penalty for each individual contravention, which in any event cannot be quantified. Rather, it contends for a single penalty, representing what occurred as a single course of conduct. 54 In Gibson (No 3), I explained at [35] that the Court's task is to "undertake a factual analysis to identify whether there is a close interrelationship between the legal and factual elements of two or more contraventions by the respondents". 55 The ACCC and Bupa submit that Bupa's contraventions of the ACL "all emanated from a common source, being a failure of Bupa Aged Care's compliance systems, such that they are properly to be regarded as factually and legally interrelated and therefore a single course of conduct for the purposes of assessing penalty". That is the case the parties presented to the Court in the statement of agreed facts and admissions. As I have noted above, the Court has no evidence before it about how the contraventions occurred, at a practical or case-by-case level, nor how residents became aware of, or were affected by, the contraventions. On the evidence as presented, there is no basis for the Court to depart from the parties' contention that the contraventions are capable of being characterised as a single course of conduct. 56 Although I am prepared to accept, on the agreed facts, that Bupa's contraventions are properly characterised as arising from a single course of conduct, that does not mean that I am bound to impose a penalty no greater than the maximum penalty stipulated by s 224(3) of the ACL for a single contravention: Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 at [229]-[235]. Plainly enough, the figure of $6 million exceeds the maximum for a single contravention, but only by several multiples, rather than by any figure related to the 692 affected residents.

The totality principle 57 The ACCC and Bupa submitted that a penalty of $6 million reflects the totality of Bupa's contravening conduct. 58 The totality principle operates as a final "check" on the process by which the Court reasons to the appropriate penalty. It is a matter of proportionality, and in this respect it is, in my view, distinct from the course of conduct principle: Gibson (No 3) at [36]. 59 The parties did not advance any submissions which would assist the Court to understand how the figure of $6 million was arrived at, save for the ACCC's indication during oral submissions that the ACCC had been prepared to give Bupa an effective 50% "discount" because of its cooperation and contrition. Implicitly, then, the ACCC invites the Court to accept that such a "discount" is appropriate. 60 With some misgivings, I am satisfied that the amount of $6 million is appropriate overall, and is proportionate to the contravening conduct, but only because of the other steps being taken by Bupa, which illustrate that it will need to expend significant sums (and has done so already) to complete those steps. The compliance program will be costly. The administration of the remediation program will be costly. The evidence does not quantify these costs but I am satisfied they would be substantial. It is an agreed fact that Bupa has engaged PPB Advisory forensic accounts (subsequently acquired by PwC Australia) to devise and implement its remediation process. 61 As noted above, were it not for these matters, I would have been inclined to see the $6 million penalty as inadequate, taking into account the matters to which I have earlier referred. Without these additional matters and the expenditure they require, the $6 million would have been closer to simply a cost of doing business for Bupa. However, when all the other measures are considered, I am satisfied it is more than that. It is on the low end of appropriate, but the Court must give weight to the fact that it is an agreed penalty, and only part of a wider set of orders against Bupa.

The redress program 62 Section 239 of the ACL provides: (1) If: (a) a person: (i) engaged in conduct (the contravening conduct) in contravention of a provision of Chapter 2, Part 3-1, Division 2, 3 or 4 of Part 3-2 or Chapter 4; or (ii) is a party to a consumer contract who is advantaged by a term (the declared term) of the contract in relation to which a court has made a declaration under section 250; and (b) the contravening conduct or declared term caused, or is likely to cause, a class of persons to suffer loss or damage; and (c) the class includes persons who are non-party consumers in relation to the contravening conduct or declared term; a court may, on the application of the regulator, make such order or orders (other than an award of damages) as the court thinks appropriate against a person referred to in subsection (2) of this section. (2) An order under subsection (1) may be made against: (a) if subsection (1)(a)(i) applies - the person who engaged in the contravening conduct, or a person involved in that conduct; or (b) if subsection (1)(a)(ii) applies - a party to the contract who is advantaged by the declared term. (3) The order must be an order that the court considers will: (a) redress, in whole or in part, the loss or damage suffered by the non-party consumers in relation to the contravening conduct or declared term; or (b) prevent or reduce the loss or damage suffered, or likely to be suffered, by the non-party consumers in relation to the contravening conduct or declared term. (4) An application under subsection (1) may be made at any time within 6 years after the day on which: (a) if subsection (1)(a)(i) applies - the cause of action that relates to the contravening conduct accrued; or (b) if subsection (1)(a)(ii) applies - the declaration is made. 63 I have summarised the redress program that Bupa has already established at [47]-[48] above. The ACCC and Bupa seek orders "to ensure that the program already commenced by Bupa … is implemented to its conclusion". I am satisfied the orders sought are appropriate.

The compliance program 64 At [34] above, I described the steps Bupa has already taken improve its governance systems and processes. The ACCC and Bupa now seek orders that Bupa establish a compliance program which meets specified requirements at its own expense. The key features of the proposed compliance program are as follows: (a) Bupa will employ suitably qualified staff to lead the compliance program. (b) Bupa will conduct a competition and consumer law risk assessment within three months of the appointment of a compliance advisor. (c) Bupa will issue a policy statement within 30 days of these orders. The statement will include, among other things, an outline of how Bupa's commitment to complying with the ACL will be realised, a requirement for staff to report compliance issues, and a statement that Bupa will take internal action against persons who are knowingly or recklessly concerned in a contravention of the ACL. (d) Bupa will establish a complaints handling system. (e) Bupa will establish whistleblower protection mechanisms. (f) Bupa will establish regular training for its staff on compliance with the ACL. (g) The compliance officer will report to the board and/or senior management every six months on the continuing effectiveness of the compliance program. (h) Bupa will cause an annual independent review of the compliance program to be carried out resulting in a report that will be provided to the board or relevant governing body. (i) Bupa will promptly address any material failures identified in the report and will notify the ACCC of the material failure and the steps taken to address it. (j) Bupa will promptly and with due diligence implement any recommendation the ACCC considers reasonably necessary to ensure that Bupa maintains and continues to implement its compliance program. 65 I am satisfied these orders are within the power of the Court under s 232 and s 246 of the ACL, and generally under s 23 of the Federal Court of Australia Act 1976 (Cth). 66 The implementation of the compliance program reduces the need for the monetary penalty to reflect general deterrence, as the risk of further contravention is reduced by the existence and implementation of this program. I am satisfied the orders sought are appropriate.

The public notice 67 This is an important aspect of the relief, not only because it is a mechanism by which the general public, and those affected, can be informed about the contraventions and the Court's findings, but also because of the general deterrence function it can serve. I also take into account the fact that the comprehensiveness of the notice, and its location on Bupa's main webpage, indicate significant cooperation and contrition from Bupa. 68 The notice will include the following words and will be maintained for 120 days: AN IMPORTANT NOTICE FOR CONSUMERS - BREACHES OF THE AUSTRALIAN CONSUMER LAW BY BUPA - ARE YOU ELIGIBLE FOR COMPENSATION? 69 As described in the joint submissions, the notice will: (a) alert previous residents who paid extra service fees at the ESS Homes of Bupa Aged Care's contravening conduct; and (b) as a result, aid the implementation of Bupa Aged Care's consumer redress program for such residents by alerting them of their potential eligibility for payments pursuant to that program. 70 The public notice will no doubt have a reputational cost for Bupa, as it should given the seriousness of the contraventions. I am satisfied the orders proposed about the public notice are appropriate.

CONCLUSION 71 If this matter had gone to trial, it would have been complex and time consuming. A large amount of public and private resources would have been expended. Bupa's conduct in avoiding that outcome, by making admissions and agreeing to material facts, should be recognised. Its self-reporting should also be acknowledged. At the same time, the evidence reveals that it has acted in a way, in respect of its own residents, a vulnerable group, which is deserving of the Court's public disapproval. 72 There will be orders in accordance with the parties' proposals. I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.

Associate: Dated: 12 May 2020

1. "Movement to music" sessions were provided to residents throughout the Relevant Period but were not provided by qualified therapists.
2. Heating systems were provided in the rooms of Applicable Residents at this ESS Home, but these were not individually controllable by residents.
3. While there was no dedicated craft room at Bupa Caulfield, arts and craft activities were regularly provided to residents in the lounge area.
4. The actual size of each single room varied, but based on sampling undertaken Bupa now anticipates that the average single room size was in fact in the order of 18-19 sq metres (including en suite and wardrobe).
5. The actual size of each 2 bed room on the Ground Floor varied, but based on sampling undertaken Bupa anticipates that the average room size was in fact in the order of 24.1 sq metres (including en suite and wardrobe).
6. Theatre sessions were provided to Applicable Residents at this ESS Home, but not twice daily.
7. However foot spas were provided to Applicable Residents for part of the Relevant Period.
8. While a cocktail hour was not held at least three times per week at Bupa Croydon, beer and wine was provided at a weekly "happy hour" or otherwise on request.
9. Heating systems were provided in the rooms of Applicable Residents at this ESS Home, but these were not individually controllable by residents.
10. However, carpeting was in place in the lounge area of Bupa Dural.
11. During the Relevant Period, the average floor area of single rooms at Bupa Greensborough was in fact 15.67m2.
12. While there was no outdoor children's play area at Bupa Greensborough, an indoor children's area was present for part of the Relevant Period.
13. While an external physiotherapist was not on site for 32 hours per week at Bupa Mosman, an external physiotherapist or physio aide was on site for at least the requisite time during the Relevant Period.
14. While the garden at Bupa Queens Park was not "specifically designed" for persons living with dementia, it was nevertheless designed in a manner suitable for those persons.
15. However, a physiotherapist was contracted to Bupa Roseville by an external provider and a physio aide was employed by Bupa Roseville, and Bupa understands that the total of their services equated to at least 14 hours per week, but the physiotherapist service itself was for less than 14 hours per week.
16. However guest speakers were invited to present to residents on an ad hoc basis.
17. 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 the Compliance Program 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.