The Federal Circuit and Family Court of Australia has granted an order sought by the ACCC, declaring Mr Adam Wadi, formerly Get Qualified Australia Pty Ltd’s (GQA) sole director and CEO, bankrupt.
The declaration follows ACCC court action in 2016 which resulted in a ruling from the Federal Court in 2017 that GQA made false or misleading representations, engaged in unconscionable conduct, imposed an unfair contract term in its consumer contracts and entered into unsolicited consumer agreements.
Mr Wadi failed to pay a $500,000 penalty imposed by the Federal Court against him in 2017, for being knowingly concerned in GQA’s conduct.
The Federal Court found GQA misled vulnerable consumers that it could guarantee them qualifications through recognition of prior learning, when GQA could not directly offer qualifications. GQA also told consumers they would receive a full refund if they were unsuccessful in obtaining a qualification when this was not the case. The Court found Mr Wadi designed and implemented GQA’s marketing scheme, sales tactics and business strategy.
“The conduct of Mr Wadi and Get Qualified Australia was particularly egregious, as they took advantage of vulnerable consumers seeking to advance their careers,” ACCC Chair Rod Sims said.
In his judgment in 2017, Justice Beach noted that Mr Wadi “displayed no remorse” for his actions. This is also reflected in Mr Wadi’s failure to pay the penalty ordered against him.
The ACCC estimates that over 5,000 customers paid between $750 and $8500 to enrol in a course with GQA and did not receive a qualification.
“The ACCC will take action where appropriate against individuals who design and implement systems that take advantage of consumers and breach the Australian Consumer Law,” Mr Sims said.
“The ACCC will take steps to enforce court orders made in its favour to hold businesses and individuals to account for their conduct in breach of our competition or consumer laws.”
Background
In 2016, the ACCC instituted proceedings against GQA in the Federal Court.
In June 2017, the Federal Court found that GQA made false or misleading representations and engaged in unconscionable conduct in its supply of services to consumers seeking recognition of their prior learning to gain qualifications, in contravention of the ACL.
In August 2017, the Federal Court ordered GQA to pay an $8 million penalty for multiple breaches of the ACL and its sole director, Mr Wadi, to pay a penalty of $500,000. The Court also made orders disqualifying Mr Wadi from managing a corporation for seven years. GQA was placed into liquidation on 17 March 2017 and did not defend the case at trial on 28 March 2017.
At the time, this was one of the highest penalties ever ordered for breaches of the ACL, and occurred prior to the increase to the maximum financial penalties under the ACL.
In September 2020, the ACCC applied to the Federal Circuit and Family Court of Australia for a sequestration order following Mr Wadi’s failure to pay a $500,000 pecuniary penalty.
When the Court makes a sequestration order, it makes a debtor bankrupt. The Bankruptcy Act 1966 and Corporations Act 2001 impose obligations and restrictions on a bankrupt person, including prohibiting a person from managing a corporation and mandating disclosure of their bankruptcy when applying for credit.