What happened to fallen wellness entrepreneur Belle Gibson? Director of Consumer Affairs v Gibson [2017] FCA 240

Belle Gibson is the fallen wellness entrepreneur who had an app, website, and book. She claimed that she had been diagnosed with brain cancer in 2009, been given four months to live and had taken and then rejected conventional cancer treatments in favour of embarking on a quest to heal herself naturally. She also made representations about proceeds she would pass on to charities. The media began to make and report allegations against Ms Gibson in March 2015 and in June 2015 on the television program 60 Minutes she admitted that she did not have cancer or undergo conventional medical treatments. I wrote a blog post identifying the potential civil and criminal offences Ms Gibson may have committed and concluded it was likely no legal action would be taken against Ms Gibson. Subsequently, the Director of Consumer Affairs in Victoria commenced consumer law proceedings against Belle Gibson. In this blog post I outline the case against Belle Gibson and the decision of the Federal Court in the liability proceedings.

Liability proceedings - Director of Consumer Affairs v Gibson [2017] FCA 240

Background

The Director of Consumer Affairs Victoria (Director) commenced proceedings against Ms Gibson on 24 May 2016 alleging contraventions of s 18 (misleading or deceptive conduct), s 21 (unconscionable conduct in connection with goods and services) and s 29 (false or misleading representations about goods or services) of the Australian Consumer Law (contained in Schedule 2 to the Competition and Consumer Act 2010) and the Victorian Consumer Law equivalent provisions.

Ms Gibson had a book (The Whole Pantry), website, Facebook and Instagram accounts, and an Apple and Android App. On all these platforms as well as in media interviews she made numerous misrepresentations relating to having brain cancer and having conventional treatment before turning to natural methods of healing.

Ms Gibson also made a number of representations about proceeds to be donated to charities. In many instances no donations were made. Other charities did receive donations but only after long periods of time had passed, and after the lack of donation had been reported by the charity.

The contraventions were brought against Ms Gibson as well as her company Inkerman Road Nominees Pty Ltd. Ms Gibson did not defend or participate in proceedings. The liability hearing was held on 13 September 2016 and judgment was delivered on 15 March 2017.  

Outcome of liability proceedings

Justice Mortimer found all of the s 18 misleading and deceptive conduct contraventions were made out and some of the s21 unconscionable conduct contraventions were made out. None of the s29 false or misleading representations about goods or services contraventions were made out. Her Honour analysed the cancer and charity representations separately

Cancer and treatment representations

Justice Mortimer found there was no difficulty characterising Ms Gibson’s statements made across her social media accounts and in media interviews as making a representation that she had brain cancer, or a brain tumour and that members of the community would erroneously be lead to believe she was suffering from terminal brain cancer when this was never the case. The implied representation that Ms Gibson had a reasonable basis for believing she had a brain cancer was also made out, as she often described her chemotherapy and radiotherapy treatment, treatment she would not be receiving had she not been professionally diagnosed. Ms Gibson had offered various conflicting explanations including that her initial diagnosis was made in her home by a man who was not a medically qualified professional and then later that he cancer diagnosis occurred at St John of God Hospital in Perth. Justice Mortimer did not have to make a finding in the liability proceedings as to whether Ms Gibson genuinely believed she had brain cancer despite there being no rational or reasonable basis for her to do so,  but this may have to be determined in the penalty proceedings.

Her Honour was not persuaded Ms Gibson had acted unconscionably in making the cancer representations as there was not sufficient evidence to find on the balance of probabilities that Ms Gibson was acting against conscience in deliberately withholding information that she did not have cancer. Ms Gibson may have a psychological or psychiatric issue causing her to be under a delusion about having cancer which is a possibility her Honour considered reasonably open on the evidence.

The s 29 contraventions were not made out. The Director alleged contraventions were made under s 29(1)(e), s 29(1)(f) and s 29(1)(g). Both s 29(1)(e) and s 29(1)(f) require a testimonial to have been made relating to the goods. Ms Gibson’s representations could not be characterised as a testimonial given the term is understood to refer to customer testimonials. The s 29(1)(g) contravention was not made out as it required the Director to make submissions that the representations that diet, health, exercise and wellness could help cure or stabilise cancer were misleading. The Director led no such evidence.

Charity representations

Five categories of representations were considered by Justice Mortimer:

a. App sales donation

Ms Gibson represented on the Whole Pantry website and the description of the android app that a portion of all sales revenue from sales of the Whole Pantry app was being, or would, within a reasonable time be, donated to charities. The implication being that donations would be made reasonably promptly. A portion of all app sales was not donated to charity. The only donation from sales of the app was $2,790 made to the Bumi Sehat Foundation in July 2015 as part of a larger $5,000 donation made over a year after the event purporting to raise money for Bumi Sehat.

b. Company earnings donation

Ms Gibson stated in the introduction to The Whole Pantry book that a large part of everything the company earned is now donated to charities and organisations which support global health, and wellbeing, protect the environment and provide education to those who otherwise wouldn’t have the opportunity. The representation was false as a large part of what the company earned was not donated on a contemporaneous and continuous basis. The evidence disclosed only two donations referrable to the company’s earnings (the Bumi Sehat donation of $5,000 and a $4,823.53 donation to Vestal Water funding a filtration system for Kinfolk Café). A little under $10,000 was donated from the company’s earnings, on no view a large part of everything the company earned when in the relevant period the company received over $420,000 from sales of the app and boo

c. App launch event donation

In notifications on social media for the virtual launch of the Whole Pantry App Ms Gibson represented that proceeds of the sale of the virtual launch tickets would be donated to four charities (the Birthing Kit Foundation, One Girl, Asylum Seeker Resource Centre (ASRC), and TWP Families including the Schwarz Family). On the evidence before the court the ASRC, Birthing Kit Foundation and the Schwarz Family received no donations from Ms Gibson or her company. One Girl received $1,000 in March 2015, only after media had started to investigate Ms Gibson’s claims. Ms Gibson’s then partner donated $1,000 to the ASRC in April 2014 but there was no evidence linking this donation to the app launch event.

d. Schwarz family app sales donation

In November 2013 Ms Gibson stated on the healing_belle Instagram account that 100% of app sales for a week would be donated to the Schwarz family. The representation was false. There was no evidence before the court the Schwarz family received a cent from Ms Gibson. While Ms Gibson maintains she collected $800 in a jar she gave to the Schwarz family, there was no evidence to support this claim and Her Honour found the $800 donation was not made.

e. Mother’s Day fundraising

In May 2014 Ms Gibson stated in media and on the company’s Facebook page that app purchases between 11 May 2014 and 18 May 2014 go straight to the 2h Project and the Bumi Sehat Foundation. The company would donate an extra $1 for each person who purchased the app that week. No funds went straight to the two organisations. More than a year later Ms Gibson made a one off $5,000 donation to Bumi Sehat but there is no evidence these funds were relatable to the Mother’s Day sales.

Justice Mortimer found all five categories of representations constituted misleading and deceptive conduct. Ms Gibson’s marketing of herself and her company centred on the image of a successful and booming enterprise with a wholesale dedication to charitable giving. There were no reasonable grounds for these representations.

Section 21 unconscionable conduct was established. Her Honour inferred that Ms Gibson well knew the potential drawing power of the statements that a portion of sales made would go to charity. Her chosen pitch used groups, such as young girls, sick children and asylum seekers that would evoke sympathy because of their vulnerabilities. Ms Gibson secured a public profile, and financial and personal benefits by deliberately playing on the Australian community’s desire to help those less fortunate.  

The orders -  Director of Consumer Affairs Victoria v Gibson (No 2) [2017] FCA 366

Orders were determined on the papers at a later date after the Director had an opportunity to submit proposed orders and submissions regarding the orders and costs. The orders included an injunction preventing Ms Gibson from making claims that she had been diagnosed with brain cancer at any time prior to 24 May 2016, that she was given four months to live, and that she had taken and then rejected conventional cancer treatments in favour of embarking on a quest to heal herself naturally. Ms Gibson was ordered to pay $30,000 towards the Director’s costs. The matter was adjourned for consideration of penalties.

Summary and penalty proceedings

Ms Gibson was found to have contravened s 18 and s 21 of the Australian Consumer Law for her misleading and deceptive cancer representations and her misleading and deceptive and unconscionable charitable donation representations. An injunction is in place preventing her from continuing to make such representations. While the contraventions have been established, penalty proceedings are yet to occur. While Ms Gibson has not participated in the Federal Court proceedings to date, she may participate in penalty proceedings to offer mitigating evidence or even appeal the decision. The maximum penalty for false or misleading and unconscionable conduct is $220,000 for individuals and $1.1m for corporations. While each course of conduct will be considered separately, regard will also be had to the totality principle to ensure the total penalty is just and appropriate as a whole. It is difficult to predict what the total penalty will be, given the unique circumstances of Ms Gibson’s case, and uncertainty as to whether she will participate in penalty proceedings to offer mitigating evidence such as medical evidence of any psychological or psychiatric conditions she may have been suffering from at the relevant times.  

Law graduate who can’t find full time legal job sues law school - Is the United States trend of law graduate law suits about to come to Australia?

In the United States, disgruntled law graduates who have been unable to secure legal jobs have been bringing claims against their law schools under state consumer laws, which vary from state to state. Anna Alaburda’s case against the Thomas Jefferson School of Law (TJSL) which is currently before the San Diego Supreme Court could be more successful than other cases, as the consumer laws in California are believed to be more favourable to consumers than consumer laws in other states. Australian law graduates have been facing similar challenges to their American counterparts, with an increase in the number of law students graduating and a sluggish legal recruitment market creating an increasingly desperate situation. Could the trend of law graduates suing their law schools spread to Australia?

Previous cases in the United States

There have been a number of previous cases in the United States where law students have claimed their law school provided misleading statements on employment prospects for their law graduates. In the 2012 New York Supreme Court case of Alexandra Gimez-Jiminaz, et al v New York Law School, nine graduates of New York Law School brought a case claiming the entering classes of 2005-2010 had been misled as by graduate outcome statistics provided by NYLS, as facts were omitted that would have given prospective students a more accurate picture of post-graduation employment prospects. The 90% employment outcome advertised included graduates working in part time jobs and those working in jobs that did not required law degrees. The damages sought were the sum equal to “the difference between the alleged inflated tuition they paid because of the allegedly misleading statements and what they characterise as the “true value” of a NYLS degree, together with certain expenses incurred”. Many of the plaintiffs had successfully started their legal careers, including:

1.       Alexandra Gomez-Jimenez who had her own thriving immigration practice;

2.       Scott Tiedke who worked as a legal compliance officer at an investment management firm;

3.       Gergana Miteva who worked as a contract attorney for some time before finding full time legal employment; and

4.       Geoffrey Corsideo who worked at a New Jersey law firm.

Justice Schweitzer dismissed the case, citing the legal principle caveat emptor “buyer beware”, and that prospective law students are “are a sophisticated subset of education consumers, capable of sifting through data and weighing alternatives before making a decision regarding their post college options”.

Anna Alaburda’s Case

Anna Alaburda is a 37 year old TJSL graduate who completed her three year Juris Doctor in 2008 and had a student debt of about $150,000 on graduation. Alaburda struggled to find full time employment as a lawyer and felt misled by the employment prospect figures she claimed were decisive to her enrolling in the JD program at TJSL. In 2011 she filed her initiating application, claiming the TJSL statistics about alumni employment outcomes were misleading and had been inflated and that she would not have studied the JD at TJSL if she had known the true statistics. The matter took until 7 March 2016 to get to the San Diego Superior Court, as the law school made a number of applications to have the matter dismissed. Alaburda, who is currently 37 years old, has a student loan debt of about $170,000, as the interest rate on the loan is 8%.

What is the real issue?

While we can all feel sorry for Alaburda and her colleagues, the law suit distracts from the real issues. First, there needs to be some degree of personal responsibility, as people are not forced to enrol in postgraduate law. Second, there is currently a large surplus of universities offering undergraduate law and postgraduate law courses, and the quality of many of these courses is questionable. Steps need to be taken to prevent even more surplus positions at law schools becoming available and to ensure all law schools offer a quality education.

1.       Ranking and reputations of law schools

The first thing to note about Alaburda’s case is her choice of law school. TJSL ranks extremely poorly in comparison to other universities offering the JD course in the United States. The law school rankings given to TJSL are so poor that the US News Law Ranking system do not publish the rankings for TSJL and a number of other poorly performing universities (presumable to protect themselves from defamation claims). Students are aware of the ranking and reputation of their law school prior to enrolling. Students studying law are also aware that it is difficult to get a job as a lawyer and that not all graduates work as lawyers after completing their JD. Getting a job as a graduate lawyer in the United States is difficult and employment rates are far from 100%. For example in 2014, 40% of law graduates across the United States did not secure a job in the law within 12 months of graduation. While this would include graduates who do not wish to practice law, this 40% would also include a large number of graduates who want a legal career.

Similar cases to Ms Alaburda’s never made it to trial in states like Illinois and Michigan as the judges managing the cases in those states concluded law students chose to have a legal education at their own risk. Alaburda would have been aware of the difficulties of obtaining employment in the law prior to starting her JD. While Alaburda had solid grades and graduated near the top of her class, even top students would struggle to get a job after attending a law school with such a low ranking reputation. Further, while Alaburda has yet to find a full time job in the law, she failed to make the most of opportunities that arose.

2.       Not taking opportunities

On graduation, Alaburda sent her resume to 150 law firms. This is not out of the ordinary for a law graduate given the state of the legal market, though other students take the approach of quality over quantity of applications. She received several interviews and one job offer. This is more success than a number of law graduates have. She turned down the legal job as the salary ($60,000) was less than for non-legal jobs she had applied for. To me, this is a clear case of a graduate choosing a non-legal path. I have no sympathy, and neither should the courts, for law graduates who turn down an offer other law graduates would do anything for, and then later claim they could not get a legal job. The starting salary for law graduates can be relatively low, as a law graduate must be trained before they become self-sufficient and useful. Salaries quickly rise for competent graduates.  Alaburda later worked in a series of part time, temporary legal positions mainly reviewing documents for law firms, found this work unsatisfactory, could not get a full time position and filed an initiating application against TJSJ.

3.       Realities of working as a junior lawyer  

It is not unusual for junior lawyers to do copious amount of document review, discovery and due diligence related work as graduates. The reality of working as a junior lawyer is that most of the work will be less than exciting, especially when working at a large law firm, but quickly becomes more engaging as you are trusted with more complicated legal work and the next generation of graduates take on the more boring work. Alaburda had a series of part-time document review roles and found this boring. However, this kind of work is the reality for most law graduates.

Will the trend of law graduates suing their law schools spread to come to Australia?

Many of the factors leading to law graduate law suits in the United States are currently present in the Australian legal market:

1.       Increasing number of law schools offering sub-par courses

The number of law schools offering undergraduate and postgraduate law has increased significantly in the past 10 years. In NSW alone, the following law courses were accredited:

·         JD at the University of Sydney (2010);

·         JD at the University of NSW (2009);

·         JD at the University of Technology Sydney (2007);

·         JD at the University of New England (2005);

·         JD at the University of Newcastle (2013);

·         JD at the University of Notre Dame (2006);

·         LLB at the University of Notre Dame (2005);

·         LLB at the Australian Catholic University (2013); and

·         LLB at the Top Education Institute (2014).

The pattern in other states is similar. Law schools are easy to establish and tend to be high profit earners for universities, as they are low cost compared to other degrees. It is not just the increase in educational institutions offering law courses that is problematic but the quality of the courses, especially given the significant expense of postgraduate courses in particular.

2.       Increasing number of law graduates

The increasing number of law schools and expanding of programs offered by existing law schools has created a large excess of law graduates. I personally have several issues with the number of law graduates churned out of law schools. However, growth in the number of law graduates is unlikely to change, as the Productivity Commission’s Review into Demand Driven Funding System recommended that law schools’ numbers not be limited.

3.       Increasingly competitive to get a job as a lawyer

At the same time the number of law graduates has increased, the legal markets has stagnated and large law firms that traditionally employed large numbers of graduates have either reduced or maintained the number of graduates they employ. New entrants into the legal market, such as LegalVision are offering new opportunities for graduates, but there is still a significant gap between law graduates wanting to work as lawyers and positions available.

However, there are a number of factors that might prevent the spread of law graduate law suits in Australia:

1.       Less financial pressure

Law graduates in the United States face significant pressure on graduation to begin paying off their $150,000 loans, which usually have an interest rate of 8%+. Australian students do not face the same pressures, as a Commonwealth supported undergraduate combined law student will graduate with a debt of about $50,000 which need only be repaid in increments once the student has graduated and is earning a significant amount of money. Australian graduates therefore do not face the same financial pressures as their counterparts in the United States and are more likely to be able to survive part time and paralegal work for some time before securing a full time legal position, not succumbing to the temptation to accept a higher paying non-legal job. In the United States, graduates face more pressure to get a high earning job immediately to pay off their loans, even if the job is non-legal.

2.       Less focus on graduate outcomes during student recruitment

Law schools in Australia are generally very careful with statistics regarding employment prospects. Students are normally lured via alumni success stories and a university’s reputation rather than a focus on statistics. There is also a lack of statistics on law graduate outcomes available. Graduate Careers Australia undertakes an annual survey of short term outcomes for graduates 4 months after completion of qualifications (http://www.graduatecareers.com.au/research/researchreports/gradstats/). These statistics are for all graduates and do not provide university by university data. A response of “full time employment” includes full time employment not related to the person’s degree. There is a breakdown by bachelor degree, and in 2015, 74.1% of law graduates who completed the survey were engaged in full time work at the time they completed the survey, about 4 months after the completion of their qualifications.   

3.       Difficulties bringing a claim under Australian consumer law

Even if a law graduate did wish to commence legal action, it would be very difficult to bring successful action under Schedule 2 to the Competition and Consumer Act 2010, as the lead possible cause of action being misleading or deceptive conduct (s.18 Australian Consumer Law) requires the conduct to be “likely to mislead or deceive”. The test requires the identification of the audience, in this case, relatively intelligent, well-educated persons considering enrolling in undergraduate or postgraduate law. It would be difficult to mislead or deceive this target audience, as potential law students would generally consider several law schools and be aware of the general reputation and quality of the law school. The test is objective, so the fact a student was actually mislead or deceived will not be determinative if the relevant population segment would not have been misled or deceived.

It is unlikely the trend of law graduate litigation will spread to Australia. However, if the number of law graduates continues to increase and the legal graduate market fails to improve, we could see law graduates take legal action against their law schools in the future. 

ACCC v RL Adams Pty Ltd [2015] FCA 1016 – Federal Court cracks down on falsely advertised “free range eggs”

Do you like your eggs free range? Do you care about the wellbeing of laying chickens but worry the “free range” eggs you buy aren’t really free range? There is good news on the horizon. The ACCC has recently started prosecuting false representations of free range standards. In the most recent free range egg misrepresentation case, Australian Competition and Consumer Commission v RL Adams Pty Ltd [2015] FCA 1016, the Federal Court found several instances of misleading and deceptive conduct in the way eggs were advertised as “free range” when they were not, and imposed large (but arguably not large enough) penalties on the offending company.

Facts:

RL Adams Pty Ltd is an Australian company which produces and sells chicken eggs. RL Adams’ main farm is Wingrave Farm in Queensland. About 83% of the eggs from Wingrave Farm are marketed as free range. The company use brand names Mountain Range Eggs and Drakes Free Range Eggs on its cartons. RL Adams represented on their free range cartons and on their website www.fresheggs.com.au that laying hens were able to move around freely on open range pastures on an ordinary day and on most days. The reality was that the laying hens were unable to and did not move freely on an open range in the relevant period. In the relevant 9 month period, the hens were kept locked in barns.

Example of Mountain Range Eggs carton packaging making the "free range" claims (image taken from the judgment):

What were the sections contravened?

Three sections of the Competition and Consumer Act were contravened:

1.       Section 18 of the Australian Consumer Law being Schedule 2 of the Competition and Consumer Act 2010 (Cth) which provides a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive.

2.       Section 29(1)(a) of the Australian Consumer Law which provides a person must not, in trade or commerce, in the connection or supply of goods, make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use.

3.       Section 33 of the Australian Consumer Law which provides a person must not, in trade or commerce, engage in conduct that is liable to mislead the public about the nature of the goods.

RL Adams Pty Ltd admitted to the contraventions, so most of Justice Edelman’s judgment concerns appropriate penalties.

Previous pecuniary penalties imposed in free range egg misrepresentation cases include:

·         No penalty imposed on the company, penalties of $30,000 and $20,000 were imposed on Directors – ACCC v CI & Co Pty Ltd [2010] FCA 1511;

·         $100,000 penalty imposed (suggested by parties) on the company - ACCC v Turi Foods Pty Ltd (No 2) [2012] FCA 19;

·         $50,000 penalty imposed on an individual – ACCC v Bruhn [2012] FCA 959;

·         $400,000 joint pecuniary penalty imposed on the companies responsible for “Steggles” products – ACCC  [2013] FCA 1109;

·         $375,000 penalty imposed on Luv-A-Duck – ACCC v  [2013] FCA 1136;

·         $300,000 penalty imposed on Pirovic Enterprises. This penalty was large considering the annual profits of Prirovic from free range eggs in NSW was $380,000 -  [2014] FCA 1028.

These cases show penalties imposed have varied greatly. In earlier cases, the ACCC often did not pursue a pecuniary penalty against the company. In more recent years, the ACCC has sought and successfully obtained pecuniary penalties against companies, in some instances by consent. The ACCC has never come close to awarding the maximum penalty of $1.1 million on a company. In the RL Adams Case, the Federal Court stated that pecuniary penalties imposed in previous cases provide little assistance (at [51]):

“With contraventions of the nature of those in this case, the breadth and variety of the many factors involved in an assessment of pecuniary penalties has the effect that any range of penalties derived from previous cases can only ever be stated in very broad terms. Indeed, the well-established term “range” can sometimes be misleading. It might be more accurate to say that an assessment of the general run of cases, including the cases mentioned in the introduction to these reasons, has so far revealed that penalties for contraventions by corporations have varied from $100,000 to $400,000”.

What pecuniary penalty did RL Adams have to pay?

RL Adams was ordered to pay $250,000 for its contravention. The Federal Court characterised the conduct as one contravention under the totality principle, but warned it should not be assumed that a series of related infringements will always be treated as a single contravention [10]. The amount was reached after considering the factors in s.224(2):

 “(2)  In determining the appropriate pecuniary penalty, the court must have regard to all relevant matters including:

(a)  the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and

(b)  the circumstances in which the act or omission took place; and

(c)  whether the person has previously been found by a court in proceedings under Chapter 4 or this Part to have engaged in any similar conduct.”

In particular, the Federal Court considered:

1.       Mitigating factors

RL Adams admitted to the contraventions early on, and completely cooperated with the ACCC in their investigations, including disclosing all relevant information requested by the ACCC.

2.       Deterrence

General deterrence is an important consideration in the imposition of pecuniary penalties [10]. Given penalties in previous “free range” misrepresentation cases have not deterred other companies in the industry making false representations about eggs, it could be argued that the pecuniary penalty needs to be raised for the sake of general deterrence.

3.       Size of RL Adams, its financial position and profits made by its representations

The additional profits obtained if eggs labelled “barn laid” had been sold as “free range” was $102,198 [62]. This profit was at the expense of purchasers. While other sellers of free range eggs may have made a loss, this loss is unquantifiable. RL Adams operations are of a small size compared to other producers.

4.       Infringement was not intentional

RL Adams confined the free range hens to barns at the time due to biosecurity issues. RL Adams had received advice about an outbreak of H7 avian influenza and about outbreaks of infectious laryngotracheitis [68]. Despite this motivation, RL Adams knew it had made free range representations and knew its hens were not free range.

5.       Previous contraventions

This was RL Adams first contravention [76].

6.       Extent of contraventions

The eggs were supplied to 63 retail locations in the relevant period across Queensland, NSW and the Northern Territory, where consumers paid premium price for the eggs despite the eggs not being free range eggs.

7.       Lack of compliance program

RL Adams did not have a compliance program to meet obligations under the Australian Consumer Law [79].

What other orders were made?

As well as the pecuniary penalty of $250,000, the following orders were made:

1.       Publication orders

a.       That RL Adams publish a correction notice on website within 14 days; and

b.      That RL Adams publish a corrective advertisement in each major metropolitan newspaper in each State or territory RL Adams supplies eggs

2.       Compliance orders

a.       appointment of compliance officer;

b.      requirements for officer training, staff training, and complaints handling;

c.       reporting obligations on progress to the ACCC; and

d.      the maintenance and administration of the ACCC compliance program for a period of 3 years.

3.       Costs orders

a.       RL Adams was ordered to pay the ACCC’s costs to the sum of $25,000.

What does this mean for the future of the free range egg industry?

The case shows the ACCC continues to be willing to investigate and prosecute companies and individuals making “free range egg” misrepresentations. While Justice Edelman discussed the importance of general deterrence in several sections of the judgment, the pecuniary penalty of $250,000 is in line with other recent cases, and is unlikely to deter other perpetrators. This aspect of the judgment is disappointing, as Justice Edelman seemed to set himself up to make a larger pecuniary penalty before settling with $250,000 which RL Adams had submitted was an appropriate penalty.