Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (In Liq) (No 5)

The Australian Competition and Consumer Commission (ACCC) filed an application against Cornerstone Investment Aust Pty Ltd (in liquidation) seeking declarations, pecuniary penalties, compensatory orders, a consumer redress order, and costs. The application followed a previous decision where it was found that the respondent, Empower, had engaged in unconscionable conduct, and contravened various provisions of the Australian Consumer Law (ACL). The court was required to decide on the relief sought by the ACCC, including the imposition of pecuniary penalties, compensatory orders, and a consumer redress order. Additionally, the court had to determine whether the applicants could withdraw an undertaking not to enforce monetary orders against the respondent in liquidation.

The court found that Empower had engaged in systemic misconduct targeting vulnerable consumers, and had contravened the ACL in numerous serious ways in relation to fifteen individual consumers. The court also found that Empower's system reflected a callous indifference to considerations of consumer protection. The court considered the purpose of declaratory relief and found that such relief was appropriate in this case as it involved the public interest and served to vindicate the ACCC's claim that the respondent had contravened the provisions of the ACL. The court also considered the applicants' request to withdraw an undertaking not to enforce monetary orders against the respondent in liquidation. The court varied the undertaking to allow the applicants to seek to prove in the external administration of Cornerstone Investments Aust Pty Ltd (in liq) as unsecured creditors.

The court made several orders, including a declaration that Empower engaged in unconscionable conduct in contravention of s 21 of the ACL, the imposition of pecuniary penalties, compensatory orders, a consumer redress order, and an order that Empower pay the applicants' costs of the proceeding. The court also varied the undertaking given by the applicants to the Court in connection with the grant of leave to proceed against the respondent. The court ordered Empower to pay $26,500,000 in pecuniary penalties and to compensate the ACCC for the VET FEE-HELP debts of 4,094 students who did not complete a unit of study in the course in which they were enrolled. The court also voided all contracts made between Empower and 35 identified consumers and annulled their associated liabilities.