Australian Securities and Investments Commission v Channic Pty Ltd (No 5)

In the matter of Australian Securities and Investments Commission v Channic Pty Ltd (No 5), the Australian Securities and Investments Commission (ASIC) sought a penalty order against the respondents for contraventions of the National Consumer Credit Protection Act 2009 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). The primary issues before the court involved the principles for determining a civil pecuniary penalty, the scope and depth of the respondents’ conduct, and the application of the “one course of conduct” and “totality” principles. The court was required to consider whether the penalty imposed was appropriate and whether the respondents’ conduct warranted the penalties sought by ASIC.

The court addressed the principles for determining an appropriate penalty, noting that ASIC's approach to grouping the contraventions into a single contravention was acceptable. It found that the respondents’ conduct was extensive and involved multiple failures to comply with the Act, including inadequate inquiries into consumers’ financial situations and reliance on a standardised formula rather than actual data. The court emphasised that the respondents had not made reasonable inquiries or verified the financial situations of the consumers, leading to unjust contracts. The court also considered the respondents' compliance with the ASIC Act, finding that Channic engaged in unconscionable conduct.

The court ultimately determined that the penalties imposed were appropriate given the severity and breadth of the respondents' contraventions. It found that the conduct of Cash Brokers Pty Ltd and Channic Pty Ltd warranted a penalty of $278,000 each, while Colin William Hulbert was ordered to pay $220,000. The court also set aside eight credit contracts and relieved the consumers from any liability arising from these contracts. Additionally, the respondents were ordered to pay ASIC's costs amounting to $420,000.