Demery v Coles Supermarkets Australia Pty Ltd

This case arose from overlapping proceedings about Coles' 'Down Down' promotions. The ACCC had already sued Coles, alleging that during the period from February 2022 to May 2023 Coles temporarily increased the prices of at least 245 products and then promoted those products as 'Down Down' at prices that were the same as, or higher than, the products' earlier ordinary selling prices. The allegation was that consumers were given a false impression of a genuine discount.

After the ACCC case was filed, Mr Demery brought a representative proceeding on behalf of consumers who purchased one or more of the affected products. His case raised materially the same liability allegations as the ACCC proceeding, but sought compensation for loss or damage. That meant Coles was facing both regulator enforcement and a private damages claim built on the same alleged pricing conduct.

The Court recorded that the two proceedings raised the same issues on liability, though not the same issues on relief, and they were therefore jointly case managed. Earlier orders had already set up an initial trial on liability issues using a sample of products. The immediate problem for the Court was how to run the class action efficiently when the ACCC was already litigating the same liability questions.

The application directly before Justice O'Bryan was Coles' application for security for costs in the representative proceeding. Security for costs is a procedural order that can require an applicant to provide protection for a respondent's legal costs if the respondent later succeeds. The judgment notes that the class action was not backed by a litigation funder and that the applicant's solicitors were acting on a no win no fee basis.

Rather than fully contesting the security application, the parties proposed a practical arrangement. They asked the Court to order that the initial liability trial in the class action be heard together with the initial liability trial in the ACCC proceeding. The applicant in the class action would take no active step, including seeking discovery, adducing evidence, making submissions or cross-examining witnesses, unless the Court later granted leave on reasonable notice.

The applicant also undertook, on his own behalf and on behalf of group members who did not opt out, to be bound by all findings of fact, findings of law and mixed findings of fact and law made in the determination of liability issues in the ACCC proceeding, and to consent to corresponding findings being made in the representative proceeding. That undertaking was expressed to be without prejudice to the applicant's right to appeal, or seek leave to appeal, any such finding.

The legal issue was not whether Coles had breached the Australian Consumer Law. The issue was whether the Federal Court had power, and whether it was appropriate, to make procedural orders aligning the representative proceeding with the ACCC proceeding for the liability phase. That included a joint liability trial, restrictions on the applicant taking active steps without leave, information-sharing arrangements, and the adjournment of the security for costs application.

The Court also had to consider how absent group members would be protected if the representative applicant largely stood back from the liability hearing. A further question was the proper form of any binding effect on group members. The reasons show that the Court was careful not to treat future liability findings as already finally determined or to make premature orders purporting to bind group members to a future judgment before that judgment existed.

Justice O'Bryan held that the Court had power to make orders largely in the form proposed by the parties and that it was appropriate to do so. The reasons refer to the Court's broad powers under ss 23, 37P and 33ZF of the Federal Court of Australia Act 1976 (Cth), rule 1.32 of the Federal Court Rules 2011, and the Court's incidental powers. The Court accepted that the proposed structure was consistent with the overarching purpose in s 37M of resolving disputes justly, quickly, inexpensively and efficiently.

The Court ordered that the initial trial on liability issues in the representative proceeding be heard together with the initial trial on liability issues in the ACCC proceeding. It also ordered that, at the joint liability trial, the evidence in the ACCC proceeding would be evidence in the representative proceeding. The applicant was ordered to take no step in either proceeding, including at the joint liability trial, unless leave was granted on reasonable notice.

Importantly, the Court's orders did not amount to a final determination of liability. The orders were procedural and were supported by undertakings. The Court had earlier raised concerns about a proposed order that all liability issues would be fully and finally determined by the ACCC judgment, and about whether s 33ZB could operate in advance to bind group members to a future judgment. The final orders were framed more carefully. They recorded the applicant's undertaking and contemplated that, after the joint liability trial, the parties would, to the extent necessary, agree or propose orders under s 33ZB to give effect to the position once there was an actual judgment.

Coles' security for costs application was adjourned indefinitely, but not finally disposed of. Coles retained liberty to re-enliven that application if, before judgment in the joint liability trial, the applicant sought leave to take a step in the representative proceeding or in the ACCC proceeding.

A key part of the Court's reasoning was that group members' interests would still be protected even though the applicant would not actively run a separate liability case unless leave was granted. The orders required Coles, subject to release from its implied undertaking in the ACCC proceeding and subject to confidentiality controls, to provide the applicant with copies of submissions, evidence and interlocutory applications filed, documents discovered, and orders made in the ACCC proceeding relating to the initial trial on liability issues.

The applicant was also to have access to all transcripts of hearings in the ACCC proceeding relating to the initial liability trial. In addition, Coles undertook to provide certain correspondence with the Court, subject to the ACCC's consent, and draft orders provided to the Court in the ACCC proceeding relating to the initial liability trial, including the trial schedule.

The Court accepted that these arrangements would allow the applicant to monitor the conduct of the liability phase and decide whether any further action was needed to protect group members. The applicant also retained liberty to apply to vary the orders before judgment in the joint liability trial if the orders ceased to adequately protect group members. The judgment gives a concrete example: if the ACCC and Coles were to compromise the ACCC proceeding without the Court determining liability questions, the applicant could seek variation.

For businesses, this part of the decision is a reminder that litigation risk is not only about the final hearing. It is also about document control, confidentiality arrangements, discovery, hearing transcripts and the way one proceeding can feed another. If a regulator case is on foot, the material generated in that case may become highly relevant to related private claims.

The practical significance of this case is twofold. First, it shows how a court may manage overlapping regulator and private proceedings where the liability issues are materially the same. A business may find that the regulator case becomes the main liability battleground, while a class action remains in place to pursue compensation if liability is established. That can reduce duplication, but it does not remove exposure.

Second, the allegations recorded in the judgment show the kind of pricing pattern that can attract serious scrutiny. The ACCC alleged that products were temporarily increased in price and then promoted as discounted at prices that were no better, or not genuinely better, than earlier ordinary prices. Whether those allegations are ultimately proved is a separate question, but the case is a strong warning that discount messaging depends on the underlying pricing history, not just the words used on a shelf ticket, catalogue or website.

Businesses that advertise savings should be able to explain what the ordinary selling price was, how long it applied, whether there was any temporary price spike before the promotion, and why the promoted price was presented as a discount. Internal records matter. So do approval processes, consistency across channels and the ability to reconstruct the pricing history later if challenged.

This is not only a supermarket issue. Any retailer or business using sale prices, strike-through pricing, comparison pricing, limited-time offers or recurring promotional labels should treat this case as a prompt to review how those campaigns are designed and documented.

The judgment was delivered on 26 August 2025. It records that the ACCC proceeding was commenced on 23 September 2024 and the representative proceeding on 14 November 2024. Orders for an initial liability trial based on a sample of products had been made on 23 May 2025. Coles filed its security for costs application on 20 June 2025. The Court then made the procedural orders discussed on this page, including timetabling for proposed opt-out orders and notice to be addressed at a case management hearing on 10 September 2025.

The status point to keep in mind is that this decision does not determine the underlying consumer law allegations. It determines how the liability phase of the class action and the ACCC proceeding are to interact, and how the security for costs issue is to be managed in the meantime.

This page is based on the Federal Court decision Demery v Coles Supermarkets Australia Pty Ltd [2025] FCA 1016, delivered by O'Bryan J on 26 August 2025. The available reasons include the orders, the Court's notes, and the early part of the reasons explaining the background, the proposed resolution and the Court's approach to power and appropriateness.

The available text is truncated after paragraph 29. For that reason, this page is written as a careful explainer of the procedural ruling and the orders that are clearly available. It should not be read as a complete account of every issue discussed later in the reasons or of any later developments in the proceedings.