14 Apr 2025
Corporate Crime & Investigations
Trading trust for profit: Federal Court clamps down on unconscionable conduct by FX contract providers
On 14 August 2024, the High Court handed down the judgment of Productivity Partners Pty Ltd v Australian Competition and Consumer Commission; Wills v Australian Competition and Consumer Commission [2024] HCA 27.
The case determined two appeals:
- the appeal of Productivity Partners Pty Ltd trading as Captain Cook College (College) in relation to unconscionable conduct; and
- the appeal of Mr Wills in relation to accessorial liability.
Accessorial liability is the mechanism by which a person can be held responsible or liable for the wrongdoing of another.
Background
In 2018, the Australian Competition and Consumer Commission (ACCC) brought proceedings against the College and Mr Wills.
In the proceedings, the ACCC argued that from 7 September 2015 to 18 December 2015, the College removed two system controls. These systems effectively ameliorated known risks of unsuitable students becoming, and remaining, enrolled in their online vocational education and training (VET) courses at the date on which VET fees became claimable by the College.1 These actions were deemed by the earlier courts to be unconscionable, and this position was upheld in the appeal.
Accessorial liability of Mr Wills
In addition to allegations that the College was unconscionable and had contravened section 21 of the Australian Consumer Law (ACL),2 the ACCC further alleged that Mr Wills was knowingly concerned in the College’s unconscionable conduct.
Wills was the Chief Operating Officer of Site Group International Ltd (Site) which was the company that acquired the College in 2014. He was also the CEO of the College between November 2015 and January 2016. Mr Wills was involved in the removal of the safeguards. Although he did not come up with the original plan to remove them in his personal capacity, he was still informed of, and oversaw, its implementation. As such, in the earlier court, Mr Wills was found to be ‘knowingly concerned’ in the College’s unconscionable conduct and deemed to be accessorily liable by virtue of s 224(1)(3) of the ACL.3
The Appeal
Mr Wills appealed the earlier decisions on two grounds:4
- first, he argued that the Court erred in finding that he had the requisite knowledge to be ‘knowingly concerned’ in the College’s contravention as there was no finding that he knew the removal of the vetting controls would take advantage of students or could be considered against conscience; and
- second, he argued that the Court erred in finding that he satisfied the participation element for accessorial liability by his conduct before he had knowledge of the essential matters making up the contravention, and by his continued holding of positions of authority, but no identified positive acts, once he obtained the requisite knowledge.
In essence, the appeal asked the question – was Mr Wills required to know or believe that the College’s system was unconscionable?
Decision
In 6 separate judgments, the Court unanimously held that Mr Wills was accessorily liable for the College’s contravention. They found that in order to test whether a person is ‘knowingly concerned’ in a contravention, one must assess whether the person:
- intentionally participated in conduct that implicates or involves them in the primary contravention; and
- has knowledge of the essential facts, or circumstances that make up the contravention (i.e., those facts that must be established in order to show that the primary contravention was committed).5
Each judge approached the question in varying ways, but ultimately came to the unanimous conclusion that to be accessorily liable, the person only is required to have knowledge of the essential facts, not how they can later be characterised by a court.
In the judgment, Chief Justice Gageler and Justice Jagot clarified that:6
The relevant distinction is not between facts and the law… 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.
Further, Justice Gordon outlined that:7
In the present case, all that was necessary to show was that Mr Wills had knowledge of all the essential facts or circumstances which were established to show that the primary contravention was committed by the College, and that he participated in that contravention. He was not required to know that the College’s conduct was “unconscionable” at law.
It was immaterial that Mr Wills did not desire an increase in unsuitable students, or an increase in misconduct. By virtue of him being aware that the removal of the safeguards would involve such outcomes, and him intending these means to achieve increased profitability, it was deemed that he intended to be involved in the essence of the acts that amounted to unconscionable conduct.8
As such, the High Court found that it was not necessary to prove that Mr Wills knew that the removal of the vetting controls was unconscionable or otherwise knew how those essential facts would be legally characterised.9
Penalty imparted
In May 2025, the Federal Court imposed penalties on Mr Wills.10
He was fined $400,000 and was disqualified from managing corporations for three years.
In the Federal case, the ACCC sought an order prohibiting Mr Wills from seeking or accepting any indemnity under an insurance policy in respect of the penalty.11
Despite this, Mr Wills was able to claim under the policy.
They found that:
Although Mr Wills’s conduct was deliberate in the sense that he consciously and deliberately engaged in it, and he was aware of each of the elements of it which gave rise to it being unconscionable, he was not aware that it was unconscionable conduct and in that sense he did not deliberately engage in unconscionable conduct and hence the conduct was not wilful. Also, Mr Wills was not dishonest and he did not intend to cause harm.
Lavan comment
This decision outlines the strict approach the court is willing to take in combatting accessorial liability and unconscionable conduct. Notwithstanding the decision was made with respect to civil appeals, its impact can have wide reaching implications within both civil and criminal spheres.
Further, the case reveals the ACCC’s “determination to pursue individuals in appropriate cases”12.
It imparts a warning to decision makers that they can be found to be liable for the unconscionable acts of another, even where they are unaware of the legal characterisation of the conduct, showcasing that it is important to be aware of the potential risks that can be associated with the conduct they oversee.
If this article has raised any concerns for you or your company/business, please do not hesitate to contact Cinzia Donald.
Disclaimer
The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.
Footnotes
1 Ibid [3].
2 Productivity Partners Pty Ltd v Australian Competition and Consumer Commission; Wills v Australian Competition and Consumer Commission [2024] HCA 27, [3] (Productivity Partners).
3 This section 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 s 21, the court may order the person to pay to the Commonwealth, State or Territory, as the case may be, such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the court determines to be appropriate.
4 Productivity Partners [9].
5 Ibid [146].
6 Ibid [82].
7 Ibid [149].
8 Ibid [279].
9 Ibid [80]-[82]; [154]; [269]; [399].
10 See Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (in administration) (No 6) [2025] FCA 542.
11 Ibid [96].
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