Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 5)

• Jurisdiction: Australia Federal only
• Judge: GLEESON J
• Judgment Date: 20 September 2019
• Neutral Citation: [2019] FCA 1544
• Date: 20 September 2019
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 5) [2019] FCA 1544

File number:	NSD 1610 of 2015
Judge:	GLEESON J
Date of judgment:	20 September 2019
Catchwords:	CONSUMER LAW – contraventions of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth) – application for declarations, pecuniary penalties, a consumer redress order, compensatory orders and costs – systemic and individual breaches of the ACL – whether the second applicant suffered loss as a result of the contravening conduct ; PRACTICE AND PROCEDURE – where applicants seek to withdraw undertaking not to enforce monetary orders against respondent in liquidation – whether undertaking precludes applicants from lodging proof of debt – undertaking varied
Legislation:	Competition and Consumer Act 2010 (Cth) Sch 2 ss 18, 21, 29, 74, 75, 76, 78, 79, 155, 224, 237, 239 Corporations Act 2001 (Cth) ss 471B, 500, 553B Federal Court of Australia Act 1976 (Cth) s 53 Higher Education Support Act 2003 (Cth) Sch 1A cl 46AA Higher Education Support Amendment (VET FEE-HELP Student Protection) Act 2018 (Cth) Trade Practices Act 1974 (Cth) ss 45D(1), 52, 53(g), 82, 87
Cases cited:	Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 Australian Competition and Consumer Commission v Acquire Learning & Careers Pty Ltd [2017] FCA 602 Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; (2017) 258 FCR 312 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited [2015] FCA 330; (2015) 327 ALR 540 Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 Australian Competition and Consumer Commission v Ford Motor Company of Australia Limited [2018] FCA 703; (2018) 360 ALR 124 Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liquidation) (No 3) [2017] FCA 1018 Australian Competition and Consumer Commission v Hillside (Australian New Media) Pty Ltd t/as Bet365 (No 2) [2016] FCA 698 Australian Competition and Consumer Commission v LG Electronics [2006] FCA 1118 Australian Competition and Consumer Commission v Midland Brick Company Pty Ltd [2004] FCA 693; (2004) 207 ALR 329 Australian Competition and Consumer Commission v Oakmoore Pty Ltd (No 2) [2018] FCA 1170 Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25 Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761; (2011) 282 ALR 246 Australian Competition and Consumer Commission v South East Melbourne Cleaning Pty Ltd (in liq) [2015] FCA 25 Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; (2002) 201 ALR 618 Australian Competition and Consumer Commission v We Buy Houses Pty Ltd (No 2) [2018] FCA 1748 Commonwealth Bank of Australia v The Law on Debenture Trust Corporation Plc [no 4] [2018] WASC 165 Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109 Johnson v R [2004] HCA 15; (2004) 205 ALR 346 King v Yurisich [2006] FCA 1369; (2006) 59 ACSR 598 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 Mathers v Commonwealth of Australia [2004] FCA 217; (2004) 134 FCA 135 Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 Raffles Pty Ltd (in liq) v Cotis [1971] VR 637 Registrar of Aboriginal and Torres Strait Islander Corporations v Matcham (No 2) [2014] FCA 27 Rural Press v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 5 Secretary, Department of Health and Aging v Prime Nature Prize Pty Ltd (in liq) [2010] FCA 597 Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249
Date of hearing:	28 January 2019, 22 July 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	Catchwords
Number of paragraphs:	127
Counsel for the Applicants:	N O’Bryan SC with D Tynan
Solicitor for the Applicants:	Australian Government Solicitor
Counsel for the liquidators of the Respondent:	A Zahra
Solicitor for the liquidators of the Respondent:	Bridges Lawyers

ORDERS

		NSD 1610 of 2015
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION First Applicant ; COMMONWEALTH OF AUSTRALIA Second Applicant
AND:	CORNERSTONE INVESTMENTS AUST PTY LTD (IN LIQUIDATION) (ACN 082 383 640) Respondent

JUDGE:	GLEESON J
DATE OF ORDER:	20 September 2019

THE COURT DECLARES THAT:

1. In the period June to mid-December 2014, the respondent trading as “Empower Institute” (Empower), in connection with the supply or possible supply, or marketing of the supply, of online vocational education courses (courses) to consumers, conducted a system or engaged in a pattern of behaviour:

   1. which comprised:

      1. using recruiters who were practically untrained, who received no training in the requirements of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth), and who were remunerated on a commission basis for securing enrolments;

      2. offering inducements to consumers to enrol, particularly in the form of Google Chromebooks; and

      3. making unsolicited consumer agreements with no process for ensuring compliance with the relevant provisions of the ACL,

   2. which occurred in circumstances where:

      1. Empower’s system was directed to enrolling students who were disengaged members of society (predominantly long term unemployed) who...