Phoenix Institute of Australia Pty Ltd v Australian Competition and Consumer Commission

Introduction 1 The applicants seek leave to appeal from a judgment of the Court which granted conditional leave to the respondents under s 444E(3)(c) of the Corporations Act 2001 (Cth) (the Corporations Act) to proceed against the applicants in a proceeding commenced on 23 November 2015 (the principal proceeding) in which the respondents seek declarations, pecuniary penalties, refunds and other orders in respect of alleged contraventions of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL)): Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (Subject to Deed of Company Arrangement) (2016) [2016] FCA 1246; 116 ACSR 353. The applicants are currently subject to a Deed of Company Arrangement executed on 24 May 2016 (the DOCA). 2 The applicants accept that leave to appeal is required by s 24(1A) of the Federal Court of Australia Act 1976 (Cth). The application for leave to appeal initially came before Yates J who, on 18 November 2016, ordered that the application be referred to a Full Court. His Honour ordered that, subject to further order, the application for leave to appeal and any consequent appeal be heard at the same time. 3 For the reasons given below, we are of the view that leave to appeal should be granted but the appeal should be dismissed, with costs.

The alleged contraventions 4 The first respondent, the Australian Competition and Consumer Commission (the ACCC), and the second respondent, the Commonwealth of Australia (the Commonwealth), allege that the first applicant, Phoenix Institute of Australia Pty Ltd (Subject to Deed of Company Arrangement) (Phoenix) and the second applicant, Community Training Initiatives Pty Ltd (Subject to Deed of Company Arrangement) (CTI), engaged in conduct in connection with the supply of vocational education courses to consumers that was misleading or deceptive, or likely to mislead or deceive, and unconscionable, in contravention of ss 18, 21 and 29(1), and in breach of the unsolicited consumer agreement provisions, of the ACL. 5 Phoenix and CTI are subsidiaries of Australian Careers Network Ltd (ACN). 6 Until March 2016, Phoenix was a Registered Training Organisation and an approved VET provider under Div 3 of Pt 1 of Sch 1A to the Higher Education Support Act 2003 (Cth) (the Higher Education Support Act). Phoenix was eligible to receive funding from the Commonwealth for the course fees of students who enrolled with Phoenix to undertake accredited courses and who borrowed their tuition fees from the Commonwealth. Phoenix's registration as a Registered Training Organisation was cancelled on 23 November 2015. It has not accepted enrolments since 16 December 2015. It has ceased trading. On 23 March 2016, it was issued with a Notice to Revoke Approval as a VET provider. 7 CTI provided services to Phoenix and other companies in the ACN Group, including the operation of call centres and document processing services. CTI has also ceased trading. 8 It is convenient to summarise the respondents' case against the applicants as the primary judge did, by quoting from the respondents' statement of facts and issues: 9. From January 2015 onwards, the Brokers and Agents, acting on behalf of Phoenix and within the scope of their actual or apparent authority, targeted potential students within low socio-economic communities across Australia by calling on them in their homes or the homes of relatives or friends, including in rural towns, remote communities and communities with significant Indigenous populations. 10. In the course of recruiting students, the Brokers and Agents made representations that: 10.1 the courses were free; and/or 10.2 if the prospective students elected to sign up for VET FEE-HELP, the debt would never have to be repaid; and/or 10.3 if the prospective students enrolled in a course they would receive a free laptop computer or iPad. [In this regard, it is alleged that each course cost at least $18,000 and many students were enrolled in two courses.] 11. The Brokers and Agents, acting on behalf of Phoenix and within the scope of their actual or apparent authority, also offered cash payments to students to introduce other potential students. 12. The Brokers and Agents recruited the majority of students for more than one course without their knowledge or consent, and recruited them for online courses despite the student not having access to the internet. 13. The Brokers and Agents completed, on behalf of the student, or directed the students in the completion of, the literacy and numeracy forms which were ostensibly designed to determine the student's ability to undertake a course. Most students did not have the necessary skills in order to complete the courses, including the mandatory work placement components. 14. The Brokers and Agents did not explain to students the nature of their VET FEE-HELP obligations if they enrolled in a course, so that most of the students did not know that they had incurred a debt to the Commonwealth or when that debt would have to be repaid. 15. The Brokers and Agents did not inform the prospective students of the fact that they could withdraw from a course, that any withdrawal had to be prior to the census date or when the census date was. 16. The Brokers and Agents did not routinely give the students copies of the enrolment forms or other documents comprising the agreement ultimately entered into with Phoenix, nor give them information that they could terminate the agreement or how they could terminate it. …. 19. Employees of CTI processed student enrolment forms procured by Phoenix, often (a) without telephoning prospective students to confirm their interest in the courses, or their capacity to speak and understand English; (b) without adequately checking that the literacy and numeracy forms had been completed by the students; (c) without regard for the fact that there were no work placements for students being enrolled in Early Childhood and Care, and Community Services courses; and (d) without properly verifying the students' identification. They also enrolled the majority of students in more than one course. This was done to maximise revenue to Phoenix from VET FEE-HELP payments from the Commonwealth (together, the Enrolment Conduct).

The VET FEE-HELP assistance scheme 9 The primary judge summarised the VET FEE-HELP assistance scheme at [11]-[12]: 11 Under [the Higher Education Support Act], an eligible student who enrolled in one or more of the Phoenix courses and satisfied the criteria in cl 43 of Sch 1A to the Higher Education Support Act was entitled to a Commonwealth student loan known as 'VET FEE-HELP'. By virtue of cl 55 of Sch 1A to the Higher Education Support Act, the amount of any such loan was paid directly to the provider of vocational education and training (VET) courses in discharge of the student's liability to pay the VET tuition fees. As such, under the scheme a student entitled to a VET FEE-HELP loan incurred a debt to the Commonwealth for each unit of study in which she or he was enrolled (s 137-18(1) and (3), Higher Education Support Act). The debt amounted to 120% of the loan (s 137-18(2), Higher Education Support Act) and the student was liable to repay the debt even if she or he did not complete the course. However, the student would become liable to repay the debt only when her or his income exceeded the minimum income threshold (being $53,354 in the period 1 July 2014 to 30 June 2015). 12 In addition, under cl 61 of Sch 1A, the Secretary may determine that an advance is to be made to a VET provider of an amount "expected to become payable under a provision of this Schedule to the provider". However, under cl 61(1A), the Secretary had power to vary or revoke a determination that an advance be made if satisfied that the provider had not complied with Sch 1A and the regulations, having regard to matters specified in cl 61(1B). Furthermore, under cl 61(2), if the advance exceeds the amount that becomes payable, an amount equal to the excess may be deducted from any amount that is payable or to be paid or recovered by the Commonwealth from the provider as a debt due to the Commonwealth. 10 The Commonwealth paid $106 million directly to Phoenix as an advance pursuant to cl 61(1) of Sch 1A to the Higher Education Support Act. The respondents accept that this means that no debt has yet been incurred by students to the Commonwealth. The applicants say that the Commonwealth is under an obligation to make further payments to Phoenix in the amount of $253 million.

The audit and reconciliation process 11 On 29 January 2016, the Department of Education and Training (the Department) wrote to Phoenix's legal representatives advising that Phoenix would be subject to an audit pursuant to cl 26 of Sch 1A to the Higher Education Support Act to determine the veracity of its enrolments. The letter enclosed a notice under cl 24 of Sch 1A requiring Phoenix to provide copies of completed documents relating to the enrolment of 1500 students. The notice required the documents to be provided by 12 February 2016. 12 On 4 February 2016, the Department appointed McGrathNicol to perform an audit of the reported enrolment data that Phoenix had provided to the Department for the 2015 calendar year. The audit was subsequently extended to cover students enrolled in a course of study with Phoenix during 2016. 13 The Department was not satisfied that Phoenix's 2015 reported student enrolments were bona fide. Further, in a letter dated 27 April 2016, the Department expressed its concern that despite requests that had been made, McGrathNicol had not been provided with access to all the information that would enable it to undertake the audit. 14 The primary judge did not have information which would enable her to determine whether there had been unacceptable delay in this regard. However, there was evidence before her Honour that the Deed Administrators had been undertaking a significant amount of work directed to collating and producing the information that was sought. The primary judge noted that the Deed Administrators had expressed concern about the audit and reconciliation process, including whether the information sought by McGrathNicol was relevant to Phoenix's entitlements under Sch 1A and whether all the information would be considered prior to finalisation of the audit. The audit was ongoing at the time the primary judge heard the respondents' leave application.

Grant of leave under s 444E(3): principles 15 At [84]-[89], the primary judge summarised the principles relevant to the exercise of the discretion under s 444E(3) of the Corporations Act to grant leave to proceed against a company subject to a deed of company arrangement. The applicants do not challenge the primary judge's summary which, for convenience, we reproduce: 84 First, where leave to proceed is sought under s 444E of the Corporations Act, the applicable principles are those applied in determining applications for leave under s 471B of that Act in relation to liquidations: Meehan v Stockmans Australian Café (Holdings) Pty Ltd (1996) 22 ACSR 123 at 125 (Lehane J) (Meehan); Easey v Grosvenor Constructions (NSW) Pty Ltd [2005] NSWSC 878; (2005) 54 ACSR 820 (Easey) at 821 [4]; Young v Brachdale Pty Ltd (Subject to Deed of Company Arrangement) [2010] VSC 654 (Brachdale) at [16]. 85 Secondly, it was not in dispute that the onus lies upon the applicants to establish that the ordinary procedure established by the DOCA should be displaced, namely, that the continued pursuit of this litigation should be substituted for the procedure whereby a claimant lodges a verified proof of debt with the deed administrators who admit or reject it wholly or in part and from whom an appeal lies to a court: Meehan at 127 (Lehane J). As, for example, Rein AJ explained in JF Keir Pty Ltd v Priority Management Systems Pty Ltd (Administrators Appointed) [2007] NSWSC 748 at [8] (quoted with approval recently in Re Pool & Spa Builders (Aust) Pty Limited (Subject to Deed of Company Arrangement) [2013] NSWSC 185 at [20]), relevant factors include: …Whether there are good reasons for allowing a creditor to depart from the general intention of Part 5.3A which is that a creditor ought not be able to take action against the company in such circumstances. 86 Thirdly, the question of whether leave should be granted turns upon the exercise of discretion. In this regard, each application must turn upon its own particular facts and the question cannot be approached as a "shopping list" of factors: Australian Competition and Consumer Commission v ACN 135 183 372 (Administrators Appointed) (formerly known as Energy Watch Pty Ltd) [2012] FCA 586 (Energy Watch) at [5] (Marshall J). As Hammerschlag J held in Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd [2011] NSWSC 1305; (2011) 285 ALR 207 (Larkden) at 215 [40]: Every application must be considered on its own circumstances. There are infinite possible scenarios. There may be a flurry or a dearth of meritorious applications. Those circumstances need have no particular quality of rarity. 87 Fourthly, the exercise of discretion is informed by previous decisions as to the relevant factors to be considered and by the purposes of the ordinary rule in s 444E(3) of the Corporations Act prohibiting a creditor from pursuing litigation including that "without the relevant restriction, a company in liquidation would be subjected to a multiplicity of actions which would be both expensive and time-consuming, as well in some cases as unnecessary": Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 313 (Re Gordon Grant) at 316 (McPherson J (Campbell CJ and Sheahan J agreeing)) with respect to the equivalent provision dealing with companies in the process of being wound up under the then Companies Act 1961-1979 (Qld)); see also Secretary, Department of Health and Ageing v Prime Nature Prize Pty Ltd (In Liq) [2010] FCA 597 (Prime Nature Prize) at [15] (Stone J). Similarly, James LJ in Re David Lloyd & Co (1877) 6 Ch D 339 at 344 in a passage relied upon by the respondents in their submissions, said with respect to the relevant English Companies Act: These sections in the Companies Act, and the corresponding legislation with regard to bankrupts, enabling the Court to interfere with actions, were intended, not for the purpose of harassing, or impeding, or injuring third persons, but for the purpose of preserving the limited assets of the company or bankrupt in the best way for distribution among all the persons who have claims upon them. There being only a small fund or a limited fund to be divided among a great number of persons, it would be monstrous that one or more of them should be harassing the company with actions and incurring costs which would increase the claims against the company and diminish the assets which ought to be divided among all the creditors. (cited with approval in JJ Leonard Properties Pty Ltd v Leonard (WA) Pty Ltd (in liq) (1986) 11 ACLR 224 at 226 (Rowland J)) 88 Reference has also been made to the "deeply rooted principle of company law" that the Court should not assist creditors to improve their position vis a vis other creditors … 89 Finally, the intention that the promotion and enforcement of the standards prescribed by the ACL are matters in the public interest is evident from the object of the Competition and Consumer Act 2010 (Cth) in s 2, being "to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection": Energy Watch at [6] (Marshall J). It follows, as North J held in Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd (Administrator Appointed) (No 3) [2011] FCA 348 (Advanced Medical) at [5]-[6], that a tension arises in cases such as the present between the public interest in the enforcement of the standards prescribed by the ACL by the ACCC as the independent regulator, on the one hand, and the regime applicable to the administration of companies (or in this case, the administration of a DOCA), on the other hand. The existence of that tension is not resolved by the admonition relied upon by Phoenix and CTI in Patrick Stevedores at 36 [43] that general laws (in that case, the Workplace Relations Act) should not be construed as intended to affect or modify the regime in Part 5.3A which affects the interests of third parties. In the exercise of the discretion to grant leave, plainly the public interest in enforcing contraventions of the ACL is a relevant consideration and the weight to be afforded to it will turn upon a consideration of all of the circumstances of the particular case. 16 The primary judge also discussed the decision of North J in Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd (administrator appointed) (No 3) [2011] FCA 348 (Advanced Medical), which her Honour considered to be an example in point that was similar, in some respects, to the present case.

The primary judge's reasons 17 The primary judge gave systematic and detailed consideration to the factors in favour of, and against, the grant of leave under s 444E(3)(c). We will not descend to the detail of her Honour's analysis. It will be sufficient for us to note her Honour's findings and the cardinal steps in her reasoning. 18 First, the primary judge noted the applicants' concession (made only for the purposes of the application for leave to proceed) that there is a serious issue to be tried in the proceeding. 19 Secondly, the primary judge addressed the public interest. Her Honour accepted that there is significant public interest in the litigation proceeding, both in terms of the non-monetary relief claimed, which was to inform and protect consumers, and the penalty relief claimed, which was to provide general deterrence of similar offending conduct. Of course, these factors were advanced on the assumption that the respondents could make good the case they had brought. 20 In this connection, the primary judge accepted that there is particularly strong public interest in permitting the respondents to pursue declaratory relief that the enrolment contracts entered into by students are void, notwithstanding the applicants' submission that students had not at that time accrued a debt to the Commonwealth; that there remained to be completed the audit and reconciliation process in respect of the money that had been advanced to Phoenix; and that, on the evidence, no individual had earned a sufficient level of income to trigger any liability to repay such a debt. 21 The primary judge did not accept that the position of students would not be prejudiced by the delay likely to be occasioned by maintaining the statutory stay or that such delay would not be prejudicial to the public interest given the number of students affected and the potential size of the debts to the Commonwealth to which students might become subject, where the students allegedly targeted by the applicants were within low socio-economic communities. 22 Relying on McHugh J's observations in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at [4], the primary judge also reasoned that the delay pending termination of the DOCA would inevitably impact on the quality of evidence from lay witnesses in the proceeding. 23 The primary judge saw the matters noted at [18]-[22] above as weighing heavily in favour of a grant of leave to proceed. 24 Thirdly, the primary judge considered the nature of the respondents' claims. The primary judge accepted that the ACCC was a regulator with an interest in ensuring accountability for contraventions of the ACL and advancing the consideration of allegations of misconduct without significant delay. Further, the primary judge accepted that the Commonwealth was not merely an ordinary creditor of Phoenix. It had allegedly paid Phoenix a substantial sum as a result of alleged contraventions of the ACL. Thus, it was seeking to recover a significant sum of public money that had, in effect, been wrongly paid to Phoenix. It was also seeking to annul any pre-existing obligation to pay further money in relation to such conduct. The primary judge reasoned that there was no unfairness to creditors in the Commonwealth seeking to recover the amounts it had paid in such circumstances. 25 Fourthly, the primary judge considered the scope of the relief sought. In this regard, her Honour noted that a number of claims for relief were not money claims provable under clause 11.3 of the DOCA. 26 Fifthly, the primary judge considered the complexity of the claims. Her Honour accepted that the claims were both factually and legally complex and that this was a compelling factor in favour of the grant of leave. 27 Sixthly, the primary judge considered the possible prejudice to creditors if leave to proceed were to be granted. The primary judge noted that the Deed Administrators had limited funds (approximately $5 million to undertake their duties) and that the cost likely to be incurred in preparing evidence in the proceeding may exceed $500,000. The primary judge accepted that this expenditure was a significant factor against the granting of leave, particularly as it was a cost to be borne in the administration of the applicants given that Phoenix's professional indemnity insurer had denied liability. 28 Nevertheless, the primary judge was not persuaded that the costs to be incurred in defending the proceeding were sufficiently significant to outweigh the importance of the litigation proceeding in light of the public interest involved. The primary judge also noted that the sum in issue in the litigation ($360 million) represented the primary asset potentially available to creditors and significantly exceeded the amount of the claims of unsecured and contingent creditors (approximately $86 million). 29 Further, the primary judge concluded that there would be a not insignificant overlap between work to be done by the Deed Administrators in the proceeding and work to be done by them in responding to the audit and reconciliation process already underway. 30 In this connection, one of the Deed Administrators, Mr Georges, had given evidence that he did not consider that it was in the interests of creditors to undertake preparatory evidence for mounting a defence until such time as the audit and reconciliation process, including any review or appeal therefrom, had been completed and the Deed Administrators could make a decision as to whether it was in the interests of creditors for the applicants to defend the proceeding. 31 Relatedly, the applicants argued that, having commenced the present proceeding, the Commonwealth then commenced its statutory audit, which was a parallel process directed to Phoenix either retaining or refunding VET FEE-HELP payments made by the Commonwealth and to ascertaining the liability of the Commonwealth to make additional payments in respect of further student enrolments. The applicants therefore raised their concern that, if the litigation were permitted to proceed, they would be subjected to a duplication in processes. As the primary judge put it: 116 The [applicants] therefore raise concerns as to the duplication in processes if the litigation is permitted to proceed. In this regard, it is not in dispute that the audit being undertaken by McGrathNicol is concerned with the same group of enrolments and VET FEE-HELP amounts payable in respect of enrolments that are the subject of prayers 9, 10 and 15 of the Originating Application. It follows that the audit and this litigation are concerned with the same group of students and the same entitlements and liabilities of Phoenix concerning amounts of VET FEE-HELP assistance. The interest of the Deed Administrators in defending these proceedings is to defend and protect that entitlement for the benefit of the creditors of the ACN Pooled Entities. 32 Thus, the applicants' position before the primary judge was that until the outcome of the audit and reconciliation process was known, the Deed Administrators would not be able to form a view about whether it was in the interests of creditors to defend the proceeding. As we have noted, the only substantial asset in the administration was Phoenix's claimed entitlement to VET FEE-HELP payments. 33 Against this, the primary judge accepted that the audit and reconciliation process, and the present proceeding, raised different, albeit related, issues. The primary judge accepted that the relief sought in the proceeding was much wider than the relief that could be obtained through the audit and review process. 34 In this connection, the primary judge noted the respondents' submission that: The reconciliation process would not determine whether the conduct of Phoenix/CTI was unconscionable. No pecuniary penalties would be ordered as part of the reconciliation process, and thus there would be no deterrent factor. Most importantly, the reconciliation process does not achieve the remedies for the non-party consumers, namely the declarations that the enrolment agreements are void and that loan agreements between the Commonwealth and the student are void. 35 The primary judge also noted the respondents' submission that: In addition, if the Court in these proceedings declares the enrolment agreements between students and Phoenix/CTI void, that will determine the outcome of the reconciliation process in relation to those students (since it will follow that they were not enrolled). The reverse is not the case (since, even if enrolments were found not to be genuine for the purposes of entitlement to VET-FEE HELP, issues would still remain as to the relationship between the students and Phoenix/CTI). Further, if the reconciliation process were to determine that some or all of the further $253 million claimed by Phoenix/CTI is payable to it, success for the applicants in these proceedings would lead to that amount becoming prima facie recoverable by the Commonwealth. There is therefore no sound reason for these proceedings to be required to await the outcome of the reconciliation process; if anything, there is an argument for giving the present proceedings priority. 36 Her Honour accepted both submissions, although she noted that they must be read in light of the respondents' acceptance that no students had, by that time, incurred any debts to the Commonwealth pending the outcome of the audit and reconciliation process. 37 Significantly, the primary judge accepted that it was apparent from the evidence of the parties that, if the principal proceeding remained stayed until completion of the audit and reconciliation process (including any reviews or appeals therefrom), the statutory stay was likely to delay progress in a resolution of the principal proceeding for a substantial period of time, unless the Deed Administrators considered that the outcome of the audit and reconciliation process was favourable to creditors. 38 The primary judge concluded: 126 In short, given: the uncertainty as to what the [applicants] may decide to do; the extent of possible further delay to these proceedings which have already been stayed for some seven months; the significant public interest in resolving the issues in this case expeditiously; and the fact that any such review or appeal process could not resolve the issues in this case; I accept that considerable weight should be given to the [respondents'] submission that the Court should not maintain the stay so as to give, in effect, a "priority" (to use the [respondents'] language) to the audit and reconciliation processes, including potential reviews and appeals with respect to those processes, over this litigation. 39 Seventhly, the primary judge noted that the respondents had signified that they would give an undertaking to the Court not to enforce pecuniary penalties, the refund remedy or any costs ordered in their favour, without further leave. The primary judge accepted that such an undertaking, which could be a condition of leave being granted, would ameliorate, to some extent, the detriment that creditors would suffer if leave to proceed were to be granted. 40 Finally, the primary judge considered the temporary nature of the statutory stay and the presumption under the Corporations Act that such a stay should be in place. However, balanced against this, the primary judge noted, once again, that permitting the stay to remain may cause substantial delays, depending upon the position the Deed Administrators might take in relation to the outcome of the audit and reconciliation process. The primary judge remained of the view that the public interest would be served by the timely adjudication of the alleged contraventions, including for the additional relief sought to protect third party consumers.

Leave to appeal: Overview 41 In applications of this nature, the Court usually proceeds on the basis of the approach articulated in Decor Corp Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 at [2] - [6], where the Full Court drew attention to two inquiries: First, whether in all the circumstances the decision below is attended by sufficient doubt to warrant it being reconsidered by a Full Court; secondly, whether substantial injustice would result if leave were to be refused, supposing the decision below to be wrong. 42 As we have noted, the applicants' application for leave to appeal was referred to a Full Court on the basis that the application and any consequent appeal be heard at the same time. As the Full Court observed in Samsung Electronics Co Limited v Apple Inc [2013] FCAFC 138 at [21], on occasions a Full Court will entertain an application for leave to appeal together with the appeal itself, particularly where the hearing of an application for leave and the appeal itself canvas much the same factual and legal territory. The Full Court cautioned, nonetheless, that, although this procedure might be followed, no encouragement should be given to a course whereby the statutory requirement to first obtain leave: … can be subverted and relegated to an unnecessary distraction from a consideration of the arguments sought to be raised on appeal. 43 It is also important to note that the judgment in the present case is not merely interlocutory in nature but discretionary in character. In Oswal v Burrup Fertilisers Pty Limited (Receivers and Managers Appointed) [2011] FCAFC 117; 85 ACSR 531, the Full Court said (at [8]): 8. The primary decision was a discretionary decision made on a matter of practice and procedure. The character of the two applications imposes a heavy burden on PO and RO. As was said in House v The King (1936) 55 CLR 499 at 505, an appeal from a discretionary judgment should not be allowed unless the Court is persuaded that the decision was made in error involving the primary judge acting upon a wrong principle, allowing extraneous or irrelevant matters to guide or affect the decision, by mistaking the facts, or by failing to take into account some material consideration. There are good reasons for that cautious approach. It avoids the risk of the pre-trial processes becoming fragmented, and so causing lengthier and more expensive litigation than is necessary. It avoids the risk of deferring or delaying the postponement of the final decision of the dispute between the parties. It avoids inappropriate intrusion into appropriate case management of cases by the primary judge, with a view to bringing the matter to a speedy, efficient, effective and just resolution. More generally, therefore, it may interfere with the proper administration of justice, as now reflected in s 37M of the FCA Act. For instance, in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564, French J at [42] said: The time and resources of the Court and the parties should not be lightly taken up with appeals about decisions in connection with proceedings which do not finally determine the rights of the parties. 44 Although trite, it is worth repeating that, in relation to such judgments, an appeal will not succeed simply because the appeal court is able to conclude that it would have taken a different view from that taken by the primary judge: Bomanite Pty Ltd v Slatex Corp Australia Pty Ltd [1991] FCA 698; (1991) 32 FCR 379 at [10]. It is necessary to demonstrate error in the judgment appealed from. 45 The applicants identified 16 substantive grounds of appeal which they addressed by reference to eight headings. We will consider the proposed grounds below. 46 As to the question of substantial injustice, the applicants submitted that the effect of the primary judge lifting the statutory stay was to require the expenditure of substantial sums on a defence which might be rendered otiose depending on the outcome of the Commonwealth's audit and reconciliation process. 47 By the time of the hearing of the application for leave to appeal, the Department had arrived at a preliminary view on the outcome of that process. Its preliminary view was that only approximately $9.2 million in VET FEE-HELP assistance was payable to Phoenix. This is well short of the $106 million already advanced, and the further $253 million claimed by Phoenix. 48 The Deed Administrators have expressed their expectation that a proceeding against the Department for judicial review and/or declaratory relief will be commenced seeking the Court's determination on questions of principle concerning the operation of cl 43 of Sch 1A to the Higher Education Support Act. The applicants argued that there was no reason to think that substantial delay would be occasioned by adopting that course. They argued that such proceedings would involve no complex forensic inquiry and were highly likely to be substantially less costly than preparing evidence to defend the principal proceeding. 49 The applicants submitted further that, if the result of such proceedings were to be unfavourable to them, then the principal proceeding would not be defended and the remaining funds of the applicants would be distributed to creditors. In these circumstances, the applicants submitted, it would be manifestly and substantially unjust to refuse leave to appeal (assuming that the primary judge should have refused leave to proceed). 50 Thus, a central theme in the presentation of the applicants' application for leave to appeal was the contention that, in light of the concurrent audit and reconciliation process being undertaken by the Commonwealth, the primary judge acted prematurely in granting leave to proceed. This theme was echoed in a number of the submissions advanced by the applicants in support of their proposed grounds of appeal. 51 It is appropriate at this stage to explore what is likely to be involved in completing the audit and reconciliation process. The process comprehends all the legal challenges which the Deed Administrators might choose to bring in the interests of creditors. The applicants have already foreshadowed one question of principle that likely will require legal adjudication, namely the point at which Phoenix's entitlement to payment under cl 55 of Sch 1A arises. Phoenix's position is that its entitlement to payment arises upon satisfaction of the steps in cl 43 of Sch 1A. The Commonwealth disputes this. It says that, before it is required to make payments under cl 55, it is entitled to inquire into the circumstances in which students come to be enrolled and to be satisfied that the enrolments are (to use its expression) bona fide. There is, therefore, a fundamental difference between the parties as to when the Commonwealth's liability under cl 55 is triggered. 52 As we have noted, at the time of the leave to proceed application, the audit and reconciliation process was underway, but not completed. The evidence before the primary judge was that, once the Commonwealth's position in relation to the audit and reconciliation process was communicated to the Deed Administrators, Phoenix would be given an opportunity to respond before a final determination is made. There was evidence before the primary judge that there was no right to a merits review in relation to that process. Mr Garey, a Senior Executive Lawyer employed by the Australian Government Solicitor acting for the respondents, said that the Commonwealth anticipated that Phoenix would commence legal proceedings if disappointed with the outcome of the audit and reconciliation process. The form of such a challenge was unclear but, given the substantial number of enrolments involved, that challenge would likely take a significant period of time (at least 12 months) to resolve. 53 Mr Georges, one of the Deed Administrators, gave this evidence: 42. I anticipate that, if the Commonwealth Department of Education and Training informs Phoenix that the proposed outcome of the audit and reconciliation processes is that Phoenix is not entitled to amounts of VET FEE-HELP assistance for all or a large number of its 2015 and 2016 enrolments, it will be necessary to respond as appropriate. If the basis for the conclusion is a view, based on the (limited) material requested, that enrolments were not (or were not likely to be) bona fide, my staff and I would need to devote significant resources to gathering an 'evidence base' to establish the bona fides of the enrolments, to support Phoenix's entitlements to amounts of VET FEE-HELP assistance, possibly on an enrolment-by-enrolment basis. In those circumstances, Mr Lindholm and I may also elect to pursue any review and appeal rights which are available to Phoenix in respect of any such decision. 43. As stated above, Phoenix had 11,679 students who enrolled in 21,713 courses of study in 2015 and 2016. If it becomes necessary to build an 'evidence base' to substantiate Phoenix's entitlement to amounts of VET FEE-HELP assistance on an enrolment-by-enrolment basis, it will be necessary to retrieve and review records relating to each enrolled student from a variety of sources, including: (a) core enrolment records relating to each application for enrolment; (b) documents held by brokers and agents who interacted with applicants for enrolment; (c) documents relating to the verification procedures undertaken by Phoenix and CTI in connection with each application for enrolment (including telephone recordings of contact with applicants for enrolment); (d) documents relating to each enrolled student's participation in courses; and (e) documents recording or relating to contact between Phoenix's employed trainers and teachers and enrolled students. I am informed by Mr Paul Harlond of my staff that it takes, on average, approximately 45 minutes per student to retrieve and review all documents (including voice recordings) held by Phoenix relating to a student. This does not include the time which is associated with liaising with brokers and agents about any records they hold about enrolled students. 54 At the hearing of the present application for leave to appeal, Mr Georges gave evidence that he intended to respond to the Commonwealth's present view that only $9.2 million was owing to Phoenix, before a final reconciliation takes place. He said that, if the outcome of the final reconciliation does not result in a significant change to the Commonwealth's position concerning Phoenix's entitlement, then the proceeding that the Deed Administrators would likely bring would seek the Court's determination of (amongst other things): the extent to which the participation or engagement of enrolled students in VET units of study is relevant to the entitlement of students to VET FEE-HELP assistance and to the entitlement of a VET provider to payments from the Commonwealth under cl 55 of Sch 1A (if at all); the extent to which the Commonwealth has erroneously construed cl 43 of Sch 1A; the extent to which the Department has taken into account irrelevant considerations and/or failed to take into account relevant considerations, in undertaking the reconciliation and determining Phoenix's entitlement to be paid amounts in respect of VET FEE-HELP assistance relating to its 2015 and 2016 enrolments; and/or the amount of VET FEE-HELP assistance to which persons enrolled with Phoenix were entitled and the amounts consequently payable to Phoenix under cl 55 of Sch 1A. 55 As reflected in the applicants' submissions before us (see [49] above), Mr Georges said that if the outcome of this foreshadowed legal challenge is unfavourable to Phoenix, then he expected that the Deed Administrators would form the view that it was not in the interests of creditors to defend the principal proceeding and that they would, in due course, distribute the funds they hold to creditors under the DOCA rather than incur legal and other expenses in defending the principal proceeding. 56 On the other hand, Mr Georges said that, if the outcome of the foreshadowed legal challenge is favourable to Phoenix, then subject to the availability of funds, and to the DOCA not terminating, it is likely that the Deed Administrators would give instructions to defend the principal proceeding at which time the Deed Administrators anticipated that they would not oppose leave being granted to the respondents to proceed with the principal proceeding. 57 Before us, the applicants focused on the prospect of proceedings for judicial review or for declaratory relief, as explained above. Before the primary judge, the emphasis, at least in the evidence, was on the possible need for the Deed Administrators to undertake a significant amount of work to marshal an appropriate evidence base to meet a determination by the Commonwealth that the enrolments in question were not bona fide. This difference in focus is important because, as we have noted, on the application for leave to appeal, the applicants contended that the determination of proceedings for judicial review and/or declarations would be confined and that the primary judge erred in finding that the audit and reconciliation process would result in substantial delay to the principal proceeding. However, as we shall recount below, in reaching her conclusion on delay, the primary judge was informed by Mr Georges' evidence quoted at [53] above: see also below at [97] and the primary judge's reasons at [125]. 58 For their part, the respondents submitted that none of the proposed grounds of appeal raise arguable errors of principle, such as would lead to the decision being set aside on appeal. Further, the respondents submitted that no substantial injustice is apparent. The respondents argued that, although the cost burden of defending the principal proceeding might be adverse to the interests of creditors, the primary judge's reasons reveal that these are not the only interests involved. 59 Further, the respondents submitted that the applicants' argument that the proceedings arising from the audit and reconciliation process would not lead to substantial delay was "speculative and probably wrong". Such proceedings would not be "a simple judicial review case". 60 The respondents also disputed the submission that the principal proceeding would not be defended should the result of the new proceedings contemplated by the Deed Administrators be unfavourable to the applicants. The respondents said that, despite the submission advanced on this application, the Deed Administrators had not, in evidence, committed themselves to that position and that the highest the evidence could be put was that they do not wish to be forced to commit resources to the principal proceeding at the present time.

Proposed grounds of appeal 61 As we have noted, the applicants grouped their proposed grounds of appeal under eight headings. In conformity with the way in which the applicants presented their application, we will consider the proposed grounds accordingly.

Public Education Relief: proposed grounds 2, 3 and 10

The applicants' submissions 62 The applicants referred to the relief claimed in paragraphs 1 to 8 and 11 to 14 of the Originating Application as "Public Education Relief" - that is, relief directed solely to public education and/or general deterrence. This relief includes injunctive relief directed to restraining Phoenix from engaging in contravening conduct in the future (paragraph 4). The relief also includes injunctive relief requiring Phoenix to publish certain information (paragraphs 5 and 6) and to undertake a compliance programme (paragraph 7). 63 In the course of the hearing before the primary judge, the respondents accepted that the relief claimed in paragraphs 4 to 7 would require "reconsideration" given that Phoenix was, by that time, no longer trading. Nonetheless, the respondents continued to seek declaratory relief (paragraphs 1 to 3 and 11 to 13) and the ACCC continued to seek pecuniary penalties (paragraphs 8 and 14) and orders for non-party consumer redress (paragraph 9), amongst other relief. 64 The applicants pointed to the primary judge's finding (at [98]-[99]) that there was "a significant public interest in the litigation": see [19]-[23] above. The applicants submitted that this finding was not open to the primary judge because the respondents had "conceded that much, if not all, of the Public Education Relief would require amendment, but did not identify the terms of the relief that would now be sought". 65 The applicants also pointed to the primary judge's citation of Australian Competition and Consumer Commission v Link Solutions Pty Ltd [2008] FCA 1790 (Link Solutions) for the proposition that non-monetary relief, including declarations, was necessary to inform and protect consumers, and non-monetary and pecuniary penalties were necessary for promoting general deterrence. They argued, however, that, in Link Solutions, Bennett J (at [16]) did not consider that relief for general deterrence was a factor in support of the exercise of the discretion to proceed against a particular respondent in that proceeding given the presence of other respondents in the proceeding against whom like relief could be obtained, which would see the public interest served. Here, the applicants submitted, the respondents had commenced proceedings in materially identical terms against other VET providers. They argued that the primary judge failed to take the existence of those other proceedings into account in reaching her findings, even though the respondents had conceded the relevance of the other proceedings to the question of the public interest. 66 The applicants then submitted that there was no evidence of prejudice that would be caused by delay in obtaining the Public Education Relief pending termination of the DOCA. Further, the applicants submitted that the primary judge erred in placing reliance on the fact that the non-monetary claims for relief were not provable in the DOCA, when the statutory stay was temporary and there was no prospect of the repeated contravening conduct by Phoenix.

Consideration 67 It is plain from [39] of the primary judge's reasons that her Honour was mindful that the respondents' claims for relief would require amendment in due course to take account of the fact that Phoenix had ceased trading and that its status as a Registered Trading Organisation and as a VET provider had changed. However, when considering the question of public interest, it is tolerably clear that her Honour was addressing the relief that would not require reconsideration by the respondents, most notably declaratory relief regarding contravention and pecuniary penalties. We do not accept that her Honour's finding of "significant public interest in the litigation" was not open to her. 68 The "concession" on which the applicants rely as to the significance of other proceedings brought by the respondents, and how those proceedings might affect the assessment of general deterrence, requires further explanation. Particular attention must be paid to the following exchange in the transcript between the primary judge and counsel for the respondents, which is the source of the concession on which the applicants rely: HER HONOUR: Can I take into account the evidence that the respondents seek to rely upon of similar kinds of proceedings having been instituted by the ACCC against other education providers? Is that relevant? Can I give it any weight? MR KENNETT: I can't say it's irrelevant. The utility of those proceedings, I suppose, is not known. It's not known, firstly, whether any of the respondents will remain in existence, but also whether the proceedings will succeed. There's one that, as my friend says, is reserved for Perram J. It has its own facts. His Honour may or may not grant relief, and we don't know what the reasons will be. We don't know what the evidence is in that case. So it is - those matters are perhaps of some relevance but very limited, we would say, because we don't know that they're identical to this case. 69 This passage reveals that the respondents' concession was not as fulsome as the applicants' submissions suggest. It was, at best, an understandably cautious and appropriately qualified acceptance that the existence of the other proceedings were not irrelevant, even though they were of very limited weight. 70 The primary judge did, in fact, take the existence of the other proceedings into account when considering the question of the public interest. At [104], the primary judge said: 104 These considerations weigh heavily, in my view, in favour of a grant of leave to proceed. They are not outweighed, in my view, by evidence in the form of ACCC media releases advising of action taken against other educational institutions for similar alleged contraventions of the ACL which may, if they ultimately proceed to a judicial determination, also have deterrent effect. 71 The applicants sought to discount this finding by suggesting in a footnote in their written submissions in chief, and later in their written submissions in reply, that this finding was not allied directly to the primary judge's conclusion on general deterrence. We think it perfectly clear that the primary judge's finding at [104] was addressing the question of general deterrence seen in the broader setting of whether it was in the public interest for the principal proceeding to continue against the applicants. 72 We see no error in the primary judge's citation of Link Solutions, which was simply for the purpose of illustrating that, when the discretion under s 444E(3)(c) is sought to be invoked in cases of the present kind, the Court is not merely dealing with a choice between permitting monetary claims to be litigated to a judgment debt and requiring such claims to be satisfied by lodging a proof of debt for determination in an insolvency regime. Plainly, the relief sought in the present case extends beyond mere monetary claims that can be dealt with satisfactorily under the DOCA. 73 Further, even though the primary judge recognised that the statutory stay was temporary, she nevertheless concluded that, given the nature of the non-monetary relief and pecuniary penalties sought, the public interest would be served by pursuing the litigation in a timely fashion, particularly in light of the allegations made, and not by letting the matter remain stayed indefinitely pending termination of the DOCA. We see no error in her Honour's exercise of judgment in that regard.

The applicants' submissions 74 The applicants referred to the relief claimed in paragraphs 9, 10 and 15 of the Originating Application as "Redress Relief" - that is, relief directed to non-party consumer redress and to related financial relief to the Commonwealth. This relief is limited by the threshold qualification stipulated in paragraph 9(b) of the Originating Application, that the consumer be a person who has incurred a debt to the Commonwealth under the VET HELP-FEE assistance scheme in respect of that person's enrolment in a Phoenix course between 1 January 2015 and the date of the order to be made. As we have noted, the primary judge accepted that, at the time of the hearing before her, there was no such person, as no payment had been made under cl 55 of Sch 1A to the Higher Education Support Act. 75 At [101], the primary judge observed that the effect of the relief sought in paragraphs 9.5, 9.6 and 10 would be to cancel any debt or future liability that students may incur to the Commonwealth and clarify their financial position, as well as resolve their former enrolment status with Phoenix. The primary judge made this observation in rejecting the applicants' submission that students would not be prejudiced by the delay likely to be occasioned by maintaining the statutory stay. 76 The applicants submitted that, in this part of her reasons, the primary judge mischaracterised the Redress Relief because, as presently framed, that relief could not have the effect of cancelling any debt or future liability or, indeed, clarifying anything. 77 The applicants also submitted that the primary judge reasoned, incorrectly, that students who might be eligible for VET FEE-HELP assistance had already incurred a contingent liability. The applicants argued that this reasoning was inconsistent with the primary judge's earlier expressed understanding (at [68]) that, for there to be a contingent liability, there must be an existing obligation out of which, on the happening of the contingency, a fixed obligation to pay a sum of money will arise. 78 The applicants also challenged the primary judge's conclusion (at [101]) that "such contingent liabilities" can still affect the financial position of students in applying for credit cards and loans. The applicants submitted that these findings were not open to the primary judge because there was no evidence on that question or, indeed, in respect of her Honour's "finding" (at [99]) that the applicants' alleged conduct was "perpetrated upon highly vulnerable and disadvantaged people".

Consideration 79 There is no doubt that the primary judge was cognisant that, at the time the leave application was heard, no debt had yet been incurred by the students. Indeed, in the very part of the primary judge's reasons which the applicants now challenge, her Honour noted ([100]) that: 100 … it was said that third party consumers (students) would not be prejudiced by delay because their debts to the Commonwealth had not yet accrued as pending the outcome of the audit and reconciliation, monies had been advanced to Phoenix only under cl 61(1) of Sch 1A and not yet paid under cl 55 … 80 It is impossible to think that the primary judge then ignored this fact when describing, in the next paragraph of her reasons, the effect of the relief claimed in paragraphs 9.5, 9.6 and 10, as her Honour understood that relief to be framed. However, it does seem that the primary judge may not have been cognisant that the Redress Relief is conditioned by paragraph 9(b) on such a debt being in existence. We say this because, in oral submissions, counsel for the respondents properly pointed out, in fairness to the primary judge, that no link was made in the submissions before her Honour between the fact that, at that time, no student was indebted to the Commonwealth, and the limiting effect of paragraph 9(b). Indeed, counsel for the respondents made clear that the drafting of paragraph 9 was not in step with the Concise Statement that the respondents had filed, which proceeds on the basis that the respondents are seeking to void all student enrolments otherwise meeting the requirements of paragraph 9, whether or not a debt, contingent or otherwise, is extant between a student and the Commonwealth. It seems that this is how the primary judge understood the respondents' claims for Redress Relief. It explains why, at [100], her Honour accepted that there was: 100 … a particularly strong public interest and pragmatic factor in this case in favour of permitting the [respondents] to pursue the declaratory relief under s 239 of the ACL that the enrolment contracts entered into by students are void. 81 It also explains why, at [101], her Honour said: 101 … The grant of relief sought by the [respondents] in paragraphs 9.5, 9.6 and 10 of the prayer[s] for relief will have the effect of cancelling any debt or future liability that students may incur owed to the Commonwealth and clarifying their financial position, as well as resolving their former enrolment status with Phoenix. I do not accept that the position of such students would not be prejudiced by the delay likely to be occasioned by maintaining the statutory stay and that such delay would not be prejudicial to the public interest given the number of students potentially affected uncertainty about these issues and the potential size of the debts to the Commonwealth to which they may be subject in the context of persons allegedly targeted within low socio-economic communities. 82 It seems to us that these findings reflect an erroneous understanding of how the Redress Relief has been framed by the respondents in the Originating Application, although not how the respondents explained their case, and the relief they sought, in the Concise Statement. As we understand it, not only was her Honour's attention not drawn specifically to paragraph 9(b) of the Originating Application, but the respondents have not sought to amend paragraph 9 to broaden the circumstances in which they say the Redress Relief is intended to be claimed. 83 With these understandings in mind, we do not think that her Honour erred in expressing the view at [101] that students had "in effect" a contingent liability to the Commonwealth. Here, her Honour was doing no more than acknowledging the potential for such a liability to arise, it being remembered that the applicants' position was that, not only was Phoenix owed the $106 million already advanced under cl 61(1) of Sch 1A to the Higher Education Support Act, but that the Commonwealth also owed Phoenix a further $253 million, both of which sums were payable under cl 55 of Sch 1A, which would have triggered the students' indebtedness to the Commonwealth. In short, in this part of her reasons, the primary judge was not addressing current indebtedness contingent or otherwise, but potential, future indebtedness. It may be that her Honour's use of "contingent" was not entirely apposite, but the meaning is clear. 84 The primary judge's remark that, in the interim, "such contingent liabilities can still affect the financial position of students" - such as when applying for credit cards or loans - was a reference to no more than possible adverse financial consequences. The primary judge did not err by taking such possibilities into account when considering the public interest in having the proceedings determined. It was not necessary for her Honour to have direct evidence that such possibilities had matured into fact. 85 In this connection, it seems to us to be most unlikely, as a matter of common sense, that students in the main would be attuned to the difference between an advance by the Commonwealth under cl 61(1) of Sch 1A to the Higher Education Support Act to their vocational training provider, and a payment to the same provider under cl 55 in respect of their tuition fees, when considering their own financial circumstances. We think it more likely that, upon enrolment, students would recognise their potential liability to repay their tuition fees and gauge their financial circumstances accordingly, including when, as might be required, disclosing those circumstances to credit providers and the like. 86 As to the remaining matter noted at [78] above, the primary judge's reference to "highly vulnerable and disadvantaged people" should be taken as no more than a recitation of the case brought by the respondents, not an actual finding of fact. So much is clear from the primary judge's prefatory observation at [99]: … if the allegations made by the ACCC are established …

The applicants' submissions 87 At [102], the primary judge found that there was a strong public interest that the proceeding not be stayed indefinitely pending termination of the DOCA. Her Honour concluded that, on the evidence, the delay was likely to be substantial, unless the Department reached a result in the audit and reconciliation process that was favourable to the applicants. As we have noted, the primary judge referred, in that connection, to the effect of delay on the quality of evidence from lay witnesses. 88 The applicants submitted that these findings were not supported by the evidence. 89 First, the applicants argued that the evidence rose no higher than that there was a potential for significant time and expense to be incurred. According to the applicants, this depended on two contingencies, namely a conclusion by the Department that a large number of Phoenix's enrolments were not bona fide, and the need or desirability for the Deed Administrators to show the bona fides of enrolments on an enrolment by enrolment basis. 90 Secondly, the applicants argued that the Department controlled the timing of the audit and reconciliation process and, at the hearing before the primary judge, had not disclosed "its thinking". 91 Thirdly, the applicants argued that the evidence made it clear that, in the event of an adverse outcome, the Deed Administrators might, as an alternative, pursue any review or appeal rights from the Department's decision. The appellants said that, if pursued, this alternative would not necessarily entail "a complex forensic response" or significant delay. They submitted that the primary judge's finding that delay was likely to be substantial was, at best, speculative. 92 Fourthly, as to the quality of the evidence being affected by delay, the applicants pointed to the fact that the respondents had identified the witnesses they would call and, on 20 April 2016, had provided unsealed copies of their affidavits to the applicants. 93 Fifthly, if the final outcome of the audit and reconciliation process (after any review and appeal) remained unfavourable, the applicants submitted that it was likely that the Deed Administrators would not defend the principal proceeding, with a result that witnesses would not be cross-examined. 94 Further, the applicants submitted that there was no evidence of the circumstances in which statements were taken from the witnesses, the characteristics or circumstances of the witnesses, or any prejudice to their recollection. 95 Sixthly, the applicants submitted that the oldest of the transactions in issue occurred no more than 22 months prior to the primary judge's judgment and that the limitation period in respect of the respondents' claims would not expire for some period of time. 96 In all, the applicants submitted that the primary judge erred in inferring, in the absence of evidence, that the delay to result from a refusal of leave to proceed would prejudice the quality of the evidence.

Consideration 97 The primary judge's conclusions on delay and its effects, in particular her Honour's assessment that the delay was likely to be substantial, must be seen in light of her Honour's analysis and acceptance of the evidence given by Mr Georges and by Mr Garey summarised at [125]: 125 Furthermore, it is apparent from the evidence of both parties that, if the present litigation remains stayed until completion of the audit and reconciliation processes (including any reviews or appeals arising therefrom), the stay is likely to delay any progress in, and resolution of, this proceeding for a substantial period of time unless the prospective position of the Department on the basis of the audit and reconciliation process is regarded as favourable to creditors' interest by the Deed Administrators. In this regard: (1) the Deed Administrators have indicated that if the proposed outcome of the audit and reconciliation processes is that Phoenix is not entitled to amounts of VET FEE-HELP assistance for all or a large number of its 2015 and 2016 enrolments on the basis of a view that the enrolments were not (or were not likely to be) bona fide, it would be necessary for them "to devote significant resources to gathering an 'evidence base' to establish the bona fides of the enrolments, to support Phoenix's entitlement to amounts of VET FEE-HELP assistance, possibly on an enrolment-by-enrolment basis". In those circumstances, Mr Georges gave evidence that they may also pursue such review or appeal rights as may be available to Phoenix. If it became necessary to build such an "evidence base", Mr Georges considered that it would be necessary to retrieve and review records relating to each enrolled student from a variety of sources, with it taking on average approximately 45 minutes per student to retrieve and review all documents (including voice recordings) held by Phoenix relating to a student. The scale of the task is apparent from the fact, as explained earlier, that Phoenix had 11,679 students who were enrolled in 21,713 courses of study in 2015 and 2016. (2) With respect to the position once the reconciliation is finalised, Mr Garey also gave evidence for the applicants that: 36. There is no right of merits review in relation to the reconciliation. If Phoenix is dissatisfied with the outcome of the reconciliation, the Department anticipates that Phoenix will seek to challenge the outcome of the reconciliation by commencing legal proceedings. The form that such a challenge might take is, at present, unclear. Given the substantial number of enrolments involved, any challenge would likely take a significant period of time (at least 12 months) to resolve. (3) Mr Garey further explained that: 37. The outcome of the reconciliation and any challenge thereof will determine what amounts are properly payable to Phoenix by way of VET FEE-HELP in relation to the 2015 and 2016 years. However, those amounts may be affected if the relief sought in prayer 9 of the Originating Application in these proceedings, declaring contracts between Phoenix and students to be void, is granted. No party took issue with this evidence of Mr Georges and Mr Garey. 98 We reject the applicants' submission that the primary judge's conclusion was not supported by the evidence and that her Honour's conclusion was speculative. It was open to the primary judge to conclude that, pending termination of the DOCA, delay was likely to be substantial. This was, essentially, a matter of evaluative judgment for her Honour on the facts as presented. We are not persuaded that the primary judge misunderstood the effect of Mr Georges' evidence as the applicants' submissions suggest or that her Honour's conclusion concerning the likelihood of substantial delay bespeaks error. In this connection, we note that her Honour spoke in terms of delay pending termination of the DOCA and not in terms of delay pending the conclusion of the audit and reconciliation process, including the pursuit of any review and appeal rights or other related legal proceedings. Nothing turns on this. In practical terms, the recovery of Phoenix's entitlement to VET FEE-HELP assistance, if any, is almost coterminous with the events that would trigger termination of the DOCA. The applicants accepted this to be the case in oral submissions. 99 As to the effect of delay on the quality of the evidence, this was, once again, a matter peculiarly for the assessment of the primary judge. We see no error in the primary judge's acceptance, based on McHugh J's remarks in Taylor, that delay will inevitably impact on the quality of evidence, particularly from lay witnesses. It is appropriate to set out the passage in Taylor on which her Honour relied, which speaks of the insidious effect that delay might have in this regard: …The enactment of time limitations has been driven by the general perception that "[w]here there is delay the whole quality of justice deteriorates". Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, "what has been forgotten can rarely be shown". So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now "knowing" that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose. 100 The primary judge did not overlook the fact that the prejudice that might be suffered by delay might be reduced, to some extent, by the fact that affidavit evidence had already been compiled. The primary judge specifically referred to that fact at [27] of the reasons and, at [103], acknowledged the amelioration stemming from that fact. The primary judge nevertheless concluded that it did not follow that the recollection of witnesses, independently of their affidavits, would not deteriorate with the passage of time. That observation was pertinent. It does not reveal error. Further, the fact that the limitation period in respect of the alleged contraventions has not expired, does not gainsay the correctness of her Honour's conclusion.

Respondents' "special" status: proposed grounds 7 to 9

Applicants' submissions 101 At [105], the primary judge identified the ACCC as a regulator with an interest in ensuring accountability for contraventions of the ACL, and the Commonwealth as a party seeking to recover public monies and to annul obligations to pay further monies incurred through allegedly wrongful conduct. 102 The applicants submitted that, because the primary judge (at [105]) referred, by way of analogy, to Young v Brachdale Pty Ltd (Subject to Deed of Company Arrangement) [2010] VSC 654 (Brachdale), her Honour erroneously equated the position of the respondents with the beneficiaries under a trust claiming to enforce that trust. The applicants contended that this was an error of principle and manifested a misunderstanding by the primary judge of the facts (presumably, of the allegations made in the principal proceeding). 103 The applicants then submitted that the primary judge was in error in treating the respondents as representing a particular class or category of unsecured creditor when s 444E(3) of the Corporations Act does not itself draw such a distinction. 104 Further, the applicants submitted that the primary judge made a factual error in finding that the Commonwealth seeks to recover $106 million paid by way of advances, when the relief sought is to recover amounts paid in purported discharge of consumers' VET liabilities. This submission is based on the fact that, at the time of the hearing before the primary judge, no sum had been paid by the Commonwealth under cl 55 of Sch 1A to the Higher Education Support Act.

Consideration 105 The primary judge did not err by identifying and taking into account the respective interests of the respondents in the principal proceeding. It was pertinent for her Honour to do so because the interests of the respondents informed the nature of the proceeding to which the statutory stay applied and revealed, in part, the existence and nature of the public interest that would be served by exercising the discretion to lift the statutory stay and to permit the proceeding to continue. Thus, even though s 444E(3) does not itself distinguish between classes or categories of unsecured creditors - a matter the primary judge noted at [106] of the reasons - it was nevertheless relevant for her Honour to take into account the particular positions of the respondents when exercising the discretion reposed in the Court. 106 We do not think, however, that the primary judge's reliance on Brachdale was apposite. Brachdale was a case where leave to proceed was sought in circumstances where the plaintiff claimed an equitable proprietary interest in real property. It was in those circumstances that Gardiner AsJ said (at [16]): 16 In Lawless v MacKendrick (No 2) Newnes J considered that there was no material difference between the principles to be applied on an application under s 471B of the Act and those applied under s 444E(3) of the Act. The cases considering the issue of granting leave in insolvency administrations generally involve an analysis of whether the claim made is one which is otherwise capable of being the subject of proof in the winding up or the deed as the case may be. If it is provable (and discharged by the Corporations Act or the terms of the deed), there would be no point to granting leave. If, on the other hand, the applicants for leave need to agitate the matters the subject of the claim because they have a proprietary claim eg the company holds property to which the claimant is entitled, which property stands outside the winding up and is not available as an asset of the company, the claimant for leave should normally be given leave. Where what the applicant for leave is claiming from the company is in reality no more than their own property, leave to proceed will normally be granted as a matter of course. The underlying principle is said to be that the company should not, merely because of the fact that if it is under insolvency administration, be permitted to withhold the applicant's property and the court will permit proceedings to be taken. 107 At [23(b)], Gardiner AsJ said: 23 In considering applications of this kind, as I have said, much the same considerations as those which apply in circumstances of applying for leave against companies in liquidation are appropriate. Obviously, these factors will vary depending on the circumstances of the particular case. In the present context the relevant factors are as follows: … (b) The applicant for leave ought not to obtain an advantage to which under the Act it is not properly entitled. Here the Plaintiffs seek to litigate a claim that the defendant currently retains property which they are equitably entitled to once they pay the balance of the purchase moneys, which they indicate they are ready and able to do. There is no element of unfairness in this, because if they establish what they claim, the property is not that of the Defendant. 108 The primary judge's reasons resonate with this passage. At [106], her Honour said: 106 …there is no element of unfairness in this, that is, no advantage which the [respondents] seek to which they may not properly be entitled, because, if the [respondents] establish their claims, the monies in question ought not to be property of the [applicants] available to creditors … 109 The respondents articulated no theory by which the Commonwealth could seek repayment of the monies advanced to Phoenix other than in debt. The Commonwealth has in fact lodged a proof of debt under the DOCA in respect of part of these monies. True it is that the monies advanced can be seen as public monies, but this does not alter the character of the debt that might exist between the Commonwealth and Phoenix or place the Commonwealth in some special position for the purpose of recovering, as a debt, monies that have been advanced. We think that the primary judge probably did imbue the Commonwealth's claim to the repayment of monies with a quasi-proprietary significance because public funds were involved. This was an error.

Applicants' submissions 110 The applicants submitted that the fact that the respondents' claims would necessitate the preparation of detailed and fact intensive evidence, at significant cost, ought to have been a significant factor against the grant of leave. Nevertheless, the applicants submitted, the primary judge relied on the complexity of the claims as a reason for lifting the statutory stay. In this connection, the applicants also submitted that the primary judge failed to take into account that, to the extent that the principal proceeding concerned the Redress Relief, the scope of the proceeding and its resultant complexity depended on the outcome of the audit and reconciliation process.

Consideration 111 The primary judge took into account, and weighed in the balance, the cost of defending the principal proceeding should the statutory stay be lifted. At [110]-[111], the primary judge said: 110 I accept, and indeed it was not challenged, that in order to defend the proceedings, significant costs are likely to be incurred and that the costs of preparing the respondents' evidence may exceed $500,000 as estimated by those advising the Deed Administrators, although that can be taken only to be a rough estimate. Some indication of the extent of preparation which the respondents may need to undertake is given by the applicants' intention to lead evidence from 25 consumer witnesses as to the circumstances in which they were enrolled in online courses offered by Phoenix in their dealings with the respondents and their agents, an ex-employee of CTI, two staff members of the Department, and expert evidence, as well as by the evidence of Mr Georges as to the lay and expert evidence which the respondents in his view would need to prepare in general terms. 111 Clearly, as the respondents submitted, the fact that defending the proceedings is likely to involve significant expenditure of the funds otherwise available to creditors to their detriment is a significant factor against the grant of leave, as is the continuing cost and expense of responding to the audit and reconciliation processes (which I address below). Furthermore, the evidence establishes that the costs of any litigation will be borne by the Deed Administration as Phoenix's professional indemnity insurer has denied indemnity to Phoenix: cf Wolstenholme v National Express Group Australia (Swanston Trams) Pty Ltd [2003] VSC 476 (Wolstenholme) at [34] (Hansen J). 112 The point dealt with by the primary judge at [108] of the reasons is a completely different point, namely the appropriateness of dealing with complex claims through a proof of debt procedure. We see no error in the primary judge's conclusion that the claims made by the respondents were legally and factually complex or, indeed, in her Honour's conclusion that this factor was a compelling one in favour of granting leave to proceed. 113 We would add that we do not see how the outcome of the audit and reconciliation process would diminish, in any way, the complexity of the legal and factual claims made by the respondents in the principal proceeding or call into question the primary judge's conclusion on that matter.

Direct prejudice to creditors: proposed grounds 12 and 13

Applicants' submissions 114 Whilst accepting that the defence of the principal proceeding would likely involve significant expenditure of funds otherwise available to creditors (see the passages quoted at [100] above), the primary judge did not consider that these costs were sufficiently significant to outweigh the importance of allowing the litigation to proceed. In reaching that conclusion, the primary judge rejected the view that leave has only been granted in cases where the costs likely to be incurred were minimal. Her Honour referred to Advanced Medical as an example in point. 115 In oral submissions the applicants contended that the view addressed by the primary judge was not the submission advanced below, which was that the applicants had been unable to locate a case where public interest considerations had led to a stay being lifted in the face of material prejudice to creditors. 116 In written submissions, the applicants submitted that the primary judge erred, firstly, because, rather than applying Advanced Medical, her Honour should have distinguished it on the basis that the respondent in that case, unlike Phoenix in the present case, was continuing to trade. Thus, in Advanced Medical, there was strong public interest in favour of granting leave to proceed so as to stop the alleged unconscionable conduct as soon as possible. 117 Secondly, the applicants submitted that there could be no public interest in the Redress Relief being granted in advance of the completion of the audit and reconciliation process, because there was no content in that relief until the Commonwealth had made payment to Phoenix of VET FEE-HELP amounts pursuant to clause 55 of Sch 1A to the Higher Education Support Act. 118 Thirdly, the applicants submitted that it was an error of principle for the primary judge to permit the principal proceeding to proceed on the basis that the public interest in obtaining the Public Education Relief outweighed the detriment to creditors. Here, the applicants advanced five propositions: there was no evidence to suggest that prejudice would arise from a delay in obtaining such relief; if the audit and reconciliation process was unfavourable to the applicants then it was unlikely that the Deed Administrators would defend the principal proceeding; the terms of the Public Education Relief to be pressed by the respondents was unknown; there was no basis to conclude that a refusal of leave would have resulted in any substantial delay in the principal proceeding; and preferring a generalised public interest over specific and substantive prejudice to creditors was inconsistent with the scope, object and purpose of the discretion conferred by s 444E(3). 119 Fourthly, the applicants submitted that the primary judge erred in finding that the amount of the money for which relief was sought totalled $360 million. The applicants submitted that the amount claimed cannot be determined until after the audit and reconciliation process. Further, the applicants submitted that the primary judged erred in concluding that this sum gave the costs to be incurred in defending the proceeding a "different complexion". In this regard, the applicants submitted that the size of the respondents' claim did not "mitigate or avoid" the prejudice to creditors or meet the point that such prejudice could be avoided by allowing the stay to remain in place until finalisation of the audit and reconciliation process.

Consideration 120 It would seem that at [112], the primary judge attributed to the applicants a particular submission which they did not make. But this is without significance to the present application. At [111], the primary judge accepted that the defence of the principal proceeding was likely to involve the significant expenditure of funds that would otherwise be available to creditors and this was a significant factor against the grant of leave. The primary judge nevertheless concluded, correctly, that the Court still retained a discretion to lift the stay. It was in this context that the primary judge rejected the view that leave has only been granted in cases where the costs likely to be incurred will be minimal, such as where the litigation is effectively at an end. The primary judge referred, in that connection, to Australian Competition and Consumer Commission v ACN 135 183 372 (Administrators Appointed) (formerly known as Energy Watch Pty Ltd) [2012] FCA 586 - a case where, the applicants said, there could be no prejudice to creditors because the company in question had been placed in administration after a judgment on liability had been given. 121 The applicants' submissions below were made in the context of them arguing, as they did on the application for leave to appeal, that the effect of lifting the stay was to require the expenditure of substantial sums on a defence that might be otiose depending on the outcome of the audit and reconciliation process. Whilst the primary judge might have erred in attributing a particular submission to the applicants which they did not make, the point made by her Honour was apposite to the case at hand: the fact that the defence costs might be significant does not mean that the discretion to lift the stay cannot and should not be exercised. Thus, we do not accept that it was inapposite for the primary judge to refer to Advanced Medical in the way her Honour did. Whether Advanced Medical is distinguishable from the present case on some other point is neither here nor there. 122 The balance of the applicants' submissions repeat a number of themes present in other submissions which we have already addressed. Principal among these is the significance of the audit and reconciliation process to determine the funds, if any, to be paid to Phoenix pursuant to cl 55 of Sch 1A to the Higher Education Support Act - a matter taken up again by the applicants in the submissions considered in following sections of these reasons. 123 The primary judge took into account the significance of the audit and reconciliation process in this regard, and also the delay that would be occasioned to the determination of the principal proceeding if the statutory stay were to remain in place while that process reached finalisation, with the Deed Administrators exercising such rights of review and/or appeal they might have and might choose to exercise. As we have said, the primary judge's assessment that the delay to the principal proceeding was likely to be substantial was open to her on the evidence adduced. 124 The primary judge was aware that, depending on the final outcome of that process, the Deed Administrators might not defend the principal proceeding. Her Honour quoted from Mr Georges' evidence in that regard at [119] of the reasons, when specifically dealing with the prejudice to creditors. 125 These were all matters which the primary judge took into account and weighed in the balance, together with other relevant considerations, including the complexity of the legal and factual issues raised in the principal proceeding and the fact that the principal proceeding and the audit and reconciliation process raise different issues, notwithstanding that they both concern the Commonwealth's obligation to pay and Phoenix's liability to refund payments for enrolments. Subject to her Honour's apparent misunderstanding concerning how the respondents had framed the entitlement to the Redress Relief in the Originating Application and the significance of the debt claimed by the Commonwealth in respect of public monies that had been advanced, we do not accept that the primary judge's weighing of the other matters reflects error, let alone errors of principle. 126 We do not accept that error was involved in the primary judge referring to $360 million as the subject of the relief sought. The significance of the reference to $360 million is apparent from [33] of the primary judge's reasons: 33 The DOCA provides that the Deed Administrators will endeavour to realise the respondents' property on such terms as they determine is in the best interests of the creditors of the ACN Group with the proceeds of such realisations to be paid into a fund from which the Deed Administrators will make distributions to the creditors of the ACN Group (cll 4 and 10, DOCA). It is not in dispute that the principal asset of the ACN Group which the Deed Administrators are endeavouring to realise is the amounts of VET FEE-HELP assistance relating to 2015 and 2016 student enrolments to which Phoenix asserted an entitlement under cl 55 of Sch 1A to the Higher Education Support Act. Nor is it in dispute that that entitlement was quantified by Phoenix at approximately $360 million relating to the enrolment by Phoenix of approximately 11,679 students in 21,713 courses of study, of which approximately $106 million has been paid to Phoenix by way of advances under cl 61 of Sch 1A and approximately $253 million remains unpaid. However, that entitlement is subject to the reconciliation and audit processes being undertaken at the time of the hearing by the Department and McGrathNicol respectively. 127 The only point raised by the primary judge at [112] when referring to $360 million as "the subject of the relief sought" was that the likely legal costs to be incurred by the applicants in defending the proceeding, whilst significant, had to be considered in the context of the total sum in dispute between the applicants and the respondents, which was significantly greater than the total sum of the claims of unsecured creditors and contingent creditors (leaving aside the Commonwealth's claim in this regard). Any infelicity in the primary judge attributing $360 million as "the relief sought" is without significance, when the point sought to be made by her Honour is perfectly clear. 128 We would add, for the avoidance of doubt, that the primary judge did not err by considering the likely amount of legal costs in the context of the total amount in dispute between the applicants and the respondents compared with the possible amount of the claims of unsecured and contingent creditors.

Applicants' submissions 129 At [113] of her reasons, the primary judge said: 113 … While it is difficult to assess with precision the extent of overlap between responding to the audit and reconciliation processes, it is inevitable that there will be some overlap and it is reasonable to infer that the overlap will not be insignificant. 130 This finding was made in the context of the primary judge noting that the Deed Administrators had known of the principal proceeding from the time of their appointment and had become familiar with the operations of the applicants in order to respond to the audit and reconciliation process. 131 The apparent point made by the primary judge in this part of her reasons was that some work required to be done in defending the proceeding was work required to be done, in any event, in complying with the audit and reconciliation process, for which costs would inevitably be incurred if the statutory stay were not lifted. 132 The applicants submitted that the primary judge's finding that the overlap would "not be insignificant" was not open to her on the basis of the evidence given by Mr Georges. The applicants' simple point is that "[t]here was no significant overlap".

Consideration 133 We do not accept that the primary judge's finding that the overlap would "not be insignificant" reveals error. 134 In his evidence, Mr Georges acknowledged that the audit and reconciliation process concerns the same group of enrolments and VET FEE-HELP amounts payable in respect of enrolments that are the subject of paragraphs 9, 10 and 15 of the Originating Application. Mr Georges acknowledged that, as a consequence, the audit and reconciliation process, and the principal proceeding, are each concerned with the same group of students and the same entitlements or liabilities of Phoenix concerning amounts of VET FEE-HELP assistance. Mr Georges also acknowledged that the lay evidence which the applicants would need to prepare, in defending the principal proceeding, would include evidence about the number of enrolments and enrolled students in courses in 2015 and 2016, and the reconciliation and audit process, including evidence about the verification processes undertaken by the applicants in respect of each application for enrolment. 135 In light of this evidence, the primary judge was entitled to conclude that there would be an overlap in respect of work carried out for the audit and reconciliation process and for work to be carried out in defending the proceeding. Further, it was open to the primary judge to infer that the overlap would "not be insignificant". The applicants' submission is no more than an invitation to the Full Court to prefer the applicants' submission that there was "no significant overlap" over the primary judge's finding that the degree of overlap would "not be insignificant". In the absence of error being demonstrated, this is not an invitation we should take up.

Impact of reconciliation on the principal proceeding: grounds 15 to 17

Applicants' submissions 136 The applicants' submissions in relation to this topic centred on, once again, the significance of the audit and reconciliation process. The crux of the applicants' submissions was that, in exercising the discretion under s 444E(3)(c), the primary judge failed to appreciate the importance of the evidence that the principal proceeding was not likely to be defended if the outcome of the audit and reconciliation process is that Phoenix's entitlement to VET FEE-HELP is less than the $106 million already received by it under cl 61(1) of Sch 1A to the Higher Education Support Act. The Deed Administrators' decision in that regard could not be made until the outcome of the audit and reconciliation process was known. If the stay were to be lifted then, in the meantime, costs would be incurred in defending the proceeding. The denouement of this reasoning was that the defence of the principal proceeding may be unnecessary and, if so, the costs incurred in doing so would be wasted, to the detriment of the general body of creditors. 137 The applicants submitted that certain countervailing considerations raised by the primary judge were "without substance". 138 First, the applicants submitted that it was beside the point that the relief sought in the principal proceeding was wider in scope than the concern of the audit and reconciliation process. The applicants submitted that the real question was whether the applicants should be required to defend the principal proceeding. Here, the applicants submitted that the respondents had control over the timing of the audit and reconciliation process, as well as the timing of their s 444E(3)(c) application. If, in the event, there was no defence of the principal proceeding, then its object will have been secured. 139 Secondly, the applicants submitted that, contrary to the primary judge's acceptance that the principal proceeding would determine the audit and reconciliation process in relation to students who had enrolment agreements with Phoenix, the Redress Relief was only sought in respect of students who had incurred debts to the Commonwealth, and there were no such students at the time of the hearing before the primary judge. The applicants submitted that the primary judge's finding that maintaining the statutory stay would delay a final resolution of the status of students' enrolment agreements with Phoenix (and whether they were, or were liable to become, indebted to the Commonwealth) was in error. 140 Thirdly, the applicants submitted, once again, that the evidence did not support the primary judge's conclusion that the delay occasioned by the audit and reconciliation process would be substantial.

Consideration 141 We do not accept that the primary judge failed to appreciate the importance of the evidence to which the applicants refer. 142 When dealing with the question of whether the defence of the principal proceeding might be rendered unnecessary, the primary judge (at [119]) quoted the following evidence given by Mr Georges: 47 Moreover, if the outcome of the audit and reconciliation processes described above (and any review and appeal process) is that Phoenix's entitlement to amounts of VET FEE-HELP assistance is less than the approximately $106 million received by Phoenix by way of advances made under clause 61 of Schedule 1A to the [Higher Education Support Act], I expect that Mr Lindholm and I will form the view that it is not in the interests of the creditors of the ACN Pooled Entities to defend this proceeding. Depending upon the amount of any shortfall between the entitlement and the advance of approximately $106 million Mr Lindholm and I may also be called upon to determine the amount of any debt to the Commonwealth which we would admit to proof. (Emphasis added.) 143 At [121], the primary judge also quoted this evidence given by Mr Georges: 121 …until the outcome of the audit and reconciliation processes described above are known, Mr Lindholm and I are unable to form a view about whether it is in the interests of the creditors of the ACN Pooled Entities to defend this proceeding; and cannot determine whether the audit and reconciliation process may result in a requirement that we make a decision reviewable by this Court concerning a debt due to the Commonwealth. 144 The simple fact is that, although seized of the applicants' arguments in this regard, the primary judge did not accept that they stood as a sufficient reason not to lift the statutory stay when other considerations indicated to her Honour that it should be lifted. 145 The primary judge's reasons show that her Honour carefully considered the competing arguments that were advanced by the parties. These included not only the arguments advanced in Mr Georges' evidence, but also the respondents' submissions we have quoted at [34]-[35] above. 146 As to the countervailing considerations to which the applicants drew attention, we do not accept that the scope of the relief sought in the principal proceeding was an irrelevant consideration for her Honour to take into account. 147 The primary judge was also mindful that the question of the Redress Relief had to be considered in light of the respondents' acceptance that no students had, by that time, incurred debts to the Commonwealth. Her Honour made specific mention of that qualification at [124] of her reasons. But, plainly, the primary judge had in mind that the incurring of such debts was in prospect. That is no doubt why, in the same paragraph of her reasons, the primary judge referred to the question of whether the students: … were, or were liable to become, indebted to the Commonwealth to their potential detriment and to the detriment of the public interest. (Emphasis added.) 148 In that connection, the primary judge also specifically referred to the power under s 239(3)(b) of the ACL to make orders to prevent or reduce loss or damage suffered, or likely to be suffered, by non-party consumers, as well as to redress loss or damage in fact suffered. 149 We accept, however, that the primary judge misunderstood how the respondents had framed the entitlement to Redress Relief in the Originating Application. 150 As we have stated above, it was open to the primary judge to find that the delay in awaiting the outcome of the audit and reconciliation process would be substantial.

Conclusion and disposition 151 We have identified two principal errors in the primary judge's exercise of discretion. The first is her Honour's apparent misunderstanding of how the respondents had framed the entitlement to the Redress Relief in the Originating Application. The second is her Honour's apparent acceptance that the Commonwealth's claim to recover public monies paid to Phoenix is a debt having a special significance in that, as public monies, "the monies in question ought not to be property of the [applicants] available to creditors". We accept that these errors were significant to the exercise of her Honour's discretion and warrant the grant of leave to appeal. 152 That being so, it falls to the Full Court to re-exercise the discretion. In doing so, we will not repeat the factors in favour of, and against, the grant of leave. They are sufficiently identified in the primary judge's reasons and in our own consideration of the applicants' and respondents' arguments on the question of leave to appeal. 153 We are persuaded that leave under s 444E(3)(c) should be granted. We can be relatively brief in expressing our reasons why that should be so. 154 The respondents' claims of misleading or deceptive conduct, and of unconscionable conduct, raise complex questions of fact and evaluation that are appropriate for determination by the Court rather than under a proof of debt procedure. Indeed, this is necessarily so in light of the fact that declarations of contravention and pecuniary penalties are sought. Only the Court can grant that relief. It follows, inexorably, that the respondents' claims must be determined by the Court. This stands as a cogent reason why leave to proceed should be granted. We leave to one side, for present purposes, the respondents' claims to the Redress Relief because, as those claims are framed, they depend upon the existence of a debt between the Commonwealth and a student under the VET HELP-FEE scheme. Relevantly, at the present time, there are no such debts. 155 The applicants have argued that the statutory stay should remain in place and that the audit and reconciliation process should run its course. They say that, once the outcome of the audit and reconciliation process is known, a more informed view can be taken as to whether leave to proceed should be granted. Here, the applicants rely on the fact that if the outcome of the process is unfavourable to them, the Deed Administrators' present attitude is likely to be that the principal proceeding will not be actively defended. 156 Whilst that position has some attraction, we are not persuaded that the mere possibility (because that is all it is) that, ultimately, the Deed Administrators may not wish to actively defend the proceeding stands as a significant reason why the litigation should not proceed now. As we have said, it is inevitable that the respondents' claims will have to be determined by the Court. This is so regardless of the vigour with which the applicants' defence might be pursued. 157 The attraction of the applicants' position lies in the assumption that the audit and reconciliation process will be unfavourable and that, in that event, the Deed Administrators will maintain their presently expressed inclinations. However, there remains the prospect, which we assume the Deed Administrators regard as a realistic prospect, that, ultimately, the outcome of the audit and reconciliation process will not be unfavourable to the applicants. If that were to be the outcome, the applicants have not suggested that the respondents' claims will not be defended. Indeed, they have suggested otherwise. 158 The applicants' position also assumes that the audit and reconciliation process will not be protracted. We do not share the applicants' confidence in that regard. How the matter might proceed once the Commonwealth has made its final determination is somewhat nebulous. The applicants have indicated that the Deed Administrators will take legal proceedings to protect what they see to be Phoenix's entitlements to payments under cl 55 of Sch 1A of the Higher Education Support Act. In this connection, there appears to be a significant debate between the parties on matters of principle as to the circumstances in which Phoenix's entitlements to payments will arise. We understand that the determination of this question may not necessarily involve a complex determination of all the facts involving the applicants' conduct in question in the principal proceeding. But even so, the time it will take to commence, hear and determine whatever claims the Deed Administrators might litigate in that regard is unclear. We are satisfied that, if the Deed Administrators commence legal proceedings as foreshadowed, then awaiting the outcome of those proceedings (and, hence, on the applicants' case, the outcome of the audit and reconciliation process) will lead to delay in hearing and determining the respondents' claims in the principal proceeding which, in the scheme of things, would be substantial. 159 With that in mind, it is our view that there is a substantial public interest in having the claims in the principal proceeding determined as soon as reasonably practicable. Moreover, we accept, as the primary judge did, that any substantial delay in hearing the principal proceeding will likely impact adversely on the quality of the evidence to be given, particularly if there is to be any challenge to the recollections and perceptions of students subjected to the alleged offending conduct. 160 It follows, therefore, that we would dismiss the appeal. 161 Although the applicants have succeeded in obtaining leave to appeal, their appeal has been unsuccessful. As the application for leave to appeal and the appeal have been heard together, we think that the appropriate order is that the applicants pay the respondents' costs of the application for leave to appeal and the appeal. 162 Orders will be made accordingly. I certify that the preceding one hundred and sixty-two (162) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Perram, Yates and Wigney.