Australian Securities and Investments Commission v SunshineLoans Pty Ltd (No 2) - [2024] FCA 345

FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v SunshineLoans Pty Ltd (No 2) [2024] FCA 345

File number: QUD 190 of 2022

Judgment of: DERRINGTON J

Date of judgment: 12 April 2024

Catchwords:
CONSUMER LAW – action by regulator under NationalConsumer Credit Protection Act 2009 (Cth) for contraventions of the National Credit Code – where respondent carries on business of providing small amount credit contracts – whether fee contained in small amount credit contracts permitted to be imposed under the National Credit Code – where fee described as an “amendment” or “rescheduled payment” fee – alleged contraventions of ss 24(1A)(a) and (b) of the National Credit Code and s 47(1)(d) of the National Consumer Credit Protection Act – hearing in relation to liability only – contraventions established

CONSUMER LAW – standing and jurisdiction – whether the court has jurisdiction to consider the regulator’s allegations – where it was submitted that the regulator lacked standing to enforce the civil penalty provisions contained in the National Credit Code through ss 166, 167 and 177 of the National Consumer Credit Protection Act – arguments rejected – no lack of standing or jurisdiction

CONSUMER LAW – evidence – whether court permitted to make findings beyond individual loan files contained in evidence – where respondent made admissions as to the number of times the impugned fee was charged and accepted by it

Legislation:
Acts Interpretation Act 1901 (Cth)

Australian Securities and Investments Commission Act 2001 (Cth)

Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth)

Corporations Act 2001 (Cth)

Evidence Act 1995 (Cth)

Federal Court of Australia Act 1976 (Cth)

Financial Sector Reform Act 2022 (Cth)

Judiciary Act 1903 (Cth)

National Consumer Credit Protection Act 2009 (Cth)

Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth)

Consumer Credit Legislation Amendment (Enhancements) Bill 2012 (Cth)

National Consumer Credit Protection Bill 2009 (Cth)

Cases cited:
AMS v AIF (1999) 199 CLR 160

Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 3) (2012) 213 FCR 380

Australian Securities and Investments Commission v BHF Solutions Pty Ltd (2022) 293 FCR 330

Australian Securities and Investments Commission v Channic Pty Ltd (No 4) [2016] FCA 1174

Australian Securities and Investments Commission v Dunjey [2023] FCA 361

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

Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345

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

Australian Securities and Investments Commission v PE Capital Funds Management Ltd (administrators appointed), in the matter of PE Capital Funds Management Ltd (administrators appointed) (2022) 159 ACSR 1

Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd (2020) 147 ACSR 598

Australian Securities and Investments Commission v SunshineLoans Pty Ltd [2023] FCA 640

Australian Securities and Investments Commission v TAL Life Ltd (No 2) (2021) 389 ALR 128

Australian Softwood Forests Pty Ltd v Attorney-General (NSW) ex rel Corporate Affairs Commission (1981) 148 CLR 121

Briginshaw v Briginshaw (1938) 60 CLR 336

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337

Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596

Foster v Jododex Australia Pty Ltd (1972) 127 CLR 421

Hobart International Airport Pty Ltd v Clarence City Council (2022) 399 ALR 214

Independent Commission Against Corruptionv Cunneen (2015) 256 CLR 1

J Hutchinson Pty Ltd v Australian Competition and Consumer Commission [2024] FCAFC 18

Mango Media Pty Ltd v Velingos (2008) 216 FLR 176

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170

Nguyen v The Queen (2020) 269 CLR 299

Seven Network Ltd v News Ltd (2009) 182 FCR 160

SunshineLoans Pty Ltd v Australian Securities and Investments Commission [2023] FCA 707

SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362

Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45

Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631

Beatty and Smith, Annotated National Credit Code (2014, 5^th ed, Lexis Nexis Butterworths)

Division: General Division

Registry: Queensland

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Number of paragraphs: 348

Date of hearing: 17 – 20 July, 4 September and 11 October 2023

Counsel for the Applicant: Mr M Brady KC with Mr S Cleary

Solicitor for the Applicant: Gadens

Counsel for the Respondent: Mr M Wyles KC with Mr A Collins and Ms S Gibson

Solicitor for the Respondent: O’Shea Lawyers

ORDERS

QUD 190 of 2022

BETWEEN:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Applicant

AND:
SUNSHINELOANS PTY LTD (ACN 092 821 960)

Respondent

ORDER MADE BY:

DERRINGTON J

DATE OF ORDER:

12 APRIL 2024

THE COURT ORDERS THAT:
1.The matter be listed for a case management hearing to set a timetable for the hearing on relief.
2.Costs be reserved for determination following the determinations in relation to relief.

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

REASONS FOR JUDGMENT
DERRINGTON J:
INTRODUCTION

By these proceedings, the Australian Securities and Investments Commission (ASIC) as the regulator with responsibility for the enforcement of the National Consumer Credit Protection Act 2009 (Cth) (NCCPA) seeks relief against SunshineLoans Pty Ltd (Sunshine Loans) in respect of alleged contraventions of the NCCPA in the course of its money lending business. Specifically, ASIC alleges that Sunshine Loans charged its customers, who had entered into “small amount credit contracts” (as defined in the NCCPA) certain fees which were prohibited. The relief sought by ASIC includes injunctions and declarations of contravention, as well as the imposition of civil penalties.
Sunshine Loans denies the alleged contraventions and claims that the fees in issue, which were referred to in its contracts with its customers variously as an “Amendment fee” or a “Rescheduled payment fee” were, in fact, fees which were payable on the customers’ default and so permitted under the legislation. It further alleges that ASIC does not have standing to bring the proceedings and, consequently, that this Court does not have jurisdiction to hear the matter. This latter issue was raised in the course of the interlocutory steps in these proceedings, though it was not until shortly before the commencement of the trial that Sunshine Loans sought to properly agitate the issue by seeking to have it determined separately by a Full Court. Its attempts to do so failed: see Australian Securities and Investments Commission v SunshineLoans Pty Ltd [2023] FCA 640 (with leave to appeal from that decision being refused in SunshineLoans Pty Ltd v Australian Securities and Investments Commission [2023] FCA 707). It subsequently sought to raise the issue as an initial point at the commencement of the proceedings. That was allowed and, after hearing from the parties on it, the determination of that question was reserved and the hearing of the evidence in relation to the issues of liability continued.
These reasons deal with both the initial question of standing and the question of liability. For the purposes of explaining the issues raised in relation to standing, it is necessary to attribute some nomenclatures to the legislation under consideration. The abbreviation “NCCPA” will be a reference to the whole of the National Consumer Credit Protection Act, whilst the expression the “Credit Act” will refer to that Act save for Sch 1, which is the National Credit Code. In turn, the National Credit Code will be referred to simply as the “Credit Code”.
Before turning to the issue of standing, it is useful to provide some background to the proceedings which contextualise how that issue and the question of jurisdiction arises.
BACKGROUND
Sunshine Loans operates a business as a credit provider of small amount credit contracts, which is regulated by the Credit Code.
Since 7 January 2011, it has held an Australian credit licence and it appears to have been a not insubstantial provider of small amount credit contracts in the Australian market.
During the period from 1 July 2016 to 2 November 2020 (hereinafter referred to as the “Relevant Period”), it utilised, and issued to its customers, five different versions of small amount credit contracts. Each of those versions contained, essentially, the same terms. For convenience, the five iterations of the small amount credit contracts utilised by Sunshine Loans will be referred to in these reasons as the “SACCs”.
The SACCs provided for the payment of various fees upon the occurrence of different events, including, relevantly, an “Amendment fee” or a “Rescheduled payment fee”, which ASIC asserts were not permitted under the NCCPA.
In its second further amended originating application, ASIC seeks relief pursuant to ss 166, 167 and 177 of the Credit Act as well as s 21 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act), for declarations, injunctions and the payment of pecuniary penalties arising from alleged contraventions by Sunshine Loans of ss 23A(1), 24(1A) and 31A(1) of the Credit Code and s 47(1)(d) of the Credit Act. Although ASIC initially made claims in relation to s 31B of the Credit Code, those claims were withdrawn in the course of the trial.
The immediately following reasons concern the issue of ASIC’s standing to seek that relief, and the related issue of the Court’s jurisdiction to grant it. As they reveal, Sunshine Loans’ submissions in relation to the question of standing are founded on a misconstruction of the definition of a “civil penalty provision” contained in the NCCPA. Its propounded construction would have the effect of rendering a number of sections in the Credit Code which impose civil penalties unenforceable as such. Conversely, a construction of the definition based on an ordinary and natural meaning of the words used avoids that capricious result.
STANDING AND JURISDICTION
In brief, Sunshine Loans submitted that ASIC has no standing under ss 166 and 167 of the Credit Act to enforce the civil penalty provisions found in the Credit Code, with the consequence that there was no justiciable issue between the parties such that the Court had no jurisdiction to hear the matter. It was not suggested that the Court lacked jurisdiction to determine whether or not it did have jurisdiction.
Sunshine Loans also submitted that ASIC does not have power to seek an injunction under s 177 of the Credit Act to direct Sunshine Loans to comply with the credit legislation where the conduct ASIC alleges Sunshine Loans has engaged in, or is proposing to engage in, constitutes or would constitute a contravention of the Credit Code rather than the Credit Act.
Mr Brady KC, counsel for ASIC, did not contest the proposition that if the alleged contraventions of provisions of the Credit Code could not be enforced under s 166 of the Credit Act, ASIC would not have standing, and the Court would not have jurisdiction to consider ASIC’s allegations in these proceedings.
This question of jurisdiction arises because the usual jurisdiction of the Court under s 39B(1A) of the Judiciary Act 1903 (Cth) (Judiciary Act) is displaced by s 186 of the Credit Act which provides that Div 2 of Pt 4-3 of the Credit Act, which is concerned with the bringing of civil proceedings, applies to the exclusion of, inter alia, s 39B of the Judiciary Act. Section 187 of the Credit Act then confers civil jurisdiction on the Court in relation to civil matters arising under the Act. The Court’s jurisdiction is thereupon dependent upon ASIC having standing to bring the proceedings. If ASIC is not entitled to a remedy against a party in the action, there would be no justiciable controversy to constitute a “matter” for the purposes of the exercise of federal jurisdiction: Hobart International Airport Pty Ltd v Clarence City Council (2022) 399 ALR 214, 223 [31].
How the claimed lack of standing and jurisdiction arises
The substance of ASIC’s allegations is that, during the Relevant Period, Sunshine Loans entered into SACCs which imposed a fee not permitted under the Credit Act and, thereafter, enforced its payment. In broad terms, it is alleged that the fee was either charged for varying the terms of the loan agreement, amending them by deferring a payment date, or for reorganising the dates on which repayments were due.
Section 31A(1) of the Credit Code prohibits, in relation to small amount credit contracts, the provision for, or imposition of, fees and charges if they are not of the type enumerated in that section, as follows:
31ARestrictions on fees and charges for small amount credit contracts
(1) A small amount credit contract must not impose or provide for fees and charges if the fees and charges are not of the following kind:
(a) a permitted establishment fee;
(b) a fee or charge (a permitted monthly fee) that is payable on a monthly basis starting on the day the contract is entered into;
(c) a fee or charge that is payable in the event of a default in payment under the contract;
(d) a government fee, charge or duty payable in relation to the contract.
Note: See section 39B for the maximum amount that may be recovered by the credit provider if there is a default in payment under the contract.
Section 23A provides that a small amount credit contract must not impose a monetary liability on a debtor which is prohibited by the Credit Code, and s 24(1A) prohibits a credit provider from entering into a small amount credit contract on terms imposing a prohibited monetary liability or requiring or accepting payment in respect of such a prohibited monetary liability. The latter section imposes a civil penalty of 5,000 penalty units for any contravention. Each of those sections is set out below:
23AProhibited monetary obligations—small amount credit contracts
(1) A small amount credit contract must not impose a monetary liability on the debtor:
(a) in respect of an interest charge (including a default rate of interest) under the contract; or
(b) in respect of a fee or charge prohibited by this Code; or
(c) in respect of an amount of a fee or charge exceeding the amount that may be charged consistently with this Code.
(2) If a provision of a small amount credit contract imposes a monetary liability prohibited by subsection (1) then:
(a) each provision (the void provisions) of the contract that imposes a monetary liability of a kind referred to in that subsection (whether or not the liability is imposed consistently with this Code) is void to the extent that the provision relates to the liability; and
(b) the debtor may recover as a debt due to the debtor any amount paid to the credit provider under the void provisions to the extent that the amount relates to the liability.
24Offences related to prohibited monetary obligations—credit providers
(1) …
(1A) A credit provider must not:
(a) enter into a small amount credit contract on terms imposing a monetary liability prohibited by subsection 23A(1); or
(b) require or accept payment of an amount in respect of a monetary liability that cannot be imposed consistently with this Code.
Civil penalty: 5,000 penalty units.
Of critical importance to Sunshine Loans’ claim that ASIC lacks standing is s 166 of the Credit Act which is, in the first instance, the claimed source of ASIC’s power to make an application for the imposition of a civil penalty and for the Court to make a declaration in relation to any contravention found to have occurred. It is contained in Div 2 of Pt 4-1 of the Credit Act, entitled, “Declarations and pecuniary penalty orders for contraventions of civil penalty provisions”, in the following terms:
166Declaration of contravention of civil penalty provision
Application for declaration of contravention
(1) Within 6 years of a person contravening a civil penalty provision, ASIC may apply to the court for a declaration that the person contravened the provision.
Declaration of contravention
(2) The court must make the declaration if it is satisfied that the person has contravened the provision.
(3) The declaration must specify the following:
(a)       the court that made the declaration;
(b)       the civil penalty provision that was contravened;
(c)       the person who contravened the provision;
(d)       the conduct that constituted the contravention.
Declaration of contravention conclusive evidence
(4) The declaration is conclusive evidence of the matters referred to in subsection (3).
Sunshine Loans submitted that the reference to “a civil penalty provision” in s 166(1) is a reference to a provision that both meets the definition of that term in s 5(1) of the Credit Act and is contained in the Credit Act. It submitted that it does not extend to provisions which satisfy the definitional requirements but which are located in the Credit Code. So the submission went, as ASIC’s attempt to enforce the Credit Code provisions under s 166 is erroneous, it has no standing to bring the proceedings, and the Court has no jurisdiction to hear the matter.
Relevant legislative provisions
In the course of submissions, the parties referred to numerous provisions in both the Credit Act and the Credit Code in support of their respective positions. It is not necessary to set them all out, but those which are of most relevance are extracted below.
Section 3 of the Credit Act makes provision for the Credit Code as follows:
3 The National Credit Code
Schedule 1 (which is the National Credit Code) has effect as a law of the Commonwealth.
The import of this section is not entirely clear. As a schedule to the Credit Act, there is little doubt that the Credit Code is an operative law of the Commonwealth: see s 13(1) of the Acts Interpretation Act 1901 (Cth) (AIA). In any event, s 3 seems to remove any doubt about that.
Section 4 of the Credit Act identifies the purpose of the Part of which it is a section, in the following terms:
This Part is about the terms that are defined in this Act (other than the National Credit Code). (For the terms that are defined in the National Credit Code, see section 204 of that Code.)
Division 2 has the Dictionary (see section 5). The Dictionary is a list of every item that is defined in this Act (other than the National Credit Code). …
Section 5 then provides definitions for numerous words and phrases used in the Credit Act. Specifically, the expression “civil penalty provision” is defined as follows:
5The Dictionary
(1) In this Act (other than the National Credit Code):
…
civil penalty provision: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if:
(a) the words “civil penalty” and one or more amounts in penalty units are set out at the foot of the subsection (or section); or
(b) another provision of this Act specifies that the subsection (or section) is a civil penalty provision.
A further definition in s 5(1) concerns the expression, “National Credit Code”, and is as follows:
National Credit Code means Schedule 1 to this Act, and includes:
(a) regulations made under section 329 for the purposes of that Schedule; and
(b) instruments made under that Schedule.

Section 5(2) of the Credit Act provides:
(2) In this Act (other than the National Credit Code), a reference to a provision is a reference to a provision of this Act, unless the contrary intention appears.
One of the issues which arose between the parties is the meaning of the expression, “this Act”, where it is used in the definition of “civil penalty provision”. That expression is also defined in s 5(1) as, “includes instruments made under this Act”. By s 13(1) of the AIA, the expression would normally include Sch 1, being the Credit Code, as it is a part of the Act.
The terms of ss 23A(1), 24(1A) and 31A(1) of the Credit Code are set out above.
Section 204 of the Credit Code is the definition section for the purposes of the Credit Code, and it similarly provides definitions for diverse words and phrases.
General nature of the submissions
In resolving the question of standing, it is not necessary nor practical to deal with each of the submissions raised by the parties. It suffices to observe that the parties had substantially different positions as to the manner in which the Credit Act and the Credit Code operate. Sunshine Loans submitted that the NCCPA has a dichotomous operation such that the Credit Act and the Credit Code operate separately and distinctly from each other. Conversely, ASIC submitted that the Credit Code, which is a schedule to the Credit Act and part of it, should operate in a harmonious and complementary manner.
Principles of construction
Although the resolution of the issues before the Court turns, in part, on the construction of the Credit Act and the Credit Code, there was little to no dispute about the principles applicable to the construction of the legislation in question. They were concisely articulated by the majority in SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362, 368 [14]:
The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.
(Footnotes omitted).
Necessarily, context is also important to the process of construction. The context in which provisions are construed includes the statutory purpose. This was emphasised in Independent Commission Against Corruptionv Cunneen (2015) 256 CLR 1, 28 [57]:
… The technique of statutory construction is to choose from among the range of possible meanings the meaning which Parliament should be taken to have intended. Contrary to counsel’s submission, there was and is nothing impermissible about looking to the context in which s 8(2) appears or seeking guidance from the objects of the ICAC Act as stated in s 2A. Rather, as Mason J stated in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd, it was and is essential to do so:
“[T]o read the section in isolation from the enactment of which it forms a part is to offend against the cardinal rule of statutory interpretation that requires the words of a statute to be read in their context: Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation; Attorney-General v Prince Ernest Augustus of Hanover. Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasise the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise.”
(Footnotes omitted).
It is axiomatic that in construing a provision, or provisions, of an Act, the interpretation which best achieves the purpose or object of the Act is to be preferred to each other interpretation: s 15AA AIA.
The proper construction of s 5(1) and s 166 of the Credit Act
A natural reading of the words used
On what might be said to be a natural reading of the words contained in the definition of “civil penalty provision” in s 5(1), the definition would pick up or include s 24(1A) of the Credit Code so that it was enforceable under s 166 of the Credit Act. If it is considered that the expression “this Act”, as used in the definition, refers to the Credit Act as well as the Credit Code (which is its schedule), the definition has the following effect:
(a)The words in the chapeau to the definition, “[i]n this Act (other than the National Credit Code)”, have the effect that the definition of “civil penalty provision” only applies in respect of its use in the Credit Act;
(b)Where the definition refers to “a subsection of this Act (or a section of this Act that is not divided into subsections)”, it includes the provisions of both the Credit Act and the Credit Code, because the words, “this Act”, would normally have that scope;
(c)Section 24(1A) of the Credit Code is a “civil penalty provision” because it meets the requirements of the first limb of the definition — the words “civil penalty” and one or more amounts in penalty units are set out at the foot of the subsection (or section); and
(d)Section 166 is a provision of the Credit Act, such that the definition is to be used in relation to it, with the consequence that a contravention of s 24(1A) of the Credit Code can be enforced by that section.
This construction gives the words in parentheses in the chapeau of s 5(1), “(other than the National Credit Code)”, appropriate work as it confines the operation of the defined term to only those provisions of the Credit Act and not further. Nevertheless, the definition of “civil penalty provision” is not confined to only those provisions of the type described in the Credit Act as opposed to the Credit Code.
This construction of the definition accords with the decision of Greenwood J in Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd (2020) 147 ACSR 598 (ASIC v Rent 2 Own Cars). That matter concerned, amongst other things, alleged contraventions of ss 17(4), 17(5), 23(1) and 32A of the Credit Code by a credit provider which provided credit through hire purchase contracts for the acquisition of used cars from its franchisees. In particular, issues were raised as to the extent to which the accessorial liability provisions operated in relation to the directors of the franchisor company. ASIC sought injunctive relief pursuant to s 177 of the Credit Act against those directors and the question that arose was whether s 169 of the Credit Act, which provided that a person who is involved in a contravention of a civil penalty provision is taken to have contravened that provision, applied in relation to contraventions of the relevant sections of the Credit Code. Greenwood J found that the words “this Act” in the second limb of the definition of “civil penalty provision” extended its operation to the Credit Code. In doing so he relied upon s 13 of the AIA which provides that “[a]ll material from and including the first section of an Act to the end of … the last schedule of the Act … is part of the Act.” His Honour observed at 623 [121]:
… Accordingly, putting to one side for the moment any engagement or operation of the first limb of the definition, a provision of the National Credit Code will constitute a civil penalty provision of the NCCP Act (and Code) if another provision of the NCCP Act (including the National Credit Code) “specifies” that a particular subsection or section “is a civil penalty provision”.
(Emphasis in original).
It is to be noted that the first limb of the definition was not relevant to the question before the Court.
His Honour reached the above conclusion that the expression “this Act” in subparagraph (b) of the definition included the Credit Code in the context of the observation (at 609 [52]) that s 5(1) was merely definitional of the words used in the Credit Act and must engage with a provision in that Act to have any operation. He observed that s 169 of the Credit Act, which applied to persons who were involved in a contravention of a civil penalty provision, encompassed persons who failed to comply with civil penalty provisions contained in the Credit Code because the expression “this Act” in the definition of “civil penalty provision” in s 5(1) of the Credit Act extended to all provisions of the NCCPA.
Although his Honour concluded that the provisions of the Credit Code in question in that case were not civil penalty provisions by operation of either of the limbs of the definition in s 5(1), he observed that the legislature had selected two methods (by reference to the two limbs in s 5(1)) of designating “civil penalty provisions” which it applied throughout both the Credit Act and the Credit Code.
Further support for the above conclusion is derived from reading the words of the definition in the context of the Act as a whole. Where the expression “this Act” is used in the legislation it must logically extend to the Credit Act and the Credit Code by reason of the operation of s 13(1) of the AIA. That this approach is clearly adopted in the Credit Act itself can be seen from the fact that where it is not intended to have its ordinary meaning, words of limitation are used immediately following the words “this Act”, such as, “(other than the National Credit Code)”: see, for example, ss 5(2), 10, 14, 15, 22, 178, 179, 324 and 325 of the Credit Act. The necessary inference being that where reference is made to “this Act” alone, the relevant section applies in the usual general manner to both the Credit Act and the Credit Code.
The alternative construction posited by Sunshine Loans was that the words of limitation in the chapeau of s 5(1) have a wider impact and limit the operative effect of the words “of this Act” in the definition of “civil penalty provision”, and that they apply only to provisions in the Credit Act which have the described characteristics. However, that would accord those words of limitation a wider operation than they have. In the chapeau, they operate to ensure that the defined terms only apply in relation to the provisions of the Credit Act and not the Credit Code, and that is as far as their natural meaning can properly extend. It is not possible to give them added effect by applying them to limit the scope of the definition to provisions within the Credit Act. Were that to be the case it would necessitate reading words into the definition such that the words “of this Act” were immediately followed with the additional expression “other than the National Credit Code”. The operation of the NCCPA does not require that, and there is nothing in this case which would justify such a step: see AMS v AIF (1999) 199 CLR 160, 183 – 184 [63].
A notable consequence of the construction referred to above is that it would allow for those provisions in the Credit Code which are within the definition of “civil penalty provision” (because the words “civil penalty” and one or more amounts in penalty units are set out at their foot) to be enforced. On the other hand, Sunshine Loans’ proposed construction would have the result that s 24(1A) and other apparent civil penalty provisions contained in the Credit Code would be redundant and unenforceable, despite expressing that a contravention could result in the imposition of a civil penalty.
It should also be accepted that the construction reached is consistent with the apparent statutory purpose of the Credit Act and the Credit Code. It is axiomatic that a construction which advances the statutory purpose is to be preferred over one that does not: s 15AA of the AIA.
In Australian Securities and Investments Commission v BHF Solutions Pty Ltd (2022) 293 FCR 330, 368 [169], the statutory purpose of the Credit Code was explained by O’Bryan J (with whom Besanko and Lee JJ agreed) as follows:
It is appropriate to characterise the National Credit Code as remedial legislation. The overarching purpose of the Code is to protect consumers from unscrupulous and unfair lending practices. As observed by McHugh J in Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15 at 41 in reference to the Trade Practices Act 1974 (Cth), such remedial legislation should be construed broadly so as “to give the fullest relief which the fair meaning of its language will allow”, citing Isaacs J in Bull v Attorney-General (NSW) (1913) 17 CLR 370 at 384. As Isaacs J made clear in the cited passage, that does not mean that the “true signification of the provision should be strained or exceeded”. But nor should limitations be read in when they are not required by the statutory text.
Here, the legislature has included in the Credit Code a number of provisions which fit within the definition of a “civil penalty provision” in s 5(1) of the Credit Act and which, if excluded as a matter of interpretation, would not be enforceable by the regulator. Those provisions include ones which prohibit lenders from imposing non-approved obligations on borrowers under small amount credit contracts. They are self-evidently protective of persons who require such loans, and the construction advanced by Sunshine Loans is one which would negate their effect. In addition, the level of penalty imposed for a contravention of s 24(1A) of the Credit Code is substantial, revealing that the legislature regarded compliance with the requirements very seriously for the purpose of the protection of persons who might seek small amount credit contracts. The statutory purpose is advanced by the construction identified as it gives effect to the Parliament’s intention to protect borrowers from unapproved terms and conditions.
The legislative history
Both ASIC and Sunshine Loans placed reliance on the history of the credit regulation legislation in support of their respective constructions.
The introduction of the NCCPA (including the Credit Code) in 2010 created a new national credit regime and replaced the state-based Uniform Consumer Credit Code (UCCC). As still appears, the Credit Code, which essentially replicated the provisions in the UCCC, was enacted as a schedule to the Credit Act. Though an important alteration was that ASIC was given responsibility for administering the new legislation, including by enforcing any contraventions of it, the new regime also included licensing requirements for credit providers.
In the original iteration of the NCCPA, the penalty regime was centred around the imposition of pecuniary penalties under Div 1 of Pt 6 of the Credit Code for a contravention of provisions that were referred to as “key requirements”. These were intended, so the Explanatory Memorandum to the National Consumer Credit Protection Bill 2009 (Cth) explained, to be similar to civil penalties imposed under the Corporations Act 2001 (Cth), which involve the regulator applying to the Court for a penalty to be paid to the government. Other consequences of a contravention included criminal sanctions by way of penalties and the obligation on a contravenor to make compensation or restitution under s 178 of the Credit Act.
The original NCCPA was subjected to not insignificant changes by the passing of the Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth), which came into effect in 2012. One change was the introduction of the concept of small amount credit contracts and the complementary s 24(1A) was inserted into the Credit Code with the apparent intention to impose criminal penalties, albeit not civil penalties, on credit providers who offer or enter into small amount credit contracts on terms which are prohibited.
The Consumer Credit Legislation Amendment (Enhancements) Act did introduce some civil penalties into the Credit Code by the insertion of ss 72(4) and 177B(4). There was no specific provision in the Credit Code by which those civil penalties could be enforced, and the only possible mechanism was by an action by the regulator under ss 166, 167 and 177 of the Credit Act. By the same amending legislation, certain additional civil penalty provisions were introduced into the Credit Act in ss 160B(1), 160C(1), 160D(1) and 160E(2) and (3).
The next relevant tranche of amendments came from the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth), which was passed in 2019. It increased the number of civil penalty provisions in the Credit Code and, relevantly for present purposes, amended s 24(1A) of the Credit Code whereby it was changed from a provision which imposed a criminal penalty to one imposing a civil penalty.
The legislative transformation of the Credit Act and the Credit Code since 2009 reveals a statutory intention to provide a suite of remedies in relation to contraventions of each. Those remedies include the imposition of criminal and civil penalties as well as remedies available to persons affected by breaches in the form of restitution or compensation. The NCCPA is thus regulatory and remedial in nature and intended to provide protection to persons who enter into credit contracts of various types. The source of the power for the enforcement of civil penalties, whether in the Credit Act or the Credit Code, was apparently intended to be s 166 of the Credit Act, with ss 167 and 177 providing avenues of consequential relief. Thus, a consideration of the historical evolution of the NCCPA supports a construction of the definition of “civil penalty provision” that ensures that s 166 of the Credit Act operates to include civil penalty provisions in the Credit Code, so as not to render them redundant.
This history also negates Sunshine Loans’ submission that the legislative intention was to cause the Credit Act and the Credit Code to operate as separate and distinct regimes. Nothing to that effect appears but, rather, it is clear that the two were intended to be integrated in their operation, even if some matters are dealt with specifically by one and not the other.
Sections 167 and 177 of the Credit Act
Sunshine Loans made effectively the same submissions in respect of s 167 that it made in relation to s 166. Section 167 permits ASIC to apply to the Court for an order that a contravenor pay a pecuniary penalty. Relevantly, it provides as follows:
167Court may order person to pay pecuniary penalty for contravening civil penalty provision
Application for order
(1) Within 6 years of a person contravening a civil penalty provision, ASIC may apply to the court for an order that the person pay the Commonwealth a pecuniary penalty.
Court may order person to pay pecuniary penalty
(2) If a declaration has been made under section 166 that the person has contravened the provision, the court may order the person to pay to the Commonwealth a pecuniary penalty that the court considers is appropriate (but not more than the amount specified in section 167A).
Again, this section operates upon breaches of civil penalty provisions and, by reason of the previous discussion, that includes any section meeting the definitional requirements, regardless of whether it appears in the Credit Act or the Credit Code. Therefore, ASIC can seek relief under s 167 for contraventions of civil penalty provisions appearing in the Credit Code.
Similar arguments were also made in relation to the operation of s 177. That section permits ASIC to seek injunctions in relation to contraventions of “this Act”. Section 177(1) relevantly provides:
177 Injunctions
(1) If, on the application of ASIC or any other person, the court is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute:
(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to contravene this Act; or
(d) inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f) conspiring with others to contravene this Act;
the court may grant an injunction on such terms as the court considers appropriate.

Consistently with the reasoning adopted above, the expression “this Act” refers to both the Credit Act and the Credit Code, with the consequence being that the relief sought by ASIC under s 177 for contraventions of provisions in the Credit Code is available if the necessary facts are made out. This, too, is consistent with the conclusions of Greenwood J in ASIC v Rent 2 Own Cars at 624 – 625 [130].
Alternative methods of enforcement of Credit Code contraventions
Sunshine Loans suggested that the enforcement of civil penalty provisions should take place via s 47(1) of the Credit Act. That section enumerates certain “general conduct obligations” and, specifically, s 47(1)(d) obliges a licensee to “comply with the credit legislation”. By s 47(4), a contravention of certain subparagraphs of s 47(1) by a credit provider is punishable by the imposition of a civil penalty, though s 47(1)(d) is not one of them.
The expression “credit legislation” is defined by s 5(1) of the Credit Act as including “this Act”, which necessarily includes the Credit Code. This was also explained by Greenwood J in ASIC v Rent 2 Own Cars, where his Honour said at 611 [69]:
Section 47(1)(c) and (d) of the NCCP Act provide that a licensee must comply with the conditions on the licence, and comply with the “credit legislation”. The term credit legislation is defined to mean the NCCP Act (which includes Sch 1, consisting of the National Credit Code); the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth); Div 2 of Pt 2 of the ASIC Act and Regulations made for the purpose of that Division; and any other Commonwealth or, relevantly, State legislation that covers conduct relating to credit activities, but only insofar as it covers conduct relating to credit activities.
(Emphasis in original).
Conversely, the submission of Sunshine Loans was that the Credit Code is brought within the scope of s 47 by subparagraph (d) of the definition of “credit legislation”, which indicates that the expression means, inter alia:
(d) any other Commonwealth, State or Territory legislation that covers conduct relating to credit activities (whether or not it also covers other conduct), but only in so far as it covers conduct relating to credit activities.
It is difficult to accept that the Credit Code, which is a schedule to, and forms part of, the NCCPA, might be described in the latter as being “other legislation”. For the reasons which have been referred to above, the expression “this Act” must mean all parts of the NCCPA including the Credit Code. That conclusion is not excluded by the chapeau to s 5(1) for the reasons previously articulated.
It would also be an unusual construction were s 47(1)(d) to be taken as the source of the requirement for a credit provider to comply with the civil penalty provisions in the Credit Code. It would be an extremely curious operation of the NCCPA were a contravention of a civil penalty provision in the Credit Code to only be enforceable in a derivative manner pursuant to s 47(1)(d), albeit not as resulting in a civil penalty.
Sunshine Loans similarly submitted that s 124 of the Credit Code should be seen as the mechanism through which contraventions of civil penalty provisions in the Credit Code are intended to be enforced. It was submitted that this prevented the existence of any legislative lacuna in relation to the enforcement of those provisions. That section provides:
Division 2—Other penalties
124Civil effect of contraventions
(1) If a credit provider or lessor contravenes a requirement of or made under this Code, the court may order the credit provider or lessor to make restitution or pay compensation to any person affected by the contravention and, in that event, may make any consequential order it considers appropriate in the circumstances.
(2) An application for the exercise of the court’s powers under this section may be made by:
(a) a person affected by the contravention; or
(b) ASIC on behalf of a person affected by the contravention, if the person has consented in writing to ASIC making the application; or
(c) ASIC (on its own behalf).
It can be accepted that a contravention of any of the provisions which impose a civil penalty for their contravention will enliven s 124(1) at the suit of the persons or entities identified. However, the relief available under that section is the making of orders that the contravenor make restitution or pay compensation, which falls short of enforcing the civil penalty for which provision is made. It was submitted on behalf of Sunshine Loans that enforcement of the civil penalties could occur through the power of the Court to “make any consequential order it considers appropriate in the circumstances”. That, however, should be rejected. The section is directed to compensation or restitution and the additional relief is only that which is consequential to the granting of that relief. That means ancillary orders can only be made where the relief specified has been granted and the orders are consequential upon it. The making of an order that a contravenor pay to the Commonwealth a civil penalty is not consequential upon the making of an order for compensation or restitution.
It follows that s 124 does not provide an avenue for the enforcement of civil penalty provisions in the Credit Code.
Impact of the Financial Sector Reform Act 2022 (Cth)
Sunshine Loans further submitted that support for its construction of the NCCPA could be derived from the Financial Sector Reform Act 2022 (Cth) which took effect on 12 June 2023. That Act made a number of amendments to the NCCPA by introducing a number of additional penalty provisions into the Credit Code, including s 31C, in respect of which criminal penalties were imposed. It also introduced into the Credit Act ss 133CC(1), 133CD(1), 133CE(1) and 133CF(1) which were part of a wide ranging new suite of regulations relating to credit providers, but which specifically dealt with short term and small amount credit contracts. The identified provisions imposed civil penalties whereas others in the new regime imposed criminal penalties. It was suggested that this strengthened the view that there were two regimes for regulation, one being in the Credit Act and another in the Credit Code.
However, it remains the fact that the construction proposed by Sunshine Loans would have the unusual result that the civil penalty provisions in the Credit Act regulating the conduct of credit providers providing small amount credit contracts would be enforceable as such, whilst those in the Credit Code would not be. That would be somewhat astonishing given that there are now numerous provisions in the Credit Code which impose civil penalties: see ss 24, 30B (for regulations made under the Credit Code which impose civil penalties), 39B, 72, 155, 156, 174, 177B, 179GA, 179V and 179VC: and on Sunshine Loans’ submission, none would be enforceable as such.
Particular reference was made to s 31C which was introduced into the Credit Code by s 15 of the Financial Sector Reform Act. At the same time, s 111 of the Credit Code was amended to include s 31C as involving a “key requirement” for the purposes of Div 1 of Pt 6 of the Credit Code. Sunshine Loans submitted that the legislature has provided a mechanism for enforcement of s 31C by making it subject to s 112 of the Credit Code such that ASIC may enforce it as a “key requirement” provision and the orders which the Court may make under s 113 include the imposition of a penalty. From this, it seemed to be suggested that ASIC had all the power necessary to seek penalties for wrongdoing by credit providers.
However, s 24(1A) is not identified as involving a “key requirement” and is not enforceable via action by ASIC under s 112. It follows that reference to the introduction of the Financial Sector Reform Act and the new s 31C does not assist Sunshine Loans’ submissions. On the contrary, it substantially negates them. In addition, the insertion into the Credit Code of a number of additional civil penalty provisions which do not involve “key requirements” means that, on Sunshine Loans’ submission, these provisions will also be unenforceable. It follows that the sensible construction is that the mechanism for enforcement of the civil penalty provisions in the Credit Code is, and remains, s 166 of the Credit Act, which is consistent with the ordinary meaning of the definition of “civil penalty provision”.
Conclusion on the operation of s 5(1) and jurisdiction
The definition of “civil penalty provision” in s 5(1) operates such that any provision meeting the description in subparagraphs (a) or (b), contained in either the Credit Act or the Credit Code, is within its scope. This has the consequence that a contravention of such a provision is enforceable by ASIC under ss 166 and 167 of the Credit Act, and ASIC is entitled to seek the remedies which it now does in the originating application. It follows that this Court has jurisdiction to hear the matter.
Shortly before judgment was due to be delivered in this matter, ASIC drew the Court’s attention to Australian Securities and Investments Commission v Ferratum Australia Pty Limited (in liq) [2023] FCA 1043 (ASIC v Ferratum). The following observations of Kennett J (at [7]) are consistent with, and reinforce, the conclusion reached above:
… Section 24(1A) of the Code provides for a “civil penalty” of 5,000 penalty units for its breach and is thus a “civil penalty provision” within the meaning of the NCCP Act (see s 5), with the result that declarations and civil penalty orders are available for its breach under Part 4-1 of the NCCP Act as well as the remedies provided for in Part 4-2. Contraventions of s 24(1A) can also attract criminal penalties (s 24(2)).
Similarly, it is not the case that s 177 of the Credit Act applies only in relation to breaches of the Credit Act. The relief sought by ASIC under s 177 for contraventions of provisions in the Credit Code is available if the necessary facts are made out.
Other “jurisdictional” challenges
A further issue raised by Sunshine Loans was whether ASIC is entitled to obtain declaratory relief in relation to the alleged contraventions of s 24(1A) of the Credit Code which occurred prior to 13 March 2019 (hereinafter, the “pre-13 March 2019 contraventions”). Prior to that date, a contravention of that section resulted in a criminal penalty only, but from that date, any contravention resulted in a civil penalty.
By way of brief background, by its second further amended originating application, ASIC seeks declarations of contraventions of s 24(1A) of the Credit Code by Sunshine Loans in respect of the period from 1 July 2016 to 2 November 2020 (being the Relevant Period). It seeks those declarations pursuant to s 166 of the Credit Act and s 21 of the Federal Court Act on the basis that the former provision enables the Court to make declarations in respect of contraventions that occurred after 13 March 2019, whilst the latter provides the Court’s foundation to make declarations in respect of the pre-13 March 2019 contraventions.
On 30 August 2023, a few days prior to the commencement of the hearing, Sunshine Loans sought leave to amend its response to ASIC’s further amended concise statement. Leave was subsequently granted, and the amendments made by Sunshine Loans revealed what appeared to be a new jurisdictional challenge; namely, that the Court does not have jurisdiction to make declarations in relation to the pre-13 March 2019 contraventions.
Although the submissions made in support of this challenge were opaque, it appears that two main grounds were advanced. First, that the Court did not have criminal jurisdiction such that it was unable to deal with the pre-13 March 2019 contraventions which carried criminal penalties. Secondly, that the Court did not have jurisdiction to make a declaration at the suit of ASIC which had no power to bring proceedings in relation to the pre-13 March 2019 contraventions.
The Court’s jurisdiction in respect of the pre-13 March 2019 contraventions
Sunshine Loans’ submission in relation to the first ground was that this Court only had civil jurisdiction under the Credit Act and that, until 13 March 2019, a contravention of s 24(1A) only gave rise to a criminal offence. Although not expressly articulated, it appears that the substance of the submission was that where a declaration of contravention is sought in relation to a provision which carries the imposition of a criminal penalty, the jurisdiction which is exercised is criminal in nature and this Court has no such jurisdiction. This was sought to be buttressed by the proposition that if ASIC sought a declaration in respect of the pre-13 March 2019 contraventions, it would be required to prove each contravention beyond reasonable doubt by reason of the section involving the imposition of criminal penalties.
The civil jurisdiction of this Court conferred by s 187 of the Credit Act is wide and is “in relation to civil matters arising under this Act”. The reference to “matter” includes any act or omission. Additionally, this Court’s jurisdiction is expressly stated to be without limitation.
Here, ASIC’s claim for declarations in relation to the pre-13 March 2019 contraventions is a “civil matter” arising under the Credit Act for the purposes of s 187. ASIC seeks only a declaration of contravention and does not seek the imposition of any criminal penalty. On the matters mentioned in its second further amended concise statement, no issue is raised that Sunshine Loans has engaged in any criminal conduct and no determination or declaration is sought that any criminal conduct has occurred. ASIC has stated that no criminal proceedings are on foot or contemplated, such that the potential for prosecution of Sunshine Loans is not imminent or “on the cards”.
There are many instances where Courts have made declarations that persons have breached legislative provisions which, if a contravention is established to the requisite degree in criminal proceedings, may also constitute a criminal offence: see, for example, Australian Softwood Forests Pty Ltd v Attorney-General (NSW) ex rel Corporate Affairs Commission (1981) 148 CLR 121, where it was expressly recognised that the defendants were liable to criminal prosecution in relation to the conduct in respect of which the declaratory relief was sought; Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596, 603, where there was express recognition of the right of the Crown to seek a declaration of contravention of a statutory provision which would also constitute criminal conduct, but where it was also recognised that the declaration is not one that a crime has been committed.
It has also been recognised that civil courts should be wary of making declarations against a party for contravention of a statutory provision where a criminal prosecution in respect of the same subject matter as the declarations is a real possibility: Australian Securities and Investments Commission v Dunjey [2023] FCA 361 [139]. Though, in that last-mentioned case, Feutrill J did not consider this to provide a basis to refuse to grant the declarations sought as his Honour was satisfied (at [151] – [153]) that ASIC had no intention of referring the contraventions to the Commonwealth Director of Public Prosecutions, and no intention to prosecute the defendants itself under s 274 of the Credit Act.
ASIC’s approach in the present case of seeking mere declarations of a breach of a criminal provision is uncontroversial and consistent with that adopted by Yates J in Australian Securities and Investments Commissionv Membo Finance Pty Ltd (No 2) [2023] FCA 126 [23], [50] – [51], [78] – [79] (ASIC v Membo Finance). That decision related to admitted contraventions of ss 47(1)(a) and 47(1)(e) of the Credit Act, which only became civil penalty provisions from 13 March 2019. His Honour noted that ASIC relied, as it has here, upon both s 21 of the Federal Court Act and s 166 of the Credit Act as the basis for the declaratory relief because some of the provisions alleged to have been contravened were criminal penalty provisions at the time of the contraventions, rather than civil penalty provisions. Notably, his Honour was prepared to make declarations in reliance on s 21 of the Federal Court Act.
The making of a declaration in a civil suit of the contravention of a statutory provision which, in other proceedings, might carry with it the imposition of a criminal penalty, does not transform the proceedings into a criminal prosecution. Here, the relief sought by ASIC in relation to the pre-13 March 2019 contraventions is a civil matter and therefore falls within the scope of s 187 of the Credit Act.
The limited scope of s 166 of the Credit Act
Sunshine Loans further submitted that ASIC has no power to bring an action against it in respect of the pre-13 March 2019 contraventions under s 166 of the Credit Act, because that section only provides ASIC with the power to seek a declaration that a person has contravened a civil penalty provision. However, the potential limits of s 166 are irrelevant in circumstances where ASIC does not rely upon it to support its declarations in this respect. Section 21 of the Federal Court Act, being the provision upon which it relies, provides:
The Court may, in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.
The power under s 21 is only limited by the Court’s discretion: Foster v Jododex Australia Pty Ltd (1972) 127 CLR 421, 435; Seven Network Ltd v News Ltd (2009) 182 FCR 160, 389 [1016]: and it extends to making a declaration at the suit of a regulator to encourage compliance with an Act which the regulator has responsibility to administer: Australian Securities and Investments Commission v PE Capital Funds Management Ltd (administrators appointed), in the matter of PE Capital Funds Management Ltd (administrators appointed) (2022) 159 ACSR 1, 41 [201]. The power has been used to make declarations where the provision contravened was also a criminal offence. Some examples in relation to the Credit Act are ASIC v Rent 2 Own Cars at 617 [97], 619 [105] and 682 [436(1)], which concerned contraventions of s 32A of the Credit Code, and Australian Securities and Investments Commission v Channic Pty Ltd (No 4) [2016] FCA 1174 [1817], which concerned contraventions of s 133(1) of the Credit Act which was both a civil penalty provision and an offence by reason of s 133(6).
Sunshine Loans claimed, however, that there was no civil matter arising under the Credit Act because ASIC did not have power to bring a proceeding for contravention of the Credit Act, and absent that power there was no civil matter. It relied upon the observations in Hobart International Airport Pty Ltd v Clarence City Council at 223 [29] to the effect that there needed to be a justiciable controversy between the parties in the sense of there being some right, duty or liability to be established by the determination of the Court. Further reliance was placed on the following proposition at 223 [31]:
The question in these appeals can be approached in this way because, in federal jurisdiction, “questions of ‘standing’ to seek equitable remedies such as those of declaration and injunction, [when they arise,] are subsumed within the constitutional requirement of a ‘matter’”. The “significance of standing to the existence of a matter for the purposes of Ch III” is, in essence, that there is no “matter” “unless there is a remedy available at the suit of the person instituting the proceedings in question”.
So it was said, the only remedy for ASIC in relation to the pre-13 March 2019 contraventions was pursuant to s 206 of the Credit Act, being the power to take criminal proceedings, or s 274 of the Credit Act, being the power to prosecute. As has been demonstrated above, that is not correct, and ASIC has wider powers under the Credit Act to take action in relation to contraventions of its provisions.

Moreover, by s 239 of the Credit Act, ASIC has “the general administration of this Act” — that carries with it the power to seek declarations in relation to its contravention, even without express statutory foundation. In Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 3) (2012) 213 FCR 380, 441 [271], Perram J observed the following in relation to ASIC’s standing to seek declarations of contraventions of the Australian Securities and Investments Commission Act 2001 (Cth):
The Court appears not to have an express power under the ASIC Act to declare, at the suit of ASIC, that provisions of that Act have been breached. But it does have a general power to make a binding declaration of right even where no consequential relief is claimed by virtue of s 21 of the Federal Court of Australia Act 1976 (Cth). The course of authority in this Court confirms that where a regulator seeks a declaration of a contravention of the statute it administers, it has standing to pursue that claim: cf Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2001] ATPR 41-801 at [30] per Carr J; Australian Competition and Consumer Commission v Kaye [2004] FCA 1363 at [199] per Kenny J.
That observation was adopted and applied by Allsop CJ in Australian Securities and Investments Commission v TAL Life Ltd (No 2) (2021) 389 ALR 128, 173 [217]. As his Honour indicated (at 174 – 175 [223]), a declaration of the contravention of an Act at the suit of a regulator who has responsibility to administer it can be made using the power in s 21 of the Federal Court Act:
Section 21 of the Federal Court Act is wide enough to encompass a declaration sought by a regulator to vindicate the public interest in encouraging compliance by a party and others with an Act of public importance which the regulator has a statutory responsibility to administer. The phrase “declaration of right” should not be construed narrowly and extends to any situation involving the field of legal relations: Johnco Nominees Pty Ltd v Albury-Wodonga (NSW) Corporation [1977] 1 NSWLR 43 at 65E–F. See also Sankey v Whitlam (1978) 142 CLR 1 at 23; 21 ALR 505 at 513–14. It extends to obligations and duties of a party the bringing about or encouragement of compliance with which is within the remit of the regulator in its statutory duty of general administration.
This is a complete answer to Sunshine Loans’ assertion that what was required was an express or specific conferral of power on the Court. Here, ASIC has general administration of the Credit Act and has the standing and authority to bring proceedings for declarations to vindicate the public interest in the encouragement of compliance with that Act.
It follows that ASIC’s claim for relief in relation to the pre-13 March 2019 contraventions is relief which ASIC is entitled to pursue and in respect of which the Court has jurisdiction to grant. As such, it is a “civil matter” for the purposes of s 187 of the Credit Act.
Matters raised in Sunshine Loans’ concise response
A number of additional matters were raised by Sunshine Loans in its second further amended response to ASIC’s second further amended concise statement as to the Court’s alleged lack of jurisdiction. Although they were not the subject of any substantial oral submissions, they need to be considered, albeit briefly.
Section 204 of the Credit Act, which was raised by paragraph 2E of Sunshine Loans’ response, is irrelevant to the matters under consideration. It is concerned with the exercise of powers by State or Territory courts in relation to persons who have committed offences under the Credit Act and there are no relevant criminal proceedings in this matter.
By paragraph 2G of Sunshine Loans’ response, it was asserted that there was no original jurisdiction in the Federal Court in relation to offenders or persons charged with offences against the Credit Act. That is incorrect, as some jurisdiction is vested in this Court by s 188 of the Credit Act. However, regardless of whether that is so or not, it is irrelevant in this case where no issue of criminal responsibility arises.
Contrary to the assertion in paragraph 2K, this Court does have jurisdiction to determine whether Sunshine Loans contravened s 24(1A) in the period prior to 13 March 2019, as such a determination is a civil matter for the reasons referred to above.
By paragraph 2M, Sunshine Loans asserted that ASIC is prohibited from pursuing proceedings for alleged offences against s 24(1A) of the Credit Act, but again, that is irrelevant in the context of the present proceedings.
By paragraph 2N, it was complained that ASIC did not make any application under s 124(2) of the Credit Act, however, that complaint does not assist Sunshine Loans as s 124(2) is only relevant where orders for restitution or compensation are sought, which is not applicable in this case.
In relation to paragraphs 2P and 2Q of Sunshine Loans’ response, ASIC accepted that this Court does not have jurisdiction by reason of s 39B of the Judiciary Act to make a declaration that Sunshine Loans contravened s 24(1A) of the Credit Code, because s 39B does not apply to Div 2 of Part 4-3 of the Credit Act. Nevertheless, it relied upon the Court’s unlimited civil jurisdiction with respect to the Credit Act conferred by s 187(1) as the foundation of the Court’s jurisdiction in relation to the pre-13 March 2019 contraventions and the power granted by s 21 of the Federal Court Act to give the relief. There is, consequently, no basis for striking out any part of ASIC’s claim.
Sunshine Loans’ concern expressed in paragraph 2S is founded upon the notion that ASIC is pursuing criminal proceedings against it but, as has been explained, that is not the nature of the current action.
By paragraph 2U, it was submitted that this Court does not have original jurisdiction to grant an injunction under s 177 of the Credit Act upon a finding that Sunshine Loans contravened s 24(1A) of the Credit Act prior to 6 June 2019. Whether that is so or not does not need to be determined because, as is revealed below, there is more than sufficient conduct subsequent to that date to potentially support the issuing of an injunction.
It follows that none of the matters raised by Sunshine Loans give rise to a finding that this Court lacks jurisdiction to deal with, or that ASIC lacks power to seek relief in relation to, the contraventions alleged in the present proceedings.
LIABILITY
The remainder of these reasons concern the question of Sunshine Loans’ liability for the various alleged contraventions of the Credit Act and the Credit Code arising in connection with the SACCs which it entered into with its customers (who are also referred to interchangeably below as the “borrowers”).
The SACCs
In the Relevant Period, the SACCs utilised by Sunshine Loans took five different forms, although each version was substantially the same. Each SACC was contained in a composite document of multiple parts which were headed, respectively, “Consumer Credit Contract Schedule Financial Table”, “Information Statement – Small Amount Credit Contract”, “Consumer Credit Contract Terms – Small Amount Credit Contract”, and “Direct Debit Request New Customer Form”.
The standard forms of the SACCs from the Relevant Period were contained at Annexure A to E of the Statement of Agreed Facts, and were used by Sunshine Loans as follows:
(a)for the period from 1 July 2016 until 31 July 2017, the version contained at Annexure A was used;
(b)for the period from 1 August 2017 until 28 February 2018, the version contained at Annexure B was used;
(c)for the period from 1 March 2018 until 31 May 2018, the version contained at Annexure C was used; and
(d)for the period from 1 June 2018 until 2 November 2020, either of the versions contained at Annexure D or Annexure E was used.
In the “Consumer Credit Contract Schedule Financial Table” document (referred to herein as the “Financial Table”), the following words appear immediately below the heading of the document:
This Financial Table together with the Consumer Credit Contract Terms forms the Consumer Credit Contract between you and us.
The Financial Table is in the form of an offer from the borrower to enter in a credit contract with Sunshine Loans as the credit provider “on the Terms set out in this Financial Table and the Consumer Credit Contract Terms”, although the execution page of the agreement is contained at the end of the document headed “Consumer Credit Contract Terms – Small Amount Credit Contract” (hereinafter referred to as the “CC Contract Terms”).
The Financial Table is substantially in the form of a schedule which sets out the borrower’s name, the type of financial facility required, the amount of credit including establishment fees and the first month’s credit charge, the total of the repayments and an identification of the regularity of the required repayments. Below those matters, the Financial Table sets out the “Credit Fees and Charges” (the emphasis appearing in the original):

Credit Fees and Charges:

Fees and Charges retained by us and included in Amount of Credit:

$151.20

Made up of the Establishment fee

$126.00

and the First month’s credit charge

$25.20

Monthly Credit Charge

$25.20

Other Fees and Charges retained by us:

Default fee or Direct Debit Dishonour fee

$35.00

Rescheduled payment fee

$35.00

Arrears account management fee

(Charged on the 7th day from the original last repayment date and weekly thereafter)

$30.00

Fees and Charges paid to others:

Direct Debit Fee (directly charged by EziDebit)

$0.55 per payment

External debt collection costs

Not Ascertainable

External legal enforcement costs

Not Ascertainable

The reference to the “Rescheduled payment fee” in that part of the Financial Table is important in the context of the dispute between the parties. In subsequent iterations of the CC Contract Terms, that fee was relabelled as an “Amendment fee”.
For clarity, unless stated otherwise, any extracts from the SACCs have been taken from the version of the SACC contained at Annexure A of the Statement of Agreed Facts.
The CC Contract Terms document does not elaborate upon all of the rights and obligations that appear in the schedule in the Financial Table. It commences by repeating that the terms of the agreement between the borrower and Sunshine Loans are to be found in it and the Financial Table. It then provides that Sunshine Loans agrees to lend the amount of credit identified in the Financial Table subject to the terms set out. Those terms include the right to terminate the agreement upon, inter alia, the borrower’s default. Under the heading, “Credit Charges”, adjacent to cl 2, the following is provided:
You will pay all the Credit Charges shown in the Financial Table from the day you obtain the Amount of Credit until the balance on your account with us has been completely repaid.
Clause 3 of the CC Contract Terms is important in this case. It provides:
3. Repayments
1. You must make the repayments shown in the Financial Table subject to any other repayment arrangements or variations agreed between us from time to time.
2. If this contract is terminated or reaches its term, you will pay us:
a. the unpaid balance of the Amount of Credit; and
b. any other credit fees or other charges or other amounts payable under this Consumer Credit Contract whether debited to your account at that time or not.
…
5. If your cheque or direct debit is dishonoured then:
a. that repayment will not be considered as made; and
b. the default fees and direct debit dishonour fees and charges shown in the Financial Table will become due and owing and can be debited to your account from the date that the cheque was received or the direct debit was attempted.
6. If any repayment either in part or in whole amount remains outstanding after the Date of Final Payment shown in the Financial Table, we may charge you the amount shown as an Arrears account management fee in the Financial Table for each week until and unless such amount is paid in full, up to the limits prescribed by law.
…
Clause 5 of the CC Contract Terms explains the position between the parties where there has been a default by the borrower:
5. Default
1.        You will be in default under this Consumer Credit Contract if:
a. you do not make the repayments shown in the Financial Table, or such other repayments as agreed between us from time to time, on or before the days on which they are due;
b. you do not make any other payment required by this Consumer Credit Contract;
c. any document information provided by you in your application form or otherwise is found to be false or inaccurate, or materially changes at any point and you do not provide us with updated information within a reasonable period; or
d. you breach any variation of this Consumer Credit Contract as agreed between us or as imposed by a court, tribunal or dispute resolution agency.
2.        If you are in default under this Consumer Credit Contract:
a.         the unpaid balance of the Amount of Credit ; and
b. any other default fees, credit fees or other charges or other amounts payable under this Consumer Credit Contract whether debited to your account at that time or not
all become due and payable.
…
(Emphasis added).
Clause 6.3 also relevantly provides:
6.General Provisions
…
3. If we waive our rights under this Consumer Credit Contract from time to time, such waiver will only be for that specific time on those terms only and unless we agree to vary this Consumer Credit Contract and provide notice of such variation in writing.
The combination of the Financial Table and the CC Contract Terms provides a somewhat problematic agreement. There are a number of fees and charges which appear in the Financial Table which have no correlating clause in the CC Contract Terms to elucidate the circumstances in which they are payable. For instance, in the Financial Table, there appears an item called “Establishment fee”, and adjacent to it is an amount of $126.00. It is not referred to in the CC Contract Terms, either directly or indirectly, save that it might be seen as part of the amount of “credit” which it is said is lent to the borrower. Similarly, the Financial Table refers to a “Monthly Credit Charge” of $25.20, though there is nothing in the CC Contract Terms which directly refers to it. There are some generalised references to charges which are “reasonably incurred” and the statement in cl 2 that the borrower is to pay “all the Credit Charges shown in the Financial Table” from the commencement of the loan. However, save for the title given to the charge in the Financial Table, there is nothing to indicate that it is to be paid monthly.
In contrast, there is a correlation between the entry in the Financial Table of “Default fee or Direct Debit Dishonour fee” and the CC Contract Terms where the latter identifies, in cl 3.5(b), that the fee will become payable if a “cheque or direct debit is dishonoured” or, pursuant to cl 5.2, where the borrower is in default under the credit contract. Similarly, the fee described in the Financial Table as “Arrears account management fee” is referenced in cl 3.6 of the CC Contract Terms as being an amount payable where “any repayment either in part or in whole amount remains outstanding after the Date of Final Payment shown in the Financial Table”.
The “Rescheduled payment fee”, however, does not appear to have any direct correlation with the CC Contract Terms. Although the terms make generalised references to fees and charges which are referred to in the Financial Table, there is no term which specifically identifies the occasion on which a “Rescheduled payment fee” is payable by the borrower. The same observation applies in relation to an “Amendment fee”, where that expression is used in subsequent iterations of the Financial Table. For convenience, the fee (whether described as a rescheduled payment fee or as an amendment fee) will hereinafter be referred to as the “Amendment Fee”.
In the Statement of Agreed Facts, the parties agreed that during the Relevant Period, Sunshine Loans entered into 670,609 SACCs on the terms set out in one of the five versions referred to above. Each included the Financial Table which made provision for the charging of the Amendment Fee.
It was also agreed that, prior to entering into a SACC with a borrower, Sunshine Loans required the borrower to complete an online application form and provide documents in support of their application for credit.
At the time of entering into a contract with a borrower, Sunshine Loans arranged for the borrower to enter into a direct debit arrangement with either Ezidebit Pty Ltd or PowerPay Pty Ltd, pursuant to which the amounts of the scheduled repayments would be automatically debited from the borrower’s bank account and electronically transferred to Sunshine Loans.
During the course of the loan, Sunshine Loans would communicate with the borrowers via telephone calls or by electronic means on the internet. The latter communications included emails and other written communications with Sunshine Loans employees through a portal on Sunshine Loans’ website.
The interactions between Sunshine Loans’ customer service officers and the borrowers were recorded in a “customer transaction log” by the customer service officer either recording details of their telephone conversations with the borrower in it, or copying written electronic messages exchanged with the borrower into it.
Part of the recording of the transactions between Sunshine Loans and the borrowers involved the preparation and maintenance of statements of account for each borrower’s SACC.
The issues raised
The case advanced by ASIC concerns the inclusion of the Amendment Fee in the 670,609 SACCs which Sunshine Loans entered into in the Relevant Period, the alleged charging of that fee on 12,693 occasions, the alleged payment of the fee by borrowers on 8,376 occasions, and the alleged receipt of $293,160.00 by Sunshine Loans in respect of the fee.
At the centre of the dispute is ASIC’s contention that the Amendment Fee is not within the scope of fees and charges which are permitted under s 31A(1) of the Credit Code. The specific area of debate between the parties appeared to be whether the Amendment Fee falls within s 31A(1)(c), which permits the imposition of, or provision for, a “a fee or charge that is payable in the event of a default in payment under the contract”.
On the basis that the Amendment Fee does not fall within s 31A(1), ASIC claims that Sunshine Loans contravened s 24(1A)(a) of the Credit Code by entering into the SACCs on terms imposing the Amendment Fee, and that it contravened s 24(1A)(b) by requiring payment of the same and, thereafter, receiving payment. Each of these alleged contraventions are said to also amount to a breach of s 47(1)(d) of the Credit Act, which requires a credit provider to comply with the credit legislation. ASIC seeks injunctions and declarations of contravention, as well as the imposition of civil penalties.
These reasons concern only whether ASIC has established the alleged contraventions. What relief should be granted, if any, is to be determined following a further hearing. As a result, the following issues presently arise for determination:
(a)Whether the SACCs which Sunshine Loans entered into with borrowers imposed or provided for a monetary liability which was prohibited by the Credit Code. In particular, whether the Amendment Fee falls within s 31A(1)(c) of the Credit Code;
(b)If the Amendment Fee was a prohibited monetary liability, whether, and on how many occasions, Sunshine Loans contravened:
(i)s 24(1A)(a) of the Credit Code (concerning the entry into a small amount credit contract on terms imposing a prohibited monetary liability); and
(ii)s 24(1A)(b) of the Credit Code (concerning the requirement or receipt of payment of an impugned fee or charge); and
(c)If any of the breaches of s 24(1A) are made out, whether they also constitute a breach of s 47(1)(d) of the Credit Act.

Again, were it necessary to determine whether Sunshine Loans acted honestly, I would have to conclude that it did not. If one ascribes to its directors and officers a reasonable level of integrity and intelligence, it would be difficult to conclude that they held any belief that the manner in which Sunshine Loans charged the Amendment Fee to its customers was permitted under the Credit Code. As I have found, that lack of honesty extended to the evidence which they gave.
There is no basis on which the Court might exercise the power in s 183 of the Credit Code to relieve Sunshine Loans from liability for its contraventions.
Sunshine Loans contravened s 24(1A)(b)
The above establishes that Sunshine Loans contravened s 24(1A)(b) by requiring the payment of a prohibited monetary liability on each occasion that it charged the $35.00 Amendment Fee to a customer’s loan account. It also contravened s 24(1A)(b) of the Credit Code on each occasion that it accepted payment from a customer in relation to the Amendment Fee. Both conclusions are made taking into account the seriousness of the allegations and the requirements of the high degree of assurance required by the test in Briginshaw.
The scope of the s 24(1A)(b) contraventions
In terms of the specific contraventions established by reference to the 61 loan files in evidence (that is, excluding the five files where the SACC was entered into more than six years prior to the commencement of the action), Sunshine Loans submitted that there were four specific instances where it could not be said that the Amendment Fee was required by Sunshine Loans or actually paid by the customer.
The first was Customer 5, whose file was contained at SS-33 of the First Smirnov Affidavit. There, the evidence showed that the loan amount was for $1,500.00 and that an Amendment Fee of $35.00 was charged to the account on 1 February 2019. Thereafter, a number of other fees were charged to the account including “EziDebit Failed Payment” fees and “Arrears Management” fees and these were all added to the account. Subsequently, the customer made a series of payments of $198.00 but additional arrears management fees were charged. Ultimately, although entries were made to the statement of account indicating that arrears management fees were being charged, the amount of each was $0.00. This occurred because Sunshine Loans had, by that time, charged the customer an amount of additional fees which equalled the amount borrowed and, pursuant to s 39B of the Credit Code, it was unable to charge any further fees. At that time the outstanding balance was $426.00, which was subsequently paid off and the statement of account recorded a nil debit.
Sunshine Loans submitted that there was no evidence that the money paid to it was in respect of the Amendment Fee rather than the arrears management fees, albeit that the latter were not charged to the account. That submission should obviously be rejected. The state of the account was maintained by Sunshine Loans and it identified the borrower’s indebtedness and the manner in which the payments received were attributed to the debt. It is, with respect, beyond any doubt that it did not increase the borrower’s indebtedness in relation to the arrears management fees which it was not able to charge and that it caused the payments received to discharge the previously arising obligations. Whatever might have happened prior to the date when Sunshine Loans was unable to charge additional fees, it is apparent that once the $426.00 debt existing at that date was paid off, the customer had paid the amount of the previously charged Amendment Fee.
The second instance, which raised a slightly different issue, was in relation to Customer 13, whose file was contained at SS-21 of the First Smirnov Affidavit. That customer entered into a loan for $2,000.00. On 3 August 2020, a “Contract Amendment” fee of $35.00 was charged to the account, which resulted in the total indebtedness being $343.52. On 5 August 2020, the loan amount was reduced to nil consequent upon the payment of an amount necessary to discharge that debt. Some time later, being after ASIC commenced its investigation into Sunshine Loans’ charges, Sunshine Loans repaid the Amendment Fee to 60 customers, one being Customer 13. Sunshine Loans therefore submitted that, because it had repaid the fee, it had not required or accepted its payment. With respect, that submission is not remotely sustainable. The facts, as they appear, make it clear that the fee was “required” because its payment was identified by Sunshine Loans as being a legal obligation owed by the borrower. It is also beyond any doubt that the amount was “accepted” by Sunshine Loans, as is evidenced from the entries in the statement of account which it maintained. The fact that an equivalent amount was subsequently repaid is not to the point.
The third customer in respect of whom an issue was raised was Customer 21, whose file was contained at SS-37 of the First Smirnov Affidavit. This loan was for the sum of $1,250.00 which was advanced on 14 November 2018. Following discussions between the customer and Sunshine Loans, a variation of the repayments occurred and a “Contract Amendment” fee of $35.00 was charged on 1 February 2019. That resulted in a total indebtedness of $760.00. The customer subsequently defaulted in the making of a number of payments, resulting in additional fees of $65.00 being incurred and the total indebtedness increasing to $825.00. At that point, Sunshine Loans and the customer agreed that the customer would make three payments of $250.00 to discharge the loan, with the consequence that $75.00 of the total $825.00 owing would not be paid. The customer thereafter paid the three instalments and reduced the debt to nil. Sunshine Loans claimed that the Court could not be satisfied that the Amendment Fee of $35.00 was paid, as it might have been included in the $75.00 which was written off by Sunshine Loans.
The answer to this turns on how the money was accounted for in the account. However, there is insufficient evidence to reach any sufficient conclusion in relation to this issue. It is true that in his affidavit filed 10 July 2023, Mr Simmons identified how he caused Sunshine Loans’ computer databases to be interrogated by its IT consultants, InMarket Systems Pty Ltd, to ascertain on how many occasions the Amendment Fee had been paid by borrowers. It appears that the instructions included the following:
Where the customer has repaid the amount financed, the establishment fee and all monthly credit charges, I instructed InMarket to perform an analysis on a “money in money out” basis relying on the order in which any fee was posted to the loan statement. Where any part of the $35 fee had been paid, I instructed InMarket to count that loan file as one where the relevant fee had been paid.
Whilst it is likely that Sunshine Loans operated its loan accounts in the same manner as the instructions given to InMarket Systems Pty Ltd, the evidence falls short of satisfying the onus in this case. The evidence of Mr Simmons certainly shows that he adopted a specific approach to the accounting for payments in the loan accounts for the purposes of the present action, but it is not clear from that acknowledgment that the usual day-to-day business operated that way. It cannot be said that the evidence established that Sunshine Loans received the Amendment Fee from Customer 21.
The last specifically referred to customer was Customer 40, whose file was contained at SS-105 of the First Smirnov Affidavit. There, the loan was for $500.00, and it was advanced on 9 September 2020. On 5 October 2020, the customer indicated an inability to make his repayments and requested a deferral for two weeks. This was agreed to and a “Contract Amendment” fee of $35.00 was debited to the account. Subsequently, various repayments were made by the borrower and a not insubstantial number of default fees were incurred. At the point where the total indebtedness had reached $637.00, Sunshine Loans ceased debiting any further default fees to the account. It is apparent that, at this point in time, the borrower had been charged all of the fees which Sunshine Loans was entitled to charge on the loan. Although further defaults occurred and the default fees were noted on the statement of account, a nil amount was debited in respect of them. The loan was subsequently paid off.
As was the case in relation to Customer 5, it is apparent that the Amendment Fee was included in the borrower’s indebtedness as at the date at which Sunshine Loans was unable to charge any further fees. It is also apparent from the manner in which the payments were made that the borrower repaid the outstanding indebtedness from that date and that included the “Contract Amendment” fee. There is no sensible argument that Sunshine Loans did not receive payment of it.
Findings as to non-compliance with s 24(1A)(b) of the Credit Code
In light of the above, the following specific findings in respect of s 24(1A)(b) can be made by reference to the 61 loan files:
(a)Between 1 July 2016 and 13 March 2019, Sunshine Loans required payment of the Amendment Fee:
(i)from 19 customers, being Customers 1, 2, 3, 5, 11, 12, 14, 17, 20, 21, 23, 24, 25, 26, 28, 29, 30, 36 and 37;
(ii)on 19 occasions, being on one occasion in respect of Customers 1, 2, 3, 5, 11, 12, 14, 17, 20, 21, 23, 24, 25, 26, 28, 29, 30, 36 and 37;
(b)Between 1 July 2016 and 13 March 2019, Sunshine Loans accepted payment of the Amendment Fee:
(i)from 11 customers, being Customers 1, 2, 11, 12, 17, 20, 23, 25, 28, 36 and 37;
(ii)on 11 occasions, being on one occasion in respect of Customers 1, 2, 11, 12, 17, 20, 23, 25, 28, 36 and 37;
(c)After 13 March 2019, Sunshine Loans required payment of the Amendment Fee:
(i)from 42 customers, being Customers 4, 6, 7, 8, 9, 10, 13, 15, 22, 31, 33, 34, 35, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65 and 66;
(ii)on 47 occasions, because in respect of Customers 9, 34, 35 and 66 it charged the Amendment Fee on two, three, two and two occasions respectively;
(d)After 13 March 2019, Sunshine Loans accepted payment of the Amendment Fee:
(i)from 35 customers, being Customers 4, 5, 6, 7, 9, 10, 13, 15, 22, 35, 39, 40, 41, 42, 43, 45, 46, 47, 48, 49, 50, 51, 52, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65 and 66;
(ii)on 39 occasions, because in respect of Customers 9, 35 and 66, it charged the Amendment Fee twice.
The “extrapolation” of the contraventions
The remaining question, which was highly contested between the parties, is whether it is open for the Court to make findings of contravention beyond the 66 loan files adduced in evidence.
ASIC’s case is that the 66 loan files are representative of the manner in which the Amendment Fee was charged to all customers and paid by them over the course of the Relevant Period. It asks the Court to find that, during the Relevant Period, Sunshine Loans required payment of the Amendment Fee on 12,693 occasions and received payment of the Amendment Fee on 8,376 occasions.
The figures advanced by ASIC are derived from evidence adduced by Sunshine Loans in these proceedings, although larger figures were initially provided by Sunshine Loans to ASIC in response to statutory notices prior to the proceedings being commenced. Relevantly, by an email dated 10 May 2021 to ASIC, Dr O’Shea of O’Shea Lawyers set out the “number of times Sunshine Loans has charged the Amendment Fee”. Further, by two affidavits of 10 July 2023 and 24 July 2023, Mr Bigg, a computer program developer at InMarket Systems Pty Ltd, deposed that the sum of the number of occasions the Amendment Fee was paid was 8,376. Those figures can be summarised as follows:

Financial Year

Charged

Paid

01/07/2016 – 30/06/2017

1,003

470

01/07/2017 – 30/06/2018

3,856

1,750

01/07/2018 – 30/06/2019

4,971

3,778

01/07/2019 – 30/06/2020

2,469

2,072

01/07/2020 – 30/06/2021

394

306

Total

12,693

8,376

ASIC submitted that the Court could make findings beyond the 66 loan files, because the files were “illustrative” of Sunshine Loans’ practice in relation to all the SACCs. First, because the files were a random sample of all the SACCs entered into by Sunshine Loans which were charged an Amendment Fee over the course of the loan. Secondly, that the files demonstrate that Sunshine Loans engaged in the same practice of charging the Amendment Fee across the entirety of the Relevant Period. Thirdly, it relied on the fact that Sunshine Loans has made admissions in relation to the uniformity of its practice. Finally, because the evidence from the 66 loan files is consistent with Sunshine Loans’ admissions about its practices during the Relevant Period.
Sunshine Loans submitted that an “illustrative” case is not available to ASIC on the evidence because whether the Amendment Fee charged on each occasion was prohibited must be assessed on each occasion it was debited to the customer’s loan statement. However, for the reasons which have been given above, a precise analysis of the factual circumstances in each case is not needed to determine whether there has been a contravention, and that is particularly so in circumstances where admissions as to the charging and receipt of the fee have been made.
In particular, by its solicitor’s correspondence dated 5 and 10 May 2021 and by the evidence adduced by Mr Bigg, Sunshine Loans has admitted to the precise number of times on which it required payment of, and accepted, the Amendment Fee. Although the solicitor’s correspondence does not admit to “requiring” the Amendment Fee within the meaning of s 24(1A)(b), in light of the above findings, it is clear that Sunshine Loans required the payment of the Amendment Fee each time it charged the $35.00 fee to a customer’s account.
Though it might be accepted that the random nature of the selection of the 66 loan files is sufficient to demonstrate Sunshine Loans’ practice of imposing, requiring or accepting impermissible Amendment Fees, it is not necessary to rely on that in respect of the broader findings that ASIC seeks. Those findings can be made by reference to terms of the several iterations of Sunshine Loans’ SACCs and the admissions of charging and receiving the fee.
The five versions of the SACCs provided that the Amendment Fee was payable upon there being an amendment to the agreement. As such, it was a fee which was not permitted by s 31A of the Credit Code, its imposition was prohibited by s 23A, and by s 24, Sunshine Loans was prohibited from entering into a SACC on terms which imposed such a term, from requiring it, or accepting payment of it.
Once it was concluded that the Amendment Fee was a prohibited fee, Sunshine Loans’ admissions as to the number of times it entered into SACCs with its inclusion and as to the number of times it was charged and received, established the relevant number of contraventions in each respect.
It is not necessary to find that the Amendment Fee was paid following a concluded agreement to vary the terms of the initial loan as Sunshine Loans submitted. The contravention of s 24(1A)(b) is to require or accept payment “in respect of” a monetary liability that cannot be validly imposed. The Amendment Fee was such a liability and Sunshine Loans admitted that it charged it on 12,693 occasions and on 8,376 times it was paid. Such actions of requiring and accepting payment were “in respect of” the prohibited fee and, necessarily, a contravention followed.
In any event, it is highly likely that Sunshine Loans followed its practice of charging the Amendment Fee upon the reaching of an agreement between it and the borrower to alter the terms of the loan’s repayment. This was consistent with the evidence of Sunshine Loans’ witnesses as well as its practice as appears from the specific files considered in this case.
Sunshine Loans relied on the fact that there are no authorities where a Court has found that a sample of instances are sufficient to make broader findings of contraventions of a civil penalty provision. However, the evidence that will be sufficient to establish a contravention will vary and be dependent on the nature of the contraventions alleged, the circumstances of the case, the existence of any admissions, and the persuasiveness of the specific evidence before the Court. In some cases, a sample of contraventions may well be sufficient to make broader findings of contraventions. The Full Court made observations to a similar effect in Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631, 655 [110] – [111], albeit in the context of unconscionable conduct and the evidence that may be accepted to establish a “system” or “pattern” of behaviour:
… What happened with 80 consumers, even on a hypothetical sample of thousands … may well be sufficient evidence for a Court to decide whether or not there is a pattern.
In contrast, can conduct in relation to six consumers establish a “pattern of behaviour” or a “system”? As we explain below, in a known class of more than 3,600 consumers, and on the limited evidence before the primary judge, we would find they could not, at least not without persuasive evidence about how the six could be said to be representative of the 3,600.
Those observations eschew Sunshine Loans’ submission that there was a need for ASIC to adduce evidence of every single loan file in respect of which a contravention was alleged.
In any event, this is not a case where it is necessary for the Court to draw inferences as to whether the 66 example loan files are representative of a larger sample. Once the nature of Sunshine Loans’ obligations under the NCCPA are ascertained and the terms of the SACCs understood, the admissions made render the contraventions alleged by ASIC almost self-evident.
Contraventions of s 47(1)(d) of the Credit Act
The final issue of liability is whether Sunshine Loans’ contraventions of s 24(1A) of the Credit Code also amount to contraventions of s 47(1)(d) of the Credit Act. That subsection required Sunshine Loans, as a licensee, to “comply with the credit legislation”.
As found above, the “credit legislation” necessarily includes the Credit Code. By its contraventions of ss 24(1A)(a) and (b) of the Credit Code, Sunshine Loans failed to comply with the credit legislation and thereby also contravened s 47(1)(d) of the Credit Act.
DISPOSITION
ASIC has established an extensive number of contraventions by Sunshine Loans of s 24(1A) of the Credit Code, being a civil penalty provision, as well as a contravention of s 47(1)(d) of the Credit Act.
At the conclusion of the liability hearing, ASIC asked the Court not to make any declarations as to the contravention of any of the provisions, but merely to make findings to support the declarations which might be sought. The intention behind this was that, if the declarations were made, the appeal period would begin to run which would generate difficulties given that no hearing on penalty would have occurred. It is appropriate to adopt that course. The submissions raised by Sunshine Loans concerning the appropriateness of the making of declarations will be dealt with following the hearing in relation to relief, although it should be noted that under s 166(2) of the Credit Act, the Court is required to make declarations of contravention.
The parties are to be heard as to the appropriate declarations, injunctions, and civil penalties as a result of the findings of contravention.

I certify that the preceding three hundred and forty-eight (348) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

Associate:
Dated: 12 April 2024

File number:	QUD 190 of 2022
Judgment of:	DERRINGTON J
Date of judgment:	12 April 2024
Catchwords:	CONSUMER LAW – action by regulator under NationalConsumer Credit Protection Act 2009 (Cth) for contraventions of the National Credit Code – where respondent carries on business of providing small amount credit contracts – whether fee contained in small amount credit contracts permitted to be imposed under the National Credit Code – where fee described as an “amendment” or “rescheduled payment” fee – alleged contraventions of ss 24(1A)(a) and (b) of the National Credit Code and s 47(1)(d) of the National Consumer Credit Protection Act – hearing in relation to liability only – contraventions established CONSUMER LAW – standing and jurisdiction – whether the court has jurisdiction to consider the regulator’s allegations – where it was submitted that the regulator lacked standing to enforce the civil penalty provisions contained in the National Credit Code through ss 166, 167 and 177 of the National Consumer Credit Protection Act – arguments rejected – no lack of standing or jurisdiction CONSUMER LAW – evidence – whether court permitted to make findings beyond individual loan files contained in evidence – where respondent made admissions as to the number of times the impugned fee was charged and accepted by it
Legislation:	Acts Interpretation Act 1901 (Cth) Australian Securities and Investments Commission Act 2001 (Cth) Consumer Credit Legislation Amendment (Enhancements) Act 2012 (Cth) Corporations Act 2001 (Cth) Evidence Act 1995 (Cth) Federal Court of Australia Act 1976 (Cth) Financial Sector Reform Act 2022 (Cth) Judiciary Act 1903 (Cth) National Consumer Credit Protection Act 2009 (Cth) Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) Consumer Credit Legislation Amendment (Enhancements) Bill 2012 (Cth) National Consumer Credit Protection Bill 2009 (Cth)
Cases cited:	AMS v AIF (1999) 199 CLR 160 Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 3) (2012) 213 FCR 380 Australian Securities and Investments Commission v BHF Solutions Pty Ltd (2022) 293 FCR 330 Australian Securities and Investments Commission v Channic Pty Ltd (No 4) [2016] FCA 1174 Australian Securities and Investments Commission v Dunjey [2023] FCA 361 Australian Securities and Investments Commission v Ferratum Australia Pty Limited (in liq) [2023] FCA 1043 Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 Australian Securities and Investments Commissionv Membo Finance Pty Ltd (No 2) [2023] FCA 126 Australian Securities and Investments Commission v PE Capital Funds Management Ltd (administrators appointed), in the matter of PE Capital Funds Management Ltd (administrators appointed) (2022) 159 ACSR 1 Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd (2020) 147 ACSR 598 Australian Securities and Investments Commission v SunshineLoans Pty Ltd [2023] FCA 640 Australian Securities and Investments Commission v TAL Life Ltd (No 2) (2021) 389 ALR 128 Australian Softwood Forests Pty Ltd v Attorney-General (NSW) ex rel Corporate Affairs Commission (1981) 148 CLR 121 Briginshaw v Briginshaw (1938) 60 CLR 336 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596 Foster v Jododex Australia Pty Ltd (1972) 127 CLR 421 Hobart International Airport Pty Ltd v Clarence City Council (2022) 399 ALR 214 Independent Commission Against Corruptionv Cunneen (2015) 256 CLR 1 J Hutchinson Pty Ltd v Australian Competition and Consumer Commission [2024] FCAFC 18 Mango Media Pty Ltd v Velingos (2008) 216 FLR 176 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 Nguyen v The Queen (2020) 269 CLR 299 Seven Network Ltd v News Ltd (2009) 182 FCR 160 SunshineLoans Pty Ltd v Australian Securities and Investments Commission [2023] FCA 707 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45 Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631 Beatty and Smith, Annotated National Credit Code (2014, 5^th ed, Lexis Nexis Butterworths)
Division:	General Division
Registry:	Queensland
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	348
Date of hearing:	17 – 20 July, 4 September and 11 October 2023
Counsel for the Applicant:	Mr M Brady KC with Mr S Cleary
Solicitor for the Applicant:	Gadens
Counsel for the Respondent:	Mr M Wyles KC with Mr A Collins and Ms S Gibson
Solicitor for the Respondent:	O’Shea Lawyers

ORDER MADE BY:	DERRINGTON J
DATE OF ORDER:	12 APRIL 2024

Credit Fees and Charges:
Fees and Charges retained by us and included in Amount of Credit:	$151.20
Made up of the Establishment fee	$126.00
and the First month’s credit charge	$25.20
Monthly Credit Charge	$25.20
Other Fees and Charges retained by us:
Default fee or Direct Debit Dishonour fee	$35.00
Rescheduled payment fee	$35.00
Arrears account management fee (Charged on the 7th day from the original last repayment date and weekly thereafter)	$30.00
Fees and Charges paid to others:
Direct Debit Fee (directly charged by EziDebit)	$0.55 per payment
External debt collection costs	Not Ascertainable
External legal enforcement costs	Not Ascertainable

Financial Year	Charged	Paid
01/07/2016 – 30/06/2017	1,003	470
01/07/2017 – 30/06/2018	3,856	1,750
01/07/2018 – 30/06/2019	4,971	3,778
01/07/2019 – 30/06/2020	2,469	2,072
01/07/2020 – 30/06/2021	394	306
Total	12,693	8,376