When your barrister’s strongest argument in your defence is that you are incompetent, you’re in trouble!

On 9 April 2024, the Federal Court found in the ACCC’s favour on all counts, that DG Institute engaged in misleading conduct in relation to  “no equity” representations in promoting the RER program,  claims that the ‘Vestey Trust’ would protect all assets from creditors, and representations that the ‘Vestey Trust’ had been tested and upheld by the Federal Court (Sharrment v Official Trustee in Bankruptcy).    For background to the ACCC’s claims see here.

The Judge remarked that the ‘Vestey Trust’ system had no resemblance to the structure implemented by the (well known) Vestey family, and that members of the Vestey family have had their names taken in vain!

Grubisa was sole director of DG Institute and the Court found that Grubsia was “knowingly concerned in and party to the contraventions”, meaning that the Court can impose penalties (which could include fines and injunctions) on Grubisa personally.

Grubisa’s barrister was unable to argue that the representations were true (because they were so clearly false).  Even a lawyer who Grubisa called as her witness, to explain her “banks don’t give change” statement, couldn’t support her misleading statements.

Grubisa’s witness “The part I’d have the most concern about…is the statement “banks don’t give change”.

ACCC’s barrister “That’s simply not true”

Grubisa’s witness “Not in my experience”

The ACCC asked the Court to find that Grubisa had personal responsibility for the misleading representations.  While a corporation can breach the misleading and deceptive laws even if it is unaware that its representations are misleading, to make adverse findings against an officer of the corporation (such as Grubisa) the Court must find that the individual knew the statements were misleading.

Therefore, her barrister was left to argue that Grubisa was incompetent, and was unaware that she was making misleading statements.

Justice Jackman didn’t buy it.     

While raising doubts about Grubisa’s competence and legal skills numerous times in his decision, saying “I have not formed a high opinion of Ms Grubisa’s legal competence”, the Judge found that due to her legal qualifications and time in legal practice Grubisa “must have known that the representations she was making were not true”.  

The Judge also took into account that Grubisa didn’t give evidence (where she would have had the opportunity to explain any claim that she lacked competence).

The Court will next hold a hearing to determine penalties.

Update December 2024 – Grubisa and MWC’s appeal to the Full Court of the Federal Court about these findings, and penalties, was unsuccessful.