Australian Securities and Investments Commission v Darranda Pty Ltd (Liability) - [2024] FCA 1015

FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v Darranda Pty Ltd (Liability) [2024] FCA 1015

File number(s): VID 181 of 2022

Judgment of: HESPE J

Date of judgment: 4 September 2024

Catchwords: CONSUMER LAW – consumer credit – whether customer contracts are consumer leases or credit contracts for the purposes of the National Credit Code (Sch 1 to the National Consumer Credit Protection Act 2009 (Cth)) – whether Australian Credit Licence holder failed to do all things necessary to ensure that its licensed credit activities were engaged in efficiently, honestly and fairly – whether master franchisor “involved in” contraventions

Legislation:
Evidence Act 1995 (Cth), s 140

Federal Court of Australia Act 1976 (Cth), s 21

National Consumer Credit Protection Act 2009 (Cth) ss 3, 5, 47, 166, 169, Sch 1 (National Credit Code) ss 3, 4, 5, 9, 11, 14, 17, 23, 24, 32A, 169, 170, 171, 172, 173, 174, 174A

Cases cited:
Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181

Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208; (2020) 275 FCR 57

Australian Securities and Investments Commission v AMP Financial Planning Pty Ltd (No 2) [2020] FCA 69

Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414

Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1422

Australian Securities and Investments Commission v Ferratum Australia Pty Limited (in liq) [2023] FCA 1043

Australian Securities and Investments Commission v GetSwift [2021] FCA 1384

Australian Securities and Investments Commission v Membo Finance Pty Ltd (No 2) [2023] FCA 126

Australian Securities and Investments Commission v National Australia Bank Ltd [2022] FCA 1324

Australian Securities and Investments Commission v Rent 2 Own Cars Pty Ltd [2020] FCA 1312

Australian Securities and Investments Commission v Westpac Banking Corporation (Omnibus) [2022] FCA 515

Cochrane v Moore (1890) 25 QBD 57

Commissioner of State Revenue v Politis [2004] VSC 126

Commissioner of Taxation v Carter [2022] HCA 10; (2022) 274 CLR 304

Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520

Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 275 CLR 165

Earl of Egmont v Smith (1877) 6 Ch D 469

Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61; (2002) 117 FCR 588

Flinn v White [1950] SASR 195

Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121

Hill v Wilson (1873) LR 8 Ch App 888

Irons v Smallpiece (1819) 106 ER 467

Make It Mine Finance Pty Ltd [2015] FCA 393; (2015) 238 FCR 562

Maxwell v Maxwell [2022] NSWSC 1028

Nolan v Nolan [2003] VSC 121; (2003) 10 VR 626

Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27

Rowland v Stevenson [2005] NSWSC 325

Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53

Scammell v Ouston [1941] AC 251

Scott v Bridge [2020] EWHC 3116 (Ch)

Tesco Supermarkets Ltd v Nattrass [1972] AC 153

Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661

Division: General Division

Registry: Victoria

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Number of paragraphs: 296

Date of last submission/s: 26 March 2024

Date of hearing: 5–14 February 2024, 18 March 2024

Counsel for the Applicant Ms F McLeod SC, Ms L Papaelia and Ms A Ballard

Solicitors for the Applicant Australian Securities and Investments Commission (in house)

Counsel for the Respondents Mr B Quinn KC and Mr A Middleton

Solicitors for the Respondents Strongman & Crouch

ORDERS

VID 181 of 2022

BETWEEN:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Applicant

AND:
DARRANDA PTY LTD (ACN 005 663 561)

First Respondent

RENT4KEEPS (AUST) PTY LTD (ACN 006 507 811)

Second Respondent

ORDER MADE BY:

HESPE J

DATE OF ORDER:

4 SEPTEMBER 2024

THE COURT ORDERS THAT:
1.Within 14 days, the parties file an agreed minute or, in the absence of agreement, competing minutes of order, in the light of these reasons.
2.The matter be listed for a case management hearing, in order to set a timetable for a hearing on the question of the appropriate final orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
HESPE J:
INTRODUCTION

At heart, these proceedings concern the characterisation of 516 contracts (516 Relevant Contracts) entered into between the First Respondent (Darranda) and its customers over the period 1 April 2019 to 30 June 2019 (relevant period). The essential issue is whether those contracts are consumer leases or credit contracts for the purposes of the National Credit Code. The Australian Securities and Investments Commission (ASIC) contends that the contracts are credit contracts and therefore subject to an annual cost cap of 48% as well as certain disclosure requirements. Darranda contends that the contracts are consumer leases and therefore the cap and the disclosure requirements do not apply.
A secondary issue concerns the manner in which Darranda conducted its business. ASIC contends that irrespective of whether Darranda’s customer contracts are consumer leases or credit contracts, Darranda failed to do the things necessary to ensure that its credit activities authorised by its Australian Credit Licences were engaged in efficiently, honestly and fairly.
A further issue arises if Darranda is found to have contravened a civil penalty provision. That issue is whether Rent4Keeps (Aust) Pty Ltd, the master franchisor, was involved in any of Darranda’s contraventions of a civil penalty provision for the purposes of s 169 of the National Consumer Credit Protection Act 2009 (Cth) (Credit Act).
STATUTORY CONTEXT CONCERNING CONSUMER LEASES AND CREDIT CONTRACTS
The Code is contained in sch 1 to the Credit Act and given effect by s 3 of that Act. The Court was provided with a version of the Code that the parties agreed was applicable during the relevant period.
Section 5(1) of the Code provides:
Provision of credit to which this Code applies
(1) This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of precontractual obligations) is proposed to be entered into:
(a) the debtor is a natural person or a strata corporation; and
(b) the credit is provided or intended to be provided wholly or predominantly:
(i) for personal, domestic or household purposes; or
(ii) to purchase, renovate or improve residential property for investment purposes; or
(iii) to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes; and
(c) a charge is or may be made for providing the credit; and
(d) the credit provider provides the credit in the course of a business of providing credit carried on in this jurisdiction or as part of or incidentally to any other business of the credit provider carried on in this jurisdiction.
Section 4 of the Code provides:
Meaning of credit contract
For the purposes of this Code, a credit contract is a contract under which credit is or may be provided, being the provision of credit to which this Code applies.
Section 3(1) of the Code provides:
(1) For the purposes of this Code, credit is provided if under a contract:
(a) payment of a debt owed by one person (the debtor) to another (the credit provider) is deferred; or
(b) one person (the debtor) incurs a deferred debt to another (the credit provider).
Section 9 of the Code provides:
Goods leases with option to purchase to be regarded as sale by instalments
(1)For the purposes of this Code, a contract for the hire of goods under which the hirer has a right or obligation to purchase the goods, is to be regarded as a sale of the goods by instalments if the charge that is or may be made for hiring the goods, together with any other amount payable under the contract (including an amount to purchase the goods or to exercise an option to do so) exceeds the cash price of the goods.
Note: A contract includes a series of contracts, or contracts and arrangements (see Part 13).
(2)A debt is to be regarded as having been incurred, and credit provided, in such circumstances.
(3)Accordingly, if because of subsection 5(1) the contract is a credit contract, this Code (including Part 6) applies as if the contract had always been a sale of goods by instalments, and for that purpose:
(a) the amounts payable under the contract are the instalments; and
(b) the credit provider is the person who is to receive those payments; and
(c) the debtor is the person who is to make those payments; and
(d) the property of the supplier in the goods passes under the contract to the person to whom the goods are hired on delivery of the goods or the making of the contract, whichever occurs last; and
(e) the charge for providing the credit is the amount by which the charge that is or may be made for hiring the goods, together with any other amount payable under the contract (including an amount to purchase the goods or to exercise an option to do so), exceeds the cash price of the goods; and
(f) a mortgage containing the terms and conditions set out in the regulations is taken to have been entered into in writing between the person to whom the goods are hired under the contract and the supplier as security for payment to the supplier of the amount payable to the supplier by the person to whom the goods are hired under the contract; and
(g) any provision in the contract for hiring by virtue of which the supplier is empowered to take possession, or dispose, of the goods to which the contract relates is void.
(4) For the purposes of this section, the amount payable under the contract includes any agreed or residual value of the goods at the end of the hire period or on termination of the contract, but does not include the following amounts:
(a) any amount payable in respect of services that are incidental to the hire of goods under the contract;
(b) any amount that ceases to be payable on the termination of the contract following the exercise of a right of cancellation by the hirer at the earliest opportunity.
Note: Part 11 (Consumer leases) applies to the contracts specified in that Part for the hire of goods under which the hirer does not have a right or obligation to purchase the goods.
Section 14 of the Code provides:
Credit contract to be in form of written contract document
(1) A credit contract must be in the form of:
(a) a written contract document signed by the debtor and the credit provider; or
(b) a written contract document signed by the credit provider and constituting an offer to the debtor that is accepted by the debtor in accordance with the terms of the offer.
(2) An offer may be accepted by the debtor for the purposes of paragraph (1)(b):
(a) by the debtor or a person authorised by the debtor accessing or drawing down credit to incur a liability; or
(b) by any other act of the debtor or of any such authorised person that satisfies the conditions of the offer and constitutes an acceptance of the offer at law.
(3) The credit provider, or a person associated with the credit provider, may not be authorised by the debtor for the purposes of subsection (2). However, this subsection does not prevent the debtor authorising the credit provider to debit the debtor’s account.
(4) In the case of a contract document consisting of more than one document, it is sufficient compliance with this section if one of the documents is duly signed and the other documents are referred to in the signed document.
Section 17 of the Code relevantly provides:
Matters that must be in contract document
(1)      The contract document must contain the following matters.
…
Amount of credit
(3)      The contract document must contain:
(a)       if the amount of credit to be provided is ascertainable:
(i)        that amount; and
(ii) the persons, bodies or agents (including the credit provider) to whom it is to be paid and the amounts payable to each of them, but only if both the person, body or agent and the amount are ascertainable; and
(b) if the amount of the credit to be provided is not ascertainable—the maximum amount of credit agreed to be provided, or the credit limit under the contract, if any; and
(c) if the credit is provided by the supplier for a sale of land or goods by instalments—a description of the land and its cash price or of the goods and their cash price.
The requirement under paragraph (c) is in addition to, and does not limit, the requirement under paragraph (a) or (b).
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Annual percentage rate or rates
(4)In the case of a credit contract other than a small amount credit contract, the contract document must contain:
(a) the annual percentage rate or rates under the contract; and
(b) if there is more than one rate, how each rate applies; and
(c) if an annual percentage rate under the contract is determined by referring to a reference rate:
(i) the name of the rate or a description of it; and
(ii) the margin or margins (if any) above or below the reference rate to be applied to determine the annual percentage rate or rates; and
(iii) where and when the reference rate is published or, if it is not published, how the debtor may ascertain the rate; and
(iv) the current annual percentage rate or rates.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Calculation of interest charges
(5) In the case of a credit contract other than a small amount credit contract, the contract document must contain the method of calculation of the interest charges payable under the contract and the frequency with which interest charges are to be debited under the contract.
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
Total amount of interest charges payable
(6)In the case of a credit contract other than a small amount credit contract, the contract document must contain the total amount of interest charges payable under the contract, if ascertainable (but only if the contract would, on the assumptions under sections 180 and 182, be paid out within 7 years of the date on which credit is first provided under the contract).
Note: A penalty may be imposed for contravention of a key requirement in this subsection: see Part 6.
…
Section 23(1) of the Code provides:
Prohibited monetary obligations—general
(1)A credit contract (other than a small amount credit contract) must not impose a monetary liability on the debtor:
(a) in respect of a credit fee or charge prohibited by this Code; or
(b)in respect of an amount of a fee or charge exceeding the amount that may be charged consistently with this Code; or
(c)in respect of an interest charge under the contract exceeding the amount that may be charged consistently with this Code.
Note 1: A penalty may be imposed for contravention of a key requirement in this subsection, but only at the time the credit contract is entered into: see Part 6.
Note 2:This subsection also applies to liabilities imposed contrary to section 133BI of the National Credit Act: see subsection (7) of that section.
Section 24(1) of the Code relevantly provides:
Offences related to prohibited monetary obligations—credit providers
(1) A credit provider must not:
(a)enter into a credit contract on terms imposing a monetary liability prohibited by subsection 23(1);…
Section 32A(1) of the Code provides:
Prohibitions relating to credit contracts if the annual cost rate exceeds 48%
Entering into a credit contract
(1) A credit provider must not enter into a credit contract if the annual cost rate of the contract exceeds 48%.
Criminal penalty: 50 penalty units.
Part 11 of the Code applies to consumer leases.
Section 169 of the Code provides:
Meaning of consumer lease
For the purposes of this Code, a consumer lease is a contract for the hire of goods by a natural person or strata corporation under which that person or corporation does not have a right or obligation to purchase the goods.
Section 170(1) of the Code provides:
Consumer leases to which this Part applies
(1) This Part applies to a consumer lease if, when the lease is entered into:
(a) the goods are hired wholly or predominantly for personal, domestic or household purposes; and
(b) a charge is or may be made for hiring the goods and the charge together with any other amount payable under the consumer lease exceeds the cash price of the goods; and
(c) the lessor hires the goods in the course of a business of hiring goods carried on in this jurisdiction or as part of or incidentally to any other business of the lessor carried on in this jurisdiction.
Section 171(1) of the Code provides:
Short term or indefinite leases
(1)This Part does not apply to a consumer lease for a fixed period of 4 months or less or for an indefinite period.
Section 172(1) of the Code provides:
Presumptions relating to application of this Part
(1)In any proceedings (whether brought under this Code or not) in which a party claims that a lease is a consumer lease to which this Part applies, it is presumed to be such unless the contrary is established.
Section 173(1) and (1A) of the Code provides:
Form of consumer lease
(1)       A consumer lease must be in the form of a written lease document:
(a)       signed by the lessor and the lessee; and
(b)       containing the information required by this Division.
(1A) Subject to subsection (2), a consumer lease may consist of one or more separate documents.
Section 174 of the Code provides:
Disclosures in consumer leases
(1)       A consumer lease must contain the following matters, if ascertainable:
(a) a description or identification of the goods hired under the lease;
(b) the amount or value of any consideration to be paid or provided by the lessee before the delivery of those goods;
(c) the amount of any stamp duty or other government charge (other than on receipts or withdrawals) payable by the lessee in respect of the lease;
(d) the amount of any other charges not included in the rental payable under the lease, and a description of those charges;
(e) the amount of each rental payment to be made by the lessee under the lease, the date on which the first rental payment is due and either the dates on which subsequent rental payments are due or the interval between rental payments;
(f) the number of rental payments to be made by the lessee, and the total amount of rental payable under the lease;
(g) a statement of the conditions on which the lessee may terminate the lease;
(h) a statement of the liabilities (if any) of the lessee on termination of the lease.
(2) A consumer lease is taken to comply with this section despite any omission or other error if the court is satisfied that the omission or error is not of such a nature as to mislead the lessee to his or her disadvantage.
(3) A lessor must not enter into a consumer lease that contravenes a requirement of this section.
Civil penalty:             5,000 penalty units.
(4) A lessor commits an offence of strict liability if the lessor enters into a consumer lease that contravenes a requirement of this section.
Criminal penalty:        100 penalty units.

It was not in dispute in this proceeding that each of the 516 Relevant Contracts was a contract for the hire of goods. Nor was it in dispute that each of the customers under each of the 516 Relevant Contracts was a natural person nor that each of s 170(1)(a)-(c) were otherwise satisfied.
In summary, the distinction between a credit contract and a consumer lease in the context of this proceeding relevantly depends on whether the hirer has a right or obligation to purchase the goods.
FACTS AND EVIDENCE
Darranda’s witnesses
Darranda adduced evidence from five witnesses:
(a)Mr Payne (the founder and one of the directors of Darranda and Rent4Keeps (Aust)) who gave evidence about the background of Darranda’s business;
(b)Mr Boucher (Chief Executive Officer of Rent4Keeps (Aust)) who gave evidence of the background to Darranda’s Australian Credit Licence and the background to the form of its customer contracts;
(c)Mr Tannous (Group Operations Manager of Darranda) who gave evidence about the customer approvals process;
(d)Mr Chikyala (Chief Technology Officer of Rent4Keeps (Aust)) who gave evidence about Darranda’s technology systems and training processes;
(e)Ms Wallace (Team Leader of Centralised Leads Officers at Darranda) who gave evidence about her experience of the training she received and the application process for customers.
Each of Messrs Payne, Boucher, Tannous and Chikyala, and Ms Wallace, were cross‑examined.
Market context of consumer leases
Under a consumer lease, consumers make rental payments to the lessor (usually fortnightly) over a fixed term. The fortnightly payments tend to be relatively low but over the term of the lease, the consumer generally pays significantly more than the retail price of the goods.
The subject of consumer leases tends to be household appliances including whitegoods. Oftentimes these goods have no or little value at the end of the lease. Under a consumer lease the consumer does not have a contractual right or obligation to purchase the goods at the end of the lease. Because the goods do not have a material residual value, there is a practical question as to what the lessor is to do with the goods at the end of the lease. ASIC recognised that, as a practical matter, most lessors allow the consumer to either retain the goods at the end of the contract or “gift” the goods to a third party nominated by the consumer. The notion of “gifting” became central to Darranda’s business model.
Consumer leases are appealing to those on lower incomes by giving such consumers access to household goods without the need to finance the entire payment up front. Many lessees are recipients of government benefits.
Background to Darranda’s business
Darranda operates a franchise business under the name “Rent4Keeps” (Rent4Keeps Business), which rents personal use and household items (such as appliances and furniture) to customers.
Mr Payne founded the Rent4Keeps Business. Mr Payne has a background in accounting and had conducted a number of businesses including Dial-a-Dino’s master franchise, “Abra Kebab” and a mortgage broking business. He had no background in consumer credit or consumer leasing.
In around April 2011, he responded to a newspaper advertisement in relation to franchise opportunities for a business called “Rent the Roo”. Although Mr Payne did not become a franchisee of “Rent the Roo”, he saw promise in the business and decided to start his own business of what he described as “product rentals”.
In 2011, Mr Payne decided to commence his own business of consumer product rentals which he called Rent4Keeps. Mr Payne changed the name of a company he had previously incorporated to “Rent4Keeps (Aust) Pty Ltd”. That company became the master franchisor of the Rent4Keeps Business. Darranda, another pre-existing company owned by Mr Payne, became the master franchisee of the Rent4Keeps Business in Victoria.
In 2012, Rent4Keeps (Aust) granted State master franchises in each of Queensland, New South Wales and Western Australia. During the relevant period, Darranda operated the master franchise business in Victoria, South Australia, Tasmania and the Northern Territory.
Mr Payne described the Rent4Keeps Business in the following terms:
The Rent4Keeps business broadly involves renting out personal use goods (such as TVs, fridges, washing machines and furniture) to customers by way of a consumer lease agreement. I understand from my years of experience in operating the Rent4Keeps business that consumers who have difficulties buying products outright (or difficulties obtaining credit to buy products) seek out Rent4Keeps to rent the products they need, as they can lease the product by making regular lease payments. I have been told by many of Rent4Keeps’ customers that without the consumer leases provided by Rent4Keeps, they would not be able to access the products they need.
Around 60% of Rent4Keeps’ customers are repeat or referral customers. The other 40% (new customers) come through some of the marketing that Rent4Keeps does.
When he started the business, Mr Payne had no to little understanding of the regulatory framework within which consumer leases were provided or of the distinction between consumer leases and credit contracts.
In 2011, Mr Payne prepared a document he entitled an “Operations Manual” (2011 Operations Manual). The 2011 Operations Manual named the head office personnel and their responsibilities as:
RENT4KEEPS Head Office Personnel
Director - Vikki Payne
Manager - Kevin Payne
Administration - Alan Symons
State Operations Manager - Alan Symons
Accountant - Michael Dudley
Marketing - Kevin Payne
Public Relations - Kevin Payne
Training - Kevin Payne/Alan Symons
Responsibilities
•Support of R4K Franchisees
•Franchise System Development
•Group Product Sourcing
•Corporate Marketing
•Franchisee Training
•Franchisee Reporting & Payment
•Development of New Franchisee Territories
•Administration and Accounting
Notably, there was no compliance or regulatory officer with responsibility for regulatory compliance named in the 2011 Operations Manual.
The 2011 Operations Manual described the “R4K Services” as including:
At the end of the rental term we allow the customer to give the product, free of charge, to a person of their choosing
The advertising and marketing section of the 2011 Operations Manual recorded that “Rent4Keeps” has two meanings:
The Customer “Keeps” the product
More importantly, we “Keep” the Customer
An Australian Credit Licence Application was made on behalf of Darranda in April 2011. Darranda’s intended business was described as “lessor” and the credit activities that Darranda intended to engage in were described as relating to “other consumer leases”. The application included a representation that there is “a person(s) internal to the business who will be responsible for ongoing monitoring and reporting in relation to the applicant’s level of compliance and for maintaining the adequacy of the applicant’s compliance arrangements from the date of commencement of its credit licence”.
In January 2012, Darranda employed Mr Tannous, initially in a role focussed on promoting and launching new franchises. Mr Tannous had worked with Mr Payne in the hospitality industry. Mr Tannous was one of two Darranda employees — the other being Mr Symons. Mr Tannous’s role included training franchisees in how to market their businesses in shopping centres and assisting them with franchise related documentation. In early 2012, Mr Tannous prepared a document entitled “Sales Process” (later named “R4K Credit Process”) and another entitled “R4K Procedures for Debt Management”, both of which he revised over the 2012 and 2013 calendar years.
The December 2013 version of the Credit Process document describes the Rent4Keeps Business’s sales process from the receipt of new customer enquiries to assessing whether the customer satisfies an initial serviceability assessment process to proceeding to and processing an application. By 2013, the sales process included the following steps for completing the signing process:
•Rental Agreement / Tax Invoice - Details of the nominated person for the item the customer would like the goods gifted to be completed in section 3.
•You must complete the Rental Agreement in full i.e. First Name and Surname of the “GIFTEE” and then have the Box on the Right Hand side initialled by the applicant or Applicants in box 2 should a secondary applicant be on the Agreement.
THE FOLLOWING STATEMENT MUST BE VERBALLY DELIVERED TO THE RENTER IN THE FOLLOWING MANNER
•“The items remain the property of R4K until the rental agreement is completed”.
•“At the end of the rental agreement - R4K will consider gifting the products to the person nominated in section 3 on the rental agreement”
Rent4Keeps (Aust)’s Australian Credit Licence Annual Compliance Certificate dated 31 May 2012 included Mr James Allen in the list of “fit and proper people”. Mr Allen had responsibility for compliance related activities. He was not a legal practitioner nor did he have legal qualifications.
In late 2012, Mr Payne employed Mr Boucher and, in June 2013, Mr Chikyala. They assisted in the development of an in-house IT system. Mr Boucher worked on financial modelling, market research and, with Mr Allen, on matters related to regulatory compliance. Mr Chikyala was engaged to work on the Rent4Keeps Business’s IT system and its client relationship management software.
From about 2014, the Rent4Keeps Business’s franchise network ceased to rely upon written manuals and moved to computer-based systems and processes.
From 2014, Mr Tannous’s responsibilities transitioned to overseeing and managing the performance of existing franchisees and to assisting in the development of IT systems.
In January 2015, ASIC wrote to Mr Allen informing him of concerns it had arising from information it had received in respect of his past employment. Mr Boucher informed ASIC by email that having received a copy of the ASIC letter from Mr Allen, Rent4Keeps (Aust) had “terminated Mr Allen’s employment with immediate effect”. By 29 June 2015, Mr Allen had been reinstated as a compliance officer for Rent4Keeps (Aust). Mr Allen passed away in July 2019.
In about late 2018, Mr Tannous’s role expanded to include overseeing Darranda’s general operations. He performed this expanded role during the relevant period.
Darranda’s business during the relevant period
As master franchisor, Rent4Keeps (Aust) provides marketing, administration and systems support, including compliance related services, and training to its franchise network.
At a practical level, during the relevant period, representatives of the Rent4Keeps Business (whether they be franchisees, managers or employees of franchisees) operated on a mobile basis — there were no Rent4Keeps stores. Customer relationship management software (CRM) was installed on an iPad provided to these representatives. This software was maintained by Rent4Keeps (Aust). Customer applications were processed using the CRM. If the application was approved, the representative purchased the item from a retailer, attended the customer’s premises for the rental agreement to be signed electronically on the iPad, and delivered the product to the customer.
Darranda used Centrepay to collect payments on many of its leases. Centrepay is a voluntary deduction service under which recipients of Centrelink payments can choose to have certain amounts deducted (including those payable under a lease of household goods) from their Centrelink payments prior to the recipient receiving their Centrelink payments. Recipients of Centrelink payments can opt out of a Centrepay deduction at any time.
History of terms and conditions of Darranda’s rental agreements
In 2011, Mr Payne engaged Frenkel Partners, a law firm which had performed work for him in the past, to prepare a standard form rental contract. The agreement was comprised of a tax invoice and a page of terms and conditions.
The proforma tax invoice included at item 3 a Renter Declaration. Item 3(d) of that Renter Declaration was in the following terms:
At the end of the Rental Term I hereby gift the item/s rented on behalf of Rent4Keeps to:
Name:
Clause 5 of the 2011 Rent4Keeps terms and conditions provided:
5. Ownership and Interest
5. 1You have a right to use the Products during the Term, but the Products remain the property of Rent4Keeps until the end of the Rental Agreement.
5.2At this time, if you have met all the terms and conditions of the agreement then Rent4Keeps allows you to gift the item/s to a person of your choice on their behalf.
5.3This is the person nominated in "Renter Declaration" subsection d) on the previous page.
By letter dated 15 February 2013, ASIC wrote to Ms Payne as director of Rent4Keeps (Aust) expressing concerns relating to the company and its rental business. ASIC noted that on the Rent4Keeps Business’s website it was said that “You keep the product” and “[t]he product is yours to gift at the end of the term – to your partner, relative or anyone of your choosing”. ASIC’s letter went on to state:
Based on information contained in your Australian credit licence application, ASIC understands that the Company offers consumer lease facilities. As you are aware there are differences between goods leases with an option to purchase and consumer leases.
•Goods leases with an option to purchase – these include contracts for the hire or rental of goods where the consumer has a right or obligation to purchase the goods and the amount payable under the contract exceeds the cash price of the goods (i.e. where goods are effectively sold by instalments such as "rent to own" arrangements). These are deemed to be credit contracts in terms of section 9 of Schedule 1 to the Credit Act.
•Consumer leases – Contracts for the hire or rental of goods for a set period, where the consumer does not have a right or obligation to purchase the goods and the amount payable under the contract exceeds the cash price of the goods is defined in section 169 of Schedule 1 of the Credit Act.
The pre contractual and contractual disclosure obligations for consumer leases and credit contracts (i.e. goods lease) are different.
As the name of your company, website and business, Rent4Keeps, indicates that the consumer has a right to keep the goods, we ask that you clarify your business model and also demonstrate what information you are disclosing to consumers concerning their financial commitments and their rights and obligations in relation to ownership of the goods.
ASIC also expressed concerns relating to:
(a)misleading statements in relation to the representation in the business name “Rent4Keeps” which may mislead or deceive a customer that they have a right to purchase “whereas in fact they may only have a right to determine to whom the goods may be gifted”.
(b)certain representations made which could have the potential to create an expectation by the consumer that the Rent4Keeps Business “rent[s] to everyone”. Such a claim was inconsistent with a licensee’s responsible lending obligations.
ASIC required a detailed explanation of the Rent4Keeps Business and customer contract terms.
Mr Payne instructed Holley Nethercote to respond to ASIC’s concerns. Mr Payne selected Holley Nethercote because, based on his inquiries, he had found out Holley Nethercote had performed services for ASIC and he wanted his business to be “ASIC-proof”.
By letter dated 8 March 2013, Holley Nethercote responded to ASIC’s letter, stating that “Rent4Keeps provides consumer leases only” and “does not provide credit under credit contracts or pursuant to sale of goods by instalments arrangements”. Holley Nethercote went on to say:
At the end of the rental term Rent4Keeps may, at its discretion, gift the goods which are the subject of the rental agreement to a person nominated by the lessee. There is no right or obligation for the hirer of the goods to purchase the goods at the end of the rental term.
Holley Nethercote noted that:
(1)Several aspects of the “Operations Manual” were being updated as the Rent4Keeps Business was “in the process of introducing a new Customer Relationship Management (CRM) software system”. The CRM system was implemented to improve record keeping and in compliance particularly with respect to responsible lending obligations.
(2)It had undertaken a review of the Rent4Keeps Business’s advertising material and changes were being made.
Holley Nethercote submitted that “‘Rent4Keeps’ can have several meanings and, coupled with Rent4Keeps [sic] credit disclosure documents and rental agreement, consumers will not be misled by the Rent4Keeps name” and that the name “Rent4Keeps” was not misleading given “that the consumer keeps the benefit of the product, if they want, without the right or obligation to purchase”.
Holley Nethercote represented to ASIC that it had reviewed the Rent4Keeps Business’s rental agreement in light of new obligations that were imposed from 1 March 2013 by amendments made to the Credit Act.
A copy of what was said to be the Rent4Keeps Business’s current template Rental Agreement, as updated in February 2013, was attached to the Holley Nethercote response. That template included at Item 3(d) of the Renter Declaration the following:
At the end of the Rental Term, Rent4Keeps may, at its discretion, gift the Products to the following person nominated by me:
Clause 5 of the template Terms and Conditions provided:
5. Ownership and Interest
5.1You have a right to use the Products during the Term, but the Products remain the property of Rent4Keeps until the end of the Rental Agreement.
5.2At this time, if you have met all the terms and conditions of the Agreement then Rent4Keeps will gift the item/s to the person nominated by you in “Renter Declaration” subsection d) on the previous page.
By letter dated 27 June 2013, ASIC responded to Holley Nethercote expressing concerns about the form of the Rent4Keeps Business’s customer contract as follows:
After reviewing the template copies of the contracts you have supplied, we are of the view that the contracts on offer appear to be a sale of goods by instalment agreement, rather than a consumer lease.
You have indicated that the consumer may nominate who is to receive the goods at the end of the fixed term of the agreement. The name of this nominee appears to be inserted at clause 3d of the ‘Tax Invoice and Rental Agreement’ (the agreement).
Clause 3d states:
‘At the end of the Rental Term, Rent4Keeps may, at its discretion, gift the Products to the following person nominated by me:’
Our concern is that there appears to be nothing in the agreement stipulating who may be nominated to receive the goods at the end of the rental term.
In addition, clause 5 of the agreement says at 5.2
‘At this time [end of the Rental Agreement], if you have met all the terms and conditions of the agreement then Rent4Keeps will gift the item/s to the person nominated by you in “Renter Declaration” subsection d) on the previous page.’
In this clause, it is indicated that the company will gift the items to the nominated person. This is indicating the company’s intention to release the goods — with the discretionary component that was indicated in clause 3d, removed.
If the nominated person is the renter, and they are assured of ownership at the conclusion of the agreement then the contract would appear to give the renter a right or obligation to purchase the rented item.
ASIC thus expressed its concerns as:
(1)There appears to be “nothing in the agreement stipulating who may be nominated to receive the goods at the end of the rental term”.
(2)The wording of cl 5.2 “indicated that the company will gift the items to the nominated person” and this indicated “the company’s intention to release the goods — with the discretionary component that was indicated in clause 3d, removed”.
(3)If the nominated giftee was the renter and they were assured of ownership at the conclusion of the agreement, then the contract appeared, in ASIC’s view, “to give the renter a right or obligation to purchase the rented item”.

Holley Nethercote responded to ASIC by letter dated 10 July 2013, representing that:
The ‘Tax Invoice and Rental Agreement’ that Rent4Keeps uses has been amended in response to ASIC’s observations and concerns (the Amended Agreement). The amendments make it clear that while the renter may nominate the person whom they wish to be given the rented goods (the Goods), Rent4Keeps at all times retains the discretion to gift the Goods or not. The renter does not have a right to retain the goods or gift the goods to another at the end of the lease term.
The Amended Agreement is attached at Annexure A. The amendments are as follows:
Clause 3d of the Renter Declaration now states:
‘At the end of the Rental Term, Rent4Keeps may, at its discretion, gift the Products to a person nominated by me. That person cannot be myself. Rent4Keeps is not bound by my nomination. The person I nominate is ______________________.’
Clause 5.2 of the Rent4Keeps Terms and Conditions now states:
‘At this time [end of the Rental Agreement], if you have met all the terms and conditions of the agreement then Rent4Keeps may gift the item/s to the person nominated by you in “Renter Declaration” subsection d) on the previous page’
These amendments clarify that the Amended Agreement is a consumer lease and not a sale of goods by instalments agreement.
The evidence was that none of the 2013 Holley Nethercote changes to the 2011 invoice and rental agreement were in fact implemented in 2013. The evidence was that the form of the contract in fact in use by Darranda did not change from the 2011 version prior to 2014.
On 14 January 2014, Mr Boucher informed Holley Nethercote of his proposal to include two fees to the invoice part of the Rental Agreement, which he annotated and sent to Holley Nethercote by email. The form of the invoice with his handwritten changes and terms and conditions sent by Mr Boucher was the 2011 version. Holley Nethercote responded to Mr Boucher noting the terms did not match those provided to ASIC and, by email sent on 23 January 2014, forwarded Mr Boucher a copy of its letter to ASIC of 10 July 2013.
Mr Boucher instructed Mr Chikyala by email sent on 23 January 2014 to “please use” the version provided by Holley Nethercote “in rolling out as our new invoice” and that Mr Chikyala would also need “other wording to be added to section 2”.
A customer rental agreement from December 2014, to which Darranda was a party, was consistent with the terms provided by Holley Nethercote to ASIC on 10 July 2013, but with the addition of a note below section 2 of the invoice disclosing that the total payment included an Agreement Administration Fee and Franchise Process Fee. The agreement supports Mr Chikyala’s evidence that he updated the CRM to reflect the Holley Nethercote terms that had been given to ASIC in July 2013.
Between October 2016 and the end of March 2017, Rent4Keeps (Aust) sought advice in relation to the inclusion of late and other fees in its rental agreements. Rather than seeking this advice from Holley Nethercote, Rent4Keeps (Aust) returned to Frenkel Partners.
By email sent on 29 March 2017, Frenkel Partners sent to Mr Boucher a marked-up copy of a document entitled “Rent4Keeps Tax Invoice & Rental Agreement”. The content of that document was different from any version that had been used by Darranda, even though the document used a Rent4Keeps Business trademark. The invoice section did not include any equivalent to 3d of the Renter Declaration provided to ASIC by Holley Nethercote. The terms and conditions included a marked-up cl 5 in the following terms:
5.        Ownership and Interest
5.1You have a right to use the Product during the Term, but the Product remain ~~the~~ Our property ~~of Rent 4 Keeps~~ unless ownership is transferred to You at the end of end of the Term in accordance with this Agreement. During the term, You must not:
a)        part with possession of the Product; or
b)        give another person an interest in the Product.
5.2Subject to the terms of this Agreement, at the end of the Term, provided You have complied with all of Your obligations under this Agreement, ownership of the Product automatically transfers to You.
The terms of the Frenkel Partners document were not consistent with a consumer lease.
On around 5 April 2017, the Rent4Keeps Business’s CRM system was updated to include the terms and conditions from the Frenkel Partners document (including cl 5 (as amended) as set out in [72]) but continued to use the form of the invoice provided by Holley Nethercote (including 3d in the form provided to ASIC in the letter of 10 July 2013).
On 6 April 2017, Mr Allen amended cl 5.2 of the terms and conditions on the Rent4Keeps Business’s CRM system. No amendment was made to cl 5.1. The amended cl 5 as at 6 April 2017 provided:
5.        Ownership and Interest
5.1You have a right to use the Product during the Term, but the Product remain Our property unless ownership is transferred to You at the end of end of the Term in accordance with this Agreement. During the term, You must not:
a)        part with possession of the Product; or
b)        give another person an interest in the Product.
5.2Subject to the terms of this Agreement, at the end of the Term, provided You have complied with all of Your obligations under this Agreement, ownership of the Product automatically transfers to the nominated giftee.
Mr Allen passed away in 2019. The basis of and the reasons for the amendments he made are not known.
ASIC inquiries of the Rent4Keeps Business
In December 2014, ASIC informed Mr Allen that ASIC Licensing had decided to recommend the refusal of an Australian Credit Licence application made on behalf of a Rent4Keeps franchise entity. The reasons included:
•the Applicant does not have adequate supervision and monitoring procedures to ensure credit services provided by its representatives are compliant.
•the Applicant's responsible lending policies do not meet the requirements set in ASIC's Regulatory Guide 209: Credit licensing: Responsible lending conduct.
In late 2014, Mr Allen approached Mr Chikyala to work on strengthening the CRM to ensure regulatory compliance.
In February 2015, ASIC issued a notice to Darranda requiring it to lodge a written statement pursuant to s 49 of the Credit Act. The notice was directed to matters relating to Darranda’s compliance with its responsible lending obligations.
Throughout 2016, Rent4Keeps (Aust) made changes to its systems, including improvements to its CRM to centralise its process for credit assessments. Training was implemented to foster a culture whereby franchisees were to use and follow the CRM which was to be viewed within the Rent4Keeps Business network as the “source of all truth”. Amongst the changes made to the processes was a modification to the algorithm relating to the processing of applications which required a giftee name to comprise more than three characters. The characters could be symbols and spaces.
On 29 September 2016, there was a licensing cancellation hearing at which Darranda sought to challenge a proposed decision by ASIC to cancel Darranda’s Australian Credit Licence. At the conclusion of that hearing before the Administrative Appeals Tribunal, Darranda made an offer for ASIC to review the changes and new systems Darranda and the Rent4Keeps franchise network had implemented to address ASIC’s concerns. ASIC suggested that an independent third party be engaged to conduct that review and report back to ASIC. The review would need to focus on responsible lending and how the processes implemented addressed ASIC’s concerns. ASIC put the following to Darranda:
When accepting a consultant we would require advice that there has been no previous relationship with the consultants to ensure their independence. Generally we are also provided with details of the expertise/experience of those conducting the review (ie CV of the key people involved in the review) to show their qualifications to conduct a review in this area. For a review of this kind, we would expect the key persons involved to have experience with the application of the responsible lending laws.
Mr Payne sought to appoint Pitcher Partners to conduct the review of the Rent4Keeps Business’s credit assessment process.
It took some months before ASIC and Darranda could reach agreement on an appropriate third party consultant to conduct the review and the terms of engagement. While ASIC was satisfied that Pitcher Partners was qualified to conduct an audit of the processes and procedures that Rent4Keeps (Aust) had implemented, ASIC was not satisfied that Pitcher Partners was qualified to provide an opinion on whether those processes were sufficient to make Darranda (and the Rent4Keeps network more generally) compliant with the legislated responsible lending obligations. On 2 November 2016, ASIC gave Mr Boucher a list of possible compliance consultants. One of those consultants named was from Holley Nethercote. ASIC also raised the prospect of imposing a condition on the Australian Credit Licence held by Darranda and/or Rent4Keeps (Aust).
In November 2017, Rent4Keeps (Aust) continued to refine its CRM system, including improving the interface with myGov services and introducing improved expense and income validations within the CRM system.
Pitcher Partners met with Holley Nethercote in the first half of the 2017 calendar year to formulate audit procedures with a view to commencing an audit before the end of May 2017.
On or about 23 November 2017, ASIC informed Rent4Keeps (Aust) of conditions it proposed to put on Rent4Keeps (Aust)’s Australian Credit Licence. Those conditions included:
1) The licensee must:
(a) By 24 November 2017 engage an external compliance consultant (the Consultant), whose appointment and terms of reference are to be approved by ASIC in writing.
…
(c) require the Consultant to undertake a review of the licensee’s franchisees and representatives as specified by ASIC compliance with the following provisions:
(i)the general conduct obligations under section 47 of the National Consumer Credit Protection Act 2009 (National Credit Act); and
(ii)The responsible lending obligations under Chapter 3 of the National Credit Act;
….
(f) ensure that the Consultant submits the report…to the licensee and ASIC by 15 December 2017.
Pitcher Partners was engaged in November 2017 to prepare a written report as required by the Australian Credit Licence conditions. Pitcher Partners in turn engaged Holley Nethercote to assist in the review.
Pitcher Partners provided a final report dated December 2017. While the final report was issued by Pitcher Partners, Holley Nethercote had undertaken an assessment of the Rent4Keeps Business’s key documents, including the tax invoice and rental agreement that had been used in November 2017. Pitcher Partners relied on Holley Nethercote’s legal opinion relating to the Rent4Keeps Business’s compliance with the requirements of the Credit Act. Pitcher Partners assessed customer files based on a compliance checklist provided by Holley Nethercote.
Holley Nethercote provided a draft of its report dated 30 November 2017 to Mr Boucher. On page 40 of a 48 page report, which canvassed a range of topics relating to the statutory obligations imposed on Rent4Keeps (Aust) and its franchisees, was a subheading entitled “Consumer Lease Agreement”, where the following observation was recorded:
Fundamental to the distinction between a credit contract and a consumer lease is whether the customer has the right or obligation to acquire the goods at the end of the lease. The Paragraph 3(d) of the Renter declaration makes it quite clear that the customer does not have any such right or obligation. Rather, Rent4keeps may, at its discretion, give the product to a person nominated by the consumer.
However, clause 5 of the terms and conditions is unclear. Clause 5.1 contemplates ownership being transferred to You (the consumer) at the end of the Term. Clause 5.2 says that at end of the term ownership of the Product automatically transfers to the nominated giftee. Clause 5.1 and 5.2 seem inconsistent with each other, and clause 5.2 seems to be at odds with the discretion referred to in the Renter Declaration.
The Renter Declaration and clause 5.2 would not give rise to a credit contract, but clause 5.1 with its reference to 'You' confuses the matter.
Draft recommendation 39 (out of 40 draft recommendations made) was that:
…Rent[4]Keeps conduct a review of its terms and conditions to rectify this uncertainty and also for any provisions that may offend against the unfair contract terms legislation
In early December 2017, one of the partners of Holley Nethercote met with Mr Payne, Mr Boucher and Mr Allen to discuss the draft report.
On the following day, Mr Boucher met with Mr Allen. Mr Boucher made a handwritten notation on the copy of the draft provided to him to change “You” to “giftee” in the margin next to the second paragraph set out at [89] above. Mr Boucher gave Mr Allen his copy of the draft Holley Nethercote report with Mr Boucher’s handwritten notation and asked Mr Allen to implement that change. The next day, Mr Allen returned that copy to Mr Boucher and told Mr Boucher the change had been made.
A purported final version of Holley Nethercote’s report was issued on 14 December 2017. Unlike the draft provided to Mr Boucher, the 14 December 2017 report included the following observations:
[Under a heading Compliance Procedure]
There was a physical Operations Manual provided to Franchisees in 2012. In 2015 a project was commenced to updated [sic] the Operations Manual. However, this was discontinued in favour of replacing a physical Operations Manual with the procedures that are available through the CRM.
Nevertheless I was provided with copies of the 2015 Operations Manual. My understanding is that this Operations Manual has not been made available to Franchisees. The Operations Manual was very readable and contained a lot of excellent material on conducting a small business and a user friendly ‘how to’ in relation to operating a franchised territory. However, it was largely silent in relation to the National Credit Act. Some parts of the Operations Manual were incorrect in dangerous ways. For example in describing the rent for keeps offering:
3.1.9.1 –“At the end of the rental term the customer keeps the product, free of charge.” “Rent4Keeps our name says it all”
3.1.9.3 “Product is the customers at the end of the agreement”.
3.3.8 Scripting requiring the Franchisee to tell the customer that “At the end of the Lease they OWN THE GOODS – it’s’ that simple”
All these passages suggest that the customer has a right at the end of the lease to the goods. This would make the rental agreement a credit contract, rather than a consumer lease.
It is inconsisent [sic] with text presumably added later that explains that Rent4Keeps may at its discretion gift the product at the end of the term.
And later:
The Scripting for Explanation of Documents makes it clear that there is no right or obligation to purchase the goods at the end of the lease. However, not all Territory managers follow the script and we received mixed explanations.
The Operations Manual 2012, which many Franchisees will have, is very unclear in relation to the right or obligation to purchase the goods at the end of the lease and may be contributing to the variations in approach taken by the interviewees. (See comments above under Compliance Procedure at page 14).
We recommend that training focus on the importance of explaining this component of the contract correctly.
Not all statements recorded as appearing in the 2015 Operations Manual (which was not before the Court and there was no evidence that it was ever provided or made available to franchisees) appeared in the 2012 version of the Operations Manual. Instead the 2012 Operations Manual included the following statements:
R4K Services
…
At the end of the rental term we allow the customer to give the product, free of charge, to a person of their choosing
…
Rent4Keeps - Our name says it all!
…
Shopping Centre Displays Guidelines
…
When addressing the clients, your typical discussion will be along the lines of:
Hello, my name is …………………… from R4K.
Can I explain our business and service to you?
OK Thanks.
We are a locally based home appliance and furniture rental business.
We offer clients the opportunity to choose any BRAND NEW white good, electrical appliance or furniture they need from any supplier and we rent it to them for a year to two years and at the end of the term they OWN THE GOODS. It is that simple.
The Pitcher Partners report recorded the following finding:
In light of the identified shortcomings in R4K’s processes and procedures additional and ongoing training is required to be provided to all employees on:
•Responsible lending;
•How licensees ensure they comply with the Responsible lending practices;
•The roles and responsibilities of licensees and credit representatives;
•Provision of leases in an efficient, honest and fair manner (including not falsifying records associated with the provision of credit); and,
•Key roles and responsibilities for compliance across R4K.
It was also identified that R4K Responsible Managers had significant knowledge and experience on responsible lending but did not demonstrate an understanding of the general obligations under Section 47 of the Act.
It was found that there was also inconsistent practices about the gifting of the product at the conclusion of the lease.
The Pitcher Partners report included a corresponding high priority recommendation that training be developed which informed staff about each of the above matters, as well as:
additional and ongoing training should be conducted (as part of employees annual training requirements) on the general compliance obligations under the National Credit Act and broader regulatory changes affecting the credit industry, ie, privacy, competition law, cyber security etc.
R4K should update their training for all staff and franchisees to ensure they understand the importance of the gifting provisions in their consumer leases.
On 15 February 2018, Mr Boucher sent an email to ASIC attaching Rent4Keeps (Aust)’s response to the Pitcher Partners report. Included in that response was the following representation:
The terms and conditions of the R4K Tax Invoice and Agreement have been amended so any ambiguity with the gifting provisions are eliminated.
R4K (Aust) have also revised their internal credit application and agreement process to include audio scripting for all applications.
All customers will be played a recorded audio which explains, in plain English, the terms and conditions of the consumer lease including important issues like gifting.
By email sent to him on 22 February 2018, Mr Boucher received another version of the final Holley Nethercote report dated 19 December 2017. Relevantly, under the heading Compliance Procedure, was the following (emphasis added):
There was a physical Operations Manual provided to Franchisees in 2012. In 2015 a project was commenced to updated [sic] the Operations Manual. However, this was discontinued in favour of replacing a physical Operations Manual with the procedures that are available through the CRM. The Operations Manual is not in use.
Nevertheless I was provided with copies of the 2012 and 2015 Operations Manuals. My understanding is that the 2015 Operations Manual has not been made available to Franchisees. However, some Franchisees will have been provided with the 2012 Operations Manual.
Contrary to the observation in the Holley Nethercote report, Mr Payne’s evidence was that the 2012 Operations Manual was not used and instead was replaced with two documents — one entitled “R4K Credit Process” and the other entitled “R4K Procedures for Debt Management” which were authored by Mr Tannous in about 2013.

It is unnecessary for me to resolve the conflicting evidence as I am satisfied that by the relevant period in 2019, the 2012 Operations Manual was not in use.
Regulatory reports in relation to consumer leasing
On 7 August 2015, the Federal Government announced a review of the small amount credit contract (SACC) laws contained in the Credit Act. The review also covered consumer leases. The Government asked the Review Panel to examine and report on the effectiveness of the law relating to SACCs and to make recommendations on whether any of the provisions which apply to SACCs should be extended to consumer leases.
In September 2015, ASIC issued Report 447 entitled “Cost of consumer leases for household goods” which set out ASIC’s findings on the costs charged by providers of leases of household goods. The report recorded:
[36]From our previous work reviewing lessor conduct, we have found that many lessors operate a model in which the consumer is able to have continued use of the leased goods (or similar goods) at the end of the lease for minimal or no additional cost. This feature is disclosed to the consumer both in advertising and also at the time that the consumer is entering into the lease. In cases where the purchase price of the goods is so low that the lessor is unlikely to have any commercial value at the end of the lease, there is a strong disincentive for the lessor to regain possession of the leased goods.
[37]Lessors arrange for the consumer to retain possession of the goods at the end of the lease contract, using two approaches:
(a)a rent-to-buy model, under which there is an expectation that the consumer will be able to buy the goods at the end of the lease for a token or nominal amount; and
(b)a gift model, in which the lessor agrees that the leased goods can be gifted to a third party as nominated by the consumer.
In December 2015, the Review Panel published an interim report entitled “Review of the Small Amount Credit Contract Laws” setting out the Review Panel’s initial observations. One of those observations was:
The high cost of consumer leases appears to be causing consumers financial harm. While there are technical differences between credit contracts and consumer leases, these differences do not appear to justify consumer leases being excluded from the consumer protection regulations that apply to other forms of finance under the Credit Act.
The report also referred to Rent4Keeps as an example of a lease provider using a business name “which implied that the consumer would become the owner”.
Rent4Keeps (Aust) made a submission to the Review Panel in respect of the interim report.
In March 2016, the final SACC report was issued. It recommended the introduction of a cap on the total amount of the payments to be made under a consumer lease of household goods. The Review Panel recommended a higher cap than allowed in general for credit products “to ensure a viable continuing consumer lease of household goods market”. The higher cap was to cover the additional costs associated with providing services for leased goods. The report included the following observation:
The Panel also notes that under the law a lessor under a consumer lease retains ownership of a good and cannot guarantee ownership to the consumer at the end of the agreed lease period. However, in practice, many consumer lease providers have mechanisms to allow ownership at the conclusion of the term to pass to the lessee or their nominee. This practice highlights the artificiality of the distinction under the National Credit Code between sales by instalment (including hire purchase) which currently are subject to the 48 per cent APR cap and consumer leases which currently escape any cap. The distinction, which is based on form rather than substance, provides no reason not [to] seek to achieve similar consumer protection, whether through appropriate caps or otherwise, for both categories of products.
On 28 November 2016, the Government released its response to the Review of the Small Amount Credit Contract laws.
In October 2017, an exposure draft of the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2017 was released for consultation. The consultation period was 22 October 2017 – 3 November 2017.
Rent4Keeps (Aust) made a joint submission with Rent the Roo and Local Appliance Rentals. The submission was entitled “Submission from Franchise Leasing Group (FLG)”. The submission was concerned that the cap proposed to be introduced by the Bill (being a multiple of 1.48 of the base price of the goods) was too low and would result in the consumer lease industry becoming unviable. A cap of two times the base price was sought.
Following the public consultation, the Bill was not progressed.
Reforms, including the introduction of a cap on costs charged under consumer leases, were enacted by the Financial Sector Reform Act 2022 (Cth). The cap applies to consumer leases entered into, or variations to consumer leases made, on or after 12 June 2023.
Darranda’s customer processes during the relevant period
During the relevant period, the process implemented by Darranda (and the broader Rent4Keeps franchise network) by which customers came to enter rental agreements with Darranda involved the following.
Customers interested in obtaining the use of a product from the Rent4Keeps Business made an enquiry either through the Rent4Keeps website or by calling the Rent4Keeps office. The website and office were operated by Rent4Keeps (Aust). These customer leads were received by a centralised leads officer.
Customers who made an enquiry then completed an application process. The purpose of the application process was to assess the credit capacity and character of the customer. The centralised leads officer receiving the enquiry asked the customer for information including the customer’s address, previous addresses and the names and contact details of at least two referees. The customer was then sent a number of links for the customer to attach financial information such as bank statements and myGov statements to send to the Rent4Keeps Business. The centralised leads officer reviewed this information to obtain an understanding of the customer’s income and expenditure. The centralised leads officer obtained further details of the product being sought by the customer.
The application was assessed against a credit approval matrix. The approval process involved the use of a Quick Rental Calculator to calculate the amount of the fortnightly payments (which were a function of the cost of the product, other charges and the length of the rental period) and assess whether the customer had the capacity to pay those fortnightly payments based on the customer’s income and expenditure. A credit search was also conducted using credit data and information from Equifax and the results of that search recorded by the centralised leads officer.
The completed application and supporting information was forwarded by the centralised leads officer to the Rent4Keeps Centralised Credit Compliance team for review. Once reviewed, the application was submitted into the software system for approval by a credit officer. Once the system recorded the application as approved, the centralised leads officer phoned the customer to inform the customer of the approval, confirmed the product details and obtained the name of a person who the customer nominated as “giftee”.
Customers were allocated to a franchisee by a centralised leads officer, based on the location of the customer. Darranda was allocated customers in areas designated as Darranda franchise areas. Once the customer application was approved, and the product details confirmed, the franchisee allocated to the customer purchased the product sought by the customer from a retailer with the franchisee’s own funds.
After purchasing the product, Darranda’s field representative attended the customer’s premises. The field representative was expected to assess the customer’s need for the product. If the field representative was satisfied that the customer had a genuine need for the product, the field representative used an iPad (or other tablet device) to complete the rental agreement and tax invoice form with the customer. The form included a block for the nominated giftee name to be completed. The evidence (which I accept) was that during the relevant period to complete this block more than three characters were required to be entered. However, those characters could include symbols or spaces. The customer created a proforma signature and initials on the tablet. The field representative was then required to enter the representative’s own signature on the tablet.
Under Darranda’s processes, it was expected that field representatives would draw the customer’s attention to the terms of the agreement and to the terms of the Renter Declaration. An audio recording was required by the system to be played before the system enabled the next step to be completed. The script for the audio recording was in the following terms:
<<Applicant Name>> of <<suburb>>. Please listen carefully to the following message in relation to your rent for keeps rental agreement. The agreement is for a <<product name>>. The agreement term is for <<term>> months. There will be <<number of schedule payments>> scheduled. <<payment frequency>> payments of $<<scheduled amount>>. The total agreement value will be <<$>>. At the completion of the rental term Rent4Keeps may at its sole discretion gift the product or products to the person nominated by you. For this agreement that person is <<giftee>>. Rent4Keeps is not bound by your nomination. Your payment conduct over the term of the agreement will determine if the product is gifted at the end of the term. If you agree with this recorded statement and you do not require any changes please proceed to sign as your acknowledgement and your complete acceptance of these terms.
The audio recording was “dynamic” in the sense that it automatically adopted the applicant’s name, suburb, product name, rental term and payment details.
Once the computer system registered that the audio had been played, the system enabled the customer to apply their signature to the agreement and adopt their initials at different parts of the agreement. After the customer signature blocks were completed, the field representative applied the representative’s signature in the respective signature block. An email was sent to the customer attaching a signed copy of the agreement.
Once the agreement was signed, the field representative handed the product to the customer or, in the case of large bulky products, confirmed the third party delivery details with the customer.
Once the system registered the agreement as having been signed, the system generated a task to press a button in the system to produce a welcome letter to be sent to the customer (generally by email).
When the system registered that the customer had two rental payments left to be made, the system generated a task for the centralised leads officer to either have the system send a letter (by email), an SMS or to have the centralised leads officer call the customer. The customer was asked if the customer wished to secure another product. In at least some instances, the SMS sent to the customer informed the customer that there were two payments left to be made and if the customer made at least one of those payments, the last payment would be waived. There was no mention in the letter or SMS of the product being gifted or the possibility of it being gifted at the end of the contract term.
Once the system registered all payments as having been made, the system generated three tasks to be completed by a representative or employee of the Rent4Keeps Business. The three tasks were:
(1)Check that Centrepay deductions had ceased to be made from the customer’s Centrepay payments.
(2)Call the customer to tell the customer that the agreement had come to its end and check with the customer that there was no change to the nominated giftee. In respect of customers of Darranda, these tasks were undertaken during the relevant period by a contractor, Ms Sheryl Privitelli. If the nominated giftee name had changed, Ms Privitelli was tasked with updating the name of the nominated giftee recorded in the system.
(3)Have a letter sent to the customer confirming the agreement had come to an end and ask the customer if they would like to rent another product. The letter made no mention of the product being gifted at the end of the contract term.
I find that, contrary to ASIC’s submissions, this was the process provided for in the systems used by Darranda. However, there was nothing in the process that provided for a delegate or representative of Darranda to exercise a discretion at the end of the agreement. Darranda did not seek to repossess the products at the end of the agreement or contact the nominated giftee to inform the nominated giftee that Darranda had transferred ownership of the product to them. Darranda did not seek to confirm if the customer retained possession of the product after the end of the agreement.
In cross-examination, Mr Boucher gave the following evidence (emphasis added):
APPLICANT’S SENIOR COUNSEL: Now, these customers needed those goods, they were often household appliances and other essentials; correct?
MR BOUCHER: Yes.
APPLICANT’S SENIOR COUNSEL: And they were not able to access credit for those goods easily elsewhere from banks and the like; correct?
MR BOUCHER: Correct.
….
APPLICANT’S SENIOR COUNSEL: They continued to need the goods throughout the course of the rental agreement; right? They needed a fridge at the start, they needed a fridge at the end; correct?
MR BOUCHER: Yes.
APPLICANT’S SENIOR COUNSEL: And there was no action to take that fridge away from them at the end of the agreement; correct?
MR BOUCHER: Correct.
APPLICANT’S SENIOR COUNSEL: And when you give them the marketing touch point call, you don’t say, “We’re coming to get the fridge. Can we get you a new one?” you assume that they will keep it, right?
MR BOUCHER: No.
APPLICANT’S SENIOR COUNSEL: So if you assume they won’t keep it, why was it not part of your marketing to offer them a new essential product, the same product?
MR BOUCHER: We didn’t ask for them – the same – we didn’t ask them if they ..... another – two fridges.
APPLICANT’S SENIOR COUNSEL: Exactly. You assumed they would keep the first fridge; right?
MR BOUCHER: No.
APPLICANT’S SENIOR COUNSEL: Does that not just contradict exactly what you just said; they wouldn’t need two fridges?
MR BOUCHER: Well, what are you going to do with two fridges?
In cross-examination, Mr Tannous gave the following evidence:
APPLICANT’S COUNSEL: Did you train your staff to suggest to consumers that they name as the giftee someone who was close to them, like their mum or their child?
MR TANNOUS: The customer was allowed to nominate anyone they felt comfortable with.
…Ideally, you want a family member.
HER HONOUR: Ideally, you want a family member?
MR TANNOUS: Yes.
Mr Payne’s evidence in cross-examination was:
APPLICANT’S SENIOR COUNSEL: So if we produce documents and copies of the website that suggest the language was used in those terms, “you keep the product”, you would be surprised by that?
MR PAYNE: Yes.
APPLICANT’S SENIOR COUNSEL: And if we produce documents and entries on the website that say, “The product is yours to gift at the end of the term to your partner, relative or anyone of your choosing,” you would be surprised by that too?
MR PAYNE: No, that’s right.
I find that Darranda generally expected the nominated giftee to be a member of the customer’s household and generally expected the customer would continue to have physical possession or use of the product after the end of the rental agreement. Mr Payne’s evidence was based on his understanding of how the concept of a consumer lease had operated in practice. That understanding was reflected in the following evidence:
MR PAYNE: Well, I pinched the concept. I copied the concept from Rent the Roo. So fundamentally it wasn’t really my concept. I looked at a concept that somebody else was doing. I thought it was going well. Been going for 80 years – the industry, and I thought I may as well join in. So I copied somebody else’s concept, and then proceeded to, you know, compete with them…
…and I thought that after looking at the Rent the Roo model and the amount of inquiries that I was getting, that I was more than well placed to develop a better system than that. That business – and that business had been going for 10 years. I then looked at the Thorn model [Radio Rentals] that had been going for 80 years. I thought I could develop a system better than they had, so as a consequence of those observations - - -
…
APPLICANT’S SENIOR COUNSEL: And you’ve given evidence there were no standard procedures in place requiring the franchisee to retrieve those goods, to deliver them to the nominated giftee or to make any contact with the giftee at all, okay?
MR PAYNE: No, in line with what the industry that has operated for 80 years, we did exactly what every other operator has done for the last 80 years. Exactly.
Given their lack of legal training, Mr Payne’s and Mr Boucher’s evidence is to be understood drawing no distinction between ownership (“keeping”) and possession. Because Darranda’s expectation was that the nominated giftee was a family member, the expectation was that the customer would continue to have access to the use of the product.
Franchisee training
Rent4Keeps (Aust) provided policies in relation to training to franchisees and staff. Between 2013 and 2018, Mr Tannous was involved in training franchisees and staff in relation to how to engage with customers, the application process, the assessment of customer applications and entering into customer contracts. Mr Tannous was familiar with the processes as they applied in the relevant period. Mr Boucher was also involved in reviewing training materials for franchisees and their representatives during the relevant period.
Messrs Tannous, Boucher, and Chikyala conducted up to four roadshow presentations each year where they travelled around Australia to demonstrate and train any changes to the Rent4Keeps Business’s processes. Memoranda were also provided to franchisees highlighting instructions on changes to the systems.
During the relevant period, training was focussed on the computer customer relationship management software system (whether it be called the CRM or enterprise resource management system, “ERP”). Within Rent4Keeps (Aust), this system was described as the “source of all truth” which is understood to mean that the system is to be the only source of information and all relevant information is to be stored in and found on that system. The use of the centralised automated system was regarded by management of Rent4Keeps (Aust) as critical to compliance with ASIC requirements.
In March 2016, Mr Tannous and Mr Boucher gave a presentation to the Rent4Keeps Business’s staff (including franchisees) entitled “R4K CRM Training”. The presentation noted:
(1)Audits completed since 2015 had shown that the majority of users did not record notes in the system and, if they did, the notes were insufficient. This resulted in changes being made to the software so that the system required notes to be entered in certain sections of the “R4K Application Process”.
(2)The focus was primarily on financial data collection to ensure compliance with responsible lending obligations. The fields to be completed included a record of why the customer required the product and why the agreement was approved.
(3)Attention was also given to the “giftee” nomination process. The presentation recorded that 12.5% of agreements written in 2015 had “incorrect” giftee names. Examples on another slide included “TBA”, “Mum”, “Cat”, “Wife”.
(4)The presentation included the following as a “Giftee Script”:
As I have explained to you this is a Rental Agreement and Rent4Keeps is the owner of the goods for the full term of the agreement. Once all of the rental payments have been made in full R4K need to decide what will happen to the rented goods and R4K may consider gifting them to the third party nominated by yourself today.
(5)The reason for having a “giftee” was because of the difference between a consumer lease and a hire purchase agreement. The presentation recorded the following:
•Consumer Lease - at the end of the credit term the goods may be:
•Returned
•Purchased for a nominal fee
•Given to a nominated giftee (R4K model)
•Higher [sic] Purchase – at the end of the contract the consumer owns the goods.
Higher Purchase = R4K would therefore have to quote the interest rate charged.
NOTE: The user will not be allowed to proceed in the agreement process if a first & surname have not been noted.

It was common ground that none of the 516 Relevant Contracts was a small amount credit contract within the meaning of s 5 of the Code.
By its further amended notice of defence, Darranda admitted that if the 516 Relevant Contracts (or any of them) were credit contracts:
(a)the 516 Relevant Contracts imposed a monetary liability in respect of an amount of a fee or charge or of an interest charge that exceeded the amount that may be charged under the Code (and therefore would be in breach of s 23(1) of the Code);
(b)the annual cost rate of the contracts exceeded the 48% cap provided for in s 32A of the Code;
(c)the 516 Relevant Contracts did not disclose the cash price of the goods, the annual percentage rate or rates, the method of calculating the interest charges or the frequency with which interest charges would be debited under the contract or the total amount of interest charges under the contract.
Because I have concluded that the 516 Relevant Contracts were credit contracts it follows that Darranda as a credit provider party to those contracts, contravened:
(a)ss 23(1) and 24(1)(a) of the Code;
(b)s 32A(1) of the Code;
(c)s 17(3)(c), (4)(a), (5) and (6) of the Code.
General obligations
Section 47(1)(a), (c) and (d) of the Credit Act provides:
(1)      A licensee must:
(a)do all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly; and
…
(c)       comply with the conditions on the licence; and
(d)       comply with the credit legislation; …
As explained below, Darranda failed to comply with one of the conditions of its credit licence during the relevant period by failing to have a “key person” and was therefore in breach of s 47(1)(c) of the Credit Act.
As a result of the contraventions of the Code, Darranda failed to comply with the credit legislation and was therefore in breach of s 47(1)(d) of the Credit Act.
“Efficiently, honestly and fairly”
In so far as s 47(1)(a) is concerned, ASIC contended that irrespective of whether the rental agreements were properly classified as “credit contracts” or “consumer leases”, Darranda failed to ensure that its credit activities were engaged in “efficiently, honestly and fairly” as required by s 47(1)(a) of the Credit Act.
Applicable principles
The principles applicable to a consideration of whether a licensee engaged in its licensed activities “efficiently, honestly and fairly” have been judicially considered in the context of s 912A(1)(a) of the Corporations Act 2001 (Cth). The principles are equally applicable to s 47(1)(a) of the Credit Act, which uses the same expression: Australian Securities and Investments Commission v Membo Finance Pty Ltd (No 2) [2023] FCA 126 at [37] (Yates J).
The principles were first elucidated by Foster J in Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414 and summarised by Beach J in Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208; (2020) 275 FCR 57 in the following terms (emphasis in original):
[506]First, the words “efficiently, honestly and fairly” are to be read as a compendious indication requiring a licensee to go about their duties efficiently having regard to the dictates of honesty and fairness, honestly having regard to the dictates of efficiency and fairness, and fairly having regard to the dictates of efficiency and honesty.
[507]Second, the words “efficiently, honestly and fairly” connote a requirement of competence in providing advice and in complying with relevant statutory obligations. They also connote an element not just of even handedness in dealing with clients but a less readily defined concept of sound ethical values and judgment in matters relevant to a client’s affairs. I have emphasised here the notion of connotation rather than denotation to make the obvious point that the boundaries and content of the phrase or its various elements are incapable of clear or exhaustive definition.
[508]Third, the word “efficient” refers to a person who performs his duties efficiently, meaning the person is adequate in performance, produces the desired effect, is capable, competent and adequate. Inefficiency may be established by demonstrating that the performance of a licensee’s functions falls short of the reasonable standard of performance by a dealer that the public is entitled to expect.
[509]Fourth, it is not necessary to establish dishonesty in the criminal sense. The word “honestly” may comprehend conduct which is not criminal but which is morally wrong in a commercial sense.
[510]Fifth, the word “honestly” when used in conjunction with the word “fairly” tends to give the flavour of a person who not only is not dishonest, but also a person who is ethically sound.
In addition to the above summary, Beach J made the following relevant observations:
(1)A contravention of the “efficiently, honestly and fairly” standard does not require a contravention or breach of a separately existing legal duty or obligation, whether statutory, fiduciary, common law or otherwise. The statutory standard itself is the source of the obligation (at [512]). However, breach of another provision may itself be sufficient to constitute a violation of general obligations: Australian Securities and Investments Commission v Westpac Banking Corporation (Omnibus) [2022] FCA 515 at [73] (Beach J). This has been applied in the context of the general obligation to ensure that the credit activities authorised by a licence are engaged in efficiently, honestly and fairly (see, Australian Securities and Investments Commission v Ferratum Australia Pty Limited (in liq) [2023] FCA 1043 at [48] (Kennett J)).
(2)The standard should be viewed as a “statutory norm” to be read in the applicable statutory context (at [519]).
(3)In relation to the term “fairly”:
(a)Judges applying s 912A(1)(a) have usually not sought to define “fairly” except to explain its structural setting in the composite phrase (at [520]).
(b)Dictionary definitions are not adequate for the task because they are intrinsically circular (at [520]).
(c)Although “fairly” cannot be defined by negative conditions (eg free from bias, free from dishonesty), to stipulate negative conditions is not unhelpful (at [521]).
(d)The term “fairly” is not to be viewed only from the perspective of an investor, borrower or other person interacting with the licensee. Fairness is to be judged having regard to the interests of both parties. The section is not a back door into an “act in the [best] interests of” obligation (at [522]).
(4)The section requires one to look at the licensee’s behaviour more generally than with regard to any one person (at [525]–[526]). The language of the relevant section here is in the generality of “the credit activities authorised by the licence”.
(5)The section does not require one to “ascertain the boundaries and content of a cause of action or an element thereof sounding in damages in favour of an individual (cf claims for misleading or deceptive conduct or statutory unconscionability)” (at [527]).
To this summary, the following may be added:
(1)Use of the word “ensure” imports a forward-looking element into the obligation. It is necessary not only to act efficiently, honestly and fairly from day to day, but to take steps to guard against lapses from that standard by employees or representatives: Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1422 at [146] (Downes J), citing Australian Securities and Investments Commission v AMP Financial Planning Pty Ltd (No 2) [2020] FCA 69 at [105] (Lee J); Ferratum at [49] (Kennett J).
(2)Although the subjective intentions of the alleged infringer may clearly be relevant, the standard may be unintentionally breached. Contravention is generally a matter for objective analysis: Australian Securities and Investments Commission v National Australia Bank Ltd [2022] FCA 1324 at [352] (Derrington J); Ferratum at [49] (Kennett J).
ASIC’s pleaded case
ASIC’s pleaded case was that during the relevant period, Darranda:
(1)entered into the hire contracts in circumstances where the gifting clauses were included for the purpose of having the hire contracts characterised as consumer leases and not credit contracts and avoiding obligations and/or limitations that apply to credit contracts but do not apply to consumer leases;
(2)induced consumers to acquiesce in entering into the hire contracts that contained the gifting clauses by:
(a)engendering in consumers a reasonable expectation that, despite the gifting clauses, they could keep the goods by reason of the use of the trademark “Rent4Keeps”, a logo using those words and the words “Rent new, rent now, rent4Keeps”, adopting a practice of assuring customers that they could keep the goods if the customer asked and not taking any steps to enforce the gifting clause or confirming that the goods had been gifted or otherwise taking steps to verify the identity of the giftee;
(b)offering the hire contracts to consumers who were financially vulnerable, in need of the essential good that they hired and unlikely to be able to obtain the good from elsewhere; and
(c)establishing momentum by already approving the application by the time the requirement to nominate a giftee was disclosed;
(3)used standard form hire contracts that were confusing as to whether ownership passed at the end of the contract term and, if so, to whom;
(4)after being put on notice in December 2017 that the standard form hire contracts contained inconsistencies that were relevant to their characterisation as consumer leases or credit contracts and, despite knowing that certain obligations and/or limitations applied to credit contracts that did not apply to consumer leases, failed to resolve the inconsistencies in their contracts;
(5)assuming the hire contracts are credit contracts, failed to comply with the rate cap or the disclosure requirements and accessed Centrepay in circumstances where it had been approved to use Centrepay on the basis that the hire contracts were consumer leases;
(6)adopted and implemented a business model and processes with some or all of the above features and in the above circumstances where it was required to ensure that it did not do so, it generated financial reward for itself at the expense of its clients;
(7)failed to have an officer of Darranda, or a person performing duties on behalf of Darranda, acting as the “key person” for the purposes of its Australian Credit Licence and failed to notify ASIC within five business days, or at all, that the “key person” had ceased to be an officer of Darranda or to perform duties on behalf of Darranda with respect to its credit business and to lodge with ASIC an application for variation of that condition as required by s 47(1)(c) of the Credit Act; and
(8)failed to have in place necessary compliance measures to ensure that the matters identified in the preceding subparagraphs did not occur.
In so far as the “key person” matter is concerned, ASIC provided the following particulars:
Harry Fares was the “key person”, being an appropriately qualified and experienced person nominated by the licensee and approved by ASIC to be responsible for the day‑to-day oversight of the credit activities authorised by the licence. Harry Fares ceased to be an officer of Darranda or to perform duties on behalf of Darranda on 12 November 2018.
There are parts of ASIC’s case that appear to elide the obligation to engage in licensed activities efficiently, honestly and fairly with an obligation to act in the best interests of the customers. As Beach J observed in AGM Markets, the standard of “efficiently, honestly and fairly” is not to be viewed solely from the viewpoint of the customer. The fact that Darranda sought to generate a financial reward by offering a product that was directed to consumers in need of the product and who would otherwise struggle to access the product does not of itself demonstrate that Darranda failed to do all things necessary to ensure that the credit activities authorised by its licence were engaged in efficiently, honestly and fairly.
Nor does the fact that Darranda attempted to deliberately structure its arrangements so as to satisfy the definition of consumer lease in order to be subject to the requirements applicable to consumer leases as opposed to a credit contract establish a failure of the “efficiently, honestly, fairly” standard. To this end, there is merit in the Respondents’ submission that the Code recognised a distinction between a consumer lease and a credit contract and subjected the two categories to different regulatory requirements. A conscious decision by those conducting a business to seek to adopt one form of contract over another does not result in a breach of the standard of efficiently, honestly and fairly.
I also accept that Darranda did not deliberately seek to engender a belief in customers that they would be entitled to own the product at the end of their rental agreements. Darranda sought to train staff and representatives to explain to customers that they would not own the product at the end of the rental agreement.
However, for the reasons set out above, the rental agreements did not satisfy the definition of consumer lease because, although the contract required that ownership not be transferred to the customer, the contract operated to transfer ownership to the customer’s nominee and thus provided for a purchase by the customer at the end of the rental term, subject only to the customer complying with the terms of the agreement. As a result, the agreements were credit contracts and did not comply with the requirements of the Code. A failure to comply with a requirement of the Code can itself demonstrate a failure to engage in credit activities efficiently, honestly and fairly: Westpac at [73] (Beach J); Ferratum (Kennett J).
The name “Rent4Keeps”
ASIC submitted that by using the business and trademarks “Rent4Keeps”, Darranda engendered in consumers a reasonable expectation that, despite the gifting clauses, they could keep the goods.
Use of the name “Rent4Keeps” must be evaluated in the context of the circumstances as a whole.
When Mr Payne commenced the Rent4Keeps Business, he had little to no understanding of the legal requirements of a consumer lease or how a consumer lease was different from a credit contract or hire purchase agreement. His evidence in ASIC examinations was that he chose the name because it was “catchy”.
By 2013, Mr Payne was on notice from ASIC that:
(1)A consumer lease required that the hirer not have the right to acquire the goods rented.
(2)The name “Rent4Keeps” had the potential to mislead customers into believing that they did have such a right.
At trial Mr Payne under cross-examination said that the name “Rent4Keeps” had special significance for him:
…what I’m saying is, in terms of the business creation, the name, which is what you started your questioning on, the business creation of the name, it had nothing to do with the customer. It was everything to do with me and my family and my wife. We were having a rental business for life, for keeps. We were going to keep it. Dad, what he said to me, you know, “Whatever you do in life, son, do it for keeps. Be good to people, but do it for keeps”. And that’s what I did. That was the “keeps” angle. That was the – the “4Keeps” bit that was in my heart when I came up with that name, and there was nobody I showed that said anything different to me.
Mr Payne’s evidence on this point was in the nature of ex post reconstruction, having regard to the fact that Mr Payne had been questioned about the name both at trial and earlier by ASIC in its examinations. I attach no weight to this part of Mr Payne’s evidence. It is not supported by the contemporaneous documents (in the form of the Operations Manuals which he drafted) or his earlier testimony.
In relation to the relevant period, ASIC relied upon the following as instances of Rent4Keeps (Aust) and Darranda using the term “Rent4Keeps” as a verb to convey to customers that the customer would keep the goods rented:
(a)use of the registered trade mark “Rent new! Rent now! Rent4Keeps!”; and
(b)use in advertising of the slogan “It’s as easy as 1… 2… 3. 1. Select the goods. 2. Call us & we visit. 3. Rent4Keeps”.
I do not consider that it is appropriate to analyse these catchphrases in grammatical terms. The catchphrases may also convey that if the consumer wishes to rent something new immediately, the consumer should contact the business called “Rent4Keeps”.
ASIC relied upon a screenshot of an archived website. The screenshot had a tab labelled “Rent To Own: Appliance Rentals” above the search bar. ASIC sought to rely upon this tab label as conveying to consumers that they would own the product. A relevant extract of the image relied upon is depicted below:
There was no expert evidence explaining how the tab label was generated much less how a consumer might interpret or rely upon a tab label appearing above an internet search bar. Mr Payne gave evidence of his understanding that the tab label was in some way related to a google search result and that he had engaged a “Google expert” who Mr Payne believed had ensured that the Rent4Keeps Business would be returned in response to a search request for “Rent to Own”. Mr Payne’s evidence was speculative. In the absence of expert evidence in respect of how the tab was generated, no weight is accorded to the existence of this image.
Although in and of themselves, the use of the trading name and its related slogans does not demonstrate that the terms of the written agreement were a sham during the relevant period, having been put on notice that the name “Rent4Keeps” was apt to convey to customers that they would keep the goods, it was critical that the terms of the rental agreements and communications to customers were clear. The evidence was that Darranda’s officers, and those providing services to Darranda, were not even aware of the actual terms Darranda was using in its business. That itself was reflective of the deficiencies in the manner in which Darranda conducted its affairs.
ASIC also sought to rely upon an SMS message sent to customers in December 2018 that included the following:
Last minute gift ideas? Think R4K! Gaming/Phones/Tablets & more. Gr8prices!
The SMS message sent in December 2018 was reflective of the lack of understanding those within Rent4Keeps (Aust) had of the “gifting” clauses used in the Rent4Keeps terms and conditions. The SMS was not consistent with terms and conditions that provided for Darranda to own the products rented until the end of the agreement and which provided that the rental customer was not to part with possession of the goods during the rental period. As set out above, there was no consistent understanding by those individuals with responsibility for the Rent4Keeps terms and conditions of what the “gifting” clauses meant or required. The terms on which Rent4Keeps (Aust) and Darranda sought to contract with customers were not terms that were readily understood by those responsible for conducting the Rent4Keeps Business. The SMS message is reflective of a lack of competence by Darranda in how it engaged in its licensed credit activities.
Deficiencies
The evidence supports a finding that there were serious deficiencies in the manner in which Darranda engaged in its credit activities. Those deficiencies included:
(1)A failure by those with ultimate responsibility for Darranda’s affairs to be aware of the terms and conditions that were in fact being used by field representatives. The testimony of both Mr Payne and Mr Boucher was that neither was aware that the terms and conditions during the relevant period continued to be in the form critiqued by Holley Nethercote in its 2017 report.
(2)A failure to ensure that its advisors were providing advice on terms and conditions that were in use. The mark-ups received from Frenkel Partners were provided on a document that bore no resemblance to the terms and conditions that had been in use and that had been provided to ASIC.
(3)A failure to ensure that changes that were advised to be made to the terms and conditions were in fact made.
(4)A failure to appoint a compliance officer with legal training and instead relying entirely on external providers, whether they be legal advisors or third party training providers. During the relevant period, there was no individual with legal training who had responsibility for ensuring that the terms and conditions reflected the advice received.
(5)A failure to have a system in place for monitoring the activities of field representatives and to assess their compliance with the matters in respect of which they had received training. The difficulties were compounded by an overreliance on technological solutions which were inadequate to wholly or substantially address human behaviours. For example, the audio recordings relied upon to ensure customers were aware of certain key terms without any compliance monitoring undertaken to evaluate whether the recordings were in fact being played at a volume and in a setting that enabled them to be heard by customers.
(6)Entering into contracts that provided for Darranda to have a discretion that may be exercised but having no system in place for the exercise of that discretion.
(7)Failing to have a person acting as the “key person” for the purposes of its Australian Credit Licence and failing to notify ASIC within five business days, and for almost a year, that on 12 November 2018, its “key person”, Harry Fares, had ceased to be an officer of Darranda or to perform duties on behalf of Darranda. By failing to have a person acting as a key person, Darranda was in breach of a condition of its Australian Credit Licence and accordingly was in breach of s 47(1)(c) of the Credit Act.

These deficiencies resulted in:
(1)Darranda using terms and conditions that were not clear and that lacked consistency in how field representatives in practice communicated with customers.
(2)Darranda breaching the terms of its credit licence. The failure to have a “key person” or notify ASIC within any reasonable time was likely a result of a failure to have a person responsible for compliance who had the requisite legal training.
The deficiencies demonstrate a failure to “do all things necessary to ensure” that its activities were undertaken efficiently, resulting in Darranda failing to meet a standard of competence and thus failing to engage in its activities “efficiently, honestly and fairly”.
Whilst I do not find that the controlling minds of Darranda intended to mislead customers or intended to breach the Credit Act or the Code, there was a lack of honesty in that Darranda should have been well aware of the deficiencies in its systems. It had been put on notice that its terms were at least confusing but took inadequate steps to clarify the terms. It was dealing with a financially vulnerable group of customers, offering a product to them that was highly nuanced. Although there was no subjective intention on the part of Darranda’s controlling minds to take unfair advantage of its customers, failing to have systems in place that effectively monitored the terms and conditions being used in the business, and whether those terms and conditions reflected the advice that had been received by Darranda, fell short of what may be considered to be “ethically sound”.
The nuanced nature of the product it sought to offer was not properly understood by those responsible for Darranda’s marketing communications (which were essentially outsourced to Rent4Keeps (Aust)). In sending communications to customers that were not consistent with the terms of the rental agreement, Darranda failed to ensure that its credit activities were engaged in “efficiently, honestly and fairly” as required by s 47(1)(a) of the Credit Act.
Darranda’s breach of its licence condition requiring it to have a “key person” is not to be dismissed as a mere oversight. It had been subject to a licence cancellation hearing as a result of ASIC concerns in relation to its compliance with responsible lending obligations in 2016 yet continued to fail to have in place a system for monitoring compliance with its licence conditions in 2019. The failure to comply was a result of a breach of the standard of competence required to engage in licensed credit activities “efficiently, honestly and fairly”.
INVOLVEMENT OF RENT4KEEPS (AUST)
ASIC contended that Rent4Keeps was “involved in” Darranda’s contraventions of ss 47(1)(a) and 47(4) of the Credit Act and ss 17(3)(c), 17(4)(a), 17(5), 17(6), 23(1), 24(1)(a) and 32A of the Code.
Section 169 of the Credit Act provides:
A person who:
(a) attempts to contravene a civil penalty provision; or
(b) is involved in a contravention of a civil penalty provision;
is taken to have contravened the provision.
The term “involved in” is defined in s 5 of the Credit Act relevantly as follows:
involved in: a person is involved in a contravention of a provision of legislation if, and only if, the person:
…
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention…
A company may be knowingly concerned in a contravention. The intention and knowledge of the directing or governing mind and will of a company may be imputed to the company for this purpose: Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170–1 (Lord Reid); Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 at 127 (Mason CJ, Wilson and Toohey JJ); Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181 at [406] (White J).
The following principles are relevant:
(1)“Knowingly concerned in” requires more than knowledge; the phrase “concerned in” also requires conduct, by act or omission, which implicates or involves the person in the contravention or shows a practical connection between the person and the contravention: see for example Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61; (2002) 117 FCR 588 at [34] (Kenny J); Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27 at [146] (Gordon J).
(2)The knowledge that is required is actual knowledge of the essential factual elements of the contravention: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 667 (Mason ACJ, Wilson, Deane and Dawson JJ); Australian Securities and Investments Commission v Rent 2 Own Cars Pty Ltd [2020] FCA 1312 at [371] (Greenwood J). It is not necessary to know that those facts are capable of characterisation in the language of the statute: Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53 at [48] (Gummow, Hayne and Heydon JJ); Productivity Partners at [82] (Gageler CJ and Jagot J), [270] (Edelman J), [339] (Beech-Jones J).
(3)To invoke s 169, the contravention in respect of which involvement is required to be demonstrated is contravention of a “civil penalty provision”, as that term is defined in s 5(1) of the Credit Act. In the present case, the relevant civil provisions are s 24(1)(a) of the Code and s 47(1)(a) of the Credit Act. As explained by Greenwood J in Rent 2 Own Cars at [123], s 17 of the Code is not a civil penalty provision (as defined). Section 32A of the Code provides for a criminal penalty and is therefore not a civil penalty provision. Sections 47(1)(c) and (d) of the Credit Act are not civil penalty provisions by reason of s 47(4).
(4)ASIC has the burden of proving its case to the civil standard provided for in s 140 of the Evidence Act 1995 (Cth). As Lee J stated in Australian Securities and Investments Commission v GetSwift [2021] FCA 1384 at [118]–[122]:
[118]…This section requires the Court, in a civil proceeding, to find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. In deciding, in a civil case, whether it is satisfied that the case has been proved, the Court is to take into account: (a) the nature of the cause of action or defence; (b) the nature of the subject‑matter of the proceeding; and (c) the gravity of the matters alleged. Although the standard of proof remains the balance of probabilities, the degree of satisfaction varies according to the seriousness of the allegations made and the gravity of the consequences (if the allegations are found to be correct).
…
[121]As the defendants rightly stress, there is no doubt that the so‑called “Briginshaw principles” apply to civil penalty proceedings (which is a particular example of the application of s 140(1) of the EA): see Adler v Australian Securities and Investments Commission (ASIC) [2003] NSWCA 131; (2003) 179 FLR 1 (at 29–30 [142]–[148] per Giles JA); Whitlam v Australian Securities and Investments Commission [2003] NSWCA 183; (2003) 57 NSWLR 559 (at 592 [117]–[119] per Hodgson, Ipp and Tobias JJA).
[122] It follows that, for ASIC to succeed, I am required to reach a state of satisfaction or an actual persuasion that it has proved its allegations of contravention, while taking into account the seriousness of the allegations and the gravity of the consequences that could follow if the allegations were to be accepted. Having said this, although the fact that this is a civil penalty proceeding is of real importance, when one comes to considering the “gravity of the matters alleged”, the focus is upon the particular factual allegations in the case, not an examination of the cause of action or issues at a level of abstraction. This makes sense when one considers that the focus on the gravity of the finding is linked to the notion that the Court takes into account the inherent unlikelihood of the alleged conduct, and common law principles concerning weighing evidence: see Qantas Airways Limited v Gama [2008] FCAFC 69; (2008) 167 FCR 537 (at 576 [137]–[138] per Branson J); Briginshaw (at 361–362 per Dixon J).
The directing or governing mind of Rent4Keeps (Aust) for this purpose is to be found in Mr Payne and Mr Boucher. Although Mr Boucher was not a director of Rent4Keeps (Aust), he was authorised to oversee, and had responsibility for overseeing, its operations. Those operations included setting up the operating systems, computer systems and setting the standard terms and conditions pursuant to which the Rent4Keeps Business’s franchises were to operate.
A contravention of s 24(1)(a) of the Code requires:
(a)entry into a credit contract by a credit provider;
(b)the terms of that credit contract imposing a monetary liability exceeding the amounts permitted by the Code (as provided for in s 23(1)).
Mr Payne and Mr Boucher each had actual knowledge that Darranda was entering into agreements with customers, though they did not have actual knowledge of each contract entered into.
Neither Mr Payne nor Mr Boucher knew that the contracts being entered into had the character of credit contracts under the Code. However, knowledge of the legal character of the contracts is not required. The factual element of the contravention is to be found in the terms of the contracts entered into.
The Respondents rely upon the fact that neither Mr Payne nor Mr Boucher had actual knowledge of the terms of the contracts entered into by Darranda. Each had assumed that the changes noted by Mr Boucher as a result of the Holley Nethercote recommendations had been made. It was submitted that it followed from their lack of knowledge of the actual terms of the contracts that Rent4Keeps (Aust) was not knowingly concerned in Darranda’s contraventions of the Code.
That submission is not accepted. Whilst Mr Payne and Mr Boucher did not have actual knowledge of the form of some of the terms of the rental agreements, they did have actual knowledge of the term of the contract providing for automatic transfer of ownership at the end of the contract to the person nominated by the hirer of the goods if the hirer complied with the terms and conditions of the agreement. It was that term which resulted in the hirer having a right to purchase the goods and the contracts having the legal character of credit contracts. During the relevant period, Mr Payne also knew that the terms of the rental agreements imposed monetary liabilities that were not consistent with the rate cap set by the Code. Mr Payne knew that his business model was premised on generating a rate of return higher than that which would result from the rate cap set by the Code. This was evident in the submissions made in 2016 and 2017 as part of the reform of the Code to which he had input.
Mr Payne and Mr Boucher not only had actual knowledge of these aspects of the terms and conditions of the rental agreements — these aspects of the rental agreements were based on the instructions they were responsible for providing to Frenkel Partners. Mr Payne and Mr Boucher’s involvement extended beyond the possession of knowledge. It follows that Rent4Keeps (Aust) was involved in Darranda’s breach of s 24(1)(a) of the Code and pursuant to s 169 of the Credit Act, Rent4Keeps (Aust) is taken to have contravened s 24(1)(a) of the Code.
In so far as Darranda’s contravention of s 47(1)(a) of the Credit Act is concerned, the factual element of that contravention was the deficiency in the systems, processes and marketing services. Each of those were functions which Darranda had outsourced to Rent4Keeps (Aust) and which Rent4Keeps (Aust) had assumed responsibility for designing. As a franchisee, Darranda was encouraged, if not obligated, to adopt, implement and rely upon those systems, processes and procedures. Mr Payne and Mr Boucher not only knew of the elements and features of the processes and procedures but were ultimately responsible for the design and delivery of those systems, processes and procedures to franchisees, including Darranda.
On the facts, Darranda’s failure to meet its general obligation under s 47(1)(a) cannot be divorced from the actions and conduct of Rent4Keeps (Aust). As a consequence, Rent4Keeps (Aust) was involved in Darranda’s breach of its obligations under s 47(1)(a) of the Credit Act and is taken to have contravened s 47(1)(a), pursuant to s 169 of the Credit Act.
CONCLUDING REMARKS
The subject goods leased were generally goods with no material resale value. There was no economic incentive for a lessor to repossess the goods at the end of the contract. Furthermore, in many cases, the consumer might reasonably be expected to have a continuing need for the goods after the conclusion of the contract. It is not surprising that as a practical matter at the end of the contract the renter in fact remained in possession of the goods.
A gifting mechanism was a concept that had been accepted by ASIC over the years as satisfying the legal definition of a consumer lease. However, as a technical legal matter, such a gifting mechanism could only so satisfy that definition within very limited constraints. It required the gift to be at the discretion of the lessor. The “discretion” could not be locked in at the commencement of the contract, conditionally or otherwise. It could not be “automatic”. To be implemented effectively, it required a process for its exercise. There is a real question as to whether, as a practical reality, such a mechanism was ever likely to be effectively implemented given the economic reality of the lack of commercial value in the goods at the end of the lease.
Darranda’s contraventions were not the result of malice or ill-will or an intention to exploit customers. They were at least partially the result of a lack of competence in operating in a highly regulated industry. There was no executive responsible for compliance who had the necessary qualifications and training. Those with executive management responsibility were not even aware of the terms on which Darranda was contracting with customers.
To be effective at law, a gifting mechanism required the lessor to essentially navigate a narrow strait. The guidance provided by ASIC and Darranda’s advisors was technical and nuanced. It is hardly surprising that Darranda foundered.
DISPOSITION
The hearing held in February 2024 was limited to issues of liability.
ASIC has established breaches by the Respondents of “civil penalty provision[s]” (as defined in s 5 of the Credit Act): s 47(1)(a) of the Credit Act and s 24(1)(a) of the Code.
ASIC has also established breaches by Darranda of ss 17(3), 17(4), 17(5), 17(6) and 32A of the Code.
Forms of relief
Under s 166(2) of the Credit Act, the Court is required to make declarations that the Respondents contravened a civil penalty provision.
Pursuant to s 113(1) of the Code, the Court is required, on an application being made, by order to declare whether or not the credit provider (Darranda) has contravened a key requirement in connection with a credit contract. For credit contracts that are not continuing credit contracts, key requirements relevantly include s 32A(1) and ss 17(3), 17(4), 17(5) and 17(6) of the Code: s 111(1) of the Code. The 516 Relevant Contracts were not continuing credit contracts as defined in s 204 of the Code.
ASIC also sought declarations pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) in respect of Rent4Keeps (Aust) in relation to its involvement in Darranda’s contraventions of ss 17 and 32A. These sections are not civil penalty provisions. As Greenwood J in Rent 2 Own Cars explained (original emphasis):
It would only be appropriate to make a declaration that a person was involved in a contravention of a particular provision, for the purposes of a provision of the [Credit Act] (and the Code) …being the source of a legal obligation or liability. Otherwise, a declaration [pursuant to s 21 of the Federal Court Act] resting solely on, and for the purposes of, a defined term, is detached from any statutory nexus engaging liability on the part of the relevant person.
A declaration may be made that a person has been knowingly concerned in a contravention of the Credit Act which is not a contravention of a civil penalty provision as explanatory of the granting of an injunction: Rent 2 Own Cars Australia at [130]-[131] (Greenwood J). Section 177(1) of the Credit Act empowers the Court to grant an injunction if, on the application of ASIC or any other person, the Court is satisfied that, relevantly, a person has engaged in conduct that constitutes or would constitute “being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act”. I have not determined at this stage whether an injunction is to be granted.
A question also arises as to whether a declaration should be made, and if so in what terms, regarding Darranda’s contravention of s 47(1)(c) and (d) of the Credit Act. As noted above, neither s 47(1)(c) nor 47(1)(d) is a civil penalty provision.
In light of the findings I have made, I will hear from the parties regarding the terms of the declarations to be made.
Questions as to what civil penalty, if any, should be imposed also arise from the findings in relation to the contraventions. I will therefore need to hear from the parties, and possibly receive further evidence, as to the appropriate relief.
Orders
Orders will be made for:
(a)the parties to file an agreed minute or competing minutes of order in the light of these reasons; and
(b)the matter to be listed for a case management hearing, in order to set a timetable for a hearing on the question of the appropriate final orders.

I certify that the preceding two hundred and ninety-six (296) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hespe.
Associate:
Dated: 4 September 2024

File number(s):	VID 181 of 2022
Judgment of:	HESPE J
Date of judgment:	4 September 2024
Catchwords:	CONSUMER LAW – consumer credit – whether customer contracts are consumer leases or credit contracts for the purposes of the National Credit Code (Sch 1 to the National Consumer Credit Protection Act 2009 (Cth)) – whether Australian Credit Licence holder failed to do all things necessary to ensure that its licensed credit activities were engaged in efficiently, honestly and fairly – whether master franchisor “involved in” contraventions
Legislation:	Evidence Act 1995 (Cth), s 140 Federal Court of Australia Act 1976 (Cth), s 21 National Consumer Credit Protection Act 2009 (Cth) ss 3, 5, 47, 166, 169, Sch 1 (National Credit Code) ss 3, 4, 5, 9, 11, 14, 17, 23, 24, 32A, 169, 170, 171, 172, 173, 174, 174A
Cases cited:	Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181 Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liq) (No 3) [2020] FCA 208; (2020) 275 FCR 57 Australian Securities and Investments Commission v AMP Financial Planning Pty Ltd (No 2) [2020] FCA 69 Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414 Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1422 Australian Securities and Investments Commission v Ferratum Australia Pty Limited (in liq) [2023] FCA 1043 Australian Securities and Investments Commission v GetSwift [2021] FCA 1384 Australian Securities and Investments Commission v Membo Finance Pty Ltd (No 2) [2023] FCA 126 Australian Securities and Investments Commission v National Australia Bank Ltd [2022] FCA 1324 Australian Securities and Investments Commission v Rent 2 Own Cars Pty Ltd [2020] FCA 1312 Australian Securities and Investments Commission v Westpac Banking Corporation (Omnibus) [2022] FCA 515 Cochrane v Moore (1890) 25 QBD 57 Commissioner of State Revenue v Politis [2004] VSC 126 Commissioner of Taxation v Carter [2022] HCA 10; (2022) 274 CLR 304 Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 275 CLR 165 Earl of Egmont v Smith (1877) 6 Ch D 469 Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61; (2002) 117 FCR 588 Flinn v White [1950] SASR 195 Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 Hill v Wilson (1873) LR 8 Ch App 888 Irons v Smallpiece (1819) 106 ER 467 Make It Mine Finance Pty Ltd [2015] FCA 393; (2015) 238 FCR 562 Maxwell v Maxwell [2022] NSWSC 1028 Nolan v Nolan [2003] VSC 121; (2003) 10 VR 626 Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27 Rowland v Stevenson [2005] NSWSC 325 Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53 Scammell v Ouston [1941] AC 251 Scott v Bridge [2020] EWHC 3116 (Ch) Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661
Division:	General Division
Registry:	Victoria
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	296
Date of last submission/s:	26 March 2024
Date of hearing:	5–14 February 2024, 18 March 2024
Counsel for the Applicant	Ms F McLeod SC, Ms L Papaelia and Ms A Ballard
Solicitors for the Applicant	Australian Securities and Investments Commission (in house)
Counsel for the Respondents	Mr B Quinn KC and Mr A Middleton
Solicitors for the Respondents	Strongman & Crouch

ORDER MADE BY:	HESPE J
DATE OF ORDER:	4 SEPTEMBER 2024