Australia and New Zealand Banking Group Ltd v Bollas & Ors [1999] VSCA 50

2. This appeal arises out of an application by the appellant bank against a large group of respondent customers of or borrowers from the ANZ Bank ("the Bank") for declarations that each of the respondent customers or debtors was "liable to pay the credit charge" on a series of regulated loan contracts, notwithstanding claimed contraventions of the Credit Act 1984 which, if made out, would result in the Bank being deprived, by reason of s.42 of the Act, of the right to claim credit charges under each of the contracts. The application had been commenced pursuant to s.85B of the Act in the Credit Tribunal in a form not uncommon in that Tribunal whereby the lender or "credit provider", in this case the Bank, joined a large number of respondents said to be representative of the debtors who have either claimed contraventions of the Act or hereafter might seek to rely upon contraventions in order to reduce their obligations to make repayments.

5. It would seem the object of the proceeding was to have declarations made as to the effect of the inclusion in and the exclusion of certain items from a number of loan contracts thought to be typical of those entered into by the Bank with various debtors over the years. But the proceeding was not directed to their ultimate effect on each of the contracts for it was said that it was still open for the Bank to seek orders under s.85 varying the civil penalties said to have been incurred by reason of its alleged contraventions. Doubtless that explains why such small items, sometimes involving amounts as little as $1.75 and $2.75 were raised and were still the subject of the appeal to this Court, although it might be thought that any consequential penalty depriving the bank of all its credit charges (by reason of s.42) could well be the subject of an order pursuant to s.85 determining that the borrower should pay the credit charge. Because of the nature of this proceeding and the choice of what were seen to be a large number of test cases, the parties very sensibly sought to reach an agreement as to the facts upon which the Tribunal (and thus this Court) might rely. The agreed statement of facts is in fact a very substantial document not merely because it covers a number of disputes and contracts which are not the subject of the present appeal but because it refers in turn to a series of documents in each case consisting at least of the loan contract and more often than not a number of other selected documents relating to the particular contract. The proceeding therefore had certain characteristics of a case stated so that, as is almost inevitably the case, the abbreviated description of the relevant circumstances led to a number of difficulties as to precisely what had occurred in the course of making the contracts and the surrounding transactions, many of which have had to be examined as best could be done.

8. Another difficulty resulting from this form of proceeding was that the dates of the contracts in question covered a period from March 1985 to March 1994, although the subjects of the appeal cover a slightly shorter period. Two specific difficulties followed: (1) the form of contract adopted by the bank changed significantly over the period, to the extent that it makes it very difficult to describe with any precision the nature of the contracts in general and (2) the provisions of the Credit Act were amended on many occasions during the period, as were the Credit Regulations 1984, although it was said that none of those amendments had any significant bearing on the issues raised on this appeal. Consequently the Court was invited to use the third reprint of the Credit Act, as at 1 July 1998, as the basis for resolving the issues relating to all the subject contracts, although it might be thought that the majority of the contracts were controlled by the provisions of reprint No. 1 as at 16 August 1989 which, as it turns out, was also the reprint used for the hearings which led to the decision in AVCO Financial Services Ltd. v. Abschinski [1994] VicRp 76; [1994] 2 V.R. 659. The acceptance of such an invitation is capable of producing injustice in those cases where later amendments were not applicable, but it was proposed, and I would be prepared to adopt, the method of dealing in general with the submissions made upon the assumption that the most recent reprint applies but, in order to avoid possible injustices, the parties being invited to bring in minutes of orders which would deal with the specific respondents, having regard to the relevant facts and the provisions of the Act then in force, unless the Court reaches the conclusion that the appeal should be entirely dismissed.

11. If such an approach would appear to be too cavalier, it should be noted that the Act is no longer in force for effectively all new contracts inasmuch as a Consumer Credit Code was brought into operation in 1996 pursuant to the Consumer Credit (Victoria) Act 1995: see ss.19A and 19B of the Credit Act. That Code, remarkably, is to be found only as a schedule to the Consumer Credit (Queensland) Act 1995, and any reprint thereof. Even more remarkably, when the Court pointed out to the solicitor for the Secretary to the Department of Justice, as a respondent to this appeal, that there seemed no copy of that Code available from or under the authority of the State Government Printer, this was not controverted and the Court was later informed that to the Department's knowledge there was no official copy of the Queensland Code available in Victoria, ignoring, as one must, unauthorised commercial reprints. Was it Caligula who caused his decrees to be inscribed so high above the archways of ancient Rome that none of the public could read them?

14. Having regard to the limited continued applicability of the Credit Act, there seems little of general principle which would require further exposition by me other than that which is contained in the judgment of Phillips, J.A. which I have had the benefit of reading. Apart from minor matters of emphasis, there is no need to deal with each of these matters further, except to the extent that here follows. It was not suggested that any matter here raised directly affects the interpretation of the new Consumer Credit Code, about which I therefore say nothing.

17. Other than the issue which relates to the appearance on a number of contracts of more than one percentage rate (which requires consideration of s.40 of the Act), each of the matters raised involved challenges or assumed challenges to loan transactions which were said in one way or another and not to comply with s.36 of the Act and, in the majority of cases, with the requirements as to the statement of the "amount financed" in accordance with Schedule 4 to the Act. It must be reiterated, as was examined by me in some detail in AVCO, that the issue raised by s.36 and Schedule 4 is one only of disclosure and so it must be looked at in the light of the legislature's requiring borrowers to be informed of certain aspects of their loan transactions. It has led to much litigation because, in the absence of the relief which may be given pursuant to s.85, the consequence of non-compliance is the extinguishment of the borrower's liability to pay all credit charges by reason of s.42. The present case does not raise for consideration whether each of the relevant contracts was in writing in accordance with s.31 of the Act, nor whether certain possible alterations or additions to terms and conditions of those contracts were invalidated by reason of s.32(5). The difficulty is that although those matters are not raised directly they may have a bearing on what constitutes the "contract" in each case which is the subject of the disclosure requirements of s.36. In the end, however, I have felt able to reach my conclusions by assuming that the documents the subject of this appeal reflect the terms of the parties' agreement (whether satisfying ss.31 and 32 or not) except in those cases where the inference should be drawn that the Bank could have made the relevant entries and debited the borrower's account only if it had contractual authority to do so. If the payment occurred or might have occurred after settlement or if the borrowers were thereafter free to choose, i.e., were not contractually bound, to direct that the payments be debited to one or other of their accounts, it does not seem possible on the materials before this Court, and before the Tribunal, to reach a conclusion that they must have been disclosed in accordance with s.36. That is because Schedule 4, by reason of the covering words, requires disclosure of each of the relevant amounts which "under the contract, are payable by a debtor to the credit provider ...".

20. To my way of thinking that relatively simple analysis enables the Court to dispose of most of the disputed categories of transactions, in particular the series of claims relating to fees and charges. The only clear indication of a contractual requirement, when not expressed in the contract document before the Court, is where the borrower receives less than the paragraph (a) moneys, in other words less than the "amount agreed under the contract to be lent", but even then it is of no consequence where any diminution in the amount paid to the borrower reflects only directions or assumed directions to the Bank to debit or pay out sums other than those described in paragraphs (b) to (f) of clause 1 of Schedule 4, including those amounts prescribed under paragraph (d) as set forth in regulation 27 of the 1984 regulations or regulation 30 of the 1995 regulations. The reasons for excluding from the requirement of disclosure of amounts not so described in or under paragraphs (b) to (f) are sufficiently set out in the decision in AVCO. Thus, regardless of whether they were debited to the borrower's loan account or to some other account of the borrower, I consider there was no obligation to disclose pursuant to s.36 any of the payments or amounts which did not come within the categories in Schedule 4. Phillips, J.A. has pointed out that some of the payments in the test cases of this kind were, as was conceded in argument, in fact within paragraphs (b) to (f) inasmuch as they in fact were prescribed by regulation. Apart from those payments I have had great difficulty in understanding why the Tribunal and the learned trial judge thought that they should have been disclosed, especially in the light of the majority's reasoning in AVCO. There seemed some suggestion at one stage that the small amounts in question ought not to be treated as truly "lent" but that misunderstands the proper meaning to be given to paragraph (a). It was also suggested that the payments should be treated as part of the credit charges, but that seemed to flow from the conclusion that the moneys were not lent. I can see no reason to doubt that the proper sum was stated as the amount financed in each case and there was no basis for holding that they should otherwise have been disclosed pursuant to s.36. There should be a declaration accordingly.

23. The appellant Bank also sought to challenge the conclusions reached in relation to certain payments or disbursements which did come within paragraphs (b) to (f) of clause 1 of the fourth Schedule. I agree with Phillips, J.A. that the appellant failed to establish that the payments and disbursements, in the first category, which I would infer were both authorised and agreed, were not made "under" the contract. For reasons which need not be repeated here, I agree that word should here be given an interpretation appropriate to its use in this context and not one which would have enabled credit providers to create artificial transactions in order to deny their obligation to make disclosure. Each transaction should be looked at as a whole, including any related mortgage transaction. The amounts in question were in fact deducted and in each case it was only the balance of the moneys "agreed to be lent" which was available in an account of the debtor to be used for the debtor's other purposes. Having regard to the nature of the payments I see no reason to do other than infer that each of the payments was made under and for the purpose of the contract, where those amounts were directly debited to the respondent's loan account or an account of the respondents which, as explained by Phillips, J.A., was not relevantly different. As his careful analysis demonstrates, each case must depend upon a proper analysis of the unsatisfactory materials before the Court. I therefore agree with his analysis and the conclusions to which he has come in relation to what he has called the third category of contract.

26. I should add that, to the extent that there be doubt as to what was intended by the terms of the legislation, then I consider that the interpretation placed upon the relevant sections by Phillips, J.A. should be preferred, inasmuch as the object to be achieved was the proper disclosure to the borrower of each payment of the kind described or authorised by the fourth schedule. Parliament clearly thought that there was a risk that persons entering into these credit contracts might agree to do so without fully apprehending that they would be obliged to pay to a credit provider one or more of the charges described in that schedule so that notice was essential for them to be fully informed before they were lent the moneys. Whether rightly or wrongly, Parliament saw that the payments of the kind described might be extracted from borrowers at the time of settlement in circumstances where they might feel that they would lose the benefit of the loan if they did not acquiesce in the making of the payments. A construction which might permit lenders artificially to sever the making of these payments from the contract itself, whether by formal or informal means, would not, in my opinion, be consistent with the objects of the legislation.

29. As to the other matters raised on this appeal I would likewise agree with Phillips, J.A.'s analysis of the materials before the Court and the proposed resolution of those issues. I would add only this in relation to the claims made by the appellant that it had not contravened s.40 by allowing the insertion of more than one "annual percentage rate" on the contract documents. On its face the section seems an unusual provision inasmuch as, if there were true uncertainty as to the rate of interest to be imposed, then the contract might fail for want of certainty. In substance, of course, it is the credit charge which identifies the amount to be paid by way of interest in a concrete form which ought to be clear, at least to the extent that borrowers should be able to appreciate their obligations to pay it over the course of the contract. Nevertheless, those borrowers would otherwise in most cases be ignorant of or uncertain about the true rate of interest which was being imposed, were it not for provisions requiring the stating of the annual percentage rate. To my way of thinking s.40 is intended to ensure that borrowers are not left in ignorance of or are not misled or confused as to what rate of interest is in fact being charged. Before the introduction of this and other similar legislation in the past, it was common for borrowers to be told that they would pay interest at a rate which has come to be known as a "flat rate". Parliament has determined that that method of describing a rate of interest on borrowings of this kind is not an appropriate or informative method of describing the relevant interest rate. Consequently a statutory formula has been chosen to describe the true interest rate and I believe that s.40 was designed to prevent unscrupulous lenders from trying to assert that the interest rate payable by particular borrowers is in fact less than what is properly calculated under statute. For those reasons I consider that Phillips, J.A.'s analysis and conclusions on these issues is correct.

32. I am therefore of the opinion that this appeal should be disposed of in the manner proposed by Phillips, J.A. The Court's conclusions in general terms follows from the judgment given at this time. It will be necessary for the parties to take into account the matters referred to above and in Phillips, J.A.'s judgment before seeking from the Court what one might hope to be an agreed order for disposition of this appeal.

37. This is an appeal from the decision of a judge in the Trial Division of this Court to the extent that his Honour dismissed an appeal from the determination of the Credit Tribunal under s.85B of the Credit Act 1984 ("the Act"). The appellant bank, as a "credit provider" within the meaning of the Act, commenced an application to the Credit Tribunal on 30 August 1996 to have determined whether and if so to what extent it had failed to comply with certain requirements of the Act in relation to a large number of loan contracts entered into by it with sundry borrowers (or "debtors" as they are called by the Act). As I apprehend it, the loan contracts in question were selected as exemplifying certain uncertainties in the legislation about which the appellant was seeking the Tribunal's determination and an Agreed Statement of Facts and Documents was filed. These facts and these documents were agreed as setting out the whole of the evidence, and no further or other evidence was led on either side. In accordance with what is permitted before the Tribunal the respondents to the application were collectively called simply "Various Respondents" in the title to the proceeding, though each was properly named and identified in the relevant loan contract which formed part of the agreed statement of facts and documents.

40. Before the Tribunal the appellant contended, in respect of all the loan contracts in question save for one or two in relation to which it conceded breach, that there had not been any failure on its part to comply with those requirements of the Act that were raised for consideration. In part the appellant succeeded and in part it failed. The decision of the Tribunal was announced on 13 December 1996, when detailed reasons for determination were published. On 19 December 1996 formal declarations were made accordingly. On 24 December the appellant filed notice of appeal to the Trial Division of this Court and leave to appeal (to the extent that leave was needed) was given by consent under the since-repealed s.85H of the Credit (Administration) Act 1984 on 7 February 1997. The appeal was heard in May 1997 and on 23 October 1997 the appeal was dismissed (save in one respect not presently relevant), the judge upholding the Tribunal's decision in virtually every respect. In part this decision was accepted by the appellant, for it now appeals to the Court of Appeal only in respect of some of the loan contracts considered below, the bank contending as before, however, that in respect of these at least there had been no failure on its part to comply with the Act. Schedule C to the notice of appeal now before us lists the borrowers whose contracts are involved on the present appeal. Although the title to the proceeding as framed in the notice of appeal includes the cryptic designation "Various Respondents", that is not appropriate to a proceeding in the Court; in my opinion an order should be made for amendment of the title to designate as respondents to the appeal "Raymond and Dianne Bollas and others according to Schedule C".

43. That is subject to one qualification. The Secretary to the Department of Justice was also a respondent to this appeal and so the title, when amended, should conclude (as it does at present) "and the Secretary to the Department of Justice". When the appeal was called on counsel appeared briefly for this respondent to announce that her client was willing to abide the result and would take no further part. That is how the matter then proceeded and so in what follows I make no further reference to the Secretary or the Department; the expression "the respondents" means only the borrowers identified in Schedule C.

47. Three points need to be made at the outset. First, this litigation concentrates - it might be thought unduly - on what, if they are errors at all, are in many instances errors of little consequence. For instance, the complaint in one case is that the appellant bank failed to record, as part of the loan contract, the charge it would be making for providing a bank cheque. The charge was a relatively small one, yet it is relied upon. The reason of course is that under this complex legislation default on the part of the lender (the "credit provider") attracts significant consequences: so far as presently relevant, s.42(1) absolves the borrower (the "debtor") from all liability for the "credit charge", which, in these cases, is the interest charge - and interest not just on the item in question but on the whole amount of the borrowing. Such a prize is surely a real incentive, at least for the borrower, to call for the examination of the loan transaction in every detail.

50. On the other hand, what the Act gives it sometimes takes away; for by s.85 the Tribunal is authorised, on application by the credit provider, to relieve (either wholly or in part) against the consequences of non-compliance with the Act. In the ordinary course that power to grant relief on the application of the credit provider might be thought to make the pursuit of detail by the debtor not worth the expense involved, but not so here. That is because of the structure of this litigation. Under s.85B, either party can seek a declaration about whether there has been a failure to record something that should have been recorded, as part of the loan contract, with the consequence that liability for the credit charge is removed, subject to s.85. Such a declaration is all that was sought in this case. The parties have chosen test cases and, on the assumption that these represent many others, have sought to have determined the extent to which there has been compliance or not on the part of the appellant bank with the requirements of the statute, and in particular s.36. What might otherwise have simply been an interlocutory application has thus been converted, by dint of s.85B, into principal litigation. The end of this litigation is the declaration authorised by s.85B, no matter that the Tribunal might yet relieve (perhaps in full) against the consequences of any declaration of non-compliance. We were told from the Bar table that as yet no formal application has been made by the bank under s.85. It is perhaps unfortunate that the Court of Appeal is required to adjudicate on the question of compliance or no without regard to the possibility of relief under s.85; for if non-compliance be established and relief subsequently granted in full on application under s.85, the borrower whose loan contract is in issue would appear to have little real interest in the outcome of the current litigation - however useful in the future the appellant might find the Court's decision on the question of compliance.

53. The third point is that the parties are seeking the declaration under s.85B on an agreed statement of facts. Each side asserts, to a greater or lesser extent, that in the absence of any further evidence, its position is the correct one. At one stage in the argument counsel for the respondents suggested that, unless we were satisfied that the appellant succeeded in the absence of any further evidence, the present dispute might be remitted to the Tribunal for further facts to be found, but later that suggestion was withdrawn. I mention it only to emphasise that both sides are now resting in this litigation under s.85B on such facts as we have been given. Each side is prepared to stand or fall according to those facts and if they are deficient in any respect (and I have in mind in particular the evidence of actual intention of the parties to a particular loan contract), then that deficiency may enure to the advantage of one and the disadvantage of the other. However it works out, each side seeks a final determination from this Court about compliance under the statute on such facts as are before us. That other evidence might well have been led, had the parties chosen to do so, is nothing to the point; nor is it to the point that other evidence might well be led in future in the light of our decision on this occasion.

57. The Credit Act deals with various types of contract but this appeal is concerned only with "loan contracts" as defined by s.5 and as regulated in Division 1 of Part 3. More particularly we are concerned with loan contracts under which an amount of money was lent by the appellant bank, apparently in the ordinary course of its business, to one or more of the respondents. So far as presently relevant, s.5 defines "loan contract" as-

"... a contract under which a person in the course of a business carried on by him provides or agrees to provide, whether on one or more occasions, credit [meaning here 'any form of financial accommodation'] to another person, not being a body corporate, in one or more of the following ways - (a) by paying an amount to or in accordance with the instructions of that other person; ...".

61. Section 31 is pivotal to the regulation of loan contracts by Division 1 of Part 3. Section 31 reads in full:-

"(1) Subject to sub-section (2), a credit provider shall not enter into a credit sale contract or a loan contract that is not in writing signed by the debtor.

(2) Sub-section (1) is not contravened if a credit sale contract or a loan contract is made by the acceptance of an offer in writing signed by the debtor to the credit provider to enter into the contract."

In all of the cases raised now for consideration, the appellant bank's standard form of written offer was used which, once certain details had been written in, was signed first by the intending borrower or borrowers and then not long afterwards on behalf of the bank to signify the bank's acceptance of the written offer. Section 32 of the Act regulates the form of such an offer in writing and requires that a copy be given to the would be borrower. No argument was raised before us over the requirements of s.32, but one or two points should be noted in passing. Section 32 prohibits a lender from proffering an offer in writing to the proposed debtor for signature unless it includes a notice in the form prescribed: as to which see Credit Regulations 1984, reg.10(1), Schedule 1, Form 2. By subs.(3), the proposed debtor is to be given a certified copy of the offer document for his own use and by subs.(5), once the offer document has been signed by the debtor, "any subsequent alteration of, or addition to, the terms and conditions of the contract has no force or effect unless" the debtor has also signed or initialled "opposite the alteration or addition" on both the original offer document and the copy earlier given him. This would indicate that the alteration or addition must itself be in writing, though by subs.(6) it is made an offence for the credit provider to "alter or add to the terms and conditions specified in" the loan contract, if done with intent to deceive the debtor, whether or not the addition or alteration is signed or initialled as provided in subs.(5).

68. In argument, the offer documents, signed first by the borrowers and then on behalf of the bank to signify acceptance as already described, were called the loan contracts. In this litigation the parties were in dispute over the requirements of ss.36 and 40, both of which prescribe what shall, and in part what shall not, be included in a "loan contract" and so the contents of the offer documents were examined in great detail and measured against those requirements. It was an important part of the bank's argument, however, that s.36, and s.40 too, were dealing only with the loan contract which was entered into by the parties when the offer in writing was formally accepted by the bank, and with nothing else. Section 36 was not dealing, it was said by counsel, with any other agreement or arrangement between the borrower and the lender.

71. This proposition was reflected in more than one line of argument advanced before us on behalf of the appellant bank. Thus it was contended that s.36(1) in particular was not concerned with a mortgage taken by the lender by way of security, even if the existence of that mortgage was something which had to be referred to in the loan contract; the loan contract was itself distinct from the mortgage and what was required under the mortgage could not be equated to what was required by the loan contract. Further, performance under the loan contract was not to be confused with the loan contract itself; the two had to be kept quite distinct. In the ordinary course performance came some time after the making of the loan contract (whether a matter of days or weeks) and there was therefore plenty of room for further discussion over performance. Performance might then include something not earlier agreed, or even something altogether different, but s.36 was concerned only with the loan contract as constituted by the offer in writing and acceptance of that offer, and not subsequent performance. In order to emphasise the distinction, appellant's counsel made the point that performance might even be in breach of the express terms of the loan contract; yet that would be irrelevant, he said, to the question of compliance or no with the requirements of s.36 in particular.

74. The distinction between contract and performance was given particular application to questions of disbursement. Thus, though the loan contract, as made, was for, say, $10,000 to be paid to the borrower, nothing in s.36, it was said, precluded the borrower from making other and more specific arrangements later for the disbursement of the sum when paid: for example, as to $50 for some stamp duty fee for which the borrower was otherwise liable; as to $60 in payment to the bank itself on account of the first instalment by way of repayment; or as to $3.50 in payment to the bank for providing a bank cheque for the balance of the $10,000, which was otherwise to be paid, perhaps, to some third party - say, another creditor of the borrower. None of these separate arrangements, made over and above and after the loan contract was made by acceptance of the offer in writing, was relevant (the argument ran) to the statutory requirements of ss.36 and 40. Indeed, it was said that there was no evidence before the Court to establish how far, if at all, any such arrangements for disbursement were the product of agreement and were not just unilateral action on the part of the bank; for instance, the charge for the bank cheque might have been exacted (it was contended) without reference to the customer at all. But whether agreed or not agreed, the manner of performance was distinct from the making of the contract and it was the loan contract as entered into in writing - and only that loan contract - which fell to be measured against the requirements of ss.36 and s.40, or so it was contended.

78. It is convenient now to examine in more detail the requirements of s.36 so far as relevant to this appeal. As already indicated, all of the loan contracts in issue were constituted by the acceptance by the bank of an offer in writing made by the intending borrower or borrowers and, as I apprehend it, in every case repayments to the bank were to be by instalments. In brief, then, s.36(1) required that the loan contract "shall include" -

(b) a statement of the amount financed in accordance with Schedule 4;

(c) a statement of the credit charge in accordance with Schedule 5;

(d) a statement of the total of the amount financed and the credit charge;

(e) a statement of the annual percentage rate in accordance with s.38.

In addition, the loan contract "shall include" details of when and where payments were to be made by the borrower and the amount and number of the instalments to be paid. It should include, too, a statement "whether any mortgage relating to the contract has been or is agreed to be entered into" and, if a commission charge was payable, a statement of to whom and by whom that charge was payable. The term "commission charge" is defined in s.5.

87. The foregoing is sufficient to indicate the structure of s.36(1). Critical, so far as the lending is concerned, is the statement of "the amount financed" and the statement of "the credit charge", the total of which must be plainly stated. Both terms are defined in s.5, the first, "amount financed", by reference to clause 1 of Schedule 4 (about which more in a moment) and the second, "credit charge", by reference to s.11(1). In short, the "credit charge" in relation to a loan contract is the amount by which the amount payable under the contract by the borrower to the lender (but not including any deferral charges, default charges or enforcement expenses) exceeds the amount financed. As will be seen, "the amount financed" is, in lay terms, the principal sum which is borrowed (directly or indirectly), while the credit charge includes such things as the interest charged by the lender for the loan and any other fees, charges and expenses which the lender would seek to recoup but which, for some reason or another under this Act, may not be included within "the amount financed". For instance, had it not been permitted to include, as part of the amount agreed to be lent, the amount of the valuation fees under consideration in Avco Financial Services Ltd. v. Abschinski [1994] VicRp 76; [1994] 2 V.R. 659 (which is further discussed below), the lender must have included the amount of the valuation fees within the credit charge as the only means of recouping from the borrower the amount of those fees which had been incurred in connection with the loan transaction. To include the valuation fees within the credit charge would have been permitted, but then the amount of those fees would have been at risk to the extent that the credit charge is put at risk by the terms of the Act. Moreover, to the extent that the credit charge was increased by inclusion of the valuation fees, "the annual percentage rate", which is to be stated in accordance with s.38, must have been increased correspondingly. We were told in argument that the statement of the annual percentage rate is required in order to enable those who would borrow to compare like with like, when shopping around for the best deal; and if so it is in the interests of the lender, as a marketing exercise, to include any fees or charges within the amount financed rather than within the credit charge. It must be said, however, that if a loan contract is entered into in accordance with the Act and is then performed by all parties according to its tenor, the outcome would appear to be the same, whichever course is adopted.

90. It is important, then, to be clear about what may and what may not be included within the "amount financed" when properly stated according to the Act. As I have said, s.36(1) requires that the loan contract include "a statement of the amount financed in accordance with Schedule 4". I read this to mean a statement in accordance with Schedule 4 of the amount financed - which is certainly consistent with the definition in s.5 of "amount financed": that is, "the sum of the amounts required to be stated in accordance with clause 1 of Schedule 4". Much of the argument before us centred on clause 1 of Schedule 4. Schedule 4 is headed "Statement of amount financed in relation to loan contract" and clause 1, so far as presently relevant, is as follows:-

"1. A statement of the amount financed shall state - (a) the amount agreed under the contract to be lent (other than amounts referred to in paragraphs (b) to (f)) - and shall include statements showing separately such amounts as, under the contract, are payable by a debtor to the credit provider (otherwise than as part of the credit charge) whether or not the credit provider pays, or has paid, those amounts to another person and are - (b) amounts payable in respect of contracts of insurance (if any), entered into in relation to the contract .... (c) amounts payable in respect of -

(i) stamp duty payable in respect of or in relation to the contract;

(ii) stamp duty payable in respect of or in relation to any mortgage relating to the contract entered into on or before the relevant date; or

(iii) fees payable to a duly qualified legal practitioner (not being the credit provider or an employee of the credit provider) authorised to prepare documents for the contract or for a mortgage relating to the contract entered into at or before the time of the making of the contract;

(d) amounts that are prescribed charges for the purposes of this paragraph; (e) amounts that are the consideration [etc., not presently relevant]; (f) amounts payable in respect of the value of any consideration [etc., not presently relevant] -

and shall state the amount financed, being the sum of the amounts referred to in the preceding paragraphs."

99. To apply clause 1 properly one must appreciate the relationship between paragraph (a) on the one hand and paragraphs (b) to (f) on the other. The latter all commence with the word "amounts" and all of them are qualified by the introductory lines which follow paragraph (a) and precede paragraph (b). These words occupy some four lines in the Act as printed (Reprint No.3) and I shall refer to them as "the covering words" (as Ormiston. J. did in Avco). It follows from the fact that the covering words end with the expression "and are" that, if an amount is to be separately shown by virtue of the covering words, then that amount must not only be fairly within one of the paragraphs (b) to (f), it must also be an amount which "under the contract [is] payable by a debtor to the credit provider (otherwise than as part of the credit charge)". Yet because paragraph (a) is itself expressed as excepting "the amounts referred to in paragraphs (b) to (f)", it follows equally that any amount which falls within one of the descriptions in paragraphs (b) to (f) must also be such as can be so excepted from the description in paragraph (a) - that is, it must be part of "the amount agreed under the contract to be lent". As McGarvie and Gobbo, JJ. said in Custom Credit Corporation Ltd. v. Gray [1992] VicRp 36; [1992] 1 V.R. 540, at 553:-

" For Sch.4 to require an amount to be stated separately that amount must fall both within the description in para.(a) of clause 1, and within one of the descriptions in paras(b) to (f). ..."

103. Taking a broad view, the concept underlying paragraphs (b) to (f) in clause 1 seems to me to be of a disbursement or expense made or incurred by the lender, presumably in connection with the loan transaction, but which by agreement is to be borne ultimately by the borrower, the disbursement or expense being added by agreement to the amount otherwise being lent, thereby increasing in turn the amount which must be paid or repaid by the borrower to the lender as the contract is performed. Appellant's counsel sought to encapsulate the distinction being drawn in clause 1 by suggesting that paragraph (a) was looking to the amount under the loan contract which was to be put by the lender at the disposal of the borrower, while paragraphs (b) to (f) were referring to amounts which, though lent, were earmarked for other purposes in connection with the loan transaction and therefore were not going to be at the disposal of the borrower. This contrast is attractive, but if it is to be useful some care may be needed in recognising what is "at the disposal of the borrower". For as Avco demonstrates, even a portion of the amount described in paragraph (a) may in fact be earmarked by agreement (subject to s.75 of the Act) - or perhaps simply applied by the lender - for payment of fees or charges incurred in relation to the transaction but not mentioned in paragraphs (b) to (f).

106. In Avco the Full Court was concerned with certain valuation fees, incurred in relation to the loan transaction, but not described within any of paragraphs (b) to (f) of clause 1 and therefore not requiring separate identification thereunder. At the relevant time (which was before 11 August 1987), they were not "prescribed charges" within the meaning of paragraph (d): contrast Credit Regulations 1984 reg.27(1)(g), which was introduced by amendment on 11 August 1987 by S.R. No.213/1987 reg.2(c). It was found as a fact that the borrower had nonetheless agreed (apparently at the time of the making the loan contract in writing) to pay the lender the amount of these valuation fees which, as I have said, had been incurred by the lender in connection with the loan transaction and without recouping which the lender would not have been prepared to proceed. Perhaps, although it is not clear, the lender incurred the fees on behalf of the borrower. Be that as it may, the fees were not within paragraphs (b) to (f) and so the lender had included them in the written document within the amount stated under paragraph (a) - "the amount agreed under the contract to be lent". The valuation fees were identified: there was no difficulty there. The question was only whether the loan contract failed nonetheless to comply with s.36(1) because the valuation fees had been included within "the amount financed", although not falling within any of the paragraphs (b) to (f).

109. In Avco, it was contended for the Department that only fees within paragraphs (b) to (f) could be included within the amount financed and that as the valuation fees here in question were not within paragraphs (b) to (f) they could not be included, even under paragraph (a). Only Southwell, J. agreed with this submission, Fullagar, J. and Ormiston, J. being of the contrary view. The majority considered that paragraphs (b) to (f) did not set out exhaustively the fees and charges that might properly be included within the amount financed, but were exhaustive only as to what had to be shown separately, with the result that what was not mentioned within paragraphs (b) to (f) might nonetheless be included under paragraph (a) - provided, of course, that the amount could fairly be described as "agreed under the contract to be lent". That was so in relation to the valuation fees in question (in the view of their Honours) and accordingly there was no default under s.36, in particular s.36(1)(b). (As pointed out earlier, if the view of Southwell, J. had prevailed so that the valuation fees were not properly included as part of the amount financed, the lender, if it was to recoup those amounts at all from the borrower, must have included them within the credit charge.)

112. None of this was challenged by counsel for the appellant. Instead Mr. Archibald contended that the cases now under consideration did not involve the sort of agreement for payment of fees canvassed in Avco, made when the loan contract was first entered into. Section 36 of the Act and thus Schedule 4 were concerned solely with the terms and conditions of the loan contract when entered into by the parties and not at all with what happened thereafter when the lender came to disbursing the amount to be made available to the borrower - that is, the amount stated under paragraph (a) of clause 1. The form of the bank's offer document included provision for disbursement directions by the borrower, which in itself was not inconsistent with paragraph (a) of clause 1. If the amount in paragraph (a) was truly to be put by the lender at the disposal of the borrower (as Mr. Archibald said was so), there was no apparent reason, he argued, why the borrower should not give instructions for its disbursement according to his wishes at or immediately before the moment of disbursement; and that that should be so did not impinge upon the altogether different requirements of s.36(1)(b) and the question of compliance or no with Schedule 4 at the time when the contract in writing was entered into, and as matters stood then. Whether that submission is correct is central to much of this appeal.

115. In part, respondents' counsel sought to meet the distinction thus raised, which was essentially between the making of the contract and performance under it, by arguing that the critical expression in the covering words directed attention to the instalments payable by the borrower to the lender under the contract, by way of repayment. These, it was said, were the only amounts that answered the description -

"such amounts as, under the contract, are payable by the debtor to the credit provider (otherwise than as part of the credit charge)".

Therefore what had to be shown separately in the document in writing depended upon the extent to which those instalments could be seen as answering also the descriptions that followed in paragraphs (b) to (f) - that is, how far the instalments payable under the contract by the debtor were amounts (to use the words of paragraph (b) by way of example) "in respect of contracts of insurance (if any) entered into in relation to the loan contract etc." or (to use another example) were (or, I suppose, reflected) "prescribed charges" within paragraph (d). In short, what had to be shown separately in the loan contract by virtue of the covering words and the paragraphs that followed in clause 1 depended on the extent to which, if any, the instalments which were made payable by the debtor under the contract, largely by way of repayment, were payable by reason of any of the various amounts described in paragraphs (b) to (f) - or, in other words, how far those instalments reflected those amounts.

120. As already indicated, this submission does not correspond with the way in which I read the covering words, but in the end it may not matter greatly. If the respondents' submission is confined to an examination of the terms and conditions of the loan contract as entered into, concentration on the instalments made payable by the debtor may not make any significant difference to the result; on any view the amounts required to be shown separately by reason of the covering words and what follow them must be amounts "payable by a debtor to the credit provider" and it is only by means of the instalments that anything at all is so paid under the contract. But the respondents sought to push the argument further and to contend that what mattered was not only the agreement reflected in the loan contract when made, but also what happened thereafter; so that if after the contract was made any part of the loan moneys was disbursed for an amount described in one or other of the paragraphs (b) to (f), then a failure to show the amount separately in the written document meant default under s.36(1)(b) with consequent loss of the credit charge under s.42. As I followed the argument, that result flowed because once such a disbursement had been made its payment was necessarily reflected in the instalments required of the debtor under the contract.

123. In so far as the respondents' submission sought to establish that the instalment payments required of the debtor under the contract could be characterised by reference to events arising after the loan contract was entered into, the submission seems to me to raise for determination the very question raised by the submission of the appellant bank; that is, how far, if at all, may one look to such events arising after the contract is entered into for the purpose of establishing compliance or no with s.36(1)(b) in particular. The appellant says not at all, distinguishing the making of the loan contract from performance under it. The respondents argue otherwise, but I do not think the argument gains anything from insisting that the covering words be read as referring expressly to the instalments required of the debtor under the contract. The respondents' submission does however tend to meet another argument put by the bank - that is, that an amount payable under some other agreement, say a mortgage or a contract of insurance, cannot be said to be payable "under the contract", meaning the loan contract - but, as will be seen, that is an argument I would reject in any event, and again in order to justify that conclusion I see no need to read the covering words as referring expressly to the instalment payments required of the debtor. Whether they do or not therefore seems to me to be of no great moment.

127. Avco having been canvassed in part, something should be said now of s.75 of the Act before proceeding to the detail of this appeal. Strictly speaking, this litigation is not concerned with s.75; it is concerned only with s.42 which, imposing a civil penalty for default, deprives the lender of the credit charge under the contract if the loan contract "is not in writing or is not in accordance with section 36" or if "the annual percentage rate ... is not disclosed in accordance with s.38" or if "a loan contract is deemed to be not in accordance with the provisions of this Division by reason of s.40(1)" (which, as we shall see, also concerns the statement of the annual percentage rate). That is the provision made by s.42(1)(b), (c) and (d). This proceeding was instituted to ascertain whether, and in what respects, s.42 was called into play, if at all, in the cases which were put before the Tribunal for consideration. Where s.42(1) is called into operation, s.85 enables the Tribunal to relieve against the consequences, but, as earlier noted, no application has yet been made in that respect; instead a declaration has been sought under s.85B as to whether the borrower is or is not liable to pay the credit charge in each of the cases put before the Tribunal.

130. Section 75 is altogether different. It renders void certain agreements, prohibits the credit provider from making such agreements and imposes a fine for offending. The main thrust of the section is found in subs.(1). That is expressed as making void certain agreements "entered into by a credit provider", which appears in context to mean an agreement between the credit provider and the debtor (as they are called in the Act); for the agreement must be one whereby -

"... a debtor agrees to pay to, or on behalf of, the credit provider any costs, fees or charges incidental to, or relating to - (a) the provision of credit under a regulated contract; (b) guaranteeing or securing the repayment of any such credit; or (c) negotiations for the provision of any such credit or for guaranteeing or securing repayment of any such credit ...".

These are very broad words and, as was pointed out in Avco, would in themselves encompass a loan contract which otherwise is authorised under the Act. The words of exception that follow what has just been set out are therefore critical. So far as presently relevant they read: -

"... other than costs, fees or charges permitted by this Act to be included as part of the amount financed under a ... regulated loan contract ..."

Under s.75(1), an agreement to which the sub-section applies is made void and under sub-s.(2), any amount paid by the debtor to the credit provider in accordance with the agreement is recoverable as a debt. By s.75(3) a credit provider is prohibited from entering into an agreement that is void under s.75(1) and a pecuniary penalty is imposed for offending.

137. Section 75 is not directly in issue on this appeal; nor was it in issue in Avco. That caused Fullagar, J. to do no more than express a tentative opinion about its operation. Southwell, J., however, expressed a concluded view and so did Ormiston, J., but their Honours were not in agreement. It will be recalled that in Avco it was found as a fact that the lender and the borrower had agreed upon the payment by the borrower of the valuation fees which had been incurred by the lender (whether they were incurred on its own behalf or on behalf of the borrower). Apparently the question was debated whether that agreement was one for fees other than fees "permitted by this Act to be included as part of the amount financed"; if it was, then the agreement would appear to be rendered void by s.75 and prohibited to the credit provider.

140. Southwell, J., who alone considered that the valuation fees could not properly be included as part of "the amount financed", held that the agreement for the payment of the valuation fees by the debtor (by including those fees as part of amount agreed to be lent) was made void by s.75(1). This conclusion followed inevitably, it would seem, from his Honour's opinion that paragraphs (b) to (f) were exhaustive as to the fees and charges that could be included in the statement of the amount financed (as required by s.36(1)(b)). As valuation fees were not to be found in any of those paragraphs (as they then stood), and as on the view that paragraphs (b) to (f) were exhaustive in this regard paragraph (a) could add nothing, it followed that the valuation fees were not "permitted by this Act to be included as part of the amount financed". Necessarily, then, s.75(1) made the agreement void whereby the credit provider was to recoup the valuation fees from the debtor and made the amount recoverable if paid by the debtor.

143. Ormiston, J. adopted what was essentially the opposite view. Like Fullagar, J. his Honour considered that the valuation fees could be included under paragraph (a) of clause 1 as part of "the amount agreed under the contract to be lent" and thereby included "as part of the amount financed" when stated in accordance with Schedule 4. But of course the Act did not expressly permit that inclusion: valuation fees were not mentioned expressly in any of paragraphs (b) to (f) and their inclusion was allowed (under paragraph (a)) only by virtue of the absence of any prohibition. Being of the view that s.75 did not render void what was thus allowed in the statement (required by s.36(1)(b)) of the amount financed, his Honour held that the words "permitted by this Act to be included as part of the amount financed" must mean permitted in the sense of not prohibited. Again this conclusion seems logically to follow from the primary opinion - in this case, that the valuation fees could properly be included as part of "the amount agreed ... to be lent" under paragraph (a). As the valuation fees were therefore "permitted by this Act to be included as part of the amount financed", the agreement to pay them was not made void by s.75 or prohibited to the credit provider.

146. Fullagar, J., however, took the middle ground. Like Ormiston, J., he considered that the Act did permit the valuation fees to be included as part of "the amount financed" (on the ground that they could properly be included under paragraph (a) as part of "the amount agreed under the contract to be lent") and on that basis it was strictly speaking unnecessary to say anything about the operation of s.75(1): its operation did not fall for decision. His Honour did not see the operation of s.75 as impinging on the operation of s.36 and s.42, the former making void certain agreements, the latter depriving the credit provider of the credit charge (subject to s.85). But having declared that no concluded view on s.75 was called for, Fullagar, J. proceeded to express a tentative view as follows, at 665:

"In my tentative opinion the words 'permitted by this Act to be included as part of the amount financed' ... should be read down to refer only to costs fees or charges which are by the Act affirmatively permitted, that is to say, by the Act affirmatively singled out for permission, and so as not to include costs etc. which are permitted only for the reason that the Act outside s.75 fails to prohibit them. I would myself emphasise in the critical words the expression 'by this Act' .... As at present advised I do not think that 'permitted' in the critical words of section 75(1), can be read as 'left unprohibited'."

In the result, s.75(1) prohibited an agreement to charge the valuation fees as part of the amount financed -

"unless and until Sch.4, or some other provision of the Act, affirmatively and specifically 'permits' such inclusion ... ."

Thus with respect to the agreement reached between lender and borrower whereby the valuation fees were paid or to be paid by the lender and then recouped from the borrower as part of the amount lent, Fullagar, J. was disposed to the view that s.75(1) rendered that agreement void, notwithstanding that by virtue of s.36(1)(b) and Schedule 4 the amount of the valuation fees could be included under paragraph(a) of clause 1, without loss of the credit charge. (As already mentioned, an alteration in the regulations made after Avco required the inclusion of valuation fees as "prescribed charges" within paragraphs (b) to (f).)

153. With great respect, I find the difference in result under s.75 on the one hand and s.36 when taken in conjunction with s.42 somewhat awkward and, I think, unlikely to have been intended. But the Act is very difficult to construe and, as Fullagar, J. emphasised, the Act itself expressly provides for very different consequences under s.75 and s.42. The one renders an agreement void; the other frees the debtor from all liability for the credit charge (subject of course to s.85). Perhaps the two need not work in tandem but, as I say, the conclusion that they do not is at least an awkward one, though it may be driven by the statute. The awkwardness is avoided on the views of both Southwell, J. and Ormiston, J. (diametrically opposed though they are) and to that extent those views are the more attractive, if I may say so with respect. Of course if the authority of Avco is to be respected and the majority view accepted, that the valuation fees could on the facts of that case be properly included under paragraph (a) of clause 1 as part of "the amount financed", it is not open to adopt the opinion of Southwell, J. concerning the meaning of s.75(1); the two are inconsistent. Whether that means that the view of Ormiston, J. on s.75(1) should prevail despite the tentative rejection of that view by Fullagar, J., is another matter and is best left until it must be decided - which is not so here. Indeed, in view of the clear division of opinion in Avco it is surely better to leave s.75 aside altogether unless it becomes necessary to say something more about it when construing or applying s.36 in determining this appeal.

157. I turn now to the specific loan contracts put forward for examination in connection with the issues which the parties seek to have determined on this appeal. First and foremost were four categories of case into which many of the loan contracts were divided for the purposes of the appeal, by reference to the type of fees or charges in issue and the source of the funds from which they were paid or recouped. These four categories were identified in the parties' Summary (a shortened version of the Agreed Statement of Facts and Documents) and I take each in turn.

161. The first of the four categories consisted of loan contracts in respect of which there were fees or charges which were within the descriptions found in paragraphs (c) and (d) of clause 1 of Schedule 4 and which were paid (or recouped) by means of a debit passed by the appellant bank to what the parties called "the loan contract account", that being, I assume, an account kept by the bank in the name of the borrower and to which all of the amount financed was in one way or another debited and to which also the borrower's repayments were in time credited.

164. According to the parties' Summary, there were three loan contracts in this category and they involved the borrowers Ceeney (see Tab B57 in the appeal book), Duvjnak (Tab B58) and Moncrieff (Tab B59). The fees in question were for stamp duty on mortgage (payable to the Titles Office) or a search fee (apparently payable to the Titles Office in connection with the mortgage) and (in each of the three cases) the fee payable to the Titles Office on registration of a mortgage. In each of these three cases, the offer in writing signed by the borrower (and I include in that term the borrowers where there were more than one) contained a statement that there was a mortgage relating to the contract which had been or was agreed to be entered into (a statement in conformity with s.36(1)(i)). It was agreed for this litigation that the stamp duty, search fee and registration fees I have mentioned were amounts of the type described in paragraphs (c) and (d) of clause 1 of Schedule 4 (if the paragraphs are read as standing alone), but that the duty and the fees were "not disclosed" in the document in writing - that is, in the document containing the offer signed first by the borrower and later signed to signify acceptance on behalf of the bank. The amount of the fees and the duty in question was none the less debited in each case to the relevant loan contract account.

167. Because the relevant loan contract accounts were debited it would seem to be clear enough that the borrowers shouldered the ultimate financial burden for the payment of the fees and the duty in question, though no doubt the bank saw in due course to the actual payment, whether to the Titles Office or otherwise. In each of these three cases, the internal records of the bank show that the debiting operated to reduce the amount which, on the day of settlement, was otherwise being made available and put at the disposal of the borrower. In these circumstances it is perhaps surprising to find the bank contending that the payment of these amounts was no part of the loan contract that had to be in writing but, as I apprehend it, the submission went thus. When the loan contract was entered into (and so at the time at which it had to be in writing), the loan contract contained no requirement that these amounts should be paid to or by the bank. None the less the borrower was liable for them, although not by virtue of the loan contract but by virtue of the mortgage which though given in connection with the loan contract was separate therefrom. The subsequent debiting of the amount of the fees and duty to the loan contract account was consistent with some subsequent instruction from the borrower when ordering, according to his own choice, the disposition of the funds which under the loan contract were being put at his disposal. This was how the facts should be understood as there was no direct evidence to gainsay it and no inference to the contrary was justified, having regard in particular to the terms of the offer in writing which stated the amount agreed to be lent without deduction for the fees and duty in question. In the circumstances (so the argument ran) the deduction of the amount of the fees and duty from the amount otherwise being put at the disposal of the borrower on the day of settlement was simply at the option of the borrower, not affecting in any way the agreement between the parties about what "under the [loan] contract [was] payable by a debtor [i.e., the borrower] to the credit provider [i.e., the lender] " (to adapt the expression used in the covering words in clause 1). There was therefore no requirement that the amount of those fees and the duty be shown separately under clause 1 of schedule 4 (which would have served to reduce the amount otherwise "agreed under the contract to be lent"), and accordingly no non-compliance by the bank with s.36(1)(b) because they were not shown separately in the document relied upon.

170. It must be said that if the appellant is right and these amounts in question did not have to be shown separately in the loan contract because of the distinction between the making of the contract when first put in writing and the subsequent giving of directions for disbursement in anticipation of the day of settlement, that distinction would seem to afford a reasonably simple means for a credit provider to avoid, if it wished, the requirement of the covering words in clause 1 and the following paragraphs (b) to (f). It might be thought that for the bank to follow the course of waiting for instructions from the borrower for the payment of such sums out of what otherwise was going to be made available to the lender on the day of settlement, without specifying for payment in the contract, was to run the risk that such instructions would not be forthcoming and the amounts not paid at all. But the answer to that surely lies in Mr. Archibald's own submission that, even where the bank acted without instructions by withholding the amounts from what otherwise was being put at the disposal of the borrower on the day of settlement, those amounts would still not have to be shown separately in the contract document because of the distinction between the making of the loan contract in the first place and performance under the contract subsequently. It was only if the loan contract required that the amounts be paid or retained out of what otherwise was being lent that there was a need to show the amounts separately in the contract document.

173. To my mind, the argument of the appellant ought to be rejected, and I make three points. First, there is the distinction which Mr. Archibald sought to draw between liability under the mortgage and liability under the loan contract. The bank contended that the amounts here in question, which all concerned the mortgage given, or to be given, in connection with the lending, were payable by the borrower by virtue of the provisions of the mortgage and therefore, being payable under the mortgage, were not amounts payable "under the contract" (meaning the loan contract) within the covering words in clause 1. But to my mind the conclusion does not follow from the premise. The loan contract made reference to the mortgage as held, or to be held, by the bank and I suppose (in this context of amounts for stamp duty, registration fees and the like) that that there was no purpose for the mortgage save as security for the borrower's obligations under the loan contract; at all events nothing suggests otherwise. It follows, I think, that whatever fees or charges were payable under the mortgage, by virtue of its provisions, were properly to be regarded as payable by the borrower "under the contract"; the two are not mutually exclusive as the appellant's argument tended to suggest. After all, in view of the covering words what are relevant are not just "amounts [which] under the contract are payable by" the borrower, but "amounts [which] under the contract are payable by [the borrower] to the credit provider" - and that will often be the product of the loan contract rather than the mortgage. In short, I do not consider the distinction which the bank sought to draw between the requirements of the mortgage and the requirements of the loan contract as of significance in itself, given the link between the two. And that is a conclusion which seems to me consistent with the approach taken in both Custom Credit Corporation and in Westpac Banking Corporation v. Donald-Murrell [1992] VicRp 73; [1992] 2 V.R. 429 at 438-9.

176. Nevertheless, the view that in the present circumstances what is payable under or by virtue of the mortgage is to be regarded as payable "under the contract" is subject to the overriding requirement in respect of any amount encompassed by clause 1: that is, that the fees and the duty in question be amounts forming part of "the amount agreed under the contract to be lent" - and that brings me to the second point. The appellant contends that subsequent instruction by the borrower for disbursement of what otherwise is being made available to the borrower, for own use as it were, is something over and above the terms of the loan contract which, the bank implies, alone creates the obligations of the parties irrespective of any such instructions given after the contract was first entered into (and reduced to writing). But that is not so, I think. The bank's own offer document makes express provision for the giving of such instructions; there is room on the second page for such instructions to be written in. At least when they are written in before or when the document is signed there can be no argument but that those instructions are part of the loan contract - and (perhaps surprisingly in view of its being placed in this first category) Moncrieff (Tab B59) appears to have been just such a case.

179. In Moncrieff the amounts of $33 for a search fee and $42 for a registration fee were in issue. On page 1 of the offer document, as signed [AB B340], the amount agreed to be lent is stated as $6,000 and no reference is made to the amount payable for search fee or registration fee in connection with the mortgage from the borrower. On the second page, under the heading "Disbursement" the instructions for settlement have been written in brief terms, and those instructions included "search $33 Reg $42" (obviously meaning the search fee of $33 and the registration fee of $42). According to the Agreed Statement of Facts and Documents [AB B37] the bank's transaction report (which is included among the agreed documents [AB B342]) shows, in line with the instructions for settlement, that on 21 September the amount of $6,000 was disbursed as follows: $2,000 and $2,759.64 to United Credits, $948 to "savings mortgage loan", $217.36 to the Access account of the borrower and his wife and $33.00 and $42.00 for the search fee and registration fee respectively. These sums were all debited (as I follow the Agreed Statement) to the loan contract account in the name of the borrower. Neither of the fees, however, was shown separately on the front page of the offer document; there the sum of $6,000 appeared without reduction and yet the second page of the document makes it clear that it was agreed - and apparently from the outset - that the search fee and the registration fee would be paid to or by the bank by deduction from the moneys otherwise being lent to the borrower. I cannot see how it can then be argued that these fees were not to be shown separately if s.36(1)(b) was to be complied with. (It was not argued that their mention on the second page of the document satisfied the bank's obligation.)

182. Moncrieff was thus not an example of instructions for disbursement of funds, given after the parties entered into the contract in writing and before the day of settlement. However, Ceeney (Tab B57) and Duvjnak (Tab B58) were. In both, the offer document which was signed contained no significant instructions for disbursement of the moneys that were to be made available to the borrower on the day of settlement; instead, in the case of Ceeney there were only two straight lines drawn to indicate the absence of any present instructions [AB B331] and in Duvjnak there was only the word "cash" [AB B335]. But how could settlement occur without some or more specific instructions? It is, I suppose, always possible that cash was to be handed over, but that was surely most improbable and it did not occur. Instead, as the bank documents show, before settlement the bank was able to note the required draw-down as including separate amounts for the fees now in question, which must necessarily have reduced the balance that would otherwise have been put at the disposal of the borrower, for own use: see in re Ceeney the bank's diary note dated 12 November 1987 and in re Duvjnak the diary note dated 6 August 1992. The bank claims that these instructions were no part of the relevant loan contract, but why not? In the absence of any evidence otherwise I would infer that these instructions for disbursement were given by the borrower not only under the loan contract but in furtherance of it, in order to facilitate performance on the part of the bank. If given by the borrower, the instructions were obviously accepted by the bank. We cannot say, on what little we are told, whether the instructions came about at the unsolicited suggestion of the borrower or at the urging of the bank, and it does not matter; it is enough that these instructions for disbursement were agreed upon as the means of carrying out the bank's part of the bargain which stood awaiting fulfilment. It seems to me that in those circumstances by the time of settlement the loan contract, for the purposes of the Act, comprised the document in writing as supplemented by the instructions for disbursement of the moneys otherwise agreed to be lent. Those instructions were in effect for the payment to the bank by the borrower of the amounts in question for fees and duty, and as these amounts were within the descriptions in paragraphs (b) to (f) of clause 1 of schedule 4 and they went in reduction of what otherwise was the amount agreed under the contract to be lent (paragraph (a)), they should have been shown separately in the contract in writing, if s.36(1)(b) was to be satisfied. They were not shown separately and the bank was in default under s.36(1)(b) accordingly.

185. Nor, as I see it, does this reasoning confuse the making of the loan contract with performance under it; for that distinction has little significance, I think, for present purposes - which is the third point that I would make. It is true that the instructions for disbursement were given by the borrower so that the contract might be performed, but those instructions were given under the contract and became part of it. The moneys were advanced by the bank under and in accordance with the offer document as supplemented by the instructions which were so necessary to performance and I cannot regard the instructions for performance as in some way independent of and separate from the loan contract itself - the more especially as the offer document itself anticipated the giving of such instructions. The bank's argument was that the loan contract, which was in writing, contained no such instructions and therefore those instructions could not be part of the contract; but that argument is circular. The Act requires the loan contract to be in writing and that means, I think, the loan contract under which the moneys are advanced by lender to borrower: see, for example the definition of "credit provider" in s.5. Once the inquiry becomes one for the contract under which the moneys were advanced, the definition of the loan contract as it stood when first entered is of no more than historical interest. The predominant requirement of the Act is to be found implied in s.31(1): a loan contract shall be in writing. Section 31(2) cannot be understood as other than ancillary and it cannot be an answer that the offer document was in writing if the loan contract under which the moneys were advanced was not wholly in writing. It is the contract as it stands by the day of settlement which must be in writing and answer the requirements of s.36(1).

188. If this conclusion is thought to raise unnecessary difficulties for the parties when all that is at issue are the directions for disbursement of what otherwise is to be put the disposal of the borrower, the answer lies in a formal amendment of the sort envisaged by s.32(5). Alternatively, the bank should see to it, as apparently happened in Moncrieff, that all instructions for settlement are finalised by the time that the offer document is signed.

192. Although I have found non-compliance with s.36(1)(b) in the three cases within the first category raised for decision, it is otherwise with the cases in the next category (which, though it is the third of the four in the parties' Summary, I am calling the second category). In the cases within this second category the amounts in question, though debited to the loan contract account of the borrower in broadly similar circumstances to those affecting the cases in the first category, were not amounts within any of the descriptions found in paragraphs (b) to (f) of clause 1 of Schedule 4. That is the only distinguishing feature, as the cases were presented to us.

195. Under this head, there were four loan contracts put in evidence: Cassar (Tab B63), Goodman (Tab B64), Ceeney (Tab B57) and Duvjnak (Tab B58). In the cases of Cassar, Goodman and Duvjnak, the amounts involved were (or included) amounts for production fees charged by other banks (Westpac, State Bank and Commonwealth Bank respectively), and in the course of the argument it became common ground that (at least to the extent of those amounts) these cases should not have appeared within this category; the production fees just mentioned were in fact amounts included within the descriptions found in paragraphs (b) to (f) and thus far therefore the cases I have identified were examples in the first category, not the second. Putting those amounts aside, there were only two amounts left and in what follows I deal exclusively with those two.

198. First, in the case of the loan contract involving the borrowers Cassar (Tab B63), according to the Agreed Statement of Facts and Documents [clause 7.1, AB B40-1; contrast Tab B63, AB B368] there was a debiting of the loan contract account of the borrower for the cost of three bank cheques provided by the lender (at a cost of $3.50 each), that cost being included within the bank's transaction vouchers for disbursements at the time of settlement (disbursements totalling the amount financed). In the case of Ceeney (Tab B57), according to the Agreed Statement [clause 7.1, AB B42; contrast Tab B57, AB B332] there was an amount of $65 charged by the lender itself as a production and lodgement fee, an amount included in the bank's diary note of disbursements at the time of settlement (such disbursements again totalling the amount financed). In the course of the argument it was agreed by the parties that these amounts (for the three bank cheques and the sum of $65) were not within the descriptions found in paragraphs (b) to (f) and so were the only examples put forward of cases within this second category: i.e., amounts not within paragraphs (b) to (f) but nonetheless debited by the lending bank to the borrower's loan contract account and to that extent serving to reduce the sum otherwise made available to the borrower and put at the borrower's disposal at the time of settlement.

201. In my view, the debiting of these amounts for the bank cheques and for the bank's own production and lodgement fee does not involve non-compliance with s.36(1)(b). These amounts are like the valuation fees considered in Avco: inasmuch as they were not within the descriptions found in paragraphs (b) to (f) of clause 1 of Schedule 4, they were not required to be shown separately, even if they formed part of the amount financed. Whether they did or did not then ceases to matter; either way there was no default under s.36(1)(b) when they were not shown separately.

204. The argument of the bank on this appeal was that, on the evidence before us, it could not be concluded that the amounts in question did form part of the amount financed; for the offer document made no reference to them and in those circumstances, it was argued, there was no basis for concluding that the loan contract, when entered into, included the payment of these amounts out of any of the moneys being provided under the contract. Yet they were so paid out of the amount provided under the contract to the extent that the amount agreed to be lent (according to the offer document and stated as such by reference to paragraph (a) of clause 1) was placed to the credit of the loan account from which these amounts were debited. From what I have said when dealing with the first category of fees and charges, it might be thought to follow that, on the evidence we have, I would be prepared to infer that the amounts now in question were paid under a loan contract which by the time of performance included provision for their payment. But it is perhaps not so clear in relation to the fees for bank cheques; for this was simply payment for a service provided at the time of settlement - and in the end, as I have said, it just does not matter. Whether or not the loan contract was supplemented or amplified after the document in writing was signed by the borrower as an offer and accepted on behalf of the bank, there was no need for the amounts here at issue to be shown separately in any statement of the amount financed. If payment of these amounts formed part of the loan contract, they were nonetheless (like the valuation fees considered in Avco) properly included within the amount "agreed under the contract to be lent", within the meaning of paragraph (a) of clause 1, and did not have to be shown separately. It is a fortiori if these amounts were paid altogether independently of the loan contract, and because the borrower, being obliged to make the payment, chose to do so out of the amount agreed to be lent, and without affecting in any way at all the terms of the loan contract as first made. Either way, there was no failure to comply with s.36(1)(b).

207. It must be stressed that this conclusion flows from the agreed fact that the amounts in question, the cost of the three bank cheques and the sum of $65, did not fall within the descriptions found in paragraphs (b) to (f) of clause 1. We were not asked to consider whether that was so or not; the parties simply sought our answer to the problem on that footing. Thus it was not contended, for instance, that the cost of the bank cheques, which in each case was simply added to the sum otherwise disbursed for an outgoing, should on that account be treated in the same fashion as the outgoing in question. The conclusion I have expressed about the items in this second category depends upon the premise agreed between the parties for the purpose of this litigation - as indeed, to a greater or lesser degree, do all the answers which I venture to give to the problems raised.

211. That brings me to the third of the four categories of case (the second in the parties' Summary). As in the first category, loan contracts in this category involved fees and charges falling within the descriptions found in paragraphs (c) and (d) of clause 1 of Schedule 4 (when read independently of the covering words), and the amount of these (according to clause 6.2 of the Agreed Statement of Facts and Documents [AB B37]) was debited by the appellant bank at the time of settlement to an account of the borrower - but in these instances an account which was not the loan contract account.

214. Here, there were five loan contracts raised for consideration: Bulle (Tab B60), Elvey (Tab B49), Hardy (Tab B61), Patterson (Tab B62) and Wilson (Tab B66). As in the first category of cases, the amounts here at issue were for stamp duty and fees on the registration of a mortgage and they included also a search fee and a fee on the discharge of mortgage. There is no need to consider the detail of these; for it was part of the case, as presented to us, that these were amounts falling within paragraphs (b) to (f) of clause 1. All that differentiates these cases from those in the first category is that, though debited by the bank, the amounts were debited to an account which was not the borrower's loan contract account.

217. Now, if that other account was otherwise altogether independent of the lending transaction and one to which no part of the loan moneys found their way, it might have been easy to conclude that, even though the amounts now in question were payable by the borrower to the credit provider in the sense that, as between the parties to the loan contract, they were ultimately the borrower's responsibility, the amounts were not in any way paid to or recouped by the bank out of the sum "agreed under the contract to be lent" (and accordingly formed no part of the "amount financed" under the relevant loan contract and did not require disclosure by virtue of s.36(1)(b)). But, as will be seen, though the amounts in question were indeed debited to an account which was not identified as the loan contract account, they were none the less debited to an account into which at least a portion of the money otherwise lent by the bank found its way, and sometimes in such a fashion as to reduce what otherwise was being made available to the borrower and put at the disposal of the borrower as part of "the amount agreed under the contract to be lent". Where that was so, it is difficult, I think, to distinguish the cases in this, the third, category from those in the first category (with the result that there was a failure by the bank to comply with the requirements of s.36(1)(b) because the amounts in question were not shown separately in the loan contract). Because that conclusion is dependent upon the facts of the case, it is not possible, I think, to give a universal answer to the cases in this third category.

220. An example or two will make this clear. In Bulle (Tab B60) the offer document was very straightforward: the "amount agreed to be lent" was stated to be $15,000, and that too was stated to be the "amount financed". The "credit charge" was stated to be $8,812.50 and, conformably with clause 1 of Schedule 4, the total of amount financed and credit charge was given, $23,812.50. No other amounts were relevantly shown "separately" as required by clause 1. According to the offer document the bank was to hold a second registered mortgage as security for the loan. Instructions for disbursement were "into current account 3054 27777" - and this, it seems, was the borrower's loan contract account.

223. According to the Agreed Statement of Facts and Documents [AB B37-8] the amount agreed to be lent was disbursed as follows: the sum of $4,607.11 to this last-mentioned account and the sum of $10,392.89 to the "personal cheque account". Thus, though these two sums total $15,000 (the "amount agreed to be lent" according to the offer document), by far the greater part of that amount found its way into the personal cheque account of the borrower. That happened on 29 September 1989, which it appears from the bank's transaction report [AB B346] was the day of settlement. On the same day the bank debited the personal cheque account with (inter alia) three sums totalling $111.60, comprising $58.60 for production fee payable to the Bank of Melbourne, $45.00 for mortgage registration fee and $8.00 for search fee payable to the Titles Office. (It is only these last two, $53 in all, that are the amounts presently at issue.) On the few facts that we have, I would infer that the three sums totalling $111.60 were debited to the borrower's cheque account by agreement between borrower and lender, an agreement reached in supplementation of the written document and as part of the instructions for settlement so necessary to performance of the loan contract. It is obvious that the debiting of these sums went to reduce the amount that otherwise was being made available by the bank to the borrower and put at his disposal; the sum of $10,392.89, if it was ever to be at the borrower's disposal, was promptly made less by $111.60 and the amount agreed to be lent was correspondingly made less. As this was all by antecedent agreement between the parties (as I infer) within the framework of the lending transaction, the two amounts in question (being amounts within paragraphs (b) to (f) of clause 1) ought, according to s.36(1)(b), to have been shown separately in the loan contract in writing, serving thereby to reduce the amount of $15,000 as the "amount agreed to be lent" while leaving unaffected the amount of $15,000 as the "amount financed". These two amounts were not shown separately and the amount agreed to be lent was wrongly shown as $15,000 and to that extent there was non-compliance by the bank with clause 1 of Schedule 4 and s.36(1)(b). (The third sum of $58.60 included in the total debit of $111.60 is to be dealt with shortly in the fourth category of case.)

226. Reference to the facts of Bulle, so far as we are told them, serves to expose the reasoning involved. In the case of Wilson (Tab B66) we are told even less. The loan contract was supported by a third mortgage over the borrower's home. The offer document stated the amount agreed to be lent as $21,300, which was also given as the amount financed. According to the Agreed Statement of Facts and Documents [AB B39-40], bank records revealed that government fees totalling $178 were "payable in relation to the loan contract": $84 for stamp duty on mortgage, $47 for registration of mortgage and $47 for discharge of mortgage - and all three were amounts within the descriptions found in paragraphs (b) to (f) of clause 1 of Schedule 4, though none of them was shown separately in the offer document. It appears from the bank's transaction report [AB B395] that on 7 September 1990 the sum of $178 was paid by the bank to the credit of the borrower's access account (not the loan contract account) and on the same day the three sums totalling $178 were debited to that account. Other fees - bank fees - that were also "payable in relation to the loan contract" were charged, we are told, on 15 November 1990, which makes it difficult, if not impossible, to discern the date of settlement. I assume however that it was not earlier than 7 September 1990. Further I infer from a bank memorandum headed "Loan Approval - Advice of Costs" [AB B394] that all three items debited on 7 September, two fees and the duty, were part and parcel of the lending transaction, and that though paid out of the access account of the borrower that was simply for convenience, by antecedent arrangement between the parties. It follows that the sums so debited went in reduction of what was otherwise being made available to the borrower and put at the borrower's disposal, and so the amounts in question ought to have been shown separately in the loan contract in writing. They were not, and there was accordingly non-compliance with s.36(1)(b).

229. The position in respect of the Elvey loan contract (Tab B49) was, I think, relevantly different, though we are told too little for that conclusion to be expressed with much confidence. The offer document stated the amount agreed to be lent as $15,000 and this was also given as the amount financed [AB B306]. There was to be security in the form of an unregistered mortgage given by a guarantor and that mortgage was entered into on 20 September 1989. The offer document was itself signed by the borrower, and also on behalf of the bank, on 18 September 1989. According to the Agreed Statement of Facts and Documents [AB B38] "the proceeds of the loan were disbursed" as to $14,502.75 by bank cheque and as to $497.25, to the borrower's access account with the bank - a total of $15,000. The amounts now in question, and which it is agreed were within the descriptions found in paragraphs (b) to (f) of clause 1 of Schedule 4, were two: $130 for registration of discharge of mortgage (presumably some other mortgage than that taken for security) and $24 for stamp duty on the unregistered mortgage (no doubt the one taken for security). The first was debited to the borrower's access account on 14 September 1989 and the second 13 days later, on 27 September. Yet here the settlement date appears from the bank's transaction report [AB B311] to have been 18 September, the very date on which the offer document was signed by both parties.

232. What then to make of the debiting of the two sums of $130 (before settlement) and $24 (after settlement)? The access account, a copy of which is supplied, had other transactions recorded at about this time, and the sum of $130 was a debit against an existing credit balance in the thousands. It is therefore more difficult to infer that the debiting of that $130 was part and parcel of the loan transaction - or at all events that it went to diminish what otherwise was being made available under the loan contract to the borrower for the borrower's own use. The debit of $130 actually pre-dates the offer document and should be considered in conjunction with the borrower's instructions for disbursement. The instructions in the offer document are brief and to the point: $500 to the access account and $14,500 by bank cheque for Avis Rent-a-Car and these instructions seem to reflect what was in fact done at settlement. The only difference lay in the bank's adding to the sum paid by bank cheque a further $2.75 for the provision of the bank cheque, which correspondingly diminished by $2.75 the amount that could be credited to the borrower's access account. In those circumstances I would not infer that the debiting of the access account on 14 September with $130 (or indeed with $24 subsequently on 27 September) was otherwise than at the choice of the borrower and independently of the loan contract. In other words, I would not infer that that debiting was part of the bargain struck by the parties by way of the loan contract.

235. Of course it is none the less quite possible that that debiting was a part of the loan contract between the parties; perhaps the parties were always agreed that the balance over and above whatever was required for Avis Rent-a Car should be paid into the access account and that any fees or charges payable in relation to the loan contract should be debited to that account (and if that were agreed the amounts now in question should have been shown separately in the loan contract in writing). But the facts given us are too few to justify the inference that it was so, there being no precise correspondence here between the crediting and the debiting, either in date or amount (to mention but one consideration). In short therefore, so far as I can tell on the facts we have, $15,000 was the amount "agreed under the contract to be lent" on this occasion and, without reduction, that amount was made available by the bank for use by the borrower and put at the borrower's disposal accordingly. How the borrower chose to apply that money by medium of the access account is not presently to the point. It follows that the failure in that contract to show separately the amounts now in question - of $130 and $24 - does not mean non-compliance with s.36(1)(b).

238. By this reasoning I see Elvey as a case on one side of the line and Bulle and Wilson on the other. Without my tediously going through the facts of the other two cases in detail, suffice it to say that Hardy seems to me similar to Elvey, while Patterson is like Bulle and Wilson and I shall attempt to state why in short compass.

241. In Hardy (Tab B61) the "amount agreed to be lent" ($9,313.33) was credited, in accordance with the disbursement instructions included in the offer document, to the borrower's access account with the bank [AB B352]. That was done on 26 September 1990 - apparently the settlement date - while the two amounts now in question, $90 for a production fee payable to the Challenge Bank and $47 for fee on registration of mortgage, were debited to that access account respectively on 18 September (before the settlement date) and 19 October (well after the settlement) [AB B38-9, B354-5]. A copy of the access account is supplied, and it shows a number of transactions in September and October, the account being overdrawn until the "amount agreed to be lent" was deposited on 26 September, and then much in credit. Critically, I cannot infer agreement to diminish the amount otherwise agreed to be lent by the debiting of the amounts now in issue and so I cannot conclude that there was non-compliance with s.36(1)(b) because the amounts of $90 and $47 were not identified in the offer document.

244. As for Patterson (Tab B62), the "amount agreed to be lent" ($10,050) was credited to the borrower's access account on 10 June 1992 (which was settlement day), while the amount of the fee now in question ($54 for fee on registration of mortgage) was debited to that account on the same day - and the bank's transaction report for 10 June 1992 shows that the crediting and the debiting were all of a piece [AB B39, AB B365]. In those circumstances and wanting any further or other facts, I see no reason here not to infer that the debiting of the amount of the fee was part and parcel of the loan contract as it stood between the parties by the time the "amount agreed to be lent" was made available, immediately reduced as it was by the debiting of the $54. If, as I would infer, that was by agreement, the amount of the fee of $54 should have been separately shown in the loan contract in writing. It was not, and so there was non- compliance with s.36(1)(b).

247. Finally I make two observations before leaving this third category. First, I observe that in both Hardy and Patterson the access account seems to have been the only account of the borrower involved in the lending transaction, to which the amount agreed to be lent was deposited in full. There seems to have been no other account that might have been designated "the loan contract account" and to that extent the description of this category might tend to mislead. But as will be apparent from what I have said, what is important in my opinion is not the number of accounts involved, but the extent to which the amount debited for fees or charges was debited as part and parcel of the lending transaction between bank and borrower. That it was so is perhaps easier to see if there is but one account involved - as it was in the case of Patterson, though it was not so in the case of Hardy. Secondly, I emphasise that the foregoing conclusions are premised on the fact, agreed by the parties for this litigation, that the amounts now in question though not identified separately in the offer document did fall within the descriptions found in paragraphs (b) to (f) of clause 1 of Schedule 4, a fact which we are merely invited to accept.

251. That brings me to the last of the four categories: loan contracts in relation to which there were fees or charges which were not within paragraphs (b) to (f) of clause 1, but the amount of which was debited to an account of the borrower with the appellant bank other than the loan contract account. Here the critical fact is that the amounts in question fell outside the descriptions in paragraphs (b) to (f) so that, whether or not they were to be debited as part of the loan contract, there was no need to show then separately by virtue of clause 1 of Schedule 4. Either the debiting of these sums was part of the loan contract or it was not. If it was, then these amounts are like the valuation fees in Avco: sufficiently included in the loan contract in writing within the "amount agreed to be lent" and needing no separate or further identification. If their debiting was not part of the loan contract, then a fortiori these amounts needed no identification in the loan contract in writing; indeed to include them would have been not to disclose, but to distort. Either way, the failure to identify the amounts in question in the written document did not involve non-compliance with s.36(1)(b) of the Act. These are the reasons which I expressed more fully when dealing with the second category.

254. According to the parties' Summary, four loan contracts were raised for consideration within this fourth category: Wilson (Tab B66), Elvey (Tab B49), Hardy (Tab B61) and Bulle (Tab B60). But in the course of the argument it became agreed that the loan contracts of Hardy and Bulle were not properly included within this fourth category. That left only the loan contracts of Wilson (Tab B66) and Elvey (Tab B49). In the case of Elvey, the amount was a princely $2.75, charged by the lending bank for providing a bank cheque [AB B44]. In the case of Wilson, there was an amount of $50 charged by the lending bank for a search fee and $175 for the lodgment of documents [AB B43], which, as mentioned above, were the bank fees debited on 15 November 1990, long after the debiting of the other fees and charges on 7 September 1990, dealt with as part of the third category. But that does not matter now. For the reasons already stated, it seems to me that nothing in Schedule 4 required that these amounts be shown separately in the loan contract in writing. They were either part of the "amount agreed to be lent" or they were not, and either way nothing more needed to be said for compliance with s.36(1)(b).

258. In dealing with the four categories I have just dealt with, I have referred to the possibility of an agreement between lender and borrower specifically dealing with the amounts now in question by way of disbursement of moneys lent, an agreement made in amplification or supplementation, and indeed in furtherance, of the loan contract evidenced by the offer document. In the first category, I have found on the evidence as we have it that such further agreement existed, and in the third category that it sometimes existed. In the second and fourth categories, it was unnecessary to decide if it was so or not. It might be thought that Avco suggests that if there was such a further agreement for the debiting of these amounts, whether in the loan contract account of the borrower or in some other account of the borrower, that further agreement, being an agreement for the payment of fees or charges incidental to or relating to the provision of credit under the loan contract, fell foul of s.75(1) and was therefore void. That would depend upon what construction was adopted of the words in parentheses in s.75(1) "other than costs, fees or charges permitted by this Act to be included as part of the amount financed under ... a regulated loan contract", as to which, as I have said, there were, in substance, three opinions expressed in Avco. We were not asked to decide the question under s.75 and therefore I do not propose to add further speculation about the meaning and effect of s.75. If s.75 applies at all, I agree with what was said in Avco about its serving only to render void the separate agreement entered into.

261. In any event s.75 cannot impinge upon the conclusions expressed in relation to the second and fourth categories of case; for in each of those the existence or not of such a further agreement, possibly falling within s.75, was irrelevant to the conclusion. It was not irrelevant in the first and third categories of case, for in my view, where it existed, that further agreement created a need for further writing if the requirements of s.36(1)(b) were to be met. For the appellant bank, Mr. Archibald argued that that could not be so because the further agreement was rendered void by s.75(1): if void, it could not have had the effect I have suggested. But, according to the statement of facts agreed for this litigation, in the first and third categories of case the amounts in question were amounts which were properly regarded as falling within the descriptions found in paragraphs (b) to (f) of clause 1. It therefore follows that, if and in so far as the further agreement for the debiting of those amounts was an agreement otherwise falling within s.75, the agreement was squarely within the words of exception as one for -

"costs, fees or charges permitted by this Act to be included as part of the amount financed under ... a regulated loan contract".

And that is so on all of the three views expressed in Avco about the meaning of the word "permitted"; for all three judges accepted that that word at least included whatever was required to be shown separately in a loan contract by virtue of the covering words and paragraphs (b) to (f). Accordingly any further or supplementary agreement for the disbursement of funds in cases within the first and third categories was not an agreement made void by s.75.

266. Thus, s. 75 is either irrelevant to the matters now falling for decision or innocuous in the circumstances. It is irrelevant in two of the four categories dealt with and in the other two categories, where it did matter or might have mattered, s.75 does not operate to render any relevant agreement on costs, fees or charges void. Beyond that I say nothing further about s.75.

270. The four categories of case just dealt with accounted for the bulk of the argument on this appeal, but a number of other loan contracts were also raised for consideration. Two of these other cases were not unlike the foregoing in that they, too, were concerned with the obligation created by s.36(1)(b) to include in the loan contract "a statement of the amount financed in accordance with Schedule 4", though here the focus was, not on the covering words in clause 1 of Schedule 4 and paragraphs (b) to (f), but directly on paragraph (a) and the need to state "the amount agreed under the contract to be lent", excluding amounts referred to in paragraphs (b) to (f).

273. The two loan contracts identified for us as raising the relevant problem involved the borrower Logozzo (Tab B17) and the borrowers O'Callaghan (Tab B3). In the first of these it was claimed on behalf of the respondents that the wrong amount had been stated in the offer in writing which was signed by the borrower and later accepted by the bank, while in the second no amount at all had been stated in the document against the words "Amount agreed to be lent"; that line was simply left blank.

276. It is convenient to note first that the expression "Amount agreed to be lent", though used in the common form of offer document, must be understood in context as meaning the amount more particularly described in paragraph (a) of clause 1 - that is, it means not the total amount agreed to be lent, which would include the amounts in the following paragraphs (b) to (f), but the net amount after excluding the amounts in those following paragraphs. Paragraph (a) makes that plain and that is how the common form of document must be read and understood. In passing, I note that although the Credit Regulations 1984 reg.19(2) and Schedule 4 deal with the meaning of certain terms for use in loan contracts, the term "amount agreed to be lent" is not one of them: perhaps its meaning in line with paragraph (a) of clause 1 was thought too obvious to need specific provision. Certainly it does seem obvious from the context in which "Amount agreed to be lent" appears at the top of the list in the offer document, immediately after the heading "Amount Financed".

280. With that said, the way in which the offer document was compiled for signature in Logozzo (Tab B17) should now be set out. Items 1, 2 and 3 were as follows [AB B117], omitting all descriptions against which no money sum was inserted:-

These amounts were all written on the printed document, the figures being placed within the boxes printed for the purpose. As can be seen the total amount financed was given as $13,100, and the total of both the amount financed and the credit charge as $24,104 (the latter being stated to conform with s.36(1)(d) of the Act).

296. In the case of this loan contract, the borrower's disbursement instructions were contained in the offer document - to "pay the amount agreed to be lent" to an account with the bank, number 7841-19462. This was done and - no doubt on the same day, 5 June 1990 - the total sum of $24,104 was shown as "loan drawn down" in another account, designated the "Personal Loan Account" of the borrower. Thereafter this latter account was credited with monthly deposits of $300 each, apparently going in repayment of the loan by instalments as provided by the offer document, and in reduction of the amount owing according to this account. (It is true that the offer document provided for one instalment of $291.30 and 83 instalments of $286.90, while the deposits at least in the first three months were of $300, but nothing turns on that; it was simply assumed in argument that the bank was accepting monthly instalments of at least $300.)

299. Thus far there would have been no problem. The difficulty to which our attention was drawn lay in the fact that the personal loan account, though apparently commencing on 5 June, contained as a first entry, not the draw-down of $24,104, but a deposit of $60. This amount, it was contended, had been put to the credit of the account out of the sum being otherwise made available to the borrower under the loan contract, and hence was an amount that "never left the bank". It would appear that the sum of $60 was surplus to the borrower's requirements at least by 5 June, the date of the draw down, and this handwritten diary note of the bank's was in evidence [AB B125]:-

"Draw loan Credit surplus funds back to PLA Balance of funds to [indecipherable] A/c. 7891-19462."

From this one may infer that the borrower did not need the last $60 and, whether expressly or impliedly, authorised the crediting of the sum to the personal account where it presumably went to reduce the balance owing, as did the monthly payments of $300 (though in excess of the instalment actually required by the terms of the contract itself).

304. In the course of argument the question was canvassed whether the $60 had proved surplus to the borrower's requirements by reason of events or circumstances affecting the borrower after the loan contract was entered into, or whether it was the direct result of the only way in which the bank had been willing to structure the lending transaction. The basis for this last lay in the expression "must be in even $100" under the description "amount financed " where that amount is declared in the offer document, as can be seen in what is set out above. We were told that the expression "must be even $100" signified a requirement of the bank's own, that the amount financed must be in round hundreds; and the suggestion made in argument was that it was in order to accommodate this idiosyncratic requirement of the bank's that the "amount agreed to be lent" was $12,060 - and not just $12,000, which, it would seem, was all that the borrower required of the bank (at least by 5 June). The amount for insurance - an amount which was required to be shown separately according to schedule 4 - was given as $1,040; it may be supposed that that figure could not be altered and the only other way, then, to accommodate a requirement that the "amount financed" be in even hundreds was to adjust the "amount agreed to be lent" to suit - in this case by adding $60. That is what it was suggested had happened, so that the $60 which was on 5 June credited to the borrower's personal loan account had been no more than a sum used by the bank to round up the borrowing for its own purposes, not the debtor's.

307. In the end I do not think it matters whether that suggestion is correct or not. The submission of the respondents was that the $60 was a sum which had not been lent at all, that it "never left the bank" and should never have been included in the "amount agreed to be lent"; and that it was so included constituted a mis-statement of the "amount agreed to be lent" and hence was non-compliance by the appellant with the requirements of s.36(1)(b) and Schedule 4. The submission depended mainly on the crediting of the sum of $60 in the personal loan account on 5 June, and I do not think the reason for that matters much. It may have been the result of the bank's own ingenuity in seeking to accommodate its own internal policy on lending or it may have been the product of some change of heart or perhaps circumstances affecting the borrower himself. Either way I do not accept the submission that the amount agreed to be lent was overstated and that on that account there was non-compliance with s.36(1)(b) and Schedule 4.

310. It may be taken that the sum of $60 was indeed surplus to the borrower's requirements by 5 June, and for that reason was credited to the account from which the amount lent was drawn down and on the same day. The balance owing was thereby reduced by $60. But if that was the result of a change of mind or change in circumstances on the part of the borrower, I see no basis for supposing that in some way that made the loan contract incorrect in including the $60 in the amount agreed to be lent. On the present hypothesis it was the amount of $12,060 that was agreed to be lent, even if on the day for draw-down the borrower had no use of the last $60 and promptly paid it back to reduce the amount otherwise owing. And if that conclusion is correct, I see no reason for concluding otherwise if, as was suggested, it was the fact that the bank agreed to lend $12,060 because it was unwilling to agree to lend $12,000. That the amount to be lent (and put at the disposal of the borrower) should be $12,060 and not $12,000 was on this hypothesis a condition of the bank's being willing to lend at all, and it must have been agreed by the borrower. In those circumstances I think it was the fact that $12,060 was agreed to be lent, and the amount was accordingly not overstated in the loan contract.

313. In short, the respondents' submission was made because there was a deposit of $60 which appeared in the personal loan account of the borrower on 5 June, immediately before the loan draw-down of $24,104. The argument was that the making of the deposit on the same day as the draw-down made it plain that, of what was drawn-down, at least the sum of $60 had never been lent. This argument was accepted by the Tribunal and it also found favour with the judge on appeal, but with respect I am not persuaded. I think that counsel for the appellant bank was right when he submitted that the mere crediting of the $60 does not, in itself, indicate that the amount agreed to be lent was not lent. As already mentioned in an earlier context, it seems appropriate to regard the "amount agreed to be lent" (as that expression is to be understood in the light of paragraph (a) of clause 1 of Schedule 4) as the amount which is to be put at the disposal of the borrower and there is nothing in the borrower's personal loan account or in the other evidence before us to indicate that the amount that was put at the disposal of the borrower in this instance did not include the sum of $60, even though that sum was deposited to reduce what otherwise was owing. In other words there is nothing to show that that was not in truth a choice of the borrower, however it came about in the first place that the amount agreed to be lent went beyond $12,000. Perhaps it may be said that on this occasion it is important to distinguish between the loan contract and performance under it.

317. That brings me to the loan contract involving the borrowers O'Callaghan (whom I shall refer to as "the borrower" as usual) in which the loan contract has nothing at all written in the space left for figures against the expression "Amount agreed to be lent". (This form does not contain boxes for figures but spaces, introduced by dollar signs.) It is not so easy here to set out what matters from items 1, 2 and 3 of the printed form of offer document because there is nothing at all written in any of the spaces left for figures under the heading "1. Amount Financed". So far as relevant all that appears [AB B59] is this:-

"1. Amount financed Amount agreed to be lent . $_______ Plus Insurance [and a number of other items are then listed, reflective of paras.(b) to (f) of clause 1] Amount financed .................. $ 2. Credit charge Minimum credit charge ............ $ 7.50 Predetermined credit charge ...... $ 3. Total Amount financed .................. $ 1500

The respondents submitted that because nothing was stated as the "amount agreed to be lent", being the first item in Clause 1 of Schedule 4, the credit provider was in default under s.36(1)(b) by failing to include within the loan contract a proper "statement of the amount financed in accordance with Schedule 4".

324. That argument has some attraction because it focuses on what is a formal omission of prescribed detail, and s.36(1)(b) is concerned with form. Clause 1 of schedule 4 does commence, in paragraph (a), with the amount agreed to be lent other than amounts referred to in paragraphs (b) to (f). But after those paragraphs, clause 1 concludes -

"and shall state the amount financed, being the sum of the amounts referred to in the preceding paragraphs."

Certainly on this occasion the amount financed was stated. Appellant's counsel urged that, being stated at $1,500, it was necessarily the amount agreed to be lent because of the absence of any other items under preceding headings reflecting any of paragraphs (b) to (f). In the absence of any such amounts, the "amount financed" could only be the "amount agreed to be lent" without addition. He submitted that as nothing was included for paragraphs (b) to (f), nothing was payable for these items under the loan contract and, as the amount agreed to be lent under paragraph (a) was "but a residuum", as he put it, it necessarily followed that $1,500 was both the amount financed and the amount agreed to be lent. The difficulty with the argument is that with all of the spaces for figures under Item 1 left blank - that is, with nothing inserted against any of the descriptions found under the heading "1. Amount financed" - one is left ultimately to speculate about how that amount is made up.

329. The arguments either way do not bear much elaboration. It is a matter of looking at Schedule 4 in conjunction with s.36(1) and deciding whether the Act required that the amount agreed to be lent be stated, even when the amount agreed to be lent was identical with the amount financed. In my view it does, as a matter of form, and it requires it to be stated as something distinct from "the amount financed". It may be that the two figures are the same (as they were in the case of O'Callaghan), but if so the same figure must be given in both places. The purpose of requiring each of the items to be set out is surely so that there can be no doubt in anyone's mind about what (as appellant's counsel put it) was the amount to be put at the disposal of the borrower as distinct from those amounts which were not at his disposal and which were already ear-marked as having to be applied in respect of certain outgoings in connection with the transaction. That is not made plain beyond argument when nothing at all is inserted in the spaces left for the figures.

332. Mr. Archibald submitted that in the circumstances it was in substance self-evident what the amount agreed to be lent must have been and what therefore was at the disposal of the borrower without deduction. But that supposes a fairly precise knowledge of the detail of Schedule 4 and in particular the relationship between paragraph (a) of clause 1 and the following paragraphs (b) to (f). How far that would be apparent to a lay reader of the offer document I am not prepared to venture. Secondly, and more importantly, counsel's argument depended upon an assumption that in relation to amounts described in paragraphs (b) to (f), the absence of a figure on the printed form was equivalent to "nil", an assumption that was not being made, of course, in relation to the amount reflective of paragraph (a). Yet what was the basis for supposing that a blank meant nil in some cases under the heading "1. Amount financed", but not all? Had $1,500 been inserted as the amount agreed to be lent, it might well have been self-evident then that all other blanks were equivalent to nil, but not while the critical first figure was absent. So long as that first figure was absent the missing information was not a matter of necessary inference, and vice versa: Custom Credit Corporation at 546, contrast Westpac Banking Corporation [1992] 2 V.R.429 at 436-7 per Brooking, J.

335. To my mind the omission of all figures under the heading "1. Amount financed" was equally consistent with the culpable omission of important deductions as with the conclusion that nothing of any significance was left out, as the appellant contended. In my opinion, the statement of amount financed as $1,500 without any supporting detail constituted a failure to give the borrower the information which the Act required. It may be that when $1,500 was paid to him when the loan contract was performed, he must then have known that there was to be no deduction from that sum; but that is the very information which the Act requires should be given him, in writing, at an earlier stage. And if the credit provider had defaulted and paid less than $1,500, whether by oversight or perhaps because of some expense that should have been mentioned to the borrower but was not, why should the borrower not have ready to hand the very information in writing which the Act intended him to have when the loan contract was entered into?

338. In short, I consider that the loan contract in writing was in this instance left blank in at least one important respect and that this constituted a failure to comply with s.36(1)(b). When all the circumstances attending the loan transaction are known, however, it might well turn out that the non-compliance proved so unimportant in the event that relief against its consequences under s.42 could readily enough be procured under s.85, if application were made.

343. It is convenient at this point to turn to the question raised for determination concerning insurance premiums. As set out in the parties' Summary, the issue is (at least in part) whether the appellant bank, as the credit provider, neglected to comply with s.36(1)(b) and clause 1 of Schedule 4 when it failed to disclose in the relevant loan contract a premium for credit insurance which, it seems, was deducted by the bank in its own favour out of the amount agreed to be lent and otherwise put at the disposal of the borrower - that is, out of the amount referred to in paragraph (a) of clause 1 of Schedule 4.

346. This issue was raised for decision in the context of two loan contracts in particular, one involving the borrower Bollas (Tab B43) and the other, Parker (Tab B46). In both cases a credit insurance policy was entered into at or about the time that the loan contract was made, to cover the borrower's obligations under the loan contract in the event of death, sickness, accident or the borrower's unemployment. No mention of this insurance is found in the loan contract - that is, in the offer document that was signed by the borrower and accepted by the bank. The amount of the insurance premium was not mentioned in the document, but nonetheless the premium was retained by the bank out of the moneys otherwise lent to the borrower. In the course of argument on the appeal, the parties agreed that, on whatever ground, the amount of the insurance premium was within one or other of the paragraphs (b) to (f) of clause 1 of Schedule 4, subject to this: the respondents asserted and the appellant denied that the amount was payable "under the contract" within the meaning of the covering words. The appellant contended that its very absence from the contract in writing meant that it was not payable "under the contract".

349. Thus, it was the submission of the respondents that the failure to identify the amount of the premium in the contract in writing constituted a further instance of non-compliance with s.36(1)(b) (no further or other argument being advanced in relation to s.36(1)(h)). The appellant bank said not so, contending that there was no non-compliance on the ground that the amount of the premium did not answer the description of amounts that required disclosure according to the covering words. Mr. Archibald submitted that the absence of the amount from the offer in writing was evidence that it was not payable "under the contract" and that its subsequent deduction by the bank from what was otherwise made available to the borrower under the loan contract did not point the other way. Retention by the bank of the amount for the premium out of the sum which otherwise was agreed to be lent was equally consistent, he argued, with a direction by the borrower that that should happen, a direction given after the loan contract was entered into - or indeed with the bank's retaining the sum out of the moneys otherwise put at the disposal of the borrower without any authority to do so and, in short, wrongfully. There was just no evidence on how the deduction had come about and an inference could not be drawn of non-compliance with s.36(1)(b) when the evidence in that regard was still equivocal.

352. On that analysis, the problem of the insurance premium is to be approached in much the same way as the first of the four categories just dealt with, the answer to the problem depending upon what inference should be drawn from such facts as we have. If the loan contract under which the moneys were made available by the bank to the borrower at settlement is to be discovered wholly within the offer document (as first signed by the borrower and later accepted by the bank), then the amount of the premium is not payable under the contract and need not be shown separately. The document is indeed then the best evidence of that. But if the document is not the whole contract because by the time of settlement the parties had themselves amplified their agreement to include the deduction of the amount of the insurance premium from what was otherwise to be made available and so put at the disposal of the borrower, then in my opinion the amount of that premium was by then an amount such "as, under the contract, [was] payable by [the] debtor to the credit provider" within the meaning of the covering words - and as such was required to be shown separately in writing in the loan contract, if there was to be compliance with s.36(1)(b). Whether that was so or not thus depended upon the facts.

355. In Parker (Tab B46), we have the offer in writing, signed by the borrower and accepted on behalf of the bank; the proposal for the loan insurance; and a print out from the records of the bank showing (we were told) inter alia the settlement of this loan contract by draw down on 20 February 1989. According to the relevant items 1, 2 and 3 in the offer in writing, which was apparently signed by the borrower on 16 February 1989, the amount financed was $2,100, the pre-determined credit charge was $330.75 and the total of the two was $2,430.75. The proposal, too, appears to have been signed by the borrower, but this on 17 February. The settlement details on 20 February show four things; $2,004.50 for "customer's account"; $330.75 for "interest"; $95.50 for insurance" and (obviously the total of these) $2,430.75 for "draw down". Thus on the bank's own figures it is clear that at settlement the bank did deduct and retain the amount of the insurance premium.

358. So what, then, is the proper inference to be drawn from those facts in the case of Parker? Appellant's counsel emphasised how skimpy the facts were and that is so; but it is the parties' choice to seek a determination of the application of the Act on these facts and nothing more. It is, as I said at the outset, somewhat artificial to seek to have the problem resolved on that basis, particularly as the loser in the present contest, or its successor in kind, will no doubt ensure that there is more evidence next time. But doing what I can on the evidence as we have it, I think it should be inferred that the bank made the deduction at settlement by arrangement with the borrower and that in consequence at or immediately before the settlement the loan contract did contain provision to that effect - though the document earlier prepared and signed made no reference to it. On these facts I think that the draw down was under and pursuant to a loan contract with provision for deduction of the amount of the insurance premium, and so, in default of that amount's being shown separately in the document in writing, there was non-compliance with s.36(1)(b).

361. In Bollas (Tab B43) we have less evidence than in the case of Parker. Again we have the offer in writing, apparently signed in this case for the borrowers on 10 November 1987. That document contains figures that are indecipherable on the copy we have, though it is plain that items 1, 2 and 3 make no reference to an amount for insurance premium. We have, too, the insurance proposal form, again signed by on behalf of the borrowers on 10 November, showing in this case that the premium payable for the insurance was $421.33. (The proposal also states: "Amount of Loan $8000 -" and "Total Amount Financed: 13740-00".) In the case of Bollas we have no computer print out from the bank, showing settlement details. Instead the parties' Agreed Statement of Facts and Documents includes this in paragraph 3.1.1 [AB B31]:-

"Clause 1 of the Bollas contract (44) dated 10 November, 1987 does not state that the amount financed included an amount in relation to an insurance policy. When the loan moneys were disbursed, the sum of $421.33 was disbursed from the proceeds of the loan as the premium for an accident, illness and life insurance policy. A copy of the proposal, which was accepted by the insurers, signed by the Respondents is contained in the Tab. No statement of the type of insurance or the amount of the premium is included in the loan contract."

365. I think that in this paragraph the disbursement of the loan moneys and disbursement of $421.33 mean disbursement by the bank, not the borrower, and on that basis, and despite the lack of other evidence or perhaps because of it, I think it proper for us to infer from the evidence we have that the bank's disbursing the sum of $421.33 from the moneys otherwise put at the disposal of the borrower at settlement of the lending transaction was pursuant to agreement with the borrower and as such was a provision, by the time of settlement, of the loan contract under which moneys were lent. It was a disbursement, I infer, from the amount described in the document in writing as "amount agreed to be lent" and as such was an amount that ought to have been separately shown by reason of the covering words and one or other of paragraphs (b) to (f), and the failure to show the amount separately in writing was non-compliance with s.36(1)(b).

368. Finally, in respect of both Bollas and Parker I mention the question of so-called "commission charges". From paragraphs 2.1.1 and 2.1.3 of the Agreed Statement of Facts and Documents, a commission was payable by the insurer to the appellant bank on each of the insurance contracts entered into for Bollas and Parker, apparently on the basis that each was business introduced to the insurer by the bank. The parties' Summary prepared for this appeal suggests that such a commission is within the definition of "commission charge" - and that may be so, presumably by virtue of paragraph (b) of the definition in s.5 if (as I have just held in effect) the premium for the insurance contract was included within the "amount financed" under the loan contract. If a "commission charge" as defined was involved, then under s.36(1)(h) a statement of to whom and by whom the charge was payable was required to be included in the loan contract. Yet it was not; the document in writing was silent on insurance, as already noted.

371. Paragraph 6 of the parties' Summary talks of a question under s.36(1)(h) of the Act, but in terms that suggest that the question of compliance or no with s.36(1)(h) in respect of the commission payable on the insurance is to be resolved by deciding compliance or no with s.36(1)(b) in respect of the insurance premium. Hence paragraph 6 commences under the heading Insurance Premiums:-

"This issue [for the Court] is whether the Appellant breached section s.36(1)(b) and clause 1 of Schedule 4 of the Credit Act 1984 by failing to disclose in the relevant loan contract a credit insurance premium advanced from the loan monies and thereby also failing to disclose a commission charge (Grounds 3(b) and (c) of this Appeal, AB546)." [emphasis added]

Grounds 3(b) and (c) of the notice of appeal mention only the insurance premiums, not the commission payable therefor by the insurer to the bank.

376. If any issue affecting commission is being treated by the parties as dependent simply upon the answer in respect of premium, then it is enough to have resolved the latter; in respect of premium I have said that in my opinion, on the evidence given us, there was non-compliance with s.36(1)(b). The agreed facts suggest, however, that other considerations might bear upon the issue of the commission and possible non-compliance with s.36(1)(h); it is said in paragraphs 2.1.1 and 2.1.3 that in each of the cases of Bollas and Parker the borrower was given a copy of the proposal and in that document it was stated: "A commission is receivable by the ANZ Bank". In argument, however, this was not mentioned and the point did not seem to be pursued at all. In the circumstances I prefer to say nothing concluded about the question of s.36(1)(h) and the commission charges that were possibly involved; for it seems to me that no particular argument was advanced by either side on that aspect.

380. Thus far the various points of difficulty which have been canvassed have depended upon s.36(1)(b) and Schedule 4 of the Act. The next difficulty raised for determination on this appeal was different, focussing on s.36(1)(e) and s.40, which when it applies, deems the loan contract "to be not in accordance with the provisions of this Division". This last then attracts s.42(1)(d) under which, once again, the debtor is freed of all liability for the credit charge, subject as always to any application for relief under s.85.

"(1) A loan contract shall include - ... (e) a statement of the annual percentage rate in accordance with section 38; ...."

According to s.38, the annual percentage rate "required under section ... 36 to be stated in ... a loan contract is" any one of a number of alternatives, which are set out in paragraphs (a) and (b) of s.38. Paragraph (a) is not relevant; we were told that paragraph (b) applied and that the annual percentage rate had, in this case, been disclosed in accordance with the calculation specified in sub-paragraph (i). In substance, as I follow it, this is an arithmetical calculation of the interest rate which, if applied to the daily unpaid balance of the amount financed, yields the amount of the credit charge on the assumption that all payments under the contract are paid on the respective days on which they are required to be paid. See also reg. 13, Schedule 2, method No.2.

388. In passing, I note that the "annual percentage rate" is an expression much used in the Act. It is defined in s.5 to mean the "annual percentage rate within the meaning of section 10" and in s.10 it is described, for present purposes, as "the annual percentage rate [which] has been disclosed in accordance with section 38". At least in a loan contract which is regular and which complies with the requirements of the Act everything points to the "annual percentage rate" being a rate of interest. Indeed, in s.5, the expression "daily percentage rate" is defined as meaning "the rate determined by dividing the annual percentage rate under the contract by 365", and, under s.11(2), the "daily percentage rate", when applied to "unpaid daily balances", serves to yield the "accrued credit charge" at a given time.

391. It is in that context that s.40 makes the provision upon which the argument before us turned. Section 40(1) is as follows:-

"(1) Subject to section 39, a credit sale contract or a loan contract shall be deemed to be not in accordance with the provisions of this Division if it includes- (a) a statement of, or a reference to, more than one annual percentage rate for the purposes of the contract; (b) a statement of, or a reference to, any other rate to the effect that the credit charge under the contract is or is to be determined by the application of that rate to the whole or any part of the amount financed; or (c) a statement of, or a reference to, a right of the credit provider or any other person to increase, or take any action that results in the increase of, the annual percentage rate."

It was paragraph (a) upon which the argument before us concentrated.

396. The parties' Summary identified six loan contracts as in evidence in this connection and each contained a statement first of the "amount financed", a statement of the credit charge, and a statement of the total of these two - all in purported compliance with s.36(1)(b), (c) and (d). These appeared as items 1, 2 and 3 in the printed form of offer. Item 4 followed, thus:-

In five of the six loan contracts before us, a number (for example, 20.15) was written within this box, but another number then followed immediately, outside the box, and so it was argued on behalf of the respondents that s.40(1)(a) applied and deemed the loan contract "to be not in accordance with the provisions of this Division". The appellant contended that the number within the box was the only statement of an annual percentage rate for the purposes of the contract and that the other number was mere surplusage, of no consequence. The submission was that "there can be only one annual percentage rate under the loan contract" and that one rate was plainly enough the figure given in the box.

402. In my opinion the respondents are correct on this aspect of the appeal. Although in their Summary the parties did not refer in this connection to the loan contract involving the borrowers Tavoletti (Tab B37), in argument counsel for the appellant took the Court to that loan contract to demonstrate the force of the submission that s.40(1)(a) had no application. In the case of Tavoletti, Item 4 of the offer in writing read as follows when signed:-

Nothing else was found near these figures: in particular, there was nothing to suggest why there should be two figures, one inside the box provided and one outside, in brackets. Appellant's counsel contended that, in truth, 20.33% was a correct statement of the annual percentage rate as required by s.38(b)(i), and the other number was simply superfluous, having no contractual significance and standing merely as an irrelevant addition to what had to be stated. The expression 12% could not be relevant under s.40(1)(a) because it did not answer the description in paragraph (a), "a statement of or a reference to [an] annual percentage rate for the purposes of the contract". He said that 12% was not an "annual percentage rate" because it was not the product of any of the calculations authorised by s.38. Nor was it a statement of a rate "for the purposes of the contract"; for, being outside the box, it was not given any effect "for the purposes of the contract".

408. It is true that s.38, and in particular paragraph (b), authorises more than one method of calculating what then becomes the annual percentage rate: the credit provider is given the power to elect between three different methods of deriving the result - different at least in terms. It might then be said that s.40(1)(a) was directed at precluding the credit provider from using more than one of those methods, or at all events from stating in the contract document - perhaps to the confusion of the borrower - the result of any more than one of those methods. But that would, I think, give too narrow a meaning to s.40(1): it seems to me an unlikely construction and I do not think it should be adopted. In my view, s.40(1)(a) is directed to a statement in the loan contract of more than one rate as the annual percentage rate. It is not concerned with the method of calculation, whether the method complies or does not comply with s.38. Section 40(1) is concerned with what is stated in the contract document and if more than one percentage is given for the "annual percentage rate", I think that s.40(1)(a) is attracted. That is what happened in the case of Tavoletti.

411. By way of further example, Mr. Archibald took us to the loan contract involving the borrowers Elvey (Tab B49) where again there are two percentages written at Item 4 of the offer document. In the box, against the description "annual percentage rate" 19.19 has been written, immediately before the sign "%". Between the words and the box, and a little above them both, has been written "17.75%". I do not know what was meant by the addition, nor, I think, did counsel. It seems to me that if s.40(1)(a) is to apply sensibly, then it covers a case like that where, at or near the expression "annual percentage rate", two percentages are stated. I do not think that one of the two can be said to be irrelevant because it is not stated, or referred to, "for the purposes of the contract" (for its purpose is unknown) or because it is not an "annual percentage rate" properly so calculated as such under s.38. In my view s.40(1)(a) applies and the loan contract is deemed thereby "to be not in accordance with the provisions of" Division 1 of Part 3, with the result spelled out in s.42(1)(d). Nor do I see s.40(2) as militating against that conclusion; for s.40(2), in regulating the operation of a loan contract within its terms, is spelling out another consequence of the conduct described in the section.

414. Another loan contract specifically mentioned by appellant's counsel in argument, by way of example, involved the borrowers Claridge (Tab B45). In that offer document, against the description "annual percentage rate" in Item 4 there appeared in the box "20.15" before the sign "%" and after the box, in parentheses, the expression "flat 11.25". Again, the reason for this is unclear; the latter may be no more than a re-statement of the former percentage in different form. But why should that matter? Against the expression "annual percentage rate" it remains true that two percentage rates are stated, albeit that one of them is said to be "flat". I am unable to see why the loan contract, which contains such a twofold statement of a percentage near the item "annual percentage rate", does not attract the operation of s.40(1)(a), with the consequence that the loan contract is "deemed to be not in accordance with the provisions of" Division 1 of Part 3.

417. Finally, in this regard, I deal with the loan contract with the borrower Joyce (Tab B54). On this offer document, not two but three numbers are found to have been written at one time or another near the item "4. Annual Percentage Rate". In the printed box, the figures 17.02 have been written and then crossed out and immediately below (though outside the box) the figures 18.41 have been written. To my mind, that is a plain correction, a substitution of the latter for the former, and nothing turns on it. That is not, I think, a statement of more than one annual percentage rate which could attract the operation of s.40(1)(a). The difficulty, for the bank, is that between the words "annual percentage rate" and the box and, again, on a notional line above them, there appear a third number "10.25" - again, quite unexplained. It appears to me, looking at its position on the document, that this third number has been written in connection with item 4 as a percentage rate and accordingly, for reasons given by reference to the loan contracts already discussed, I regard the third number as not authorised by the statute. On this loan contract there are two percentage rates stated, 18.41 and 10.25 and I see no reason why s.40(1)(a) is not attracted accordingly.

420. It therefore follows that in the case of each of the loan contracts mentioned the statement of the annual percentage rate is such that s.40(1)(a) operates to deem that loan contract to be "not in accordance with" Division 1 of Part 3. Thus far, I have concentrated on paragraph (a) of s.40(1), because that was the subject of the argument addressed to us; but, if I were wrong in what I have so far said, it may perhaps be that paragraph (b) would operate to bring about the same result. If, as appellant's counsel suggested, the reader of the loan contract would understand the expression "annual percentage rate" as meaning only a rate properly calculated in accordance with s.38, the reader must also know, I suppose, of the significance of the "annual percentage rate" to the determination of "the credit charge"; and if that were correct, a "statement of, or a reference to, [an]other rate" might arguably be taken to be "to the effect that the credit charge under the contract is or is to be determined by the application of that rate ....". If so, s.40(1)(b) would operate to deem the loan contract "to be not in accordance with the provisions of this Division" with the same consequence under s.42, as follows when s.40(1)(a) is called into operation. That is a tentative view; it is not necessary to say anything further about s.40(1)(b).

424. That is sufficient to dispose of the matters that were argued before us. According to its Outline of Argument, it was part of the appellant's case that the judge below had "misconceived the task he was required to perform" by treating the appeal from the Credit Tribunal as something less than a full appeal, notwithstand-ing that according to the since repealed s.85J of the Credit (Administration) Act 1984 an appeal lay "as if the determination [of the Credit Tribunal] were a determination of the County Court". (Contrast, however, s.85H under which leave to appeal, to the extent that leave was needed, was given by consent on 7 February 1997.) In the end, no argument was put on this aspect and nothing appeared to turn on it, so we need not consider it. The issues raised by this litigation, so far as they were still live, were argued afresh before us and it is on that footing that the foregoing conclusions have been expressed. And perhaps that was the inevitable result of the nature of the proceeding, in which declarations were being sought under s.85B of the Credit Act presumably for the purpose of affording guidance on the proper approach to the construction of the statute and the parties' future conduct in consequence, either in relation to these specific loan contracts or others like them.

427. That leads me to emphasise, yet again, that the conclusions expressed are, in large part, dependent upon the facts agreed by the parties for the purpose of this litigation. For instance, in relation to fees and charges in question, we were not asked to consider the correctness or otherwise of the parties' agreement that such fees or charges were either within or without the descriptions found in paragraphs (b) to (f) of clause 1 of Schedule 4: yet much turns upon that fact in a given case. In essence, as I apprehend it, the parties have raised the various loan contracts for consideration because they see them as affording a proper context in which to resolve questions of construction upon which guidance is sought, initially from the Tribunal and now from the Court. The facts and circumstances affecting particular loan contracts are there in order to expose in more detail than might otherwise be possible the reasoning by reference to which the various provisions of the Act are being construed.

430. In the result, however, it does not seem possible at this stage to formulate satisfactorily the particular orders that should follow from the foregoing, in order to dispose of this appeal. The parties should now be invited to consider what orders they want, if the appeal is to be allowed. In accordance with the invitation of both sides, I have referred throughout the foregoing to the Credit Act 1984 as found in Reprint No. 3, incorporating amendments to 1 July 1998, but the loan contracts were made before that date and the parties must now consider if that is material to the order sought in any given case. Moreover, in the course of these reasons I have mentioned occasions on which the parties in argument departed from their prepared stand (for example by acknowledging that some loan contracts thought initially to fall into one category were, on reflection, found to fall in another) and that in itself would require some adjustment of the orders framed in the appellant's notice of appeal, quite apart from such adjustment as is needed if, as I think, the appellant fails on some aspects of its appeal. In short, if the opinions expressed in these reasons for judgment prevail, I think that the parties should be invited to formulate, for the consideration of the Court, appropriate orders for the disposition of the appeal.

435. I gratefully adopt the comprehensive statement of facts and issues in the reasons for judgment prepared by Phillips, J.A. As the learned presiding judge takes a similar view to the view taken by his Honour, I shall state my own conclusions as briefly as possible.

439. Section 32(5) and (6) of the Credit Act 1984 provide:

"(5) Where a person signs a document and thereby offers to enter into, or enters into, a credit sale contract or a loan contract, any subsequent alteration of, or addition to, the terms and conditions of the contract has no force or effect unless, after the alteration or addition has been made, the person has, opposite the alteration or addition, signed or initialled the margin of -

(a) the document in which the terms and conditions of the contract are specified; and

(b) the copy of the document given to him pursuant to sub-section (3) or (4).

(6) Where a person signs a document and thereby offers to enter into, or enters into, a credit sale contract, or a loan contract -

(b) an agent of the credit provider authorised to make or receive the offer to enter into the contract; or

(c) a supplier in relation to whom the credit provider is a linked credit provider -

shall not alter or add to the terms and conditions specified in the document with intent to deceive the debtor or, where the alteration or addition is made by the supplier, with intent to deceive the credit provider, whether or not the document in which those terms and conditions are specified has been signed or initialled as provided in sub-section (5).

Those provisions build upon s.31, which is to the effect that a credit provider shall not enter into a credit sale contract or a loan contract that is not in writing signed by the debtor but that that prohibition is not contravened if such a contract is made by the acceptance of an offer in writing signed by the debtor. In this judgment I shall use the word "debtor" in the sense defined in s.5(1) of the Act.

452. A distinction may be drawn between the contract and the document that contains it. Sub-section (6) of s.32 is apparently directed to fraudulent alterations of, or additions to, the document. Sub-section (5) appears to be directed to alterations of, or additions to, the terms and conditions of the contract, whether it be the contract into which the parties have entered or the contract into which the debtor has offered to enter. The difficulty is that the draftsman proceeds to treat the alteration or addition as something made to the document. One way or another, the legislative intention is that, just as the original contract or offer had to be in writing in order to comply with s.31, so too must any subsequent alterations of, or additions to, the terms and conditions of the contract.

455. In the first and third categories of loan contracts identified by Phillips, J.A. fees or charges which were conceded to fall within the descriptions in paragraphs (c) and (d) of clause 1 of Schedule 4, at all events when read independently of paragraph (a) and the covering words, were debited either to the loan contract account or to another account which, on analysis, might prove to be in no different position. The critical issue to my mind is whether those fees or charges were so debited pursuant to an alteration of, or addition to, the terms and conditions of the loan contract. I see no reason to infer that they were. (There was no onus on the Bank to prove that it had not contravened the Act: see ss.42 and 85B.) The evidence is at least equally susceptible of the interpretation that the debtors did no more than authorize the Bank to apply some of the amount agreed to be lent to those fees and charges. On that view the debtors were still contractually free to pay the fees and charges from other resources, but they chose to pay them by using part of the amount agreed to be lent. That may be true even in the case of Moncrieff, for the instructions for disbursement of funds are probably just an authority to the Bank, not a term of the contract.

458. Accordingly I consider that the appellant should succeed in relation to all four categories. In the case of the second and fourth, there is in addition the reason on which Phillips, J.A. founds his conclusion. Where the fees and charges were payable under the loan contract that may have had other consequences, but we are concerned only with Schedule 4.

461. It is unnecessary for me to express a view as to whether amounts paid under a mortgage may also be payable under a loan contract, but I observe that paragraph (c) of clause 1 of Schedule 4 draws a distinction between stamp duty payable in respect of, or in relation to, the contract and stamp duty payable in respect of, or in relation to, any mortgage relating to the contract. The covering words apply to both kinds of duty, but a distinction is also drawn between a mortgage entered into on or before the relevant date and a mortgage entered into thereafter. The "relevant date" is defined in clause 2 to mean the date on which the loan contract is entered into or, if it is entered into by the acceptance of an offer, the date on which the offer is made.

464. Section 75 does not apply, on my analysis, if only because the evidence does not disclose an agreement to pay as opposed to an authority to the Bank.

467. In my opinion, that result accords with commercial reality. A bank agrees to lend, say, $10,000 to a debtor. The mere fact that the debtor authorizes part of the $10,000 to be disbursed in payment of fees or charges does not mean that the terms of the contract must be altered. There may simply be a revocable mandate. Unless the bank had acted on the mandate, the debtor could change her mind and decide to pay the fees or charges from other funds at her disposal. There is no need to comply with s.32(5), because the parties are not engaged in altering or adding to the terms and conditions of the loan contract. If they do choose to alter or add to those terms, then of course s.32(5) must be complied with, but that will not ordinarily be the case and no consumer protection objective is served by forcing the parties to vary their contract.

470. If there is an alteration of, or addition to, the terms of the contract it may well be that the statement in compliance with s.36(1)(b) will have to be updated. It is unnecessary to confine s.36 to the contract as originally entered into.

474. I respectfully agree with the conclusions that Phillips, J.A. has expressed in relation to the amount agreed to be lent in the Logozzo and O'Callaghan contracts. The way in which the sum of $60 was treated in the former case appears to me to be another example of an authority to the Bank that did not involve an alteration of, or addition to, the terms and conditions of the loan contract. In the O'Callaghan case the document may imply that the amount agreed to be lent is $1,500, but that is insufficient: the amount agreed to be lent must be expressly stated.

478. The insurance premiums appear to me to be further examples of disbursements that need involve, and probably did involve, no variation to the loan contracts. I therefore respectfully differ from the conclusions of Phillips, J.A. on this branch of the case. Like his Honour, and for the same reasons, I say nothing about s.36(1)(h).

482. Section 40(1)(a) prohibits a statement of, or a reference to, more than one annual percentage rate for the purposes of the contract. There is no prohibition against providing additional information about a single annual percentage rate. The prohibition is against two or more annual percentage rates that produce different consequences in terms of dollars. That appears from s.39, which permits, as an exception to s.40, the statement of an acceptable rate of interest as well as a higher annual percentage rate that does not exceed the acceptable rate by more than two per cent. It also appears from s.40(2), which provides that, where there is a statement of, or a reference to, more than one annual percentage rate, the lower or lowest rate applies.

485. Accordingly, in my view, the critical issue is whether, in each of the relevant contracts, more than one annual percentage rate is stated or one annual percentage rate is stated, accompanied by additional information that does not involve the statement of a different annual percentage rate. Thus in Claridge the 11.25 per cent appearing outside the box is expressly described as the equivalent flat rate. As the other members of the Court take a different view of this branch of the case, I do not think that it is profitable to take the matter further or to consider s.40(1)(b).