High Court decision clarifies officers’ liability in corporate unconscionable conduct

As published by the Australian Institute of Company Directors, a landmark High Court ruling in Productivity Partners Pty Ltd (trading as Captain Cook College) v Australian Competition and Consumer Commission [2024] HCA 27 has provided critical clarification on corporate unconscionable conduct and individual officer liability under Australian Consumer Law. The case highlights how corporate systems and processes can constitute breaches of the law and sets a precedent for holding individuals accountable for their involvement in such conduct.

The case centred on Captain Cook College, a private vocational education and training provider, which generated income through student fees funded by a government loan scheme. Following changes to the VET loan scheme in 2012 aimed at expanding access for disadvantaged groups, the college dismantled enrolment safeguards in 2015 to enhance revenue. This action exploited systemic flaws in the loan scheme, which allowed providers to receive funds without bearing the costs of students failing to complete courses.

The High Court determined that Captain Cook’s decision to remove safeguards constituted unconscionable conduct. Justice Michelle Gordon observed that the college’s revised system was deliberately designed to increase revenue by reducing student attrition, regardless of the inevitable harm caused to vulnerable students.


The ruling also addressed individual liability, finding that the former CEO and the parent company are liable as accessories to the unconscionable conduct. The Court reaffirmed that accessory liability requires intentional participation and knowledge of the essential facts constituting the contravention, though it does not require the individual to recognise the conduct as unlawful.

The case illustrates the risks of unethical practices within flawed regulatory frameworks, with the Commonwealth cancelling over $2.8 billion in loans to 152,800 students by 2021 due to widespread misconduct in the VET sector.

This ruling sends a strong message to corporations and their officers: unconscionable conduct, particularly targeting vulnerable individuals, will face significant legal consequences. It also provides crucial guidance for regulatory bodies like the ACCC in enforcing accountability for corporate misconduct.

For businesses, this decision reinforces the need to ensure that systems and practices are ethically sound and comply with consumer protection laws to avoid similar repercussions.

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