Ali v Australian Competition and Consumer Commission

In Ali v Australian Competition and Consumer Commission, the appellants, Ms Ali and Mr Cameron, sought a stay of the penalty and costs orders made against them in the Federal Court. These orders arose from findings that they had engaged in conduct that was misleading, unconscionable and in breach of good faith obligations under the Competition and Consumer Act 2010. The appellants contended that if the penalty and costs orders were enforced, they would be financially incapable of continuing their appeal against the findings of liability, penalty and costs. They argued that the enforcement of these orders would render them unable to fund their appeal, thereby losing the opportunity to have the questions raised by the appeal determined.

The legal issue before the court was whether the appellants had established a sufficient reason for a stay of the penalty and costs orders. The court applied the test set out in Powerflex Services Pty Ltd v Data Access Corp, which requires the court to consider whether the orders would render the appellants financially incapable of continuing the appeal. The court noted that the appellants did not need to establish special circumstances or a special reason to justify the grant of a stay, as the orders were interlocutory in nature. The court also considered that the respondent, the Australian Competition and Consumer Commission, had not identified any prejudice in a stay and had not objected to the admission of the appellants' affidavits without cross-examination.

The court found that the appellants had established a sufficient reason for a stay of the penalty and costs orders. The court accepted the appellants' evidence that they did not have the financial capacity to meet the demands of the orders and that, without a stay, it was highly likely that they would not be able to continue their appeal. The court also noted that the redress orders, which constituted about $1 million, would be allocated to consumers while an appeal of the matter was pending, and that the Australian Competition and Consumer Commission had not provided a clear or apparently binding undertaking as to how those funds would be managed in the event the Court found there was no power for such an order or that the form was inappropriate. The court concluded that the appellants had established a sufficient reason for a stay of the penalty and costs orders, and that the enforcement of those orders would render them financially incapable of continuing their appeal.

The court made orders that the parties were to file an agreed minute, or competing minutes of proposed orders reflecting the outcome of these reasons within seven days, and that the matter be listed for a case management hearing by telephone at 10.30 am (AWST) on Wednesday 1 July 2020. Entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.