In the final chapter of the story, Belle Gibson, the disgraced alternative health promoter behind "The Whole Pantry" has been ordered to pay a fine of $410,000 for misleading and deceiving consumers with her false cancer and charitable donation claims.
In March 2017, Justice Mortimer of the Federal Court of Australia held that Ms Gibson had engaged in misleading and deceptive conduct and unconscionable conduct in the course of the promotion of smart phone apps and her book "The Whole Pantry". Her Honour also held that Ms Gibson and her company falsely claimed that proceeds from sales of the book and apps were donated to various charities. You can read our post on that decision here.
Last month, Justice Mortimer held that penalties in the sum of $410,000 should be imposed on Ms Gibson in relation to the charitable donations representations which comprised 5 separate contraventions:
- $90,000 for The Whole Pantry app sales false donation claims.
- $50,000 for the launch of The Whole Pantry app false donation claims.
- $30,000 for the 2014 Mothers Day event false donation claims.
- $90,000 for company earnings false donation claims.
- $150,000 for failing to donate 100% of one week's app sales to the family of Joshua Schwarz, a boy who had an inoperable brain tumour.
Her Honour held that Ms Gibson’s conduct in relation to the Schwarz family, whose son Joshua was seriously ill with brain cancer, was "particularly disgraceful". There was no evidence that the Schwarz family received a cent from Ms Gibson or her company in relation to sales of The Whole Pantry app. Her Honour held that by her conduct Ms Gibson "sought to use the tragic terminal illness of a young boy for her own selfish purposes."
As Ms Gibson's company is in liquidation, the Director of Consumer Affairs Victoria only sought a penalty against Ms Gibson personally. Justice Mortimer indicated that if the fine was paid, a donation to those who had been promised them would provide the possibility that "some good might still come for the vulnerable people and organisations supporting them".
Justice Mortimer's decision highlights the importance of ensuring any promotion and advertising of products is truthful, including in respect of donations to charities or individuals. If not, businesses run the risk of being held liable under the Australian Consumer Law and suffering reputational damage.