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The Federal Court has today ordered Master Wealth Control Pty Ltd (DG Institute) to pay $5 million in pecuniary penalties for making false or misleading representations to consumers in the promotion and sale of two education programs called Real Estate Rescue (RER) and Master Wealth Control (MWC), and to pay consumer redress totalling $14.7 million to students enrolled in the MWC program.
The redress orders made by the Court require DG Institute refund consumers an amount equivalent to the course fees paid by more than 2100 students who enrolled in the MWC program between April 2017 and November 2022.
DG Institute's sole director, Dominique Grubisa, was also ordered to pay $1 million in penalties, and disqualified from managing corporations for five years, for being knowingly concerned in the contraventions by DG Institute.
"These orders underscore the importance for businesses and company directors to ensure statements made to consumers promoting their products and services are accurate and not misleading," ACCC Commissioner Liza Carver said.
"The substantial consumer redress orders, the penalties imposed and the five year disqualification order against Ms Grubisa reflect the serious nature of the conduct, and clearly demonstrate the consequences of making false claims when promoting goods or services to consumers."
DG Institute is required to contact consumers who may be eligible for redress and to post information about the redress scheme on its website and Facebook pages.
The Court also ordered injunctions restraining DG Institute and its officers, and Ms Grubisa, from making similar or the same representations for a period of five years.
The Court also ordered DG Institute and Ms Grubisa to pay the ACCC costs of the proceedings.
The ACCC is carefully considering the Court's judgment.
Background
The ACCC commenced legal action against DG Institute and Ms Grubisa in December 2022.
DG Institute offers courses and mentoring programs, including RER and MWC programs, to consumers relating to property and business investment, including strategies for asset protection.
On 9 April the Federal Court found the company had made false or misleading representations to consumers in the promotion and sale of the RER and MWC programs in contravention of the Australian Consumer Law.
The Court found the specific following statements about the programs were false or misleading:
- Students of the RER program would be able to assist distressed homeowners to sell their home and retain some of the equity, whereas if a mortgagee were to repossess the property, the homeowner would lose any remaining equity in the property - including because "banks don't give change." In fact, a mortgagee is only entitled to amounts owed to it, plus any reasonable costs of recovery.
- Students of the MWC program could completely protect all their assets from creditors by setting up a specific trust DG Institute called a 'Vestey Trust' using transaction documents provided by DG Institute. In fact, the transaction documents provided did not provide the level of protection from creditors promised.
- The 'Vestey Trust' system promoted by DG Institute had been tested and upheld as effective by the Full Court of the Federal Court of Australia in the 'Sharrment' case, when in fact this was not the case.
The RER program and the MWC program were promoted through free in-person seminars, free online webinars and videos featuring Ms Grubisa, and on the DG Institute website.
Between 2017 and 2022 well over a thousand students enrolled in the programs, and each paid between $4,500 and $9,200 to participate.
Ms Grubisa is and was at all relevant times the sole director of DG Institute.
