Australian Securities and Investments Commission v Kobelt [2019] HCA 18

HIGH COURT OF AUSTRALIA

KIEFEL CJ, BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION APPELLANT

AND

LINDSAY KOBELT RESPONDENT

Australian Securities and Investments Commission v Kobelt [2019] HCA 18 12 June 2019 A32/2018

ORDER

Appeal dismissed with costs.

On appeal from the Federal Court of Australia

Representation

S P Donaghue QC, Solicitor-General of the Commonwealth, and K E Clark with P P Thiagarajan for the appellant (instructed by Australian Securities and Investments Commission)

T J North QC and H M Heuzenroeder for the respondent (instructed by Lempriere Abbott McLeod)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Australian Securities and Investments Commission v Kobelt

Trade practices – Consumer protection – Unconscionable conduct – Where s 12CB(1) of Australian Securities and Investments Commission Act 2001 (Cth) relevantly prohibited "unconscionable" conduct in trade or commerce in connection with supply or possible supply of financial services – Where respondent provided "book-up" credit to Anangu customers of general store – Where book-up credit allowed deferral of whole or part of payment for goods subject to respondent retaining customer's debit card and personal identification number – Where respondent used debit card to withdraw whole or nearly whole of wages or Centrelink payments shortly after credited to prevent customers having practical opportunity to access monies – Where respondent applied part of withdrawn funds to reduce customer's indebtedness and made remainder available for provision of future goods and services – Where respondent's record-keeping inadequate and often illegible – Where customers vulnerable due to remoteness, limitations on education, impoverishment and low levels of financial literacy – Where book-up system "tied" Anangu customers to general store – Where customers had understanding of basic elements of book-up system – Where withdrawals authorised by customers – Where customers generally supportive of book-up and respondent's business – Where book-up protected customers from cultural practices requiring sharing of resources with certain categories of kin – Where book-up ameliorated effects of "boom and bust" cycle of expenditure and allowed purchase of food between pay days – Whether respondent's conduct unconscionable within meaning of s 12CB(1) of Act.