The Federal Court declared Peter Foster bankrupt last week, granting the ACCC’s application for a sequestration order after he failed to pay costs in the SensaSlim matter.
“The ACCC took this action because we are committed to enforcing compliance with court orders made against individuals and companies for breaching consumer law,” ACCC Commissioner Sarah Court said.
In April 2014, the Court found SensaSlim had engaged in misleading or deceptive conduct and had made false or misleading misrepresentations by failing to disclose Mr Foster’s involvement in the SensaSlim franchise. The Court also found Mr Foster was knowingly concerned in the conduct.
Following the judgment, the Court ordered Mr Foster to pay a $660,000 penalty in May 2016, and to pay the ACCC’s costs, which he has not done. The Court also issued orders restricting Mr Foster from being involved in a range of businesses indefinitely and permanently disqualified him from managing a corporation.
Mr Foster unsuccessfully appealed this penalty and was ordered to pay the ACCC’s costs of the appeal, amounting to $56,714. Mr Foster also failed to pay these costs.
“The ACCC will continue to take action against those who do not pay penalties and costs orders made against them by the court,” Ms Court said.
Mr Foster’s bankruptcy takes effect from 14 December 2017. The Official Trustee will determine whether any proceeds will be distributed among Mr Foster’s creditors.
The ACCC instituted proceedings against SensaSlim, Peter Foster and others in July 2011.
SensaSlim Australia Pty Ltd (in liquidation) supplied an oral spray (the SensaSlim Solution) that was claimed to cause weight loss, and represented that the SensaSlim Solution was the subject of ‘a large worldwide clinical trial’.
The SensaSlim Solution was distributed through franchisees to be on-sold to consumers. Around 110 areas were sold to franchisees for the cost of $59,950 each. SensaSlim earned approximately $6.4 million from the sale of these franchises.
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