Re-imposing penalty
74 The discretion having miscarried below, it falls to this Court to exercise the penalty discretion afresh.
75 The contravening conduct and the importance of general deterrence in this exercise has been explained above, and it is unnecessary to repeat. Suffice to say the seriousness of that conduct must be reflected in the penalty imposed.
76 It is recognised that ordinarily separate contraventions arising from separate acts should attract separate penalties. However where separate acts give rise to separate contraventions which are inextricably interrelated, they may be regarded as a "course of conduct" for penalty purposes: Yazaki at [234]. This avoids double punishment for those parts of the legally distinct contraventions that involve overlap in wrongdoing: see for example, Cahill at [39] and [41]. Whether the contraventions should be treated as a single course of conduct is fact specific having regard to all of the circumstances of the case.
77 The ACCC's case before the primary judge was that there were six different courses of conduct, or at least three. Properly considered, we find that there are at least three different courses of conduct (being one course of conduct for each government organisation that Employsure by its advertisement represented it had an affiliation with).
78 As the Court is considering the penalty afresh it is not constrained by any of the factual findings of the primary judge. Unlike some cases when the resentencing or re-penalising occurs in circumstances where there had been no challenge to the primary judge's factual findings, in this appeal several findings of the primary judge have been challenged and were the subject of argument.
79 We do not agree with the primary judge's conclusion, which accepted Employsure's submission that the contraventions amounted to one course of conduct: see [13]-[16] above.
80 The primary judge reached the conclusion that there was a single course of conduct because he found that the six Google Ads "were all published on the same medium and were found to convey the same representation, on the basis of the same statements and omissions, albeit with reference to three government agencies": PJ at [80] (italics in original). The primary judge also said the ACCC's position was inconsistent with how it ran its case on liability.
81 It is important to recall that the rationale for the course of conduct principle is that it avoids double punishment for those parts of the legally distinct contraventions that involve overlap in wrongdoing. In Cahill at [39] the Court observed:
The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is "the same criminality" and that is necessarily a factually specific enquiry.
82 Also see: Yazaki at [234].
83 Given the findings in Employsure FC, and taking into account the whole of Employsure's conduct, it is difficult to see how there is a risk that Employsure will be penalised twice for what is essentially the same contravening conduct in circumstances where we have found that there were at least three courses of conduct. Although the advertisements the subject of the contraventions were directed to the same result, and had the same vice, they nonetheless reflected separate acts, directed at three different agencies. They covered differing time spans. The mere coincidence that the six Google Ads appeared on the same medium does not reflect that Employsure engaged in a single course of conduct. Nor does the fact that, viewed generically, the Google Ads all conveyed an affiliation with a government agency. It may have been part of an ongoing marketing or advertising campaign or strategy, but that does not, without more, suggest it was one course of conduct, not least because Employsure chose to misrepresent an association with the differing government agencies using differing advertisements and over differing periods. Those two factors (being the use of the same medium and government affiliation) appear to have been at the heart of the primary judge's finding. Moreover, the reliance by the primary judge at [86] on the role of Google's algorithms in displaying the Google Ads in his finding that Employsure had a limited role in the outcome failed to recognise Employsure's necessary and substantial anterior role in the design of the Google Ads including, for example, the choice of the text to be included. The Full Court found in Employsure FC at [51], [53], [55], [57], [59] and [61] that it was uncontentious that each of the six Google Ads was a paid search result that always appeared as the first search result on the internet user's screen during the relevant period. The Full Court explained (at [24]-[49]) how, by paying for a Google Ad to appear prominently in the list of search results on a user's screen, Google's algorithms will determine the order in which paid results appear at the top of the list.
84 Further, insofar as the primary judge concluded in PJ at [87] that the suggestion that more than one course of conduct was inconsistent with the ACCC's case on liability, it cannot be accepted.
85 The assessment of whether a representation is conveyed for the purposes of the ACL is substantially different from whether conduct constitutes a course (or multiple courses) of conduct for penalty purposes for at least two reasons.
86 First, the assessment of whether conduct constitutes a course (or multiple courses) of conduct for penalty purposes involves a wider range of factual considerations that may be relevant and is informed by the purpose of preventing double punishment, whereas whether a representation is conveyed for the purposes of the ACL is a comparatively narrower inquiry, informed less by principle and more by factual inference. In a case of the present kind, it involves a two-step process of first, identifying the relevant class, and then asking whether the representation was conveyed to that class by the conduct: see for example, Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 199 per Gibbs CJ.
87 Second, the assessment of whether a representation is conveyed is a consideration made in the context of deciding whether conduct contravenes a legislative provision. This assessment is anterior to the assessment of whether multiple contraventions constitute one or several courses of conduct, which is made in the context of penalty assessment and only arises where contravention has been established.
88 For these reasons, it was not inconsistent for the ACCC to submit that there were multiple courses of conduct where it also argued that the same conduct conveyed one umbrella representation, namely the Government Affiliation Representations.
89 As explained above at [50], there are a number of considerations to be taken into account in assessing the appropriate deterrent value of a penalty. However, it is important to recall that the principal object of a penalty is deterrence, general and specific.
90 It may be accepted, as the primary judge found, that specific deterrence has a lesser role to play in the imposition of this penalty given Employsure's more recent conduct directed towards improving its compliance systems, but it nonetheless still is of relevance. That is so even where there is no suggestion that there is any deficiency in the current system. It was also accepted by the ACCC below that Employsure was a company that wanted to comply with its legal obligations: PJ at [94]. Importantly, any limitation on the need for specific deterrence does not diminish the significance of general deterrence in the penalty imposed.
91 Given the purpose of imposing a pecuniary penalty, care must be taken not to unduly elevate the significance of any one consideration.
92 One can take the following two illustrations of where other considerations were elevated by the primary judge not in accordance with this principle and where the conclusions underpinning those considerations were themselves flawed.
93 First, the primary judge placed too great an emphasis on the possible "modesty" of Employsure's profit from the Google Ads. The primary judge concluded that Employsure's profit from the contravening conduct may have been "modest", it was a small portion relative to all of Employsure's Google Ads, and they obtained customers from other channels: PJ at [104]. In that context, it was also concluded that although the Declaration by the Full Court reflects that the conduct occurred over a period of more than two years, the evidence was that the impressions or clicks on the ads were for approximately a 10 month period: PJ at [105]. It is difficult to understand how a characterisation of the profit as "modest" can be made, as the amount of benefit is unascertainable. Indeed, the primary judge accepted that fact. Be that as it may, the magnitude of the profit is only one factor to consider in assessing the conduct as a whole. In addition to the primary judge placing too great an emphasis on this point in the context of deterrence being the primary consideration, his Honour also placed too great an emphasis on the role of actual or measurable profit in assessing the conduct as a whole. Employsure used the Google Ads for a period of just over two years, with them being accessible for that period. As explained above at [60], it can be inferred that Employsure considered it worthwhile and in its interests to continue to do so. Moreover, the contraventions relate to engaging in conduct that was misleading or deceptive, or likely to do so, and making false or misleading representations. Those contraventions are established regardless of any profit made. That this Google advertisement campaign might not have been as successful as others or that Employsure had other sources of customers might tell about the impact of the conduct. But such conduct nonetheless is to be deterred.
94 Second, as referred to above, the Declaration relates to the contraventions covering a period of over two years. Before the primary judge following the remittal, evidence was presented, it was said, not to challenge that fact, but to show that the Google Ads were only clicks or impressions over a 10 month period (being in relation to each of the six advertisements and over the same period). That evidence is unsatisfactory. It cannot be used to traverse the Declaration, especially given the two year time span was accepted by Employsure as accurate at the time it was made. There is no evidence as to how that acceptance occurred or why what was relied on before the primary judge at the liability hearing was different. The information appears inherently improbable. In any event, the penalty is to be imposed for the two year period, and as explained above, on any scenario, the Google Ads could be viewed and accessed during that period.
95 Further, it is to be recalled that the Full Court declared that Employsure made a false or misleading representation that it had government sponsorship or approval in contravention of s 29(1)(h) of the ACL: Declaration. Misrepresenting that one has government sponsorship or approval is very serious and must be deterred. In the context of this case, the business owners whom the Full Court found would have googled the relevant keywords and were at least likely to have been misled or deceived by the Google Ads may have been in commercial distress, and the majority were likely small business owners: Employsure FC [129] and [133]-[135]. It is unlikely that the ordinary small business owner would research the "fair work ombudsman" or the "fair work commission" unless they were in some form of commercial distress or need (for example, if faced with defending or potentially defending a claim in the Fair Work Commission). The ordinary small business owner, and indeed any member of Australian society, is entitled to rely on the belief that Commonwealth Government organisations exist to serve the public good; not to make a profit as was the case with Employsure, which made the representations that its services had government sponsorship or approval. In doing so, it falsely or misleadingly represented that its services were of a particular standard or quality: ACL s 29(1)(b); Declaration.
96 We consider this conduct to be very serious and consider there to be a great need for general deterrence in the circumstances.
97 Weighing all the relevant factors, and given the purposes of imposing a civil penalty, for the reasons above, we consider the penalty which should be imposed in lieu of that imposed by the primary judge is $3 million. In the circumstances, that level of penalty reflects the seriousness of the contraventions, satisfies the element of deterrence required, and contains a sufficient sting to ensure that the penalty amount is not such as to be regarded by Employsure or others as an acceptable cost of doing business.
98 We turn now to considering the second ground in the amended notice of appeal, being the ACCC's appeal against the Costs Judgment.