Productivity Partners Pty Ltd v Australian Competition and Consumer Commission

HIGH COURT OF AUSTRALIA

GAGELER CJ,
GORDON, EDELMAN, STEWARD, GLEESON, JAGOT AND BEECH‑JONES JJ

Matter No S118/2023

PRODUCTIVITY PARTNERS PTY LTD (TRADING
AS CAPTAIN COOK COLLEGE) & ANOR  APPELLANTS

AND

AUSTRALIAN COMPETITION AND CONSUMER
COMMISSION & ANOR  RESPONDENTS

Matter No S116/2023

BLAKE WILLS  APPELLANT

AND

AUSTRALIAN COMPETITION AND CONSUMER
COMMISSION & ORS  RESPONDENTS

Productivity Partners Pty Ltd v Australian Competition and Consumer Commission
Wills v Australian Competition and Consumer Commission

[2024] HCA 27

Date of Hearing: 7 & 8 February 2024
Date of Judgment: 14 August 2024

S118/2023 & S116/2023

ORDER

In each matter:

Appeal dismissed with costs.

On appeal from the Federal Court of Australia

Representation

J C Giles SC with R B Davies for the appellants in S118/2023 and the second and third respondents in S116/2023 (instructed by MinterEllison)

M R Hodge KC with C E Bannan for the appellant in S116/2023 and the second respondent in S118/2023 (instructed by HWL Ebsworth Lawyers)

S P Donaghue KC, Solicitor-General of the Commonwealth, and O Bigos KC with S A C Patterson and L G Moretti for the first respondent in both matters (instructed by Johnson Winter Slattery)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Productivity Partners Pty Ltd v Australian Competition and Consumer Commission
Wills v Australian Competition and Consumer Commission

Trade practices – Consumer protection – Unconscionable conduct – Where s 21 of Australian Consumer Law ("ACL") relevantly provided that persons must not, in trade or commerce, in connection with supply of services, "engage in conduct that is, in all the circumstances, unconscionable" – Where s 224(1) of ACL relevantly provided that Court may order person to pay pecuniary penalty when that person "knowingly concerned in, or party to, the contravention" of provisions including s 21 – Where Productivity Partners Pty Ltd ("College") offered vocational education and training ("VET") courses funded through Commonwealth loan program – Where College altered enrolment process to remove safeguards ameliorating known risks of unwitting or unsuitable persons becoming and remaining enrolled at date on which VET fees became claimable by College from Commonwealth – Where Mr Wills was Chief Operating Officer of parent company of College and, for part of relevant period, acting Chief Executive Officer of College – Whether College engaged in unconscionable conduct in contravention of s 21 of ACL – Whether Mr Wills knowingly concerned in or party to that contravention.

Words and phrases – "accessorial liability", "community expectations", "community standards", "conscience", "corporate systems liability", "ecclesiastical", "essential elements", "essential facts", "essential matters", "intentionally participated", "involved", "knowingly concerned", "moral obloquy", "normative standard", "offensive to conscience", "sharp practice", "societal norms of acceptable commercial behaviour", "unconscionable conduct", "values of Australian common law".

Competition and Consumer Act 2010 (Cth), s 139B, Sch 2 (Australian Consumer Law), ss 21, 22, 224(1).

GAGELER CJ AND JAGOT J.  

Overview

1. These appeals concern the application of the proscription against unconscionable conduct in s 21 of the Australian Consumer Law[1] ("the ACL") to a corporation offering and providing online vocational education and training ("VET") funded through a Commonwealth scheme known as the Vocational Education and Training Fee Higher Education Loan Program ("the VFH scheme"). Through the VFH scheme, the Commonwealth assisted people to fund their VET by paying an eligible person's tuition fees ("VET fees") directly to a registered training organisation which was a "VET provider" on the basis that the person would incur a debt to the Commonwealth, in the amount of the VET fees plus a 20% "loan fee" ("VFH debt"), which the person would be required to repay to the Commonwealth over time through the tax system once the person earned above a specified threshold.

   [1]Competition and Consumer Act 2010 (Cth), s 131(1) and Sch 2 ("ACL").

2. Productivity Partners Pty Ltd trading as Captain Cook College ("the College") was a VET provider that offered, relevantly, online VET courses. Site Group International Ltd ("Site") acquired the College in 2014. Blake Wills was the Chief Operating Officer of Site and, between November 2015 and January 2016, acting Chief Executive Officer ("CEO") of the College.

3. The Australian Competition and Consumer Commission ("the ACCC") alleged that the College engaged in a system of conduct, or a pattern of behaviour, in respect of persons who enrolled in the College's online courses that was, in all the circumstances, unconscionable in contravention of s 21 of the ACL. The principally relevant conduct was that, during the period from 7 September 2015 to 18 December 2015 (called "the impugned enrolment period"), the College changed its process for enrolment by removing two system controls which had previously ameliorated known risks of unwitting or unsuitable persons becoming enrolled and remaining enrolled at the date on which VET fees became claimable by the College from the Commonwealth in respect of their enrolment under the VFH scheme. The principally relevant circumstances were that the College claimed VET fees from the Commonwealth under the VFH scheme in respect of people enrolled in the impugned enrolment period with the consequence that, given the structure of the VFH scheme, those people incurred a VFH debt to the Commonwealth in the amount of the VET fees paid plus the 20% "loan fee".

4. The ACCC further alleged that Mr Wills was knowingly concerned in the College's contravention of s 21 of the ACL by operation of s 224(1)(e) of the ACL (which relevantly enables a penalty for a contravention to be imposed on a person who "has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision") and that Site was in turn knowingly concerned in the College's contravention by operation of s 139B of the Competition and Consumer Act 2010 (Cth) (which provides for certain conduct of directors, employees or agents of bodies corporate to be taken to have been engaged in also by the body corporate).

   Courts below

5. The primary judge in the Federal Court of Australia, Stewart J, found that the College had engaged in a system of conduct, or a pattern of behaviour, in respect of people who were enrolled in online courses in the impugned enrolment period which was, in all the circumstances, unconscionable in contravention of s 21 of the ACL and that Mr Wills, and through him Site, were knowingly concerned in the College's systemic unconscionable conduct and therefore also liable for that conduct.[2] 

   [2]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472.

6. On appeal to the Full Court of the Federal Court of Australia, the majority, Wigney and O'Bryan JJ, agreed with the primary judge and concluded that the appeals should be dismissed other than in one relevant respect concerning the date from which Mr Wills (and, through him, Site) was knowingly concerned in the College's contravention of s 21 of the ACL. The primary judge had found that date to be 7 September 2015. The majority in the Full Court found that date to be 20 November 2015, being the date on which Mr Wills became the acting CEO of the College. Downes J, in dissent in the appeals to the Full Court, would have allowed the appeals of the College and Site, and of Mr Wills.[3] In these reasons, the majority in the Full Court will be referred to as the Full Court.

   [3]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180.

   The appeals

7. This Court granted special leave to appeal both to the College and Site ("the Productivity Partners appeal") and separately to Mr Wills ("the Wills appeal").

8. In the Productivity Partners appeal, there are two principal grounds of appeal. The first is that the Full Court erred in upholding the finding of the primary judge that the College engaged in unconscionable conduct within the meaning of s 21 of the ACL without the primary judge having made adequate reference to matters listed in s 22 of the ACL, being matters to which s 22 provides a court "may have regard" for the purpose of determining whether a person has contravened s 21. The second is that the Full Court erred in holding that the College's conduct, in removing the two system controls and operating an enrolment system without those controls, constituted unconscionable conduct in contravention of s 21 of the ACL in the absence of an intention that the risks ameliorated by those controls eventuate. There is also a third ground of appeal in the Productivity Partners appeal relating to Site's liability (through Mr Wills) which is wholly consequential on the outcome of the Wills appeal.

9. In the Wills appeal, there are also two principal grounds of appeal. The first is that the Full Court erred in finding that Mr Wills had the requisite knowledge to be knowingly concerned in the College's contravention of s 21 of the ACL in the absence of any finding that Mr Wills knew that the College's conduct involved taking advantage of consumers or was otherwise against conscience. The second is that the Full Court erred in finding that Mr Wills satisfied the participation element for accessorial liability by his conduct before he had knowledge of the essential matters making up the contravention (being from 20 November 2015 as found by the Full Court) and by his continued holding of positions of authority, but no identified positive acts, after he had the requisite knowledge. Mr Wills also added a third, derivative, ground of appeal that he could not be liable if the College itself had not contravened s 21 of the ACL.

10. By notice of contention in each appeal, the ACCC contends that the Full Court erred in holding that Mr Wills (and through him, Site) was knowingly concerned in the College's contravention of s 21 from 20 November 2015 only, and not from the earlier date of 7 September 2015. It will be apparent that the second ground of appeal in the Wills appeal cannot be maintained if the ACCC succeeds in that contention.

    Summary of conclusions

11. In respect of the Productivity Partners appeal, the findings of the primary judge either not challenged or undisturbed on appeal to the Full Court amply support the conclusion of the Full Court that the College had engaged in a system of conduct, or a pattern of behaviour, in respect of people who were enrolled in online courses in the impugned enrolment period that was, in all the circumstances, unconscionable in contravention of s 21 of the ACL throughout the impugned conduct period (the period from 7 September 2015 to September 2016, during which the College claimed and retained VFH revenue derived from students enrolled during the impugned enrolment period). Section 22 of the ACL does not require a court to evaluate the impugned conduct by reference to the presence or absence of the circumstances that provision specifies irrespective of the relevance of those circumstances to the impugned conduct or to the cases as put by the parties to the court. The second substantive ground of appeal, as will be explained, depends on an incomplete and therefore inaccurate characterisation of the salient facts.

12. In respect of the Wills appeal, it was not necessary for Mr Wills to know that the impugned conduct was unconscionable for him to be found to have been knowingly concerned in the College's contravention of s 21 of the ACL. The question whether conduct is unconscionable or not is one of characterisation, not fact. To be knowingly concerned in the contravention of s 21 of the ACL it was necessary only that it be proved that Mr Wills knew the essential matters which together made up the conduct ultimately characterised by the primary judge and the Full Court as unconscionable, not that he knew that the conduct could, let alone would, be so characterised.

13. As will also be explained, the only error by the Full Court was in overturning the primary judge's finding that Mr Wills was knowingly concerned in the contravention of s 21 of the ACL from 7 September 2015. There was no error in the primary judge's finding to that effect and, accordingly, no basis for the Full Court to overturn that finding.

14. We turn now to a summary of the relevant findings of fact below, none of which were challenged in the appeals. We also note in this context that Mr Wills was available to but did not give evidence in the hearing before the primary judge.

    The VFH scheme

15. The VFH scheme operated under the Higher Education Support Act 2003 (Cth). In 2012 the scheme was amended with the aim of broadening the demographic of students who qualified for assistance for the express purpose of addressing low participation rates from identified demographic groups – including Indigenous Australians, people from non-English‑speaking backgrounds, persons with a disability, people from regional and remote areas, people from low socio-economic backgrounds, and people not currently engaged in employment.

16. A person's entitlement to loan funding under the VFH scheme was conditional on (amongst other things) being enrolled in a VET unit of study, remaining enrolled in that unit of study at the end of the relevant "census date", and completing a request for Commonwealth assistance form on or before the census date. The "census date" for a VET unit of study was the date determined by the VET provider to be the last date on which a person enrolled could withdraw without incurring any VFH debt to the Commonwealth. The College's courses would generally have several census dates, with the tuition fees (and the related VFH debt) being proportionally allocated across those dates.

17. An enrolled person incurred a VFH debt to the Commonwealth immediately after a census date. Because the Commonwealth may have paid the VET fees before that date, a VET provider was required to repay any VET fees paid in respect of a VET unit of study if the enrolled person withdrew on or before the relevant census date. An enrolled person could therefore withdraw from a VET unit of study on or before the first census date without incurring any financial liability to the VET provider or to the Commonwealth.

18. The Full Court fairly described the VFH scheme as involving a "moral hazard" insofar as the VET provider received the benefit but did not bear the cost of enrolling persons who did not have a proper understanding of the obligation to pay the course fees or a realistic capacity to complete the course in which they enrolled.[4]

    [4]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 198 [53].

19. As the primary judge put it, the VFH scheme "gave rise to an obvious risk, being the risk of unsuitable or otherwise insufficiently interested or committed [persons] being too easily or casually, or unconscionably or deceptively, signed up as students, progressing through their census dates thereby incurring debts to the Commonwealth and the VET provider being paid its tuition fees, and the [enrolled persons] not otherwise engaging with the course in any meaningful way or receiving any meaningful benefit".[5]

    [5]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 481 [22].

20. As the Full Court put it, persons "might be enrolled in circumstances where they had no or limited understanding of the obligations they were incurring because there was no immediate financial impact for them, and in circumstances where they were not capable of undertaking the course for which they were enrolled".[6]

    [6]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 199 [54].

21. These risks and problems were known publicly through Senate inquiries and media reports and privately by the College and Site before 7 September 2015.

    Management of the College

22. The College obtained approval to offer units of study through the VFH scheme on 30 March 2012. Site acquired the shares in the College in 2014.

23. As at mid-2015, the College represented a substantial proportion of Site's consolidated revenue and profits. The financial performance of the College was very significant to the performance of Site overall, and the performance of the College would have been of key concern to Mr Wills.

24. An Advisory Board for the College was established in May 2014. Mr Wills was a member. The charter of the Advisory Board included a "mission", amongst other things, to plan strategic initiatives, to identify and analyse growth opportunities, and to agree on opportunities to be pursued. The key areas of reporting and responsibility for the Advisory Board included financial and operational performance as well as sales and marketing. The charter also said that:

    "The Chief Executive Officer has primary responsibility to the Board for the affairs of the Business.

    The Board appoints the Chief Executive Officer to manage the business on behalf of it and shareholders and must delegate sufficient powers to allow him to manage effectively. The Chief Executive Officer must carry out the objectives of the Board in accordance with its instructions, and report to the Board all matters the Chief Executive Officer considers to be material to the affairs of the Company."

25. Meetings of the Advisory Board occurred monthly from July 2015. Typically, Mr Wills chaired and "facilitated" these meetings, which the senior management of the College attended.

    The College's business model

26. The College offered the following online courses during the relevant period: Diploma of Business, Diploma of Project Management, Diploma of Information Technology, and Diploma of Human Resources Management. These courses had between two and four units of study each. Each unit of study had a census date, being the deadline for the person enrolled to withdraw from the course without incurring any liability under the VFH scheme. An enrolled person would pass their census date and incur a debt for a unit of study two weeks after the commencement of that unit of study. The course fees meant that the financial obligation assumed by enrolling in one of the College's online VET units of study and incurring a debt was substantial, with course fees ranging, at times during the impugned enrolment period, from a total of $13,000 to $20,000.

27. The College used marketing and sales agents, referred to by it as "course advisors" ("CAs"), to "recruit" persons to enrol in online courses the College offered. Before Site acquired the College, approximately 80% of people enrolled in courses offered by the College had been recruited by the College's then sole marketing and sales agent. After Site acquired the College, the College also contracted with other marketing and sales agents. In each case, "the commission structures were such as to strongly incentivise the agents to recruit students and ensure that they passed at least their first census date and incurred VFH debts".[7]

    [7]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 195 [42].

28. Those aspects of the College's business model compounded the risks known to be inherent in the VFH scheme in two critical respects.

29. First, the College's outsourcing of the recruitment of students to marketing and sales agents remunerated on a commission basis upon the student passing a census date meant that the "College was vulnerable to an obvious risk that its agents might pursue commission revenue in an unethical manner: agents might seek to recruit persons who were unsuitable to undertake the online courses of study offered by the College (for example, having insufficient language, literacy or numeracy skills or no access to a computer) or might engage in misleading conduct about the financial obligations that would be incurred by the student".[8] This was referred to by the primary judge and the Full Court as the "CA misconduct risk".

    [8]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 199 [56].

30. Second, the "College provided its courses through an online campus. This meant that the College had no face to face contact with students and only dealt with students online or via telephone. Dealing with students in that manner increased the difficulty of guarding against the risk of students being misled or unsuitable students being enrolled. That problem was known to the College and its senior managers."[9] This was referred to by the primary judge and the Full Court as the "unsuitable enrolment risk".

    [9]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 199 [57].

31. The primary judge found, and the Full Court accepted, that key personnel at the College, and Mr Wills at Site, were aware of both the CA misconduct risk and the unsuitable enrolment risk.

    The College's system controls

32. Before the changes made during the impugned enrolment period, the College ameliorated the CA misconduct risk and the unsuitable enrolment risk by two system controls.

33. The first of the system controls was an outbound quality assurance ("QA") call undertaken by an admissions officer at the College as part of the enrolment process. The QA call would generally occur 48 hours after the person had submitted an enrolment application form and a pre-enrolment quiz provided to them by a CA, such that the CA would not be present at the time of the call. The purpose of the call was to ensure that the person understood the commitment they were making under the VFH scheme and to identify any reasons that suggested the person may not have the ability to undertake the course.

34. The second of the system controls was a process, known as a "campus driven withdrawal", in accordance with which the online attendance of an enrolled person would be monitored by a student support officer or campus administrator in the first weeks of study and, if a person was not engaged online and remained uncontactable during that period, they would be withdrawn before the first census date.

    Changes to system controls during the impugned enrolment period

35. From April 2015 the College experienced declining enrolments, with the College's marketing and sales agents reporting to the College that its enrolment processes were "convoluted and difficult".[10] The obvious inference, which the primary judge drew, was that "the College's enrolment process was adversely affecting the agents' commission revenue – the agents would not receive any commission unless the student passed the first census date and would not receive their whole commission unless the student passed the second census date".[11]

    [10]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 203 [71].

    [11]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 204 [76].

36. Driven by "sales and marketing objectives",[12] the College's management – and Mr Wills, who was involved in its management – responded by adopting two changes to the College's system controls. These changes were implemented on 7 September 2015.

    [12]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 204 [76].

37. First, the College ceased making outbound QA calls and instead allowed CAs to initiate inbound QA calls to an admissions officer of the College at the time the person was being enrolled, such that the CA would be present at the time of the call. Second, the College ceased campus driven withdrawals.

38. The positive effects of the changes on the College's declining enrolments and consequential deteriorating financial position were dramatic and rapid. The College went from having just a few hundred people in total to a few hundred joining every week. The College's financial results, circulated to Mr Wills, showed the College's VFH revenue to have increased by 255% from August to September 2015. Revenue for the month of December 2015 was more than 5000% greater than the average for July and August 2015.

39. The negative effects of the changes on the number of unsuitable persons enrolled were also dramatic and rapid. The primary judge found that in the six months from January to June 2015, there was not a single person who was enrolled in the College and who progressed through at least one census and incurred a VFH debt with whom the College had had no contact after the initial QA call. In contrast, in the 11‑month period from July 2015 to May 2016, there were 1859 people who progressed through at least one census and incurred a VFH debt with whom the College had had no contact after the initial QA call.

40. Subsequent analysis of the College's records comparing the period from 1 November 2014 to 6 September 2015 (approximately ten months) and the period from 7 September to 18 December 2015 (approximately three months) yielded these results:[13]

    [13]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 214-215 [107]-[108].

Description	Earlier Period	Relevant Period
(1)	Length of the period	10 months	3 months
(2)	No. of course enrolments	1,316	7,324
(3)	No. of enrolments through C1	806	6,032
(4)	% of enrolments through C1 (i.e., conversion rate)	61.25%	82.36%
(5)	% of enrolments withdrawn before C1 (i.e., attrition rate)	38.75%	17.64%
(6)	Tuition fees claimed (and not refunded, re-credited or reversed)	$7,403,000	$54,165,875
(7)	% of enrolments through at least C1 with no LMS [learning management system] log in	27.9%	86.5%
(8)	Tuition fees claimed (and not refunded, re-credited or reversed) in respect of enrolments through at least C1 with no LMS log in	$1,999,313	$46,136,459
(9)	% of enrolments through at least C1 who did not complete any unit of competency	81.9%	98.9%
(10)	Tuition fees claimed (and not refunded, re-credited or reversed) in respect of enrolments through at least C1 who did not complete any unit of competency	$5,650,375	$49,579,168
(11)	% of enrolments through at least C1 who did not complete the course	93.2%	99.7%
(12)	Tuition fees claimed (and not refunded, re-credited or reversed) in respect of enrolments through at least C1 who did not complete the course	$7,078,250	$50,063,293

41. The primary judge's unchallenged finding was that the two changes to the enrolment and withdrawal processes substantially caused these dramatic changes. The Full Court's unchallenged findings included that the results from the earlier period: (a) reflected poorly on the practices of the College's agents; (b) exposed that many of the persons enrolled were "not 'suitable', in the sense that they either had no interest in undertaking the course for which they were enrolled or had no capability to do so whether as a result of a lack of language, literacy and numeracy skills or technology skills or access";[14] and (c) exposed that of those enrolled persons who passed through the first census date (and incurred a VFH debt), about 82% did not complete any unit of competency and about 93% did not complete the course. In the second, and impugned, period, the Full Court's unchallenged findings included that: (a) the number of enrolments increased by a factor of about 20; (b) the percentage of enrolled persons who withdrew or were withdrawn prior to the first census date reduced to about 20%; and (c) the percentages of enrolled persons who passed through the first census date (and incurred a VFH debt) and who never accessed the learning management system, who did not complete any unit of competency and who did not complete the course were, respectively, about 87%, 99% and almost 100%.

    [14]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 215 [112].

    Government VFH loan cap

42. On 1 December 2015, the Commonwealth announced a cap on the total VFH loans existing VET providers would be able to issue in 2016.

43. The Department of Education and Training informed Mr Cook on 18 December 2015 that the cap for the College for 2016 would be $16,818,413. The consequence was that the College could not enrol any new students in 2016. The College ceased enrolling students in its online courses on 18 December 2015.

44. However, the College continued to claim VFH revenue from the Commonwealth, in respect of the persons enrolled between 7 September and 18 December 2015, until September 2016. By the College claiming the VFH revenue, the enrolled person incurred the corresponding debt (plus the 20% loan fee) to the Commonwealth.

    Unchallenged conclusions below

45. The primary judge concluded that allowing persons who could not be contacted by the College to remain enrolled beyond the first census date so that the College could claim the VFH revenue from the Commonwealth "was to act against conscience; it was a sharp practice that was manifestly unfair to such [persons]; it was driven by avarice without regard to the interests of such [persons]; it preyed on their vulnerability (being their being prey to CA misconduct, their unsuitability or their uncontactability)".[15]

    [15]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 571 [500].

46. The Full Court rejected the challenge to these conclusions, saying:[16]

    "We reject the appellants' further submission that the primary judge's findings do not demonstrate that the College took advantage of the risk of agent misconduct. The findings demonstrate precisely that, and that is what the primary judge found (at PJ [500]). The risks and problems associated with the VFH scheme and the College's use of agents to recruit students were known to the College. There could not be a more powerful demonstration of the risks and problems than the fact that, prior to the enrolment process changes, about 50% of enrolled students withdrew or were withdrawn before the first census date. This was not merely a theoretical risk; it was a manifest problem. It was plain that the College's agents had been recruiting large numbers of students who did not understand what they were committing to. The College knew that the outbound QA call enrolment procedure and the campus driven withdrawal procedure provided important safeguards against that problem. The catalyst for the College to change its enrolment process and remove those safeguards was the fact that agents were increasingly referring students to VET providers other than the College because they were unhappy with the College's enrolment process, and the College's revenue was declining as a result. The College changed its enrolment process in consultation with its agents to placate its agents. It removed the two safeguards for students with the result that more students would pass through the first census, incurring a VFH debt, and agents would receive more commission. This gave agents the incentive to refer more students to the College. The result was that the College's revenue experienced an exponential increase, brought about by the combined effect of an increased number of students enrolling and a much higher proportion of those students passing the first census. In changing its enrolment process, the College took advantage of the known risks and problems of the VFH scheme and its recruitment system to gain a financial benefit for itself to the disadvantage of persons who enrolled in circumstances where the person did not do so willingly and with full knowledge of the obligation being incurred (the VFH debt) or where the person was unsuitable for enrolment because they lacked sufficient language, literacy or numeracy skills or technology skills or access."

    [16]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 235 [177].

47. The Full Court noted the email from Mr Cook to, amongst others, Mr Wills on 20 September 2015 saying that there was "already a very robust and rigorous agent selection, on boarding and monitoring process" and that the College was "taking what we believe are the necessary precautions". The Full Court also noted the precautions on which the College relied to defend its conduct, being: (a) contractual obligations in its contracts that required agents to carry out sales fairly, providing accurate information to prospective students; (b) an agent induction and on-boarding process comprised of a training presentation and a knowledge quiz aimed at training agents to act appropriately; (c) maintaining a student complaints register, agent issues and complaints register and CA monitoring log to address agent misconduct; (d) speaking directly to prospective students during the inbound QA call to confirm their contact details and provide information, including withdrawal information, and ascertaining whether prospective students completed the required pre-enrolment questions; (e) a system for admissions officers to flag concerns about a QA call or student, so that enrolment was not processed until the concern was resolved; (f) terminating relationships with marketing partners or individual agents when misconduct had been established; and (g) reversing enrolments or reimbursing students' VFH debts in cases in which the College thought CA misconduct had occurred.

48. The Full Court observed, however, that none of these matters, individually or together, were "sufficient to protect students and there was no evidence from the corporate respondents to support any finding that any officer on behalf of the corporate respondents believed that these components operated effectively to protect students".[17] The Full Court concluded that:[18]

    "the College could not have had any basis for a belief that the elements of its business systems [on which it relied] would materially reduce the risk, which arose from the unethical or careless conduct of recruitment agents and which regularly materialised, of persons being enrolled in the online campus in circumstances where the person does not do so willingly and with full knowledge of the obligation being incurred or where the person is unsuitable for enrolment because they lack sufficient language, literacy or numeracy skills or technology skills or access. Rather, the elements of its business systems that were proven to have materially reduced that risk were the outbound QA call and particularly the campus driven withdrawal process. Under financial pressure brought about by agents bypassing the College because of its more stringent enrolment processes, the College removed those elements of its system."

    [17]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 235-236 [178].

    [18]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 237 [179].

49. Overall, the Full Court concluded that "the effect of the College's decision to change its enrolment process ... foreseeably, indeed inevitably, inflicted harm on students" and that before 7 September 2015 the College and Mr Wills were "well aware" of the "risk of unwitting or unsuitable students being enrolled in their courses, and the need to take steps to mitigate that risk" as, before that date, the "problem of unwitting and unsuitable students being enrolled at the College was prevalent".[19] The College acted upon the enrolment process changes and took full advantage of the changes and, in so doing, "took advantage of the students who were enrolled as a result of agent misconduct or who were unsuitable for enrolment by maintaining their enrolment and claiming VFH revenue from the Commonwealth".[20]

    The Productivity Partners appeal

    [19]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 241 [184], 255 [227].

    [20]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 246 [198].

    The meaning and application of the statutory provisions

50. The College proposed in oral submissions that, as a matter of the proper construction of the statutory provisions, s 22 must limit the scope of s 21 of the ACL. The submission is unsustainable in the face of the clear language of ss 21 and 22.

51. Section 21(1), to the extent relevant, provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person engage in "conduct that is, in all the circumstances, unconscionable". Section 21(3)(a) provides that, for the purpose of determining whether a person has contravened s 21(1), a court "must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention". By corollary, for the purpose of determining whether conduct in which a person has engaged is unconscionable, a court can have regard to circumstances that were reasonably foreseeable at the time of the alleged contravention. Section 21(4) relevantly provides that it "is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour".

52. Section 22(1) provides as follows (noting those paragraphs on which the College particularly relied):

    "Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

    (a)the relative strengths of the bargaining positions of the supplier and the customer; and

    (b)whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

    (c)whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

    (d)whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

    (e)the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

    ...

    (g)the requirements of any applicable industry code; and

    ...

    (i)the extent to which the supplier unreasonably failed to disclose to the customer:

    (i)any intended conduct of the supplier that might affect the interests of the customer; and

    (ii)any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

    ...

    (l)the extent to which the supplier and the customer acted in good faith."

53. Faced with the opening words to s 22(1) ("[w]ithout limiting the matters to which the court may have regard for the purpose ..."), the College retreated in oral argument to the conventional observation that s 22 gives guidance to the content of the norm established by s 21,[21] but sought to elevate that guidance so that the presence or absence of each matter specified in s 22(1)(a)-(l) constituted, in and of itself, a mandatory relevant consideration to be weighed in the circumstances of every case.

    [21]eg, Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 37 [83], 38 [87], 49 [120], 60-61 [154]-[155], 105 [302]; Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26-27 [57]-[58].

54. The College's gloss on the conditional operation of the word "may" in s 22(1) ("... the court may have regard to ...") disregards five key aspects of the provisions.

55. First, while the word "may" in s 22(1) ("... the court may have regard to ...") is to be understood as a conditional and not a permissive expression[22] – meaning that the "court must take into account each of the considerations identified in [s 22(1)] if and to the extent that they apply in the circumstances"[23] – that is not the same as the presence or absence of each matter in s 22(1)(a)‑(l) being, in and of itself, a mandatory relevant consideration irrespective of the circumstances.

    [22]Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at 587 [189], 620 [294].

    [23]Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26 [57].

56. Second, the matters in s 22(1)(a)‑(l) are non-exhaustive. As such, they embody "the values and norms recognised by the statute" by reference to which "each matter must be judged" to the extent that it "appl[ies] in the circumstances".[24]

    [24]Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26 [57].

57. Third, it is the totality of the circumstances relevant to the conduct being considered (as required by s 21(1)) which dictates if any matter in s 22(1)(a)‑(l) is applicable. If applicable, that matter must be considered. If not applicable, the matter need not be considered (subject, of course, to a judge's duty to give reasons addressing any substantial argument put during the hearing, a principle not raised in the present appeals).

58. Fourth, and confirmatory of this understanding of the provisions, is that the matters in s 22(1)(a)‑(l) are of a nature that may or may not be engaged in any given circumstances (for example, that there is no applicable industry code in a given case as specified in s 22(1)(g), in the ordinary course, would disclose nothing beyond that fact and therefore nothing capable of being weighed in the overall evaluation). This explains why the correct approach to s 22(1)(a)‑(l) is that the matters specified must be considered "if and to the extent that they apply in the circumstances".[25]

    [25]Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26 [57], referring to Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 38 [87], 49 [120], 60-61 [154]-[155], 105 [302].

59. Fifth, and as the ACCC submitted, the legislature intended s 21 to be applied within the adversarial paradigm of curial proceedings in Australia. Within that paradigm, as the Full Court observed:[26]

    "it is a fundamental principle that a party is bound by the party's conduct of the case below. The parties define the issues to be determined at trial and, in a case brought under s 21 of the ACL, identify by evidence and submissions the matters that the parties contend are relevant to the determination of the case and should be taken into account, including by reference to the matters enumerated in s 22(1). There is no appellable error if a judge fails to take into account a fact or matter that neither party placed reliance upon at trial. In its submissions on this appeal, the appellants failed to identify any submission put to the primary judge with respect to the matters enumerated in s 22(1) that the primary judge failed to take into account."

    [26]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 253 [218].

60. That the presence or absence of each matter in s 22(1) is not a mandatory relevant consideration to be weighed by a court in every case, irrespective of the circumstances, does not mean that the required evaluation involves nothing more than, as the College put it, an "instinctive reaction that the legislation sought to avoid". The normative standard set by s 21(1) is tethered to the statutory language of "unconscionability". While that term is not defined in the legislation and, in its statutory conception, is "more broad-ranging than the equitable principles",[27] it expresses "a normative standard of conscience which is permeated with accepted and acceptable community standards",[28] and conduct is not to be denounced by a court as unconscionable unless it is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience".[29] The items listed in s 22(1)(a)‑(l) are matters that the legislation requires to be considered, in the overall evaluation of the totality of the circumstances to be undertaken for the purpose of s 21(1), if and to the extent those matters are applicable. This is why both "close attention to the statute and the values derived from it, as well as from the unwritten law"[30] and "close consideration of the facts"[31] are necessary.

    [27]Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26 [56]. See ACL, s 21(4)(a).

    [28]Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26 [57].

    [29]Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 40 [92]. See also Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 26-27 [58].

    [30]Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 60 [153].

    [31]Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 74 [217].

    No error in primary judge's approach to s 21(1) by reason of s 22(1)(a)-(l)

61. As the Full Court said, the primary judge's reasons are "lengthy and careful".[32] The primary judge closely considered the statutory provisions and the need for a "precise examination of the particular facts"[33] on the basis that "unconscionability is a serious allegation; it is sufficient to warrant censure for the purposes of deterrence by the imposition of a civil penalty; and, being penal in character, tends against too loose or diffuse a construction".[34] In undertaking the evaluation, the primary judge also recognised that "it is the system as a whole as constituted by, potentially, many inter‑related integers that is to be assessed".[35]

    [32]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 186 [8].

    [33]Jenyns v Public Curator(Qld) (1953) 90 CLR 113 at 118, quoted in Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 492 [70].

    [34]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 492 [69].

    [35]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 494 [77].

62. Further, the primary judge was cognisant of and expressly referred to the College's submission that its conduct did not "have the requisite character of being unconscionable by reference to societal norms of acceptable commercial behaviour or the statutory criteria in s 22(1)".[36] The primary judge rejected that submission, correctly explaining numerous factors directly relevant to the matters in s 21 and s 22(1)(a)‑(l) including:

    [36]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 572 [509].

    (1)While the fact that no dishonesty was alleged is a relevant factor, "the absence of dishonesty does not mean that the conduct was not unconscionable".[37]

    [37]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 573 [512].

    (2)It was "not so easy to accept the notion that there was an absence of undue influence, pressure or unfair tactics" given that the College knew its agents "might use undue influence, pressure or unfair tactics on unsuspecting consumers, and indeed the evidence bore out that that form of CA misconduct risk materialised from time to time" and yet the College removed the two key safeguards in any event.[38]

    (3)While "there is nothing inherently unconscionable about selling an online course by telephone", it was the College's system as a whole, in all of the known and reasonably foreseeable circumstances at the time of the impugned conduct, which was important.[39]

    (4)It could not be inferred that the College's campus driven withdrawals policy was "consistent with the withdrawal policy of every other VET provider in Australia"[40] and, in any event, "just because everyone is rorting a poorly designed and/or administered scheme does not mean that no one's rorting is unconscionable".[41]

    (5)While the VET Guidelines did not mandate that each VET provider have a campus driven withdrawals policy, and "if particular conduct is not against the rules that may be relevant in the evaluative judgement with regard to unconscionability",[42] it is not determinative. In any event, the VET Guidelines proscribed any "barriers to withdrawal" and abolishing campus driven withdrawals introduced a barrier to withdrawal in the sense that an absence of awareness by a person that they have been enrolled or that they can withdraw constitutes a barrier to withdrawal. In all probability, most persons who had not engaged with the College online and were uncontactable by the College (meaning "numerous telephone calls and emails go unanswered") were likely not to have been aware that they were enrolled.[43] For these people, it is wrong to say that the abolition of campus driven withdrawals did not, in practice, introduce any barriers to withdrawal.

    (6)People's personal responsibility and autonomy must be recognised, as "we are indeed free to make our own bad decisions", but the conclusion of unconscionability in this case "no more undermines notions of personal responsibility and autonomy than what Parliament requires by way of offering protection against a particular type of conduct, namely that which is in all the circumstances unconscionable".[44]

    (7)Given that "the pursuit ... for [one's] own advantage is an omnipresent feature of legitimate commerce", the profit-maximisation purpose of the College (and Site) said little about the quality of the conduct as unconscionable or not, but it was not irrelevant. For example, had the College acted intending to protect people from misconduct by agents, but misjudged how to do so leading to adverse effects, "the situation would have been quite different".[45]

    (8)The College's systems included numerous elements that existed before and after the process changes, but the dichotomy between the period before and after 7 September 2015 was not false as the College undertook the changes specifically aimed at reversing the trend of declining market share, knowing "that there was a greater likelihood that unsuitable students would be enrolled and that they would progress to census without being withdrawn".[46]

    (9)While there were contractual terms requiring the College's agents to act promptly and honestly, and they received training in that respect, "it was known that there was a risk that they would not act as required".[47]

    (10)The case did not depend on a "false comparator" between the College's processes before and after 7 September 2015 (rather than, as the College argued was the correct approach, a consideration of the College's processes after 7 September 2015 evaluated against societal norms of acceptable commercial behaviour).[48] Rather, the "fact that the system was changed in material respects and the reasons for those changes, as well as the knowledge and understanding of the [C]ollege as to their predicted and subsequently realised effects, are all part of the relevant circumstances to be taken into account when making the ultimate evaluation".[49]

    (11)Knowledge, intention, and reasonable foreseeability of consequences are all relevant to the required evaluation of the conduct, and consideration of them does not "expand statutory unconscionability into the territory of tort and fiduciary duties".[50]

    [38]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 573 [513].

    [39]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 573 [514]-[515]. See ACL, s 21(3)(a).

    [40]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 574 [516]-[517].

    [41]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 574 [517].

    [42]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 574 [518].

    [43]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 574 [519].

    [44]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 575 [521].

    [45]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 575 [522].

    [46]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 576 [526].

    [47]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 576 [527].

    [48]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 577 [529].

    [49]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 577 [530].

    [50]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 578 [533].

63. These aspects of the primary judge's analysis expose his Honour's close attention to the values underlying the statutory provisions, including s 22(1)(b), (c), (d), (e), (g), (i), and (l) and the obligation to consider all of the relevant circumstances. The primary judge did not need to cross-refer to each paragraph of s 22(1) to demonstrate that the entirety of his reasons involved a careful application of the provisions to the relevant facts in a manner consistent with authority. The "subject-matter, scope and purpose"[51] of the statutory provisions do not support the contention that the primary judge had to state the matters in s 22(1)(a)‑(l) which were inapplicable and give weight to their absence. Further, and as the ACCC put it, the absence of a finding against the College (for example, no finding that it did not act in good faith), in the context of the case as put to the primary judge, cannot be converted into a default finding in favour of the College.

    [51]Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40.

64. For these reasons, the College's first ground of appeal must be rejected.

    Risk and intention

65. The College contended that the primary judge and the Full Court erred by acting on the mistaken premise that ss 21 and 22 of the ACL are directed to the protection of people from risk. The contention was that a change to a system that increases a risk that misconduct will not be detected does not contravene s 21(1) of the ACL, at least absent an intention that the misconduct occur. The College supported this contention by pointing to s 22(1)(i)(ii) as the only matter in s 22(1)(a)-(l) referring to the concept of risk.

66. The contention is wrong in principle. It ignores the corollary of s 21(3)(a) that, for the purpose of determining whether conduct in which a person has engaged is unconscionable, regard can be had to circumstances that were reasonably foreseeable at the time of the conduct. An increase in a risk of misconduct being undetected that was reasonably foreseeable at the time of the conduct in question can be considered in determining whether conduct is unconscionable without need for any intention that the misconduct occur.

67. The contention, moreover, is disconnected from the facts. The ordinary meaning of "risk" is a possibility. The two risks in this case – CA misconduct and unsuitable enrolment – were not mere possibilities of the College's business of offering online VET courses. CA misconduct to procure enrolments, and associated unsuitable enrolments, were known to be "manifest", "common-place" and "prevalent" occurrences.[52] These things occurred, and were known to occur, as an ordinary part of the College's business of offering online VET courses despite the measures the College took to minimise them occurring. They were circumstances endemic to the College's online VET courses against which the College had found it necessary to take action which reduced, but did not eradicate, CA misconduct and unsuitable enrolment. Those endemic circumstances, moreover, involved the known fact of real harm to the persons who were enrolled, and who remained enrolled beyond a census date, being the incurrence of the person's VFH debt to the Commonwealth. The case was not one, as the College would have it, of a mere risk involved in a commercial judgment, later shown to be erroneous.

    [52]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 189 [17], 232 [168], 236 [178], 254 [221], 255 [227], 256 [229], 259 [245], 279 [323(b)].

68. The line between, on the one hand, the College intending that its agents commit misconduct to entice people to enrol in its online courses (and intending that unsuitable people be enrolled in its online courses), and, on the other hand, intending to increase the number of enrolled persons who remained enrolled beyond the first census date in order to increase the College's VFH revenue in the context of agent misconduct in enrolling people and unsuitable people being enrolled, is real. But the existence of that line does not negate the force of the findings of the Courts below that the College intended to regain its market share and took advantage of the people who were enrolled as a result of agent misconduct, or who were unsuitable for enrolment, by maintaining their enrolment and claiming VFH revenue from the Commonwealth.[53] 

    [53]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 571 [500], 575 [521]; Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 235 [177], 242 [189].

69. For these reasons, the College's second ground of appeal must be rejected.

    The Wills appeal

70. Section 224(1)(e) of the ACL provides that if a court is satisfied that a person has been "in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person" of a provision of, relevantly, Pt 2‑2 (which includes s 21), the court may impose a pecuniary penalty in respect of each act or omission by the person to which the section applies, as the court determines to be appropriate. The primary judge concluded that Mr Wills was knowingly concerned in the unconscionable system of conduct or pattern of behaviour of the College from 7 September 2015.[54] The Full Court concluded that Mr Wills was knowingly concerned in the unconscionable system of conduct or pattern of behaviour of the College from 20 November 2015.[55]

    [54]Australian Competition and Consumer Commission vProductivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 608 [761]-[763].

    [55]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 189 [16(c)].

    Knowledge that conduct was unconscionable not required

71. Mr Wills founded his argument for his first ground of appeal on the proposition that, for a person to be knowingly concerned in another person's contravention of s 21(1) of the ACL, the person must know that the other person's conduct has the character of being unconscionable. The proposition was said to derive from Giorgianni v The Queen[56] and Yorke v Lucas.[57] Mr Wills' argument was that, although the ACCC did not have to prove that Mr Wills subjectively believed the College's conduct was unconscionable, it had to prove that he knew that the conduct had "the character that means it is against conscience". This, Mr Wills said, the ACCC did not plead and made no attempt to prove.

    [56](1985) 156 CLR 473.

    [57](1985) 158 CLR 661.

72. Mr Wills' foundational proposition is irreconcilable with the reasoning in Giorgianni and Yorke v Lucas and is indistinguishable from a proposition rejected in Rural Press Ltd v Australian Competition and Consumer Commission,[58] which was not sought to be re-opened.

    [58](2003) 216 CLR 53.

73. In Giorgianni the offence was driving in a manner dangerous to the public. Section 351 of the Crimes Act 1900 (NSW) provided that a person who, relevantly, procured the commission of the offence may be indicted, convicted and punished as a principal offender. It was alleged that the defendant, Giorgianni, procured the driver to drive the truck with defective brakes and, thereby, to drive in a manner dangerous to the public.[59] The trial judge had summed up to the jury by reference to what the defendant knew or ought to have known.[60] Gibbs CJ concluded that:[61]

    "No one may be convicted of aiding, abetting, counselling or procuring the commission of an offence unless, knowing all the essential facts which made what was done a crime, he intentionally aided, abetted, counselled or procured the acts of the principal offender. Wilful blindness ... is treated as equivalent to knowledge but neither negligence nor recklessness is sufficient."

    [59](1985) 156 CLR 473 at 475.

    [60](1985) 156 CLR 473 at 476.

    [61](1985) 156 CLR 473 at 487-488.

74. Mason J said that "knowledge of all the essential facts giving rise to the dangerous driving is necessary to constitute commission of the offence on the part of [the defendant]", wilful blindness being sufficient to constitute knowledge.[62]

    [62](1985) 156 CLR 473 at 495.

75. Wilson, Deane and Dawson JJ said that what was required was "knowledge of the essential matters which went to make up the offences of culpable driving on the occasion in question, whether or not [the defendant] knew that those matters amounted to a crime".[63] This is because "[i]ntent is required and it is an intent which must be based upon knowledge or belief of the necessary facts".[64] Accordingly, it "is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under the law", knowledge of the law never being required to establish liability under s 351 of the Crimes Act.[65]

    [63](1985) 156 CLR 473 at 500.

    [64](1985) 156 CLR 473 at 507.

    [65](1985) 156 CLR 473 at 506.

76. It followed that, for the defendant in Giorgianni to be liable as an accessory, it had to be proved that the defendant knew the brakes were defective and could fail in which event the driving of the vehicle would be dangerous and that the defendant procured his employee to drive the truck in that known defective condition. It did not have to be proved that the defendant knew that, if the brakes failed, the driving of the truck in that defective condition would be capable of being or in fact characterised as driving "in a manner dangerous to the public" (as per the offence provision).

77. This accorded with the approach in, amongst other cases, R v Robert Millar (Contractors) Ltd[66] and R v Glennan,[67] both of which are referred to in Giorgianni.[68] In Robert Millar the required knowledge to be guilty of procuring death by dangerous driving was knowledge that the tyre was dangerous and therefore created a serious risk to other road users.[69] In R v Glennan, to be an accessory to the commission of the offence of driving with more than the prescribed quantity of alcohol present in the blood, the defendant did not need to know the concentration of alcohol in the driver's blood. Rather, what had to be proved in that regard was that the defendant knew how much alcohol the driver had consumed and encouraged or permitted the person to drive in that known circumstance.[70]

    [66][1970] 2 QB 54.

    [67][1970] 2 NSWR 421.

    [68]eg Giorgianni v The Queen (1985) 156 CLR 473 at 482, 486-487.

    [69][1970] 2 QB 54 at 72.

    [70][1970] 2 NSWR 421 at 426.

78. In Yorke v Lucas, the contravention was engaging in conduct that was misleading or deceptive or likely to mislead or deceive. In that case, the reasoning in Giorgianni was applied to the aiding and abetting provision. Mason A-CJ, Wilson, Deane and Dawson JJ said that Lucas, who had communicated the false statements about the business's turnover, "lacked the knowledge necessary to form the required intent".[71] The contravening conduct was the making of false representations, but the fact that Lucas had made the representations did not make him liable as "he had no knowledge of their falsity and could not for that reason be said to have intentionally participated in the contravention".[72] Their Honours confirmed further that there "can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention".[73]

    [71](1985) 158 CLR 661 at 667.

    [72](1985) 158 CLR 661 at 667-668.

    [73](1985) 158 CLR 661 at 670.

79. The proposition rejected in Rural Press was that accessorial liability in respect of a contravention of a proscription of certain anti‑competitive conduct depended on proof of knowledge that the conduct was anti-competitive in the required sense.[74] Gummow, Hayne and Heydon JJ said that:[75]

    "In the end the argument was only that McAuliffe and Law [managers at Rural Press] 'did not know that the principal's conduct was engaged in for the purpose or had the likely effect of substantially lessening competition ... in the market as defined'. It is wholly unrealistic to seek to characterise knowledge of circumstances in that way. Only a handful of lawyers think or speak in that fashion, and then only at a late stage of analysis of any particular problem. In order to know the essential facts, and thus satisfy s 75B(1) of the [Trade Practices Act 1974 (Cth)] and like provisions, it is not necessary to know that those facts are capable of characterisation in the language of the statute."

    [74](2003) 216 CLR 53 at 57-58.

    [75](2003) 216 CLR 53 at 74 [48] (footnote omitted).

80. It followed that what had been proved sufficed. Law's and McAuliffe's knowledge that the circulation of the River News in the Mannum area competed with the circulation of the Standard in that area and their intention that this competition "should come to an end"[76] meant that each knew the essential elements constituting the contraventions whether or not they knew that "the purpose or effect of the arrangement was substantially to reduce competition in the market ultimately identified in the judgment".[77]

    [76]Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at 281 [155].

    [77]Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at 284 [163].

81. The reasoning in Anchorage Capital Master Offshore Ltd v Sparkes[78] does not advance the first ground of Mr Wills' appeal. In that case, in the context of the prohibition on conduct that is misleading or deceptive, the Court of Appeal of the Supreme Court of New South Wales (Ward P, Brereton JA and Griffiths A‑JA) referred to the "longstanding controversy as to whether, in order to incur liability as an accessory, knowledge that the representation is false is required (the narrow view), or knowledge of facts which would have falsified the representation if they had been adverted to suffices (the wider view)", noting "authorities supportive of both views".[79] Their Honours held that, as the case of misleading or deceptive conduct involved a false representation, a person could not be knowingly concerned in that conduct without knowing that the representation was false.[80] Knowledge of other facts from which it could be inferred or deduced that the representation was false, short of wilful blindness, did not suffice.[81]

    [78](2023) 111 NSWLR 304.

    [79](2023) 111 NSWLR 304 at 360 [329].

    [80](2023) 111 NSWLR 304 at 365 [342]-[343].

    [81](2023) 111 NSWLR 304 at 359-360 [329]-[330].

82. The relevant distinction is not between facts and the law. Nor is it between objective facts and evaluative facts. It is between the essential matters constituting the contravention (be they facts, circumstances, or states of mind) and the character, quality, nature, or status of those matters for the purpose of the characterisation of the conduct the statute requires. For accessorial liability, knowledge of the former is required but knowledge of the latter is not.

83. This is why the Court of Appeal of the Supreme Court of New South Wales was right in Anchorage Capital to conclude that the alleged accessories had to know that the representation was false and the circumstances in which the representation was made. But in saying that "[w]here the contravention is the prohibition on engaging in misleading or deceptive conduct, one can be 'knowingly concerned' in it only if one knows that the conduct is misleading or deceptive",[82] their Honours are not to be misunderstood as saying that the person had to know that the conduct (the false representation) was capable of being, or would be characterised as, misleading or deceptive or as conduct proscribed by s 18 of the ACL. In context, it is apparent that their Honours meant only that the person had to know the representation was false (mere knowledge of facts from which a person might have deduced or inferred falsity being insufficient) and the circumstances in which the representation was made. Knowledge of the potential or actual character, quality, nature, or status of the conduct as misleading or deceptive for the purposes of the statutory prohibitions against such conduct was not required.

    [82](2023) 111 NSWLR 304 at 360 [330].

84. For these reasons, Mr Wills' first ground of appeal must be rejected. It also follows that the third consequential ground of appeal in the Productivity Partners appeal relating to Site's liability (through Mr Wills) must be rejected.

    Time from which Mr Wills had required knowledge

85. Mr Wills' second ground of appeal (which depends on the Full Court finding that Mr Wills only had the requisite knowledge to be knowingly concerned in the College's contravention from 20 November 2015 onwards) cannot be maintained if the ACCC's notice of contention (that the Full Court erred in so finding and that the primary judge was correct that Mr Wills had the requisite knowledge from 7 September 2015 onwards) is upheld. As such, the ACCC's notice of contention should be determined first.

86. The Full Court correctly identified that the language used in s 224(1)(e) of the ACL, of a person "in any way, directly or indirectly, knowingly concerned in, or party to, the contravention" is "not confined to a person who physically or practically undertakes the unlawful conduct, but extends to a person who is in a position of authority and expressly or implicitly approves or assents to the unlawful conduct".[83] It also observed the relevant fact that Mr Wills chose not to give evidence and that the primary judge inferred as a result that Mr Wills' evidence would not have assisted his case.[84]

    [83]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 266 [279].

    [84]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 267 [281].

87. The Full Court agreed with the primary judge that from 7 September 2015 Mr Wills knew: (a) of the CA misconduct risk; (b) of the unsuitable enrolment risk; (c) of the implementation of the enrolment process changes (the abolishment of the outbound QA call and campus driven withdrawal processes); (d) that those changes were being made to reverse the College's declining enrolments and conversion rate; and (e) that the changes would likely lead to a substantial increase in the number of students who became enrolled in an online course, in the number and proportion of students who passed at least the first census, and in the revenue of the College.[85]

    [85]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 287 [339].

88. The Full Court considered, however, that Mr Wills was only "knowingly" concerned in the College's contraventions from 20 November 2015 and not from 7 September 2015 because the primary judge's findings did not "support a conclusion that, as at 7 September 2015, Mr Wills had a sufficient awareness of the extent to which the outbound QA call procedure and the campus driven withdrawal process were important safeguards to protect the interests of students who were enrolled unwittingly or who were unsuitable for the course in which they were enrolled".[86] The Full Court said further that "[c]ertainly, it can be inferred that Mr Wills had some awareness of that fact by virtue of the Sero campus investigation. However, we consider that to be an insufficient basis to infer that Mr Wills had a real appreciation, as at 7 September 2015, of the full consequences of the changes." [87] The "Sero campus" was an online campus managed by a third party, Sero Learning Pty Ltd, on behalf of the College, which had been the subject of an investigation by the College in November 2014. That investigation revealed that about 85% of Sero's enrolled students were passing through their first census date without ever having accessed the online learning management system because, as recognised within the College, the Sero campus was "not doing campus driven withdrawal and just processing through census regardless".

    [86]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 287 [340].

    [87]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 287 [340].

89. The Full Court's conclusion about Mr Wills' insufficient awareness of the "full consequences of the changes" imposes too high a bar on his knowing participation in the College's contraventions and, in any event, does not accurately reflect the full import of the primary judge's findings in the context of Mr Wills' choice not to give evidence. Mr Wills did not need to know the "full consequences of the changes" as those "full consequences" (at least in the sense of the number of unsuitable students enrolled and remaining enrolled at the first census date and thereby incurring a VFH debt) were not essential to the contravention.

90. Moreover, the primary judge had found that as at 7 September 2015 Mr Wills was aware that: (a) the abolishment of the outbound QA call and campus driven withdrawals would remove mechanisms to mitigate the CA misconduct risk;[88] and (b) these changes "would likely lead to the process changes results".[89] The "process changes results", in this context, means the vast increase in the number of people being enrolled and remaining enrolled at the first census date without the College being able to contact them.[90] So much is apparent from the primary judge's other findings that:

    (1)In December 2014 Mr Wills had been party to a "thorough discussion" about the Sero investigation, which showed that 84.7% of people enrolled in the Sero campus were remaining enrolled at the first census date for the course and incurring a VFH debt whilst being uncontactable by the College and never having accessed the online system, a circumstance which the College's own "rigorous QA process" would not have permitted to occur.[91]

    (2)Mr Wills was "well aware that there was an ongoing risk of CA misconduct and that that misconduct could significantly harm the interests of substantial numbers of consumers ... deceived or confused into enrolling".[92] While the primary judge does not specify a date for this awareness, the evidence of Mr Wills' involvement in the College's business before 7 September 2015, which immediately precedes this observation, does not permit an inference of such awareness only after that date. This inference is also confirmed by the next relevant finding.

    (3)"The evidence identified above demonstrates that during the earlier period the college was well aware of the risk of unsuitable students being enrolled in their courses, and the need to take steps to mitigate that risk. [Mr] Wills was also aware of this risk from, at least, the discussion of the report in the Advisory Board on 12 May 2015, circulation of the Senate inquiry report by him on 16 June 2015, or Mr Coward [Site's quality and compliance manager] emailing Mr Wills about the internal audit in August 2015."[93]

    [88]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 583 [564].

    [89]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 583 [565].

    [90]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 283 [327].

    [91]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 512 [182], 513 [184]-[185].

    [92]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 517 [204].

    [93]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 519 [220]. See also 518 [213].

91. The primary judge's conclusion that it was not "established on the evidence that Mr Wills was necessarily aware that the poor conversion rate was because of the high proportion of students who were uncontactable and who were therefore subject to campus driven withdrawal"[94] did not undermine the force of these other findings. Nor did it undermine the force of the Full Court's own observation that Mr Wills was actively involved in management and oversight of the College from his role on the Advisory Board established in May 2014, and in its meetings from July 2015, and the Full Court's reference to the unchallenged findings below that Mr Wills was "a key driver of changes at the College to improve its financial performance and while he was not the architect of the enrolment process changes, the relevant decisions were reported to him and he oversaw their implementation ... and was a participant in key aspects of it".[95]

    [94]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (t/as Captain Cook College) [No 3] (2021) 154 ACSR 472 at 520 [223].

    [95]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 221 [127].

92. In circumstances where Mr Wills chose not to give evidence, it is not possible to reconcile the Full Court's acceptance of what Mr Wills did know as at 7 September 2015 – including that "the changes would likely lead to a substantial increase in the number of students who became enrolled in an online course, in the number and proportion of students who passed at least the first census and in the revenue of the College"[96] and that the changes were "being made to reverse the College's declining enrolments and conversion rate"[97] – with its conclusion that as at that date he had insufficient knowledge of the "extent to which the outbound QA call procedure and the campus driven withdrawal process were important safeguards" against agent misconduct and unsuitable enrolments.[98]

    [96]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 283 [327].

    [97]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 287 [339].

    [98]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 287 [340].

334. Section 22(1) also includes several matters that will or will not form part of the "circumstances" of relevant conduct, namely, s 22(1)(b), (c), (d) and (k). If no evidence is adduced about one of these circumstances, the court should infer that the unconscionability of the alleged conduct does not depend upon that circumstance and therefore that the alleged conduct does not offend the standard entailed in that circumstance, a breach of which may support a finding of unconscionability. Those standards are that a supplier should not: require a customer to comply with conditions that were not reasonably necessary for the protection of the supplier's legitimate interests (s 22(1)(b)); engage in relevant conduct where the customer is unable to understand any documents relating to the supply or possible supply of the goods or services (s 22(1)(c)); exert undue influence or pressure on, or use unfair tactics against, the customer or a person acting on behalf of the customer in relation to the supply or possible supply of the goods or services (s 22(1)(d)); or secure a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the acquisition of the goods or services (s 22(1)(k)).

335. While s 22(1) is explicitly non-exhaustive of the matters that may support a finding of unconscionability within the meaning of s 21(1), a finding that the circumstances of the alleged conduct do not include a breach of one of the standards that is implicit in s 22(1) may tend to suggest that the conduct is not unconscionable. Thus, in Australian Securities and Investments Commission vKobelt, Kiefel CJ and Bell J observed that "[t]he absence of the exertion of undue influence, pressure or unfair tactics bears on the assessment of whether the commercial advantage obtained by the supplier in connection with the supply of the financial service is an unconscientious advantage".[347] Similarly, in Paciocco v Australia & New Zealand Banking Group Ltd, Gageler J reasoned that it was not permissible for a party alleging statutory unconscionability to "ignore" matters identified in the relevant statute as circumstances bearing upon a finding of unconscionability.[348] While the non-existence of a matter in s 22(1) might be inconclusive (or even irrelevant) in a given case, this will depend upon the other circumstances that are said to support a conclusion of unconscionability, and the standards by reference to which that conclusion may be drawn. Non-existence of a matter may raise doubt as to what standards, not found in s 22(1) but said to be offended, are alleged to be protected by s 21(1), having regard to the terms of s 22(1).

     [347](2019) 267 CLR 1 at 30 [58] (emphasis in original).

     [348](2016) 258 CLR 525 at 587 [189].

336. A third category of "circumstances" specified in s 22(1) comprises matters of degree, found in s 22(1)(f), (i), (j)(i) and (l). If no evidence is adduced about one of these matters, the court may infer that that matter gives rise to no relevant circumstance within the meaning of s 21(1). The matters of degree are, broadly: (1) consistency of conduct in similar transactions; (2) unreasonable failure to disclose facts or risks to the customer; (3) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and (4) the extent to which the supplier and the customer acted in good faith. The matters of degree identify types of conduct, including conduct of the customer, that may contribute to a finding of unconscionability. Again, the absence of relevant matters may raise a doubt as to whether the alleged conduct is, in all the circumstances, unconscionable.

337. The fourth and final category of "circumstances" specified in s 22(1) comprises facts that may or may not exist in relation to the alleged conduct. The relevant provisions are s 22(1)(g) and (h) (requirements of industry codes) and s 22(1)(j)(ii)-(iv) (terms and conditions of any contract, and certain conduct in connection with any contract). If no evidence is adduced about one of these matters, the court may infer that that matter gives rise to no relevant circumstance within the meaning of s 21(1).

338. While they do not exhaust the universe of factors that may render conduct unconscionable within the meaning of s 21(1), the matters listed in s 22(1) are of salience in determining whether a supplier has contravened s 21(1). In my view, the requirement that the impugned conduct be evaluated "in all the circumstances" points strongly to the general utility of a systematic analysis by reference to the matters listed in s 22(1) in any case alleging contravention of s 21(1).

339. BEECH-JONES J. I write separately on the state of mind that a party must possess to be "involved" or "knowingly concerned" in a principal's contravention of the proscription on engaging in unconscionable conduct in connection with, inter alia, the supply of services found in s 21 of the Australian Consumer Law ("the ACL").[349] Such a party must have knowledge of the "essential facts" that constitute the contravention by the principal but need not know that the principal's conduct constitutes unconscionable conduct or otherwise have knowledge of the legal characterisation or complexion of those essential facts, including that the conduct is contrary to a particular standard that embodies what is meant by unconscionable. What constitutes the "essential facts" of a contravention of which the party must have knowledge will depend on what conduct the principal's contravention consists of in a particular case. The party that is involved or knowingly concerned in the principal's contravention may, but not necessarily will, possess knowledge of a particular matter or have a particular intent that the principal does not.

     [349]Competition and Consumer Act 2010 (Cth), Sch 2 ("ACL").

     Background

340. The circumstances of, and issues arising in, these appeals are set out in the judgment of Gageler CJ and Jagot J. I agree with their Honours' reasons for rejecting the first two grounds of Productivity Partners Pty Ltd's ("the College") appeal, which challenged the finding of the majority of the Full Court of the Federal Court of Australia that it had engaged in unconscionable conduct. It follows that I would also reject ground three of Mr Wills' appeal, which contended that, if the College's appeal was successful, then he could not be liable as an accessory. I also agree with that part of Gordon J's judgment that addresses the meaning of "unconscionable conduct" in s 21(1) and the relationship between ss 21 and 22 of the ACL.[350]

     [350]Reasons of Gordon J at [97]-[110].

341. I also agree with the reasons of Gageler CJ and Jagot J for upholding the Australian Competition and Consumer Commission's ("the ACCC") notice of contention in each appeal, which challenged the finding of the majority of the Full Court that there was "an insufficient basis to infer that Mr Wills had a real appreciation, as at 7 September 2015, of the full consequences of the changes" to the College's enrolment and withdrawal procedures that came into effect on that day.[351] This also disposes of ground two of Mr Wills' appeal.

     [351]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 287 [340].

342. There remains to be considered ground one of Mr Wills' appeal (and ground three of the College's appeal, which challenges the finding that Site Group International Limited was knowingly concerned in or party to the College's unconscionable conduct through Mr Wills and which depends on ground one of Mr Wills' appeal). With ground one of his appeal, Mr Wills contends that the majority of the Full Court erred in finding that he had the requisite knowledge to be liable as an accessory to a contravention of s 21 of the ACL. As the ACCC's notices of contention should be upheld, the relevant findings about Mr Wills' knowledge that must be considered are those of the primary judge.

     Accessorial liability under the Australian Consumer Law

343. Within Pt 2-2 of Ch 2 of the ACL, s 21(1) relevantly proscribes a person, in trade or commerce, in connection with the supply (or possible supply) of services to another person from engaging in conduct that is, in all the circumstances, unconscionable. Within Pt 5-2 of Ch 5 of the ACL, s 224(1) confers on a court power to impose a pecuniary penalty on a person who the court is satisfied has contravened various provisions of the ACL,[352] including s 21(1), or has attempted to contravene those provisions,[353] as well as any person who the court is satisfied:[354]

     "(c)has aided, abetted, counselled or procured a person to contravene such a provision; or

     (d)has induced, or attempted to induce, a person, whether by threats or promises or otherwise, to contravene such a provision; or

     (e)has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

     (f)has conspired with others to contravene such a provision".

     [352]ACL, s 224(1)(a).

     [353]ACL, s 224(1)(b).

     [354]ACL, s 224(1)(c)-(f).

344. Relevantly the same wording as s 224(1)(c)-(f) is used in the definition of "involved" in the ACL.[355] The significance of that definition is that a claimant who suffers loss or damage because of conduct that contravenes a provision of Ch 2 or 3 of the ACL may recover the amount of the loss or damage from the contravener or any person "involved" in the contravention.[356] This includes a contravention of s 21(1), as well as s 18(1) of the ACL, which proscribes a person, in trade or commerce, from engaging in conduct that is "misleading or deceptive or is likely to mislead or deceive".

     [355]ACL, s 2(1).

     [356]ACL, s 236(1).

345. The ACL also extends the power to grant injunctive relief for breaches of s 21(1) and other provisions of the ACL to persons who fall within the above categories (ie, aider, abettor etc).[357]

     [357]ACL, s 232(1)(a), (c)-(d).

346. A variety of Commonwealth legislation adopts the above language in similar contexts.[358] The references to aiding, abetting, counselling, procuring or being directly or indirectly knowingly concerned in or a party to a contravention appear to have their statutory origins in former s 5 of the Crimes Act 1914 (Cth).

     Giorgianni and Yorke v Lucas

     [358]See, for example, Australian Securities and Investments Commission Act 2001 (Cth), s 12GD(1)(c)-(f); Banking Act 1959 (Cth), s 65A(1)(c)-(f); Competition and Consumer Act, s 44ZZD(3).

347. In Yorke v Lucas, this Court construed the provision of the (former) Trade Practices Act 1974 (Cth)[359] that was materially identical to s 224(1)(c)-(f) and the definition of "involved" in the ACL as requiring an intentional participation in the relevant contravention on the part of an accessory.[360] An accessory, including a party said to be knowingly concerned in the contravention, must have knowledge of the "essential matters",[361] the "essential facts"[362] or the "essential elements"[363] of the contravention. This conclusion was derived from applying the understanding of the words "aided, abetted, counselled or procured" to "designate participation in a crime as a principal in the second degree or as an accessory before the fact" in criminal law as explained in Giorgianni v The Queen.[364] 

     [359]Section 75B.

     [360]Yorke v Lucas (1985) 158 CLR 661 at 667, 676.

     [361]Yorke v Lucas (1985) 158 CLR 661 at 667, 676.

     [362]Yorke v Lucas (1985) 158 CLR 661 at 670, 674.

     [363]Yorke v Lucas (1985) 158 CLR 661 at 670.

     [364](1985) 156 CLR 473 ("Giorgianni"); see Yorkev Lucas (1985) 158 CLR 661 at 667, 673-674, 676-677.

348. Giorgianni confirmed that, even where an offence committed by a principal is one of strict liability, an accessory to that offence must have some form of guilty knowledge.[365] In Giorgianni, the appellant was convicted of procuring an offence under (former) s 52A of the Crimes Act 1900 (NSW) of driving a motor vehicle at a speed or in a manner dangerous to the public where death or grievous bodily harm is occasioned through the impact of that vehicle with any vehicle or other object.[366] The appellant's employee drove a truck with defective brakes, which failed, and the truck struck several vehicles of which some passengers were killed or injured.[367] There was evidence from which it could be concluded that the appellant was, or ought to have been, aware that the brakes were defective.[368] The offence under s 52A was strict in the sense that, although the driving must have been conscious and voluntary, to be culpable a driver of the vehicle need not have known of the dangerous condition of the vehicle.[369] 

     [365]Giorgianni (1985) 156 CLR 473 at 481, 500-501, citing Johnson v Youden [1950] 1 KB 544 at 546.

     [366]Giorgianni (1985) 156 CLR 473 at 475. Section 351 of the Crimes Act 1900 (NSW) provided that a person who, inter alia, procured an offence may be indicted, convicted, and punished as a principal offender.

     [367]Giorgianni (1985) 156 CLR 473 at 475.

     [368]Giorgianni (1985) 156 CLR 473 at 476.

     [369]Giorgianni (1985) 156 CLR 473 at 499.

349. The trial judge in Giorgianni directed the jury that the Crown had to prove that the appellant "knew or ought to have known" of the defect with the brakes and "the danger thereby to the public".[370] This Court held that the trial judge's summing up was defective insofar as it permitted the jury to convict the appellant based on imputed knowledge (ie, "ought to have known") as opposed to actual knowledge (or what might be inferred from "wilful blindness").[371] Using similar language to Yorke v Lucas, the Court referred to the necessity to establish that the accessory had knowledge of what was variously referred to as the "essential circumstances",[372] the "essential matters"[373] or the "essential facts"[374] of the offence, even though the principal offender could be convicted "in the absence of [such] knowledge".[375]

     [370]Giorgianni (1985) 156 CLR 473 at 503.

     [371]Giorgianni (1985) 156 CLR 473 at 487-488, 495, 504-505, 508.

     [372]Giorgianni (1985) 156 CLR 473 at 482.

     [373]Giorgianni (1985) 156 CLR 473 at 481, 500.

     [374]Giorgianni (1985) 156 CLR 473 at 487-488.

     [375]Giorgianni (1985) 156 CLR 473 at 483; see also R v Rohan (a pseudonym) (2024) 98 ALJR 429 at 437 [38].

350. Two related limitations on the breadth of the proposition in Giorgianni that the accessory must have knowledge of the essential circumstances, matters or facts of the principal's offence, even though the principal offence is of strict liability, should be noted.

351. First, the accessory's knowledge must concern the relevant nature, character and circumstances of the principal's unlawful act, but does not necessarily extend to knowledge of an element of the contravention that is a consequence of that act.[376] Thus, in Giorgianni, it was an element of an offence under s 52A of the Crimes Act 1900 (NSW) that death or grievous bodily harm was occasioned to a person through impact with a vehicle being driven in a manner dangerous to the public. Each member of this Court held that to be an accessory, it is not necessary to have any knowledge or intention concerning the impact of the vehicle or the occasioning of death or grievous bodily harm.[377]

     [376]See, for example, Stokes (1990) 51 A Crim R 25 at 38; R v Creamer [1966] 1 QB 72 at 80-81.

     [377]Giorgianni (1985) 156 CLR 473 at 479, 495, 503.

352. Second, the accessory's knowledge of the essential circumstances, matters or facts that constitute the offence does not extend to knowledge that those circumstances, matters or facts constitute an offence.[378] Further, the requisite knowledge of the accessory does not extend to knowledge of the legal characterisation or complexion of the essential circumstances, matters or facts of the offence.[379] Thus, in Rural Press Ltd v Australian Competition and Consumer Commission, this Court rejected a contention that to be an accessory to a contravention of former s 45 of the Trade Practices Act, the accessory must have knowledge that the principal's conduct "was engaged in for the purpose or had the likely effect of substantially lessening competition ... in the market", that being the language of the statutory provision applicable to the principal.[380] It was observed that it was necessary to know the "essential facts" but not that those facts were "capable of characterisation in the language of the statute".[381] In Rural Press, the facts found against the accessories included that they intended that competition in a particular market and area "should be brought to an end".[382]

     [378]Giorgianni (1985) 156 CLR 473 at 494, 500, citing Johnson v Youden [1950] 1 KB 544 at 546-547; Yorke v Lucas (1985) 158 CLR 661 at 667.

     [379]See R v Boston (1923) 33 CLR 386 at 392; R v Rogerson (1992) 174 CLR 268 at 282-283.

     [380]Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at 74 [48], see also 60 [2].

     [381]Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at 74 [48], see also 60 [2].

     [382]Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at 284 [162].

353. The conclusion in Rural Press that the characterisation of the market effect of the principal's conduct was not an "essential fact" of which they needed to have knowledge is consistent with Toohey and Gaudron JJ's analysis of the meaning of "dishonesty" in Peters v The Queen[383] (which was later endorsed in Macleod v The Queen[384]). In Peters, Toohey and Gaudron JJ held that where "dishonesty" is not used in legislation in a "special sense", it is established by first demonstrating that a person had some particular knowledge, belief or intent at the time they committed the relevant act and then demonstrating that engaging in the act with that state of mind was dishonest "by the standards of ordinary, decent people".[385] Their Honours added that whether or not the means employed were contrary to those standards was not a "question of fact", but a "question of characterisation".[386] As such, it was not a matter for evidence even though, if there is a dispute about whether the means employed were dishonest according to the standards of "ordinary, decent people", the issue is left to the jury.[387]

     [383](1998) 192 CLR 493 ("Peters").

     [384](2003) 214 CLR 230 at 245 [46], 256 [99], 264-265 [130].

     [385]Peters (1998) 192 CLR 493 at 504 [18].

     [386]Peters (1998) 192 CLR 493 at 508 [28].

     [387]Peters (1998) 192 CLR 493 at 504 [18], 508 [29].

354. In some contexts, the difference between an accessory having knowledge of the essential circumstances, matters or facts (or, to use the language in Yorke v Lucas, the essential matters, facts or elements) concerning the acts of the principal, on the one hand, and the legal characterisation or complexion of those circumstances, matters or facts, on the other hand, can be fine. Many of the dangerous driving cases involving accessories state or imply that an accessory must have knowledge that the relevant defect, manner of driving or condition of the driver was "dangerous" or represented a "danger".[388] While the word "dangerous" was used in the statutory provisions creating the offences in such cases,[389] requiring such knowledge on the part of an accessory is not necessarily the same as attributing to the accessory knowledge that the vehicle was driven in a manner dangerous to the public. In any event, the operative principle was articulated in Rural Press. As explained next, Rural Press reflected what was decided in Yorke v Lucas in relation to accessorial liability for misleading or deceptive conduct.

     [388]See, for example, Du Cros v Lambourne [1907] 1 KB 40 at 45‑46; R v Robert Millar (Contractors) Ltd [1970] 2 QB 54 at 72; Giorgianni (1985) 156 CLR 473 at 476‑478.

     [389]Motor Car Act 1903 (UK), s 1; Road Traffic Act 1960 (UK), s 2; Crimes Act 1900 (NSW), s 52A(1)(c), (3)(c).

     Accessorial liability for misleading or deceptive conduct

355. The statutory provision contravened by the principal in Yorke v Lucas was the previous equivalent of s 18 of the ACL.[390] Like s 18, that provision imposed a form of strict liability on a principal that engaged in conduct that was misleading or deceptive or likely to mislead or deceive.[391] In Yorke v Lucas, a corporate land agent representing the vendor of a business was found to have contravened that provision by unwittingly but falsely representing the average weekly turnover of the business to a proposed purchaser. The director of the land agent who made the representation (Mr Lucas) was found not to be involved in the contravention in circumstances where he was "not aware and had no reason to suspect" that the information provided concerning the turnover was incorrect.[392] In concluding that the director had to have knowledge of the falsity of the representation to be involved in the contravention, Mason A-CJ, Wilson, Deane and Dawson JJ observed:[393]

     "A contravention of s 52 involves conduct which is misleading or deceptive or likely to mislead or deceive and the conduct relied upon in this case consisted of the making of false representations. Whilst Lucas was aware of the representations – indeed they were made by him – he had no knowledge of their falsity and could not for that reason be said to have intentionally participated in the contravention." (emphasis added)

     [390]Trade Practices Act 1974 (Cth), s 52.

     [391]Yorke v Lucas (1985) 158 CLR 661 at 666.

     [392]Yorke v Lucas (1985) 158 CLR 661 at 665.

     [393]Yorke v Lucas (1985) 158 CLR 661 at 667-668.

356. Brennan J also held that to be knowingly involved in the contravention, the director must have had "knowledge of the acts constituting the contravention and of the circumstances which give those acts the character which s 52 defines" (ie, the falsity of the representation).[394] 

     [394]Yorke v Lucas (1985) 158 CLR 661 at 677.

357. However, consistent with what was later decided in Rural Press, knowledge of the falsity of the principal's representation is not to be equated with knowledge that the principal has engaged in conduct that was misleading or deceptive (or likely to mislead or deceive) contrary to the statute. Knowledge of the falsity of the representation was necessary in Yorke v Lucas because the misleading conduct in that case "consisted" of the making of a false representation (to a particular recipient).[395] However, the conduct referred to in s 18 of the ACL is not confined to representations,[396] and not all cases where the conduct can be characterised as the making of a representation are as straightforward as those considered in Yorke v Lucas. An identification of the requisite knowledge that an accessory must possess will depend on the nature of the conduct of the principal that contravenes the statutory provision. 

     [395]Yorke v Lucas (1985) 158 CLR 661 at 667-668.

     [396]Competition and Consumer Act, s 4(2). See Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 622-625 [100]‑[108], 646 [179]; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 ("Miller & Associates") at 368 [14]‑[15].

358. For example, in some contexts, the failure to disclose some relevant fact or matter may amount to misleading or deceptive conduct where the circumstances are such that there is a reasonable expectation that the fact or matter would be disclosed.[397] Although it is neither possible nor necessary to exhaustively state in the abstract the requisite knowledge an accessory must possess to be liable for such misleading or deceptive conduct, in broad terms an accessory would have to be aware of the non‑disclosure and that disclosure was required. Such knowledge is different to being aware that the principal's conduct was misleading or deceptive within the meaning of the statute.

     [397]Miller & Associates (2010) 241 CLR 357 at 368-370 [14]-[20]; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 41, citing Kimberley NZI Finance Ltd v Torero Pty Ltd (1989) ATPR (Digest) ¶46-054 at 53,195.

359. Similarly, where the conduct is directed towards a large class of persons or the public in general, a conclusion that the principal has engaged in conduct that is misleading or deceptive contrary to the statute will, at least in part, require an attribution of certain characteristics to the "ordinary" or "reasonable" members of that class of persons (or the public in general) to whom the conduct is directed to determine whether the conduct has a tendency to lead into error.[398] The precise state of mind required to establish accessorial liability for such conduct will depend on how the case is framed but it may not necessarily require that an accessory have knowledge of, say, the characteristics of the "ordinary" or "reasonable" members of the class of persons (or the public in general) to whom the conduct is directed. 

     [398]Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at 84-85 [101]-[103]; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 651 [39].

360. In Anchorage Capital Master Offshore Ltd v Sparkes,[399] the New South Wales Court of Appeal (Ward P, Brereton JA and Griffiths A-JA) noted the existence of a longstanding difference of opinion in the decisions of intermediate courts of appeal as to whether, to be liable as an accessory in circumstances like those considered in Yorke v Lucas, an accessory had to have knowledge of the falsity of the representation[400] or if mere knowledge of the facts that rendered the representation false was sufficient.[401] In this case, the majority of the Full Court of the Federal Court took the latter view.[402] That approach is contrary to Yorke v Lucas and Giorgianni. In Anchorage Capital, the Court of Appeal was correct in adopting the former view, although the Court also erred in equating that knowledge with knowledge that the principal's conduct was misleading or deceptive.[403] 

     [399](2023) 111 NSWLR 304 at 359-360 [329].

     [400]See, for example, Belconnen Lakeview Pty Ltd v Lloyd (2021) 156 ACSR 273 at 309 [148], 310-311 [155]-[157].

     [401]See, for example, Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1 at 7-10 [6]-[13].

     [402]Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2023) 297 FCR 180 at 273 [305].

     [403]Anchorage Capital Master Offshore Ltd v Sparkes (2023) 111 NSWLR 304 at 360 [330].

     Accessorial liability for unconscionable conduct

361. In this Court, there were several different formulations of the state of mind Mr Wills contended had to be established before it could be concluded that he was involved in the College's contravention of s 21 of the ACL. Thus, Mr Wills contended that to be liable as an accessory, it had to be established that he knew that the College's conduct "involve[d] predation, exploitation, or lack of good faith, or otherwise [bore] the character that render[ed] it against conscience". The difficulty with this contention is that conduct need not be characterised as predatory, exploitative or lacking in good faith to be unconscionable, and to say that an accessory must know that the principal's conduct "bears the character that renders it against conscience" is just a different way of stating that the accessory must know that the principal's conduct was unconscionable.

362. It was also contended that, consistent with Gordon J's analysis of the meaning of "unconscionable" in Stubbings v Jams 2 Pty Ltd,[404] it had to be alleged and found that Mr Wills knew that the relevant conduct of the College was "offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society".[405]

     [404](2022) 276 CLR 1 at 26-27 [56]-[58].

     [405]Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1 at 27 [58], citing Australian Securities and Investments Commission vKobelt (2019) 267 CLR 1 at 40 [93].

363. This submission should also be rejected. The description of unconscionability in Stubbings and the cases to which it refers were not identifying some essential matter, fact or element of a contravention of s 21(1) of the ACL of which an accessory must have knowledge. To require that an accessory appreciate that the conduct of the principal contravened a community standard identified as part of a judicial exposition of the meaning of unconscionability is no different in substance to requiring that the accessory know the legal complexion or characterisation of the principal's conduct.[406]

     [406]cf Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53.

364. To be liable as an accessory, a party such as Mr Wills must, inter alia, have knowledge of the essential facts concerning the conduct of the principal that was said to amount to unconscionable conduct contrary to s 21(1) of the ACL. It follows from the above that this requires a close analysis of what the principal's contravention of s 21(1) "consisted" of. If, in a simple case, the unconscionable conduct was found to consist of the principal, being a supplier, engaging in conduct requiring a customer to comply with a condition that was not reasonably necessary for the protection of the supplier's legitimate interests,[407] then the accessory would have to be aware that the condition was imposed and that it was not necessary to protect the supplier's legitimate interests, even if the supplier did not have knowledge of the latter.

     [407]ACL, s 22(1)(b).

365. However, the analysis of the knowledge an accessory must possess can become more complex depending on the nature of the unconscionable conduct alleged and found against the principal. With unconscionability, the conduct alleged against the principal often involves the attribution of some form of intention or knowledge of at least some conduct, circumstance, consequence of conduct or likely result of conduct to the principal. In such a case, to be liable, the accessory will also have to possess that intention or knowledge. Thus, while a party "involved" or "knowingly concerned" in a contravention of s 21 must possess knowledge of the essential facts of the principal's contravention, even if in some cases the principal did not, that does not mean that in all cases the intention or knowledge of the accessory will differ from that of the principal.

     Mr Wills was involved in the College's unconscionable conduct

366. The primary judge's findings of knowledge and intention against Mr Wills included that, from no later than 7 September 2015, he was aware of the proposed enrolment and withdrawal process changes at the College,[408] that the changes were being made to maximise or increase the College's profits,[409] that there were risks of agents engaging in misconduct in the recruitment of students (ie, the "CA misconduct risk")[410] and unsuitable students being enrolled (ie, the "unsuitable enrolment risk"),[411] that the process changes would remove mechanisms that mitigated those risks,[412] and that the result of the process changes would be (and over time was) a substantial increase in the number of students who enrolled in the College's online courses.[413] The primary judge also found that by the time Mr Wills commenced as acting Chief Executive Officer of the College in November 2015, he "knew that substantial numbers and proportion of students were getting nothing from the college yet they were incurring very substantial debts to the Commonwealth".[414] Lastly, the primary judge found that Mr Wills knew that "the college ran a system of recruitment, enrolment and progression through census dates of students which enabled the college to pocket vast sums of money, effectively from students, via the [FEE-HELP] scheme, in return for which the college had to deliver nothing to very substantial numbers of students".[415]

     [408]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 582 [557].

     [409]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 582 [559].

     [410]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 582 [562]; see reasons of Gageler CJ and Jagot J at [29].

     [411]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 583 [563]; see reasons of Gageler CJ and Jagot J at [30].

     [412]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 583 [564].

     [413]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 583 [565].

     [414]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 584 [574].

     [415]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 584 [575].

367. The effect of the primary judge's findings was that, from no later than 7 September 2015, Mr Wills knew that the process changes would lead to the CA misconduct risk and the unsuitable enrolment risk materialising and that as a consequence substantial numbers of students would incur debts for courses that they did not properly appreciate they had enrolled in and in respect of which they would not receive any benefit,[416] and knew and intended that the College would derive substantial revenue (and profits) as a consequence. After 7 September 2015, Mr Wills' belief and expectation that these matters would ensue from the enrolment and withdrawal process changes gave way to knowledge that they had come to pass.

     [416]Australian Competition and Consumer Commission v Productivity Partners Pty Ltd [No 3] (2021) 154 ACSR 472 at 584 [574].

368. As noted, with some contraventions of s 21 of the ACL, the accessory need not possess any greater intention or knowledge than that of the principal. This is such a case. The essence of the unconscionability alleged and found against the College was that it knew of the likelihood that the process changes would lead to misconduct of the agents in enrolling students and that the College intended to take advantage of that likelihood to increase profits.[417] The findings made against Mr Wills were to the effect that he shared that knowledge and intention. Those findings were sufficient to establish that he had the requisite state of mind to be involved or knowingly concerned in the College's unconscionable conduct.

     [417]See, for example, reasons of Gageler CJ and Jagot J at [67]‑[68].

369. I would reject ground one of Mr Wills' appeal (and ground three of the College's appeal).

370. I agree with the orders proposed by Gageler CJ and Jagot J.