Federal Court of Australia Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344 File number: NSD 1104 of 2022 Judgment of: JACKMAN J Date of judgment: 9 April 2024 Catchwords: CONSUMER LAW – misleading and deceptive conduct – where first respondent represented that: first, distressed homeowners lose remaining equity in their property because "banks don't give change"; second, a so-called "Vestey Trust" structure would enable consumers to protect all assets; and third, that "Vestey Trust" structure had been tested and upheld as effective by the Full Court – whether second respondent liable as accessory – where second respondent had actual knowledge that conduct was misleading and deceptive – declaratory relief granted Legislation: Bills of Exchange Act 1909 (Cth) ss 89(1), 95(1) Competition and Consumer Act 2010 (Cth) s 75B, Sch 2 ('Australian Consumer Law') ss 18, 29(1)(b), 29(1)(g), 29(1)(m), 34, 224, 248 Evidence Act 1995 (Cth) s 140(2) National Consumer Credit Protection Act 2009 (Cth) Sch 1 ('National Credit Code') s 107(2) Conveyancing Act 1919 (NSW) s 12 Property Law Act 1974 (Qld) s 88(1) Real Property Act 1886 (SA) s 135 Real Property Act 1900 (NSW) s 58(3) Transfer of Land Act 1893 (WA) s 109(1) Transfer of Land Act 1958 (Vic) s 77(3) Cases cited: Anchorage Capital Master Offshore Limited v Sparkes [2023] NSWCA 88; (2023) 111 NSWLR 304 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; (2021) 392 ALR 205 Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2023] FCAFC 45 Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544 Australian Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915 Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd (No 2) [2005] NSWSC 267; (2005) 53 ACSR 305 Australian Securities and Investments Commission v Somerville [2009] NSWSC 934; (2009) 77 NSWLR 110 Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45 Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35 Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 Gore v Octahim Wise Ltd [1995] 2 Qd R 242 Handevel Proprietary Limited v Comptroller of Stamps (Victoria) (1985) 157 CLR 177 In re Baron Vestey's Settlement; Lloyd's Bank Ltd v O'Meara [1951] Ch 209 Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; (2019) 101 NSWLR 658 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 297 FCR 180 Pyrotek Pty Ltd v Ausco Industries Pty Ltd [1991] FCA 743 Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470; (2011) 280 ALR 503 Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53 Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 408 ALR 195; (2023) 97 ALJR 388 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 State of Western Australia v Bourke (No 3) [2010] WASC 110 Truong v R [2004] HCA 10; (2004) 223 CLR 122 Turner v O'Bryan-Turner [2021] NSWSC 5 Vestey v Inland Revenue Commissioners [1962] Ch 861 Vestey v Inland Revenue Commissioners [1980] AC 1148 Yorke v Lucas (1985) 158 CLR 661 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 107 Date of hearing: 18–19 March 2024 Counsel for the Applicant: Mr J Arnott SC and Ms V Brigden Solicitor for the Applicant: Webb Henderson Counsel for the Respondents: Mr G Sirtes SC and Mr B May Solicitor for the Respondents: Assure Lawyers Pty Ltd ORDERS NSD 1104 of 2022 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: MASTER WEALTH CONTROL PTY LTD (ACN 148 036 677) First Respondent DOMINIQUE EVA GRUBISA Second Respondent order made by: JACKMAN J DATE OF ORDER: 9 APRIL 2024 THE COURT DECLARES THAT: 1. The first respondent (DG Institute), in trade or commerce and in connection with the supply or possible supply of services in Australia, in the period July 2018 to November 2022: (a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL); (b) made false or misleading representations that the Real Estate Rescue (RER) program had a benefit which it did not have, being the benefit of assisting distressed homeowners to retain some of the value of the equity in their properties in the event of a sale when they would otherwise lose all of the value of their equity, in contravention of s 29(1)(g) of the ACL; (c) made false or misleading representations concerning the existence, exclusion or effect of a right, being the right of a homeowner to receive monies from the proceeds of a forced sale of property owned by them where the purchase price exceeds the amount able to be lawfully retained by the mortgagee under the homeowner's mortgage, in contravention of s 29(1)(m) of the ACL; and (d) engaged in conduct that was liable to mislead the public as to the nature, characteristics, and suitability for purpose of services, being that the "equity deal" strategy taught in the RER program, would achieve the result of assisting distressed homeowners to retain some of the value of the equity in their properties in the event of a sale when they would not otherwise be able to do so, when the strategy would not have that result, in contravention of s 34 of the ACL; by: (e) making statements in the promotional materials set out in Annexure A to the Concise Statement (Promotional Materials) for the RER program which represented to consumers that the "equity deal" strategy taught in the RER program would allow consumers to assist a distressed homeowner to sell their property but retain some of the value of the equity they held, in circumstances where otherwise if the mortgagee were to repossess the property, the homeowner would lose any remaining equity in the property (No Equity Representations). 2. DG Institute, in trade or commerce and in connection with the supply or possible supply of services in Australia, in the period April 2017 to November 2022: (a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; (b) made false or misleading representations that the Master Wealth Control (MWC) program had a benefit which it did not have, being the benefit of equipping consumers with a strategy that was effective to protect all of their assets in a way that would provide complete protection from creditors, in contravention of s 29(1)(g) of the ACL; and (c) engaged in conduct that was liable to mislead the public as to the nature, characteristics or suitability for purpose of services, being that the strategy taught would enable consumers to protect all of their assets in a way which would provide complete protection from creditors, when it would not, in contravention of s 34 of the ACL; by: (d) making statements in the Promotional Materials for the MWC program and in the instructional material for the MWC program set out at Annexure B to the Concise Statement (Program Materials), that represented that the asset protection strategies called the "Vestey Trust" structure taught in the MWC program would enable consumers to protect all of their assets by setting up a specific trust called the Vestey Trust using transaction documents provided by DG Institute, which would provide complete protection from creditors (Vestey Trust Representations) when that protection was not provided by the adoption of those strategies. 3. DG Institute, in trade or commerce and in connection with the supply or possible supply of services in Australia, in the period April 2017 to August 2022: (a) engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; (b) made false or misleading representations that the asset protection strategy taught in the MWC program had a particular approval, being the approval of the Full Court of the Federal Court of Australia (Full Court) in Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 (Sharrment), which it did not have in contravention of s 29(1)(g) of the ACL; (c) made false or misleading representations that the asset protection strategy taught in the MWC program was of a particular standard or quality because it had received the approval of the Full Court in Sharrment when it had not, in contravention of s 29(1)(b) of the ACL; and (d) engaged in conduct that was liable to mislead the public as to the nature, the characteristics and the suitability for purpose of the services, in that the asset protection strategy taught in the MWC program was said to have received the approval of the Full Court in Sharrment, when it had not, in contravention of s 34 of the ACL; by: (e) making statements in the Promotional Materials and Program Materials which represented that the Vestey Trust structure taught in the MWC program had been tested and upheld as effective by the Full Court in Sharrment (Authority Representations), when it had not. 4. By her conduct in making the statements on video in the Promotional Materials and in Program Materials, and in drafting, reviewing, editing and approving content for the Promotional Materials and Program Materials, the second respondent (Ms Grubisa) was involved in DG Institute's conduct in making the No Equity Representations, Vestey Trust Representations and Authority Representations, by aiding, abetting and procuring the contraventions and by being knowingly concerned in and party to the contraventions. The Court orders that: 5. The costs of the proceedings to date be reserved. 6. The proceedings be listed for case management at 9.30 am on 23 April 2024. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT JACKMAN J: Introduction 1 The applicant (the ACCC) contends that the first respondent, operating under the business name "DG Institute" (DG Institute), made false or misleading representations in contravention of ss 18, 29(1)(b), 29(1)(g), 29(1)(m) and 34 of the Australian Consumer Law (ACL), being Sch 2 to the Australian Competition and Consumer Act 2010 (Cth), in the course of the promotion, sale and delivery of two programs to consumers, namely the Real Estate Rescue (RER) and Master Wealth Control (MWC) programs during the period April 2017 to November 2022 (the Relevant Period). The first category of representations was made in the promotion of the RER program (the No Equity Representations). The two remaining categories of representations were made in the course of the promotion and delivery of the MWC program (the Vestey Trust Representations and the Authority Representations). The ACCC also alleges that the second respondent (Ms Grubisa), who was DG Institute's sole director during the Relevant Period, aided, abetted or procured the contraventions or was knowingly concerned in or party to them. 2 Ms Grubisa's role in DG Institute during the Relevant Period included delivering the majority of seminars for the programs, including where seminars were conducted live by delivering a substantial amount of the seminar content herself, and by recording the seminars for download or streaming. The Statement of Agreed Facts (SAF) includes the facts (at [13]) that Ms Grubisa: (a) graduated from the University of Sydney with a Bachelor of Arts (Honours) and a Bachelor of Laws in 1994; (b) graduated from the University of Sydney with a Master of Laws in 1996; and (c) was admitted to practice as a solicitor of the Supreme Court of New South Wales in 1994. 3 During the Relevant Period, at least 1,900 consumers enrolled in the RER program (SAF [16]). The DG Institute promoted the RER program in promotional materials as a program by which participants would be taught a strategy called an "equity deal" (among other strategies), that would allow them to benefit financially from becoming involved in the sale of properties while also assisting homeowners to retain some of the value of the equity in properties owned by them (SAF [18]). The RER program involved, among other things: (a) completing an online course including viewing videos and reading material; and (b) attending a workshop delivered over one, two or three days, either in person or online (SAF [19]). In the financial years ended 30 June 2018 to 30 June 2021, DG Institute earned revenue from the RER program in the total amount of $8,876,025. 4 During the Relevant Period, at least 1,800 consumers enrolled in the MWC program (SAF [17]). The MWC program involved participants, among other things: (a) being given access to an online portal, with materials and resources that could be worked through by participants at their own pace; (b) watching videos and reading information on the materials; and (c) answering a series of questionnaires about their assets, dependents and other matters (SAF [20]). The template documents provided to participants included documents entitled Equitable Mortgage, Declaration and Acknowledgement, Promissory Note, Notice of Assignment and caveat (SAF [21]). There is also a reference in the SAF at [21] to a Deed of Assignment, but there does not appear to have been any such template document, and I regard the parties as having been mistaken in that regard. During the financial years ended 30 June 2018 to 30 June 2021, DG Institute earned revenue attributable to the MWC program in the total amount of $9,223,457. 5 In its response to a notice issued under s 155(1)(a) and (b) of the Competition and Consumer Act 2010 (Cth) dated 2 September 2021, and varied on 7 October 2021, DG Institute wrote a letter to the ACCC on 29 October 2021 setting out various details relating to DG Institute and the programs which it conducted. Included in that response was a table summarising the number of seminars promoting the RER and MWC programs, which showed that for the period in question (being a shorter period than the Relevant Period), DG Institute conducted 116 seminars promoting either the RER or MWC programs or both, and the aggregate number of attendees was 36,174. The response also indicated that the price for students who enrolled in the RER program varied over time between $4,500 and $6,500 where payment was made by lump sum (and between $5,400 and $7,800 where payment was made by way of instalments), and the price for students who enrolled in the MWC program varied over time between $6,500 and $7,500 (where students paid by way of lump sum) and between $7,200 and $9,200 (where students paid by way of instalments). 6 These reasons are concerned with the initial stage of the hearing, which dealt only with the claims for declaratory relief as to the alleged contraventions. The other remedies sought by the ACCC are to be dealt with subsequently. I deal first in these reasons with the RER program and the No Equity Representations, and will deal separately with the MWC program and the Vestey Trust Representations and the Authority Representations. The RER Program and the No Equity Representations 7 As I have indicated above, one of the strategies taught to participants in the RER program was called an "equity deal", which would allow the participants to benefit financially from becoming involved in the sale of properties while also assisting homeowners to retain some of the value of the equity in properties owned by them. That strategy is described as follows in the ACCC's Concise Statement at [5]: The strategy involved identifying homeowners who may be in financial distress, including by monitoring court lists to identify possession, divorce or probate proceedings, and then contacting such homeowners with a view to reaching agreement for the program participant to purchase the homeowner's property below market value, or being authorised to sell the property and retain the proceeds above a certain amount. The strategy was promoted as being one which would allow participants to acquire a property below market value and sell it for a higher amount, while allowing the homeowner to receive the benefit of part of the value of the equity held by the homeowner in the property, which the Promotional Materials indicated the homeowner would not otherwise receive in the event of a forced mortgagee sale. That general description of the RER program is admitted by the respondents (Amended Concise Statement in Response at [7]), except for the final phrase concerning the Promotional Materials, as the respondents deny that the No Equity Representations were made. 8 The ACCC then alleges in its Concise Statement at [6] that by various statements in the promotional materials in the Relevant Period, DG Institute conveyed: (a) that the strategy was designed so the program participants applying it would be assisting homeowners who may be financially distressed to achieve a better outcome than they would if the mortgagee (usually a bank) were to take steps to repossess the homeowner's property and sell it; and (b) that if a bank repossessed the property owned by the homeowner, the entire proceeds of sale including the homeowner's remaining equity in the property would be retained by the bank, leaving "no change" for the homeowner. The effect of such statements is alleged in the Concise Statement at [7] to be that DG Institute represented that the "equity deal" strategy taught in the RER program would allow program participants to assist a distressed homeowner to sell their property but retain some of the value of the equity they held, in circumstances where otherwise if the mortgagee were to repossess the property, the homeowner would lose any remaining equity in the property (the No Equity Representations). It is then alleged at [8] that the No Equity Representations were false or misleading because, in the event of a sale of a property by a mortgagee, the mortgagee is entitled only to the amount owing to it under its agreement with the homeowner as secured by the mortgage plus its reasonable costs of recovery. 9 The ACCC contends that DG Institute made the No Equity Representations with respect to the "equity deal" in four separate videos narrated by Ms Grubisa. It is convenient to begin with the video presentation referred to as the "Real Estate Rescue Webinar" which was published on YouTube on 3 July 2018 and downloaded by the ACCC on 22 June 2021 (the RER Webinar). A transcript of the RER Webinar is included in the evidence (at CB Tab 44), and the video itself lasts for about 1 hour and 44 minutes. 10 The RER Webinar began with Ms Grubisa welcoming the audience to the RER Webinar on buying "under market distressed properties in Australia between 10 and 40 percent below market value right now" (CB 1339). Ms Grubisa outlined her qualifications by way of a Bachelor of Arts, a Bachelor of Laws and a Master of Laws, and noted that she became a solicitor in 1994 and a barrister in 1996 (CB 1339). 11 After about 20 minutes, Ms Grubisa relates an anecdote of brokers making a fraudulent loan application, falsely stating that the borrower earned $300,000 a year rather than the $30,000 which the borrower had stated to the broker. Ms Grubisa says that "how it worked was the lenders knew that the borrower couldn't afford the loan, but they were lending on the basis of the equity. And what they were really doing was stealing people's equity" (CB 1344). Another anecdote related by Grubisa suggested that banks were lending additional cash for borrowers to make their repayments, and as property prices increased the banks would make further advances to enable further repayments to be made (CB 1344–5). Ms Grubisa said that the damage from non-performing loans and from people defaulting on their loans from mortgage stress was "playing out now", and referred to "all of that equity theft. All of those dodgy loans are now coming through the system." (CB 1346). 12 After about 35 minutes, Ms Grubisa referred again to there being "a lot of stress there coming through the system" and "big, big numbers of distress and defaults in our system", and then said the following (at CB 1347): Now the problem I have with that is that banks don't give change. If a bank repossesses a property, how the system works is they go off to Court. If you default and it's over three months they'll go off to the Court and they'll get what's called an Order for Possession. So what the mortgage will actually say – all our mortgages say this in the small print – if you default all bets are off, we take over. We get to sell your house. And what they do in practice is they keep all of the proceeds of sale. So if the house sells for a million dollars, and you only owe 800,000, they'll still keep the 200,000. And they will claim it's for indemnity costs. 'Cause in the mortgage it says you indemnify us for everything, so they load their bill, and they keep everything for the drama of it all. (emphasis added) While Ms Grubisa made that statement, there was displayed on the screen an image with the heading "Banks Don't Give Change" and a picture of a hand with a rubber stamp poised above a manila envelope on which the word "JACKPOT" was stamped. I note at this point that the ordinary meaning of the word "jackpot" is a large prize or amount of winnings. Ms Grubisa went on to say that "banks are in the business of lending money, not in the business of selling houses", and explained that once the bank gets a Court order, the bank will change the locks, appoint the agent, sell the property "and they keep everything". Ms Grubisa then said: "They've caused all this distress, plus they're cleaning up and keeping any leftover equity in the deal" (CB 1348) (emphasis added). 13 Ms Grubisa then explained that she knew how to identify distressed properties in the system and was able to acquire those properties under market value "for a win/win for both me and the owner" (CB 1348). Ms Grubisa explained that distressed properties would arise through sales by a mortgagee, or in a divorce, or in a bankruptcy, or in a deceased estate, and technology assisted in identifying these properties, particularly through applications which were filed in Court (CB 1349). 14 After about 48 minutes, Ms Grubisa explained three types of situation depending on the borrower's debt levels, the first of them being what she called an "equity deal". This arose when the borrower's debt was less than the value of the property so that there was "some change", there was "money left over", and there was "wealth still in the property". Ms Grubisa explained that the "essence of an equity deal is that there is change left over" and that the homeowner "will be prepared to take a haircut on that for a quick outcome" (CB 1350). 15 After almost 50 minutes, the video showed a gentleman who identified himself as Ray Clapton and said the following (at CB 1350): I'm from Sydney. I'm a bricklayer. I have been a bricklayer for 33 years. Through one of the strategies that I purchased, I just bought a house for 515 to 520,000, that was real estate value. I picked it up for 315,000. That's an instant equity of about 195,000. I done all that in five days. It sure beats laying bricks for a living. 16 Ms Grubisa then appeared again on the video and explained how Ray Clapton achieved that transaction. Ms Grubisa posed the question as to why the homeowner did not just sell their property given that there was $200,000 in equity, and explained that unfortunately people in debt tend to "avoid these things" on the basis that their "head's in the sand" (CB 1350). Ms Grubisa then explained that after payments have been missed the interest rate increases and in this case the homeowner had been paying 12% interest for two years, which he could not afford. Ms Grubisa explained that Ray Clapton saw the matter in a Court list and contacted the owner pointing out that the Sheriff was coming the following week and would change the locks and evict them and would "take over". Ms Grubisa then attributed to the homeowner the following reasoning: "So he knew he would have got nothing from that process, and he'd been to legal centres, he'd been told that" (CB 1351) (emphasis added). Ms Grubisa then attributed to Ray Clapton the proposition that he could move quickly and could beat the bank and suggested that they negotiate "a figure with a figure 4 in front of it", which Ms Grubisa referred to as "A discount to market for a quick sale so that the homeowner gets something, like a good six figures in his hand" (CB 1351). The homeowner then said that he was not moving and would not sell to Ray Clapton, and Ray Clapton then suggested that if he bought the property he would permit the owner to stay on as tenant with market rent. Ms Grubisa then made the following statement (at CB 1351): So here's how they worked this one out. The mortgage, what the bank were owed was 295,000. Ray said, "I would give you six figures. We could work out a figure where you take the lion's share of your equity." And the homeowner said, "No, I am prepared to discount that. Give me something; but give me the right to stay here and rent it back." And they agreed on a contract price of 315,000. 'Cause Ray listened to the homeowner's need and was able to craft a solution for a win/win. He got $200,000 worth of equity that he could draw against to buy something else. And this particular homeowner got to stay on in his home. Still there to this day. So the essence of an equity deal is that the bank are not getting to sweep the pool. They're not taking absolutely everything and bulldozing through and getting everything. What happens, how we do it, is far fairer and more effective, is that the bank gets only what they're owed. The debt. The 295. The equity is then split between yourself and the homeowner at an agreed amount and on terms that you negotiate. 'Cause you can be flexible. You can negotiate something to fit their needs, and you can get paid as well, and there is money left for them. So it's a far fairer and more equitable way 'cause banks don't give change. You can imagine how you could help people understanding and using a system like that for a win/win. (emphasis added) The image was shown again on the screen entitled "Bank's Don't Give Change" with the picture of the hand holding a rubber stamp poised above an envelope on which the word "JACKPOT" has been stamped. The ACCC submits, and I accept, that in the context of the statements made by Ms Grubisa, the "jackpot" is the amount of about $200,000 which Ms Grubisa was suggesting would have been taken by the bank if Ray Clapton had not stepped in and negotiated that amount for himself. 17 Another video relied on by the ACCC is entitled "Property Success Summit Promotional Livestream" dated 13 February 2021 (CB Tab 42), which runs for 7 hours and 5 minutes and was apparently held on a Saturday (CB 1243). It contains many statements to the same effect as the RER Webinar. Ms Grubisa again referred to her legal qualifications and experience and said that she had "pulled a magnifying glass over a very, very narrow, but deep area of the law, and that was debt law" (CB 1242). Ms Grubisa then said rather surprisingly: "no-one at my level of expertise as a lawyer had ever really looked in detail at that area of law before" (CB 1243). Ms Grubisa said that there was a total value of $7 billion of distressed properties in Australia "that are going to have to be cleaned up" and that when a bank moves in to sell up a property "the clock starts running and that's when insolvency experts and lawyers, and the whole system comes on board, there is no equity left" (CB 1259) (emphasis added). After 2 hours and 57 minutes, Ms Grubisa explained the "equity deal", giving as an example that the mortgage may be $500,000, the debt to the bank may be $300,000, and there is $200,000 of equity in that property "that will get chewed up in fees and costs and expenses, nothing left over for the homeowner" (CB 1262) (emphasis added). 18 Ms Grubisa referred to the other kinds of transactions which may be available, and then said, "lets deep dive into an equity deal" (CB 1262) and the video then showed Ray Clapton making the same statement as in the RER Webinar. Ms Grubisa then explained how Ray Clapton had been able to purchase a property at $200,000 below market value, making substantially the same statements as in the RER Webinar as to the homeowner's equity being "chewed up in fees and charges" with "no change left for the homeowner" (CB 1262), and the bank coming in and taking "not just the 295 that they're owed, but everything, all of the extra 200,000 odd in equity gets eaten up with lawyers' fees and other charges" (CB 1263). Ms Grubisa stated that: "The way we do it is far fairer, more equitable than the system, because what happens is the bank's there and, yeah, they're owed money, but they only get what they're owed. In this situation, the $295,000" (CB 1263). Ms Grubisa then stated (at CB 1263): So if you can help homeowners before it goes pear-shaped, when you identify them coming into the legal system about to go through the process that scoops up everything, winner takes all, you're able to then stop, intervene and abort that process and assist the homeowner for a win-win. (emphasis added) 19 A further video entitled "Real Estate Rescue Promotional Livestream" dated 17 March 2021 (CB Tab 43) contained the same or similar statements as to an "equity deal", and also included the particular deal achieved by Ray Clapton (although on this occasion his name appears as Ray Clapham) (CB 1326). After about 1 hour and 18 minutes, Ms Grubisa said the following concerning that transaction (CB 1327): The way that the system works is that the banks, the lawyers, the powers that be take everything, the equity, there's nothing left over for anyone else. Now the homeowner, as you rightly would have pointed out, had a couple hundred thousand dollars equity in this property, so a far more fair and more equitable way to do it is the way that we do it, and what Ray did for the homeowner here. Ray steps in, he buys the property. The bank only get then what they're owed. They get their $295,000 back. (emphasis added) 20 A further video entitled "Fast Property" dated 25 July 2022 contained similar material (CB Tab 50). For example, Ms Grubisa said after about 23 minutes (CB 1428): People do have equity left in properties, but the problem is that when banks repossess, everything gets eaten up with fees and charges, default rates, legal costs, and it's a fruitless exercise for the homeowner. They've lost control and they haven't saved or preserved their equity in property. (emphasis added) After about 30 minutes, the transaction undertaken by Ray Clapham (as his name appears at CB 1430) was outlined and explained as an example of an "equity deal". Ms Grubisa explained that the effect of the transaction was that "the equity is preserved" (CB 1431), and went on to state: Otherwise, the system means that when the homeowner loses control, that equity gets taken up and eaten up in fees, charges, penalties, default rates, legal fees, real estate agents, professionals, everyone else gets their snout in the trough. The effect of an "equity deal" was stated by Ms Grubisa as being that "the bank only gets what they're owed" (CB 1431). 21 The material provided to students who enrolled in the RER program from 2018 included a 237 page manual entitled "Real Estate Rescue", which was replaced by a further iteration in June 2021 of 236 pages. These manuals are not relied on by the ACCC for its allegations concerning the making of the No Equity Representations, but are said to form part of the broader context. I have not relied on this material in making any of the findings below in relation to the No Equity Representations, and the false and misleading nature of those representations, but for the sake of completeness I set out the salient aspects of the course materials for the RER program relied upon by the ACCC. 22 In the 2018 manual, Module 6 dealt with "Strategy". The kind of transactions referred to in the promotional videos as the "equity deal" are referred to in the manual as "wholesale deals", which were said to be the appropriate strategy in circumstances where the homeowner has more than 15% equity (CB 646 and 653). The background information for such wholesale deals included the proposition that: "If the bank repossesses they [the owners] get nothing" (CB 654). 23 The first of the case studies provided in the manual for wholesale deals (CB 655) referred to a transaction undertaken by Mani who met homeowners who had already been locked out of their property, and told Mani that their mortgage was $200,000. Mani estimated that the property was worth $420,000, and accordingly the homeowners had $220,000 equity in the property. Mani is then said to have explained to the owners that, as the bank had locked them out of the property and already appointed an agent to sell it, "The owners will get nothing of their equity when the property is sold. Their $220K equity will be eaten up by the bank and its lawyers as banks do not give change." Mani then proffered an alternative that he would pay out the debt to the bank and give the owners something for their equity, being more than would result from allowing the bank to sell the house. Mani is then said to have explained to the homeowners that if he paid the bank in full and discharged the mortgage, then the bank was legally obliged to discharge the mortgage, which the manual referred to as the concept of the equity of redemption. Mani was said to have paid the homeowners $50,000 cash for their equity (implicitly conferring on Mani a benefit of $170,000) and Mani is said to have on-sold the property within two months. 24 A further case study pertaining to a "takeover deal" (CB 661) concerned a person by the name of Aaron, who negotiated with a homeowner who owed only $120,000 on a property worth $300,000. Aaron is said to have explained to the homeowner that the matter had already proceeded to judgment for the bank against the owners, that the bank would be changing the locks the following week and the owner would be out on the street "with nothing as the bank would not give him his change – they would sell the property and pocket everything (including the significant equity in the property)" (CB 661). Aaron is then said to have offered to take over the homeowner's loan if the bank permitted him to do so, and would pay for the owner's $13,000 of arrears, and offered to pay $240,000 for the house. Aaron is then said to have found a buyer for the property, and transferred title from the current owner to the new owner, with the result that from the sale proceeds Aaron paid out the $120,000 mortgage, paid the owner $120,000 for his equity, and kept $60,000 for himself (CB 661). 25 The iteration of the manual issued in June 2021 also contained the case studies pertaining to Mani (CB 930) and Aaron (CB 936), together with the propositions that the homeowners' equity in the property would be "eaten up by the bank and its lawyers as banks do not give change" (CB 930) and that "the bank would not give him his change – they would sell the property and pocket everything (including the significant equity in the property)" (CB 936). Were the No Equity Representations made as alleged? 26 It is common ground between the parties that in a case such as this, where the persons in question are not identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld, but are members of a class to which the conduct in question was directed in a general sense, the alleged conduct must be judged by its effect on ordinary or reasonable members of the class: Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45 at [103] (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ); Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 408 ALR 195; (2023) 97 ALJR 388 at [83] (the Court). The ACCC submits that the relevant class of consumers to which the No Equity Representations was directed included any consumer sufficiently interested in registering for the RER program by attending a free seminar, watching a video or attending an online live stream in search of further information regarding the program. The ACCC submits that there is no basis to conclude that it comprised sophisticated investors or people with a detailed knowledge of financial or legal matters. The respondents submit that the relevant class of consumers was people who held significant assets, and who had the ability to purchase real property with sufficient access to the money required to do so (T123). The respondents submit that the relevant class would have had some knowledge of the nature of mortgages granted over real property and of what occurs upon default, and would have had sufficient means and willingness to pay the fees required to enrol in the RER program (T128.45–129.23). 27 In my view, the relevant class of consumers would have comprised a varied audience with different levels of understanding concerning the market for real estate and the operation of mortgages and their enforcement. I do not think there is any basis to infer that the relevant class was relatively sophisticated in terms of financial or legal matters generally, and I do not think that the ordinary or reasonable member of the class would have had any real understanding of the process for the enforcement of mortgages, including the manner in which mortgagees enforce their powers of sale in relation to defaulting borrowers. Accordingly, I do not regard the relevant class of potential purchasers as having brought any special knowledge or expertise to bear on how they should have understood the representations made in the four videos as to the homeowner losing any equity held in the property in the event of mortgagees taking possession of and selling the property. The ordinary or reasonable member of the relevant class would, in my view, have taken those representations at face value as bearing their natural and ordinary meaning. 28 The respondents submitted that the ordinary or reasonable member of the class would not have taken the relevant representations literally in light of the falsity, and indeed absurdity, of thinking that, in all circumstances, including the circumstances of a valuable property securing a relatively low amount of indebtedness, a mortgagee sale of the property would yield nothing to the borrower by way of surplus (T134.47, 138.17–26, 142.35–36). However, the video presentations do contain some extreme illustrations of equity of about $200,000 being entirely consumed on a mortgagee sale of properties worth respectively $500,000, $515,000, and $1 million. There is no doubt that in these illustrations, DG Institute was representing that there would be no surplus available for the homeowning borrower after a mortgagee sale, and the ordinary or reasonable members of the class would have understood the representations in that way. 29 I am satisfied that the statements made in the four videos such as "banks don't give change", "there is no equity left", "they keep everything" and "everything else would have got chewed up in fees and charges" would be understood by consumers in the relevant class as bearing their ordinary meaning. Statements such as these conveyed that if the mortgagee were to repossess and sell the property, the homeowner would lose all remaining equity as a matter of course, regardless of how much equity remained in the property. Were the No Equity Representations false or misleading? 30 The respondents did not challenge the proposition advanced by the ACCC, which is clearly correct, that in the event of a sale of a property by a mortgagee, the mortgagee is entitled only to the amount owing to it under its agreement with the homeowner as secured by the mortgage, plus its reasonable costs of recovery, as alleged in the Concise Statement at [8]. The premise of the No Equity Representations, that all remaining equity in the property would be taken by the mortgagee in the event of a forced sale, is simply untrue at the level of absolute generality at which it was expressed. The ACCC submits, and I accept, that the relevant statements were made in unqualified terms as to what would happen, rather than what might happen, without any regard to the circumstances of individual homeowners and with no exceptions. 31 The respondents called, as an expert witness, an experienced solicitor in the field of mortgagee possession proceedings and mortgagee sales, Mr Shepherd, who agreed that banks can and do return surplus funds to borrowers, and that it was incorrect to state as a general proposition that a homeowner would not receive surplus monies in the event of a mortgagee sale (T81.04–05, T81.23–28). When Mr Shepherd was taken to the case study involving Mani in the 2018 manual (CB 655), Mr Shepherd said that in his experience it was simply untrue to say, "banks do not give change" (T87.18–25). I regard that evidence as applying equally to the statement that "banks don't give change" which appears aurally and visually in the promotional videos. Mr Shepherd's evidence is supported by documents produced on subpoena by the Commonwealth Bank of Australia showing 16 instances within the Relevant Period in which surplus funds resulted from the sale of residential properties and were paid to the borrower (Exhibit A). 32 Senior counsel for the respondents conceded that if the relevant representations are found to be representations in relation to the position which applies to every bank in Australia in every circumstance of a mortgagee repossession, as leaving the borrower without any surplus, then the representations were "simply not in conformity with reality" (T120.28–32), and were "untrue" and "wrong" (T138.17–26). Indeed, senior counsel for the respondents described such a proposition as "absurd" (T134.47), and as "nonsense" (T142.35–36). In relation to the illustrations given in the videos of cases where the borrower had about $200,000 equity in the property which is the subject of the mortgagee sale, and all of that equity is said to be lost through the fees, costs and expenses of the mortgagee sale process, senior counsel for the respondents did not seek to justify the figure of lost equity in any circumstance (T136.28–31), and accepted that the illustrations of $200,000 equity being lost were "exaggeration" (T136.43–45). Senior counsel for the respondents accepted that the $200,000 illustrations were "an extreme and I won't seek to justify it for a single moment" (T137.16). Accordingly, the respondents accepted that if I find that the No Equity Representations were made in the manner alleged by the ACCC, as I have done, then those representations were false and misleading. Are the alleged contraventions of the ACL established? 33 In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd, the High Court set out some well-established principles concerning ss 18 and 29 of the ACL. They are relevantly as follows: (a) determining whether a person has breached s 18 of the ACL involves four steps: first, identifying with precision the "conduct" said to contravene s 18; second, considering whether the identified conduct was conduct "in trade or commerce"; third, considering what meaning that conduct conveyed; and fourth, determining whether that conduct in light of that meaning was "misleading or deceptive or … likely to mislead or deceive": [80]; (b) the third and fourth steps require the court to characterise, as an objective matter, the conduct viewed as a whole and its notional effects, judged by reference to its context, on the state of mind of the relevant person or class of person. That context includes the immediate context (relevantly, all the words in the document or other communication and the manner in which those words are conveyed, not just a word or phrase in isolation) and the broader context of the relevant surrounding facts and circumstances: [82]; (c) where the conduct was directed to the public or part of the public, the third and fourth steps must be undertaken by reference to the effect or likely effect of the conduct on the ordinary and reasonable members of the relevant class of persons. This avoids using the very ignorant or the very knowledgeable to assess the effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful: [83]; and (d) although s 18 takes a different form to s 29, the prohibitions are similar in nature and in the Self Care appeal there was no relevant meaningful difference between the words "misleading or deceptive" in s 18 and "false or misleading" in s 29: [84]. I note that in the present case, neither party suggested any relevant difference between those two provisions. 34 Further, I note that conduct is, or is likely to be, misleading or deceptive if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39] (French CJ, Crennan, Bell and Keane JJ). In addition, the threshold "likely to be" is satisfied where there is a real and not remote possibility that conduct will mislead or deceive: Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; (2021) 392 ALR 205 at [89] (Rares, Murphy and Abraham JJ). 35 In the present case, the relevant conduct consisted of the No Equity Representations, which I have found to be established as alleged. It is evident from the fact that those representations were made in the course of promoting the RER program that the conduct was engaged in "in trade or commerce". I have found that, taking into account all of the circumstances and the relevant class of persons to whom the representations were addressed, the No Equity Representations were false and misleading as an objective matter. The allegation as to contravention of s 18 of the ACL is therefore established. 36 In respect of the alleged contraventions of s 29, it is also evident that the No Equity Representations were made in connection with the supply or possible supply of services by DG Institute, being the RER program, or in connection with the promotion of the supply of those services. As to the particular allegation concerning s 29(1)(g), that provision relevantly prohibits a person, in trade or commerce, in connection with the supply or possible supply of services or in connection with the promotion by any means of the supply or use of services, from making a false or misleading representation that services have "benefits". The ACCC submits, and I accept, that DG Institute contravened that provision by making false and misleading representations that the services offered by it (namely, the RER program) had a benefit that it did not have, being the benefit of assisting distressed homeowners to retain some of the value of the equity in their properties in the event of a sale when they would otherwise lose all of the value of their equity. 37 As to the particular allegation concerning s 29(1)(m) of the ACL, that provision relevantly prohibits a person, in trade or commerce, in connection with the supply or possible supply of services or in connection with the promotion by any means of the supply of services, from making a false or misleading representation concerning the existence or effect of any "right". The ACCC submits, and I accept, that DG Institute contravened that provision by making false and misleading representations concerning the existence and effect of a right, being the right of a homeowner to receive monies from the proceeds of a forced sale of a property owned by the homeowner, where the purchase price exceeds the amount able to be lawfully retained by the mortgagee. I regard the No Equity Representations as going beyond a representation merely as to banking practice, and also as pertaining to the legal rights of mortgagees exercising their power of sale, a matter which was explicitly stated by Ms Grubisa when referring to the standard clauses of mortgages (CB 1347). In each of the Australian jurisdictions referred to in the RER course materials (CB754 and 760), that right on the part of the mortgagor is a statutory right, in that the mortgagee is required to distribute sales proceeds in accordance with the legislation applying in the relevant state, and cannot recover any more than what is secured by its mortgage, plus sale costs, with any surplus to be paid to the mortgagor: Real Property Act 1900 (NSW) s 58(3); Property Law Act 1974 (Qld) s 88(1); Transfer of Land Act 1958 (Vic) s 77(3); Transfer of Land Act 1893 (WA) s 109(1); Real Property Act 1886 (SA) s 135. While mortgagees may recover their reasonable enforcement costs, any provision of a mortgage to which the National Credit Code applies that appears to confer a right greater than reasonable costs is void: National Credit Code, s 107(2), being Sch 1 to the National Consumer Credit Protection Act 2009 (Cth). The standard terms and conditions of mortgages lodged with various state land registries by the four major Australian trading banks are in evidence, and those terms give the bank the right to reimbursement of legal fees and other reasonable enforcement expenses in relation to an action taken on default, but they do not otherwise purport to give the banks the right to the surplus proceeds of sale beyond the amounts owing to the bank. 38 The ACCC also alleges a contravention of s 34 of the ACL which prohibits a person, in trade or commerce, relevantly from engaging in conduct that is liable to mislead the public as to the nature, the characteristics, or the suitability for their purpose of any services. Liability under s 34 will arise in more limited circumstances than under ss 18 and 29, because there must be an actual probability that the public will be misled: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 at [44] (Allsop CJ); Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544 at [22] (Burley J). The words "the public" do not mean the world at large or the whole community, and there will be a sufficient approach to the public if the approach is general and random, and if the number of people approached is sufficiently large: Australian Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915 at [73] (Gleeson J); Australian Competition and Consumer Commission v viagogo AG at [23]. The ACCC submits, and I accept, that DG Institute contravened s 34 by engaging in conduct that was liable to mislead the public as to the nature, characteristics and suitability for purposes of the RER program, by representing that the equity deal strategy taught would achieve the result of assisting financially distressed homeowners to retain some of the value of the equity in their properties in the event of a sale when they would not otherwise be able to do so in the event of a mortgagee sale by a bank. For the reasons given above, that strategy would not have that result, because in the event of a mortgagee sale, financially distressed homeowners may otherwise have been paid surplus monies from that sale. Is Ms Grubisa liable as an accessory? 39 The ACCC contends that Ms Grubisa was involved in each of DG Institute's contraventions by aiding, abetting or procuring them or by being knowingly concerned in, or party to them. If that accessory liability is established, then certain remedies may be available pursuant to ss 224 and 248 of the ACL by way of civil pecuniary penalties and disqualification orders. In considering the issues of accessory liability in these proceedings, I have taken into account the gravity of the matters alleged and their potential consequences for Ms Grubisa, pursuant to s 140(2) of the Evidence Act 1995 (Cth). 40 It is well established that in order for a person to be "knowingly concerned" in a contravention within the meaning of s 75B of the Competition and Consumer Act 2010 (Cth), the person must have actual (not imputed or constructive) knowledge of the essential facts constituting the contravention, although it is not necessary for the person to know that those facts constitute a contravention: Yorke v Lucas (1985) 158 CLR 661 at 667 and 670 (Mason ACJ, Wilson, Deane and Dawson JJ); Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53 at [48] (Gummow, Hayne and Heydon JJ). In Anchorage Capital Master Offshore Limited v Sparkes [2023] NSWCA 88; (2023) 111 NSWLR 304 at [329], the New South Wales Court of Appeal (comprising Ward P, Brereton JA and Griffiths AJA) referred to a longstanding controversy as to whether, in order to incur liability as an accessory, knowledge that the representation is false is required (the narrow view), or knowledge of facts which would have falsified the representation if they had been adverted to suffices (the wider view). Their Honours referred to a large number of authorities supportive of the two views, but held that the narrow view was the correct one on the basis that "Where the contravention is the prohibition on engaging in misleading or deceptive conduct, one can be 'knowingly concerned' in it only if one knows that the conduct is misleading or deceptive": [330] and [342]. However, a month before that judgment was given, the Full Court of the Federal Court gave judgment in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 297 FCR 180, in which the reasons of Wigney and O'Bryan JJ at [297]–[314] appear to accept the wider view. An appeal to the High Court in that case was heard in February 2024, and judgment is reserved. The New South Wales Court of Appeal recently noted that a live debate remains about the wider view: Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35 at [120]–[122] (Bell CJ, with whom Stern JA and Basten AJA agreed). 41 In the present case, I am comfortably satisfied, for the reasons which follow, that Ms Grubisa had actual knowledge that the No Equity Representations, which she knew had been made by her, were in fact false and misleading, and thus Ms Grubisa is liable as an accessory even on the narrow view. It is therefore not necessary for me to express any opinion as to whether, as a matter of law, the wider view would be sufficient to establish accessory liability. I infer from Ms Grubisa's legal qualifications and experience as a solicitor and barrister who has practised in the fields of debt recovery and enforcement of mortgages that she knew that it was untrue as a general proposition and without qualification that a distressed homeowner would lose any remaining equity in their property if the property were sold by a mortgagee. Indeed, the respondents submitted that if I interpreted the statements relied on in support of the No Equity Representations as a blanket assertion covering all banks and all circumstances (which I have found above to be the proper meaning of the representations), then "the accessorial liability case would be difficult" to defend (T120.28–30). In advancing their submissions as to whether the No Equity Representations were made, the respondents submitted that it is unlikely that a reasonable consumer in the relevant class could believe the No Equity Representations: respondents' opening written submissions at [55]. As noted earlier, it was the respondents own submission that the No Equity Representations were "absurd" and "nonsense". I infer that Ms Grubisa had a level of knowledge greater than that of a reasonable consumer in the relevant class (and I note that the respondents did not make any submission to the contrary), and it follows that Ms Grubisa must have known that the representations she was making were not true. I also infer that Ms Grubisa knew that the No Equity Representations had been made, having personally delivered the relevant statements with knowledge of their audience (and I interpolate here to note that the respondents did not make a contrary submission in respect of any of the representations). Accordingly, I have inferred that Ms Grubisa had actual knowledge that her conduct was misleading and deceptive, including with respect to the particular elements of ACL ss 29(1)(m), 29(1)(g) and 34 discussed above. 42 I draw those inferences with greater confidence in light of the fact that Ms Grubisa did not give evidence at the hearing. According to the rule in Jones v Dunkel (1959) 101 CLR 298 at 308 (Kitto J), 312 (Menzies J) and 320–21 (Windeyer J) the unexplained failure by a party to call a witness may in appropriate circumstances: (a) support an inference that the uncalled evidence would not have assisted the party's case, particularly where it is the party who is the uncalled witness; and (b) permit the court to draw, with greater confidence, any inference unfavourable to the party who failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn. See also Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 at [63] (Heydon, Crennan and Bell JJ). In the present case, I have drawn inferences unfavourably to Ms Grubisa that she had actual knowledge of the falsity of the No Equity Representations. There is no doubt that Ms Grubisa was in a position to cast light on whether those inferences should be drawn; indeed, she was in the best position of anyone to do so. Her failure to give evidence is unexplained. 43 The words "aiding" and "abetting" are synonymous: Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd (No 2) [2005] NSWSC 267; (2005) 53 ACSR 305 at [115] (Palmer J). Aiding and abetting a plan has been described as helping or assisting or encouraging its implementation, and procuring has been described as taking action to bring about the improper result in that there must be a causal connection between that action and the conduct impugned: Australian Securities and Investments Commission v Somerville [2009] NSWSC 934; (2009) 77 NSWLR 110 at [41] (Windeyer AJ). A person procures a contravention if he or she causes it to be committed, persuades the principal to commit it or brings about its commission: State of Western Australia v Bourke (No 3) [2010] WASC 110 at [18]–[19] (Murray J); Truong v R [2004] HCA 10; (2004) 223 CLR 122 at [30] (Gleeson CJ, McHugh and Heydon JJ). Being "concerned" in a contravention requires association with, implication in, or a practical connection with the contravening conduct: Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]–[325] (Moore J); Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26] (Tamberlin, Gyles and Gilmour JJ); Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [227] (White J). Ms Grubisa's conduct satisfied each of these alternative elements of accessory liability. 44 Accordingly, I am satisfied that Ms Grubisa aided, abetted and procured the contraventions and was knowingly concerned in and party to the contraventions with actual knowledge of the essential elements that made the conduct false and misleading. I am also satisfied that Ms Grubisa was knowingly involved in each of the contraventions of s 29 and s 34 by reason of the matters which establish her knowing involvement in the contravention of s 18, together with her actual knowledge of the particular elements required by ss 29(1)(g) and (m) and 34. The MWC Program and the Vestey Trust Representations 45 The respondents admit the correctness of the general description of the MWC program as described by the ACCC in its Concise Statement (Amended Concise Statement in Response at [12]), but denied that the Vestey Trust Representations and Authority Representations were made. The aforementioned general description of the MWC program is as follows. The DG Institute promoted the MWC program as teaching strategies which would enable participants to protect completely their assets from creditors. The strategies taught in the MWC program included setting up a structure described by DG Institute as an "impenetrable Vestey Trust" or "asset protection trust" (Vestey Trust) using what was described by DG Institute as "legally binding documentation" provided by it. DG Institute instructed program participants to set up the Vestey Trust by executing, or arranging to be executed, a number of template documents provided to them by DG Institute which variously included documents entitled Equitable Mortgage, Declaration and Acknowledgement, Promissory Note, Notice of Assignment and caveat (Transaction Documents). The promotional materials and course materials provided to participants after signing up to the MWC program disclosed the purpose of the Vestey Trust structure as being to protect the participant's assets from attack by creditors. DG Institute conveyed through the promotional materials and the course materials that if a person who had set up the Vestey Trust structure later owed money to a creditor (other than a secured creditor who had an existing security interest at the time the Vestey Trust was established), the creditor could not access any equity in the person's property (including real, personal and liquid assets), because the equity was mortgaged to a trustee of a trust whose secured interest in the property would rank ahead of the creditor's interest. 46 The ACCC contends in its Concise Statement (at [13(a)]) that, in the context of the promotional materials and course materials, DG Institute represented to consumers in the Relevant Period that the Vestey Trust structure taught in the MWC program would enable participants to protect all of their assets by setting up a specific trust called the Vestey Trust using the Transaction Documents provided by DG Institute, which would provide complete protection from creditors (Vestey Trust Representations). The ACCC contends in the Concise Statement (at [14]) that the Vestey Trust Representations were false and misleading because the Transaction Documents do not provide a participant's assets with the asserted protection from creditors. The issues as to whether the Vestey Trust Representations were made and whether they were false and misleading were put in issue by the respondents. However, at the commencement of the second day of the hearing before me, the respondents conceded that it was appropriate to make the declaration sought in para 2 of the ACCC's originating application to the effect that DG Institute contravened ss 18, 29(1)(g) and 34 of the ACL by making the Vestey Trust Representations. In my view, that concession was appropriate for the reasons which I give below. The respondents did not make any concession as to the alleged accessory liability of Ms Grubisa in relation to the Vestey Trust Representations, and accordingly it is necessary to set out the evidence in detail in order to decide that issue. 47 I have adopted the term "Vestey Trust" only because it was the term used by DG Institute and Ms Grubisa in the promotional material and course material, and it has been used consistently by the parties in these proceedings. However, it appears to be a misnomer. The structure contemplated by the Transaction Documents bears no resemblance to any transaction or structure ever undertaken or implemented by any member of the Vestey family as far as the legal representatives for the parties are aware, and bears no resemblance to any of the transactions or structures which have been the subject of litigation in the United Kingdom concerning members of the Vestey family: see In re Baron Vestey's Settlement; Lloyd's Bank Ltd v O'Meara [1951] Ch 209; Vestey v Inland Revenue Commissioners [1962] Ch 861; Vestey v Inland Revenue Commissioners [1980] AC 1148. The ACCC in the present case does not make any allegation that the respondents engaged in false and misleading conduct by wrongly attributing the Transaction Documents or the overall structure to one or more members of the Vestey family. However, I observe that members of the Vestey family (and, by implication, their professional advisers) have had their names taken in vain. 48 In terms of the promotional material for the MWC program, it is convenient to begin with the video entitled "Property Success Summit Promotional Livestream" dated 13 February 2021 (CB Tab 42), to which I have already referred in the context of the promotional material for the RER program. That video is 7 hours and 5 minutes in length, and the relevant portion dealing with the MWC program begins after about 4½ hours. Ms Grubisa referred to a saying that 2% of people controlled 98% of the world's wealth, and attributed to those people a focus on maintaining control (CB 1281). Ms Grubisa said that the bigger one grows, the bigger the target one will be. She referred to the "all monies clause" as a charging clause in relation to all monies that are owed to the lender, exposing all of one's assets to exposure for any debts that may be incurred at any time (CB 1283). Ms Grubisa said that she would show her audience how to block off the "all monies clause" (CB 1283). 49 Ms Grubisa said that she had made it her life's mission and focus to look at what the 2% do. After doing a lot of research, Ms Grubisa claimed to have found the answer in "the impenetrable Vestey Trust", which she said had stood the test of time and preserved the wealth of the wealthiest family in England (CB 1284). Ms Grubisa referred to a number of appeals by the British Government "all the way to the House of Lords", and said the following: "The highest courts in the land over a hundred plus years and it still could not be penetrated." (CB 1284) 50 Ms Grubisa then sought to explain the proposed structure, beginning with the assumption that the relevant client has a property which is subject to a first mortgage and is seeking to protect the equity in the property (CB 1287). Ms Grubisa said that a trust would be created, being the Vestey Trust, which is different from other trusts that her audience may have seen, in that "it owns nothing", saying "This trust is owed. It's your friendly creditor. You owe it money." (CB 1287). Ms Grubisa said that this particular trust is going to lodge a caveat on the title to any property which the client owns, saying that the client owes money to the trust. Ms Grubisa made the following statements (at CB 1287–8): So you have a caveat saying you owe money to this trust. Doesn't own anything. It is owed. And the trust then ties up all of your equity in any property. It's a friendly creditor. And that way you're in control of the equity of your property because you've registered it first. So any other equity that comes after the first mortgage is paid, you know now stand in line and you have an early warning system. You're in control of that equity there. So how do we set that up and what we want to do here is we – we don't want to lend the trust 300,000, borrow it back, or have any money moving. We want to effect this quickly and easily to protect you now. So what we're going to do is use legally binding paperwork. First of all a "Deed of Trust" is set up. That sets up your friendly creditor. Your trust that doesn't own anything, It is owed. A "Deed of Acknowledgement" reinforces that that debt is owed. An "Equitable mortgage." "Equitable" means "unregistered". So it is a mortgage – very normal kind of a mortgage. Don't have to register mortgage. Mortgage just shows that a debt is owed. But that mortgage is recognised with a caveat lodged on the title. Caveats don't state an amount. It just says that money is owed to this trust. We have a "Deed of Assignment" assigning your net worth across to the trust however you're holding your wealth. A "Promissory Note" in law is like an IOU. It reinforces that there is a debt there. And ultimately a "Caveat". The caveat — beware or be warned — is lodged on the title to tell the whole world as public record that money is owed to this trust. So this is ground-breaking because there is no stamp duty payable … It's very flexible as you grow. So you only need to set this up once. It adjusts with your wealth. It's a lifetime journey and this one trust protects all of your assets. Soaks up your equity. No matter how big you grow you remain that small target. And you will only have to set this up once. It protects your business, assets, all of your personal assets like your personal property, as well as real property. And any portion or equity or share you have in anything of value basically. … Business and other assets. Plant and equipment, stock in trade, that sort of thing, this will protect it. It will protect your cash in a bank. It will protect shares. It will protect vehicles. Other chattels. Your income. Basically, anything of value and ultimately your family's future. 51 Ms Grubisa then discussed issues of succession and family planning and then returned to the message of her clients being in control, saying (at CB 1289): "How do we do that? Well what you want is everything in there. That is something that you're in control of because you're the person with the key and no-one's getting through there unless you say so. So how we do that is what I call the Vestey Trust system. I call it that because like the Vesteys you want to build something where you have control. Not just now but for generations. So this is a done for you bespoke service. What it involves is creating what I just showed you. All of that infrastructure to make sure that you're in control so that's the trustee, the deed of acknowledgement, the equitable mortgage, the promissory note, and the caveat so total value there $10,000. And that makes sure you're a very small target and you're on the front foot in control of everything during your lifetime. 52 About 10 minutes later in the video Ms Grubisa said the following (at CB 1291): Your lawyer and accountant, with the greatest of respect, won't be able to do this. They just won't have this intellectual property. Not that there's anything wrong with them. Not that I am saying sack them. They're great at what they do. We are just extra resources on your team and our focus is your protection against the downside. 53 Ms Grubisa then said that implementing the structure would not change the client's tax position at all (CB 1291). She then referred to there being legal precedent for this by way of the Full Federal Court's decision in Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 ('Sharrment'), to which I will return separately below in the context of the Authority Representations. 54 Ms Grubisa then said (CB 1292): So it is the impenetrable Vestey Trust built around you. And that's to have your back for your lifetime. 55 The same or substantially similar statements were made in a number of other video presentations as follows: (a) the "Protect Your Wealth Masterclass" video dated 27 July 2021 (CB Tab 46); (b) the "Business Recovery Summit" video dated 14 August 2021 (CB Tab 47); (c) the "Master Wealth Control Promotional Video" dated September 2021 (Tab 48); (d) the "Asset Armour" video dated 5 July 2022 (Tab 49); (e) the "Fast Property" video dated 25 July 2022 (Tab 50); and (f) the video entitled "MWC Financial Survivor Training Module 3" (Tab 52). That last video also referred to the asset protection strategy available through the MWC program as "an invisible force field so no-one can get through and attack it" (CB 1447). The video concluded after about 24 minutes with the statement (at CB 1452): You have the knowledge and the understanding, you're empowered now to build a force field around everything that you have so that you can't ever lose it. 56 In addition, there was a video entitled "How to Protect Your Assets from Creditors, Lawyers and the Government" dated 23 June 2021, which ran for one minute and 35 seconds, in which Ms Grubisa introduced herself as "an author, lawyer, property investor and a debt expert", and said the following (CB 1363): So I'm coming live to you to tell you exactly what you have to do to get your house in order so that you are in full control, you'll never, ever lose money or any of the wealth you've gained, and you can poise yourself to take advantage of opportunity and gain more wealth in times ahead. 57 In terms of the course materials available to those who enrolled in the MWC program, the first of those materials was an "onboarding email" (CB Tab 31), in which Ms Grubisa on behalf of DG Institute said the following (CB 1203): Congratulations once again on taking this important step towards securing and protecting the wealth you've worked so hard to build. … You have taken control of your destiny and with my support you'll have a time-tested, proven, airtight system that will protect any assets that are important to you. 58 In that email, a video entitled "Welcome to Master Wealth Control – Video 1 Welcome" (CB Tab 51) was made available to course participants. That video runs for a little over 16 minutes. Ms Grubisa referred to the research which she did going back over 100 years, and referred to having found out about Lord Vestey setting up a trust that became known as "the Impenetrable Vestey Trust" (CB 1443). Ms Grubisa said that "No one could attack it and no one could get through it and it went to the highest Courts in the land." Ms Grubisa referred to the British Government wanting to penetrate the trust and get its assets, and said that in the early 1990s the core company of the Vesteys went into liquidation but the Vesteys lost nothing, and then said (CB 1443): That's how watertight the protection was. So, I've drilled down. I've researched all of that and I've applied that to Australian and Global law to protect your worldwide assets. Okay, so let's just run through what I'm going to be doing for you as part of this package. Remember, this package is for life. What I'll be doing then, is be building an invisible force field around all of your wealth as it currently stands. We're not going to change anything. We're not going to change ownership. We're not going to undo what's already there. Everything stays as it is. Business as usual. It won't change anything for you except it will stop anyone getting through and attacking what you have. So, what you're going to get is the Vestey Trust built from the ground up around your assets. That will protect everything you have for your lifetime….Your Vestey Trust will protect everything in your lifetime as you grow your wealth. 59 After about 10 minutes, Ms Grubisa referred to three things that clients needed to consider when buying and selling property, namely tax, borrowing and asset protection (CB 1445). She then said that clients need not worry about asset protection, saying "I've taken care of that" (CB 1445). She then said that "this invisible forcefield is very flexible" and in terms of refinancing or future purchases and sales of property it is "like a gate", as it could be opened to let a mortgagee in if the client wants to borrow money and close it "to block out anyone else wanting to attack you and protect your equity in that property" (CB 1445). Ms Grubisa referred to the need for her to obtain instructions as to what would be put "in the force field" and said that "this force field will protect any wealth that you nominate" (CB 1445). A little later, Ms Grubisa said that whatever "forms part of your net worth should be included" (CB 1446). 60 Newly enrolled participants were also welcomed to the MWC program by way of a webpage entitled "Welcome to Master Wealth Control" (CB Tab 29). The webpage contains the following statement (CB 1070): An ounce of prevention is better than a pound of cure – Master Wealth Control is an asset protection system that comprehensively protects all of your wealth when you need it without: • the hassle of restructuring • the need to pay stamp duty or changeover costs • changing your tax position or current structuring This is structuring that our legal team will build around your wealth. Its design is such that everything will remain "business as usual" for you. Nothing will change but you will be protected and have peace of mind knowing that you are in control should anything ever go wrong. The client was then asked to complete the questionnaire (CB Tab 32). The questionnaire sought various details by way of instructions, including nomination of the properties and other assets proposed to be protected from creditors by way of the MWC program. The answers to the questionnaires were then used by DG Institute to prepare the Transaction Documents for the particular client. 61 Turning then to the Transaction Documents (CB Tab 30), these are included within a bundle of documents entitled in the index to the Court Book "MWC Example Docs" dated 11 March 2021. That bundle comprises example documents for two fictitious clients, Nicola Jane Cormack and Joe Cormack, and the bundle has been treated by the parties as representing what was provided for clients in the MWC program. 62 The bundle begins with a covering letter by Ms Grubisa on behalf of DG Institute thanking the clients for investing in the Master Wealth Control Asset Protection System. The letter sets out a number of steps as to what the clients needed to do. Step 2 was to read the individual Asset Protection Plan, and included the following statement (CB 1075): We understand that you may wish to discuss this plan and the official documents with your own accountant. We have prepared a briefing paper for you specifically to give to your accountant to fill them in on the important details and answer questions that they may have – please refer to "Briefing Paper for Accountant" in the Table of Contents. Step 5 involved setting up a bank account in the name of the trust, and Step 6 dealt with the Notice of Assignment and said the following (CB 1075): When you set up a bank account in Step 5 above then you can use the Notice of Assignment to assign your personal wages, rent or other income to be directed to be banked directly into the Trust. Please refer to "Notice of Assignment" in the Table of Contents to help with this. The letter concluded as follows (CB 1076): Once you have completed all nine steps there is nothing more to do unless you add further property or assets to your portfolio. We have outlined what to do in these circumstances – please refer to "Subsequent Assets Purchases and Disposals" in the Table of Contents for more details. Congratulations! You have invested your time and resources into safeguarding your future and your assets are now fully protected. You can now get on with living your life and building your wealth with the peace of mind that comes with being bullet proof. 63 After that covering letter, the Asset Protection Package for the Cormacks was provided, beginning with the Table of Contents (CB 1078). The "Details Provided on Questionnaire" were set out (CB 1080–82). After that, there appeared the "Individualised Asset Protection Plan" for the Cormacks. That document sets out the assets requiring protection based upon the details submitted in response to the questionnaire (CB 1083–84). Reference was then made to the Cormacks' real property being protected from attack by creditors (CB 1084), and to personal goods and chattels, as well as cash, shares and personal earnings income, all of which it was said "can be protected quickly and easily through the asset protection trust mechanism" (CB 1085). There then appeared the following (CB 1085–86): The Objective of the Asset Protection Plan The main objective of the Asset Protection Plan is to prepare for what might happen if some unknown event take you by surprise. You want to consolidate what you have and protect your properties (both current and future). You want to block off any avenue of recourse a potential future creditor may have against you, leaving the equity in your assets fully protected. We want to separate you as an individual from your wealth (so there is no equity in your assets for creditors to get!). We have reverse engineered things to look at where you are open to attack from creditors. The strategies that we will now outline for you will seal off that exposure. Your present situation is not precarious. You do not have pressing creditors, but what you are looking for now is to move forward and to shore up your wealth and hedge against the risk of going backwards in the event that an unexpected liability for a debt occurs. We can act now to protect all your equity in your present and future property and your other wealth quickly and easily through a Trust, Equitable Mortgage and Caveats. Should you ever get served with or receive a letter of demand or court documentation at any time you MUST notify us immediately as we need to be involved in this process for your ultimate protection. The Course of Action The most important instrument for the success of this strategy is the creation of a Trust. Once this Trust is set up you will mortgage all of your equity in your assets to the Trust through an instrument called an Equitable Mortgage (an unregistered mortgage), supported by another legal document called a Promissory Note (which is like an IOU). It is important to understand is that there is no change in the ownership of your assets, everything remains as it is at present. The title to your home, your investment properties, cars, household furniture and appliances will not change. Whether you own assets outright or you owe money on them, such as a mortgage on your own home to the bank, or finance on your car, you have some equity in your assets. If you own something free of debt, then your equity in it is 100%. If you have a $50,000 car with a loan from a finance company of $35,000 it simply means that your equity in the car is $15,000. So, by way of an Equitable Mortgage you mortgage your equity in all of your assets listed in the questionnaire to your Trust. The result is that you have added another layer of debt over your assets so that your available equity in your assets is reduced to zero. This layer of debt ranks second after any first mortgage to your bank or other lender. The difference between mortgaging your equity in your assets to your trust and the bank loan on your home or the finance company debt on your car is that your Trust debt is 'friendly' debt but nevertheless it is still a legal debt which is owed to your trust. The terms and conditions of the equitable mortgage are explained here in detail later on. The equitable mortgage creates a charge over your equity in your assets rather than you transferring ownership to your Trust because if ownership is transferred then – • Stamp duty is payable on the market value of the assets (not on equity). • The first mortgagee (bank) has to agree to the transfer – expect a new loan application, valuation, fees and charges. • In the case of a vehicle, the Transport Department needs a change of registration and stamp duty and fees. • Except for your principal place of residence, a change of ownership of assets makes you liable for capital gains tax which is assessed on market values as at the date of purchase and date of transfer to your Trust. So for these reasons it is a waste of money transferring ownership from you to the trust and it achieves nothing positive or beneficial for you in terms of asset protection. Besides, when we get to the Trust later on, you will find that the Trust itself cannot borrow. You register a Caveat on the title to your real estate to protect the Trustee's interest in the property. You can also register your Trust's debt over your other assets by registering the charge with ASIC on the Personal Property Securities Register. You also create a Promissory Note to back up the mortgage. The result is that anyone looking at your equity as an avenue of claiming a debt from you will find it impossible to recover. The upshot is that you still own everything, it is all 100% "under finance" so that the equity available to creditors in your assets is zero. … Your Trustee You have nominated The New York 365 Securities Fund Pty Ltd as Trustee for your asset protection Trust. It is important that you understand that there are ongoing costs and responsibilities involved with having a corporate Trustee. The Trustee company will have no assets for creditors to claim, it will have no debt and be completely neutral. The reason we need a separate and fresh company is that we don't want a company that is trading or has traded. Future Property Purchases Once we set up the protective structuring, you will be able to buy properties in your own name or whatever other entity suits you for tax or borrowing purposes giving you the tax deductions available for investment properties. However, you cannot buy assets in the name of the Trust we have set up for you because the Trust Deed does not allow the trust to borrow and because the Trust is an inactive, dormant vehicle and its sole purpose is to protect you – it acts as a shield or forcefield and will never own assets. … The asset protection Trust that will be created will have a restriction in it preventing it from borrowing. It cannot borrow and it will never borrow, because to do so will mean that if a default occurs lenders will then have recourse to all of the assets of the Trust when the specific purpose of creating the Trust is to keep creditor's claims at bay and protect you. Future purchases then can be in your name, in the name of a company with you as guarantor or as Trustee for another Trust (that is, another trust which your accountant may require you to use to own property for tax purposes). The purpose of this asset protection Trust will be to sit there and do nothing, be completely inactive but to take a mortgage or charge over your equity in all assets that you own so that your asset protection needs are now covered with this structuring. In addition to your personal assets, if you have a trust or a company that owns other assets (such as a business or real estate) then that trust or company needs to be joined with you in all of the documents to provide those entities with asset protection too. Income Without you having asset protection a creditor pursuing you would be able to attack your income with a garnishee order. That means they can intercept any money coming to you from other parties, such as rent due to you from an estate agent, or customers who pay you in business. But by creating a trust and having all your finances in a separate bank account in the name of your Trust it will render them untouchable by your creditors. What you need to know is that a separate bank account for the trust is necessary to make your asset protection work. It will also afford you the ultimate protection for your cash and savings. If you have an offset account in relation to your mortgage – any cash stored here will be protected automatically because a mortgage is debt (not an asset) – you simply have a draw-down facility with an offset account and your indebtedness will change from time to time via your offset account or line of credit but it is all debt, As such, this cannot be subject to garnishee. You may therefore continue to store money in offset and line of credit accounts. In the event that you have lump sums of cash which you are holding (for example you are saving money for a deposit or investment) then that should be stored in the Trust's bank account. The reason for that is that it will be protected from garnishee. The only caveat here though is that monies stored in offset accounts are not protected from attack from the actual bank holding the money. They say "possession is nine tenths of the law" and this applies with offset accounts – should there be an issue or dispute over monies owed to that mortgagee bank then they may take the money in your offset account to reduce your debt to them and whilst that cash may be protected from others, it is not protected from that lender should they come after it. … 64 There then appeared the "Briefing Paper for Accountant" (CB 1093). That document referred to the formation of the Trust, the creation of an equitable mortgage over the client's real and personal property in favour of the Trust with the clients as debtors, and the lodgment of caveats on the title to real property and the registration of interests on the Personal Property Securities Register (PPSR). The document then included the following: The Caveat and PPSR interest will become a fixed and floating charge over asset equity and charge equity in property after the first mortgage or any other prior registered interest. There will therefore be nothing for any other creditors or a Trustee in bankruptcy to obtain from the property. Available equity will effectively be mortgaged to the hilt to the Trust. The document explained that there will be no transfer of title and property ownership would remain as is, and that nothing would change concerning tax liability. I note at this point that the document said nothing concerning the loan which was intended to be secured by the equitable mortgage, comprising advances by the trustee to the clients, except for the statement that available equity would be "mortgaged to the hilt". 65 The package also included a document entitled "Instructions for Opening a Trust Bank Account" (CB 1099–1102). The document began by explaining that a trust bank account is an additional layer of protection for the client's cash and savings and is an account in the name of "your Trustee as trustee of the trust". The document then said the following (CB 1099): It is critical that you set up the bank account at the time that you sign all of your documents. If you have significant cash that you wish to protect, you can then transfer it into the trust bank account. The protection comes because the account is not in your name, it is in the name of the Trustee because the Trustee is holding the money for you. The document explained that the client would need to take $10 to the bank to deposit into the new account and said the following: You may later withdraw these monies as part of the "loan monies" from the Trust which will be added to as money goes in and out of the Trust over time. The document set out specific instructions for the bank, beginning with the clients asking the bank to open a trust account in the name (which had been chosen by the clients) "The New York 365 Securities Fund Pty Ltd as trustee for The Venice Trust" (CB 1102). The second of the specific instructions for the bank was as follows: Request the bank to issue you with the types of cards you would normally use to facilitate your daily banking (ie debit card, EFTPOS card) and cheque books if required. Please note that some banks may have restrictions on what they will issue for daily banking on a Trust account so talk this through with your proposed bank to ensure that all your requirements are met. Under the heading "How do I operate this new bank account?" the following statement was made (CB 1102): You can also use this account to receive income that you would normally have banked in your own name such as wages, rent etc. Refer to "Notice of Assignment" on page 5 for more details. A very important thing is that the Trust cannot borrow because the trust deed does not permit borrowing. The reason for this is that if the trust borrowed and defaulted on the loan, the lender would move on the trust to make recovery and that would decimate the trust and expose your other assets. 66 I interpolate at this point that in a separate document provided to clients who enrolled in the MWC program, entitled "Your Guide to Asset Protection" (CB Tab 56), the following was stated in relation to the trustee's bank account (at CB 1492): You will not have any bank accounts in your own name as all your banking will be done through the trust and your trustee will direct the bank to allow you to be a signatory to the cheque account and that you are given an EFTPOS card. This will enable you to cover your cost of living and your creditors cannot garnishee your bank account because it would have been closed. 67 The Transaction Documents were then included in the package with instructions immediately preceding each document as to what the client needed to do to finalise and sign each document together with some commentary concerning the document. 68 The first of the Transaction Documents was the Deed of Trust (CB 1107–19). It refers to Ms Grubisa as the settlor and The New York 365 Securities Fund Pty Ltd as the trustee. The Trust Fund is defined in cl 1.2 as meaning the assets described in the Schedule (being $10 cash), and all assets at any time added to it by way of further settlement, accumulation of income, capital, accretion or otherwise. The Trust Deed takes the form of a relatively conventional discretionary trust, in which the discretionary objects are the Cormacks, various parties related to them and other persons whom the trustee may from time to time in its discretion determine. The only notable feature of the terms of the Trust Deed is that it does not contain the prohibition on the trustee borrowing which had earlier been referred to in the package. That is the first of a number of matters arising in the Transaction Documents which cause me to doubt the level of legal skill and competence of Ms Grubisa. As I explain later in these reasons, that is an important factor in assessing the accessory liability case against Ms Grubisa. 69 The next of the Transaction Documents is the Equitable Mortgage. The commentary immediately preceding that document refers to the nature of a mortgage as involving the lender "taking security over a property for money lent until a debt is repaid", and an equitable mortgage being a mortgage which is not registered on the title to a property (CB 1121). Reference was made to lodging a caveat rather than registering the mortgage, which was said to be just as valid and effective in protecting the equity in property (CB 1121). The commentary stated that Nicola and Joe Cormack needed to sign the Equitable Mortgage as the Borrowers (CB 1121). 70 The Equitable Mortgage refers to the Borrowers as Nicola and Joe Cormack and also the trustee of their pre-existing trust. The Lender is the trustee of the new trust, being The New York 365 Securities Fund Pty Ltd. The recitals referred to the Borrowers having title and ownership of the property described in the Schedule to the deed (which lists the real property and other assets of the Borrowers) together with all properties in which the Borrowers have interests in the future. Recital B refers to the Borrowers wishing to borrow money described in the deed from the Lender, and recital C refers to the Lender having agreed to lend money to the Borrowers on the terms and security for repayments set out in the deed. The terms of the Equitable Mortgage provided relevantly as follows (CB 1123–4): 1. The Debt: The Borrowers declare and acknowledge receipt from the Lender of all monies lent to them by the Lender under this deed from time to time and in the future. A statement in writing from time to time signed by the Lender shall be conclusive proof and prima facie evidence of the amount outstanding and due from the Borrowers. 2. Payments: The Borrowers agree to repay the debt as demanded by the Lender. The loan is interest free. 3. The Properties: The Borrowers are the owners of the real estate and personal property ("the Property") specified in the Schedule to this deed which they own free and clear of all mortgages, charges, liens or encumbrances except as stated. The Borrowers hereby pledge and mortgage the Property and their interest in it to the Lender as security for repayment of the debt upon the terms set out in this deed. In addition the Borrowers agree as follows: (a) If the Lender exercises any rights under paragraph 4 below [which deals with acceleration of the obligation to repay the loan in specified circumstances] they will immediately upon demand by the Lender, and in addition to any other remedies available to the Lender of any kind whatsoever, either: [i] Execute a legal mortgage in favour of the Lender in the Lender's standard form for the Lender to register on the title to the Properties incorporating the terms of this deed including but not limited to the Debt noted above, or [ii] Sell the Properties and apply the proceeds thereof to repay the Debt in full or as much of the Debt as can be repaid to the Lender from the proceeds, or [iii] Both of the above …. Clause 6(f) provided that the Borrowers granted the Lender a caveatable interest in the Property. 71 The next document was the "Promissory Note", and the commentary in relation to that document made the following statement (CB 1134): A Promissory Note is a legal document where one party acknowledges a debt to another – a more common term you may be familiar with is an "IOU". The Promissory Note or IOU supplements acknowledges that we owe our Trustee a debt. Should everything go pear-shaped and worst case scenario you are made bankrupt, your Trustee is a secured creditor of yours. This means that they will get paid out in priority over other creditors who get what is left, usually nothing or one or two cents in the dollar, your Trustee will get paid everything (all your wealth) – it is therefore preserved and kept safe for you. 72 The terms of the Promissory Note describe the Principal Sum as follows (CB 1136): Such sums as advanced to the Issuers from time to time. The amount outstanding shall be in writing signed by the Payee which shall be conclusive and prima facie evidence of such amount. The Issuers are described as Nicola and Joe Cormack, and the trustee of their pre-existing trust. The Payee is described as The New York 365 Securities Fund Pty Ltd as Trustee for The Venice Trust. The Repayment Date is stated to be as follows (CB 1136): On demand but not earlier than the last day of the initial term of 50 years. The Fixed Interest Rate is described as "NIL 0% per annum". The Promissory Note also includes the following provision (CB 1137): Should the Issuers fail, refuse, neglect or be unable to pay the Principal Sum to the Payee when due, the Issuers acknowledge liability to pay to the Payee all of its costs, charges and expenses of recovery, litigation and enforcement including legal and Court costs. The Issuers hereby grant the Payee a caveatable interest in all real estate the subject of an equitable mortgage signed by the issuers on this day. 73 The ACCC criticised the Promissory Note for not satisfying the requirements of a Promissory Note under s 89(1) of the Bills of Exchange Act 1909 (Cth), which provides as follows: A promissory note is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to or to the order of a specified person, or to bearer. The ACCC submits that the Promissory Note does not contain a "sum certain in money" but instead refers to "such sums as advanced to the Issuers from time to time". The ACCC submits that the Promissory Note is not a valid promissory note and has no statutory force. While I accept that the Promissory Note does not satisfy the definition in s 89(1), I do not see that that is a matter of any consequence for the efficacy or otherwise of the Transaction Documents. A failure to satisfy s 89(1) has the consequence that the document will not enjoy the benefits conferred by s 95(1) of applying many of the provisions of the Bills of Exchange Act 1909 relating to bills of exchange to the purported promissory note in question. The fact that a transaction may not be a valid promissory note within the meaning of s 89(1) does not mean that it has no legal effect at all, and such a document may still take effect as a valid contract at common law supported by consideration: Turner v O'Bryan-Turner [2021] NSWSC 5 at [349]–[354] (Ward CJ in Eq); Gore v Octahim Wise Ltd [1995] 2 Qd R 242 at 250 (Williams J). The ACCC correctly accepted that the Promissory Note was a valid contract at common law supported by consideration (T66.25–29; T67.36–38). Further, it does not appear to me that any aspect of the proposed transactional structure requires that the Promissory Note be a negotiable instrument or otherwise enjoy any of the benefits conferred by s 95(1) of the Bills of Exchange Act 1909. 74 The next document is the Declaration and Acknowledgement, the commentary for which said that it supplemented the equitable mortgage as a statement by the owners of the assets which are mortgaged to the Trust and that they have the ability to mortgage their equity in their assets to the Trust (CB 1141). The Declarants are Nicola and Joe Cormack, together with the trustee of their pre-existing trust, and the document provides relevantly as follows (CB 1142): A. The Declarants hereby mortgage and charge revocably and unconditionally their equity in the property described in the Schedule hereto to the Trustee together with all of their equity in such other properties in which the Declarants have interest hereafter. B. The Declarants acknowledge that the Trustee's mortgage and charge over their equity in the particularised assets shall be and remain in force until all monies due to the Trustee are repaid. The Schedule lists the real property and other assets of the Declarants. 75 Paras A and B, which I have extracted above, are badly drafted. It makes no sense for a party to mortgage only that party's "equity in the property", rather than mortgaging the property itself. The party's equity in the property corresponds to the equity of redemption, representing the surplus in value of the property over and above the amount of the debt which the mortgage secures. The true intention of the drafter of the document must have been to refer to the mortgage being over the property itself. Again, this error in drafting (which is reflected also in the passage extracted above from CB 1085–86) causes me to doubt the legal competence of Ms Grubisa, who I infer either drafted or reviewed the drafting of the document. As I have said, the question of Ms Grubisa's competence is relevant to the claim for accessory liability, and in particular the issue of Ms Grubisa's knowledge of the false and misleading nature of the relevant representations. 76 The next document is the Notice of Assignment. The commentary provides by way of general information the following (CB 1148): When you set up a bank account in the name of your Trust and operate this account as part of your daily banking, then you use the Notice of Assignment to evidence this formally. This is a legal document under legislation which provides for assignment of monies due to you to be paid to another, which in this case is your Trustee. It transfers and assigns your entitlement to the money owed to you to the Trust so that you don't receive the money. The income is still assessable for tax in your own name as income you have earned but the money will go directly to the Trust (and therefore cannot be seized by a creditor with a garnishee order because it does not come into your hands). Under the heading "What is the benefit of doing a Notice of Assignment?", the commentary states (CB 1148): It formalises the paper trail and gives the person paying them money due to you (eg the managing agent paying over the rent for your investment property or your employer or business paying you wages or drawings) formal direction as to where to pay the money, that is, not to pay you but to pay the trustee. Under the question "What types of income would we generally use the Notice of Assignment for?" the commentary stated (CB 1148): The most common types of income would be salary and wages, drawings or rental income on your rental property, although there are other types of income that you could also assign. The instructions for signing the Notice of Assignment stated the following (CB 1149): The Notice of Assignment can be used for any type of income. You need to do a separate form for each entity to whom you give the notice (ie one to your employer, one to the real estate agent). 77 The Notice of Assignment begins as follows, taking the example for Nicola Jane Cormack (CB 1150): TAKE NOTICE that I the undersigned, Nicola Jane Cormack (the assignor) hereby absolutely assign and transfer to The New York 365 Securities Fund Pty Ltd (ACN 000 000 000) (the assignee) all of my legal right, title, interest and beneficial ownership in all monies due and owing to me by you and I hereby acknowledge that all rights, benefits and title to all monies due to me now and hereafter until further written notice from me are now the personal property of the assignee to the absolute exclusion of any claim I have in respect thereof. All payment summaries and statements of income are to continue to be issued to me in my name. 78 I note at this point that the Notice of Assignment was evidently intended to be a notice as contemplated by s 12 of the Conveyancing Act 1919 (NSW) and cognate legislation in other states and territories. However, it appears that the assignment is one made without consideration. In those circumstances, the Notice of Assignment validly assigned any existing debts or other choses in action, but was ineffective to assign any rights in relation to mere expectancies or possibilities of future entitlement: Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 26 (Windeyer J). It appears to me likely that this issue would have had substantial ramifications for the purported protection being provided for the clients' assets from attack by creditors. If, as I have said, the only valid assignment was of existing debts and not of all income in the future, then the amount of cash which was likely to be validly deposited in the trustee's bank account would be much lower than was contemplated by the structure. That, in turn, would have limited the amount which the trustee was able to lend to the clients, with the further consequence that the Equitable Mortgage would not have secured as large a debt as was contemplated. The Notice of Assignment thus proceeds on a legal error of substantial importance to the proposed structure. Again, this has a bearing on my assessment of Ms Grubisa's legal competence. However, I regard this as a matter of carelessness on Ms Grubisa's part, and I infer that she genuinely believed that the Notice of Assignment would be effective to assign all future income to be earned by the clients to the trustee. 79 The package then contains a "Testamentary Trust Will" for each of the Cormacks (CB 1154–97), which does not call for any particular comment. 80 Finally, the package deals with "Caveats". The commentary refers to the caveat being a "notice to anyone running a title search on your property that your Trustee has a secured interest in the property", and explains that the Trustee will have a second claim behind the bank which is the first mortgagee "because its caveat was registered second (and it will take everything)" (CB 1199). The commentary then states: The judgment creditor will get nothing because they registered last and so have last priority and all the money has already been paid out to the first 2 higher ranking creditors. This way, your interest in the property is protected and kept safe by your Trustee. 81 In light of the material in that package, it is important to recognise how the loan made by the trustee to the clients was proposed to be made. In its outline of opening submissions, the ACCC put its primary case on the basis that no loan would actually be made under this structure, and accordingly there would not be a valid mortgage or security, relying on the principle that a mortgage is security for the payment of a debt or the discharge of some other obligation (and in the present case only a debt was contemplated): Handevel Proprietary Limited v Comptroller of Stamps (Victoria) (1985) 157 CLR 177 at 192 (Mason, Wilson, Deane and Dawson JJ). However, the ACCC did not maintain that contention in its final address (T95.06–20). Its concession in that regard was properly made. What was intended by the structure was that debts and future income of the clients would be assigned to the trustee and paid into the trustee's bank account, from which the clients would withdraw money from time to time to meet their personal expenses. Those withdrawals would constitute the loan advanced by the trustee to the clients. The Equitable Mortgage and the Promissory Note contemplate that those advances would be made by way of loan, and there is no indication that any other kind of transaction (such as a gift or distribution by the trustee) was intended. 82 However, the ACCC advanced as its secondary submission that any protection offered by the structure would be limited to the amount of the debt owed by the client to the trustee, and that debt would accrue incrementally as moneys came into the trustee's bank account and were drawn upon by the client, rather than providing immediate protection over all equity in real property and other assets upon signing the documents (written opening submissions at [71]). When senior counsel for the respondents conceded at the beginning of the second day of the hearing that it was appropriate to make a declaration as to the Vestey Trust Representations being in contravention of the ACL, the concession was made on the express basis of the secondary line of argument advanced by the ACCC, namely that a debt was created but it was not a debt which was immediately sufficient to cover the value of the clients' equity in the property and other assets being mortgaged (T92.32–43). 83 The effect of the Transaction Documents may thus be summarised at its most basic level as follows: (a) a discretionary trust would be created and controlled by the client; (b) all future income of the client was intended to be assigned to the trustee and paid into the trustee's bank account, although as a matter of law that was only valid to the extent of existing debts at the time the Notice of Assignment was given; (c) the client would then withdraw money from time to time from the trustee's bank account to meet personal expenses of the client, thereby borrowing money from the trustee free of interest and with no obligation of repayment for at least 50 years; and (d) that loan would be secured by the Equitable Mortgage, and would also be the subject of a caveat on the title of any real property and could be the subject of PPSR registration in respect of personal property. 84 That structure has an obvious flaw as a structure designed to protect the client's property from creditors, in that it will only afford protection to the extent of the amount of the secured loan by the trustee to the client. In the early stages of the structure, the amount of the loan will be relatively small. The amount of the loan will be limited by the amount of the existing debts which are assigned to the trustee, and will be limited further by the amount of the withdrawals from the trustee's bank account to meet personal expenses of the client. For example, a person who earns and spends about $2,000 per week (ie about $100,000 per annum) might have a debt to the trustee at the end of the first week of the life of the structure of about $2,000, and at the end of the first year of about $100,000. However, most members of the relevant class would be likely to have net assets worth more than, say, $2,000 or $100,000. For example, if one takes a person with net assets of $500,000, and income and expenses of $100,000 per annum, the amount of the secured loan from the trustee to the client will not equal or exceed the net assets of the client for 5 years, even if one wrongly assumes that the assignment applies to all future income and even if one makes the unrealistic assumption that the value of the client's net assets would not change at all over that period. However, the MWC program claimed to provide clients with complete and immediate protection from creditors to the extent of all their net worth. It is in light of that obvious flaw that I turn to consider the question of Ms Grubisa's accessory liability. Is Ms Grubisa liable as an accessory? 85 I have referred above in the context of the No Equity Representations to the relevant principles applicable to the ACCC's allegation that Ms Grubisa was involved in DG Institute's contraventions by aiding, abetting or procuring the contraventions or by being knowingly concerned in or party to the contraventions. 86 The ACCC submits that it should be inferred from Ms Grubisa's qualifications and experience that she knew that the Vestey Trust structure could not offer complete protection to clients against creditors, whatever her beliefs as to its ability to offer some protection. The ACCC submits that Ms Grubisa knew that the only funds available to the trustee to lend to the client derived from amounts assigned to the trustee as well as any amounts placed in the trustee's bank account on opening, and that at no point did DG Institute undertake a valuation of the client's assets or seek to ensure that the amount of the debt owing matched the value of the assets sought to be secured. The ACCC submits that the Vestey Trust Representations were statements of fact, rather than statements of opinion, but that even if they are treated as statements of opinion then DG Institute misrepresented that the relevant opinion was held, was based on rational or reasonable grounds, and was the product of a reasonable application of the legal knowledge, expertise and skills of DG Institute. 87 The respondents' submissions may be categorised as advancing three main propositions. First, the respondents submit that Ms Grubisa prepared the Transaction Documents incompetently despite her best intentions (T154.42) and that Ms Grubisa fundamentally failed to understand the structure at its most basic level (T156.10–14). Second, the respondents point to a number of aspects of the proposal as pointing away from actual knowledge by Ms Grubisa that the structure would not provide complete protection to clients: the ongoing and lifelong relationship which was proposed (T161), the expectation that the structure would be provided to the client's accountant (T130, 163), and the proposal to register interests on the PPSR and issue notices of assignment (T164). Third, the respondents submit that the relevant representation was one of opinion as to questions of law (consistently with the Amended Concise Statement in Response at [16A]). 88 In my view, the flaw in the structure that the loan secured by the equitable mortgage would be most unlikely to reach the value of the client's assets for a very substantial period of time (if ever) was so obvious that Ms Grubisa must have been aware of it when conceptualising, drafting and implementing the structure. While I have not formed a high opinion of Ms Grubisa's legal competence, my reservations on that matter concern technical aspects of legal drafting, and also as to her knowledge of relatively advanced legal topics. Those matters concern the lack of the claimed prohibition in the Trust Deed on the trustee borrowing, the failure to appreciate that the assignment would be effective only in relation to existing debts and not in relation to all future income, and the infelicity of referring in the Declaration and Acknowledgment and elsewhere to a mortgage only over the client's "equity in the property". However, what I have referred to as the obvious flaw in the structure is an error of a very different kind from those matters of technical legal drafting and knowledge. That obvious flaw is a matter of commonsense which would be readily appreciated by anyone with elementary legal knowledge. Ms Grubisa had successfully undertaken both a Bachelor of Laws and a Master of Laws degree, and had practised as both a solicitor and barrister for some years. I am comfortably satisfied that Ms Grubisa did have actual knowledge of that obvious flaw, and accordingly had actual knowledge of the false and misleading nature of the Vestey Trust Representations. As with the No Equity Representations, I draw that inference more confidently in light of the fact that Ms Grubisa did not give evidence. In expressing those conclusions, I have again taken into account the gravity of the matters alleged and the consequences for Ms Grubisa of my findings. 89 As to the second line of argument advanced by the respondents, I do not regard the other aspects of the proposal in the MWC program as significantly pointing away from the conclusion which I have expressed. The matters relied on by the respondents did serve to create an impression of self-confidence on the part of Ms Grubisa and the DG Institute in the efficacy of the proposed structure, which I regard as a significant element in the marketing and continuing attractiveness to consumers of the MWC program. The encouragement for clients to consult their accountants may be regarded as the most weighty of the matters relied on by the respondents. However, it should be observed that the "Briefing Paper for Accountant" makes no reference to the loan by the trustee to the client or how it will arise over time, except to say that "Available equity will effectively be mortgaged to the hilt to the Trust" (CB 1093). That statement was false, and reflects what I have referred to as the obvious flaw in the structure, although that flaw would be apparent to an accountant only if the accountant were also given the whole package of Transaction Documents and associated commentary rather than merely the briefing paper. It is also not clear that a person who is willing to advertise a misleading scheme to the public at large would not also be willing to distribute a summary of that scheme to accountants. 90 As to the question whether the Vestey Trust Representations should be characterised as representations of fact or of opinion, that is a matter to be viewed from the perspective of the ordinary or reasonable person to whom the statement or representation is directed, and not from the perspective of the maker: Ireland v WG Riverview Pty Ltd [2019] NSWCA 307; (2019) 101 NSWLR 658 at [30] (Bell ACJ, with whom Barrett AJA agreed). In that passage, Bell ACJ applied Campomar v Nike at [102], and also cited with approval the observation of French J in Pyrotek Pty Ltd v Ausco Industries Pty Ltd [1991] FCA 743 at 33 to the effect that a statement which has the character of a statement of fact when read by an ordinary person may to another, who has relevant knowledge, be seen as an opinion involving interpretation of other data. As Bell ACJ reasoned at [32], ordinarily the more informed the target audience regarding the subject of the impugned remarks, the more willing the court will be to construe the statements as opinions, or as reasonably held beliefs. 91 In the present case, the ACCC submits, and I accept, that there is no reason to conclude that the target audience was well-informed. In my view, the target audience was unlikely to possess any expertise or special knowledge in relation to matters of asset protection or structures involving trusts and loans, but comprised ordinary people interested in taking steps to protect their assets. Further, in the context in which the Vestey Trust Representations were made in the promotion of the MWC program and in the course materials used in that program, the audience would not have understood DG Institute's statements to have been statements of opinion but ones of fact, particularly in that the MWC program was presented as providing to consumers a structure which provided complete protection as a matter of absolute certainty. The ACCC submits, and I accept, that these were statements of fact as to the essential features of the proposed structure provided in the MWC program, rather than statements of opinion as to the likely level of protection offered to clients, and they would have been understood by the audience in that way. 92 In any event, even if the Vestey Trust Representations were to be regarded as statements of opinion, the representations also contain the implied representations that the opinion was held by DG Institute, that it was based on rational or reasonable grounds, and that it was the product of a reasonable application of the legal knowledge, expertise and skills of DG Institute. Whether these implications arise from the representation is also to be assessed from the perspective of the target audience: Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2023] FCAFC 45 at [89] (Mortimer and Halley JJ). It follows from the findings which I have made above as to Ms Grubisa's actual knowledge of the obvious flaw in the structure that each of those implied representations was also false and misleading. The implication is strengthened by the emphasis given in the promotional material to Ms Grubisa's legal knowledge and experience, and her claim to have discovered the "impenetrable" Vestey Trust as the result of her extensive research. 93 Accordingly, I find that Ms Grubisa is liable as an accessory for her involvement in DG Institute's conduct in making the Vestey Trust Representations by aiding, abetting and procuring the contraventions and by being knowingly concerned in and party to the contraventions. As with the No Equity Representations, Ms Grubisa knew that her conduct was misleading and deceptive. Because Ms Grubisa had actual knowledge that the Vestey Trust Representations were false, it is unnecessary for me to express an opinion as to the wide view of accessorial liability. The MWC Program and the Authority Representations 94 The ACCC contends in its Concise Statement (at [12]) that Ms Grubisa on behalf of DG Institute stated in the promotional materials and course materials for the MWC program that there was a legal precedent for the Vestey Trust structure, with the implication that the Vestey Trust Structure taught in the MWC program had been tested and upheld as effective by the Full Court of the Federal Court of Australia in Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449. It is then contended at [13] that DG Institute represented in the Relevant Period that the Vestey Trust structure taught in the MWC program had been tested and upheld as effective by the Full Court in Sharrment (Authority Representations). The Authority Representations are alleged to have been false and misleading because Sharrment did not concern a Vestey Trust and does not provide authoritative precedent or support for the legitimacy or effectiveness of the Vestey Trust structure: at [15]. 95 The ACCC relies on six statements by DG Institute as to the making of the Authority Representations, which fall into two categories. The first category comprises the following statement in the video entitled "Property Success Summit Promotional Livestream" of 13 February 2021 (at CB 1292), and substantially similar statements in the video entitled "Protect Your Wealth Masterclass" dated 27 July 2021 (at CB 1373), and the video entitled "Master Wealth Control Promotional Video" of September 2021 (at CB 1405): Next question that often comes up is, is there a legal precedent for this? Yes. It's a full court of the Federal Court of Australia. So Australia wide jurisdiction. In a matter of Sharrment and the Official Trustee in Bankruptcy. So that's on Appeal. Three judges. What happened then was the worst and that was that bankruptcy occurred. And then what happened was that the Trustee in Bankruptcy went up to the Federal Court and said, "Oh, this trust is a sham. It's all a scam. And no money has changed hands." And the Court said, "No. This was set up at a time when they were solvent before bad stuff happened." And it stood up in that respect. So that's on Appeal Australia wide jurisdiction. It should be observed that in the minute or two before that portion of the videos, the word "this" had been used in connection with whether the participant's lawyer and accountant would be able to do "this", and whether "this" would change the participant's tax position, and in those passages the word "this" undoubtedly refers to the particular transactions and structure outlined in the MWC program. 96 The second category comprises statements where the term "legal precedent" was not used but the words "tested" and "stood up on appeal" were used. In the video entitled "Business Recovery Summit" dated 14 August 2021 (CB 1388–9), the following statement was made by Ms Grubisa: This has been tested in a Full Court of the Federal Court, so this concept. Now, it's a case called Sharrment v The Official Trustee in Bankruptcy. And what happened was this was all set up in good times for structuring and asset protection and then, the worst happened. So, there was actually bankruptcy, and the Trustee in Bankruptcy went to the Court and it went on appeal. So, the Federal Court is Australia-wide jurisdiction, a higher court, an appeal court, three judges. And what happened there was the Trustee in Bankruptcy said, "This is all rubbish. No money changed hands. This was set up to defeat creditors." So, what they wanted the Court to do was remove any money that went back to the Trust and said, "Give it to us in bankruptcy." And the Court said, "No. This was set up for a legitimate purpose, way before any bad stuff happened and the owner of the assets has the right to do that and indefeasibility of title, whatever happens first, whatever comes first is upheld." So, it stood up on appeal Australia-wide in that case. Similar language was used in the video entitled "Asset Armour" dated 5 July 2022 (CB 1419), and in the video entitled "Welcome to Master Wealth Control – Video 1 Welcome" (CB 1445), the latter being made available only to those who enrolled in the MWC program as an accompaniment to the onboarding email (CB Tab 31). 97 As to whether the Authority Representations were made, the ACCC submits that it is plain from the statements and the context of explaining the Vestey Trust structure taught in the MWC program, that DG Institute represented that the structure that it was promoting to consumers had been tested and upheld as effective by the Full Court of the Federal Court in Sharrment. The respondents submit that all that was being represented was that Sharrment was being used to support the "overall architecture of the scheme, not the specific documents" and "not the Vestey Trust as it has been conceived by Ms Grubisa or the specific documents", and was used to support the generalised notion that the transaction is not a sham even though no money changed hands (T150.41–151.12). The respondents rely upon Ms Grubisa's statements to the effect that the particular documents in the MWC program were her creation, so that they could not have been copied simply from the Sharrment case (T150.18–19). 98 In my view, the statements made by Ms Grubisa in relation to Sharrment clearly conveyed that Sharrment was authority for the legal efficacy of transactions which were to the same, or substantially the same, effect as the Transaction Documents used in the MWC program. The statements were not merely statements to the effect that Sharrment supported the legal efficacy of the generalised concept of a secured debt being owed to a trustee without money actually changing hands. The use of the word "this" as a reference to that which was tested in Sharrment or that which was the subject of legal precedent undoubtedly referred to the particular structure which was taught in the MWC program. That is clear from the context in which the statements were made. It is also obvious from the fact that Ms Grubisa referred to Sharrment for the practical point of conveying the absolute certainty of protection which the structure taught in the MWC program purported to provide. 99 There is also an issue between the parties as to whether the Authority Representations were a statement of fact, or one of opinion. In my view, the statements would have been understood by the audience as statements of fact, given the unequivocal and unqualified certainty with which the statements were made to an audience without any special knowledge of the subject-matter. Further, the statements were made in the same videos and materials as the Vestey Trust Representations, which I have also held to have been representations of fact rather than of opinion, and there is no reason for treating the statements going to the Authority Representations any differently. Even if the Authority Representations were to be treated as statements of opinion, I would have found that they also conveyed the implied representations that the opinion was held by DG Institute, that it was based on rational or reasonable grounds, and that it was the product of a reasonable application of the legal knowledge, expertise and skills of DG Institute. In that regard, I rely on the reasons already given in relation to the Vestey Trust Representations. For the reasons given below, including as to Ms Grubisa's actual knowledge, I would have found that each of those implied representations was false and misleading. 100 As to the false and misleading nature of the Authority Representations, the respondents appeared to accept that if one construes the statements by DG Institute as being to the effect that the decision in Sharrment was authority for the legal efficacy of the documents used in the present case, then the statements were false and misleading, saying that "that could not be a statement that could be reasonably held" (T153.11–15). That concession was well made. Sharrment did not concern a structure of the kind described by DG Institute in the MWC program, and did not provide authoritative precedent or support for the legitimacy or effectiveness of the structure promoted by DG Institute. 101 Sharrment was an appellate decision which overturned the judgment at first instance in which it was held that a portion of the proceeds of sale of a property called "The Chase" formed part of the divisible property of an estate of a person (W) who died insolvent and whose property was subject to an order for administration in bankruptcy. The Chase was purchased by a company, Seyta Pty Ltd (which was controlled by W, and was the trustee of the W Family Trust (No 6), which trust later became the sole beneficiary of the W Family Trust (No 4)). Most of the purchase price was paid by Seyta, with the deposit paid by W and the balance of much of the purchase monies originating from other companies controlled by W. Preceding that purchase, there had been a number of transactions entered into by companies controlled by W, including the grant of options to acquire unissued capital, a series of loans, allotment of shares and gifts, with the result being on the face of it to create a debt of $420,000 owed by W to Dare Reed Nominees as the then trustee of the W Family Trust (No 4). At some point after the purchase, Sharrment Pty Ltd was appointed trustee of the W Family Trust (No 6) in place of Seyta. The primary judge had found that the relevant companies were alter egos of W, that the juggling of funds was an artifice or sham intended to create the appearance of a debt due by W to the W Family Trust (No 4), that The Chase was purchased out of monies provided by W and that The Chase was held on trust for W with the result that the remaining proceeds of sale were held on trust for W's estate. 102 The Full Federal Court (comprising Lockhart, Beaumont and Foster JJ) held that the transactions were not shams, but real transactions, and in order for the acts or documents to be shams, the parties must intend that the acts or documents are not to create the legal rights or obligations which they give the appearance of creating. There was no suggestion of any express arrangement or understanding that the transactions were not to take effect according to their terms (per Beaumont J at 468), and there was a real debt created (per Lockhart J at 461). 103 There is no reference in Sharrment to any of the key aspects of the structure as outlined in the MWC program. While trusts were created, arguably for the purpose of giving effect to some of the transactions, they were not of the same nature as what was presented in the MWC program as the Vestey Trust. There was no equitable mortgage created in the transactions which were the subject of Sharrment, and the then trustee of the W Family Trust (No 4), Dare Reed Nominees, received funds which were ultimately applied by Seyta for the part-purchase of The Chase by reason of the purported gift of $420,000 by Belanto Pty Ltd, another company controlled by W. There was nothing suggesting the existence of documents akin to the other Transaction Documents in the MWC program, being a promissory note, declaration and acknowledgment, notice of assignment or caveat. Accordingly, Ms Grubisa's claim on behalf of DG Institute that Sharrment was a legal precedent, which had tested the structure proposed in the MWC program and that that structure had stood up to that test, was false and misleading. It follows that DG Institute contravened s 18 of the ACL. 104 As to the allegations by the ACCC as to contraventions of s 29, like the Vestey Trust Representations, the Authority Representations were made in the course of promoting the MWC program, and also in the course of delivering that program, and it is therefore plain that they were made in trade and commerce and in connection with the supply or possible supply of services by DG Institute (being the MWC program) and in connection with the promotion of the supply of those services. The ACCC submits, and I accept, that DG Institute contravened s 29(1)(g) of the ACL by making false or misleading representations that the services offered by it (being the asset protection strategy taught in the MWC program) had a particular "approval", being that of the Full Court in Sharrment, which it did not have. The ACCC also submits, and I accept, that DG Institute contravened s 29(1)(b) of the ACL by making false or misleading representations that the asset protection strategy taught in the program was of a particular standard or quality, because it had received the approval of the Full Court in Sharrment, when it had not. 105 The ACCC also submits, and I accept, that DG Institute contravened s 34 of the ACL by engaging in conduct that was liable to mislead the public as to the nature, characteristics and suitability for purpose of the MWC program, in that the asset protection strategy taught in the MWC program was said to have received the approval of the Full Court in Sharrment, when it had not. 106 As to Ms Grubisa's accessory liability for the Authority Representations, I infer from the statements that Ms Grubisa made that she had read and analysed Sharrment. Despite my reservations as to Ms Grubisa's legal skill and competence, I infer from Ms Grubisa's legal qualifications and experience that she understood the reasoning in effect of Sharrment, and was aware that the decision did not refer to the asset protection structure which was taught in the MWC program, or any structure which resembled it. Accordingly, Ms Grubisa knew that Sharrment did not provide authoritative precedent or support for the legitimacy or effectiveness of the structure which DG Institute provided in the MWC program. Ms Grubisa therefore had actual knowledge of the false and misleading nature of the Authority Representations, which she also obviously knew that she had made. Accordingly, Ms Grubisa knew that her conduct in making the Authority Representations was misleading and deceptive. I conclude therefore that Ms Grubisa is liable as an accessory to the contraventions of the ACL arising from the Authority Representations by aiding, abetting and procuring the contraventions and by being knowingly concerned in or party to the contraventions. As with the No Equity and Vestey Trust Representations, that conclusion follows irrespective of whether it is the narrow or wide view of accessorial liability that is correct. Conclusion 107 Accordingly, the ACCC is entitled to the declarations as to contraventions of the ACL which it seeks in the originating application. It is common ground that I should deal with the question of costs at the conclusion of the proceedings, at the stage of deciding what further remedies are appropriate. I certify that the preceding one hundred and seven (107) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman. Associate: Dated: 9 April 2024