Federal Court of Australia

Australian Competition and Customer Commissioner v Mosaic Brands Limited (No 2) [2025] FCA 1699

ORDERS

THE COURT DECLARES THAT:

Wrongly accepting payment

1.    In the period from 23 September 2021 to 31 March 2022, the respondent, Mosaic Brands Limited (in liquidation), contravened section 36(4) of the Australian Customer Law, contained in schedule 2 to the Competition and Customer Act 2010 (Cth) (ACL) on 738,586 occasions, by, in trade or commerce, accepting payment from customers for goods ordered online from websites owned and operated by Mosaic accessible through the following URL addresses: www.autographfashion.com.au, www.beme.com.au, www.crossroads.com.au, www.katies.com.au, www.millers.com.au, www.nonib.com.au, www.rivers.com.au, www.rockmans.com.au, www.wlane.com.au (collectively, the Websites), and either:

(a)    failing to deliver the goods at all on 4,213 occasions; or

(b)    on those occasions where the relevant websites specified delivery periods not exceeding 20 days from the date of purchase, failing to deliver the goods within those specified delivery periods; or

(c)    on those occasions where the relevant website did not specify a delivery period, failing to deliver the goods within a reasonable period which, in all the circumstances, was a period not exceeding 20 days from the date of purchase.

(the s 36(4) ACL contraventions)

Delivery Time Representations

2.    In the period from 23 September 2021 to 31 March 2022, Mosaic, in trade or commerce, engaged in conduct that was misleading or deceptive or likely to mislead or deceive Australian customers, in connection with the promotion and supply of goods, in contravention of s 18 of the ACL, by publishing, or causing to be published, on each of the Websites, statements which represented that goods purchased online from Mosaic through the relevant websites would be despatched within indicated periods, and delivered to customers within indicated periods, in circumstances where:

(a)    Mosaic did not have reasonable grounds for making those representations due to Mosaic’s deficient and defective warehousing and logistics systems and operations; and

(b)    in a large proportion of cases, Mosaic failed to despatch or deliver goods within the indicated despatch and delivery periods, respectively.

Faulty Goods Representations

3.    In the period from 23 September 2021 to at least 23 October 2022, Mosaic, in trade or commerce, in connection with the promotion and supply of goods to Australian customers:

(a)    engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 18 of the ACL; and

(b)    made false or misleading representations concerning the existence, exclusion or effect of any warranty, right or remedy in contravention of section 29(1)(m) of the ACL (the s 29(1)(m) ACL contraventions);

by:

(c)    publishing, or causing to be published, statements on eight of the Websites that expressly or impliedly represented to customers that they would not be entitled to a refund for faulty goods if they did not seek a refund within six months from the date of purchase (Faulty Products Term),

when in fact:

(d)    a customer’s right to a refund for faulty goods under the ACL is not limited to a period of six months from purchase.

Warranty Contravention

4.    In the period from 23 September 2021 to at least 23 October 2022, Mosaic in trade or commerce, in connection with the supply of goods to Australian customers, contravened section 102(2) of the ACL (the s 102(2) contraventions) by:

(a)    publishing, or causing to be published, statements on eight of the Websites which contained the Faulty Products Term;

(b)    thereby giving to customers a warranty against defects that did not comply with regulation 90 of the Competition and Customer Regulations 2010 (Cth).

AND THE COURT ORDERS THAT:

1.     Mosaic pay to the Commonwealth the following pecuniary penalties:

(c)    $20,000,000 in respect of its conduct which constituted the s 36(4) ACL contraventions;

(d)    $5,000,000 in respect of its conduct which constituted the s 29(1)(m) ACL contraventions; and

(e)    $50,000 in respect of its conduct which constituted the s 102(2) ACL contraventions.

2.     Mosaic pay the Applicant’s costs of, and incidental to the proceeding.

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

REASONS FOR JUDGMENT

WIGNEY J:

1    The respondent, Mosaic Brands Limited (in liquidation) was a large business which marketed and supplied clothing, shoes, accessories and homewares to customers under several well-known brand names: Autograph, Beme, Katies, Millers, Noni B, Rivers, Rockmans and W. Lane (collectively the brands). The branded products were sold at both “bricks and mortar” stores and also online through various websites using the various brand names (collectively the websites). In March 2024, the applicant, the Australian Competition and Customer Commission (ACCC) commenced this proceeding alleging that Mosaic contravened several provisions in the Australian Customer Law (ACL) (being schedule 2 of the Competition and Customer Act 2010 (Cth)). Mosaic filed a defence to the ACCC’s claim, however for reasons that are explained later, it ultimately did not actively defend the claim.

2    There were two broad categories of alleged contraventions by Mosaic. The first category of contraventions concerned statements made on the brands’ websites in respect of the times within which goods ordered from the website would be despatched or delivered, or might reasonably be expected by the consumer to be despatched or delivered. The ACCC alleged that between 23 September 2021 and 31 March 2022 Mosaic accepted payment from customers for goods purchased online via the websites and failed to deliver those goods within the specified delivery period, or within a reasonable time, or at all, and thereby contravened s 36(4) of the ACL. The ACCC also alleged that the various statements on the websites about delivery times in respect of goods purchased online were misleading and deceptive and Mosaic thereby contravened s 18 of the ACL. This category of contravention may conveniently be referred to as the delivery time contraventions.

3    The second category of contraventions concerned statements on the brands’ websites in respect of the availability of refunds where the supplied products turned out to be faulty. The relevant statements on the websites were to the effect, or at least implied, that customers would not be entitled to a refund for faulty goods if they did not seek a refund within six months from the date of purchase (the faulty goods representation). The ACCC alleged that by making the faulty goods representation on its website between 23 September 2021 and 23 October 2022, Mosaic contravened: s 29(1)(m) of the ACL by making false or misleading representations concerning the existence, exclusion or effect of a warranty, and s 102(2) of the ACL by giving customers a warranty against defects that did not comply with reg 90 of the Competition and Customer Regulations 2010 (Cth). This category of contravention may conveniently be referred to as the faulty goods and warranties contraventions. The ACCC initially claimed that when it made the faulty goods representation Mosaic also contravened s 18 of the ACL, though it ultimately did not seek any relief in respect of that alleged contravention.

4    On 28 October 2024, Mosaic went into administration and receivership pursuant to Part 5.3A of the Corporations Act 2001 (Cth). The ACCC subsequently sought, and was granted, leave pursuant to s 440D of the Corporations Act, to continue to prosecute the proceedings: see Australian Competition and Customer Commission v Mosaic Brands Limited [2025] FCA 99. The administrators and receivers did not oppose the grant of leave and, in effect, indicated that they would not continue to defend the proceeding. Mosaic subsequently went into liquidation.

5    The proceeding was heard on an undefended basis in August 2025. The ACCC adduced evidence and advanced detailed submissions in accordance with the applicable principles in respect of undefended proceedings of this nature: see Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 at CLR 282 (per Mason CJ and Gaudron J); United Group Resources Pty Ltd v Calabro (No 5) [2011] FCA 1408 at [44]; Westpac Banking Corporation v Forum Finance Pty Ltd (in liq) [2024] FCA 1176 at [275].

6    On 29 August 2025, having considered the evidence adduced and the submissions advanced by the ACCC, I determined that the ACCC was entitled to the relief it sought and made declarations and orders accordingly. I indicated, however, that I would not be in a position to provide reasons for some time. The provision of reasons has been regrettably delayed, though given that the ACCC had obtained the relief it sought, and Mosaic was in liquidation, it appeared to me that no party was likely to suffer any material prejudice as a result of the delay. It should also be noted that these reasons are considerably shorter than they would otherwise have been the case had the ACCC not obtained the relief it had sought and had there been any real prospect of either the orders being enforced or an appeal being filed in the interim.

EVIDENCE ADDUCED BY THE ACCC

7    The ACCC read several affidavits, though it would perhaps be fair to say that its case against Mosaic mainly relied on documentary evidence along with admissions made by Mosaic in the pleadings.

8    The ACCC relied on affidavits sworn or affirmed by an ACCC officer and an ACCC solicitor which, collectively, annexed or exhibited many documents including, most relevantly: copies of documents produced by Mosaic in response to compulsory notices; transcripts of examinations of Mosaic employees and former employees pursuant to compulsory notices; and historic images of websites of the brands at certain times. The ACCC officers also deposed to various other facts, including facts relating to the ACCC’s receipt of a substantial number of complaints from customers of the brands in respect of delays in the delivery of goods and previous investigations and actions taken by the ACCC in respect of Mosaic’s conduct.

9    The ACCC also relied on an affidavit of a director of an outsourcing agency that had been retained by Mosaic to provide call services and customer support services to Mosaic. The affidavit evidence of that witness included evidence of the increasing number of complaints received by Mosaic in relation to undelivered goods in 2021 and 2022, and Mosaic’s inadequate response to those complaints.

10    Finally, the ACCC relied on affidavits of six consumers who had ordered goods from one of the relevant websites and had experienced significant delays. The consumers gave evidence about their experiences of delayed delivery of products and the inconvenience this caused them; the absence of refunds being provided in a timely way – or at all; and their frustrations generally with Mosaic’s implementation of their delivery processes.

SUMMARY OF FACTS ESTABLISHED BY THE EVIDENCE

11    The ACCC’s written submissions in respect of liability and relief included a very lengthy and detailed recitation of the facts established by the evidence adduced by the ACCC. Having read both the evidence and submissions I am satisfied that the facts as stated in the submissions were established by the evidence, though as will be seen I do not necessarily agree with some the ACCC’s submissions in respect of the characterisation of some of the facts or the conclusions that flow from them. It is unnecessary to replicate in these reasons the detailed statement of facts included in the submissions. What follows is a short summary that is sufficient to explain the basis of my findings in respect of both the contraventions and the appropriate pecuniary penalties.

12    Unless stated otherwise, the following summary of the relevant facts established by the evidence relates to the periods relevant to the alleged contraventions. The relevant period in respect of the delivery time contraventions is the period between 23 September 2021 and 31 March 2022. The relevant period in respect of the faulty goods and warranties contraventions is the period between 23 September 2021 and 23 October 2022.

Mosaic’s business

13    Mosaic was one of the largest specialty fashion retailers in Australia. It owned and operated nine fashion brands: Autograph, Beme, Crossroads, Katies, Millers, Noni B, Rivers, Rockmans and W. Lane. Approximately 952 shops operated by Mosaic around Australia sold products, including clothing, shoes, accessories and homewares, that bore those brand names.

14    Mosaic also offered those branded products for sale online via websites it operated for each of its brands. The websites were accessible through URL addresses that included the brand names. In the 2022 financial year the brands’ websites were visited by over 71 million customers.

15    In the 2022 financial year, Mosaic’s business generated total revenue of $619,651,000. Online sales were a significant revenue stream for Mosaic and accounted for around 36% of its total revenue. Mosaic’s revenue from online sales in that period was $223,000,000.

16    Mosaic engaged warehousing and logistics companies to receive, warehouse and dispatch the products it sold online to customers. It also engaged carriers, primarily Australia Post, to deliver the products dispatched from its warehouses to customers. Mosaic maintained, or at least purported to maintain, oversight of the warehousing and logistics and carrier companies in respect of its business operations. As will be seen, Mosaic’s inadequate and deficient systems and processes, and its lack of any effective oversight of the systems employed by the companies it retained in respect of warehousing and logistics, significantly contributed to its failings in respect of delivering products purchased online in a timely fashion.

17    When a customer ordered a product online, Mosaic accepted payment for the product and retained a record of the date of the order. Mosaic also recorded the date on which a product was dispatched from one of its warehouses to a carrier for delivery to the customer. Mosaic did not, however, as a matter of practice keep track of the dates when products were actually delivered to customers. The time it took Mosaic to deliver a product to a customer included the time from the order date to the dispatch date and the time it took Mosaic’s carrier to deliver the product to a customer following dispatch from Mosaic’s warehouses.

Statements on the websites in respect of delivery times

18    Mosaic published statements on each of the brands’ websites which provided information about the time that a customer could or might expect an item purchased online to be delivered. Those statements were often made on several “pages” which formed part of the website and were generally accessible by the customer by clicking on links on the webpage. Those pages included the product page (which contained details of the product that the customer could purchase), the frequently asked questions (‘FAQ’) page (which generally included a question and answer section about delivery processes and times) and the delivery information page (which, not surprisingly, included information about delivery times).

19    The statements concerning delivery times varied between the websites of the brands. There was little uniformity between the websites. Sometimes the delivery times were expressed in days, and sometimes they were expressed in terms of business days. Sometimes the time specified was the time for dispatch from the warehouse, or the delivery time once the product was dispatched from the warehouse. Often the delivery times were expressed in qualified, or less than emphatic, terms; for example, orders “should be delivered within” a specified time frame (emphasis added). Sometimes the statements were expressed in somewhat unclear or ambiguous terms. To give but one example: “FREE standard shipping Australia-wide for orders over $120 between 7-10 days via Australia Post”. To complicate matters further, sometimes the statements in respect of delivery times published on the different pages on the same website were inconsistent, or at least not entirely consistent.

20    Some of the websites during some periods included warnings or disclaimers that indicated that there may be shipment delays for various reasons, including as a result of the COVID-19 pandemic, or the receipt of higher-than-normal volumes, or if the delivery address was in a regional or remote area. Some websites during some periods included a disclaimer, albeit at the very bottom of the website’s home page, that stated: “[w]e are experiencing extensive delays across our logistics networks due to higher than normal order volumes”; or that “extensive delays” were being experienced “as COVID continues to cause challenges to our logistics partners”. Some of the websites stated that delivery may take “a few more days” than the “standard time frames” due to the COVID-19 pandemic.

21    Each of the websites published a “terms and conditions” page which included the following statement:

Dispatch times may vary according to availability and any guarantees or representations made as to delivery times are subject to any delays resulting from postal delays or forces outside of our control for which we will not be responsible.

22    The websites did not, however, require a customer to click on, let alone read, the terms and conditions page before ordering and paying for a product.

23    The websites did not state whether products were or were not “in stock” at the warehouse before the customer purchased the product online. Nor was there any warning that delivery may take longer if the product was not in stock at the warehouse at the time of purchase.

24    The ACCC’s pleading and submissions contained a detailed analysis of the statements made concerning delivery times on each of the pages of the various websites during the period relevant to the delivery time contraventions. For reasons that will become apparent, I do not propose to replicate that detailed analysis in respect of each of the websites. Instead, to illustrate the difficulties in construing and reaching concluded views about what the various delivery time statements on the websites conveyed, or would have conveyed, to consumers, I will give two examples.

25    The first example concerns the delivery statements on the Autograph website. The product page on that website relevantly stated, under the heading “Home Delivery”, that “[d]ue to the Coronavirus pandemic it may take a few more days than the standard time frames to get your delivery.” The following statement also appeared under the heading “Home Delivery”: “FREE standard shipping Australia-wide for orders over $120 between 7-10 days via Australia Post”. The ACCC submitted that those statements should be construed as specifying a delivery time of 7 to 10 days plus 3 days. The additional 3 days were said to account for the “few” days referred to in the disclaimer. I am not persuaded that the somewhat ambiguous reference to “free standard shipping … between 7-10 days via Australia Post” can necessarily be read as a statement that the product would be delivered to the customer’s home within 7 to 10 days of the order. Nor am I persuaded that the disclaimer can be read as if 3 days can simply be added to 7 to 10 days for “standard shipping”.

26    The ambiguity of the statements on the product page of the Autograph website was exacerbated by equally ambiguous and somewhat inconsistent statements on the delivery information and FAQ pages of the website. A table on the delivery information page had a column for delivery time “once order is dispatched”. The details in that column therefore do not appear to be the delivery times from the time of order. Even putting that complication to one side, the figure for “metro” deliveries was “3-5 business days” and the figure for “regional” deliveries was “up to 15 business days”. Neither of those figures was consistent with the statement on the product page. The information on the FAQ page was also not consistent with the information on either the product or delivery information page. On that page, the answer to the question “[h]ow long will it take for my order to arrive” is: “Australian orders should be delivered within 7-14 days” (emphasis added).

27    Overall, it is difficult to discern any clear, unambiguous or certain statement in respect of the time or period within which goods purchased on the Autograph website would be delivered to the customer’s home.

28    The second example concerns the delivery statements on the Beme website. The product page on that website stated, again under the heading “Home Delivery”: “FREE standard shipping Australia-wide for orders over $120. Items will be dispatched with 5-7 business days” (emphasis added). There then appeared the statement: “[p]lease refer to our Shipping Policy for more information”. The ACCC submitted that the statement on the product page should be construed as specifying a delivery time of 5-7 business days plus an unspecified “reasonable period” for delivery following despatch. That interpretation of the statement, even if accepted, hardly constituted a firm or unequivocal statement in respect of the delivery time.

29    The position was complicated further by the statements on the delivery information page of the Beme website. That page included the following statements: “[d]ue to high demand we are experiencing some delays in processing orders” and “[o]ur delivery partner Australia Post is experiencing delivery delays due to high volume of parcels … [a]t this time it may take a few extra days than the standard time frames outlined below to get your delivery”.

30    The statements on the FAQ page of the website were perhaps clearer, though they were by no means consistent with the statements on the other pages. Under the heading “Shipping within Australia” it was stated that “[s]hipping within Australia will be delivered within 7-10 business days (excluding weekends and public holidays)”, though that statement was qualified by the statement that “[d]elivery may take longer, in remote, rural areas or during promotion and sale periods”.

31    When those various statements are considered together, it is again difficult to discern any clear, unambiguous or certain statement in respect of the time or period within which goods purchased on the Beme website would be delivered to the customer’s home.

32    While the statements on the other websites differed in some respects from the statements on the Autograph and Beme websites, there are similar difficulties in discerning clear, consistent, unambiguous and certain statements in respect of the time or period within which goods purchased on the respective website would be delivered to the customer’s home. It is, in other words, difficult to identify a clear and unambiguous specification on the websites of the period within which the goods would be delivered.

33    It should perhaps be noted that the ACCC submitted that the various disclaimers on the websites – by which the ACCC meant the various statements warning of potential delays – did not “erase” or “dispel” the effect of the other statements on the websites concerning delivery periods. That submission may perhaps be accepted, though it does not follow that the disclaimers can be ignored in determining what, if any, delivery period was specified on the websites. The question ultimately is whether each website during the relevant period, when considered as a whole, specified a period within which products ordered online would be delivered and, if so, what that period was. Regard can no doubt be had to the relative prominence and positioning of the various disclaimers on the websites. On my assessment of the websites, however, it is difficult to accept that the positioning and lack of prominence of the disclaimers on the websites in question was such as to rob the disclaimers of any effect at all in determining what, if any, delivery period was specified on the website.

34    One conclusion that can be drawn with certainty, however, is that to the extent that there was any delivery period specified in or on any of the websites, that period did not exceed 20 days. That is so even taking the disclaimers into account. As discussed later, that conclusion is of particular relevance when it comes to determining and framing the contraventions by Mosaic of s 36(4) of the ACL. That is because, putting the statements on the websites to one side, 20 days would be a reasonable period for the delivery of goods ordered from the websites.

Products ordered and paid for but either not delivered or delivered late

35    Hundreds of thousands of products were ordered from the various websites and paid for by the customers during the period relevant to the delivery time contraventions. A very large proportion of those ordered products were either delivered later than the delivery times stated on the websites, or were not delivered within a reasonable period, or were not delivered at all.

36    The ACCC submitted that a reasonable period for delivery of goods purchased from the websites for deliveries in Australia would be a period not exceeding 20 days. I accept that submission. The facts and circumstances which support that conclusion include that the products were relatively inexpensive “off the rack” items that a customer would expect to be in stock at the supplier’s store or warehouse. They were not bespoke or made to order products. The products were also purchased from large, well-known and established brands with a national presence, not small speciality stores in remote locations. It is also apparent that Mosaic considered 20 days to be a reasonable period for delivery as there was evidence that it had a policy of refunding a customer if the product they had ordered had not been delivered within 21 days.

37    Overall, during the period relevant to the delivery time contraventions, 739,114 orders for products were made from the websites of all the Mosaic brands and paid for by the customer. The products that were the subject of 738,586 of those orders were impacted by delivery issues: 734,373 orders were delivered more than 20 days after the date that the order was placed, in many cases more than 30 or 40 days after the date that the orders were placed, and 4,213 orders were not delivered at all. So much so was admitted by Mosaic.

38    The evidence did not suggest, and the ACCC did not submit, that the substantial number of non-deliveries and late deliveries was the product of any deliberate act or omission by Mosaic. It is also clear that there were some extenuating circumstances during the period relevant to the delivery time contraventions that caused some of the delivery delays. For example, the COVID-19 pandemic undoubtedly caused some staff shortages in Mosaic’s warehouses which in turn led to some delivery delays. Mosaic was also constructing a new warehouse at the time. The evidence clearly indicated, however, that the main factors that resulted in the non-deliveries and late deliveries were: inadequate and deficient inventory and control systems and processes; inadequate and deficient systems in respect of the monitoring and tracking of deliveries and delivery times; inadequate resources being devoted to dealing with customer complaints about delays; and the fact that customers were not advised that products were not in stock when they ordered the products on the websites.

Faulty goods representation

39    During the period relevant to the faulty goods and warranties contraventions, the websites of all the brands, other than Katies, included the following statement on a page that set out the terms and conditions of the purchase of goods from the website:

FAULTY PRODUCTS

In the event that you receive a faulty Product, we recommend that as soon as you discover a fault, or if you received an incorrect item, please use the Contact Us form and send us a picture of the item and include a brief description of the fault. Once assessed and approved by our team or Third Party Seller, and if it is within six months from the purchase date, we will refund you back to the original tender type. Items deemed as general wear and tear and not due to a manufacturing fault will not be refunded.

(Emphasis by bolding added.)

40    The products page on each website had a link to the webpage which set out the terms and conditions of purchase, including the term relating to faulty products.

41    The ACCC contended that this term or condition of the sale of the goods both concerned the existence, exclusion or effect of a warranty, right or remedy, and represented that customers would not be refunded for faulty products beyond the six-month period. That contention is plainly correct. The term itself plainly concerns the existence of a “warranty” because it constitutes a representation to customers by Mosaic that Mosaic will on “specified conditions … recompense” customers if the goods they have purchased are defective: see the definition of “warranty against defects” in s 102(3) of the ACL discussed further below. The bolded words in the above extract also clearly represent, or at least imply, that customers would only obtain a refund (recompense) if they contacted Mosaic with details of the faulty product within six months of purchase. They therefore concern the existence, exclusion or effect of the warranty.

42    The ACCC referred to this term or condition of sale as the faulty goods representation.

DELIVERY TIME CONTRAVENTIONS

43    The delivery time contraventions involved contraventions of ss 18 and 36(4) of the ACL. The following references to the relevant statutory provisions refer to the provisions in the form they took at the time of the contraventions.

Relevant statutory provisions

44    Section 18 of the ACL provided that a “person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.

45    Subsections 4(1) and (2) of the ACL provided:

4    Misleading representations with respect to future matters

(1)     If:

(a)     a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and

(b)     the person does not have reasonable grounds for making the representation;

the representation is taken, for the purposes of this Schedule, to be misleading.

(2)     For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:

(a)     a party to the proceeding; or

(b)     any other person;

the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.

46    Subsection 36(4) of the ACL provided as follows:

36     Wrongly accepting payment

…

(4)    A person who, in trade or commerce, accepts payment or other consideration for goods or services must supply all the goods or services:

(a)     within the period specified by or on behalf of the person at or before the time the payment or other consideration was accepted; or

(b)     if no period is specified at or before that time—within a reasonable time.

47    Subsection 36(4) of the ACL was a provision the contravention of which could lead to the imposition of a pecuniary penalty: see s 224(1)(a)(ii) of the ACL.

Contraventions of s 36(4) of the ACL

48    To make out a contravention of s 36(4) of the ACL by Mosaic, the ACCC was required to prove the following elements:

(1)    Mosaic accepted payment for goods (relevantly the products offered for sale on the various websites);

(2)    Mosaic did not deliver those goods either:

(a)    within the period specified by or on behalf of Mosaic at or before the time of payment; or

(b)    if no period is specified – within a reasonable time.

49    The evidence adduced by the ACCC, together with relevant admissions made by Mosaic in its defence, clearly established that Mosaic accepted payment for the products which were ordered from the brands’ websites. To successfully order products from the website a customer was required to pay for the goods.

50    In relation to the second element, a seller of goods is generally not required to specify a time within which the goods will be delivered before accepting payment for the goods. If, however, the seller chooses to specify a delivery time, it can do so in various ways, including in writing or orally. The seller may also choose to specify the expected delivery period in tentative or equivocal terms, or might qualify any statement about the delivery period, including by making provision for uncertainty or delays, including delays caused by events beyond the seller’s control, or delays caused by third parties who may be involved in the delivery of the goods. Where statements made by a seller concerning the delivery period are expressed in tentative or equivocal terms, or are heavily qualified, it may be difficult to conclude that the statements constitute the specification of a delivery period for the purposes of s 36(4) of the ACL. It may equally be difficult to determine what that period is or may be. This is such a case. Indeed, the position is made even more difficult in the case of the statements on the various Mosaic brands’ websites because in many cases the statements made on the different pages of the one website were inconsistent, or not entirely consistent.

51    The question whether a seller of goods has specified a period within which goods, for which it had accepted payment, would be delivered (and, if so, what period was specified) is a question of fact. Where the seller makes several written statements about the period within which it will or may deliver the goods, it is necessary to consider and construe those statements as a whole, though it may be that some statements that were not specifically drawn to the customer’s attention, or were unlikely to have been read or considered by the customer, may be disregarded or given little weight. The question must ultimately be approached from the perspective of the customer. What was the customer likely to have understood they were being told about the period within which the goods would be delivered?

52    As discussed earlier in the context of the consideration of the facts established by the evidence, there is no doubt that the brands’ websites contained various statements about when goods ordered and paid for online may be expected to be delivered. The difficulty is that those statements were generally equivocal or ambiguous, at times inconsistent, and usually qualified by statements about potential delays. It is in those circumstances difficult to discern any clear and unequivocal specification of the period within which the products would be delivered.

53    In its submissions, the ACCC contended that sufficiently certain delivery periods could be calculated in respect of each website despite the tentative, equivocal or qualified terms of the statements and despite the ambiguities and inconsistencies. It effectively calculated those specified delivery periods by ascribing specific figures to otherwise vague expressions or unspecified periods. For example, where a delivery period was specified but qualified by a statement to the effect that circumstances (such as the COVID-19 pandemic) might add a few days to the usual delivery time, the ACCC added three days to the specified period, based on the dictionary definition of “few”, to arrive at a certain figure. Similarly, where the website included a statement about the period within which the goods would be despatched, the ACCC added to that specified despatch period a period that was said to be a reasonable time for the time from despatch to delivery.

54    I am not entirely persuaded that the ACCC’s detailed analysis of the statements on the websites concerning delivery periods adequately accounted for all the ambiguities, inconsistencies and vagaries of the various statements, or the various qualifications to those statements, including in the disclaimers. Nor am I entirely persuaded that it is possible to conclude that any of the websites contained a sufficiently clear and unequivocal specification of a period within which the goods would be delivered, for the purposes of s 36(4) of the ACL, such that it could be concluded that the goods were or were not delivered within that specified period.

55    As adverted to earlier, however, what can be said with the requisite degree of confidence is that, to the extent that it is possible to discern, on any of the websites, a clear and unequivocal specification of the period within which the products ordered on the websites would be delivered, that period was a period of no more than 20 days. If a sufficiently certain specified delivery period could be discerned from the statements on the websites, that period was invariably less than 20 days. None of the websites included any statement which could possibly be construed as specifying a delivery period exceeding 20 days. That is significant because, if a clear or unambiguous specification of the delivery period cannot be found on the websites, a reasonable time for the delivery period would be 20 days from the time of order in any event.

56    It is, in those circumstances, unnecessary to reach any firm conclusion as to whether each or any of the websites in question in fact specified a delivery period. If they did, that period was not less than 20 days, and if they did not, a reasonable delivery period was 20 days. Mosaic admitted that 739,114 products were ordered and paid for online during the period relevant to the delivery time contraventions, and that, of those orders, 738,586 orders were not delivered within 20 days from the date the order was placed (including 4,213 orders that were not delivered at all). There was a contravention of s 36(4) of the ACL in respect of all those orders because they were either not delivered within the specified delivery period (if it is possible to conclude that a delivery period was specified on the website), or within a reasonable period (if it is not possible to conclude that a delivery period was specified).

57    I am, in those circumstances, satisfied that Mosaic contravened s 36(4) of the ACL on 738,586 occasions.

58    It should be noted that the declaration made by the Court on 29 August 2025, based on ACCC’s submissions and draft orders, stated that Mosaic had contravened s 36(4) of the ACL on 739,114 occasions. That was an error. The correct figure for the number of contraventions is 738,586. The declaration made by the Court has, with the ACCC’s consent, since been amended pursuant to the slip-rule to correct that minor error.

Contraventions of s 18 of the ACL

59    The ACCC’s case in respect of Mosaic’s contravention of s 18 of the ACL was that the statements or representations on the brands’ websites concerning delivery periods were misleading or deceptive to, or likely to mislead or deceive, customers in Australia for two reasons: first, because they were representations made with respect to future matters and Mosaic did not have reasonable grounds for making the representations; and second, because in a large proportion of cases Mosaic in fact failed to despatch and deliver goods within the periods or times referred to in those statements. I am satisfied that the contraventions are made out either way.

60    There could be no doubt that the representations on the websites were made in respect of future matters because they related to the periods within which goods purchased online would be delivered after they were ordered. Mosaic did not adduce any evidence in respect of the reasonableness of its grounds for making the representations. Therefore, by dint of s 4(2) of the ACL, Mosaic is to be taken not to have had reasonable grounds for making the representations. That would be sufficient to support a finding that Mosaic contravened s 18 of the ACL by making the delivery period representations.

61    In any event, the evidence clearly demonstrated that Mosaic did not have reasonable grounds for making the statements on the websites in respect of the periods within which products purchased by a customer online would be delivered. The absence of reasonable grounds may be inferred not only from the fact that such a large proportion of the products purchased online during the relevant period were delivered more than 20 days after they were ordered – in many cases well after 20 days – but also from the fact that Mosaic’s systems and processes concerning logistics and the monitoring and tracking of the delivery of products were deficient and known by senior management to be deficient. Mosaic’s systems and processes appeared to be so deficient that it would not have had reasonable grounds to make almost any representation concerning delivery times on the websites.

62    I am therefore satisfied that Mosaic contravened s 18 of the ACL throughout the period 23 September 2021 to 31 March 2022 by engaging in conduct that was misleading and deceptive to Australian customers. That conduct comprised the making of statements on its brands’ websites concerning delivery times which were misleading or deceptive because they concerned future matters and were made in the absence of reasonable grounds.

FAULTY GOODS AND WARRANTIES CONTRAVENTIONS

63    The faulty goods and warranty contraventions involved contraventions of s 29(1)(m) and 102(2)(a) of the ACL.

Relevant statutory provisions

64    Section 29(1)(m) of the ACL provided as follows:

29     False or misleading representations about goods or services

(1)    A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(m)     make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3‑2); or

…

65    Sections 54 and 55 of the ACL relevantly provided that, where a person supplies goods to a customer, there is a guarantee that the goods are of acceptable quality and are reasonably fit for any disclosed purpose. Sections 259 to 263 of the ACL provided for various remedies that a customer had against a supplier of goods for breaches of guarantees, including the guarantees of acceptable quality and fitness for purpose. It is unnecessary to set out in full the terms of those provisions or the nature of all the remedies that may have been available to a customer. The short point is that where the goods failed to comply with the statutory guarantees and the failure to comply was a “major failure”, or a failure which could not be remedied, the customer was entitled to reject the goods and was entitled to receive a refund of the purchase price so long as the “rejection period” had not ended. Importantly, the rejection period was not a fixed or set period of time from the time of purchase, but rather depended on a series of factors including: the type of goods; the use to which a customer was likely to put the goods; the length of time for which it was reasonable for the goods to be used; and the amount of use to which it was reasonable for the goods to be put before such a failure became apparent: see s 262(2) of the ACL.

66    Section 102 of the ACL provided as follows:

102     Prescribed requirements for warranties against defects

(1)     The regulations may prescribe requirements relating to the form and content of warranties against defects.

(2)     A person must not, in connection with the supply, in trade or commerce, of goods or services to a customer:

(a)     give to the customer a document that evidences a warranty against defects that does not comply with the requirements prescribed for the purposes of subsection (1); or

(b)     represent directly to the customer that the goods or services are goods or services to which such a warranty against defects relates.

Note: A pecuniary penalty may be imposed for a contravention of this subsection.

(3)     A warranty against defects is a representation communicated to a customer in connection with the supply of goods or services, at or about the time of supply, to the effect that a person will (unconditionally or on specified conditions):

(a)     repair or replace the goods or part of them; or

(b)     provide again or rectify the services or part of them; or

(c)     wholly or partly recompense the customer;

if the goods or services or part of them are defective, and includes any document by which such a representation is evidenced.

67    Regulation 90 of the Competition and Customer Regulations prescribed the requirements relating to the form and content of warranties against defects. It provided as follows:

(1)     For subsection 102(1) of the Australian Customer Law, the following requirements are prescribed:

(a)     a warranty against defects must be in a document that is transparent;

(b)     a warranty against defects must concisely state:

(i)     what the person who gives the warranty must do so that the warranty may be honoured; and

(ii)     what the customer must do to entitle the customer to claim the warranty;

(c)     a warranty against defects must include:

(i)     in relation to the supply of goods only—the text mentioned in subregulation (2); or

(ii)     in relation to the supply of services only—the text mentioned in subregulation (3); or     

(iii)     in relation to the supply of goods and services—the text mentioned in subregulation (4);

(d)     a warranty against defects must prominently state the following information about the person who gives the warranty:

(i)     the person's name;

(ii)     the person's business address;

(iii)     the person's telephone number;

(iv)     the person's email address (if any);

(e)     a warranty against defects must state the period or periods within which a defect in the goods or services to which the warranty relates must appear if the customer is to be entitled to claim the warranty;

(f)     a warranty against defects must set out the procedure for the customer to claim the warranty including the address to which a claim may be sent;

(g)     a warranty against defects must state who will bear the expense of claiming the warranty and if the expense is to be borne by the person who gives the warranty—how the customer can claim expenses incurred in making the claim;

(h)     a warranty against defects must state that the benefits to the customer given by the warranty are in addition to other rights and remedies of the customer under a law in relation to the goods or services to which the warranty relates.

(1A)     Paragraph (1)(c) does not apply in relation to:

(a)     services mentioned in section 63 of the Australian Customer Law; and (b)     supplies mentioned in section 65 of the Australian Customer Law.

(2)     For the purposes of subparagraph (1)(c)(i), the text is: 'Our goods come with guarantees that cannot be excluded under the Australian Customer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure'.

(3)     For the purposes of subparagraph (1)(c)(ii), the text is ‘Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:

•    to cancel your service contract with us; and

•    to a refund for the unused portion, or to compensation for its reduced value.

You are also entitled to be compensated for any other reasonably foreseeable loss or damage. If the failure does not amount to a major failure you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract’.

(4)     For the purposes of subparagraph (1)(c)(iii), the text is ‘Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:

•    to cancel your service contract with us; and

•    to a refund for the unused portion, or to compensation for its reduced value.

You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or a service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service’.

Contraventions of s 29(1)(m) of the ACL

68    As discussed earlier, the faulty goods representation on the various websites constituted a representation about the “existence, exclusion or effect of” a warranty. The essence of the representation was that customers would not receive a refund (or recompense) for faulty or defective goods if they did not contact the supplier within six months of the purchase date. The ACCC contended that the representation was false or misleading because, as discussed earlier, customers were entitled to reject faulty or defective goods and receive a refund (at least where the fault or defect was a “major failure” or one which could not be remedied) within the rejection period, which may, depending on the circumstances, be more than six months.

69    I am satisfied that the ACCC’s contention in that regard is correct and should be accepted. I am therefore satisfied that the making of the faulty products representation on the various Mosaic websites constituted contraventions of s 29(1)(m) of the ACL.

Contraventions of s 102(2)(a) of the ACL

70    As also discussed earlier, the faulty products term constituted a warranty against defects within the meaning of s 102(3) of the ACL. It also specified a condition that had to be satisfied before a customer could obtain recompense, in the form of a refund, in respect of the faulty goods. That condition was that the customer had notified the supplier of the defect within six months of the purchase date. By publishing the faulty products representation on the Mosaic brands’ websites, Mosaic gave customers a document (within the broad definition of document in s 2 of the ACL) that evidenced a warranty against defects for the purposes of s 102(2)(a) of the ACL. That document did not comply with the requirements prescribed for the purposes of s 102(1) of the ACL which, as discussed earlier, included the detailed requirements set out in reg 90 of the Competition and Customer Regulations. Among other things, the faulty goods representation did not comply with reg 90(1)(c)(ii) because it did not include the text in reg 90(2) of the Competition and Customer Regulations. I am accordingly satisfied that the making of the faulty products representation on the various Mosaic websites constituted contraventions of s 102(2)(a) of the ACL.

DECLARATORY RELIEF

71    There is no specific provision in the ACL which provides for or compels the Court to make a declaration in respect of a person’s contravention of a provision of the ACL. The Court does, however, have a wide discretionary power to make declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The exercise of that discretion in proceedings brought by a regulator, such as the ACCC, respect of contraventions of legislative provisions is generally accepted to be appropriate because such declarations serve to record the Court’s disapproval of the contravening conduct, vindicate the regulator’s claim that the defendant contravened the provision, and assist the regulator to carry out its duties and deter other persons from contravening the provisions: see Australian Competition and Customer Commission v The Construction, Forestry, Mining and Energy Union [2007] ATPR 42-140; [2006] FCA 1730 at [6] and the cases cited therein.

72    Applying those principles, I am satisfied that it is appropriate to make the declarations sought by the ACCC in respect of Mosaic’s contraventions of ss 18, 36(4), 29(1)(m) and 102(2)(a) of the ACL.

PECUNIARY PENALTIES

73    The ACCC sought the imposition of substantial pecuniary penalties against Mosaic. It might at first blush be thought, at least to those not familiar with the applicable principles in respect of pecuniary penalties, to be somewhat pointless to impose large pecuniary penalties against Mosaic in circumstances where there is no prospect that the penalties will ever be paid given that Mosaic is being wound up, or has been wound up, in insolvency. As the following brief discussion of the applicable principles will reveal, however, pecuniary penalties nevertheless have an important role to play in those circumstances. That role is to secure general deterrence; that is, to deter like suppliers of goods from committing the same or similar contraventions.

Applicable principles

74    Subsection 224(1) of the ACL relevantly provided that if a Court is satisfied that a person has contravened certain provisions (relevantly including ss 29(1)(m), 36(4) and 102(2) of the ACL) the Court may order the person to pay to the Commonwealth “such pecuniary penalty, in respect of each act or omission by the person … as the court determines appropriate”. Subsection 224(2) provided that in determining the appropriate penalty, the court must have regard to “all relevant matters” and included a list of some relevant matters, to which reference will be made shortly. Subsection 224(3) in effect specified the maximum penalty that may be imposed in respect of specific contraventions.

75    While s 224 of the ACL does not itself elucidate how the Court should go about determining the appropriate penalty, other than by identifying some “relevant matters” that the Court must have regard to, the general principles in relation to the fixing of pecuniary penalties are well-established.

76    The starting point is that the purpose of imposing a pecuniary penalty is “primarily if not wholly protective in promoting the public interest in compliance”: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 at [55] approving the statement by French J in Trade Practices Commission v CSR Ltd (1991) ATPR ¶41-076 at 52,152; [1990] FCA 521 at [40]; see also Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13 at [15]-[16], [42].

77    It follows that the “appropriate” pecuniary penalty (to use the word used in s 224(1) of the ACL) is one that serves the object of deterrence, both specific deterrence (where possible and relevant) and general deterrence. The Court must “attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene”; and the penalty must not be one which would be “regarded by [the] offender or others as an acceptable cost of doing business”: Pattinson at [15] and [17]; Australian Competition and Customer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 at [66] citing with approval Singtel Optus Pty Ltd v Australian Competition and Customer Commission (2012) 287 ALR 249; [2012] FCAFC 20 at ALR 265 [62]-[63]. The penalty must also not be greater than is necessary to achieve the object of deterrence because “severity beyond that would be oppression” and the penalty must therefore be one which “strikes a reasonable balance between deterrence and oppressive severity”: Pattinson at [40]-[41] citing with approval NW Frozen Foods Pty Ltd v Australian Competition and Customer Commission (1996) 71 FCR 285; [1996] FCA 1134 at FCR 293.

78    As noted earlier, s 224(2) includes a list of the “relevant matters” that the Court must take into account in determining a pecuniary penalty. The relevant matters in that list are: the “nature and extent of the omission and any loss or damage suffered as a result of the act or omission”, the “circumstances in which the act or omission took place” and “whether the person has previously been found by a court in proceedings under Chapter 4 or this Part to have engaged in any similar conduct”. The statutory list of relevant matters is, however, clearly not exhaustive.

79    The matters or factors which might inform the assessment of such a penalty have been said to include both matters pertaining to the nature and character of the contravening conduct and matters pertaining to the character of the contravenor: Pattinson at [18]-[19], [57]. The factors pertaining to the former generally include the circumstances in which the conduct took place, the deliberateness of the contravention and the period over which it extended. The factors pertaining to the latter generally include whether the contravenor has shown a disposition to cooperate with the relevant regulator and, where the contravenor is a company, the size of the company and whether the contravention arose out of the conduct of senior management or at a lower level. There is, however, no “rigid catalogue of matters for attention”: Pattinson at [19], citing with approval Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [91].

80    It is important to emphasise that, given that the purpose of imposing a pecuniary penalty is to deter, not to punish, the types of factors to which reference has been made are only relevant to the extent that they relate to deterrence: Pattinson at [44]. For example, the fact that a contravention of a civil penalty provision was particularly serious because it was deliberate, planned, concealed and carried out by senior management would tend to indicate that a higher penalty should be imposed because only a high penalty would be effective to deter contravening conduct of that nature. The fact that the contravening conduct was serious does not in and of itself compel a higher penalty because, unlike the imposition of sentences for criminal offending, pecuniary penalties are not imposed to punish or ensure that an offender gets his or her “just deserts”.

81    As also noted earlier, s 224(3) specifies what are in effect the maximum penalties that may be imposed in respect of contraventions of specified provisions of the ACL. While the maximum penalty that is prescribed for a contravention may be a relevant consideration when it comes to determining an appropriate pecuniary penalty, the maximum penalty does not constrain the exercise of the discretion beyond requiring “some reasonable relationship between the theoretical maximum and the final penalty imposed”: Pattinson at [55], citing with approval Australian Competition and Customer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181 at [155]-[156]. The “reasonable relationship”, it would appear, is to be determined having regard to the fact that the maximum penalty is intended “to be imposed in respect of a contravention warranting the strongest deterrence within the prescribed cap” (Pattinson at [58]), not by reference to the fact that the maximum penalty is reserved for the worst category of contravening conduct, as is generally the case when imposing a sentence for a criminal offence: Pattinson at [49]-[51].

82    Cases concerning the imposition of pecuniary penalties frequently refer to the principles that are said to apply when multiple civil penalty contraventions are committed during a single course of conduct. Similarly, reference is frequently made to the so-called “totality principle” which is said to apply when the Court is fixing pecuniary penalties for multiple contraventions. Both the course of conduct principle and the totality principle are derived from the principles that apply when sentencing for criminal offences. They address similar issues but are nevertheless conceptually distinct.

83    When sentencing for criminal offences, the course of conduct principle requires that, where an offender is to be sentenced for a “number of technically identifiable offences”, but the offender was “truly engaged upon one multi-faceted course of criminal conduct”, the sentencing court should avoid double punishment by ordering that the sentences for the separate offences be served concurrently, or partly concurrently, or by lowering the individual sentences: Attorney-General v Tichy (1982) 30 SASR 84 at 92-93; cited with approval in Johnson v The Queen (2004) 205 ALR 346; [2004] HCA 15 at [4].

84    The totality principle in criminal sentencing, on the other hand, requires the sentencing court, when passing a series of sentences in respect of separate offences, to review the aggregate sentence to ensure that it is “just and appropriate”, or “look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences”: Mill v The Queen (1988) 166 CLR 59 at 63; [1988] HCA 70 at [8], adopting what was said in Thomas, Principles of Sentencing (Heinemann, 2nd ed, 1979) at 56-57.

85    Both the course of conduct and totality principles are inextricably linked to the overarching principle that, when sentences are to be imposed for multiple offences, the sentencing court must be astute to avoid doubly punishing the offender in respect of overlapping offences and equally astute to ensure that the overall or effective sentence imposed on the offender is proportionate to the gravity of the offending conduct.

86    The course of conduct and totality principles do not directly apply to the fixing of pecuniary penalties. That is not only because, as has already been noted, pecuniary penalties are not imposed to punish, but also because the notion, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention does not apply when fixing pecuniary penalties: Pattinson at [38]. The course of conduct and totality concepts or principles may nevertheless be employed as “analytical tools” that might assist in the assessment of what penalty may be considered reasonably necessary to deter further contraventions: Pattinson at [45]. While the role that those principles may play as analytical tools was not explored in any real depth in Pattinson, the only logical or principled role they could play would appear to be to ensure that, in the case of multiple contraventions, the total penalty is not oppressive or unreasonable, in the sense that it is greater than necessary to achieve the object of deterrence.

The appropriate pecuniary penalties

87    The ACCC submitted that the appropriate pecuniary penalties that the Court should impose in respect of its contraventions of ss 29(1)(m), 36(4) and 102(2)(a) of the ACL were:

(a)    a total penalty of $20 million in respect of the contraventions of s 36(4) of the ACL;

(b)    a total penalty of $5 million in respect of the contraventions of s 29(1)(m) of the ACL; and

(c)    a total penalty of $50,000 in respect of the detailed contraventions of s 102(2) of the ACL.

88    Detailed written and oral submissions were advanced by the ACCC in support of those proposed penalties. While the Court is not bound to accept those submissions, even though the proceeding was effectively undefended and no opposing submissions were advanced, the submissions were nevertheless persuasive and should be accepted. I should also note in that context that it should be accepted that the ACCC, as an experienced and competent regulator in respect of customer law, is in a good position to gauge and evaluate the size of the penalties that are best likely to secure the object of deterrence: see NW Frozen Foods Pty Ltd at FCR 290-295; Fair Work Building Industry Inspectorate at [27], [60].

89    I am satisfied that the penalties proposed by the ACCC are appropriate and consistent with the principles to which reference was made earlier. I need only briefly outline my reasons for so concluding.

90    The maximum penalty for contraventions by a body corporate of ss 29(1)(m) and 36(4) of the ACL were (during the periods when those contraventions occurred) the greater of: $10 million; if the Court is able to determine the value of any benefit that Mosaic obtained that was reasonably attributable to the contraventions – three times the value of that benefit; and, if the Court is unable to determine the value of any such benefit – 10% of Mosaic’s annual turnover during the 12-month period ending at the end of the month in which the act or omission occurred or started to occur.

91    The ACCC contended, correctly, that it is not possible for the Court to determine the value of any benefit obtained by Mosaic that could be said to be reasonably attributable to the contraventions. There was, however, evidence to the effect that Mosaic’s total revenue in the 12 months preceding the contravening conduct was $619,651,000. Ten percent of that figure ($61.97 million) exceeds $10 million. The maximum penalty for each of Mosaic’s contraventions of s 29(1)(m) and 36(4) of the ACL is therefore $61.97 million.

92    As discussed earlier, Mosaic contravened s 36(4) of the ACL on 738,586 occasions. Given the very large number of contraventions, the effective overall maximum penalty for all the contraventions was over $40 billion, a figure so large that it provides no real guidance or assistance in determining the appropriate penalty: see Australian Securities and Investments Commission v Vanguard Investments Australia Ltd (No 2) [2024] FCA 1086 at [110]; Reckitt Benckiser at [157].

93    As for the contraventions of s 29(1)(m) of the ACL, there is authority (albeit in the context of a different statutory provision concerning misleading representations) to the effect that, where a misleading representation is made on a website, a separate misleading representation is made – and a separate contravention of the relevant provision prohibiting the making of misleading representations arises - each time a person accesses the relevant page of the website: Australian Securities and Investments Commission v La Trobe Financial Asset Management Ltd [2021] FCA 1417 at [90] and the cases there cited. It is not possible to determine how many times customers accessed the relevant webpages of the Mosaic brands’ websites. It is therefore impossible to determine how many times Mosaic contravened s 29(1)(m) of the ACL, though it may be inferred that it did so many thousands of times. The effective overall maximum penalty for all the contraventions is therefore again likely to be a figure so large that it would provide no real guidance or assistance in determining the appropriate penalty.

94    The maximum penalty for the contraventions by a body corporate of s 102(2) of the ACL (during the periods when those contraventions occurred) was $50,000. As is the case in respect of Mosaic’s contraventions of s 29(1)(m) of the ACL, Mosaic is likely to have contravened s 102(2) of the ACL on many thousands of occasions.

95    As adverted to earlier, the circumstances of this case are somewhat unusual when it comes to determining the appropriate pecuniary penalties because Mosaic has been, or is in the process of being, wound up. It follows that any penalties that are imposed will almost certainly not be paid. It also follows that the object of specific deterrence is not a material or significant consideration when it comes to fixing the penalties. The primary, if not sole, objective in imposing pecuniary penalties in the circumstances of this case is general deterrence – that is, deterring other corporations in a similar position to Mosaic from engaging in similar contravening conduct.

96    There are numerous factors and circumstances which suggest that substantial pecuniary penalties should be imposed on Mosaic so as to deter corporations who are in a similar position to it from committing similar contraventions of the ACL in the future. The penalties must be high enough that they will not be regarded as an acceptable cost of doing business by other corporations who might be tempted to engage in similar contravening conduct.

97    Mosaic’s contraventions of the ACL were undoubtedly serious contraventions. They occurred over lengthy periods – about six months in the case of the delivery time contraventions and about 13 months in the case of the faulty goods and warranties contraventions.

98    While the delivery time contraventions could not be said to be deliberate, they were nevertheless the product of defective and deficient systems and processes and a lack of appropriate care and attention on the part of senior management. Senior managers of Mosaic were aware that Mosaic was experiencing despatch and delivery delays at the time. They were also aware, or ought reasonably to have been aware, that Mosaic’s logistics, delivery and customer service systems and processes were deficient. Senior management were certainly aware that very large numbers of complaints had been received from customers about delays in the delivery of goods purchased online. Notwithstanding their knowledge of those matters, senior management failed to take any, or any appropriate, steps to review and amend the statements on the brands’ websites concerning delivery times. Perhaps more significantly, senior management did not take any, or any reasonable or appropriate, steps to ensure that Mosaic did not continue to accept payment for goods purchased online in circumstances where Mosaic clearly could not guarantee that those goods would be delivered within the timeframes referred to on the websites, or within a reasonable time.

99    There could also be no doubt that Mosaic’s delivery time contraventions caused many customers to experience significant inconvenience arising from delayed deliveries or even non-deliveries.

100    The ACCC did not contend that the faulty goods and warranties contraventions were deliberate. Again, however, it is readily apparent that Mosaic’s senior management failed to take appropriate steps to ensure that the statements made on the brands’ websites concerning warranties were not misleading and complied with the customer guarantee regime in the ACL. The failure of senior management in that regard was all the more unacceptable given that Mosaic had previously given the ACCC undertakings and had received infringement notices concerning its non-compliance with the customer guarantee regime in the ACL.

101    Mosaic was, at the time, a very large public company. Indeed, it was one of the largest speciality fashion retailers in Australia. It generated substantial revenue, including from its online sales. While it had not previously been found by a court to have engaged in conduct that contravened the ACL, in May 2021 it gave, and the ACCC accepted, undertakings pursuant to s 87B of the Competition and Customer Act. In the same month it paid five infringement notices under s 134A of the Competition and Customer Act totalling $630,000, and in September 2022 it paid another two infringement notices totalling $266,400. Those infringement notices concerned conduct that was similar to the faulty goods and warranties contraventions. Mosaic was certainly not entitled to receive any credit or leniency for its past compliance with the ACL, or any culture of compliance in that regard.

102    As discussed earlier, Mosaic engaged in conduct which contravened ss 36(4) of the ACL on 738,586 occasions. It is obviously not feasible or practicable to impose a separate penalty in respect of each individual contravention of s 36(4). Similarly, Mosaic engaged in conduct which contravened ss 29(1)(m) and 102(2)(a) on many occasions over a lengthy period. It is not possible to determine exactly how many times Mosaic contravened those provisions and it is therefore not possible to impose separate penalties in respect of individual contraventions of that provision. It may, however, be accepted that both the delivery time contraventions and the faulty goods and warrant contraventions involved courses of conduct and that the penalties imposed should reflect that fact. Likewise, regard should be had to the totality principle, as a tool of analysis, in fixing the aggregate penalties to be imposed on Mosaic. In that respect, care should be taken to ensure that the overall penalty is not oppressive, in the sense that it is more severe than is necessary to meet the objective of deterrence.

103    Having regard to all the factors and circumstances to which reference has just been made, as well as the principles concerning pecuniary penalties referred to earlier, I am satisfied that the pecuniary penalties proposed by the ACCC are appropriate penalties.

DISPOSITION

104    It is appropriate to make the declarations of contravention sought be the ACCC in respect of the delivery time contraventions and the faulty goods and warranties contraventions by Mosaic. Mosaic should be ordered to pay the pecuniary penalties proposed by the ACCC in respect of those contraventions which are considered to be appropriate penalties in all the circumstances, as well as the ACCC’s costs incidental to the proceeding.

Associate:

Dated:    16 September 2026