Australian Securities and Investments Commission v Commonwealth Bank of Australia

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 22 October 2020
• Neutral Citation: [2020] FCA 1543
• Date: 22 October 2020

Federal Court of Australia

Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 1543

File number:	VID 181 of 2020
Judgment of:	MURPHY J
Date of judgment:	22 October 2020
Catchwords:	CONSUMER LAW – agreed contraventions of the National Consumer Credit Protection Act 2009 (Cth) – principles applicable to making declarations and imposition of a civil penalty – appropriateness of agreed orders and declarations – declarations made and civil penalty imposed
Legislation:	Competition and Consumer Act 2010 (Cth) s 75(1) Fair Work Act 2009 (Cth) s 499, 500, 556 Federal Court of Australia Act 1976 (Cth) s 21 National Consumer Credit Protection Act 2009 (Cth) ss 5, 47, 115, 117, 128, 129, 130(1), 131, 133(1)(b), 133(2)(b), 166(1), 166(3), 167, 175
Cases cited:	Australian Competition and Consumer Commission v Acquire Learning & Careers Pty Ltd [2017] FCA 602 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698 Australian Competition and Consumer Commission v Leahy Petroleum (No 2) [2005] FCA 254 Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181 Australian Competition and Consumer Commission v Telstra Corporation Ltd (2010) 188 FCR 238 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2012] FCA 629 Australian Securities and Investments Commission v ANZ [2018] FCA 155 Australian Securities and Investments Commission v Axis International Management Pty Ltd [2009] FCA 852; (2009) 178 FCR 485 Australian Securities and Investments Commission v Channic Pty Ltd (No 5) [2017] FCA 363 CFMMEU v ABCC [2019] FCAFC 201; (2019) 272 FCR 290 Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39 Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972] HCA 61 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177 Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 Singtel Optus v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 Trade Practices Commission v Allied Mills Industries Pty Ltd (No 5) (1981) 60 FLR 38 Trade Practices Commission v CSR Limited [1990] FCA 762; (1991) ATPR 41-076 Trade Practices Commission v Stihl Chainsaws (Aust) Pty Ltd (1978) ATPR 40-091 Trade Practices Commission v TNT Australia Pty Limited (1995) ATPR 41-375
Division:	General Division
Registry:	Victoria
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	96
Date of last submission/s:	29 May 2020
Date of hearing:	Determined on the papers
Counsel for the Plaintiff:	Mr D R Luxton
Solicitor for the Plaintiff:	Australian Government Solicitor
Counsel for the Defendant:	Mr N J Young QC and Mr P Kulevski
Solicitor for the Defendant:	Clayton Utz

ORDERS

		VID 181 of 2020
BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff
AND:	COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) Defendant

order made by:	MURPHY J
DATE OF ORDER:	22 OCTOBER 2020

FOR THE PURPOSES OF THIS ORDER:

1. ‘20 January 2017 CLI’ means the credit limit increase of $8000, from $27,100 to $35,100, applied by CBA to the Harris Credit Contract on 20 January 2017;

2. ‘Application’ means the pre-filled application form, completed and submitted to CBA by Harris in early 2017, by which Harris applied to take- up CBA’s invitation to Harris apply to increase his credit card limit from $27,100 to $35,100;

3. ‘Assessment’ means the assessment of whether the Harris Credit Contract would be unsuitable if CBA increased the credit limit of that contract (as per the Application) as conducted by CBA prior to its provision of the 20 January 2017 CLI;

4. ‘CBA’ means Commonwealth Bank of Australia ACN 123 123 124;

5. ‘CBA credit card’ means Harris’ CBA credit card which was referrable to the Harris Credit Contract;

6. ‘CLI’ means credit limit increase;

7. ‘CLI invitation’ means the letter from CBA to Harris of 1 December 2016 inviting him to apply to increase his credit card limit on the Harris Credit Contract from $27,100 to $35,100;

8. ‘Harris’ means Mr David Harris;

9. ‘Harris Credit Contract’ means the credit contract between CBA and Harris by which Harris had a CBA credit card;

10. ‘Problem Gambler Notification’ means the notification given by Harris to CBA on 21 October 2016 that:

    1. Harris considered himself to have a gambling problem;

    2. Harris’ requirements and objectives in relation to the CLI included that he wished to cease being a problem gambler before accepting any CLI invitation; and

    3. Harris was using the Harris Credit Contract for gambling expenses, of which CBA was also aware.

THE COURT DECLARES THAT:

1. In respect of the Harris Credit Contract, CBA contravened s 130(1) of the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act) by, before making the Assessment and in the circumstances of the Problem Gambler Notification:

1. failing to comply with s 130(1)(a) of the NCCP Act by failing to make reasonable inquiries of Harris’ requirements and objectives in relation to the Harris Credit Contract, namely:

   1. reasonable inquiries as to whether Harris still considered himself to no longer be a problem gambler; and

   2. such other inquiries as were reasonably required further to information arising from the inquiries referred to in the subparagraph above; and

2. failing to comply with s 130(1)(c) of the NCCP Act by failing to take reasonable steps to verify Harris’ financial situation, namely:

   1. reasonable steps to verify whether Harris was still using his CBA credit card to pay for gambling expenses, and the extent to which he was doing so and had done so since the Problem Gambler Notification; and

   2. such other steps to verify Harris’ financial situation as were...