Australian Securities and Investments Commission v Commonwealth Bank of Australia

The Australian Securities and Investments Commission (ASIC) brought proceedings against the Commonwealth Bank of Australia (CBA) regarding overcharging errors on overdraft accounts due to a coding error. The dispute centred on the appropriate penalty for the CBA's failure to notify and remediate affected customers in a timely manner. The primary issue before the court was determining the quantum of the penalty, with ASIC seeking $7 million and the CBA arguing for a penalty between $4 million and $5 million. The court was also required to consider the public interest in predictability of outcomes in civil penalty proceedings and the parity principle in determining the penalty.

The court found the CBA's delay in notifying and remediating customers to be both serious and reflecting poorly on those aware of the bank holding onto money to which it was not entitled. The court acknowledged that while the size of the corporation does not justify a higher penalty, the penalty must impose a sufficient sting or burden to deter future contraventions. The court considered the submissions of Mr. Kulevski, who emphasised the importance of parity and predictability of outcomes, and referred to previous cases for guidance. After weighing all the factors, the court determined that a penalty of $7 million was appropriate. The court also proposed that the CBA pay ASIC's costs of and incidental to the proceeding and scheduled a further case management hearing.

The court ordered the CBA to pay a pecuniary penalty of $7 million within 30 days and scheduled a further case management hearing for 28 April 2021 at 9:30 AM. The court also proposed that the CBA pay ASIC's costs of and incidental to the proceeding. These orders were made to ensure compliance with the Australian Securities and Investments Commission Act 2001 (Cth) and to provide an opportunity for the parties to confer on the issue of costs.