Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd

Federal Court of Australia|2024-07-19|Before: Jackman J

Introduction 1 On 9 April 2024, I gave judgment in these proceedings on questions of liability for contraventions of various provisions of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL): Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344 (Liability Judgment). In this judgment, I adopt the same defined terms as I used in the Liability Judgment. 2 In the Liability Judgment, I found that the first respondent (DG Institute) contravened various provisions of the ACL by making the No Equity Representations in the RER program, and by making the Vestey Trust Representations and the Authority Representations in the MWC program. I also found that the second respondent (Ms Grubisa) was liable as an accessory by aiding, abetting and procuring the contraventions and by being knowingly concerned in and party to the contraventions. 3 The ACCC now seeks relief against the respondents by way of pecuniary penalties pursuant to s 224 of the ACL, injunctions pursuant to s 232 of the ACL, a disqualification order pursuant to s 248 of the ACL, non-party consumer redress orders pursuant to s 239 of the ACL and the issue and publication of a corrective notice. As to the non-party consumer redress orders, the ACCC's originating application sought those orders only against DG Institute, and not against Ms Grubisa. The ACCC sought at the hearing on relief to amend the originating application to claim, among other things, non-party consumer redress orders against Ms Grubisa, and I will deal first with reasons for refusing leave to amend in that way before dealing with the substantive application for relief.

Disqualification order 12 The usual practice is for the question of a disqualification order to be decided before deciding on the imposition of a pecuniary penalty, in order to ensure that if such an order is imposed then the Court will grant the further order of a pecuniary penalty in that context, and will do so only if it considers the disqualification would be inadequate if it was the only penalty: Australian Competition and Consumer Commission v Geowash Pty Ltd (subject to a deed of company arrangement) (No 4) [2020] FCA 23; (2020) 141 ACSR 515 at [65] (Colvin J; Australian Securities and Investments Commission v Citrofresh International Ltd (No 3) [2010] FCA 292; (2010) 268 ALR 303 at [15] (Goldberg J). In exercising the discretion concerning disqualification orders, courts are not concerned solely with the issue of whether the relevant person now is, or in the future will be, a fit and proper person to manage corporations, and courts take into account a wide variety of factors beyond the present and future fitness of the person to manage corporations, such as the size of any losses suffered by the corporation, its creditors and consumers, legislative objectives of personal and general deterrence, contrition on the part of the defendant, the gravity of the misconduct, the defendant's previous good character, prejudice to the defendant's business interests, personal hardship and the willingness of the defendant to render assistance to statutory authorities and administrators: Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129 at [43] (McHugh J). 13 In the present case, I have found that Ms Grubisa made the No Equity Representations, the Vestey Trust Representations and the Authority Representations knowing that those representations were false and misleading: Liability Judgment at [41], [88] and [106]. That was deliberate and dishonest conduct in contravention of the law. Further, as I discuss in more detail below, 2,112 customers paid a total of $14.7 million in course fees for the MWC program during the Relevant Period, and 1,851 customers paid a total of $9.45 million in course fees for the RER program during the Relevant Period. Although the evidence does not establish that Ms Grubisa personally derived substantial benefits from those payments, those figures indicate the scale of the conduct constituting the contraventions, and its impact on members of the public. Although Ms Grubisa has cooperated in answering requests made by the ACCC, she has not shown any contrition. There is no direct evidence of prejudice to Ms Grubisa's business interests or personal hardship resulting from a disqualification order, although I am prepared to assume that there will be a general adverse impact on her future business activities during the period of disqualification. I also take into account the legislative objectives of personal and general deterrence, which I discuss in further detail below. I also take into account that Ms Grubisa's contravening conduct, while acting as DG Institute's sole director, spanned a period of over five years from April 2017 to November 2022. 14 In all the circumstances, I regard it as appropriate that Ms Grubisa be disqualified from managing corporations for a period of five years.

Pecuniary Penalties 15 The purpose of a civil penalty regime is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the relevant Act by the deterrence, specific and general, of further contraventions: Australian Building and Construction Commission v Pattinson [2022] HCA 13; (2022) 274 CLR 450 at [9], [15] and [31] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; (2018) 262 CLR 157 at [87] (Keane, Nettle and Gordon JJ). The penalty must be fixed with a view to ensuring that the penalty is not such as to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [66] (French CJ, Crennan, Bell and Keane JJ); Pattinson at [17]. In other words, those engaged in trade and commerce must be deterred from the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention: Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 at [63] (Keane CJ, Finn and Gilmour JJ). The possibility that the penalty required to meet the object of general deterrence may be so high that the contravener will become insolvent must not prevent the Court from doing its duty: Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247; (2006) ATPR 42-091 (Heerey, Finkelstein and Allsop JJ). However, the penalty should not be greater than is necessary to achieve the object of deterrence, and severity beyond that is oppression: Pattinson at [40]. 16 Subject to the particular statutory scheme, retributive justice has no part to play in determining the appropriate civil penalty and the statutory maximum penalty does not implicitly require that contraventions be graded on a scale of increasing seriousness, with the maximum to be reserved exclusively for the worst category of contravening conduct. The statutory discretion is not constrained in this way: Pattinson at [49], [51]. Considerations of deterrence, and the protection of the public interest, may justify the imposition of the maximum penalty where it is apparent that no lesser penalty will be an effective deterrent against further contraventions of a like kind: Pattinson at [50]. 17 The majority in Pattinson considered that the statutory maximum penalty is but one yardstick that ordinarily must be applied, and must be treated as one of a number of relevant factors to inform the assessment of a penalty of appropriate deterrent value: at [53]-[55]. Their Honours rejected an approach by which the statutory maximum penalty was required to be reserved exclusively for the worst category of contravening conduct: at [10] and [49]-[51]. However, their Honours emphasised that there should be "some reasonable relationship between the theoretical maximum and the final penalty imposed"; the relationship of reasonableness being established by reference to a need for deterrence having regard to the circumstances of the contravener and the circumstances of the contravention: at [10], [53]-[55]. In cases where thousands of false or misleading representations are made, the arithmetic maximum penalty in aggregate may become so disproportionately large that it is not helpful to the Court and precise calculation therefore becomes unnecessary: see the cases which I cited in Australian Competition and Consumer Commission v Dell Australia Pty Ltd (No 2) [2023] FCA 983 at [10]. That is an important consideration in the context of on-line presentations, as it appears that there is a contravention each time a misleading representation on a website is viewed by a potential customer: Australian Competition and Consumer Commission v Megasave Couriers Australia Pty Ltd [2021] FCA 543 at [80]-[81] (O'Callaghan J). 18 Differing maximum penalties apply to the contraventions depending on the date they occurred. The maximum penalty per contravention applicable in respect of contraventions which occurred in the period April 2017 to 31 August 2018 (first penalty period) was $1.1 million: ACL s 224(3), Item 2, as at 31 August 2018. This maximum penalty applies to two months of No Equity Representations (out of a total of 52 months), 17 months of Vestey Trust Representations (out of a total of 67 months) and 17 months of Authority Representations (out of a total of 64 months). In respect of contraventions that occurred in the period from 1 September 2018 to 9 November 2022 (second penalty period), the maximum penalty per contravention is the greater of (a) $10 million, (b) three times the benefit attributable to the conduct, and (c) if the court cannot determine the value of the benefit obtained, 10% of DG Institute's annual turnover in the 12 month period ending at the end of the month in which the act or omission occurred or started to occur: ACL s 224(3), Item 2, as at 1 September 2018. This maximum penalty applies to 50 out of 52 months of the No Equity Representations, 50 out of 67 months for the Vestey Trust Representations and 47 out of 64 months for the Authority Representations. 19 The ACCC submits that given the centrality of the Vestey Trust Representations to the MWC program, the amount of fees that DG Institute received in the relevant period (being $14.7 million) is an appropriate approximation of the value of the benefit it obtained from that contravening conduct overall, although it is not possible to reliably attribute that revenue to particular instances where the Vestey Trust Representations were made. The difficulty which I have with that submission is that DG Institute incurred very substantial costs and expenses in earning that revenue, and overall did not earn a net profit over the five years in question. I deal with this matter in further detail below. The ACCC submits, and I accept, that the No Equity Representations and the Authority Representations are more difficult to connect with the decision of consumers to enrol in the courses, and thus the benefit from that contravening conduct is more difficult to estimate, although at least some consumers may have enrolled in the courses based on the content of those representations given the prominence they were given by Ms Grubisa in her promotional presentations. 20 As DG Institute's total annual revenue never exceeded $10 million during the Relevant Period and the value of the net overall benefit of the conduct of DG Institute was minimal and substantially less than $10 million, it follows that the relevant integer for the purpose of determining the maximum penalty is appropriately taken as $10 million per contravention in respect of the second penalty period. 21 With respect to Ms Grubisa, the maximum penalty for her involvement in each contravention is $220,000 for the first penalty period, and $500,000 for the second penalty period: see ACL s 224(3), Item 2, as at 31 August 2018 and 1 September 2018 respectively. 22 Section 224(4) of the ACL provides that where conduct constitutes the contravention of two or more provisions, a person is not liable to more than one penalty in respect of the same conduct. Three separate provisions of the ACL attracting the imposition of a pecuniary penalty were contravened in respect of each of the No Equity Representations and Authority Representations and two provisions attracting the imposition of a penalty were contravened in respect of the Vestey Trust Representations. Consistently with s 224(4), the ACCC only seeks a penalty with respect to contraventions of one provision of the ACL for each of the No Equity Representations, Vestey Trust Representations and Authority Representations. 23 Where there is an interrelationship between the factual and legal elements of two or more contraventions, consideration might be given to whether or not it is appropriate to impose a single overall penalty for that course of conduct: Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liq) (No 3) [2017] FCA 1018 at [36] (Beach J); Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; (2018) 262 FCR 243 at [217]-[234] (Allsop CJ, Middleton and Robertson JJ). As Moore, Middleton and Gordon JJ expressed the matter in Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1 at [39] (emphasis in original), the course of conduct 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. 24 As their Honours said in Cahill at [41], however, the principle is only a tool of analysis which can, but need not, be used in any given case in order to ensure an appropriate deterrent effect. The course of conduct principle does not operate as a de facto limit on the penalty to be imposed, and the maximum penalty for the course of conduct is not restricted to the prescribed maximum penalty for any single contravention: Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd (No 2) [2016] FCA 698 at [24]-[25] (Beach J), approved in ACCC v Yazaki Corporation at [230]-[232]. As Lee J expressed the point in Australian Competition and Consumer Commission v Equifax Australia Information Services and Solutions Pty Ltd [2018] FCA 1637 at [86], the principle is: merely a discretionary tool or analytical expedient along the way to determining an appropriate penalty. A precise allocation of the number of courses of conduct is not some sort of calculus which results in various outcomes, depending upon the characterisation of the contravening conduct, as falling into one or other of the identified courses of conduct. 25 In the present case, the ACCC submitted that it was appropriate to apply the course of conduct principle, and to do so on the basis that there were effectively three courses of conduct, comprising the conduct in making each of the No Equity Representations, Vestey Trust Representations and Authority Representations (T65.30-66.15). I accept the appropriateness of that approach, given the repetitive nature of each of these representations and the fact that they appear to have originated from three decisions made by DG Institute and Ms Grubisa as to how to structure the promotion of the two courses and the particular content to include in them. 26 In addition, the totality principle requires the Court to review the "aggregate" penalty to ensure that it is just and appropriate, and not out of proportion to the contravening conduct considered "as a whole" or the "totality of the relevant contravening conduct": Australian Securities and Investments Commission v Westpac Banking Corporation [2019] FCA 2147 at [272] and [308] (Wigney J). It involves a "final overall consideration of the sum of the penalties determined" by consideration of all the relevant factors, and requires the Court to make a final check of the penalties to be imposed on a wrongdoer, considered as a whole: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1997] FCA 450; (1997) 145 ALR 36 at 53 (Goldberg J). The totality principle will not necessarily result in a reduction from the penalty that would otherwise be imposed. In cases where the Court considers that the cumulative total of the penalties to be imposed would be too low or too high, the Court should alter the final penalties to ensure that they are just and appropriate: Australian Safeway Stores at 53. The totality principle is distinct from the course of conduct principle in performing a check at the end of the reasoning process. 27 In fixing a pecuniary penalty, the Court will engage in an "intuitive or instinctive synthesis" of all the relevant matters by weighing together all relevant factors, rather than engage in a sequential, mathematical process: Markarian v R [2005] HCA 25; (2005) 228 CLR 357 as applied to civil penalty proceedings in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; (2015) 327 ALR 540 at [6] (Allsop CJ). 28 Section 224(2) of the ACL mandates a number of factors for the Court's consideration in determining a pecuniary penalty, including relevantly: (a) the nature and extent of the contravention; (b) the nature and extent of any loss or damage suffered because of the contravention; (c) the circumstances in which the contravention took place; and (d) whether the person has previously been found by a court to have engaged in similar conduct. 29 In addition to the need for general and specific deterrence, the factors relevant to the exercise of the Court's determination of an appropriate penalty, as drawn from the authorities, include: (a) the extent to which the contravention was the result of deliberate or reckless conduct by the corporation, as opposed to negligence or carelessness; (b) the number of contraventions, the length of the period over which the contraventions occurred, and whether the contraventions comprised isolated conduct or were systematic; (c) the seniority of officers responsible for the contravention; (d) the capacity of the defendant to pay, but only in the sense that whilst the size of a corporation does not of itself justify a higher penalty than might otherwise be imposed, it may be relevant in determining the size of the pecuniary penalty that would operate as an effective specific deterrent; (e) the existence within the corporation of compliance systems, including provisions for and evidence of education and internal enforcement of such systems; (f) remedial and disciplinary steps taken after the contravention and directed to putting in place a compliance system or improving existing systems and disciplining officers responsible for the contravention; (g) whether the directors of the corporation were aware of the relevant facts and, if not, what processes were in place at the time or put in place after the contravention to ensure their awareness of such facts in the future; (h) any change in the composition of the board or senior managers since the contravention; (i) the degree of the corporation's cooperation with the regulator, including any admission of an actual or attempted contravention; (j) the impact or consequences of the contravention on the market or innocent third parties; (k) the extent of any profit or benefit derived as a result of the contravention; and (l) whether the corporation has been found to have engaged in similar conduct in the past. See Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 at [68] (Beach J), and see Pattinson at [18]-[19]. 30 That list of factors should not be regarded as a rigid catalogue of matters for attention as if it were a legal checklist; the Court's task remains to determine what is an appropriate penalty in the circumstances of the particular case": Pattinson at[19]. The matters of particular relevance in the present case are as follows.

The nature and extent of the conduct constituting the contraventions 31 The contravening conduct spanned a total of 5 years and 7 months. 32 The No Equity Representations were found to have been made in promotional materials for the RER program in the period July 2018 to November 2022. These materials included a number of videos in which Ms Grubisa made the oral statements which were found to give rise to the false and misleading representations. The No Equity Representations were to the effect that the "equity deal" strategy taught in the RER program would allow consumers to assist a distressed homeowner to sell their property but retain some of the value of the equity they held, in circumstances where otherwise if the mortgagee were to repossess the property, the homeowner would lose any remaining equity in the property. The equity deal strategy involved identifying homeowners who may be in financial distress, including by monitoring court lists to identify possession, divorce or probate proceedings and contacting them with a view to reaching agreement for the RER program participant to purchase the homeowner's property below market value, or being authorised to sell the property and retain the proceeds above a certain amount. The making of the No Equity Representations was inherently serious because DG Institute conveyed to consumers that by enrolling in the RER program, they would be helping distressed homeowners, who otherwise would not retain any equity in their properties if their properties were sold by a mortgagee, when this was false. It therefore had the intended effect of encouraging consumers to purchase a course offered by DG Institute (costing thousands of dollars, as set out below) on an entirely false premise, which was known to be false by Ms Grubisa. 33 The Vestey Trust Representations and Authority Representations were found to have been made in both promotional and program materials for the MWC program in the period April 2017 to November 2022. The Vestey Trust Representations were predominantly made in videos in which Ms Grubisa made the statements found to give rise to the representations, as well as in some written course materials, as set out in the Liability Judgment at [48]-[63]. I found that by the Vestey Trust Representations, DG Institute represented that consumers would be provided with "complete and immediate protection from creditors to the extent of all their net worth" when in fact the Vestey Trust structure would only afford protection to the extent of the amount of the secured loan by the trustee to the client: Liability Judgment at [84]. I found that the loan would be most unlikely to reach the value of the client's assets for a very substantial period of time (if ever): Liability Judgment at [88]. 34 This conduct was even more egregious than the No Equity Representations and warrants the imposition of a substantial penalty. The Vestey Trust Representations concern the core offering of the MWC course, which was the setting up of the Vestey trust structure. The structure was promoted as offering complete and immediate protection over all assets, when the structure did not and could not do so, and Ms Grubisa knew that it did not and could not do so. Consumers who enrolled in the MWC course therefore paid thousands of dollars for a service which did not offer the protection offered, when that protection was likely to have been the fundamental reason that consumers were willing to pay for that service. 35 The Authority Representations were made in six separate videos in the period April 2017 to November 2022, five of which were promotional materials and one of which formed part of the MWC program materials. Ms Grubisa made the statements found to give rise to the representations, which were that the Vestey trust structure taught in the MWC program had been tested and upheld as effective in Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449. I infer that these representations were intended to provide assurance to consumers that the Vestey trust structure was proven and would provide the protection DG Institute had otherwise falsely represented it would have. The Court should also infer that the purpose of providing that assurance, at least in the five promotional videos, was to encourage consumers to enrol in the MWC program at a cost of thousands of dollars (as set out in further detail below). I also regard the Authority Representations as serious.

Nature and extent of loss or damage suffered 36 The ACCC does not contend that any loss or damage was suffered other than the payment of course fees by customers of DG Institute. On the basis of information provided by DG Institute, 1,851 consumers signed up to the RER program and 2,112 consumers signed up to the MWC program. The cost was between $4,500 and $6,500 for the RER program where the payment was paid by way of lump sum (and between $5,400 and $7,800 where it was paid by instalments), and between $6,500 and $7,500 for the MWC program where the payment was made by way of lump sum (and between $7,200 and $9,200 where it was paid by instalments): Liability Judgment at [5]. Each customer who enrolled in the MWC program suffered the loss of the payment of that enrolment fee, as the program was promoted by way of the Vestey Trust Representations as teaching a structure that would enable participants to protect all of their assets in a way which would provide complete protection from creditors, whereas I have found that it did not provide that level of protection. Although the respondents submitted that the MWC program did provide partial protection from creditors, that was not what was being promoted as the outcome which would be achieved by paying the course fee and learning the course material. As I have indicated above, given the centrality of the Vestey Trust Representations to the MWC program, the represented outcome of complete protection was likely to have been the fundamental reason a consumer would be willing to pay for the service.

The size, financial position and profits of the contravening company 37 The following table indicates the amount of fees students paid for the MWC and RER courses during the Relevant Period, as against DG Institute's revenue and profit: DG Institute's Total Revenue Reported Profit Total MWC fees paid Total RER fees paid FY17 $4,938,915 $324,503 $1,349,764 $0 FY18 $8,089,872 ($20,992) $3,517,594.00 $0 FY19 $9,834,940 $0 $2,301,980.06 $2,974,598.57 FY20 $9,696,416 $0 $3,111,457.63 $2,416,981.66 FY21 $9,605,368 $240,600 $2,737,887.64 $2,614,784.39 FY22 $7,289,720 ($719,394) $1,102,325.00 $936,090.00 FY23 $4,145,962 $167,558 $585,830.00 $512,140.00 Total $53,601,193 ($7,725) $14,706,838.33 $9,454,594.62

I note that the profit (or loss) figures differ from those provided by DG Institute to the ACCC on 5 and 12 July 2023 (see [5] above). Ms Grubisa explained in her affidavit (paras 29-30) that the data which was provided in July 2023 was from DG Institute's Xero file, which was adjusted by its accountant in preparation for statutory accounting and reporting to the Australian Taxation Office. 38 It may seem surprising that a company offering professional services and which earned revenue in excess of $50 million over those seven financial years would have failed to make a profit overall and fell just short of breaking even. However, the ACCC did not put any submission to the effect that the financial statements of DG Institute were in any way erroneous and did not attempt to adduce any evidence to that effect. Mr Klopper, a consultant to DG Institute from September 2015 until December 2023, said that as the business relied heavily on the acquisition of clients, a large amount of money was expended on Facebook marketing, strategic relationships, joint ventures and marketing resources in order to get new customers: affidavit of 27.6.24 at para 7. For example, over $5,834,000 was spent on Facebook advertising in the financial years ended 30 June 2017 to 30 June 2023 (para 8). Mr Klopper also referred to the marketing and delivery model having been conducted through events, and Ms Grubisa and the events team travelled to major cities in Australia multiple times a year to deliver live education events, thereby requiring expenditure on travel, venue and accommodation costs (para 9). Mr Klopper also referred to DG Institute having looked at opportunities to expand the business into the USA and Asia, and Ms Grubisa and team members travelled overseas to explore those opportunities (para 10). At its peak, the DGI Group had over 45 employees (para 11). DG Institute's response of 29 October 2021 to the ACCC's s 155 notice indicated that DG Institute had more than 30 current and former employees and contractors (CB327-330). Mr Klopper said that in order to achieve growth in the business and the brand, any profits earned by DG Institute were re-invested in the business, in particular in marketing to acquire more customers (para 6). 39 In the year ending 30 June 2017, DG Institute earned sales income of $4,938,915, and made a net operating profit before income tax of $324,503 (CB660-1). Its largest items of expenditure were advertising and promotion in the amount of $1,030,348, commission paid in the amount of $628,994, consultants' fees in the amount of $515,466, contract payments of $494,926 and salaries and wages of $318,663. The notes to the balance sheet for that year show that the company lent $496,220 to Ms Grubisa (CB665). 40 In the financial year ended 30 June 2018, DG Institute earned sales revenue of $8,089,872, and made a net loss that year of $20,992 (CB684). The cost of sales is reported as a single line item of "Event Costs" of $5,468,717, and there are no notes to the profit and loss statement providing any breakdown of that figure. In the list of expenditure items additional to that line item, salaries and wages are recorded as $736,816. The notes to the balance sheet refer to a director's loan in the amount of $53,838, which I infer was a loan to Ms Grubisa. Curiously, the comparative column for 2017 has a nil amount for that director's loan (CB680), in contrast to the loan to Ms Grubisa of $496,220 recorded in the financial statements for the year ended 30 June 2017 to which I have referred. 41 For the year ended 30 June 2019, DG Institute earned revenue of $9,834,940 and nil net profit (CB711). The cost of sales was again recorded as a single line item of "Event Costs" of $4,737,061 (CB711). In the list of items of expenditure, employee expenses were recorded as $1,491,235. Payments to related parties are recorded as $1,078,214 paid for marketing expenses to Australian Investment & Migration Pte Ltd, and $463,924 in legal expenses paid to DGI Lawyers Pty Ltd (CB711 and 708). The balance sheet lists a number of loans to related parties, but there is no loan recorded to Ms Grubisa (CB707). 42 In the year ended 30 June 2020 (taking the figures from the comparative column in the following year's profit and loss statement at CB 744), DG Institute earned revenue of $9,696,416, and again recorded nil profit. It seems a remarkable coincidence that the company should have achieved a break-even position to the nearest dollar two years in a row, but the ACCC did not perform any analysis of the financial statements which might have thrown light on whether that was a "coincidence" that was not a coincidence. The event costs are recorded as $5,603,796 and employee expenses were $2,137,028. 43 In the year ended 30 June 2021, DG Institute earned revenue of $9,605,368 and achieved a net profit of $240,600 (CB744). The event costs were recorded as $4,553,193 and employee expenses were $2,751,306. 44 In the year ended 30 June 2022 (taking the figures from the comparative column in the following year's profit and loss statement at CB780), DG Institute earned revenue of $7,289,720 and made a loss of $719,394. The event costs were recorded as $4,497,345 and employee expenses were $1,839,993. 45 In the year ended 30 June 2023, DG Institute earned revenue of $4,145,962 and made a net profit of $167,558 (CB780). The event costs were recorded as $2,258,475 and employee expenses were $1,179,861. 46 As to Ms Grubisa's personal position, in answer to the ACCC's information request of 20 June 2023, the respondents' solicitors provided a spreadsheet showing the following (CB628 and 632): Financial Year 2023 2022 2021 2020 2019 2018 2017 Dividend DGI Group $0 $80,000 $117,341 $80,000 $0 $0 $0 Other Investments $0 $2 $3,250 $6,719 $3,431 $0 $507 Gross earnings - DGI Group $0 $0 $0 $0 $91,625 $71,630 $0 Total Taxable Income $0 $80,002 $119,471 $86,719 $95,056 $71,630 $507

Although DG Institute paid very substantial amounts by way of speaker fees during the Relevant Period (see, for example, CB808-9 for the year ended 30 June 2017), the evidence does not show that Ms Grubisa received any of those payments. 47 It is also relevant to take into account the number of promotional seminars and the number of potential consumers who attended them. This is shown in the table below for the period 1 January 2018 to 2 September 2021 (being a shorter period than the Relevant Period) and is taken from DG Institute's response dated 29 October 2021 to the ACCC's s 155 notice (CB333): Number of seminars Number of attendees Number who enrolled in respective program Seminars promoting RER 52 10,541 319 Seminars promoting MWC 34 13,166 226 Seminars promoting both 22 9,700 123 (MWC) 357 (RER) RER event 8 2,767 141 Total 116 36,174 490 (MWC) 676 (RER)

48 It is apparent from the evidence that DG Institute conducted a substantial business during the Relevant Period, although not an exceptionally large one. Although it earnt substantial revenue, its losses were slightly greater than its profits over that period and in the aggregate it fell just short of breaking even. The number of customers who paid for the MWC and RER programs was substantial, but not exceptionally large.

Other relevant factors 49 As to the question of previous findings by a court as to similar conduct, it is common ground that neither of the respondents has previously been found to have engaged in any similar conduct in contravention of the ACL. 50 As to the role of senior management, Ms Grubisa was DG Institute's sole director. She was directly involved in carrying out the contravening conduct, and had actual knowledge of the falsity of the representations: see Liability Judgment at [41], [88] and [106]. The respondents submit that there is no evidence that any other person at DG Institute was aware that the representations were false and misleading. Mr Klopper gave evidence that throughout the eight years that he worked as a consultant at DG Institute, he did not have a single conversation with any person referring to any flaw in the MWC structure: affidavit of 28.6.24 at para 7. I do not place any real significance on the lack of evidence of others at DG Institute being aware that the impugned statements were false and misleading, in circumstances where the sole director who was primarily involved in conducting the presentations did have that knowledge. 51 As to the question of deliberateness of the contraventions, I have found that Ms Grubisa knew that the representations were false at the time she made them, and it was Ms Grubisa who was primarily involved in deciding on the content of the written course materials in which those representations were made (see DG Institute's response of 29 October 2021 to the ACCC's s 155 notice at CB330-1). In my view, the contravening conduct was deliberate and dishonest. 52 As to whether DG Institute has a corporate culture conducive to compliance, there is no evidence that DG Institute had a corporate culture conducive to compliance at the time of the contraventions, or that it has taken any steps to change its culture in this regard since that time. However, the programs in question are no longer sold. The respondents rely on their proposal for corrective action in an attempt to remedy the deficiencies in the MWC product, which I deal with below in finding that the respondents' proposal is fundamentally inadequate and would itself involve false and misleading conduct. 53 As to cooperation with the ACCC, the ACCC submits that beyond the limited cooperation shown by their entry into a statement of agreed facts with the ACCC, in which the respondents did not admit any alleged contraventions, the respondents have not displayed any cooperation with the ACCC which would otherwise mitigate the penalty to be imposed. I reject that submission. The ACCC has not pointed to any request to DG Institute that went unanswered, and has not criticised any of DG Institute's answers as insufficient. Each of the ACCC's requests for information, including a notice to produce, has been answered promptly and with appropriate detail. In any event, I do not regard the fact that DG Institute and Ms Grubisa have contested the proceedings, including the application for a penalty, as a factor in favour of a penalty. A company or person alleged to have contravened a civil penalty provision is entitled to defend themselves without thereby attracting the risk of the imposition of a penalty more serious than would otherwise be imposed (although an admission of contravention, like a plea of guilty, is ordinarily a matter to be taken into account in mitigation): Australian Securities and Investments Commission v Citrofresh International Limited (No 3) [2010] FCA 292; (2010) 268 ALR 303 at [23]-[27] (Goldberg J), citing a number of criminal cases including Siganto v R [1998] HCA 74; (1998) 194 CLR 656 at [22] (Gleeson CJ, Gummow, Hayne and Callinan JJ) and Cameron v R [2002] HCA 6; (2002) 209 CLR 339 at [12] (Gaudron, Gummow and Callinan JJ). 54 As to the question of contrition, there has been no expression or demonstration of contrition by either DG Institute or Ms Grubisa. The respondents rely on the evidence of Mr Klopper that he deeply regrets that the MWC product does not provide the level of protection promoted and would like to remedy the situation: affidavit of 28.6.24 at para 7. However, Mr Klopper is an external consultant to DG Institute dealing with strategy, marketing and sales: affidavit of 18.6.24 at paras 4-5, and affidavit of 21.6.24 at paras 4-5. He is not an officer of DG Institute and his expression of regret is not said to have been made as an agent of DG Institute or of Ms Grubisa. The respondents rely also on the purported redress scheme which they propose, and which I discuss in detail below. As I indicate below, the redress scheme is fundamentally flawed and does not provide the complete and immediate protection which customers were told to expect and which they paid their course fees to achieve.

The appropriate amount of the penalty 55 The ACCC seeks the imposition of a penalty of $20 million against DG Institute, with that amount allocated to the particular courses of conduct as follows: (a) No Equity Representations - $2 million; (b) Vestey Trust Representations - $17 million; and (c) Authority Representations - $1 million. The ACCC seeks a penalty of $1 million against Ms Grubisa with a comparable breakdown between the three courses of conduct. The respondents submit that the appropriate amount of penalty to be paid by DG Institute is $500,000, and by Ms Grubisa the amount of $50,000. 56 The ACCC submits that the penalty sought by it (and the allocation to the particular courses of conduct which it proposes) reflect the fact that the making of the Vestey Trust Representations was the most serious aspect of the contravening conduct. I accept that submission on the basis that those representations were fundamental to the MWC program and featured in 13 publications, involving a greater number of consumers and course fee revenue than the RER program. The ACCC submits, and I accept, that the No Equity Representations were the next most serious contraventions, featuring in four separate videos and conveying a serious falsehood about the circumstances that would pertain to a mortgagee sale. However, as the ACCC submits, unlike the Vestey Trust Representations, these representations did not concern the central focus of the program. The ACCC submits, and I accept, that the Authority Representations were also serious, featuring in six videos which overlapped with the contravening conduct involved in the Vestey Trust Representations, in that both sets of representations were made with respect to the MWC program. 57 While I accept the ACCC's submission as to the relativities between the three sets of representations, I do not accept that the aggregate figure of $20 million is appropriate. The ACCC submits that it is necessary for the purpose of deterrence to impose a penalty which exceeds the benefit obtained by DG Institute from its conduct. The ACCC relies on the reasoning of Bromwich J in Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 5) [2021] FCA 1516; (2021) 157 ACSR 500 at [19]-[20], which was followed in Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd [2023] FCA 859 at [112]-[115] (Perry J). Bromwich J indicated that substantial penalties are called for when a commercial enterprise systematically engages in predatory conduct on both a government education support scheme designed to help disadvantaged members of the Australian community, and consequently upon those consumers: at [1]. In that case, AIPE had a net profit margin of about 70%, and Bromwich J was concerned that any penalty must address the potential judgment call a company may make that conduct would not be detected, or if detected, would only incur a penalty in respect of the wrongfully gained benefits: 19 and (d). Bromwich J referred to the huge profitability of AIPE's operations as reinforcing the conclusion in the liability judgment that the delivery of educational services to most of the consumers who were enrolled was never seriously in contemplation, which made it clear that a high level of immorality stood behind the deliberate and protracted unconscionable conduct of a highly predatory nature: [20]. Bromwich J said that, given that little if any compensation was likely to be paid, the penalty needed to be a strong signal that it will exceed the gross benefit of the conduct, and there should be no deduction for the costs of obtaining that benefit, because they are costs in aid of an illegal enterprise: [20]. 58 While I regard the contraventions in the present case as also being deliberate and protracted, there are substantial differences between the position of AIPE in that case, and the position of DG Institute in the present case. Most importantly, the business conducted by AIPE was an illegal enterprise, given that it purported to be an educational institution whereas the delivery of educational services to most of the consumers who were enrolled was never seriously in contemplation. By contrast, DG Institute did genuinely provide educational services to all its customers, but in the course of doing so made false and misleading representations, which its sole director knew to be false and misleading. In addition, the very high profitability of AIPE's business stands in marked contrast to the lack of profitability of DG Institute's business. The evidence shows that DG Institute undertook very substantial expenditure in carrying on and seeking to expand its business, resulting in it doing no more than breaking even over the Relevant Period. In those circumstances, in my view, a penalty which is pitched so as to exceed the gross benefit to DG Institute by way of the course fees which it received in the MWC program would cross the line from deterrence to oppression. 59 The ACCC also accepts that it may be appropriate to take into account any redress orders in determining the amount of penalty to be imposed with respect to the Vestey Trust Representations, because if the amount of redress is actually paid, it will ameliorate the loss or damage caused by the contravening conduct and reduce whatever ultimate gains may have accrued to DG Institute. As I discuss below, I regard it as appropriate to order the redress scheme as proposed by the ACCC, and I regard it as appropriate to take that into account in assessing the total amount of the penalty against DG Institute. However, in taking the redress orders into account, I do so bearing in mind that they serve a fundamentally different function, namely redress, rather than prevention or deterrence: ACCC v AIPE at 19, citing Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at [24] (French CJ, Kiefel, Bell, Nettle and Gordon JJ). I also bear in mind the requirement imposed by s 227 of the ACL that the Court must give preference to making an order for compensation in circumstances where it is appropriate to order a person to pay a pecuniary penalty and the person does not have sufficient financial resources to pay both the pecuniary penalty and the compensation. I deal with that matter below, in adopting the ACCC's proposal for the order requiring payment by DG Institute of a penalty to be stayed pending the payment of compensation. In the present case, I do not regard s 227 as rendering it necessary or desirable to reduce the amount of the penalty which would otherwise be imposed. Section 227 does not mandate the manner in which the Court is to give preference to making an order for compensation, and leaves that to the discretion of the Court in light of the facts and circumstances: Australian Competition and Consumer Commission v Campbell (No 3) [2021] FCA 528 at [158] (O'Bryan J). The balance sheet of DG Institute as at 31 March 2024 shows a deficiency in net assets of $484,555 (CB304). It therefore appears unlikely that DG Institute will be able to pay the redress orders, let alone any penalty, but it is necessary in my view to award a substantial penalty for the purpose of general deterrence. The fact that DG Institute may not have the financial resources to meet such a penalty does not diminish the need to set the penalty with the appropriate deterrent effect. I also note that if DG Institute or Ms Grubisa becomes subject to external administration before the redress orders are satisfied, then consumers will be able to prove in the liquidation or bankruptcy, but the pecuniary penalties will not be admissible to proof: s 553B of the Corporations Act 2001 (Cth) and s 82(3) of the Bankruptcy Act 1966 (Cth). The word "offence" in those provisions includes the contravention of a civil penalty provision: Mathers v Commonwealth [2004] FCA 217; (2004) 134 FCR 135 at [25]-[29] (Heerey J), which has been followed on numerous occasions as collected in Commissioner of Taxation v Pavihi [2019] FCA 2056 at [28] (Wheelahan J). 60 In all the circumstances, I regard an appropriate amount of penalty to be paid by DG Institute as $5 million. That amount is substantially more than the net benefit derived by DG Institute over the Relevant Period from the contravening conduct, although it falls substantially short of the gross benefit measured by way of MWC course fees received during that period. I regard that figure as having an appropriate effect in terms of general deterrence. 61 In respect of Ms Grubisa, the ACCC submits that the appropriate penalty is $1 million, broken down as follows: (a) No Equity Representations - $100,000; (b) Vestey Trust Representations - $850,000; and (c) Authority Representations - $50,000. The respondents submit that an appropriate penalty is $50,000. 62 In my view, a substantial penalty should be ordered against Ms Grubisa, and I regard the amount of $1 million as appropriate. She was the sole director of DG Institute and knew that the relevant representations were false and misleading when she made them repeatedly on behalf of DG Institute. Her conduct was deliberate and dishonest. I take into account the disqualification order of five years against Ms Grubisa. As I have refused the ACCC's amendment application, there is no question concerning consumer redress orders with respect to Ms Grubisa. 63 As a final check of the total penalties to be imposed, I have had regard to the totality principle. In light of the seriousness of the contravening conduct, involving deliberate and dishonest conduct by Ms Grubisa and DG Institute, no further discount to the pecuniary penalties is warranted.

Non-party Consumer Redress Orders 64 Section 239(1) of the ACL provides relevantly that the Court may on the application of the ACCC make such orders as the Court thinks appropriate if a person has contravened a relevant provision of the ACL, the contravening conduct caused or is likely to cause a class of persons to suffer loss or damage, and the class includes persons who are non-parties in relation to the contravening conduct. The order must be an order that the Court considers will either (a) redress, in whole or in part, the loss or damage suffered by the non-parties in relation to the contravening conduct, or (b) prevent or reduce the loss or damage suffered, or likely to be suffered, by the non-parties in relation to the contravening conduct. In determining whether to make an order under s 239(1), the Court need not make a finding about which persons are non-parties in relation to the contravening conduct, or the nature of the loss or damage suffered, or likely to be suffered, by such persons: s 240(3). It is not necessary for loss or damage to be clearly identifiable before redress orders can be made, and redress orders may entitle consumers to seek a refund even where they may not be able to establish before a court that they were in fact misled or deceived or that they suffered loss or damage: Director of Consumer Affairs Victoria v Domain Register Pty Ltd (No 2) [2018] FCA 2008 at [24], [28] and [35] (Murphy J). There is no requirement that the Court be satisfied that there is a precise correspondence between the redress that might be received by a particular member of the class and the actual loss suffered by that member: Australian Competition and Consumer Commission v Geowash Pty Ltd [2020] FCA 23; (2020) 141 ACSR 515 at [185] (Colvin J). Any orders must be reasonable and adapted to the purpose of effecting redress, which involves striking a balance between relevant interests to provide an outcome which is fit and proper: ACCC v Geowash at [193]. 65 In the present case, the ACCC seeks orders to implement a redress scheme which is limited to the amount that MWC students paid by way of course registration fees to DG Institute when they registered for the MWC Course, being approximately $14.7 million. As I have indicated above, I regard the Vestey Trust Representations as central and fundamental to the MWC program, and the representation as to complete and immediate protection from creditors as representing the fundamental reason why MWC students paid those fees. Accordingly, the MWC course fees paid by the students represent loss or damage which has been suffered (or likely to be suffered) by those consumers. In my view, an order requiring DG Institute to offer a refund of those fees is reasonable and adapted to the purpose of effecting redress. As I have indicated above, the redress scheme will have priority over the payment of penalties, consistently with s 227 of the ACL. 66 Under the scheme, within 14 days of the date of the order, DG Institute is required to send a notice in the form set out in Schedule 1 to MWC students in the Relevant Period, and DG Institute is to publish the notice on the DG Institute website and various social media platforms. The notice will have the effect of notifying consumers of the Court's declarations and orders that DG Institute offer students a refund of their course registration fees, that eligible students have the ability to choose to accept the redress or not (and the consequences for any future claims or acts against DG Institute), and that DGI must seek their contact information and banking details for the purposes of making redress. DG Institute must then provide a refund to each student who has submitted their bank account details within 56 days of the date of the Court's orders. The orders also provide for an affidavit to be served verifying compliance with the orders concerning the redress program. 67 The respondents propose an alternative scheme whereby consumers are given the option of a refund, and are provided with a suite of documents which the respondents submit will address the flaw in the MWC structure which was identified in the Liability Judgment. I turn then to deal with the respondents' proposed alternative, both on its merits and also having regard to s 240(1) of the ACL which permits the Court to have regard to the conduct of the respondents since the contravention occurred in determining whether to make an order under s 239(1). 68 At the outset, the respondents rely on five affidavits by customers of the MWC program who paid course registration fees to DG Institute. Each of those customers refers to my finding in the Liability Judgment that the MWC program does not offer complete and immediate protection and that representations to that effect were misleading and deceptive. Each of the five customers expresses a desire that any defects or identified issues in the program be remedied by DG Institute and says that he or she does not wish to receive a refund for the MWC program. It is not clear whether the deponents' statement that they do not wish to receive a refund is conditional on DG Institute being able to remedy any of the defects or identified issues in the MWC program. While I think that is the better reading of the affidavits, it does not ultimately matter because those five customers are not compelled to accept the offer of a refund under the ACCC's proposed redress scheme. The real question is whether DG Institute is able by way of its proposed documents to remedy the fundamental defect in the MWC program, namely that it does not provide the complete and immediate protection from creditors which DG Institute represented. It should also be noted that one of the deponents says that she and her husband are currently facing potential litigation, and annexed a letter of demand threatening a claim for damages against their company. While the letter of demand does not articulate a claim against the deponent personally, her affidavit says that she and her husband are facing potential litigation. 69 The respondents' proposed scheme involves sending MWC students a covering letter, enclosing the Liability Judgment and five draft documents to be completed and executed by the customers. The covering letter is headed "Update on Your Asset Protection Strategy" and provides relevantly as follows (CB1552-4): We are writing to inform you about some important updates regarding your asset protection strategies implemented through our services. As you may know, the Federal Court recently issued a judgment concerning certain aspects of our asset protection strategies. Summary of the Judgment: The court found that while our product provides some protection in some circumstances, it does not offer 'complete and immediate protection' without further action on your part. The protection is linked to the amount of the secured loan from the Trustee to you. We have attached the full judgment from His Honour Justice Jackman so that you may view it in its entirety. Recommended Actions: Our commitment to your financial wellbeing remains unwavering, and we are dedicated to addressing any issues highlighted by the court. We have set out below our proposals, in light of the matters raised in the judgment which are aimed at enhancing your asset protection: 1. Promissory Note: o Enclosed is a new Promissory Note. You need to specify the amount of money you wish to give to your Trustee, reflecting your individual circumstances. The greater the amount gifted, the higher the secured protection. 2. Deed of Gift: o Complete and execute the enclosed Deed of Gift, inserting the date of the Promissory Note. 3. Deed of Variation of Equitable Mortgage: o Execute the enclosed Deed of Variation, which makes minor amendments to the original document. 4. Deed of Variation of the Trust Deed: o Execute the enclosed Deed of Variation which specifies that the Trustee can make and receive gifts, and make loans but cannot borrow. 5. Execute the Resolution o Complete and execute the enclosed resolution where your trust resolves to make a loan to you. As you know our Master Wealth Control asset protection product provides a lifetime service. We have therefore engaged Assure Lawyers to assist you with these updates at no additional cost. While we recommend you seek independent legal and accounting advice, we want to ensure that you are supported through these amendments so please feel free to contact us if you have any questions, concerns or issues. 70 There then follow a number of so-called Frequently Asked Questions, one of which is as follows: Is this structure completely bulletproof? While these documents enhance your protection, no structure is completely bulletproof. Protection levels depend on individual circumstances and existing claims by creditors. As always, we will assist you on a bespoke basis in any given circumstance and you need to proactively advise us of any change in circumstance to avail yourself of our promise of lifetime support and amendments. 71 Another of the questions and answers is as follows: What if I don't want to make these changes? Should you not wish to implement these changes and instead wish to apply for a refund please contact us within 14 days at mwc@dginstitute.com.au 72 The letter then refers to the existence of clawback provisions in the Bankruptcy Act 1966 (Cth) and relevant state legislation (such as the Conveyancing Act 1919 (NSW) and cognate legislation in other states and territories) which it is said can impact the protection of assets, and allow certain transactions to be voided if they occur within a specified period before bankruptcy or insolvency. I note that the reader is not directed to any particular sections of any of that legislation (such as ss 120 and 121 of the Bankruptcy Act or s 37A of the Conveyancing Act), nor is any reference made to the lack of any limitation period in s 37A of the Conveyancing Act. 73 The new Promissory Note is substantially the same as the original Promissory Note, except that the Principal Sum is stated to be: "the sum of $_______ as gifted under the Deed of Gift dated ________." (CB1560A). The Deed of Gift (CB1503-5) provides in cl 1 as follows: The Donor hereby irrevocably gifts, transfers, and assigns to the Donee all the Donor's right, title, and interest in and to the Gifted Property described in the Schedule hereto, to be held by the Donee on the terms of the ________ Trust. The Donor is intended to be the natural person who is the customer of the MWC program, and the Donee is the trustee of the trust created as part of the MWC program. The Schedule contains a description of the Gifted Property in cl 3.1 as follows: The amount specified in the Promissory Note dated _________ and all other amounts gifted by the Donor to the Donee from time to time. 74 Pausing there, counsel for the respondents acknowledged that the gift is intended to be an amount of money that the consumer has available to him or her at the time: T130.16-131.19, 136.24-45. Accordingly, the amount stated in the Deed of Gift and also in the new Promissory Note is confined to the amount of money which the customer has in cash, presumably in his or her bank account or wallet. 75 The Deed of Variation of Equitable Mortgage (CB1555-7) relevantly adds a new cl 3.2 as follows: The Borrowers hereby mortgage the property listed in the Schedule to the Original Deed of Equitable Mortgage to the Lender as security for the repayment of the debt. This security is provided upon the terms set out in this deed and the Original Deed of Equitable Mortgage. That amendment is made to correct the infelicity in the drafting of the original documents which purported to mortgage the customer's equity in the relevant property, rather than the property itself: see Liability Judgment at [75]. The amount of the debt referred to in cl 3.2 is intended to include the amount in the new Promissory Note, which in turn is the amount referred to in the Deed of Gift, the latter being referred to in the new cl 3.1. 76 The Deed of Variation of Trust Deed (CB1558-60) adds a new cl 3.11 conferring on the Trustee the power to make and receive gifts for the purposes of the trust. The new cl 3.12 confers on the Trustee the power to lend funds to any beneficiary or other person on such terms and conditions as the Trustee considers appropriate. The document also contains a new cl 3.13 prohibiting the Trustee from borrowing money or incurring any form of indebtedness on behalf of the Trust, which the original documents drafted by DG Institute stated to be a feature of the Trust but which was not included in the drafting of the original Trust Deed: see Liability Judgment at [68]. 77 Finally, the suite of documents includes a draft resolution of the Trustee to the effect that the Trustee agrees to lend a specified sum (being equivalent to the gift received) to the Donor (being the MWC customer), the loan to be made on terms and conditions which are left blank and it is stated that the loan will be documented by a promissory note executed by the Donor in favour of the Trustee outlining the terms and conditions of the repayment (CB1497-8). 78 The ACCC draws attention to the fact that the draft resolution ends with the following: use British spelling please ChatGPT It would therefore appear that the draft resolution for the Trustee has been generated or reviewed by artificial intelligence. I do not regard that as a significant matter in the present circumstances. It cannot be said that the draft resolution by the Trustee is a matter requiring the exercise of significant legal skills or judgment, and appears to me to be the kind of thing which artificial intelligence is capable of producing effectively. I recognise that artificial intelligence does have a role to play in certain aspects of legal drafting. In my view, the important aspect, in circumstances where artificial intelligence is used, is that any such draft is scrutinised and settled by a legal practitioner, and there is nothing to suggest that that was not done in the present case. 79 In my view, the proposed communication by DG Institute, comprising the covering letter and the enclosed documents, is itself misleading and deceptive. In the covering letter, the section headed "Summary of the Judgment" refers correctly to my findings that although the MWC product "provides some protection in some circumstances, it does not offer 'complete and immediate protection'", but then adds the words "without further action on your part". I made no reference to further action on the part of customers which might provide the customers with "complete and immediate protection". More importantly, that sentence in the covering letter conveys the impression that if the MWC customers fill out and execute the enclosed documents, then that is the kind of further action on their part which will result in them having the benefit of complete and immediate protection. That impression is reinforced by the later reference to the proposed documents being "aimed at enhancing your asset protection", and it is not dispelled by the proposition that "no structure is completely bulletproof". Counsel for the respondents conceded that the true position was that the proposed revised model falls a long way short of providing complete protection to the customer's assets unless all of the customer's assets are represented by cash in the customer's bank account and wallet (so as to be capable of forming the subject-matter of the gift): T143.18-36. Counsel for the respondents later accepted that the respondents' proposed remedial program does not offer complete and immediate protection: T146.44-47, 147.26-148.5. The respondents' proposed remedial scheme thus involves a false and misleading representation in further contravention of the ACL, and is manifestly inappropriate as the basis of any order by the Court. Moreover, by proposing a misleading and deceptive scheme, the respondents have demonstrated that they have learnt little or nothing from the Liability Judgment, and certainly have not demonstrated contrition or any other conduct which might mitigate the orders which the ACCC seeks. 80 The respondents also submit that the consumer redress scheme proposed by the ACCC might encourage MWC customers to unwind or amend the transactions which they have already put in place in order to protect their assets. It is said that such alterations might prejudice the MWC customers, and leave them without whatever level of protection they have achieved through the transactions implemented to date. I do not regard that as a likely consequence of the orders sought by the ACCC, which do not purport to give advice or recommendations to MWC customers about altering the transactions which they have entered into to date, other than to inform them of the reasons and conclusions expressed in the Liability Judgment. It is entirely a matter for MWC customers to decide on what transactions (if any) they should now engage in, and what advice they should seek before making any such decisions. 81 In all the circumstances, I regard the proposed orders sought by the ACCC by way of non-party consumer redress to be appropriate and well adapted for the purpose of providing redress.

Injunctive Relief 82 The ACCC seeks injunctions to restrain both DG Institute and Ms Grubisa from engaging in similar contravening conduct as has been found to have occurred in this proceeding, in the RER program, the MWC program or any substantially similar program. The injunctions are sought for a five year period, which reflects the fact that the contravening conduct in this proceeding extended over more than five years. Given the deliberate and dishonest nature of the conduct constituting the contraventions by both DG Institute and its sole director, Ms Grubisa, I regard the injunctions as appropriate. Indeed, the respondents do not contest the injunctive relief sought by the ACCC. 83 I note that the power of the court to grant injunctions under s 232(1)(a) of the ACL does not depend on any expectation that the conduct may continue: s 232(4)(a) and Valve Corporation v Australian Competition and Consumer Commission [2017] FCAFC 224; (2017) 258 FCR 190 at [224] (Dowsett, McKerracher and Moshinsky JJ). Injunctive relief may be granted to mark the Court's disapproval of a respondent's particular conduct, or to reinforce to the market place that the restrained behaviour is unacceptable: Australian Competition and Consumer Commission v viagogo AG (No 3) [2020] FCA 1423 at [132] (Burley J).

Other Orders 84 The ACCC's non-party consumer redress orders include the issue and publication of a corrective notice as set out in Schedule 1 to the orders. The respondents accept that a corrective notice is appropriate, and have proposed their own draft notice. I regard the ACCC's final draft as appropriately framed. 85 The ACCC also seeks an order that sealed copies of the Liability Judgment and these reasons for judgment and final orders be retained on the Court file for the purposes of s 137H of the Competition and Consumer Act 2010 (Cth). While such an order may not be strictly necessary, the practice of the Court has been to make such an order, and I regard it as appropriate to do so in the present case. Such an order is in the public interest as it will ensure that any consumers who wish to bring proceedings against either of the respondents under s 236(1) of the ACL need not prove in those proceedings, at least at a prima facie level, any findings of fact made in this proceeding other than by tendering the relevant judgment. 86 As to costs, with one exception, the ACCC has been substantially successful at both the liability hearing and the hearing as to appropriate remedies. The one exception concerns the ACCC's Interlocutory Application dated 28 June 2024, seeking to amend the originating application so as to claim non-party consumer redress orders against Ms Grubisa personally. In relation to that Interlocutory Application, the ACCC should pay the respondents' costs, but otherwise the respondents should pay the costs of the ACCC of the proceedings. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.

(2010) 268 ALR 303 Australian Securities and Investments Commission v Citrofresh International Limited (No 3) [2010] FCA 292; (2010) 268 ALR 303 Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 Australian Securities and Investments Commission v Westpac Banking Corporation [2019] FCA 2147 Cameron v R [2002] HCA 6; (2002) 209 CLR 339 Commissioner of Taxation v Pavihi [2019] FCA 2056 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1 Director of Consumer Affairs Victoria v Domain Register Pty Ltd (No 2) [2018] FCA 2008 Markarian v R [2005] HCA 25; (2005) 228 CLR 357 Mathers v Commonwealth [2004] FCA 217; (2004) 134 FCR 135 Nathanson v Minister for Home Affairs [2022] HCA 26; (2022) 403 ALR 398 Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 Siganto v R [1998] HCA 74; (1998) 194 CLR 656 Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249

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