ACCC Pieces Together Case Against Broken Mosaic

In this article, authors Tamara Hunter, Zareen Qayyum & William Thorp (King & Wood Mallesons) discuss a recent Federal Court of Australia ruling that allows the Australian Competition and Consumer Commission (ACCC) to proceed with legal action against Mosaic Brands Limited (Mosaic)—a company that entered voluntary administration on 28 October 2024 and has since moved into liquidation.

This decision is part of a broader trend in which the ACCC has pursued significant penalties against insolvent companies for breaching the Australian Consumer Law (ACL). Despite these companies often being unable to pay fines, the ACCC continues to enforce compliance, emphasizing deterrence as a key enforcement objective. This article explores the ACCC’s rationale for continuing proceedings against companies like Mosaic.

Background: ACCC v Mosaic

On 4 March 2024, the ACCC initiated proceedings against Mosaic, alleging multiple violations of the ACL, including:

• Misleading customers by advertising delivery timeframes that were not met, leading to excessive delays;
• Wrongfully accepting payments for goods that were either not delivered on time, within a reasonable period, or at all;
• Providing misleading information about consumer guarantee rights within its website terms and conditions.

Following Mosaic’s voluntary administration in October 2024, the company entered liquidation in early 2025. Despite this, on 30 January 2025, Wigney J of the Federal Court of Australia granted the ACCC’s application for leave to proceed with its case against Mosaic.

Key Considerations for Granting Leave

The ACCC submitted its application under section 440D(1) of the Corporations Act, which restricts legal proceedings against a company in administration unless:

a) The administrator provides written consent; or
b) The Court grants leave, with or without conditions.

This ruling underscores the ACCC’s commitment to upholding consumer law and ensuring that even insolvent businesses are held accountable for their conduct….

CONTINUE READING…