Background
Beacon Products Pty Ltd operated a business selling cleaning products from November 2016, expanding to printer cartridges and inks from January 2020. In December 2022, Beacon transferred the business to Zandox Group Pty Ltd. Throughout this period, Warren Skry had overall responsibility for managing and operating the businesses. The ACCC challenged two alleged sales systems used by these entities to extract payment from consumers who had not actually authorized purchases.
The First System (November 2016–December 2022) involved representatives contacting consumers under the pretense of a marketing campaign, requesting delivery details, selectively recording only the confirmation portion of calls, and then shipping goods with invoices. The Second System (September 2020–February 2023) targeted existing customers, obtaining confirmations for unordered subsequent deliveries of larger quantities at higher prices, then claiming these were part of pre-existing multi-delivery agreements when consumers objected.
Evidence was provided through affidavits of consumer representatives and admissions by Mr Skry in his defense and examination. The corporate respondents’ liquidators took no active steps in the proceedings, and Mr Skry’s solicitors ceased acting in December 2025.
The Court’s Holding
Justice Halley found that the Corporate Respondents engaged in both misleading or deceptive conduct and unconscionable conduct in contravention of sections 18, 21, and 29(1)(d) and 29(1)(m) of the Australian Consumer Law. The court accepted evidence from eleven consumer representatives whose accounts were corroborated by contemporaneous documents and consistent with each other.
The court found that representations made by the Corporate Respondents—that consumers had agreed to acquire goods, that they had no termination rights, that goods could not be returned, and that they had agreed to ongoing supply arrangements—were false. The use of selectively recorded call excerpts as purported “confirmation” of orders that were never actually placed was central to the misleading conduct. The court also noted the suspicious use of pseudonyms by representatives, which suggested an intent to conceal the identity of those engaging in these practices.
With respect to Mr Skry, the court found him to be involved in the unconscionable conduct of the Corporate Respondents. The matter was scheduled for a case management hearing on 23 July 2026 to determine relief, including declarations of contravention and pecuniary penalties.
Key Takeaways
- Selective recording of telephone calls to create false evidence of consumer authorization for orders not placed constitutes misleading or deceptive conduct under Australian Consumer Law.
- Representations that consumers agreed to ongoing supply arrangements without express authorization, particularly when based on partial call recordings, are unconscionable conduct.
- Senior management responsible for overseeing business operations may be held personally liable for involvement in unconscionable conduct by corporate entities.
- Inferences adverse to parties who fail to give evidence may be drawn in consumer protection enforcement proceedings, particularly regarding factual issues on which the absent witness could have testified.
Why It Matters
This decision provides clear guidance on the illegality of deceptive sales practices common in aggressive cold-calling operations. The court’s acceptance of the ACCC’s challenge to selective call recording—a technique designed to manufacture false evidence of consumer consent—establishes that procedural manipulation cannot overcome the fundamental requirement of genuine consumer agreement. The First System’s practice of requesting “confirmation” of delivery details while consumers believed they were simply providing information for a marketing inquiry, followed by unsolicited delivery and payment demands, is now established as unconscionable.
The Second System’s targeting of existing customers to lock them into ongoing supply arrangements through misleading representations about pre-existing multi-delivery agreements addresses a particularly deceptive practice. The decision reinforces that consumer protection laws protect commercial and institutional buyers as well as individuals, as demonstrated through cases involving businesses, hospitals, and aged care facilities.