Ultra Tune's $1.5 million contempt fine: what court-ordered compliance demands

• The 2019 orders followed ACCC proceedings in which the Court imposed $2.604 million in penalties, reduced to $2.014 million on appeal.
• The orders restrained Ultra Tune from contravening parts of the Australian Consumer Law and the Franchising Code, and required a compliance program.
• The contempt findings covered four instances: one disclosure update, two fund statements and the compliance reporting.
• The Court ordered costs on the indemnity basis, and the Full Federal Court later awarded the ACCC its appeal costs.
• Under the current Code, a late disclosure update or fund statement carries up to 600 penalty units, $218,400 for conduct from 1 July 2026.

1. January 2019: after ACCC proceedings, the Federal Court imposed $2.604 million in total penalties on Ultra Tune for Code and Australian Consumer Law contraventions, including false and misleading representations and failing to act in good faith in dealings with a prospective franchisee.
2. 2019: the Court also made orders restraining further contraventions of parts of the Code and the Australian Consumer Law, and requiring a compliance program and compliant disclosure documents and marketing fund statements.
3. On appeal, the Full Federal Court upheld the finding that Ultra Tune's marketing fund statements lacked sufficient detail, and reduced the penalty to $2.014 million.
4. By September 2023 the ACCC had filed contempt proceedings alleging breaches of the 2019 orders and of the court-ordered compliance program.
5. March 2024: Justice Bromwich fined Ultra Tune $1.5 million for four instances of contempt and ordered costs on the indemnity basis.
6. 28 January 2025: the Full Federal Court dismissed Ultra Tune's appeal, which argued the Court couldn't punish it without an endorsement on the orders about the consequences of non-compliance and challenged how the fines were calculated.

• Disclosure document: it failed to update its disclosure document on time on one occasion.
• Marketing fund statements: it failed to prepare a statement on time on two occasions, and one was almost eight months late.
• Compliance program: it failed to ensure its compliance officer gave the company quarterly reports for three consecutive quarters.
• None of these was a new kind of misconduct. Each was a routine obligation the orders required it to meet.
• Justice Bromwich found the contempts weren't out of character, but reflected a corporate character insufficiently concerned with compliance, even with court orders.

• Under the current Code, a late disclosure update (s21(2)) or fund statement (s31(2)) carries up to 600 penalty units: $218,400 for conduct from 1 July 2026.
• Four breaches at that current cap would total $873,600. Ultra Tune's four contempts cost $1.5 million in fines.
• Costs were ordered on the indemnity basis, the higher scale, on top of the fines.
• The judge looked at the company's attitude to compliance, not just the size of each missed deadline.
• The outcome was public: the ACCC announced the fine in March 2024 and the failed appeal in January 2025.

• A court order, like Ultra Tune's 2019 orders, is made by a court after proceedings, and breaching it can be contempt of court.
• A court-enforceable undertaking is a promise a franchisor gives the ACCC under s87B of the Competition and Consumer Act, which a court can enforce.
• Undertakings can include compliance programs: Delicia Franchising's December 2023 undertaking included a corrective notice to franchisees and a 3-year compliance program.
• Franchisors must tell franchisees and prospects in writing, within 14 days, about any s87B undertaking they or an associate give, and any Federal Court order about it, unless the disclosure document already mentions it (s34(3)(h)).
• Either way, the obligations are public, and missing them can put the franchisor back before a court.

If you're under court orders or an undertaking, treat every obligation in them as a hard deadline.

1. Read the orders or undertaking line by line, and turn every obligation into a dated task with an owner.
2. Appoint a compliance officer with the time, authority and backup to do the job, and diarise every report they must give.
3. Report to the board at least quarterly on each obligation: done, late or at risk.
4. Build in early warnings, such as drafting fund statements a month before they're due.
5. Keep evidence of each step, because you may have to prove compliance to the ACCC or the court.
6. If a deadline will be missed, get legal advice straight away rather than waiting.
7. Have someone independent test the program each year.
8. Carry the obligations over when staff, systems or owners change.

The obligations Ultra Tune missed are ordinary Code deadlines. For a financial year ending 30 June 2026:

• 30 September 2026: last day for 75% of contributing franchisees to vote to waive a fund's audit for 2025–26 (s31(4)).
• 31 October 2026: the annual disclosure document update is due (s21), and each fund's statement must be prepared and audited (s31(2)).
• 14 November 2026: the Register confirmation or update is due (s93).
• 30 November 2026: last day to give franchisees a fund statement prepared on 31 October, because the Code allows 30 days from preparation (s31(2)(b)).
• Within 30 days of receiving the auditor's report: give franchisees a copy (s31(2)(c)(ii)).
• For a 31 December 2026 year end, the equivalent dates are 31 March, 30 April, 14 May and 30 May 2027.

• Every Code deadline is in one calendar, set from your own financial year end.
• Fund statements are drafted early and checked for meaningful detail, not just delivered on time.
• Disclosure document updates are scheduled, not left to the last week.
• Compliance reporting runs on a fixed rhythm, with a backup for every role.
• The board sees a compliance report at least quarterly.
• Any court order or undertaking is mapped to tasks, owners and evidence.
• Legal advice is sought as soon as a deadline is at risk.