Australian Securities and Investments Commission v National Australia Bank Limited

In the case of Australian Securities and Investments Commission v National Australia Bank Limited, the dispute centred on the conduct of the National Australia Bank (NAB) in relation to its "spot and refer" program. The Australian Securities and Investments Commission (ASIC) alleged that NAB, in breach of the National Consumer Credit Protection Act 2009, allowed unlicensed individuals, referred to as "Introducers," to engage in credit activities by identifying potential customers and referring them to NAB bankers for credit products. The Federal Court was tasked with determining whether NAB contravened specific sections of the Act and, if so, the appropriate penalties to be imposed.

The court was required to address several legal issues, including the applicability of section 31 of the Act, which prohibits a person holding an Australian Credit Licence from conducting credit-related business with an unlicensed individual. The court also needed to consider whether NAB had fulfilled its obligations under section 47(1)(a) and (d) to conduct authorised credit activities efficiently, honestly, and fairly. Furthermore, the court examined the appropriate pecuniary penalties to be imposed on NAB for the admitted contraventions, taking into account the totality principle and the course of conduct principle.

The Federal Court found that NAB had indeed contravened the Act by allowing unlicensed Introducers to participate in its "spot and refer" program, which facilitated the referral of potential customers to NAB for credit products. The court recognised the utility of NAB's self-reporting and the limited scope of ASIC's investigation but emphasised the importance of adhering to the statutory requirements. The court considered the totality principle, which assesses the overall conduct of the offender, and the course of conduct principle, which evaluates the duration and frequency of the contraventions. Given the admitted nature of the contraventions and the factors considered, the court determined that a penalty of $52,500,000 was appropriate. The court also noted the inutility of repetitive declaratory relief sought by ASIC, given the self-reported nature of the contraventions.

The final orders of the court required the parties to provide an agreed minute of order by a specified date, or failing that, the proposed orders reflecting the reasons given. The entry of these orders was to be governed by Rule 39.32 of the Federal Court Rules 2011.