Cigno Pty Ltd v Australian Securities & Investments Commission & Anor; BHF Solutions Pty Ltd v Australian Securities & Investments Commission & Anor

The Full Federal Court considered appeals by Cigno Pty Ltd and BHF Solutions Pty Ltd (the appellants) against decisions of the Federal Court of Australia. The dispute concerned the application of the *National Credit Code* (the Code) to certain loan facilities provided by the appellants to consumers. The Australian Securities and Investments Commission (ASIC) and the Consumer Action Law Centre (CALC) were the respondents.

The central legal issue before the Full Federal Court was whether the loan facilities offered by the appellants constituted "credit contracts" or "loan contracts" within the meaning of the *National Credit Code*. Specifically, the Court had to determine if the fees and charges imposed by the appellants, particularly those related to the provision of a "credit guarantee service," were permissible under the Code, or if they rendered the arrangements unlawful. This involved an interpretation of the definition of "credit contract" and the scope of permissible charges under the Code.

The Court reasoned that the loan facilities provided by the appellants were indeed credit contracts to which the Code applied. It found that the fees charged by the appellants, including those for the credit guarantee service, were charges for or in connection with the provision of credit. Consequently, these fees were subject to the limitations and prohibitions set out in the Code. The Court emphasised that the substance of the transaction, rather than its form or the labels used by the parties, determined whether it fell within the ambit of the Code. The Court upheld the primary judge's findings that the appellants had contravened the Code by charging fees that were not permitted.

The Full Federal Court dismissed the appeals and affirmed the primary judge's orders.