This is a big deal. iiNet was picked because (at the time) they were a smaller ISP and wouldn't have the resources to properly contest - as leaked in a Au/US cable. Fortunately they did choose to contest and are (largely unrelated - a series of strategic acquisitions) now the second largest ISP in Australia.
Unfortunately, AFACT's strategy now appears to be lobbying for changes to copyright law so that they can sue successfully.