DCZ Early Learning Pty Ltd v Semper Mortgage Management Pty Ltd

In the Federal Court of Australia, DCZ Early Learning Pty Ltd, as applicant, sought to have certain clauses in an agreement declared void under the Australian Securities and Investments Commission Act 2001 (Cth). The respondents, Semper Mortgage Management Pty Ltd, counterclaimed for fees incurred during the loan application process. The applicants required a loan to purchase part of a childcare business and engaged a broker to secure a loan from a private lender. The applicants signed an Indicative Letter after several iterations and withdrew from the loan arrangement. The respondents issued a demand for fees and lodged caveats and PPSR registrations. The court had to determine whether the clauses in the Indicative Letter could be declared void and of no effect under section 12BF of the ASIC Act, and whether the Indicative Letter constituted a standard form contract. Furthermore, the court had to decide if clauses 8 and 9 of the Indicative Letter were unfair.

The court considered the nature of the clauses, the efforts made by the respondent in preparing for the loan, and whether the fees charged were reasonable. The court found that the clauses were designed to ensure the respondent was not out of pocket for the time, effort, and expense incurred. The court considered the proportion of fees to the efforts made and whether the fees were excessive. The court concluded that the clauses were within the range of what is reasonably necessary to protect the legitimate interests of the respondent. The court also found that the clauses would cause detriment to the borrower if applied or relied upon, satisfying the third element of the definition of an unfair term under section 12BG(1)(c) of the ASIC Act.

The court dismissed the application, finding that the clauses were not void and of no effect. The court held that the Indicative Letter was a standard form contract and that clauses 8 and 9 were not unfair. The court granted judgment to the respondent on its counterclaim for fees in the sum of $150,620. The court directed that the parties be heard on the form of the orders, interest, and costs.