Background
At the liability stage, the Federal Court found that eHarmony had contravened multiple provisions of the Australian Consumer Law through representations about its dating service. Those representations concerned the functionality of free membership, monthly subscription prices and mandatory fees, the total price of subscription plans, automatic renewal, the availability of one-month subscriptions, and the financial consequences of cancellation.
The parties disagreed about the next procedural step. The Australian Competition and Consumer Commission wanted the Court to defer declarations and begin preparing for the penalty and remedies hearing. eHarmony asked the Court to declare the established contraventions immediately and address the further conduct of the proceeding after the period for seeking leave to appeal had expired.
The Court’s Holding
Justice Horan made declarations recording eHarmony’s contraventions of ss 18, 29, 34 and 48 of the Australian Consumer Law. The declarations formalised the liability findings, identified the conduct on which future penalties and remedies would be based, and enabled eHarmony to seek leave to appeal aspects of the liability decision.
The Court held that immediate declarations were appropriate because the case involved numerous claims and provisions, eHarmony proposed to challenge some findings, and different appellate outcomes could materially affect penalties and other relief. The anticipated relief phase was also likely to involve discovery and to be multifaceted rather than quick or straightforward. The Court did not finally determine whether an appeal should stay that phase; it directed that the matter be listed for a case-management hearing no earlier than 28 days later and reserved costs.
Key Takeaways
- A court may make declarations at the end of a bifurcated liability stage even though penalties and other remedies remain unresolved.
- Whether to proceed immediately to relief depends on case-specific considerations, including complexity, the likely scope of discovery, possible appellate outcomes and the risk of duplicated work.
- An application for leave to appeal declaratory orders does not automatically stay the penalty phase; any stay must be determined through case management in light of all the circumstances.
Why It Matters
The decision confirms that procedural efficiency in civil-penalty litigation may favor fixing liability through declarations before undertaking a substantial remedies phase. Where an intended appeal could alter the basis for penalties, proceeding first with declarations can avoid wasted discovery, evidence and hearings.
For businesses offering subscription services in Australia, the declarations also underscore the consumer-law risks of unclear claims about free functionality, instalment fees, total prices, renewal terms, subscription duration and cancellation liability. The amount of any penalty and the other relief remained for later determination.