Australian Securities and Investments Commission v Bendigo and Adelaide Bank Limited

The Australian Securities and Investments Commission (ASIC) filed a case against Bendigo and Adelaide Bank Limited (the Bank) concerning several contractual terms used in the Bank's business loans and facilities. ASIC argued that these terms were unfair under the Australian Securities and Investments Commission Act 2001 (Cth). The specific terms in question were those found in the Delphi Conditions and Rural Conditions, which the Bank used in contracts with its customers. The crux of the legal dispute was whether these terms met the criteria for being deemed "unfair" under the Act, particularly in light of the Bank's concession that these terms were indeed unfair.

The court had to decide several key legal issues: whether the terms in question were transparent, whether they were fair and reasonable, and whether they caused detriment to the customers. Additionally, the court needed to determine the appropriate remedies under the Act, including whether declarations should be made under sections 12BF, 12BG, and 12GND, and if the contract terms should be varied under section 12GNB.

The court found that the terms in the Delphi Conditions and Rural Conditions were indeed unfair. The court reasoned that these terms imposed significant evidential burdens on the customers, allowed the Bank to terminate contracts unilaterally without additional duties or corresponding rights for the customers, and were not transparently expressed. Furthermore, these terms could cause detriment to customers if relied upon, especially given the difficulty in contesting the Bank's unilateral determinations. The court concluded that these terms did not sufficiently mitigate the unfairness even when considered within the context of the entire contract. Consequently, the court granted the declarations sought by ASIC and varied the specific contract terms to address the unfairness identified.

The final orders included declarations that the contested terms were unfair, variations to specific contract clauses to remove the unfair aspects, and an undertaking from the Bank not to use the contested terms in future contracts. Additionally, the Bank was ordered to pay ASIC's costs of the proceeding.