Australian Securities and Investments Commission v BHF Solutions Pty Ltd (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 12 July 2023
• Neutral Citation: [2023] FCA 787
• Date: 12 July 2023

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v BHF Solutions Pty Ltd (No 2) [2023] FCA 787

File number(s):	NSD 1088 of 2020
Judgment of:	HALLEY J
Date of judgment:	12 July 2023
Catchwords:	CONSUMER LAW – Remitter – whether the second respondent, Cigno Pty Ltd (Cigno) contravened s 29(1) of the Act by engaging in credit activity within s 6(1) of the National Consumer Credit Protection Act 2009 (Cth) (Act) without holding an Australian Credit Licence – whether Cigno, engaged in credit activity by providing a credit service under item 2 in s 6(1) of the Act (Credit Service Claim) and exercising the rights of a credit provider in relation to a credit contract between a consumer, Ms Leah Morrow, and the first respondent, BHF Solutions Pty Ltd (BHFS) – where Credit Service Claim advanced on two alternative bases – where Cigno provided credit assistance, within the meaning of s 8 of the Act – where Cigno exercised the rights of BHFS in relation to a credit contract with Ms Morrow between 18 October 2019 and 20 April 2020 ; STATUTORY INTERPRETATION – meaning of suggests in s 8(a) of the Act – meaning of intermediary and securing in s 9(a) of the Act – interpretation of the phrase “exercises the rights, of a credit provider in relation to a credit contract” in item 1(c) in s 6(1) of the Act ; CONSUMER LAW – where declarations sought in respect of contraventions by BHFS and Cigno of s 29(1) of the Act – where injunctions under s 177 of the Act sought against both BHFS and Cigno – declarations and injunctions granted substantially in the form sought by the applicant, the Australian Securities and Investments Commission
Legislation:	National Consumer Credit Protection Act 2009 (Cth) ss 6, 7, 8, 9, 29, 92, 166, 177, Sch 1 (National Credit Code) ss 5, 6, 204 National Consumer Credit Protection Regulations 2010 (Cth) Corporations Act 2001 (Cth) ss 1317, 1317E, 1324 Consolidated Explanatory Memorandum, National Consumer Credit Protection Bill 2009 (Cth)
Cases cited:	Australian Securities and Investments Commission v ACN 092 879 733 Pty Ltd, [2012] FCA 923 Australian Securities and Investments Commission v BHF Solutions Pty Ltd [2022] FCAFC 108 Australian Securities and Investments Commission v BHF Solutions Pty Ltd [2021] FCA 684 Australian Securities and Investments Commission v Cassimatis (No 9) [2018] FCA 385 Australian Securities and Investments Commission v Financial Circle Pty Ltd [2018] FCA 1644 Australian Securities and Investments Commission v Marco (No 6) [2020] FCA 1781 Australian Securities and Investments Commission v McDougall [2006] FCA 427 Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd (No 2) [2022] FCA 491 Australian Securities and Investments Commission v Secure Investments Pty Ltd (No 2) [2020] FCA 1463 Australian Securities and Investments Commission v Thorn Australia Pty Ltd [2018] FCA 704 Australian Securities and Investments Commission v Warrenmang Ltd [2007] FCA 973 Australian Securities and Investments Commission v Westpac Banking Corporation [2019] FCA 2147 Australian Securities Investments Commission v Teleloans Pty Ltd (2015) 234 FCR 261; [2015] FCA 648 BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167 ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53; [2003] HCA 75 Williams v ATM & CPA Projects Pty Limited [2015] NSWSC 703
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	171
Date of last submissions:	12 December 2022
Date of hearing:	28 November 2022
Counsel for the Applicant:	Ms M Allars SC with Ms C Winnett
Solicitor for the Applicant:	Australian Securities and Investments Commission
Counsel for the First Respondent:	Mr R McHugh SC with Ms D Forrester
Solicitor for the First Respondent:	Morris Mennilli
Counsel for the Second Respondent:	Mr A Pomerenke KC with Mr P Travis
Solicitor for the Second Respondent:	Elliot May Lawyers

ORDERS

		NSD 1088 of 2020
BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant
AND:	BHF SOLUTIONS PTY LTD (ACN 631 775 123) First Respondent ; CIGNO PTY LTD (ACN 612 373 734) Second Respondent

order made by:	HALLEY J
DATE OF ORDER:	12 July 2023

THE COURT DECLARES THAT:

Against the First Respondent

1. Pursuant to s 166 of the National Consumer Credit Protection Act 2009 (Cth) (Act), that from 18 October 2019 until 14 April 2020, BHF Solutions Pty Ltd (BHFS) contravened s 29(1) of the Act by engaging in a credit activity without holding an Australian Credit Licence (ACL) authorising BHFS to engage in that activity, being the activity of being “a credit provider under a credit contract” as specified in item 1(a) of s 6 of the Act, in that:

(a) on 1 July 2019, BHFS entered into a loan management facilitation agreement with Cigno Pty Ltd (Cigno), subsequently amended from 12 September 2019 (BHFS/Cigno Agreement), under which Cigno was to manage loan agreements BHFS entered into with borrowers, in accordance with the conditions of the BHFS/Cigno Agreement, which included that Cigno was able to charge the borrower fees at Cigno’s discretion;

(b) on 18 October 2019:

(i) BHFS entered into a continuing credit contract with Ms Leah Morrow (Ms Morrow) under which BHFS was, and remained until 14 April 2020, a credit provider; and

(ii) Cigno entered into a services agreement with Ms Morrow under which Ms Morrow was charged, amongst other fees, a financial supply fee calculated as a base amount of $13 plus 60% of the loan amount (Financial Supply Fee); and

(c) the Financial Supply Fee was a “charge that is or may be made for providing the credit” within the meaning of s 6(5) of the National Credit Code (Code) in Sch 1 of the Act, that credit being credit provided by BHFS.

2. Pursuant to s 166 of the Act, that from 18 October 2019 until 14 April 2020, BHFS contravened s 29(1) of the Act by engaging in a credit activity without holding an ACL authorising BHFS to engage in that activity, being the activity of “carr[ying] on a business of providing credit being credit the provision of which the Code applies to” as specified in item 1(b) of s 6 of the Act, in that:

(a) on 1 July 2019, BHFS entered into the BHFS/Cigno Agreement with Cigno under which Cigno was to manage loan agreements BHFS entered into with borrowers, in accordance with the conditions of the BHFS/Cigno ...