Custom Credit Corporation Ltd v Lynch; Lynch v Custom Credit Corporation

Custom Credit Corporation Ltd and Ms Lynch were parties to an application before the High Court of Australia concerning the interpretation of section 36(1)(h) of the Credit Act. The dispute centred on whether a commission charge, payable by Custom Credit to a dealer, Mr Cheap Caravans, in connection with a regulated credit contract, needed to be disclosed under the Act, even if Custom Credit was not aware of the specific amount of that commission.

The primary legal issue before the High Court was the proper construction of section 36(1)(h) of the Credit Act, which mandates that a credit contract must include a statement of any commission charge payable. The court was required to determine whether the disclosure obligation extended to commission charges that Custom Credit, the credit provider, was not aware of, particularly in light of the broad definition of "commission charge" in section 5 of the Act. This definition encompassed payments made "in the nature of commission" and those connected with a regulated contract where the consideration was partly included in the amount financed.

The applicant, Custom Credit, argued that the Full Court's construction of section 36(1)(h) imposed a strict liability for non-disclosure of information that the credit provider did not know, which they contended was a radical departure from previous interpretations, such as that in *Lupi's case*, which required the commission charge to be known to the credit provider. Custom Credit's submission suggested that the standard form contract, which identified Custom Credit as a party to transactions, did not necessarily mean they were aware of commissions payable by third parties, like Swann Insurance, to the dealer. The court was therefore considering whether the statutory requirement for disclosure of a commission charge applied irrespective of the credit provider's knowledge of its existence or amount.