The Full Federal Court of Australia has found in favour of ob体育 in relation to two appeals concerning small amount lender Sunshine Loans.
The first appeal was lodged by Sunshine Loans following the liability decision of Justice Derrington on 12 April 2024 that Sunshine Loans contravened the National Credit Code by entering into small amount credit contracts containing an unlawful fee and charging those fees to customers (24-074MR). Sunshine Loans appealed that decision.
The Full Court today unanimously dismissed the numerous grounds of appeal relied on by Sunshine Loans and was critical of the way the appeal was conducted.
The second appeal was lodged by ob体育. After the liability decision was delivered Justice Derrington was due to hear submissions from the parties as to the appropriate penalty to be paid by Sunshine Loans.
Sunshine Loans applied for his Honour to recuse himself from further hearing the matter on the basis of apprehended bias. His Honour determined to do so (but on different grounds from Sunshine Loans鈥� application) and ob体育 successfully appealed that decision.
In finding for ob体育, Justices Colvin and Bromwich today delivered separate judgments (with Perram J dissenting). Justice Colvin held that the error of the primary judge 鈥榳as to view the penalty hearing as if it was a separate and distinct hearing to be conducted without any of the views formed during the first hearing being carried forward into the second hearing鈥�.
ob体育 Deputy Chair Sarah Court said: 鈥榃e are pleased the Full Court has confirmed the decision that Sunshine Loans imposed unlawful fees on its customers. Protecting consumers 鈥� especially financially vulnerable consumers 鈥� from harm is an enduring priority for ob体育.'
The matter will now come back before Justice Derrington for a hearing on the question of the appropriate penalty to be paid by Sunshine Loans.
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Background
ob体育 commenced the proceeding against Sunshine Loans on 6 June 2022. The trial before Justice Derrington took place between 17 and 20 July 2023.听
The action was brought by ob体育 after a targeted review of the Small Amount Credit Contract (SACC) market during the COVID-19 pandemic identified the misconduct. At the time of the misconduct, Sunshine Loans was one of the largest credit providers in the SACC market.
Under national consumer credit laws, a provider of a small amount credit contract must not impose fees and charges apart from: an establishment fee, a monthly fee, a fee payable in the event of a default, or a government fee, charge or duty.
A borrower is also entitled to pay out their small amount credit contract at any time and can only be charged an amount that is calculated in accordance with the National Consumer Credit Protection Act.听
If consumers have taken out a loan with Sunshine Loans and are concerned that they may have been affected by this conduct, they can make a complaint to the Australian Financial Complaints Authority (AFCA) on 1800 931 678.
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Editor鈥檚 Note 1:
The case management hearing scheduled for 14 April 2025 before Justice Derrington has been adjourned to a date to be fixed as Sunshine Loans intends to seek special leave from the High Court to appeal the decision of the Full Federal Court in Australian Securities and Investments Commission v SunshineLoans Pty Ltd [2025] FCAFC 32.
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