Australian Competition and Consumer Commission v Employsure Pty Ltd

The Australian Competition and Consumer Commission (ACCC) sought an appeal against a penalty imposed on Employsure Pty Ltd for misleading advertising practices, particularly the use of keywords in online ads that falsely suggested government affiliation. The appeal was heard by the Federal Court of Australia. The primary judge had found Employsure liable for misleading advertising and remitted the case for a new penalty hearing. The primary judge's penalty of $500,000 was deemed manifestly inadequate by the ACCC, prompting the appeal.

The primary legal issues addressed by the court involved the adequacy of the penalty imposed and the appropriateness of the costs order. The court had to consider whether the penalty was consistent with penalties imposed in comparable cases and whether the primary judge's discretion in awarding costs was correctly exercised. The court found that the penalty discretion had miscarried due to errors in the primary judge's findings and the inappropriate application of the principle that a mostly successful party should generally be entitled to its costs. The court observed that while penalties in comparable cases could provide guidance, each case must be decided on its own facts. The court also found that the primary judge misapplied the principle regarding costs, ordering the mostly successful party to pay half of the unsuccessful party’s costs, despite their success on the primary issues.

The court allowed the appeal against the penalty and costs orders. It set aside the penalty of $500,000 and imposed a penalty of $3 million, considering the misleading nature of the ads and the need for deterrence. The court also set aside the costs order and ordered Employsure to pay the ACCC’s costs of the remitted penalty hearing and the appeal, subject to a discount for the failed application for injunctive relief.