FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 3) [2017] FCA 749 File number: NSD 1610 of 2015 Judge: GLEESON J Date of judgment: 30 May 2017 Date of publication of reasons: 4 July 2017 Catchwords: CORPORATIONS – application for leave to proceed against a company in liquidation pursuant to s 500 of the Corporations Act 2001 (Cth) – proceedings alleging misleading or deceptive conduct, unconscionable conduct and making of false and misleading representations in breach of Australian Consumer Law against vocational education provider – proceeding alleging unconscionable "system of conduct" under s 21 of the Australian Consumer Law – whether public interest met by potential outcomes in materially similar proceedings – where some relief sought not available through proof of debt process – where relief sought includes refund of substantial monies paid from public revenue – where relief sought affects interests and potential liabilities of numerous third parties – leave granted Legislation: Corporations Act 2001 (Cth) Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) Federal Court of Australia Act 1976 (Cth) Higher Education Support Act 2003 (Cth) Trade Practices Act 1974 (Cth) Cases cited: Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521 Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336; [2003] ATPR ¶41-937 Australian Competition and Consumer Commission v Unique International College [2017] FCA 727 Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356 Rushleigh Services Pty Ltd v Forge Group Ltd (In Liq) (Recs and Mgrs Apptd); re Forge Group Ltd (In Liq) (Recs and Mgrs Apptd) [2016] FCA 1471 Trade Practices Commission v CSR Ltd [1990] FCA 521; [1991] ATPR ¶41-076 at 52,152 Date of hearing: 30 May 2017 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 49 Counsel for the Applicants: Mr N O'Bryan SC with Mr D Tynan Solicitor for the Applicants: Australian Government Solicitor Solicitor for the Respondent: Mr S Paterson of HWL Ebsworths ORDERS NSD 1610 of 2015 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION First Applicant COMMONWEALTH OF AUSTRALIA Second Applicant AND: CORNERSTONE INVESTMENT AUST PTY LTD (IN LIQ) ACN 082 383 640 Respondent AND BETWEEN: CORNERSTONE INVESTMENTS AUST PTY LTD (IN LIQ) ACN 082 383 640 Cross-Claimant AND: AMITY EDUCATION PTY LTD ACN 168 846 286 (and another named in the Schedule) First Cross-Respondent JUDGE: GLEESON J DATE OF ORDER: 30 May 2017 THE COURT ORDERS THAT: 1. Pursuant to s 500(2) of the Corporations Act 2001 (Cth), the applicants be granted leave to proceed against the respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GLEESON J: 1 On 30 May 2017, I granted leave to the applicants to proceed against the respondent ("Empower") pursuant to s 500(2) of the Corporations Act 2001 (Cth). By s 500(2), after the passing of a resolution for voluntary winding up of a company, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes. 2 On 26 April 2017, the sole director of Empower resolved to wind up the company. Liquidators were appointed on the same date. 3 On the hearing of the application for leave, the liquidators of Empower were represented by Mr Paterson of HWL Ebsworths lawyers. The grant of leave was not opposed by the liquidators. The liquidators do not intend to oppose the final relief sought by the applicants. 4 These are my reasons for granting leave to proceed. Background to application for leave to proceed 5 The applicants in the proceeding seek declarations and other orders, including pecuniary penalties, against Empower for alleged misconduct in connection with the supply of vocational education courses to consumers. 6 The proceeding was commenced on 8 December 2015 by way of originating application and concise statement alleging, among other things, that, from 1 March 2014 to 30 June 2015, Empower engaged in conduct that was misleading or deceptive or likely to mislead or deceive, engaged in conduct that was, in all the circumstances, unconscionable, and made representations that were false or misleading in contravention of ss 18, 21 and 29(1) respectively of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) ). 7 On 17 August 2016, the proceeding was fixed for a trial commencing 3 July 2017. 8 The applicants summarise the allegations made against Empower as follows: (1) From at least 1 March 2014, Empower carried on the business of marketing and supplying online education courses to students living in low socio-economic communities across Australia, including in rural towns, remote communities and communities with significant indigenous populations. Each course cost at least $14,800 and many students were enrolled in two courses. (2) Empower's business was focused on, dedicated to, and set up so as to achieve not a fundamentally educational purpose, but a purpose of maximising distributable profits. (3) At all times, an eligible student who enrolled in one or more of the Empower courses was entitled to a Commonwealth student loan called VET FEE-HELP. VET FEE-HELP was not paid by the Commonwealth to the student but was paid directly to Empower in discharge of the student's liability to pay the course fees. (4) A student entitled to VET FEE-HELP incurred a debt to the Commonwealth for each unit of study in which he or she enrolled. The debt amounted to 120% of the loan, and the student is liable to repay the debt even if he or she does not complete the course. However, the student only becomes liable to repay the debt when his or her income exceeds the statutory minimum income threshold (which in the period 1 July 2013 to 30 June 2014 was $51,309 and in the period 1 July 2014 to 30 June 2015 was $53,345). (5) The applicants allege that Empower deliberately recruited students who were unlikely to complete (or even begin) its courses, and did not explain to most students the nature of their VET FEE-HELP obligations if they enrolled in a course, so that most of them did not know that they were incurring a debt to the Commonwealth or when that debt would have to be repaid. (6) Empower engaged at least 23 marketing companies ("marketers") who, in turn, engaged at least 116 brokers (together, "the recruiters") to market Empower's courses and recruit students. Empower paid each marketer a commission for each student they enrolled in an Empower course in an amount ranging from $1,000 to $3,996 plus GST per student. (7) Empower did not provide training to the recruiters in relation to compliance with the Australian Consumer Law and did not monitor their recruitment practices. (8) Empower offered inducements to consumers to enrol including cash and laptop computers. (9) Empower's marketing and enrolment process was implemented across Australia. 9 The evidence filed and served by the applicants comprises: (1) twenty affidavits from consumers and other witnesses which affidavits are said to exemplify Empower's unconscionable conduct; (2) five affidavits and one proof of evidence from former employees which are said to demonstrate, among other things, that many students contacted by Empower after being signed up were unaware that they had been enrolled in a course, or simply signed up to get a free laptop; Empower did not assess students' literacy or numeracy prior to enrolment and most students enrolled by Empower were not capable of doing their courses; employees were directed to pass students who had failed assessments and recruiters paid students to enrol; (3) one affidavit from a medical doctor who gives evidence that one consumer who has an intellectual disability, attention deficit hyperactivity disorder and oppositional defiant disorder, is incapable of giving evidence; (4) an expert report of Emeritus Professor Tony Vinson, a supplementary expert report of Dr Matthew Ericson and a further expert report of Dr Ericson; and (5) two affidavits from officers of the Department of Education and Training ("Department"), regarding the operation of the VET FEE-HELP scheme and the data provided to the experts. 10 Empower has not filed any evidence in its defence, or in support of its cross-claims. 11 The applicants have already expended very substantial time, effort and expense in formulating their claim and progressing the proceeding to the present stage. There have been two interlocutory hearings and judgments delivered. A third interlocutory hearing had been listed for hearing. Principles governing application 12 The approach to applications for leave under s 500(2) was summarised by Foster J in Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356 at [18]–[24], particularly at [22], as follows: In Executive Director of the Department of Conservation and Land Management v Ringfab Environmental Structures Pty Ltd [1997] FCA 1484, Lee J discussed the relevant considerations which should ordinarily guide the exercise of the discretion to grant leave to proceed against a corporation in liquidation. The following considerations may be extracted from his Honour's judgment: (a) The purpose of having a requirement for leave is to prevent a corporation in liquidation being subjected to actions that are expensive and, therefore, carried on at the expense of the creditors of the company and, perhaps, unnecessarily. (b) In determining whether leave should be granted, the Court considers whether the balance of convenience lies in allowing the applicant to proceed by way of action to judgment, or whether the applicant should be left to pursue his or her claim by lodging a proof of debt with the liquidator. The matter is one of discretion and the onus is on the applicant to demonstrate why it is more appropriate in respect of the particular claim, to proceed by way of action. (c) For leave to be granted, it must be shown that there is a serious or substantial question to be tried and a real dispute between the parties. Leave will not be granted where the applicant does not have a genuine claim or where the claim would be futile. 13 In Rushleigh Services Pty Ltd v Forge Group Ltd (In Liq) (Recs and Mgrs Apptd); re Forge Group Ltd (In Liq) (Recs and Mgrs Apptd) [2016] FCA 1471 at [14], Foster J noted that the Corporations Act is silent as to the principles to be applied in determining an application for leave. In refusing leave in that case, his Honour conveniently summarised (at [15]-[16]) the principles emerging from several of the leading authorities as follows: 15 In Re Gordon Grant & Grant Pty Ltd [1983] 2 Qd R 314 at 315– 317, McPherson J, when sitting as a judge of the Full Court of the Supreme Court of Queensland, summarised the relevant principles. I extract the following relevant propositions from his Honour's summary: (a) A decision granting or refusing leave to proceed against a corporation in liquidation involves the exercise of a judicial discretion; (b) The prohibition against commencing or proceeding with an action or other proceeding against a company once a winding up order is made or the company is placed into liquidation is a feature of companies legislation of long standing; (c) Without the relevant restriction, a corporation in liquidation would be subjected to a multiplicity of actions which would be both expensive and time-consuming, as well as in some cases completely unnecessary. This explanation has been accepted in a number of Canadian cases and was also accepted by Street J in Re AJ Benjamin Ltd (In Liq) [1969] 2 NSWR 374 at 376, (1969) WN (Pt 1) (NSW) 107 at 109–110; (d) Generally, what is substituted for litigation in the ordinary form is a procedure by which a claimant lodges a verified proof of debt with the liquidator, who admits or rejects it wholly or in part, and from whom an appeal lies to a judge who determines that appeal de novo; (e) A claimant should proceed by way of lodgment of a proof of debt unless he or she can demonstrate that there is some good reason why a departure from that procedure is justified in the case of the particular claim in dispute; and (f) It is impossible to state in an exhaustive manner all of the circumstances in which leave to proceed may be appropriate. However, in the past, those circumstances have been said to include factors such as the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved and the stage to which the proceedings, if already commenced, may be progressed. 16 These remarks of his Honour were approved by the Full Court of this Court (Wilcox, Burchett and Beazley JJ) in Vagrand Pty Ltd (In Liq) v Fielding (1993) 41 FCR 550 at 554–555. 14 In Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521 ("AIPE"), a case which also concerns alleged misconduct in connection with the VET FEE-HELP scheme, Bromwich J recently noted at [23]: While the protection of the interests of creditors is undoubtedly important, it is wrong in principle to regard that consideration as being of itself determinative of an application for leave in all cases. As was pointed out by the Full Court in Vagrand Pty Ltd (In liq) v Fielding (1993) 41 FCR 550 at 552, while the availability of assets for the purposes stipulated by companies legislation is important, it is overstating the position to suggest that the right to pursue relief under trade practices legislation must always give way to that consideration. Their Honours observed at 552-3: It is true that, upon a winding up of a company, the appointed liquidator comes under an obligation to take control of the company's assets and realise them for the benefit of the creditors, after payment of all proper outgoings. But the liquidator takes the assets subject to such liabilities as then attach to them. ... The point, of course, is that the assets come to the liquidator with their history and inherent characteristics. Although the liquidator takes the assets on behalf of the creditors, third parties retain any rights which enure to them as a result of that history or those characteristics. ... We do not suggest that, in a case where the desired relief is otherwise unavailable, an applicant is automatically entitled to leave under s 371(2) of the Companies Code, or its equivalents. The question of leave is always a matter of discretion. But the circumstance that relief is not otherwise available to an applicant must always be a significant factor in favour of leave. 15 At [26], Bromwich J set out the following list of factors relevant to the grant of leave to proceed by a regulator against a company in liquidation: (1) the purpose of a civil penalty, and thus of such proceedings, is primarily if not wholly protective in promoting the public interest in compliance, by putting a price on contravention that is sufficiently high to deter repetition by the contravener [not a factor in this case] and by others tempted to contravene: Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476 (the CFMEU civil penalty case) at 490 [55], quoting Trade Practices Commission v CSR Ltd (1991) ATPR 41–076 at 52,152; (2) capacity to pay any penalties imposed was not a proper or relevant consideration: Australian Competition and Consumer Commission v Leahy (No. 2) [2005] FCA 254; (2005) 215 ALR 281 at 285 [11]; (3) even if a company is in liquidation, it may still be appropriate to order that it pay penalties as a measure of the Court's disapproval of the contraventions and as a measure of the seriousness in which they are regarded, including for the purposes of general deterrence: Australian Competition and Consumer Commission v SIP Australia Pty Limited [2003] FCA 336; (2003) ATPR 41-937 at 47,077-8 [59] – it was not suggested that this principle was diminished in a material way by such penalties not ultimately being recoverable by reason of the respondent being in liquidation; (4) the ACCC as the body enforcing the civil penalty provisions in question has a real interest in seeking declaratory relief to vindicate a public right that the ACL has been breached: Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885; (2001) ATPR 41-801 at 42,630 [30]; Australian Competition and Consumer Commission v Pacific Dunlop Limited [2001] FCA 740; (2001) ATPR 41-823 at 43,098-9 [63]-[69] – a point that may be seen to apply equally in respect of the other relief sought; and (5) there is a significant public interest in declarations of contravening conduct and imposition of penalties being on the public record in aid of deterrence, which is not defeated by the fact that the company is in liquidation and unable to pay the penalties: Secretary, Department of Health and Ageing v Prime Nature Prize Pty Ltd (in liq) [2010] FCA 597 at [22]-[23]. 16 At [47], Bromwich J concluded: In the absence of these proceedings, and more particularly in the absence of these proceedings succeeding, the position remains that, so far as the law and society is concerned, the respondent has done nothing wrong. It is in the community interest that the proceedings continue to resolution in order to determine whether or not that is so, especially when such large sums of public money have been expended and when those behind the respondent appear to have secured some $34 million in dividends. It is in the public interest that there be a proper determination one way or the other. Relief sought against company in liquidation 17 Prior to the commencement of Empower's liquidation, the applicants sought the following relief: (1) declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") that Empower contravened ss 18, 29(1)(g), 29(1)(i), 74, 75, 76, 78 and 79 of the Australian Consumer Law and engaged in unconscionable conduct, contrary to s 21 of the Australian Consumer Law; (2) injunctions under s 232 of the Australian Consumer Law that certain contravening conduct cease; (3) publication orders under s 246(2)(d) of the Australian Consumer Law; (4) compliance program orders under s 246(2)(b)(i) of the Australian Consumer Law; (5) pecuniary penalties under s 224 of the Australian Consumer Law; (6) injunctions under s 232 of the Australian Consumer Law requiring Empower to refund to the Commonwealth VET FEE-HELP assistance payments previously paid by the Commonwealth; (7) declarations pursuant to s 21 of the Federal Court Act and s 239 of the Australian Consumer Law that enrolment agreements between consumers and Empower are void; (8) declarations pursuant to s 21 of the Federal Court Act and s 239 of the Australian Consumer Law that agreements between consumers and the Commonwealth under the VET FEE-HELP scheme are void; (9) orders pursuant to s 239 of the Australian Consumer Law that Empower send notices to certain consumers in respect of redress of loss or damage suffered by those consumers and prevention of further loss or damage to them; (10) a declaration pursuant to s 21 of the Federal Court Act that the Commonwealth's liability to pay Empower the amount of the loan made to the consumer in discharge of the consumer's VET liability be annulled; and (11) costs under s 43 of the Federal Court Act. 18 In view of the fact that Empower has entered into liquidation, and Empower's operations have ceased, the applicants collectively no longer press the relief in (2), (3), (4) and (6) above. However, in place of the injunction sought under s 232 of the Australian Consumer Law for Empower to refund VET FEE-HELP assistance payments, the applicants propose to seek a declaration to the effect that the Commonwealth is entitled to a refund in respect of students enrolled in Empower courses in contravention of the Australian Consumer Law. If made, that declaration will form the basis of a proof of debt that can be lodged in the liquidation process. 19 The applicants submit that the relief sought under s 239 of the Australian Consumer Law, if granted, will have the effect that the relevant students' liability to pay a VET tuition fee for the course will be annulled and the Commonwealth's loans of VET FEE-HELP assistance will also be annulled. 20 The claims for declarations, pecuniary penalties, refunds and costs are proposed to be pressed (with some amendments in respect of the declarations), but the applicants are content to undertake not to seek to enforce such monetary orders without further leave. The applicants' submissions in support of granting leave to proceed 21 The applicants observed that much of the relief claimed (particularly the declarations and penalties) could not be pursued by way of proof of debt. 22 The applicants contended that the declarations sought: serve to vindicate the ACCC's claim that Empower contravened the Australian Consumer Law; are of assistance in clarifying the law; promote general deterrence; and will inform consumers of the dangers arising from conduct engaged in by Empower. Cancelling debts incurred by students enrolled in courses by Empower 23 The applicants contended that there is a particular public interest and pragmatic factor in this case in favour of permitting the applicants to continue to seek declarations under s 239 of the Australian Consumer Law that the enrolment contracts entered into by students are void. It was said that, if granted, the relief sought will have the effect of cancelling any debts that the students owe to the Commonwealth as well as preventing the liquidators from seeking to enforce enrolment agreements against individual students. 24 The applicants submitted that, according to the evidence, in the 2014 and 2015 calendar years some 6,247 students were enrolled in Empower courses with the assistance of VET FEE-HELP payments. Those students are said to have incurred debts to the Commonwealth totalling $84,055,572. 25 Clause 55 of Sch 1A to the Higher Education Support Act 2003 (Cth) ("HES Act") provides that the Commonwealth must, as a benefit to a student who is entitled to an amount as to VET FEE-HELP assistance, lend that student the amount of VET FEE-HELP assistance and pay that amount to the VET provider in discharge of the student's liability to pay his or her VET tuition fee. 26 Upon the payment by the Commonwealth to a VET provider of am amount pursuant to cl 55 of Sch 1A in discharge of the student's liability to pay his or her VET tuition fee, the student incurs a debt to the Commonwealth pursuant to s 137-18 of the HES Act. The debt is incurred whether or not the student completes the course and, in most cases, the debt is 120% of the loan. The student is only obliged to make repayments to the Commonwealth if and when he or she reaches the relevant earnings threshold under Div 154 of the HES Act. 27 Clause 61 of Sch 1A to the HES Act provides for payments to be made by the Commonwealth to VET providers of amounts expected to become payable pursuant to cl 55 in advance, for those amounts to be set off against amounts that then become payable under the HES Act, and for the recovery of any excess if the advance exceeds the amount that becomes payable. 28 The affidavit of David Justin Fintan, sworn on 3 May 2017, explains that Empower successfully applied for advance VET FEE-HELP payments for students that Empower estimated would enrol in its courses in 2014 and 2015 and who would elect to pay their course fees through the VET FEE-HELP scheme. A reconciliation of the advance payments paid to Empower against the amount of VET FEE-HELP actually accessed by Empower's students for 2014 took place in 2015 and a further reconciliation of advance payments made in 2014 and 2015 was completed by the Department on 21 December 2016. 29 On 21 December 2016, the Department wrote to Empower advising that it had partially reconciled the advance payments made to Empower in 2015 and that a debt of $10,029,076 was owing to the Department, representing non-contested amounts. It appears from the affidavit that the calculation of the debt was done on the basis that students incurred VET FEE-HELP debts totalling $84,055,572 over the relevant period. The Department issued an invoice for payment of the $10,029,076 debt within 30 days. 30 On 10 April 2017, Empower's solicitors wrote to the Department advising that the respondent acknowledged the debt to the Commonwealth stating that: "We are instructed that our client is making arrangements for payment of this invoice and that our client considers payment to be in the ordinary and proper course of Empower's business, so that it is entitled to do so". 31 On the basis of that response, the applicants submit that there appears to be no dispute that payments have been made to Empower under cl 55 of Sch 1A of the HES Act totalling $84,055,572 in respect of the 2014 and 2015 years; and that students enrolled in Empower courses in those years have incurred debts totalling $84,055,572 to the Commonwealth under that Act. 32 While it may be the case that few (if any) of the 6,247 students enrolled in courses in 2014 and 2015 have reached the relevant earnings threshold under Div 154 of the HES Act, so as to be required to make repayments to the Commonwealth, the affidavit of Andrew John Francis affirmed on 2 May 2017 provides evidence that VET FEE-HELP debts, once incurred, are required to be disclosed as liabilities by students when applying for: (1) personal loans from the Commonwealth Bank of Australia and Members Equity Bank Limited; (2) home loans, investment property loans and equity loans from Westpac Banking Corporation; and (3) various types of loans from ING Bank (Australia) Limited. 33 The applicants' submissions proceeded on the assumption that it may be inferred from Mr Francis's evidence that organisations similar to those listed above may also require disclosure of VET FEE-HELP debts when assessing applications for various types of loans. 34 The interests of these students are therefore currently affected by having been enrolled in Empower courses. Pecuniary penalty 35 The applicants submitted that the principal object of the penalty provisions of the Competition and Consumer Act is deterrence, both general and specific. In Trade Practices Commission v CSR Ltd [1990] FCA 521; [1991] ATPR ¶41-076 at 52,152 French J stated, in relation to s 76 of the then Trade Practices Act 1974 (Cth): The principal, and I think probably the only, object of the penalties imposed by s. 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the [Trade Practices] Act. 36 It was submitted that this principle applies with equal force to the operation of s 224 of the Australian Consumer Law, the consumer protection penalty provision. The purpose of a pecuniary penalty is protective in promoting the public interest in regulatory compliance. 37 The fact that Empower is in liquidation, with potentially no expectation that it will have the capacity to pay a penalty, is said to be no bar to imposing a penalty suitable for general deterrence and does not defeat the significant public interest behind the deterrence function. In Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336; [2003] ATPR ¶41-937 at 47,078; [59], Goldberg J commented: [I]f general deterrence is to have any meaning, a company in liquidation which has contravened the Act must be ordered to pay an appropriate pecuniary penalty as a deterrent to others. Prejudice to creditors 38 The applicants submit that a grant of final relief in the proceeding would not in itself prejudice the interests of the creditors. In accordance with normal practice, the applicants are amenable to giving an undertaking not to enforce any pecuniary penalties, or any costs order in their favour, without the further leave of the Court. 39 The applicants noted that the majority of the unsecured debts in the liquidation are owed to the Commonwealth, the second applicant. 40 The applicants accept that the parties will incur costs in running these proceedings. However, given the advanced stage of the matter, the applicants submit that the costs of defending the proceedings ought not outweigh the considerations in favour of allowing the proceeding to proceed and to do so in a timely way. Public interest 41 The applicants observed that the proceeding is not between competing commercial interests, but involves matters of public interest. The applicants comprise, on the one hand, the regulator which has the statutory role of seeking to enforce compliance with the Australian Consumer Law and the Commonwealth which, through the Department, provides the funding for VET FEE-HELP assistance. Consideration 42 There is a serious question to be tried as to whether Empower engaged in conduct which is alleged to constitute serious contraventions of the Australian Consumer Law. The alleged contraventions involve large sums of money and affect large numbers of consumers. 43 The liquidators have indicated that the proceeding will be uncontested. The matter was listed for hearing commencing 3 July 2017 for five weeks and had reached an advanced stage of preparation by the time of the resolution for voluntary winding up. The applicants now estimate that the trial can be concluded within three days. Thus, the additional expense of completing preparation for and conducting an uncontested trial will be relatively confined. 44 The proof of debt process will not assist the applicants to obtain all the relief they seek, in particular the pecuniary penalties and declarations. 45 There are currently several matters before the Court in which similar claims are made against education providers who allegedly exploited the VET FEE-HELP scheme. A significant common feature of the matters, or at least some of them, is that the applicants seek to establish their case based upon a "system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour": see s 21(4)(b) of the Australian Consumer Law. I was informed that judgment was reserved in a case that involved an alleged "system of conduct" but that, even so, this matter would provide an opportunity for the applicants to obtain an early judgment on the operation of s 21(4)(b). Judgment was handed down in Australian Competition and Consumer Commission v Unique International College [2017] FCA 727 on 30 June 2017, after the hearing in the present case took place. In that case, Perram J found that the defendant had engaged in a "system of conduct" within the meaning of s 21(4)(b) of the Australian Consumer Law that was unconscionable. 46 In AIPE at [35], Bromwich J rejected an argument that the existence of similar proceedings against other VET providers would meet the public interest in general deterrence that might be achieved following a grant of leave to proceed, saying: A selective and perhaps inconsistent approach to enforcing breaches of the law is not in the public interest and is not facilitative of general deterrence. In any event, each case against each education provider turns on its own facts and it cannot be assumed that the issues will be the same. Moreover, as was pointed out on behalf of the applicants, at least one of those cases involves conduct on the part of the employees rather than on the part of contractors, making that particular aspect significantly different. Further, if the rights and interests of the individual students previously enrolled with the respondent is to have any weight or significance, the fact that other students enrolled with other education providers may obtain the benefit of those proceedings, while the students enrolled with the respondent may not, rather tells against that being a reason for not granting leave. 47 I accepted that the existence of similar proceedings, without more, does not provide a sound basis for refusing to grant leave to proceed, at least where the matter is substantially ready for trial and the liquidator does not oppose the grant of leave. 48 I was not convinced that the relief sought under s 239 of the Australian Consumer Law provides a strong basis for granting leave to proceed. Although Mr O'Bryan SC explained that the applicants consider that the legislative debts of students should be avoided by declaratory relief rather than by executive process, he did not explain the rationale for the applicants' preference in any detail. In my view, this is a neutral factor. Conclusion 49 The applicants demonstrated ample grounds for the grant of leave to proceed. It is in the public interest that the applicants be given an opportunity to obtain the relief sought. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 4 July 2017 SCHEDULE OF PARTIES NSD 1610 of 2015 Cross-Respondents Second Cross-Respondent R K HOLDINGS AUSTRALIA PTY LTD ACN 151 295 920