Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd

Date of hearing: Determined on the papers

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Counsel for the Applicant: Mr NJ O'Bryan SC with Ms C Cunliffe

Solicitor for the Applicant: Corrs Chambers Westgarth

Counsel for the Respondents: The respondents did not appear

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant

AND: GET QUALIFIED AUSTRALIA PTY LTD (IN LIQUIDATION) (ACN 144 813 543) First Respondent

JUDGE: BEACH J DATE OF ORDER: 30 August 2017

False, misleading or deceptive conduct

1. In the period from about January 2016 to 17 March 2017, the First Respondent (GQA) in trade or commerce, by the conduct of its sales representatives: (a) engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the CCA); and (b) made false or misleading representations about the standard, quality and/or value of GQA's services in contravention of s 29(1)(b) of the ACL, by making representations to consumers who accessed and used GQA's online "Free Skills Review" function that they may be eligible for a qualification from a registered training organisation (RTO) affiliated with GQA without the need for study (the skills review representation), when GQA did not have reasonable grounds for making the skills review representation because: (i) GQA did not have a sufficient understanding or knowledge of the consumers' prior experience and learning to assess whether they were eligible to obtain these qualifications; and (ii) GQA online "Free Skills Review" function did not perform a genuine assessment of the consumer's eligibility to obtain these qualifications.
2. In the period from about at least April 2014 to 11 August 2016, GQA in trade or commerce, by the conduct of its sales representatives: (a) engaged in misleading or deceptive conduct in contravention of s 18 of the ACL; and (b) made false or misleading representations concerning the existence or effect of a condition, right or remedy in contravention of s 29(1)(m) of the ACL, on its website, and by the conduct of its sales representatives in emails and in telephone calls with consumers by making representations to consumers that if the consumers were not successful in obtaining qualifications through the recognition of prior learning (RPL) process, they would be entitled to a refund of 100% of any money they had paid to GQA (the 100% money back guarantee representation) when, in fact: (i) GQA purported to apply "eligibility criteria" for granting refunds which were not made clear to consumers before they made payments to GQA, and used these criteria as a basis to reject refund requests that were made in reliance on the "100% money back guarantee"; and (ii) from at least April 2016 GQA's refund policy purported to allow it to deduct a "25% administration processing fee" from any monies paid by consumers.
3. In the period from about May 2014 to 17 March 2017, GQA in trade or commerce, by the conduct of its sales representatives, (a) engaged in misleading or deceptive conduct in contravention of s 18 of the ACL; and (b) made false or misleading representations about the standard, quality and/or value of GQA's services in contravention of s 29(1)(b) of the ACL, in emails and in telephone calls with consumers by making representations that the consumers were eligible for, and through GQA's services could obtain, certain qualifications from RTOs affiliated with GQA using the RPL process (the eligibility representation), when the GQA sales representatives did not have reasonable grounds for making the eligibility representation because the GQA sales representatives: (i) were not qualified to assess, or capable of properly assessing, the consumers' eligibility for these qualifications; and (ii) did not have a sufficient understanding or knowledge of the consumers' prior experience and learning to assess whether consumers were in fact eligible to obtain these qualifications.
4. In the period from about 1 January 2015 to 17 March 2017, GQA in trade or commerce: (a) engaged in misleading or deceptive conduct in contravention of s 18 of the ACL; and (b) made false or misleading representations concerning the existence or effect of a condition, warranty, guarantee, right or remedy in contravention of s 29(1)(m) of the ACL, in the "refund policy" section of the terms and conditions of its consumer contracts and in communications with customers by making representations to consumers that GQA could charge a full service fee regardless of whether any service was provided and would only refund fees where consumers had submitted all evidence to GQA and the RTO had determined that there was insufficient evidence to grant competency (the refund ineligibility representation) when, in fact, GQA was required under the ACL to pay refunds to its customers in full and without deduction if (as was the case), GQA failed to provide customers services: (i) with due care and skill (s 60 of the ACL); (ii) that were fit for the purpose of obtaining qualifications through the RPL process (s 61 of the ACL); and (iii) within a reasonable time (s 62 of the ACL).

Unfair contract term 5. The refund policy which provided that GQA would not refund fees unless the customer had submitted all evidence to GQA and the RTO had determined that there was insufficient evidence to grant competency, which was contained in consumer contracts made between GQA and its customers in the period from about 1 January 2015 to 17 March 2017, was an unfair contract term within the meaning of ss 24 and 250 of the ACL because the term: (a) was not brought to the attention of consumers at the time of entering into an agreement with GQA; (b) was not reasonably necessary to protect GQA's legitimate interests; and (c) would cause financial and other detriment to a consumer where GQA sought to rely on this term, including where it engaged a debt collection agency to pursue consumers for unpaid fees, and is void by operation of s 23 of the ACL.

Unsolicited consumer guarantees 6. In the period from about 1 January 2015 to 17 March 2017, in relation to those consumers who provided it with their contact information in order to receive a free "eligibility assessment", who were contacted by a GQA sales representative and subsequently entered into an agreement for the supply of GQA's services, GQA contravened: (a) s 79 of the ACL, by failing to provide those consumers with an agreement in the form prescribed by s 79; and (b) s 86(1)(b) and (c) of the ACL, by requiring and accepting payment for its services before the prohibited 10 business days period ended.

Unconscionable conduct 7. In the period from about 1 January 2015 to 17 March 2017, GQA engaged in a system of conduct or a pattern of behaviour constituting unconscionable conduct in breach of s 21 of the ACL, in circumstances where GQA: (a) entered into employment and contractor agreements with sales representatives who had telemarketing sales experience (but not necessarily any expertise, experience, qualifications or specialist knowledge of the RPL process) under which it paid them a salary or hourly rate plus commission based on the number of consumers whose agreements they procured to apply for qualifications from RTOs affiliated with GQA using GQA's services; (b) provided limited and cursory training to its sales representatives about the RPL process and the competency requirements for qualifications offered by RTOs affiliated with GQA; (c) referred to its sales representatives as "Skills Recognition Specialists", notwithstanding the limited expertise, experience, qualifications or specialist knowledge that GQA's sales representatives had in the RPL process and the fact that they were not qualified to conduct Skills Recognition Assessments; (d) obtained the contact details of potential customers through (among other methods) the use of an online "Skills Review" function on its website which produced an automated response encouraging the consumer to provide their contact details and suggesting that they may be eligible for a qualification from an RTO affiliated with GQA without the need for study, irrespective of the information submitted by the consumer; (e) advised and encouraged its sales representatives to use in communications with prospective customers, a script provided by GQA which: (i) directed them to introduce themselves as "the Skills Recognition and RPL Specialist"; and (ii) provided direction about how to respond to and overcome objections raised by consumers who expressed reluctance about using GQA's services; (f) used unfair sales tactics and imposed undue pressure on consumers who had expressed interest in GQA's services by: (i) enticing prospective customers to use its services by making false or misleading representations concerning the eligibility representation and skills review representation; (ii) suggesting that using GQA's services was risk free by making the 100% money back guarantee representation designed to make the prospective customer feel safe about signing up and paying money upfront before the qualification was obtained; (iii) suggesting that consumers must agree to use GQA's services immediately or risk missing a place in the consumer's qualification of choice because of limited availability, when this was not the case; (iv) offering time limited discounts to consumers who raised concerns about their ability to pay the course fees, if the consumer agreed to enrol immediately; (v) offering instalment plans to consumers who raised concerns about their ability to pay the full amount of the fees; (vi) offering third party financing options to consumers who raised concerns about their ability to pay the full amount of the fees; (vii) not providing sufficient opportunity for consumers to consider all relevant information; and (viii) requiring payment from consumers before providing them with accessible and detailed information about the competency and evidence requirements for the qualifications in documentary form; (g) created a situation in which GQA held a position of unequal bargaining power vis-à-vis consumers by: (i) not disclosing or adequately explaining, prior to requiring payment from the consumer, the details of the competency and evidence requirements for the qualification, the refund eligibility requirements or the fees and charges which applied under GQA's refund policy; (ii) failing to comply with the disclosure requirements prior to enrolment imposed on RTOs under Commonwealth legislation or standards; (iii) in respect of consumers who provided their contact information to GQA in order to receive a free "eligibility assessment", failing to adhere to the unsolicited consumer agreement provisions of the ACL which applied to the consumers' agreements with GQA by failing to provide an agreement document in the form prescribed by s 79 of the ACL and accepting payment before the prohibited 10 business days period ended in contravention of s 86 of the ACL; and (iv) entering into consumer agreements with customers which contained unfair contract terms with respect to the payment of refunds; and (h) took advantage of the unequal bargaining position that GQA had by: (i) relying on the terms of its refund policy to refuse refund requests; and (ii) relying on the terms of its agreements with consumers to take debt recovery action against customers who did not receive qualifications.

Unconscionable conduct - WJ 8. In the period from about August 2015 to 17 March 2017, GQA, in trade or commerce, during the course of its dealings with WJ, engaged in conduct that was unconscionable in contravention of s 21 of the ACL in circumstances where: (a) GQA failed to provide services with due care and skill (by enrolling WJ without making appropriate enquiries as to his suitability for the qualification); (b) GQA's services were not fit for purpose (since GQA indicated that it could help WJ achieve a particular qualification that he was not eligible for); (c) GQA engaged in high pressure sales tactics to enrol WJ (including by calling him repeatedly, stressing the urgency of his enrolment, and telling him there were limited places available); (d) WJ relied on GQA's 100% money back guarantee representation and eligibility representation in entering into a contract with GQA; (e) GQA failed to provide services in a reasonable period (or at all); and (f) GQA denied a refund in circumstances where the consumer law guarantees applied, engaged debt collectors to obtain the remainder of the contract price, and wrote letters to WJ reserving its rights to take action against him.

Unconscionable conduct - GF 9. In the period from about 1 July 2015 to 17 March 2017, GQA, in trade or commerce, during the course of its dealings with GF, engaged in conduct that was unconscionable in contravention of s 21 of the ACL in circumstances where: (a) GQA made the eligibility representation to GF; (b) GQA provided simplistic and incomplete information to GF about the RPL process; (c) GQA failed to provide GF with basic information about his qualification for a considerable period of time after his enrolment; (d) GQA failed to provide services with due care and skill (given the persistent failure of GQA representatives to respond to GF, and the absence of assistance with GF's RPL application); (e) GQA failed to provide services in a reasonable period or at all; and (f) GQA refused a refund, and thereby made the refund ineligibility representation, which was false or misleading or deceptive since GQA's failure to render services with due care or in a reasonable period of time meant that GF was entitled to a refund under the ACL.

Unconscionable conduct - AV 10. In the period from about 10 September 2015 to 17 March 2017, GQA, in trade or commerce, during the course of its dealings with AV, engaged in conduct that was unconscionable in contravention of s 21 of the ACL in circumstances where: (a) AV relied on GQA's 100% money back guarantee representation in entering into a contract with GQA; (b) GQA provided simplistic and incomplete information to AV about the RPL process; (c) GQA provided AV with incorrect information about his qualification; (d) GQA failed to provide services with due care and skill (given the failure of GQA representatives to respond to AV, and GQA's failure to assist AV); (e) GQA failed to provide services in a reasonable period or at all; (f) GQA denied AV a refund in circumstances where the consumer law guarantees applied.

Unconscionable conduct - JA 11. In the period from about 1 August 2015 to 17 March 2017, GQA, in trade or commerce, during the course of its dealings with JA, engaged in conduct that was unconscionable in contravention of s 21 of the ACL in circumstances where: (a) GQA made the 100% money back guarantee representation and eligibility representation to induce JA to enter into a contract with GQA; (b) GQA provided simplistic and incomplete information to JA about the RPL process; (c) GQA failed to provide services with due care and skill (given the failure of GQA representatives to respond to JA, and GQA's failure to assist JA); (d) GQA failed to provide services in a reasonable period or at all; and (e) GQA denied JA a refund in circumstances where the consumer law guarantees applied.

Adam Wadi 12. By his management and operational control, executive oversight, direction and approval of GQA's business practices, including by: (a) approving the content of GQA's website; (b) devising and promoting the terms of the 100% money back guarantee; (c) approving the Free Skills Review tool when he knew it would be used to obtain customers' details and not for the purposes of assessing customers' eligibility to obtain qualifications through RPL; (d) directing GQA's sales representatives to identify themselves as "Skills Recognition Specialists" in their dealings with customers and prospective customers; (e) approving scripts used by GQA's sales representatives in their dealings with prospective customers; (f) directing GQA to implement the practice of requiring payment before providing any services; (g) approving the terms of GQA's refund policy; and (h) restricting approvals for the payment of refunds to GQA customers who did not obtain qualifications, Adam Wadi aided, abetted, counselled or procured, and was directly and indirectly knowingly concerned in each of GQA's contraventions of ss 18, 21, 29(1)(b) and (m), 79 and 86 of the ACL referred to in paragraphs 1 to 7 above.

Injunctions 13. Adam Wadi be restrained for a period of seven years from the date of this order from being in any way directly or indirectly knowingly concerned in, or a party to, or aiding and abetting, counselling or procuring a corporation entering into an unsolicited consumer agreement (within the meaning of s 69 of the ACL) in circumstances where there has been: (a) a failure to provide consumers with an agreement in the form prescribed by s 79 of the ACL; or (b) a requirement to pay, or acceptance of payment, for services before providing consumers with an agreement in the form prescribed by s 79 of the ACL. 14. Adam Wadi be restrained for a period of seven years from the date of this order from being in any way directly or indirectly knowingly concerned in, or a party to, or aiding and abetting, counselling or procuring a corporation in representing to a consumer that: (a) the consumer may be eligible for a qualification from a RTO without the need for further study, in circumstances where the corporation does not have a sufficient understanding or knowledge of the consumer's prior experience and learning to assess whether the consumer is in fact eligible to obtain the qualification; (b) the consumer will be entitled to a refund of money paid to the corporation, in circumstances in which there are terms and conditions which apply to the granting of the refund and the corporation has failed to fully inform the consumer of those terms and conditions; (c) the consumer is eligible for and can obtain qualifications from RTOs using the RPL process, unless the representation is made by a representative of the corporation who: (i) is qualified and capable of properly assessing the consumer's eligibility for the qualification; and (ii) has a sufficient understanding or knowledge of the consumer's prior experience and learning to assess whether they are in fact eligible to obtain the qualifications using the RPL process; (d) the consumer is not eligible for a refund in circumstances in which the corporation has failed to provide the consumer with services: (i) with due care and skill; or (ii) that are fit for the purpose of obtaining qualifications through the RPL process. 15. Adam Wadi be restrained for a period of seven years from the date of this order from being in any way directly or indirectly knowingly concerned in, or a party to, or aiding and abetting, counselling or procuring a corporation, which is offering RPL services to consumers, to: (a) enter into employment and contractor agreements with sales representatives who have telemarketing sales experience but not any expertise, experience, qualifications or specialist knowledge of the RPL process under which a business pays a salary or hourly rate plus commission based on the number of consumers whose agreements the sales representatives procure to apply for qualifications from RTOs affiliated with the business using its services; or (b) refer to sales representatives as "Skills Recognition Specialists", in circumstances where they have limited expertise, experience, qualifications or specialist knowledge in the RPL process and where they are not qualified to conduct skills recognition assessments; or (c) obtain the contact details of potential customers through the use of an online function on a website which encourages the consumer to provide their contact details and suggests that they may be eligible for a qualification from an RTO without the need for study; or (d) advise or encourage sales representatives to use a script in communications with prospective customers which: (i) directs them to introduce themselves as having RPL experience and expertise (unless they do have such experience and expertise); or (ii) provides direction about how to respond to and overcome objections raised by consumers who express reluctance in using the corporation's services; or (e) use unfair sales tactics or impose undue pressure on consumers who express interest in the corporation's services by: (i) enticing prospective customers to use its services by making any or all of the representations set out in paragraphs 13 and 14 above; or (ii) suggesting that consumers must agree to use the services immediately or risk missing a place in the consumer's qualification of choice; or (iii) not providing sufficient opportunity for consumers to consider all relevant information; or (iv) requiring payment from consumers before providing them with accessible and detailed information about the competency and evidence requirements for the qualifications in documentary form; or (f) create a system or practice in which the corporation: (i) does not disclose or adequately explain, prior to requiring payment from the consumer, the details of the competency and evidence requirements for the qualification, the refund eligibility requirements or the fees and charges which apply under any refund policy; or (ii) fails to comply with the disclosure requirements prior to enrolment imposed on RTOs under Commonwealth legislation or standards; or (iii) in respect of consumers who provide their contact information in order to receive a free "eligibility assessment", fails to adhere to the unsolicited consumer agreement provisions of the ACL which applies to the consumers' agreements by failing to provide an agreement document in the form prescribed by s 79 of the ACL and accepting payment in contravention of s 86 of the ACL.

Pecuniary penalties 16. Subject to order 17, GQA pay to the Commonwealth of Australia the sum of $8,000,000 by way of pecuniary penalty under s 224(1) of the ACL in respect of GQA's contraventions of ss 21, 29(1)(b) and (m), 79 and 86 of the ACL. 17. The operation of order 16 be stayed until further order. 18. Adam Wadi pay to the Commonwealth of Australia within 30 days the sum of $500,000 by way of pecuniary penalty under s 224(1) of the ACL in respect of his aiding, abetting, counselling or procuring and being directly and indirectly knowingly concerned in, and party to GQA's contraventions of ss 21, 29(1)(b) and (m), 79 and 86 of the ACL.

Disqualification 19. Pursuant to s 248 of the ACL, Adam Wadi be disqualified from managing corporations for a period of seven years.

Costs 20. Subject to order 21, each of GQA and Adam Wadi pay the ACCC's costs of and incidental to the proceeding and proceeding VID 896 of 2016, including costs reserved. 21. The operation of order 20 insofar as it affects GQA be stayed until further order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BEACH J: 1 In recent years, the education sector has been infected by the parasitic practices of operators preying upon the vulnerable and the unwary. They have taken unconscientious advantage of those who commendably have sought to improve themselves and their qualifications. It is to be expected that when such practices are exposed to judicial scrutiny, the Court will grant the relief necessary to eradicate such behaviour. Specific and general deterrence are the primary objectives of such relief, with the Court's protective jurisdiction a necessary adjunct. 2 On 23 June 2017, I made findings on liability against the first respondent (GQA) and the second respondent, Mr Wadi. It is necessary to now consider the question of relief, including penalties. The present reasons are to be read with my earlier ruling (Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liquidation) (No 2) [2017] FCA 709). In summary, I propose to impose pecuniary penalties of $8 million on GQA and $500,000 on Mr Wadi. I also propose to disqualify Mr Wadi from managing corporations for a period of seven years. 3 In my earlier ruling I found that GQA had engaged in misleading or deceptive conduct within the meaning of s 18 of the Australian Consumer Law (ACL), and made false or misleading representations within the meaning of s 29(1)(m) of the ACL, by making statements to the effect that if GQA's customers were not successful in obtaining qualifications through the recognition of prior learning (RPL) process, they would be entitled to a refund of 100% of the money the customer paid to GQA (the 100% money back guarantee representation). 4 The 100% money back guarantee representation was misleading or deceptive or false because GQA applied an eligibility criterion requiring that consumers provide to GQA valid, current, authentic and sufficient evidence and that consumers exhaust all possible avenues of obtaining their chosen qualification, in circumstances where GQA representatives did not disclose all of the relevant information in relation to: (a) units of competency for the qualifications; (b) the evidentiary requirements to be met in respect of each unit; (c) the possibility that gap training would be required; (d) the possibility that practical assessments would be required; or (e) the possibility that consumers would incur additional fees for gap training or practical assessments. This eligibility criterion was used as a basis to reject refund requests that were made in reliance on the "100% money back guarantee", in circumstances where customers were ineligible for their chosen qualification and were therefore unable to submit sufficient evidence to obtain that qualification. The 100% money back guarantee representation was also misleading or deceptive or false because GQA also deducted a 25% administration processing fee from any monies paid by consumers. GQA's intention to charge this fee was not made clear in the 100% money back guarantee representation (or elsewhere). 5 Further, GQA engaged in misleading or deceptive conduct within the meaning of s 18 of the ACL, and made false or misleading representations within the meaning of s 29(1)(b) of the ACL, by making statements through the online skills review tool that consumers may be eligible for a qualification from a registered training organisation (RTO) affiliated with GQA without the need for any further study or assessment (the skills review representation). The skills review representation was a representation as to future matters. 6 The skills review representation was misleading or deceptive or false because: (a) GQA did not have a sufficient understanding or knowledge of consumers' prior experience and learning based on the online "Free Skills Review" to assess whether they might be eligible to obtain any qualifications without the need for further study; (b) nor was any such qualification ever identified by GQA; (c) GQA had no reasonable grounds for making the skills review representation; and (d) the Free Skills Review purported to perform but did not in fact perform a genuine assessment of the consumer's eligibility to obtain or achieve any qualifications. 7 Further, GQA engaged in misleading or deceptive conduct within the meaning of s 18 of the ACL, and made false or misleading representations within the meaning of s 29(1)(b) of the ACL, by advising consumers that they were eligible for and could obtain a qualification from RTOs affiliated with GQA using the RPL process (the eligibility representation). The eligibility representation was a representation with respect to future matters within the meaning of s 4(2) of the ACL. 8 The eligibility representation was misleading or deceptive or false because on each occasion it was made, GQA had no reasonable grounds for making it. GQA sales representatives were not qualified to assess, or capable of properly assessing, consumers' eligibility for qualifications. GQA hired sales representatives to undertake eligibility assessments but did not require these sales representatives to have any prior adequate training, qualifications or experience in training or assessment either in general or in the specific qualification fields for which they would undertake eligibility assessments. From at least April 2016, GQA advertised for sales representatives with call centre experience, communication skills, drive and who had the ambition of being "extremely money hungry". 9 Further, the eligibility representation was a representation with respect to future matters within the meaning of s 4(2) of the ACL. GQA did not instruct its sales representatives to obtain any documents or evidence from a consumer before they enrolled customers and received payment from them. GQA sales representatives assessed eligibility on the basis of short telephone calls or email exchanges, which did not enable them to accurately assess a consumer's prior experience against the requirements for the chosen qualifications. As such, GQA representatives did not have a sufficient understanding or knowledge of consumers' prior experience, learning or available evidence to assess whether consumers were in fact eligible to obtain their chosen qualifications through the RPL process or at all. 10 Further, GQA engaged in misleading or deceptive conduct within the meaning of s 18 of the ACL, and made false or misleading representations within the meaning of s 29(1)(m) of the ACL, by representing that any refund was at GQA's discretion and that GQA could charge a full service fee regardless of whether any service was provided and would not refund fees unless the customer had submitted all evidence to GQA and the RTO had determined that there was insufficient evidence to grant the qualification (the refund ineligibility representation). 11 The refund ineligibility representation was misleading or deceptive or false for the reasons that I have given in my earlier ruling. 12 Further, GQA imposed an unfair contract term within the meaning of s 24 of the ACL (the refund policy) on consumers. The terms of the refund policy: (a) were not brought to the attention of consumers at the time of entering into an agreement with GQA and were not transparent within the meaning of s 24(3) of the ACL; (b) caused a significant imbalance in the parties' rights and obligations under the GQA consumer contract within s 24(1)(a) of the ACL; and (c) were not reasonably necessary to protect GQA's legitimate interests, within s 24(1)(b) of the ACL, because the policy could be relied upon to refuse a refund in circumstances where GQA had not incurred any significant costs in relation to a particular consumer or GQA would not be out of pocket if a refund were provided. Further, the refund policy caused financial and other detriment to consumers, given that affected consumers had not received the promised services (obtaining qualifications through the RPL process) but had incurred significant expense. 13 Further, GQA entered into unsolicited consumer agreements within the meaning of s 69 of the ACL with those consumers contacted by phone after completing a skills review, but these contracts were not in the form required by s 79 of the ACL because, inter-alia, they were not set out in full and did not include a notice which conspicuously and prominently informed the consumer of the right to terminate. 14 Moreover, because GQA required and accepted payments before the consumer contracts were given to the consumer, GQA also contravened ss 86(1)(b) and (c) of the ACL (which prohibits requiring or accepting payments under an unsolicited consumer agreement during a 10 business days period commencing the day after the agreement was made or, where the agreement was negotiated by telephone, commencing the day after the agreement documentation was received). 15 Further, GQA engaged in a system of conduct or pattern of behaviour that in all the circumstances constituted unconscionable conduct in contravention of s 21 of the ACL, by: (a) entering into employment and contractor agreements with sales representatives who had telemarketing sales experience, but who did not necessarily have any expertise, experience, qualifications or specialist knowledge of the RPL process, paying those sales representatives salary plus commission, providing them with limited and cursory training and describing them as "skills recognition specialists"; (b) obtaining the contact details of potential customers through the Free Skills Review function on the GQA website (and thereby making the skills review representation); (c) providing sales representatives with a script for use with prospective consumers, which directed sales representatives to introduce themselves as "the Skills Recognition and RPL Specialist here at GQA" and providing direction about how to respond to and overcome objections raised by consumers who expressed reluctance in using GQA's services; (d) directing GQA sales representatives to use unfair sales tactics, such as suggesting that enrolments were limited when they were not limited, and offering time limited discounts to encourage consumers to enrol immediately; (e) encouraging GQA sales representatives to entice prospective customers to use GQA's services by making the eligibility representation, which was misleading or deceptive or false; (f) encouraging GQA sales representatives to make the 100% money back guarantee representation, which was misleading or deceptive or false; (g) not requiring sales representatives to explain the refund eligibility requirements or the fees and charges which applied under the refund policy to consumers; (h) requiring GQA sales representatives to take payment from consumers before providing them with accessible and detailed information about the competency and evidence requirements for the qualifications in documentary form; (i) not providing sufficient opportunity for consumers to consider all relevant information; (j) not requiring sales representatives to adhere to ss 79 or 86 of the ACL in respect of consumers who provided their contact information to GQA in order to receive a free "eligibility assessment"; (k) entering into consumer agreements with customers which contained unfair contract terms with respect to the payment of refunds; (l) not requiring sales representatives to disclose to consumers the risk that they would be liable to GQA for the full cost of an RPL qualification even if they were ultimately ineligible to obtain qualifications through RPL; and (m) not requiring sales representatives to disclose to consumers that because GQA did not offer a cooling off period, consumers would be liable to GQA for the full fee and bound by GQA's terms and conditions upon payment of a deposit. 16 By such conduct and in the circumstances, GQA held a position of unequal bargaining power vis-à-vis consumers. GQA took advantage of the unequal bargaining power by relying on the terms of its refund policy to refuse refund requests and relying on the terms of its agreements with consumers to take debt recovery actions against customers who did not receive qualifications. 17 The result of such practices adopted by GQA was that: (a) GQA enticed consumers to enter into agreements under which they paid substantial sums of money to GQA by making false or misleading representations about its services. (b) GQA systematically contravened unsolicited consumer agreement provisions contained in the ACL by using the ruse of a free assessment to obtain consumers' contact details. (c) Skills recognition specialists were effectively relying on the same material which was available to consumers as the source of their "expertise". (d) GQA trained its skills recognition specialists in the use of the conversation guide and the objection handling guide. (e) GQA provided its skills recognition specialists with significant incentives to make as many sales as quickly as possible. (f) GQA usually required consumers who agreed to use GQA's services to make full payment of GQA's fees (or in some cases, partial payment with a payment plan) before GQA would assist them to compile a portfolio of evidence and make their RPL application. GQA provided credit facilities to assist consumers. (g) GQA required customers to complete the payment of fees in full before any application for a qualification based on RPL was submitted to the relevant RTO. (h) It was only after the consumer made a payment to GQA that GQA provided the customer with an information pack, including details of the relevant competency requirements and the enrolment form. GQA did not provide the customer with a document containing the terms and conditions which applied to GQA's services. (i) GQA often failed to respond to customer concerns and correspondence in a reasonable time or at all and ultimately failed to obtain the promised qualification for many of its customers. (j) GQA relied on an unfair contract term (the refund policy) to deny refunds to consumers, contrary to the promised 100% money back guarantee. (k) Finally, notwithstanding the foregoing matters, GQA's policy was to take debt recovery action against consumers who wished to discontinue their relationship with GQA and sought refunds in accordance with the 100% money back guarantee. 18 Further, GQA engaged in unconscionable conduct towards four individual consumers (identified in ACCC v Get Qualified Australia (No 2) as WJ, GF, JA and AV), in contravention of s 21 of the ACL. 19 Further, with the exception of the contraventions of s 21 of the ACL relating to the said four individual consumers, Mr Wadi aided, abetted, counselled or procured and was directly and indirectly knowingly concerned in each of GQA's contraventions of the ACL within the meaning of s 224(1) of the ACL. 20 The ACCC has now sought: (a) declarations pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) and s 250 of the ACL (the latter provision in relation to the existence of unfair terms in consumer contracts); (b) pecuniary penalties pursuant to s 224 of the ACL against each of GQA ($8 million) and Mr Wadi ($500,000); (c) an order pursuant to s 248 of the ACL disqualifying Mr Wadi from managing corporations for a period of 15 years; and (d) injunctions restraining Mr Wadi for a period of five years from being in any way directly or indirectly knowingly concerned in or a party to or aiding or abetting, counselling or procuring conduct of the kind that I have found him to have been knowingly concerned in. 21 In summary and notwithstanding that GQA is now in liquidation, it is appropriate and there is utility in ordering penalties totalling $8 million against GQA in relation to its contraventions of the ACL and $500,000 against Mr Wadi in relation to his contraventions of the ACL, on the following principal grounds: (a) The contravening conduct was deliberate and systematic to the point where it can fairly be said that GQA's business model was designed to create and exploit a position of unequal bargaining power. The conduct involved a multitude of serious and multifaceted contraventions. GQA's false representations and marketing ploys were not isolated events. They were central to its business model. (b) The contravening conduct was extensive and continued for a period of about two years, over which time GQA generated very significant revenue. Such conduct involved the use of a prolific marketing campaign in which false representations were conveyed on websites controlled by GQA, in social media and radio advertising and emails sent to consumers. For example, one of GQA's Facebook advertisements carrying the 100% money back guarantee reached 1,134,756 people. (c) Moreover, the contravening conduct affected or likely affected a large number of consumers. In the period from 1 January 2015 when GQA engaged in systematic contravening conduct, 9,635 customers applied for qualifications through GQA. More than half (a total of at least 4,900) did not obtain the specified qualification. Further, all of the at least 4,900 customers who did not receive a qualification were left out of pocket, since GQA required its customers to pay at least an upfront deposit on the total fee. GQA then aggressively pursued its customers for payment of the balance of the fee, even when the customer had not obtained the specified qualification and had legitimately sought a refund from GQA. (d) GQA's fees were significant. It charged $3,700 for providing RPL services in relation to obtaining a Certificate III in Plumbing and $6,000 for a Certificate IV in Plumbing. In relation to the 13 consumers in respect of whom the ACCC at trial either tendered affidavit material or tendered bundles of correspondence and sales call transcripts, GQA's charges ranged from $1,500 paid by PP in relation to a Certificate III in Business Administration (Medical) (Release 1) to $6,000 paid by AV in relation to a Graduate Diploma of Engineering. (e) Despite the 100% money back guarantee, which was the central enticement used by GQA to draw consumers into its web, GQA did not generally refund customers who had not received their specified qualification. (f) Generally, from 1 January 2015 to 30 June 2016, GQA generated significant revenue of approximately $16,818,737. It may be inferred that further revenue was generated in the period from July 2016 to the commencement of the present litigation. In the financial year to 30 June 2016, GQA reported total sales of $13,948,366. (g) The respondents engaged in the contravening conduct deliberately and have demonstrated no contrition at any time. GQA contested the allegations until it was placed in liquidation. Mr Wadi also contested the allegations to trial, although he did not attend the hearing on liability. He has also not sought to participate in the penalty phase and has not filed any submissions, although I gave him an extension to do so until the close of business on Monday this week (i.e. 28 August 2017) 22 In summary, the penalties sought by the ACCC are well justified to serve the principal objectives of general and specific deterrence. I will say something further later in my reasons concerning the significance of GQA now being in liquidation.

penalty - applicable principles 23 The power to impose a pecuniary penalty is governed by s 224 of the ACL. Under ss 224(1)(a)(i), (ii), (iv) of the ACL, the Court may order a person who has contravened ss 21, 29, 79 and 86 of the ACL to pay such pecuniary penalty, in respect of each act or omission by the person, as the Court determines to be appropriate. Strictly, each communication of a false representation, each failure to adhere to the unsolicited consumer agreement provisions of the ACL and each act of unconscionability involves a separate contravening act for the purposes of s 224(1). 24 Section 224(2) of the ACL provides that in determining 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 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 Chapter 4 or Part 5-2 of the ACL to have engaged in any similar conduct. 25 Section 224(3) provides that the maximum penalty for a body corporate for each act or omission to which s 224 applies that relates to: (a) section 21 (unconscionable conduct) and s 29 (false representations) of the ACL is not to exceed $1.1 million; and (b) sections 79 and 86 (the unsolicited consumer agreement provisions) of the ACL is not to exceed $50,000. 26 Section 224(3) provides that the maximum penalty for a person who is not a body corporate for each act or omission to which s 224 applies that relates to: (a) sections 21 and 29 of the ACL is not to exceed $220,000; and (b) sections 79 and 86 of the ACL is not to exceed $10,000. 27 Section 224(4)(b) provides that if conduct constitutes a breach of two or more of the provisions of the ACL for which a pecuniary penalty may be imposed, a person is not liable to more than one pecuniary penalty in respect of the same conduct. 28 Deterrence (both specific and general) is the primary objective of imposing penalties under the Competition and Consumer Act 2010 (Cth) (CCA), including the ACL. 29 As noted above, s 224(2) sets out three mandatory factors to be considered in determining the appropriate penalty. The following overlapping or additional considerations are also relevant to the assessment of a pecuniary penalty: (a) the nature and extent of the contravening conduct; (b) the amount of loss or damage caused; (c) the circumstances in which the conduct took place; (d) the size of the contravening company; (e) the degree of market power that the contravening company has, as evidenced by its market share and ease of entry into the market; (f) the deliberateness of the contravention and the period over which it extended; (g) whether the contravention arose out of the conduct of senior management or at a lower level; (h) whether the company has a corporate culture conducive to compliance with the CCA including the ACL as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention; and (i) whether the company has shown a disposition to cooperate with the ACCC. 30 Such considerations may be expanded to include: (a) whether the company has engaged in similar conduct in the past; (b) the company's financial position; and (c) whether the conduct was systematic or covert. 31 In relation to the relevant principles, I refer to and incorporate my observations in Australian Securities and Investments Commission v Superannuation Warehouse Australia Pty Ltd (2015) 109 ACSR 199; [2015] FCA 1167 at [53], [55] to [59], [61] and [63], Australian Competition and Consumer Commission v OmniBlend Australia Pty Ltd [2015] ATPR 42-492; [2015] FCA 871 at [83] to [87], [89], [92], [115] and [119] and Australian Energy Regulator v Snowy Hydro Ltd (No 2) [2015] FCA 58 at [109] to [116], [118], [121] and [124] on the questions and application of: (a) general and specific deterrence; (b) the methodology to be applied in arriving at a particular penalty figure; (c) the "course of conduct" principle, on which I will further elaborate; (d) the parity principle; and (e) the totality principle. 32 The ACCC has emphasised that it is important to have regard to the maximum penalty imposed by the ACL in a case such as the present where false representations have been made to a large number of consumers. I agree. Now it may be accepted that the maximum penalty for the s 29 contraventions is some considerable multiple of $1.1 million. But it is an arid exercise to engage in a mere arithmetical calculation multiplying the maximum penalty by the number of contraventions even if one could theoretically quantify that latter number (see Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540; [2015] FCA 330 at [17], [18], [84] and [85]). But of course some estimate of the number of contraventions is to be taken into account. In the present case, in relation to the number of s 29 contraventions, one is theoretically considering orders of magnitude well above a single contravention. But it is not productive to quantify this further. Moreover, it is not appropriate to quantify a theoretical maximum for the purpose of then ratcheting down, an impermissible exercise. 33 For present purposes it is sufficient to say that I have taken into account that the theoretical maximum penalty is at least two orders of magnitude above $1.1 million in relation to the s 29 contraventions. Let me elaborate on some principles relevant to dealing with multiple contraventions. 34 In determining the appropriate penalty for multiple contraventions, there are two related principles to consider: the "totality" principle, which may be applied at the end of the process, and the "course of conduct" principle, which may be applied as an intermediate step. 35 The totality principle requires that the total penalty for related offences not exceed what is proper for the entire contravening conduct taking into account all factors. The principle operates to ensure that the penalties to be imposed, considered as a whole, are just and appropriate. 36 Contrastingly, the "course of conduct" principle gives consideration to whether the contraventions arise out of the same course of conduct to determine whether it is appropriate that a single overall penalty should be imposed that is appropriate for the course of conduct. It has a narrower focus. The principle was explained in Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39 at [39]: It is a concept which arises in the criminal context generally and one which may be relevant to the proper exercise of the sentencing discretion. 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. Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions. (emphasis in original) 37 But even if the contraventions are properly characterised as arising from a single course of conduct, I am not obliged to apply the principle if the resulting penalty fails to reflect the seriousness of the contraventions. The principle does not restrict my discretion as to the amount of the penalty to be imposed for contraventions that may be grouped as a course of conduct. Further and as a corollary, the maximum penalty for the course of conduct is not restricted to the prescribed statutory maximum penalty for any one contravening act or omission. 38 More generally, the "course of conduct" principle does not have paramountcy in the process of assessing an appropriate penalty. It cannot of itself operate as a de facto limit on the penalty to be imposed for contraventions of the ACL. Its application and utility must be tailored to the circumstances. In some cases, the contravening conduct may involve many acts of contravention that affect a very large number of consumers and a large monetary value of commerce, but the conduct might be characterised as involving a single course of conduct. Contrastingly, in other cases, there may be a small number of contraventions, affecting few consumers and having small commercial significance, but the conduct might be characterised as involving several separate courses of conduct. It would be anomalous to apply the concept to the former scenario, yet be precluded from applying it to the latter scenario. The "course of conduct" principle cannot unduly fetter the proper application of s 224. 39 Putting to one side the "course of conduct" principle for the moment, in my view for the purposes of applying ss 224(1) and (3) to the present case, a separate act by GQA in contravention of the ACL occurred on each of the following occasions: (a) First, with regard to s 29(1) of the ACL, a separate contravening act occurred with each communication of the 100% money back guarantee representation, the skills review representation, the eligibility representation and the refund ineligibility representation to an individual consumer. (b) Second, with regard to s 21 of the ACL, a separate contravening act occurred when: (i) GQA's unconscionable conduct came to bear upon or affected each of the four individual consumers referred to in ACCC v Get Qualified Australia (No 2); and (ii) GQA's system of unconscionable conduct came to bear upon or affected any individual consumer. I agree with the ACCC that it may fairly be inferred that at least hundreds of consumers were affected by such a system, given the thousands of consumers who enrolled, the thousands of consumers who did not receive qualifications, and the at least 670 who requested a refund. (c) Third, with regard to s 79 of the ACL, a separate contravening act occurred each time GQA entered into an agreement with a customer who it had contacted using contact information obtained via its online skills review tool and failed to disclose information prescribed by s 79 of the ACL; that is to say on numerous occasions given that 95% of consumers came through the website. (d) Fourth, with regard to s 86 of the ACL, a separate contravening act occurred each time GQA required or accepted payment from customers within 10 business days of entering into an agreement with a customer who it had contacted using contact information obtained via its online skills review tool; that is to say, on numerous occasions. 40 As to website representations, in Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698, I said at [12] that: A representation is made when there is a communication of some form. The act of placing information on a website that is yet to be accessed by downloading does not involve the making of a representation. An uncommunicated statement is relevantly no representation. In reality, the representation is made when the website is viewed by a person through downloading the relevant page. 41 The issue was also considered by Edelman J in Australian Competition and Consumer Commission v Valve Corporation (No 3) (2016) 337 ALR 647; [2016] FCA 196 in the context of considering territorial reach. The website representations were made on a website based in Washington State, USA and accessed in Australia. His Honour observed at [181]: Considered by themselves, they are general representations to the world at large. They are not representations to any person or to any Australian consumer. Until the representations were accessed, the representations were meaningless and could not be the subject of any alleged contravening conduct. But, by the time a consumer had purchased a game or downloaded Steam Client the consumer had a relationship with Valve and representations were made in Australia. 42 Further, in relation to the unsolicited consumer agreement provisions of the ACL, s 79 is contravened when a "supplier" fails to ensure that an unsolicited consumer agreement complies with prescribed requirements. So, each time a "supplier" enters an agreement that fails to comply with these requirements, it is theoretically liable to a separate penalty. Similarly, s 86 is contravened when a "supplier" accepts payments within the relevant cooling off period. Each time a supplier accepts payment within the cooling off period, it is theoretically liable to a separate penalty. 43 Let me now address s 21. Discerning when a contravening act or omission has occurred for the purposes of determining when a separate penalty should be imposed is more difficult when a contravention is constituted by conduct. Moreover, difficulty arises when the contravention is dependent on "all the circumstances", as is the case with s 21 contraventions. 44 In my view, it is appropriate to characterise each of the four individual unconscionable conduct instances (consumers WJ, GF, JA and AV) as involving a separate contravention of s 21 and attracting a separate penalty. The maximum penalty that could be imposed for all of them is $4.4 million. 45 But in this case, GQA has also been found to have engaged in a system of conduct or pattern of behaviour engaged in over a period of about two years in contravention of s 21 of the ACL. What maximum penalty is theoretically available for such systematic conduct? 46 Section 21(4)(b) of the ACL was introduced on 1 January 2012 and sets out the legislative intention that s 21 is capable of applying to a system of conduct or pattern of behaviour, irrespective of whether a particular individual is identified as having been disadvantaged by the conduct or behaviour. The purpose of the amendment was to clarify rather than alter the effect of the statutory prohibition on unconscionable conduct (Explanatory Memorandum to the Competition and Consumer Legislation Amendment Bill 2011 (Cth) at [2.19]). In this context, section 21(4)(b) of the ACL was introduced to make the following clear (at [2.21] of the explanatory memorandum): Paragraph 21(4)(b) of the ACL provides that it is the intention of the Parliament that the section is capable of applying to a system of conduct or a pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour. The unconscionable conduct provisions of the ACL are not limited to individual transactions. Rather, the focus of the provisions is on conduct that may be said to offend against good conscience; it is not specifically on the characteristics of any possible 'victim' of the conduct (though these may be relevant to the assessment of the conduct). (emphasis in the original) 47 On this basis, strictly there is nothing arising from the interaction between s 21(4)(b) and s 224(1) which limits the Court's discretion to impose a penalty of more than $1.1 million in relation to a system that has involved multiple contravening acts or omissions by GQA directed at a very large number of consumers. Section 224(1) provides that a person can be ordered to pay a pecuniary penalty "in respect of each act or omission by the person to which [the] section applies". It would be a strange result if the maximum penalty that could be imposed in respect of a system that has affected at least hundreds of consumers could not exceed the maximum penalty that could be imposed for one of the four individual instances of unconscionable conduct that I have found to have been established. 48 There is little authority on the question of multiple penalties in the context of systemic unconscionable conduct. In Australian Securities and Investments Commission v Kobelt [2017] FCA 387, ASIC claimed that the respondent had engaged in a system of unconscionable conduct in relation to the supply of financial services to at least 117 customers but contended that that part of its case did not turn on any identified individual consumer. ASIC also claimed that the respondent had engaged in unconscionable conduct in dealings with five identified consumers. ASIC did not ultimately press its allegations in relation to the five individual instances of unconscionable conduct but succeeded in its claim that the respondent had engaged in a system of unconscionable conduct. On the question of penalty ASIC contended that the systemic conduct had involved 59 separate contravening acts. The trial judge rejected this submission and held that the "system" amounted to a single contravention. His Honour said at [33] and [34]: In the present case, ASIC pursued its "system" case on the basis that it could succeed without proving the circumstances of any particular individual. Having so succeeded, it would be inappropriate now for penalties to be imposed on the basis that ASIC had, instead, pursued a case that Mr Kobelt's conduct was, in respect of 59 customers, unconscionable. ASIC's contention would give rise to a further difficulty. Given that the identity of the particular 59 customers (out of the total of the 117) in respect of whom ASIC seeks the imposition of a penalty is not known, the Court is not in a position to make any assessment of the extent of the unconscionability in their individual cases, or of the impact which the unconscionable conduct had on them. 49 In my view, the present case can be distinguished from ASIC v Kobelt. First, the ACCC did not abandon its claims that GQA engaged in individual instances of unconscionable conduct. Second, the ACCC put its systems case on the basis that it was supported not just by GQA's records of its business system but by evidence relating to the experiences of thirteen of GQA's customers. This material included material relating to the particularised consumers (WJ, GF, AV and JA), affidavits from five more affected consumers (MA, DH, GD, MK and JR), and records of correspondence between four more consumers and GQA's representatives, the recordings of their telephone discussions with GQA representatives and transcripts of these calls (AS, LM, PP and VM). Accordingly, in the present case, unlike ASIC v Kobelt, it is possible to make an assessment of the extent of the unconscionability in each affected consumer's individual case, and of the impact which the unconscionable conduct had on them. More generally, it may be inferred that at least hundreds of consumers were affected, given the thousands of consumers who enrolled, the thousands of consumers who did not receive qualifications, and the at least 670 who requested a refund. In my case, I do not consider the ASIC v Kobelt limitation to be appropriate. 50 More generally, and as I have earlier indicated, in a case such as the present where false representations were made to a large number of consumers, the requirements of the unsolicited consumer agreement provisions in the ACL were routinely breached and a system of unconscionable conduct has been shown to have impacted a large number of consumers, it may not be possible or helpful to calculate the maximum possible penalty. 51 In the present case, the determination of the appropriate penalty involves an assessment of the overall extent and seriousness of the contravening conduct, taking account of the number of contraventions and the maximum penalty. Given the consistency between the exemplified cases, it is possible to draw inferences about unconscionability in the case of each of the other consumers who enrolled with GQA but did not receive a qualification, and of the impact of that unconscionable conduct. It is open for me to infer that at least some hundreds of consumers were affected by GQA's unconscionable conduct. Accordingly, it is open to me to impose penalties in relation to GQA's system of unconscionable conduct that exceed $1.1 million. 52 Before turning to the specific penalties that I propose to impose, it is appropriate to say something on the question of parity. 53 The ACCC contends that assessments of penalties in analogous cases may provide guidance. But as observed in Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) (2002) 201 ALR 618; [2002] FCA 192 at [34], "while pecuniary penalties imposed in one case provide a guide, that guide will seldom, if ever, be able to be used mechanically". Moreover, the Full Court observed in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 295 that "other things are rarely equal where contraventions of the Trade Practices Act are concerned" and in Singtel Optus Pty Ltd v ACCC (2012) 287 ALR 249; [2012] FCAFC 20 it was said at [60] that: … the court is not assisted by … citations of penalties imposed in other cases, where the combination of circumstances were different from the present, as if that citation is apt to establish a 'range' of penalties appropriate in this case. 54 To such statements may be added what the Full Court observed in Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd [2015] FCAFC 118 at [76], that "there is little to be gained by considering penalties imposed in other cases which turned upon their own facts and, indeed, where "agreed" penalties had been reached". 55 But I accept that some albeit limited guidance may be taken from the penalties imposed in Australian Competition and Consumer Commission v Acquire Learning and Careers Pty Ltd [2017] FCA 602. That case also involved a range of conduct which breached the prohibitions on false, misleading or deceptive conduct and involved contraventions of the unsolicited consumer agreement provisions in the ACL. It also involved a business established for the purposes of profiting from the Australian Government scheme that provides loans to eligible fee paying students to finance their enrolment and participation in courses offered by RTOs. Murphy J imposed penalties totalling $4.5 million in respect of conduct towards eight consumers. I would observe that the penalties proposed by the ACCC in the present case in relation to the four individual instances of unconscionable conduct are within an analogous range. 56 But two distinguishing matters should be noted. First, in ACCC v Acquire Learning, the parties reached an agreed position on liability and relief and the Court took such cooperation and also contrition into account in determining an appropriate penalty. But GQA and Mr Wadi have shown no contrition and have failed to cooperate with the ACCC. Second, that case concerned conduct which was characterised as involving eight courses of conduct directed towards eight particularised consumers. But in the present case, in addition to findings in respect of four particularised instances, findings have been made of a system of unconscionable conduct which came to bear on a very large number of consumers, widespread contraventions of the unsolicited consumer agreement provisions and multiple false representations which were communicated to a very wide audience, including online and through the use of social media advertising. The extent of the contravening conduct in the case before me is much broader than the conduct that was the subject of ACCC v Acquire Learning.

Appropriate penalty 57 The ACCC submits that penalties totalling $8 million for GQA and $500,000 for Mr Wadi are appropriate in the circumstances of this case. I agree. 58 In summary, the total penalties sought against GQA and Mr Wadi, which in my view are appropriate, can be calculated as follows: (a) First, for the multiple contraventions of s 29(1)(b) arising from GQA's communication of the skills review representation to consumers who visited the GQA Website from 1 January 2016, which I am prepared to treat as one course of conduct, it is appropriate to impose pecuniary penalties totalling $750,000 for GQA and $70,000 for Mr Wadi. (b) Second, for the multiple contraventions of s 29(1)(b) arising from GQA's communication of the eligibility representation to the 9,635 consumers who enrolled with GQA in the relevant period in telephone calls and emails from 1 January 2015, which I am prepared to treat as one course of conduct, it is appropriate to impose pecuniary penalties totalling $750,000 for GQA and $70,000 for Mr Wadi. (c) Third, for the multiple contraventions of s 29(1)(m) arising from GQA's communication of the 100% money back guarantee representation to consumers in telephone calls, via the GQA Website, in emails and in social media and radio advertising from 1 January 2015, which I am prepared to treat as one course of conduct, it is appropriate to impose pecuniary penalties totalling $750,000 for GQA and $70,000 for Mr Wadi. (d) Fourth, for the multiple contraventions of s 29(1)(m) arising from GQA's communication of the refund ineligibility representation to approximately 670 customers who sought a refund of payments they had made to GQA in the period from 1 January 2015, which I am prepared to treat as one course of conduct, it is appropriate to impose pecuniary penalties totalling $750,000 for GQA and $70,000 for Mr Wadi. (e) Fifth, for the contraventions of s 21 of the ACL arising from the four instances of unconscionable conduct which involved (and I am prepared to treat as) four courses of conduct, it is appropriate to impose pecuniary penalties totalling $1.75 million against GQA comprising: (i) a pecuniary penalty of $450,000 in relation to the conduct directed at WJ; (ii) a pecuniary penalty of $450,000 in relation to the conduct directed at GF; (iii) a pecuniary penalty of $450,000 in relation to the conduct directed at AV; and (iv) a pecuniary penalty of $400,000 in relation to the conduct directed at JA. (f) Sixth, for the multiple contraventions of s 21 of the ACL arising from GQA's system of unconscionable conduct, it is appropriate to impose pecuniary penalties of $3 million for GQA and $200,000 for Mr Wadi; I would note that even if I was to treat this as one course of conduct, nothing requires me to impose a cap of the maximum penalty for just one contravention as I have discussed earlier. (g) Seventh, for the multiple contraventions of s 79 of the ACL arising from GQA's failure to comply with requirements prescribed in s 79, which I am prepared to treat as one course of conduct, it is appropriate to impose pecuniary penalties totalling $125,000 for GQA and $10,000 for Mr Wadi. (h) Finally, for the multiple contraventions of s 86 of the ACL arising from GQA requiring consumers to make advanced payments in respect of unsolicited consumer agreements, which I am prepared to treat as one course of conduct, it is appropriate to impose pecuniary penalties totalling $125,000 for GQA and $10,000 for Mr Wadi. 59 These penalties have been calculated with regard to s 224(4), recognising that there is overlap between the false representations, the breaches of the unsolicited consumer agreement provisions and the unconscionable conduct. 60 Now the ACCC has contended that one way of justifying the total penalty of $8 million proposed in relation to GQA would be to view it as around half of the total figure ($15,122,135) that is reached by multiplying the average course fee which applied to the 13 exemplified GQA customers ($3,086.15) by the number of customers who used GQA's services but did not obtain a qualification in the period of the contraventions (4,900). Another way of looking at the figure, so the ACCC contended, is that an $8 million penalty would "strip" GQA of around half of the revenue of approximately $16,818,737 that GQA generated during the period of the contraventions, in circumstances where it is apparent that over fifty percent of GQA's customers in that period did not receive the qualifications they had paid for. But in my view neither of these informal calibrations are attractive. I will discuss the totality principle later. 61 Let me discuss some specific matters relevant to the question of penalty and why I consider the foregoing penalties to be appropriate in all the circumstances to achieve the principal objective of deterrence.

The nature and extent of the contravening conduct and the amount of loss or damage caused

100% money back guarantee representation 62 I have found that from at least 1 January 2015, GQA undertook extensive marketing via the internet, social media and radio. GQA also promoted itself using its website located at two URLs: www.gqaustralia.edu.au and www.gqaustralia.com.au (GQA Website). The 100% money back guarantee representation was conveyed in many forms and across many different media: (a) From at least 1 January 2015, the GQA Website included the statements "100% Money Back Guarantee" and "100% MONEY BACK GUARANTEE read more". (b) From at least about August 2015, GQA sent emails to customers and potential customers which contained the following statement: 100% Money Back Guarantee - It's our aim to get our applicants qualified and we will do everything we can to help you once we determine you're eligible. If, however, your application is unsuccessful, we'll give you your money back. (c) From at least about September 2015, GQA sent similar emails to customers and potential customers. (d) From at least about August 2015, GQA representatives made statements in telephone calls to customers and potential customers to the effect that: … after you've provided us with all of your evidence we'll exhaust all possible assessment methods but if the RTO deems you not competent then we will be able to issue you a 100% refund of your paid fees. (e) Some of GQA's Facebook advertisements were titled "100% Money Back guaranteed", "100% Success Guaranteed" and "100% Success or Money Back!". Some consumers who saw these advertisements were directed to the GQA Website where the guarantee was advertised in 2015 without apparent qualification and from 2016 with a limited qualification to the effect that a refund would apply only after the consumer had supplied "all of [their] valid evidence". 63 GQA also instructed its representatives to refer to the 100% money back guarantee in their discussions with prospective customers to overcome their concerns about the substantial fees that GQA charged its customers. In particular, representatives were instructed in the Objections Handling Guide to say: We pride ourselves on delivering, meaning if we say you qualify for X qualification that is what you will receive. That's the beauty of us being able to offer the 'money back guarantee' I think we are the only company in Australia that actually offer that. 64 It is well apparent from the evidence that the 100% money back guarantee worked as designed. The 100% money back guarantee was effective at overcoming consumer objections because it gave GQA's prospective customers a false sense of security that if they did not obtain the promised RTO qualification using GQA's services, then they would get their money back. For example: (a) WJ's evidence was that following a telephone conversation in which a GQA representative made the 100% money back guarantee representation, he believed that he "had nothing to lose by signing up with GQA because of the 100% money back guarantee that [the GQA representative] had told me about"; (b) The 100% money back guarantee was a deciding factor for AV in his decision to use GQA's services and to make payments to them. He was not familiar with GQA and the guarantee provided him with reassurance; and (c) The representation was made to JA in marketing material that GQA emailed to him. He agreed to pay a deposit of $420 and to make monthly instalments of $1,260 despite his scepticism about his eligibility to obtain a Certificate IV in Drilling. 65 The true position was that GQA applied an eligibility criteria to the 100% money back guarantee which required consumers to exhaust all possible avenues of obtaining their chosen qualifications. This criteria applied in circumstances in which GQA representatives had not disclosed the existence of the eligibility criteria and had not disclosed all of the relevant information in relation to the units of competency for the qualifications nor the evidentiary requirements to be met in respect of each unit. In such circumstances, it is difficult to conceive of a scenario in which GQA would consider itself bound to honour the guarantee it had made to a customer, because any customer who failed to obtain the qualification had, according to GQA or the stance that it took in its own commercial interests, failed to exhaust all avenues by refusing to provide evidence or refusing assessment.

The skills review representation 66 GQA's extensive marketing and advertising directed consumers to the GQA Website and to complete a "Free Skills Review". One such advertisement posted on Facebook on 17 August 2015 reached 41,931 people. Another advertisement posted on Facebook on 6 November 2015 reached 1,134,756. 67 GQA represented that the Free Skills Review could determine a consumer's eligibility for a qualification offered by one of the RTOs affiliated with GQA, based on the information the consumer provided in response to a number of prompts; that is, the Free Skills Review was an assessment tool. But the true position was that irrespective of the information which was submitted by consumers, the Free Skills Review produced an automated response which represented that the consumer could obtain a qualification through RPL. I have found that the Free Skills Review was nothing more than a very crude marketing device designed to obtain the contact details of prospective customers, who were invited to provide their contact information as part of the Free Skills Review. It was notably effective. 95% of GQA's leads came through the GQA Website. That is, it is likely that over 9,000 people relied upon the skills review representation, given that 9,635 people applied over the relevant period. 68 The acquisition of personal information from so many customers as a result of a deceptive ploy is an aggravating factor in itself. Moreover, by using this method to obtain sales leads, GQA subjected itself to the unsolicited consumer agreement provisions of the ACL, which it failed to comply with.

The eligibility representation 69 I have found that GQA's most notable sales tactic was to enrol consumers without confirming that they had the required evidence to support their RPL application or adequately explaining the RPL process. GQA's representatives were not qualified to assess or capable of properly assessing consumers' eligibility for qualifications. In truth, the "skills recognition specialist", who was generally the consumer's first point of contact, was a deceptive misnomer. This role was more in the nature of a sales agent. 70 In such circumstances, when GQA's representatives told consumers in telephone conversations and written correspondence that the consumer was eligible to receive a specific qualification based on their previous work experience using RPL, GQA had no reasonable grounds for any such assertion. Indeed, this conclusion is demonstrated by the experiences of individual consumers who made substantial payments to GQA on the basis of representations made to them that they were eligible to obtain qualifications using the RPL services offered by GQA. For example: (a) The GQA representative who spoke with WJ in August 2015 failed to identify whether WJ's experience was relevant to any of the units in the Water and Sanitary Plumbing area, a key stream for the Certificate III in Plumbing. Nevertheless, the representative said to WJ "What with your 10 years' experience, I can't see [any] problem getting this qualification whatsoever." As WJ did not have experience in water and sanitary plumbing, he was not eligible for and did not obtain the qualification. (b) The GQA representative who spoke with GF in July 2015 told him that he had sufficient experience to be eligible to obtain a Certificate IV in Massage Therapy through the RPL process. The representative subsequently emailed GF advising him that he was eligible for the qualification. Despite his protracted efforts to provide evidence in support of his RPL application, at the time of the hearing on liability, GF had not received the promised qualification or a refund of the $2,300 that he had paid to GQA. (c) The GQA representative who spoke with AV in September 2015 told him that his current qualification and work experience would be enough for a Graduate Diploma of Engineering. Over a year later, despite his attempts to complete his portfolio, AV had not received the qualification using RPL. GQA only refunded him in November 2016 after he engaged lawyers. (d) The GQA representative who spoke with JA on 9 September 2015 told him that he was eligible to obtain a Certificate IV in Drilling using RPL, despite appreciating that JA "seemed sceptical". JA was unable to obtain the qualification and GQA engaged a debt collector to pursue him for unpaid fees.

The refund ineligibility representation 71 I have also found that GQA denied refunds to its customers in circumstances in which it had failed to provide services to its customers with due care and skill and that were fit for the purpose of obtaining qualifications through the RPL process. On this basis I found that GQA's representation to consumers that they were ineligible for a refund was false, because they were entitled to a refund under s 269(3) of the ACL. I concluded that the refund ineligibility representation was made to each of WJ, GF, AV and JA. But it may be inferred that it is likely that these representations were made to hundreds of other consumers who sought refunds.

Unsolicited consumer agreements and unconscionable conduct 72 The false representations referred to above must be understood in the context of GQA's system of unconscionable conduct. The 100% money back guarantee representation was complemented by GQA's use of the skills review representation, the eligibility representation and the refund ineligibility representation. These false representations formed part of a pattern of conduct which started in each case with the use of pressure and unfair sales tactics to persuade a prospective customer to use GQA's services. In its essential features, GQA designed a system with the following elements: (a) GQA represented to prospective customers that GQA had conducted a thorough assessment of their eligibility to receive an RTO qualification using the RPL process. (b) GQA represented that on the basis of this assessment, it had concluded that the consumer was indeed eligible to obtain the RTO qualification using the RPL process. (c) In their dealings with consumers on GQA's behalf, GQA's representatives failed to disclose (and often significantly understated or misrepresented) what certification through RPL involved and left consumers with the impression that it would be a quick and painless process in which they would be guided by GQA's purportedly skilled and expert staff. (d) GQA's skills recognition specialists were in fact sales agents without experience or adequate training in the RPL process. GQA provided very generous incentives to these sales agents, and trained and encouraged them to use unfair sales tactics to exert pressure on consumers and thereby overcome consumers' reluctance to make substantial upfront payments. For example, GQA suggested that its sales representatives tell consumers that spaces in their qualification of choice were limited when this was not the case, and instructed its sales representatives to offer time limited discounts to secure sales. (e) Further, GQA repeatedly and falsely represented that the service was effectively risk free because if the consumer did not obtain the qualification, they would be entitled to a 100% refund. (f) GQA entered into agreements with consumers whose contact information it had obtained via the online "Free Skills Review". These agreements failed to comply with the requirements of the unsolicited consumer agreement provisions of the ACL and GQA required upfront payment of at least a substantial deposit within the statutory cooling off period in further contravention of those provisions. GQA also marketed its services in a manner that disregarded the requirements of the relevant Commonwealth RTO standards. (g) Consumers who agreed to use GQA's services found that such services did not live up to their expectations. GQA's "facilitators" were overworked and unskilled in RPL. They were unresponsive to customer queries and concerns. And even if the customer was eligible for the relevant qualification, the facilitators were ill-equipped to progress their application. (h) Moreover, when it transpired that contrary to GQA's representations, the customer was unable to obtain the promised qualification, GQA relied on previously undisclosed refund eligibility criteria as a basis for rejecting refund requests made by consumers who were either ineligible (and therefore unable to submit sufficient evidence in support of the qualification) or who had received inadequate guidance and advice from GQA's "facilitators" to complete their RPL applications. (i) Further, in many cases GQA engaged debt recovery agents to pursue consumers for recovery of unpaid amounts, notwithstanding that the consumer had not received the promised qualification and had requested a refund of amounts they had paid to GQA. 73 As I have found, GQA's business practices amounted to a system of unconscionable conduct. On this basis, the vast majority of consumers who became customers of GQA from at least 1 January 2015 were likely subjected to the contravening conduct. The consumers who suffered the greatest financial detriment as a result of the conduct were those who paid GQA's fees in full but did not obtain the qualification that GQA had promised to assist them to obtain using the RPL process and whose refund requests were rejected by GQA. It is apparent that in the relevant period (1 January 2015 to 30 June 2016): (a) 9,635 consumers used GQA's services; (b) Of its 9,635 customers in this period, at least 4,900 did not receive the qualification they signed on to receive; (c) the fees GQA charged its customers in respect of its RPL services were in the range of approximately $1,500 for a Certificate III in Business Administration (Medical) (Release 1) to $6,500 for a Graduate Diploma in Engineering; (d) the average fee which applied to the 13 exemplified consumers was $3,086.15; and (e) GQA received revenue of approximately $16,818,737. 74 Such figures are an indication of the potential effect and seriousness of the contravening conduct. But of course, the nature of the detriment suffered by consumers depended upon their individual circumstances. In relation to the four individual instances of unconscionable conduct in contravention of s 21: (a) WJ made payments to GQA totalling $1,965.64 for an RPL certification for a Certificate III in Plumbing. Despite GQA's representations to the contrary, WJ was not eligible to obtain the qualification. He sought a refund of his payments, relying on the 100% money back guarantee. GQA refused to refund WJ and engaged debt collectors to seek payment of the balance of the course fee, and a further $1,734.36. GQA also threatened damage to his credit rating. GQA also instructed its lawyers to write to WJ's father, reserving its right to seek damages caused to GQA by WJ's alleged misrepresentation that he was able to establish the relevant competencies for the Certificate III in Plumbing. (b) GF made payments to GQA totalling $2,300 for an RPL certification for a Certificate IV in Massage Therapy. After a protracted process of trying to provide all of the necessary evidence, which was hampered by a lack of assistance from GQA, GF sought a refund of his payments to GQA, which GQA refused. GF made complaints about GQA's conduct to GQA and NSW Fair Trading. GF has not obtained the qualification and has not received a refund of the payments he made to GQA. (c) AV made payments to GQA totalling $6,000 for an Advanced Diploma in Engineering. AV did not obtain the diploma, and GQA told AV that he was not entitled to a refund. AV engaged lawyers who successfully obtained a full refund of the payments he had made to GQA. (d) JA made an initial deposit to GQA of $420 in relation to an RPL application for a Certificate IV in Drilling. JA did not obtain the qualification and GQA refused his request for a refund of the deposit and engaged debt collectors to pursue him for payment of the balance of the fees, $3,780. The debt collector made threats in relation to JA's credit rating. JA sought assistance from the Consumer Action Law Centre and filed proceedings in VCAT. He subsequently settled the matter with GQA. 75 In addition to these four instances, five consumers gave evidence (MA, DH, GD, MK and JR), and correspondence relating to four consumers was tendered in evidence (AS, LM, PP and VM) to support the conclusion that GQA had engaged in a system of unconscionable conduct. It is apparent from the evidence that GQA engaged in very similar conduct in relation to these consumers. 76 In summary, GQA's conduct was systematic, serious and affected a substantial number of consumers.

The size and financial position of GQA 77 GQA promoted itself as a "market leader", "the country's leading expert in RPL and Skills Recognition", "Australia's leading Skills Recognition and RPL Specialist", and "Australia's #1 skills recognition company". GQA generated substantial revenue during the period of its contravening conduct utilising such promotions. But GQA is now in liquidation. On 28 March 2017, I granted leave for the ACCC to proceed against GQA pursuant to s 500(2) of the Corporations Act 2001 (Cth). 78 Penalties are not provable in a liquidation and it is most unlikely that GQA will pay any penalty that is imposed upon it. But in my view general deterrence considerations warrant making an order that GQA pay a significant pecuniary penalty. Now although it may not always be appropriate to order that a company in liquidation pay a pecuniary penalty, the Court should not be dissuaded from imposing a penalty on a company in liquidation if to do so will serve the purpose of deterring others from engaging in the same or similar conduct (Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513 (ACCC v Dataline.Net.Au); Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (in liquidation) [2005] FCA 1212; Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd (administrators appointed) [2004] ATPR 41-983; [2004] FCA 376; Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] ATPR 41-937 (ACCC v SIP); [2003] FCA 336; Australian Competition and Consumer Commission v The Vales Wine Company Pty Ltd [1996] ATPR 41-528; [1996] FCA 854). 79 In ACCC v Dataline.Net.Au, the Full Court said at [20]: … a court may impose a penalty on a company in liquidation if to do so would clearly and unambiguously signify to, for example, companies or traders in a discrete industry that a penalty of a particular magnitude was appropriate (and was of a magnitude which might be imposed in the future) if others in the industry sector engaged in the same or similar conduct. See also Australian Competition and Consumer Commission v EDirect Pty Ltd (in liq) (2012) 206 FCR 160; Australian Competition and Consumer Commission v Homeopathy Plus! Australia Pty Ltd (No 2) [2015] FCA 1090; Australian Competition and Consumer Commission v South East Melbourne Cleaning Pty Ltd (in liq) (formerly known as Coverall Cleaning Concepts South East Melbourne Pty Ltd) (No 2) [2015] ATPR 42-492; [2015] FCA 257. 80 In ACCC v SIP Goldberg J said at [59]: If general deterrence is to have any meaning, a company in liquidation which has contravened the Act must be ordered to pay an appropriate pecuniary penalty as a deterrent to others who might be tempted to engage in similar conduct. 81 In my view, imposing a penalty on GQA, which heavily promoted itself as a leader in the market, will send an important message to others who operate businesses purporting to assist consumers to obtain nationally recognised qualifications from RTOs. It is apparent from the facts of the present case that the information asymmetry experienced by consumers seeking to have their prior learning and experience formally recognised through RPL in a qualification from an RTO provides temptation for unscrupulous operators to engage in misleading or deceptive conduct and unconscionable conduct. 82 Moreover, recent cases involving businesses established for the purposes of profiting from the Australian Government scheme that provides loans to eligible fee paying students to finance their enrolment and participation in courses offered by RTOs and other vocational education and training providers demonstrate that exploitation in the education sector is rife (Australian Competition and Consumer Commission v Unique International College [2017] FCA 727; Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521; ACCC v Acquire Learning; Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (subject to deed of company arrangement) (2016) 116 ACSR 353; [2016] FCA 1246). Imposing a significant pecuniary penalty against GQA should significantly deter others from engaging in false representations and misleading and unconscionable conduct with respect to existing and prospective RPL candidates.

Whether the contravening conduct was deliberate 83 In my view, the contravening conduct was calculated and deliberate. GQA's prioritisation of sales over service was intentional. GQA's business model was calculated to obtain maximum commercial advantage from the information imbalance that was enshrined between GQA and its customers. GQA advertised the Free Skills Review tool knowing that it would be used to obtain customers' details and not for the purposes of assessment. The technique of suggesting that enrolments were limited (when this was never the case) was intended to persuade customers who wanted more information or were uncertain about the price to commit to GQA. GQA's practice of not disclosing key terms and conditions until after receiving payment, if at all, was a deliberate tactic, as is apparent from the script that GQA provided its sales representatives. And GQA continued with its business model notwithstanding the high volume of complaints that it received from its customers and from State Fair Trading Offices and concerns raised by its own employees. 84 I have also found that Mr Wadi was knowingly involved in GQA's contravening conduct and to have had actual knowledge of the matters constituting GQA's contraventions save for the four specific customer instances. There can be little doubt that his conduct was calculated and deliberate. A substantial penalty against him is warranted as I have earlier indicated.

Whether the contravention arose out of the conduct of senior management 85 Mr Wadi was GQA's chief executive officer, sole director, sole shareholder and the controlling mind of GQA. I have found that he was knowingly involved in GQA's contravening conduct and that he had actual knowledge of the matters constituting GQA's contraventions, save for four specific customer instances. 86 Moreover, it is also apparent that from at least 2015, other senior managers were clearly aware of the systemic problems with GQA's business model. For example: (a) On 12 January 2015, a management meeting took place "to brainstorm and determine a procedure and handling policy for requests relating to refunds, extensions, cancellations and applications on hold". Mr Wadi facilitated the meeting. Although the idea of removing the promotion or sales pitch of the money back guarantee was mooted, it was rejected by Ms Alexandra Sella, GQA's Director of Operations in advance of the meeting, because "this is a unique selling point that sets us aside from other providers." The idea of a short cooling off period was also vetoed by Ms Sella, on the basis that: This may open a whole new can of worms; I think that opens us up for even more actual refunds. The ones we are getting now are being told they cannot have a refund; it is possible for us to keep them on board. How about we keep this as an internal procedure, that within 24 hours we decide if we want to or not want to refund a candidate. (b) In June 2015, Ms Sella wrote to Mr Wadi in relation to refunding a customer: This is definitely going the legal route and I really don't want people to carry on talking to Fair Trading, the Office of Consumer and Business Services - as one day that will end up with the ACCC. (c) By October 2015, Mr Wadi emailed Ms Sella and Ms Aine O'Malley, who was at that time GQA's Customer Service Manager, and said: I'm sick of seeing complain[t]s and refunds, what is wrong here. No sales, refunds and complain[t]s is all what I have been hearing in the last three month and I'm extremely frustrated. (d) Ms Sella also suggested that a request for refund/withdrawal forms should be generated, and processing time for requests should be introduced, on the basis that this: will also possibly deter people from asking for refunds. This should be a long drawn out document to complete, with lots of questions and things to provide. (emphasis added) (e) On 2 February 2016, Renna Markson, who became GQA's "Customer Experience Manager" in November 2015, and Ms O'Malley (who was then Mr Wadi's Executive Assistant) met with Fair Trading New South Wales, to discuss the 31 complaints which had been received in the previous six months. At this meeting key systemic failings were discussed. (f) By 4 February 2016, Renna Markson wrote to Mr Wadi: … we need to improve the customer journey and experience, so that customers review on their own. Obviously it is good for potential customers to see high levels of satisfaction through the reviews but it would be even better if we are able to provide a great experience to all customers and leave them wanting to write good reviews off their own back. With the volume of refund requests I have at the moment, it is hard for me to focus on this and to develop a strategy, because I am finding it hard to stay on top of the clients in my name at the moment. I don't feel that I'm giving good customer service at the moment because of the response times. In instances when I am listening to calls and I notice a call centre agent has said something wrong, I do flag it with Andy, but at this stage it is really only areas directly related to refunds and the 100% Money Back Guarantee. I would love to be able to give recommendations and work on the strategy but while there are all these refund requests to deal with it doesn't seem like this is something I will be able to dedicate time for in the next few months. 87 In my view, the contravening conduct was also attributable to GQA's senior management as well as Mr Wadi.

Whether the company had a corporate culture conducive to compliance with the ACL 88 There is no evidence of any ACL compliance program in place at GQA at any time prior to the ACCC commencing enforcement proceedings against the respondents. This failure is all the more striking in the context of the significant volume of complaints that GQA received about its conduct from its customers and State Fair Trading Offices. A former GQA employee, LR, gave evidence that in her time overseeing GQA's "facilitators", on an average day she spent at least half of her time dealing with customer complaints and in the space of two months working with GQA, she responded to at least 100 complaints. A former employee of GQA, Mr Mark West gave evidence that when he commenced employment with GQA as its Customer Experience Manager, he became aware that GQA had a large backlog of over 100 complaints that GQA had not responded to, some of which were over six months old. Mr West also gave evidence that in March 2016, he raised his concerns about GQA's advertised 100% money back guarantee with senior managers of GQA. Mr West was concerned that many complaints he reviewed related to the guarantee. But senior management were dismissive of these concerns and Ms Sella told him that "GQA never gives refunds". 89 It was not until August 2016, when the ACCC commenced proceedings, that GQA unilaterally abandoned the 100% money back guarantee. It did not otherwise make any significant changes to its business model. And even once the ACCC had taken action, GQA continued to instruct debt collectors to pursue customers who had not received qualifications and had sought refunds from GQA. 90 During his time at GQA, Mr West warned GQA that he believed that it would face an "avalanche" of complaints. His evidence was that senior managers were indifferent to this warning and that GQA's Chief Financial Officer said to him words to the effect that "I do not care about our reputation at Fair Trading" and "we aren't scared of Fair Trading, our names are ringing from the halls of Fair Trading and they can't do anything". 91 Such evidence powerfully demonstrates the respondents' preparedness to engage in regulatory risk and demonstrates that there was no culture of compliance. Moreover, attempts by Mr West and others to encourage corrective action were stymied by GQA's management. And all under Mr Wadi's watch.

Whether the company has shown a disposition to cooperate with the ACCC in relation to the contraventions 92 The respondents have displayed no relevant contrition or cooperation. The respondents defended the present proceedings on the basis that almost no aspect of the alleged conduct was admitted. It is revealing that GQA signed up MK and accepted payments from him on 30 September 2016, after the ACCC had commenced proceedings against GQA and in circumstances in which GQA was well aware of the nature of the ACCC's allegations. It is also relevant that after proceedings were issued, GQA continued to instruct debt collectors to pursue customers who had not received qualifications and had sought refunds from GQA. On the application of the ACCC, I granted an interlocutory injunction restraining GQA from this activity pending the outcome of these proceedings. 93 Finally on this aspect, and if it needs to be said, GQA's compliance with mandatory s 155 notices does not constitute relevant cooperation for the purposes of penalty assessment.

Whether the respondents have engaged in similar conduct in the past 94 The New South Wales Civil and Administrative Tribunal (NSWCAT) has found that GQA's refund terms were unfair within the meaning of s 24 of the ACL. NSWCAT has also found that GQA represented to a customer that he would be able to qualify as a plumber within 90 days, by relying on his TAFE qualifications; and if not, he would be entitled to a refund. NSWCAT found that it was not possible for the customer to rely on his TAFE qualifications, as they were too old and that had the customer known he could not qualify, he would not have entered into a contract with GQA. GQA was ordered to refund $8,000 to the customer in December 2016.

Deterrence and totality 95 In my view, the proposed penalties sought by the ACCC against both GQA and Mr Wadi are necessary and appropriate in order to satisfy the principal objective of deterrence. 96 The contravening conduct was serious, extensive and deliberate. It took place within the context of a non-existent compliance culture, a cavalier attitude towards consumers, and the knowledge and direct involvement of senior management. The contravening conduct generated significant revenue and caused substantial consumer harm. 97 Mr Wadi, as the sole director and shareholder in GQA, stood to gain a commercial advantage from GQA's contravening conduct. He must be deterred from engaging in similar conduct in the future. The penalty proposed in respect of his involvement will achieve the object of specific deterrence and will also send a general message to the RPL sector that those individuals personally involved in such conduct will be personally held to account. 98 In relation to GQA, the question of specific deterrence is not now directly relevant as the company is now in liquidation. But it is necessary to impose a very substantial penalty for general deterrence purposes. 99 Now the penalties to be imposed are very significant and it must be recognised that a penalty must not be so high as to be oppressive. But in relation to GQA, this is not a central consideration because it is unlikely to pay any penalty in any event. And as for Mr Wadi, I have no evidence before me to suggest that the penalty to be imposed on him is oppressive or that he does not have the financial wherewithal in Australia or offshore to pay the penalty. 100 Generally, the proposed penalties are proportionate to GQA's and Mr Wadi's contravening conduct and are no greater than is necessary to achieve their deterrent objective. Moreover, taking into account all of the foregoing matters and considering the question of totality, in my view they are appropriate.

Other relief 101 I have a wide discretionary power to make declarations. But they are not to be made as a matter of course, but only after due consideration as to whether it is appropriate to do so. 102 Moreover, if a declaration is to be made then it must be framed to disclose the gist of the factual findings and disclose the basis upon which those findings are said to contravene the relevant statutory provisions. 103 In my view, it is appropriate to make declarations in this case. Declaratory relief will have utility and will serve the public interest by vindicating the ACCC's claims that GQA and Mr Wadi contravened the relevant provisions of the ACL in the manner stated, by serving the purpose of general deterrence, by marking the Court's disapproval of the particular conduct engaged in by GQA and Mr Wadi and by clearly setting out the foundation for the pecuniary penalties and other relief. 104 In my view it is also appropriate to impose injunctions under s 232 of the ACL, or alternatively under s 23 of the Federal Court Act, restraining Mr Wadi from engaging in similar conduct for a period of seven years. In my view the relevant period should be seven years rather than the five years sought by the ACCC, and in the context of the present case should be coterminous with the period of the disqualification order that I propose to make against Mr Wadi. 105 The Court has a wide power that is not limited by traditional equitable principles in determining whether to grant an injunction. But there must be a nexus between the contravening conduct and the injunction granted. The injunction must be framed so that the person enjoined knows precisely what conduct will amount to a breach. In deciding whether to grant injunctive relief, a relevant factor is whether the existing sanctions for the conduct to be the subject of the injunction, as found in the ACL, should be supplemented by the availability of the range of sanctions applicable to contempt of court. Relevant factors include the period during which and number of occasions on which contraventions occurred, the likelihood of repeat conduct and the potential for damage from repeat conduct. In my view, injunctive relief against Mr Wadi is required in the circumstances of this case because: (a) the conduct continued for a considerable period of time of approximately 2 years; (b) the conduct only ceased because of the ACCC's intervention; and (c) I have little confidence that Mr Wadi will not engage in repeat behaviour. 106 In the circumstances, the availability of the additional remedies attending any contempt of court are wholly appropriate. As is required, the terms of the injunctions are limited by reference to the conduct in contravention of the ACL in which Mr Wadi has engaged and are designed to prevent a repetition of that conduct. The injunction is also limited in time, for the reasons discussed by Young J in Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (2006) 157 FCR 162 at [233] to [234] (see also Australian Competition and Consumer Commission v Signature Security Group Pty Limited [2003] ATPR 41-942; [2003] FCA 375, at [3] to [4]; Australian Competition and Consumer Commission v Construction, Forestry, Mining & Energy Union [2007] ATPR 42-192; [2007] FCA 1546 at [8]). 107 The final matter to deal with is the disqualification order. In this regard, I have not considered it necessary to address this matter before the question of assessing a pecuniary penalty against Mr Wadi. But to be clear, ultimately I have considered the pecuniary penalty and the disqualification order together and concluded that in total they are an appropriate overall penalty against Mr Wadi (although the disqualification order also has the dual dimension or effect of protection). 108 The ACCC seeks an order under s 248 of the ACL disqualifying Mr Wadi from managing corporations for 15 years. The preconditions to such an order are that the Court is satisfied that the person has contravened or been involved in a contravention of Part 2-2, Part 3-1 or Division 2 of Part 3-2 of the ACL, and the disqualification is justified. The Court may have regard to the person's conduct in relation to the management, business or property of any corporation, and any other matters that the Court considers appropriate: s 248(2). Disqualification orders have as one of their dimensions to protect the public from the harmful use of the corporate structure or from use that is contrary to proper commercial standards. They have the effect of safeguarding the public interest in the transparency and accountability of companies and in the suitability of directors to hold office. They also have a punitive purpose and effect. In assessing an appropriate length of disqualification, consideration is to be given to the degree of seriousness of the contraventions, the propensity that the person may engage in similar conduct in the future, and the likely harm that may be caused to the public: Re HIH Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80; [2002] NSWSC 483, at [56]; Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at [34] to [35]. 109 The ACCC contends that a period of 15 years is appropriate in light of periods of disqualification reflected in other cases, e.g. Australian Competition and Consumer Commission v Halkalia Pty Ltd (No 2) [2012] ATPR 42-399; [2012] FCA 535 (15-year disqualification), Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (No 7) [2016] FCA 484 (10-year disqualification) Director of Consumer Affairs Victoria v Dimmeys Stores Pty Ltd (2013) 308 ALR 296; [2013] FCA 1371 (six-year disqualification), and Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62 (five-year disqualification). 110 But in my view these decisions are of limited assistance at least in the stipulation of the duration of the terms of disqualification. In all the circumstances I consider that a period of disqualification for seven years is appropriate. 111 Mr Wadi was the sole director of GQA and its CEO; he oversaw the operations of the company and supervised its staff. It is clear on the evidence that Mr Wadi aided, abetted, counselled and procured and was directly and indirectly knowingly concerned in each of GQA's contraventions (except the contraventions of s 21 concerning the four individual consumers) and I have found him to have been so knowingly involved. 112 Mr Wadi's conduct was serious, yet he displayed no remorse and presided over a company that denied the allegations against it and (for the most part) continued its contravening conduct until it was placed in liquidation. Mr Wadi failed to attend the trial on liability. His victims were consumers who were duped by a multifaceted system of conduct and believed that for a fee GQA would guide them through a quick and painless process that would enable them to obtain an RTO qualification that would enhance their career prospects. The conduct has caused significant consumer harm. 113 Mr Wadi remains a director of, and shareholder in, companies registered in Australia and owns property in Australia. 114 I have no faith that Mr Wadi will modify his behaviour. His conduct and self-justifying arrogance, as disclosed in some of the evidence before me, reflects an individual not suited to managing a corporation. In my view, a substantial disqualification order is justified against Mr Wadi to discharge the objectives and for the general reasons discussed by Mortimer J in ACCC v Clinica Internationale at [310] and [311]. I do not propose to impose a disqualification period of 15 years, but nevertheless a substantial term of seven years is warranted.

conclusion 115 I will make declarations and orders to accord with the above reasons. I will make a global pecuniary penalty order against each of GQA and Mr Wadi, but with the break-down as set out in my reasons. I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach.