Australian Securities and Investments Commission v Fast Access Finance Pty Ltd (No 2)

The Australian Securities and Investments Commission (ASIC) filed a lawsuit against Fast Access Finance Pty Ltd (FAF) and its franchisees, FAF Beenleigh and FAF Burleigh Heads, for contravening the National Consumer Credit Protection Act 2009 (Cth) and the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth). The dispute centred around the companies’ involvement in a business model that involved the sale and purchase of diamonds to conceal money-lending transactions. The court was tasked with deciding the appropriate penalties for the contraventions committed by the companies.

The legal issues before the court included determining whether FAF and its franchisees had contravened the relevant legislation, and if so, what penalties should be imposed. ASIC argued that the respondents' business model was deliberately designed to circumvent the interest rate limits set by law, and that the companies should be held liable for their actions. The court had to consider the culpability of each respondent and the appropriate penalties that would serve as a deterrent to future contraventions.

In its reasoning, the court found that FAF, as the designer of the diamond model, was more culpable than its franchisees, FAF Beenleigh and FAF Burleigh Heads. The court noted that while the controlling officers of FAF must have had at least a strong suspicion that the diamond model was contrary to the relevant legislation, they may have assumed that FAF was reputable and understood the law. The court also considered the number of transactions proven against each respondent, with FAF Beenleigh having a smaller number compared to FAF Burleigh Heads. The penalties imposed on the companies were based on the nature and extent of the contravening conduct, the deliberateness of the contravention, and the company's disposition to cooperate with the regulator.

The court ordered that penalties be imposed on FAF, FAF Beenleigh, and FAF Burleigh Heads for their contraventions of the National Consumer Credit Protection Act 2009 (Cth) and the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth). The penalties were determined based on the factors outlined in the ASIC's submissions, and the court considered the culpability of each respondent in setting the penalties. The court also noted that the diamond model was designed to conceal the true nature of money-lending transactions, and that the underlying reason for such concealment was to circumvent the interest rate limits set by law.