Australian Securities and Investments Commission v Kobelt

The Australian Securities and Investments Commission (ASIC) brought proceedings against Mr Kobelt, a seller of second-hand vehicles, alleging contraventions of consumer law provisions. The dispute centred on whether Mr Kobelt's practice of selling vehicles on credit without a licence constituted a contravention of section 29 of the National Consumer Credit Protection Act 2009 (Cth), and whether his conduct in providing credit to indigenous customers through a "book-up" system was unconscionable under section 12CB of the Australian Securities and Investments Commission Act 2001 (Cth). The case was heard by the Federal Court of Australia.

The primary legal issues revolved around the applicability of the National Credit Code to Mr Kobelt's credit activities and whether the difference in price between credit and cash sales constituted a charge for credit. Additionally, the court had to determine whether the varying repayments made by customers qualified as "instalments" under the Code. Furthermore, the court examined whether Mr Kobelt's conduct in the book-up system was unconscionable, considering factors outlined in section 12CC of the ASIC Act.

The court found that the difference in price between credit and cash sales constituted a credit charge, and the varying repayments were indeed "instalments." Consequently, Mr Kobelt's failure to hold a credit licence constituted a contravention of section 29 of the National Consumer Credit Protection Act. Moreover, the court held that Mr Kobelt's conduct in the book-up system was unconscionable, as it involved taking possession of customers' debit cards and PINs and transferring credit balances to repay debts. These findings were based on the evidence presented, including documentary evidence and witness testimonies, which the court found to be reliable and useful.

The court concluded that Mr Kobelt had contravened both the National Consumer Credit Protection Act and the ASIC Act. The matter was adjourned to a later date for the determination of relief and costs.