FEDERAL COURT OF AUSTRALIA

Master Wealth Control Pty Ltd v Australian Competition and Consumer Commission (Stay application) [2024] FCA 1024

ORDERS

THE COURT ORDERS THAT:

1.    The appellants are to submit a draft index to Part A of the appeal book to a Registrar for approval, by 4.00 pm on Friday, 6 September 2024.

2.    The appellants are to file and serve Part A of the appeal book within 14 days of being notified of a Registrar’s approval of the Part A index.

3.    If the parties are notified that the Full Court requires Part B of the appeal book to be prepared, the appellants are to file and serve Part B of the appeal book, no later than 30 business days before the hearing.

4.    The appellants are to file an outline of submissions (of no more than ten pages), and a chronology, by 4.00 pm on Monday, 30 September 2024.

5.    The respondent is to file an outline of submissions (of no more than ten pages), and a chronology, by 4.00 pm on Monday, 14 October 2024.

6.    The appellants are to file any submissions in reply (of no more than five pages) by 4.00 pm on Monday, 28 October 2024.

7.    The appellants are to file and serve Part C of the appeal book, by 5 business days before the hearing.

8.    The appellants are to serve on the respondent a list of authorities and legislation to which they intend to refer, by 5 business days before the hearing.

9.    The respondent is to file a list of authorities and legislation to which it intends to refer, by 4 business days before the hearing.

10.    The appellants are to file and serve an eBook of authorities being a jointly consolidated version of all the authorities, legislation and explanatory and other material proposed to be relied on at the hearing by all parties, by 4 business days before the hearing.

11.    All parts of the appeal book and lists of authorities and legislation be provided to the Court in electronic form in accordance with the format(s) specified in paragraph 4.3 of the eBooks Practice Note.

12.    The parties have liberty to apply on 3 days’ notice.

13.    Costs be reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

HALLEY J:

A.     INTRODUCTION

1    By an amended interlocutory application filed on 1 August 2024, the appellants, Master Wealth Control Pty Ltd (Master Wealth) and Dominique Grubisa, sought a stay of civil penalty, consumer redress and costs orders made by the primary judge on 19 July 2024 (19 July 2024 orders), pending hearing and determination of their appeal from orders made by the primary judge in the liability hearing: Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344 and the subsequent relief hearing: Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd (No 2) [2024] FCA 795.

2    At the conclusion of the hearing of the amended interlocutory application on 2 August 2024, I made orders, by consent, providing for a stay of the civil penalty orders (Orders 1 and 2) and the costs orders (Orders 12 and 13) and an order for security for costs. The respondent in these proceedings (ACCC) consented to a stay of the civil penalty orders and the costs orders, on the basis of the security for costs order and an undertaking given by the appellants to expedite the appeal.

3    The orders also provided for a stay of the consumer redress orders (Orders 7 to 11), but only on an interim basis. The consumer redress orders were stayed on an interim basis in order to permit the parties to provide further written submissions directed at the significance of the inclusion of new grounds in the notice of appeal filed on 1 August 2024, challenging for the first time the making of the consumer redress orders (New Grounds).

4    The parties subsequently filed submissions addressing the New Grounds.

5    On 23 August 2024, I listed the issue of whether the interim stay of the consumer redress orders should be discharged, for judgment. On the delivery of judgment on that day I advised the parties that I had determined that the stay of the consumer redress orders, pending the final determination of the appeal, should not be discharged and provided extensive oral reasons. At the conclusion of my oral reasons, counsel for the ACCC indicated that she had been instructed to seek written reasons.

6    These are my written reasons for declining to discharge the stay of the consumer redress orders.

B.     BACKGROUND

7    On 15 December 2022, the ACCC commenced proceedings NSD 1104 of 2022 against Master Wealth and Dominique Grubisa, for making false or misleading representations in contravention of the Australian Consumer Law in Sch 2 to the Competition and Consumer Act 2010 (Cth).

8    On 9 April 2024, following a hearing on liability, the primary judge made declarations that Master Wealth had made false or misleading representations in contravention of the Australian Consumer Law and that Ms Grubisa was involved in those contraventions, and published reasons for judgment: Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344 (Liability Judgment or LJ).

9    On 23 April 2024, the primary judge made timetabling orders and listed the matter for hearing on 4 July 2024 to determine the remaining question of relief.

10    On the same day, the appellants filed an application for leave to appeal the Liability Judgment, together with an interlocutory application seeking a stay of the proceedings pending the hearing of the application for leave to appeal and/or the appeal (initial stay application).

11    On 13 May 2024, I heard the initial stay application and at the conclusion of the hearing made orders dismissing the application on the basis that the initial stay application was premature given the question of relief had yet to be determined.

12    On 19 July 2024, the primary judge made orders for relief, and published reasons for judgment: Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd (Penalty) [2024] FCA 795 (Relief Judgment or RJ).

13    On 26 July 2024, the appellants filed an interlocutory application seeking a stay of the 19 July 2024 orders pending the hearing of the appeal (stay application) and an affidavit in support of the stay application of Ms Grubisa.

14    On 31 July 2024, I commenced hearing the stay application. At that stage the grounds of appeal were set forth in a draft notice of appeal annexed to an affidavit of the appellants’ solicitor affirmed on 22 April 2024 (draft notice of appeal). None of the grounds in the draft notice of appeal sought to impugn the orders made by the primary judge on 19 July 2024.

15    At the hearing on 31 July 2024, the appellants advanced the stay application on the basis that because of the financial position of Master Wealth, unless there was a stay of the 19 July 2024 orders, the orders would have the effect of rendering the appeal that the appellants otherwise sought to advance in the draft notice of appeal nugatory. The appellants relied on an affidavit of Ms Grubisa sworn on 30 July 2024 in which she addressed the current financial position of Master Wealth.

16    The ACCC advised the Court that it would consent to a stay of the civil penalty orders and the costs orders if the appellants agreed to provide security for its costs of the appeal and undertook to prosecute the appeal with expedition. The ACCC, however, opposed any stay of the consumer redress orders.

17    The consumer redress orders were in the following terms:

7.    Pursuant to section 239 of the ACL, DG Institute offer redress to each student who enrolled in the MWC program in the period April 2017 to November 2022 (the MWC students) in accordance with orders 8 to 10 below.

8.    DG Institute must within 14 days of the date of this order, cause to be sent a notice in the form of Schedule 1 to the MWC students:

(a)     where DG Institute has an email address for the student, by email;

(b)     where DG Institute has a postal address but not an email address, or DG Institute receives an “undeliverable” message for the email address and has a postal address, by ordinary prepaid mail;

(c)     where DG Institute has neither a valid email address nor a postal address, by whatever means (if any) DG Institute can use to send the notice.

9.    DG Institute must at its own expense within 14 days of the date of this order, publish or cause to be published a link to a notice substantially in the form of Schedule 1 for a period of 45 days and must not delete or modify the publication or post during that period:

(a)     on the home page of the website with the URL https://www.dginstitute.com.au/

(DG Institute Website);

(b)    on the Facebook page with the URL https://www.facebook.com/DGInstituteAustralia;

(c)     the Facebook page with the URL https://www.facebook.com/DominiqueGrubisa/;

(d)     the Instagram account with the name “dominiquegrubisa” or the URL https://www.instagram.com/dominiquegrubisa/; and

(e)     the LinkedIn account with the URL https://www.linkedin.com/in/dominiquegrubisa/.

10.    DG Institute must, within 56 days of the date of this order, provide a refund (in an amount equal to the course registration fee paid by that student plus interest at the prejudgment interest rate set out in the Court’s practice note (GPN-INT) from the date the student paid the course registration fee to the date the refund is provided) to each MWC student who has provided DG Institute with the student’s bank account details, by depositing the refund in the student’s nominated bank account.

11.    By 63 days of the date of this order, the proper officer of DG Institute provide to the Applicant an affidavit detailing the respective steps it has taken to comply with orders 7 to 10 above, including:

(a)     details of the dates on which payments were made;

(b)     the recipients of the payments and the amounts paid;

(c)     for any students who have not been provided a refund, the steps taken to provide such a refund and the reasons why the refund has not been provided.

18    An immediate problem confronting the appellants at the hearing on 31 July 2024 was that there was no challenge to the consumer redress orders (or indeed any of the other 19 July 2024 orders) in the draft notice of appeal. Further, the relevant conduct giving rise to the consumer redress orders was with respect to a declaration of contravention regarding what were known as the “Vestey Trust Representations”. The making of that declaration was not challenged in the draft notice of appeal. Hence, as presently framed, the appeal could not lead to any result in which the consumer redress orders could be overturned.

19    It was therefore not apparent why the Court should exercise its discretion, consistent with the interests of justice, to stay the consumer redress orders in circumstances where they were not relevantly challenged or could not relevantly be challenged, given the form in which the draft notice of appeal was then advanced.

20    In those circumstances the appellants sought and were granted an adjournment of the hearing of the stay application to the following day to give them an opportunity to reconsider the position on which they were advancing their stay application.

21    On 1 August 2024, prior to the resumption of the hearing of the stay application, the appellants filed a notice of appeal, and were granted leave to rely on an amended interlocutory application seeking a more targeted stay of the 19 July 2024 orders, limited to the civil penalty orders, the consumer redress orders and the costs orders.

22    The notice of appeal included, for the first time, a challenge to the second declaration made by the primary judge in the Liability Judgment, which was a declaration with respect to the Vestey Trust Representations (Ground 11) and a challenge to the consumer redress orders (Grounds 29 and 30).

23    The amended interlocutory application sought a stay pursuant to r 36.08 of the Federal Court Rules 2011 (Cth) (Rules) of Orders 1 to 2 and 7 to 13 of the 19 July 2024 orders and that they be stayed “pending the hearing of the appeal from those orders”, rather than as previously expressed in the original stay application “pending the hearing of the appeal in Master Wealth Control Pty Ltd and Anor v Australian Competition and Consumer Commission NSD489/2024”.

C.     RELEVANT PRINCIPLES

24    Rule 36.08 of the Rules relevantly provides:

(1)    An appeal does not:

(a) operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or

(b) invalidate any proceedings already taken.

(2) However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined.

…

25    The relevant principles governing the application of r 36.08 are well settled. For present purposes it is sufficient to provide the following summary.

26    A successful party is prima facie entitled to the benefit of the judgment which it has obtained: Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 at 66 (Burchett, Heerey and Whitlam JJ). Nevertheless, the Court has power to order a stay under r 36.08(2) of the Rules.

27    There must be “a reason or an appropriate case” to warrant the exercise of discretion in favour of granting a stay: Powerflex at 66.

28    The onus is on the applicant for the stay to demonstrate a proper basis for a stay that will be fair to all parties: Alexander v Cambridge Credit Corporation Ltd (recs apptd) (1985) 2 NSWLR 685 at 694 (Kirby P, Hope and McHugh JJA).

29    The general rule is that a stay will be granted where there is a likelihood that a successful appeal would be rendered nugatory: Australian Competition and Consumer Commission v BMW (Australia) Limited (No 2) [2003] FCA 864 at [5] (Finkelstein J) citing Wilson v Church (No 2) (1879) 12 Ch D 454 at 458.

30    In addition to considering whether or not the grant of a stay would render a successful appeal nugatory, it is also well established that the Court should consider (a) the balance of convenience, (b) the competing rights of the parties, and (c) whether either party will be prejudiced by the stay: BMW at [5] citing Marconi’s Wireless Telegraph Co Ltd v Commonwealth (No 3) (1913) 16 CLR 384 at 386; Phillip Morris (Australia) Ltd v Nixon [1999] FCA 1281 at [17].

31    A stay should not be granted unless the appeal is at least arguable, however, it is usually inappropriate to speculate as to its prospects of success: In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd (No 2) [2020] FCA 722 at [25] (Katzmann J); BMW at [5].

32    The degree of confidence which a Court needs to have in an appeal’s prospects will most likely vary with all of the circumstances of the case including the potential prejudice which might be suffered by the parties as the result of the granting or refusal of the stay: Stefanovski v Digital Central Australia (Assets) Pty Ltd [2017] FCA 1121 at [4(e)] (Derrington J); Redbubble Ltd v Hells Angels Motorcycle Corporation (Australia) Pty Ltd (2022) 168 IPR 74; [2022] FCA 1039 at [35(e)] (Derrington J).

33    There is a strong reason for refusing a stay where it is established that there is a real risk that the granting of a stay may prevent the successful party at trial from obtaining the full benefits of their judgment if the appeal were unsuccessful: Stefanovski at [4(h)]; Redbubble at [35(h)].

D.     SUBMISSIONS     

34    The appellants submitted that unless the consumer redress orders were stayed the appeal would be rendered nugatory because Master Wealth has no ability to provide the compensation to students contemplated by those orders.

35    The appellants submitted that Grounds 11, 29 and 30 in the notice of appeal now made it clear that they were challenging both (a) the liability that gave rise to the consumer redress orders, and (b) the consumer redress orders themselves on the basis that they were manifestly excessive.

36    More specifically, the appellants submitted that Grounds 29 and 30 of the notice of appeal advance separate and discrete grounds of appeal directed at the consumer redress orders and there was no rule of law preventing a party from appealing the quantum of a penalty or other relief, even where liability had otherwise been admitted.

37    The ACCC submitted that generally the authorities make clear that it would only be in special or exceptional circumstances that there would be a stay of consumer redress orders.

38    The ACCC submitted that any delay in the students receiving redress would be prejudicial and that these were proceedings brought in the public interest for the benefit of the students, as consumers. In addition, it submitted an additional consideration is that any remaining funds that might otherwise be available to Master Wealth would be consumed by legal fees in pursuing the appeal.

39    The ACCC submitted that the grounds advanced by the appellants to challenge the consumer redress orders have no prospects of success, or the grounds are so weak that in the exercise of the Court’s discretion, notwithstanding the other matters as to prejudice, the Court should exercise its discretion not to stay, or in this case, to discharge the stay of the consumer redress orders, for the following reasons.

40    First, the ACCC submitted that the fundamental flaw in Grounds 29 and 30 is that Master Wealth accepted before the primary judge that the fees paid to it by students represented the loss or damage that they had suffered.

41    Second, the ACCC submitted that the only dispute between the parties below with respect to the consumer redress orders was whether or not the Court should order Master Wealth to issue students with a suite of documents, to accompany the notifications of entitlement to a full refund for Master Wealth customers. The suite of documents proposed by the appellants was found to be misleading and deceptive: RJ [79]. That finding is not challenged on appeal.

42    Third, the ACCC submitted that the matters sought to be agitated in Grounds 29 and 30 were not argued below, and the same refund payment outcome, in any event, would be expected, or would be reached on the basis of the orders proposed below by the appellants, or by the orders made by the primary judge, and therefore, the grounds seeking to challenge the consumer redress orders were not reasonably arguable, or so weak as not to justify any diversion of funds, to permit funds to be incurred on legal expenses.

43    Further, the ACCC submitted:

(a)    the appellants impermissibly seek to divorce the structure that was provided from the level of protection that was promised to flow from that structure;

(b)    it is not necessary for the Court to be satisfied that there was any precise correspondence between the redress that might be received by a particular member of the class and the actual loss suffered by that member;

(c)    s 240(3)(b) of the Australian Consumer Law provides that the Court does not need to make a finding about the nature of loss or damage suffered or likely to be suffered by persons in respect of whom redress is ordered; and

(d)    what the appellants are seeking to do, in substance, is to require the Full Court to remit the matter to the primary judge for an extensive and individualised inquiry into the individual circumstances of students to assess whether any protection was provided to them at all, and if so, when and how much.

44    The ACCC submitted that the proposition that the course fees paid by students represented the loss or damage which had been suffered or likely to be suffered was a proposition which was accepted, and in fact, advanced, by Master Wealth to the primary judge. The ACCC submitted that in those circumstances it is not open for the appellants to challenge that proposition in a ground of appeal before a Full Court.

E.     CONSIDERATION

45    I was satisfied that if the consumer redress orders were not stayed pending the determination of the appeal, the appeal would have been rendered nugatory.

46    Ms Grubisa gave unchallenged evidence in her affidavit that:

(a)    on at least one approach, if the consumer redress orders were required to be paid in full, Master Wealth would be required to provide a refund in the order of some $14.7 million to its former students;

(b)    Master Wealth’s accountant had prepared a profit and loss statement and a balance sheet for Master Wealth as at 30 June 2024 that recorded a loss of $65,006.65 for that financial year, and a balance sheet as at 30 June 2024 with negative equity of $667,134.08; and

(c)    the primary judge had referred in the Relief Judgment at [4] to a balance sheet for Master Wealth as at 31 March 2024, which showed net assets in a negative amount of $484,555.00.

47    On the financial information before the Court, there is no serious prospect that Master Wealth would be able to comply with the consumer redress orders, in any material amount, let alone in the sum of $14.7 million. It is possible that in the future, a liquidator might be able to commence proceedings to seek to claw back or recover funds, but on the financial statements of Master Wealth before the Court, Master Wealth has not disclosed any material ability to meet the consumer redress orders.

48    There were references during the hearing to a company of which the former husband of Ms Grubisa was apparently a director. There was insufficient evidence, however, to form any view on the material before the Court, that that company would be either in a position to, willing to or would otherwise be under any obligation or liability to, remit funds to Master Wealth to enable it to satisfy any of the consumer redress orders.

49    In my view, for the foregoing reasons, it is reasonably apparent that if the present stay of the consumer redress orders is discharged, it is likely that a liquidator will be appointed to Master Wealth and the appeal sought to be advanced by the appellants will be rendered nugatory.

50    I am also satisfied that the balance of convenience favours a stay of the consumer redress orders. The specific prejudice that the ACCC identified was a delay in students receiving the benefit of the consumer redress orders and the diversion of financial resources that could otherwise be utilised to compensate students to paying the legal costs of the appellants in advancing their appeal. In many cases this would be a material consideration. In this case, however, the parlous financial position of Master Wealth demonstrates that this consideration carries more limited weight. The financial evidence before the Court does not provide any plausible basis that Master Wealth would be able to provide compensation to students, in whole or in material part, pursuant to the consumer redress orders. Further, the financial evidence does not suggest that Master Wealth is able to fund the proceedings or satisfy the order for security for costs from its own resources. On the material before the Court, it would appear that third parties will have to fund the provision of the security for costs and the appellants’ legal costs of prosecuting the appeal.

51    In light of these matters, the critical issue in determining whether or not the stay of the consumer redress orders should continue, turns on an assessment of the prospects of success of the grounds of appeal advanced by the appellants.

52    In determining whether to grant a stay of orders pending an appeal, the degree to which a Court needs to be satisfied that appeal grounds are arguable will generally be informed by all the circumstances of a case, including an assessment of whether rights of appeal would be rendered nugatory and where the balance of convenience might otherwise lie, particularly the extent of any prejudice to the party resisting the stay. In my view, a more rigorous standard, consistent with the interests of justice and the reasoning in Redbubble and Stefanovski referred to at [32] above, is applied where it is questionable whether likely rights of appeal would be rendered nugatory in the absence of a stay or where a stay would cause material and irredeemable prejudice to the successful party at first instance.

53    Unlike the position that had prevailed on the first day of the hearing of the stay application, the notice of appeal that had been filed on the second day of the hearing, included grounds challenging both the liability giving rise to the relief obtained by the ACCC, including the consumer redress orders (principally, Ground 11), and that the compensation to students provided pursuant to the consumer redress orders was manifestly excessive (principally, Grounds 29 and 30).

54    Ground 11 is in the following terms:

The learned trial judge erred in making declaration 2, in that the declaration is broader and goes beyond his Honour’s finding at [82] that the product could not provide immediate and complete protection, which finding correctly adopted the temporal limits on the concession by Senior Counsel for the Respondents set out by his Honour at [82].

(Emphasis in original.)

55    I accept that read as a whole, the primary judge’s reasoning was that the Vestey Trust Representations were representations to the effect that the product offered by the appellants provided “immediate and complete” protection for consumers. The declaration made by the primary judge with respect to the Vestey Trust Representations, however, was expressed as the provision of “complete” protection. It was not qualified or otherwise supplemented with the word “immediate”.

56    It is not readily apparent, however, how the findings made by the primary judge at LJ [84] to the effect that the financial structure and programmes promoted to students would provide some students with at least some measure of protection of their financial assets in future periods relevantly qualify or are inconsistent with the proposition that the financial structure and programmes promoted to students did not offer “complete” protection to students. Any temporal delay in obtaining protection or any protection less than complete protection would appear to be consistent with a finding that the Vestey Trust Representations, as framed in the declaration, was false or misleading and deceptive. These are of course only preliminary observations made in the context of the stay application but for present purposes, on the material before me, I am not able to conclude that the challenge to the making of the Vestey Trust Representations in the notice of appeal has arguable prospects of success.

57    Ultimately, I was satisfied, however, that the grounds relied upon to challenge the quantum of the consumer redress orders were at least arguable, given my conclusions that (a) if the stay of the consumer redress orders is not continued, there would be every likelihood that the appeal against those orders would be rendered nugatory, and (b) the absence of any material immediate prejudice to students, at least on the financial information of Master Wealth before the Court.

58    Grounds 29 and 30 are in the following terms:

29.     His Honour erred by finding at [65] that the MWC course fees paid by students represented the loss or damage which had been suffered (or likely to be suffered) in circumstances where:

(a) students received the asset protection structure that had been paid for, namely the creation of a corporate trustee and instructions to borrow from the trustee after gifting or assigning income to it, and many students were likely to have already established it;

(b) his Honour found that the structure still offered some protection from creditors, albeit on an incremental basis; and

(c) in light of the above, students could be expected to have a range of protection depending on the amount that had been gifted or assigned to the trustee and borrowed from it.

30.     In the premises, the complete refund of all students of all course fees in orders 7 - 10 was manifestly excessive.

59    Contrary to the submissions of the ACCC, I accept that it is at least arguable that the proposed form of orders provided by the appellants to the primary judge at the relief hearing did not constitute a concession by the appellants that the course fees paid by students necessarily represented the loss or damage which they had suffered by reason of the Vestey Trust Representations.

60    The proposed form of orders provided by the appellants to the primary judge, included proposed order 9, as follows:

9.     An order pursuant to s 239 of the ACL hat MWC provide a refund to each student enrolled in the MWC program in the period April 2017 to November 2022 who requests such a refund within 90 days from the date of these orders in an amount equal to the course registration fee paid by that student.

61    I accept that proposed order 9, as set out above, on its face, is in unqualified terms.

62    Proposed order 9 was reflected by the primary judge in Order 7 of the 19 July 2024 orders. Order 7 provided:

7.     Pursuant to section 239 of the ACL, DG Institute offer redress to each student who enrolled in the MWC program in the period April 2017 to November 2022 (the MWC students) in accordance with orders 8 to 10 below.

63    Order 8 of the 19 July 2024 orders provided for a notification procedure, and Order 9 provided for the provision of additional information that would be made available to students who had been notified of the opportunity to obtain a refund.

64    Order 10 provided that within 56 days of the making of the orders, a refund was to be provided in an amount equal to the course registration fee. This in effect, provided for a full refund as advanced in proposed order 9 of the appellants’ proposed orders, to those students who had provided their bank account details.

65    Schedule 1 to the 19 July 2024 orders provided the specific form of the notification and information to be provided to students. It stated that eligible students could either choose to accept the redress or not to accept the redress, and if they chose to accept the redress, then they were to provide their name and bank account details to enable the redress to be paid. It was not a case of blanket compensation, rather, compensation would be offered to all students, but would only be paid in the event that, effectively, the student agreed to take it up.

66    Had that been the end of the inquiry, it is difficult to see how the appellants could seriously challenge the consumer redress orders.

67    Order 9 of the appellants’ proposed orders, however, was advanced as part of a suite of orders that relevantly included the following additional orders:

7.     The Respondents are to issue to all clients who purchased the “MWC program” in the period April 2017 to November 2022 the information at Tab 4 of the Confidential Exhibit to the affidavit of Greg Klopper sworn 28 June 2024 as amended by the documents annexed to the affidavit of Greg Klopper sworn 1 July 2024 (Supplementary MWC Documents).

8.     An order that the Supplementary MWC Documents be issued within 14 days of these orders as follows:

(i)     where MWC has an email address for the client, by email;

(ii)     where MWC has a postal address but not an email address, or MWC receives an “undeliverable” message in response to an email, by ordinary prepaid post.

68    Those proposed orders provided for a regime or a structure whereby explanatory documents, in the form of what were described as the Supplementary MWC Documents, were to be provided to all students at the same time as the offer of full refunds was made to them (explanatory documents). The explanatory documents might neutrally be described as an attempt by Master Wealth to put in context what otherwise were very damning findings by the primary judge, no doubt in the expectation that those explanations would militate against a wholesale refund request from all students.

69    It also is necessary in that context to understand that the consumer redress orders proposed by the appellants to the primary judge appear to have been advanced in a context where they were seeking to persuade the Court that they had understood the significance of the conduct, the impact it had on students and the extent to which they were now prepared to compensate students who may have been misled, and in that context, were hoping for a more modest pecuniary penalty than might otherwise be imposed for the purposes of specific and general deterrence. The relationship between the consumer redress orders and the pecuniary penalty orders is emphasised in the notice of cross appeal filed by the ACCC on 21 August 2024 in which the ACCC contends that the pecuniary penalties should be substantially increased if there is to be any adjustment or alteration to the consumer redress orders by reason of any decision of the Full Court.

70    The primary judge declined to make proposed orders 7 and 8 in the terms sought by the appellants. His Honour concluded that the explanatory documents were misleading and deceptive, and even went as far as to state that the appellants’ proposed provision of the documents demonstrated a lack of contrition on the part of Master Wealth and potentially Ms Grubisa: RJ [79].

71    The fact that the explanatory documents might have been found by the primary judge to be misleading or deceptive is clearly relevant for the purposes of contrition and pecuniary penalties. The finding, however, does not necessarily preclude the appellants from relying on proposed orders 7 and 8 as qualifying any alleged concession otherwise made in proposed order 9.

72    Nor did I accept the submission made by the ACCC that the “same refund payment outcome” would necessarily be expected if the primary judge had made orders consistently with the appellants’ proposed orders 7 and 8. In my view, it is plausible that a not insignificant number of students might be less likely to demand a refund if they were provided with the explanatory documents. The primary judge appeared to have implicitly at least reached that view given his concern that the explanatory documents were misleading or deceptive.

73    Finally, I accepted the force of the submissions made by the ACCC, that I have summarised at [43] above. Each bears directly on the merits of the appeal against the consumer redress orders. None of those matters, however, precluded a finding that Grounds 29 and 30 have arguable prospects of success, or necessarily lead to a finding that the grounds are so weak that they justified discharging the interim stay of the consumer redress orders and thus, for the reasons advanced at [45] to [49] above, rendering the appeal against those orders nugatory.

74    For the foregoing reasons, I was satisfied that Grounds 29 and 30 of the appeal are arguable, but that was a preliminary conclusion reached only for the purposes of determining whether in the interests of justice the stay of the consumer redress orders should continue until the determination of the appeal. As the authorities make clear, it is not appropriate for me to consider the merits of grounds of appeal, except to the extent that I am to consider whether or not there are arguable prospects of success.

F.     DISPOSITION

75    For the foregoing reasons, I determined not to discharge the interim stay that I had granted of the consumer redress orders (Orders 7 to 11 made by the primary judge on 19 July 2024) pursuant to Order 1(a) of the orders that I made on 2 August 2024.

76    I otherwise made orders timetabling the preparation of the appeal, substantially in the form proposed by the parties.

Associate:

Dated:    4 September 2024