Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 5)

The Australian Competition and Consumer Commission (ACCC) brought an action against SensaSlim Australia Pty Ltd (in liquidation) in the Federal Court, seeking declarations and penalties for misleading and deceptive conduct under the Australian Consumer Law (ACL). The primary dispute concerned the misleading representations made in the sales of franchises by SensaSlim Australia to prospective franchisees. The ACCC alleged that these sales involved misleading statements regarding the efficacy and benefits of the SensaSlim weight loss program, which were presented to franchisees through various sales tools, including the SensaSlim DVD.

The legal issues before the Court included whether SensaSlim Australia had engaged in misleading or deceptive conduct by presenting information that exaggerated the benefits of the SensaSlim program, and whether certain individuals connected with SensaSlim Australia could be held accountable under the ACL. The Court had to determine the applicability of the Franchising Code of Conduct and the relevant definitions of "director" and "officer" under the Corporations Act 2001. Additionally, the Court examined the extent to which the representations in the sales process constituted misleading conduct under the ACL.

The Court found that SensaSlim Australia had engaged in misleading and deceptive conduct by presenting information that was not supported by evidence, particularly through the SensaSlim DVD. The DVD, which was a central sales tool, was found to contain misleading information that exaggerated the benefits of the SensaSlim program. The Court also considered the roles of individuals connected with SensaSlim Australia, determining that some could be considered officers under the Corporations Act. The Court concluded that the misleading conduct was deliberate and significant, warranting the imposition of penalties and declarations sought by the ACCC.

The Court ordered SensaSlim Australia Pty Ltd to pay penalties for the misleading conduct, and made declarations that certain conduct by SensaSlim Australia constituted misleading or deceptive conduct. Additionally, the Court held that certain individuals associated with SensaSlim Australia could be considered officers under the Corporations Act.