Cash Converters International Limited v Gray

Solicitor for Ja-Ke Holdings Pty Ltd: No appearance

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 482 of 2014

BETWEEN: CASH CONVERTERS INTERNATIONAL LIMITED (ACN 069 141 546)

SAFROCK FINANCE CORPORATION (QLD) PTY LTD (ACN 098 566 520)

CASH CONVERTERS PERSONAL FINANCE PTY LTD (ACN 110 275 762)

JUDGES: JACOBSON, MIDDLETON AND GORDON JJ DATE OF ORDER: 1 SEPTEMBER 2014 WHERE MADE: SYDNEY

1. The Applicants be granted leave to appeal from the orders made by the primary judge on 2 May 2014.
2. The appeal be dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth). IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 483 of 2014

BETWEEN: CASH CONVERTERS INTERNATIONAL LIMITED (ACN 069 141 546)

JUDGES: JACOBSON, MIDDLETON AND GORDON JJ DATE OF ORDER: 1 SEPTEMBER 2014 WHERE MADE: SYDNEY

1. The Applicants be granted leave to appeal from the orders made by the primary judge on 2 May 2014.
2. The appeal be dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 482 of 2014

BETWEEN: CASH CONVERTERS INTERNATIONAL LIMITED (ACN 069 141 546)

SAFROCK FINANCE CORPORATION (QLD) PTY LTD (ACN 098 566 520)

CASH CONVERTERS PERSONAL FINANCE PTY LTD (ACN 110 275 762)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 483 of 2014

BETWEEN: CASH CONVERTERS INTERNATIONAL LIMITED (ACN 069 141 546)

JUDGES: JACOBSON, MIDDLETON AND GORDON JJ DATE: 1 SEPTEMBER 2014 PLACE: SYDNEY

INTRODUCTION 1 Two representative proceedings were commenced under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the FCA) with Ms Gray as the lead applicant in relation to two types of 'Cash Converters' loans obtained between 2010 and 2013. Loans for larger amounts were styled as 'Personal Loans' and loans for smaller amounts were styled as 'Cash Advances'. 2 In NSD 2090 of 2013, Ms Gray claims that Ja-Ke Holdings Pty Ltd (Ja-Ke), a credit provider and the franchisee of the Penrith Cash Converters store, provided multiple cash advances of between $100-$200 to her from 1 July 2010 to 12 October 2012 (the Cash Advances Proceeding). Ms Gray's central claim is that the imposition by Ja-Ke of a deferred establishment fee in respect of those cash advances breached cl 7 of Sch 3 of the Credit (Commonwealth Powers) Act 2010 (NSW) (the Credit Act) or was otherwise unconscionable and in contravention of s 12CB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act). Ms Gray alleges that the other respondents to the Cash Advances Proceeding - Cash Converters Pty Ltd (CCPL), the franchisor of the Cash Converters franchise in Australia, and Cash Converters International Limited (CC International), the parent entity of CCPL, were involved in the contraventions by Ja-Ke and were thereby accessories to Ja-Ke's unconscionable conduct. 3 The Originating Application and the Amended Statement of Claim in the Cash Advances Proceeding both state that Ms Gray and the persons she represents are natural persons who: (a) entered into one or more credit contracts in New South Wales between 1 July 2010 and 30 June 2013, being the provision of credit to which the National Credit Code (Code) applies; (i) in which $1,000 or less was advanced; and (ii) in respect of which the lender was either: (A) a franchisee of a franchise in which the franchisor was [CCPL] (NSW Franchisee); or (B) Cash Converters (Cash Advance) Pty Ltd [(CC Cash Advance)]; (NSW Cash Advance Contracts) … The Originating Application states that those persons "(b) repaid the NSW Cash Advance Contract within approximately one month". The Amended Statement of Claim states that they "(b) signed a document entitled 'Cash Advance Early Repayment Election'". For present purposes, that inconsistency may be put to one side. 4 In NSD 2089 of 2013, Ms Gray claims she entered into personal loan contracts with two credit providers who were entities in the Cash Converters corporate group - Safrock Finance Corporation (QLD) Pty Ltd (Safrock) and Cash Converters Personal Finance Pty Ltd (CC Personal Finance) (the Personal Loans Proceeding). Again, the central claim is that the deferred establishment fee charged in respect of the personal loans breached cl 7 of Sch 3 of the Credit Act or was otherwise unconscionable and in contravention of s 12CB(1) of the ASIC Act. The claim against CC International, the parent of Safrock and CC Personal Finance, is that it was involved in their contraventions and is accessorily liable. 5 The Originating Application in the Personal Loans Proceeding states that Ms Gray and the persons she represents are natural persons who: (a) entered into [credit contracts] with either of [Safrock] or [CC Personal Finance] between 1 July 2010 and 30 June 2013, being the provision of credit to which the National Credit Code (Code) applies; and (b) had any of the following fees and / or charges debited to their account under the credit contract: (i) an 'Administration Fee'; or (ii) an 'nAdmin' Fee; or (iii) a 'Deferred Establishment Fee'. The Amended Statement of Claim describes the group members in the same terms except that the phrase "credit contracts" in (a) reads "one or more credit contracts in New South Wales". Again, that inconsistency may be put to one side. 6 The respondents in both the Cash Advances Proceeding (other than Ja-Ke) and the Personal Loans Proceeding (collectively, Cash Converters) seek leave to appeal from interlocutory orders of the primary judge where her Honour declined to strike out the whole or part of Ms Gray's statement of claim in each proceeding. Cash Converters contends that s 33C(1) of the FCA requires that each group member whom Ms Gray represents must have a claim against each respondent to the proceeding and that both proceedings are not properly constituted because this requirement is not met. 7 For the reasons that follow, we would grant Cash Converters leave to appeal but would dismiss the appeal. Both proceedings are properly constituted. 8 The balance of these reasons for judgment will consider the legislative framework and then turn to consider the proper construction of s 33C(1) of the FCA, including the state of the existing authorities and the application of s 33C(1) of the FCA to these proceedings.

legislative framework 9 Part IVA of the FCA addresses representative proceedings and was inserted into the FCA in March 1992. It contains six divisions. Division 2, entitled "Commencement of representative proceeding", contains ss 33C-33W (inclusive). 10 Section 33C is headed "Commencement of proceeding" and provides: (1) Subject to this Part, where: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact; a proceeding may be commenced by one or more of those persons as representing some or all of them. (2) A representative proceeding may be commenced: (a) whether or not the relief sought: (i) is, or includes, equitable relief; or (ii) consists of, or includes, damages; or (iii) includes claims for damages that would require individual assessment; or (iv) is the same for each person represented; and (b) whether or not the proceeding: (i) is concerned with separate contracts or transactions between the respondent in the proceeding and individual group members; or (ii) involves separate acts or omissions of the respondent done or omitted to be done in relation to individual group members. 11 Section 33D headed "Standing" provides: (1) A person referred to in paragraph 33C(1)(a) who has a sufficient interest to commence a proceeding on his or her own behalf against another person has a sufficient interest to commence a representative proceeding against that other person on behalf of other persons referred to in that paragraph. (2) Where a person has commenced a representative proceeding, the person retains a sufficient interest: (a) to continue that proceeding; and (b) to bring an appeal from a judgment in that proceeding; even though the person ceases to have a claim against the respondent. 12 Section 33H addresses the manner in which a representative proceeding is to be commenced. It relevantly provides: (1) An application commencing a representative proceeding, or a document filed in support of such an application, must, in addition to any other matters required to be included: (a) describe or otherwise identify the group members to whom the proceeding relates; and (b) specify the nature of the claims made on behalf of the group members and the relief claimed; and (c) specify the questions of law or fact common to the claims of the group members. (2) In describing or otherwise identifying group members for the purposes of subsection (1), it is not necessary to name, or specify the number of, the group members. The questions common to the Cash Advances Proceeding and the Personal Loans Proceeding are annexed to these reasons for judgment.

issue 13 It is common ground that the applicant must have a claim against each respondent. But does s 33C(1) of the FCA require that each group member have a claim against each respondent to the proceedings? The answer is no. 14 The authorities are inconsistent. There is conflicting authority of the Full Court of the Federal Court (cf Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487 at [107]-[137] and Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 at [122]-[130] and [246]-[248]) and inconsistent decisions of single judges of the Federal Court (see for example, Johnstone v HIH Ltd [2004] FCA 190 at [38]; Guglielmin v Trescowthick (No 2) (2005) 220 ALR 515 at [29]; McBride v Monzie Pty Ltd (2007) 164 FCR 559 at [7]; Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (2008) 251 ALR 166 at [65]; Pampered Paws Connection Pty Ltd v Pets Paradise Franchising (Qld) Pty Ltd (No 3) [2009] FCA 138 at [125] and Kirby v Centro Properties Ltd (2010) 189 FCR 301 at [11]). 15 After an extensive review of the authorities, the primary judge held that she was not bound by the Full Court decision in Philip Morris and that the reasoning of Carr and Finkelstein JJ in Bray was to be preferred so that it was not necessary under s 33C(1)(a) of the FCA for each group member to have a claim against each respondent.

parties' submissions 16 Cash Converters contends that the primary judge erred by finding that she was not bound to follow Philip Morris and by finding that the reasoning of Carr and Finkelstein JJ in Bray was to be preferred. Cash Converters submitted that, as a matter of statutory construction, the ordinary and natural meaning of s 33C(1)(a) is that each of the 7 persons must have claims against the "same person" meaning the respondent or respondents to the suit. That construction was said by Cash Converters to be supported by the statutory text including the other sections of Pt IVA, the secondary or extrinsic materials and the "procedural solutions open in appropriate cases". In relation to the earlier authorities that have considered s 33C, Cash Converters submitted that the previous decision of the Full Court in Philip Morris was ratio, was not convincingly wrong, and was therefore binding. Cash Converters submitted that the subsequent decision of the Full Court in Bray was wrong and should not be followed. 17 Ms Gray contends that the primary judge was correct to follow Bray and that, in any event, the proper construction of s 33C(1) is that it does not impose a requirement that every group member have a claim against every respondent. This construction was said to be supported by the other sections of Pt IVA, as well as the overarching purpose of civil practice and procedure provisions: s 37M of the FCA. Reference to extrinsic material was said to be unnecessary and unhelpful in this case.

analysis 18 These reasons for judgment will consider the proper construction of s 33C of the FCA (and, in particular, s 33C(1)(a)) and then turn to consider the authorities. 19 The starting point is the statutory text. Context and purpose are also important: Federal Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 87 ALJR 588 at [47] citing Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 87 ALJR 98 at [39], Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 87 ALJR 131 at [24], Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] and Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397. 20 First, the express words of s 33C. It contains two subsections. The first sub-section is qualified by the phrase "Subject to this Part". It identifies three elements that must exist before a proceeding may be commenced under Pt IVA. Those three elements are: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact … The proceeding that may be commenced is addressed in the last line of the subsection - "a proceeding … by one or more of those persons as representing some or all of them". 21 If there is one respondent, then the applicant and six other persons, by definition, will have claims against that respondent. The question which arises is what does s 33C(1) require if the applicant's circumstances (and those of the group members) give rise to a claim of multiple wrong doing against more than one respondent? Does s 33C(1)(a) require that the applicant and each group member have a claim against each respondent? Or, does it require no more than that there be seven or more persons with a claim against the same respondent (subject of course to satisfying the requirements of sub-paragraphs (b) and (c))? If the usual requirements for the joinder of parties are met, can an applicant (being one of the seven or more persons with claims against one respondent) join in the proceeding other respondents in respect of whom some group members have claims and some do not? The answer is yes. 22 Cash Converters' argument falls at the first hurdle. If the condition in s 33C(1)(a) is met by observing that 7 or more persons have claims against the same respondent (and sub-paragraphs (b) and (c) are satisfied), that is the end of the enquiry. Cash Converters' submission would require the Court to treat the condition in s 33C(1) for starting a representative proceeding where seven or more persons have a claim against one respondent as imposing an additional requirement that they cannot have a claim against anyone else, or treat it as though the condition reads that "a representative proceeding can only be begun where seven or more persons have claims against all defendants". That is not what s 33C, or any other provision in Pt IVA, says or provides. 23 Indeed, adopting the construction contended for by Cash Converters would result in this Court falling into the error identified by the High Court in Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at [11]-[13] in relation to the threshold requirements for Pt IVA representative proceedings, namely: … Like other provisions conferring jurisdiction upon or granting powers to a court, Pt IVA is not to be read by making implications or imposing limitations not found in the words used; this is so even if the evident purpose of the statute is to displace generally understood procedures [See PMT Partners Pty Ltd (In liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313, 316; Andjelic v Marsland (1996) 186 CLR 20 at 39]. In particular, the scope of s 33C is not confined by matters not required by its terms or context; however, the terms must be construed and the context considered…. Section 33C attempts to resolve issues which bedevilled representative procedures as they had been developed, particularly by courts of equity. This is apparent from the terms of s 33C(2). Thus, the relief may consist only of damages and may not include equitable relief and the proceeding may be concerned with separate contracts or transactions and involve separate acts or omissions. What is required is that the claims give rise to a common issue of law or fact which is "substantial". … In construing this requirement it is convenient to have regard to the defects and uncertainties in the previous procedures developed by the courts. … 24 In Bray at [245], Finkelstein J considered what "claims" means in s 33C(1). His Honour resolved that issue in these terms: The better view, in my opinion, is that the word means, in this present context, the facts which give rise to the action as well as to the legal basis of the action. That is, s 33C is concerned to establish that the action be sufficiently collective in nature so as to warrant it being brought as a representative or class action. For an action to be "collective in nature" I mean that it involves claims which are closely connected either by reference to the underlying facts (inevitably there will be differences) or to the underlying legal principles (where there might also be differences) that are raised by the facts. This approach appears to be mandated both by the language of s 33C(1) as well as its context. … We agree. 25 Next, the context in which s 33C sits. Other provisions in Pt IVA do not support the construction of s 33C(1) contended for by Cash Converters. The possibility of multiple respondents and variation between claimants in a representative proceeding is expressly acknowledged in a number of provisions of Pt IVA. Section 33D provides that a person who has a "sufficient interest to commence a proceeding" on their own behalf against another person can commence a representative proceeding on behalf of other persons. That is, the applicant must have a claim against all respondents. That applicant retains a sufficient interest to continue that representative proceeding and to bring an appeal from a judgment in that proceeding, even though the applicant ceases to have a claim against the respondent. Section 33H requires identification of the group members to whom the proceeding relates, identification of the nature of the claims made on behalf of the group members and the relief claimed and the questions of law or fact common to the claims of the group members. Section 33Q expressly deals with the situation where the issue or issues common to all group members will not finally determine the claims of all group members. Directions may be made under s 33Q(1) which may include establishing a sub-group consisting of those group members and appointing a person to be the sub-group representative party on behalf of the sub-group members (s 33Q(2)). Section 33R goes further and permits the Court to direct an individual group member to appear in the proceeding for the purpose of determining an issue that relates only to the claims of that member. None of that is surprising when it is recalled that s 33C(2) expressly records that a representative proceeding may be commenced whether or not the relief sought is the same for each group member. Further, the draft Federal Court (Grouped Proceedings) Bill 1988 (Cth), which formed part of the recommendations made by the Australian Law Reform Commission in Grouped Proceedings in the Federal Court, Report No 46, (1988), specifically provided that the relief sought by a group member need not be the same as the relief sought by the principal applicant: cl 9 of the draft Bill, see also Bray at [245]. If s 33C was as prescriptive as Cash Converters contends (a view we do not accept), some, if not all, of those provisions in Pt IVA would be unnecessary.

Earlier Authorities 26 The earlier authorities are inconsistent: see [14] above. It is neither necessary nor appropriate for the Court to address each of those authorities. Much of the debate about what those cases in fact decided and what they have contributed to the jurisprudence of Pt IVA has proceeded from taking statements in those cases out of context and, in particular, divorced from the facts of the case and the specific issues being addressed by the Court at that time. 27 For present purposes, it is sufficient to make the following points about the two preceding decisions of the Full Court of the Federal Court that considered s 33C(1). 28 First, the decision in Philip Morris particularly at [107]-[137]. The facts cannot be ignored. The basis on which the case was argued cannot be ignored. Importantly, it was common ground that in order to satisfy para (a) of what the High Court described as the ''threshold requirements'' imposed by s 33C(1) of the FCA (Wong v Silkfield at [28]-[29]), "it was necessary that the applicants' pleading allege facts that establish that they and every member of the represented class have a claim against every respondent": Philip Morris at [108] and [126]. That state of affairs led Sackville J to record at [109] that perhaps because there was no dispute about that (and another question), the parties did not explore further the relationship between the procedural requirements of Pt IVA of the FCA and the general principles governing pleadings in the FCA. It is true that his Honour went on to address some of these questions. But his Honour did so having express regard to the fact that the parties in that appeal accepted, in our view incorrectly, that s 33C(1)(a) requires every applicant and represented party to have a claim against the one respondent or, if there is more than one, against all respondents. What is self-evident from the reasons for judgment is that the contrary argument (see [19]-[25] above) is not recorded and one is entitled to assume was not the subject of debate or argument before that Court. In short, the specific issue raised in these proceedings was not in issue in Philip Morris because it was not in dispute. If a point is not in dispute in a case, then the decision lays down no legal rule concerning that decision: Coleman v Power (2004) 220 CLR 1 at 44-4 cited in McBride at [7]. 29 Next, the decision in Bray, particularly at [122]-[130] and [246]-[248]. Again, the facts cannot be ignored. The basis on which the case was argued cannot be ignored. The question this Court is asked to determine was addressed differently by the three judges. According to Carr J, the issue did not arise because as his Honour explained at [122]: As I have held that each group member in this application has a relevant claim against all of the respondents, it is strictly not necessary for me to decide this question. However, I shall briefly express my views. After analysing some of the authorities, his Honour considered two cases where there was more than one respondent but not all group members had a claim against all respondents. His Honour recorded that the problem was resolved quite simply: by way of a sub-group in one case, and in the other, by the joinder of additional applicants, each of whom had a personal claim against a particular respondent and was therefore competent to represent other group members who had claims against that respondent: at [127]-[128]. 30 Carr J concluded at [129]-[130] by stating that: In my view, such a course fits squarely with the language of s 33C(1) and at the same time satisfies the policy behind the introduction of Pt IVA. There are sufficient procedural safeguards in s 33C(1)(b) and (c) to protect the integrity of the court's processes, ie that the claims arise out of the same, similar or related circumstances and give rise to a substantial common issue of law or fact. There are other procedural safeguards in Pt IVA to ensure that representative proceedings are not misused. For those reasons, were it necessary for me to decide the point, I would decline to follow Philip Morris to the extent that it is authority for the proposition that, where there is more than one respondent, every group member must have a claim against every respondent in a representative proceeding, on the basis that it was clearly wrong on that point. 31 Branson J dissented. Her Honour was not persuaded that Philip Morris was clearly wrong and considered that it should be followed by the Federal Court until the High Court took a different view of the proper construction of s 33C(1): at [199]. 32 Finkelstein J considered "afresh" the true effect of s 33C(1): at [243]. After dismissing Philip Morris (correctly in our view), his Honour stated at [248]: … I am of the very firm view that there is nothing in the language of s 33C(1), when considered in isolation or in its setting, which requires that result [that it is necessary for every applicant and every represented party to have a claim against all respondents if there is more than one respondent]. It is as well to recall the words of the section. Section 33C(1)(a) provides that "subject to this Part, where seven or more persons have claims against the same person … a proceeding may be commenced by one or more of those persons as representing some or all of them". It can immediately be acknowledged that a properly constituted representative proceeding must involve a group of seven or more persons each of whom has a claim or claims against one person. But that is all the section requires. It simply does not address the situation where some members of the group, say 10 out of a group of 15, also have claims (that is, causes of action) against some other person, being causes of action which satisfy both s 33C(1)(b) (each claim arises out of the same circumstances) and s 33C(1)(c) (each claim gives rise to common issues of law or fact). Is it necessary for the claims of this smaller group to be prosecuted in a separate proceeding or can they be joined in the proceeding brought by the larger group? I will not place a construction on s 33C which requires separate proceedings to be instituted. If it were impermissible to bring such an action, all the objectives of Pt IVA, the reduction of legal costs, the enhancement of access by individuals to legal remedies, the promotion of the efficient use of court resources, ensuring consistency in the determination of common issues, and making the law more enforceable and effective, would be undermined. For the reasons set out at [19]-[25] above, we agree. 33 We do not accept that the proper construction of s 33C(1) requires that every group member has a claim against all respondents if there is more than one respondent.

EXISTING proceedings 34 Against that background, it is necessary to turn to consider these Pt IVA proceedings. The nature of the claims is described at [2]-[5] above. Ms Gray and six other persons have a claim against each respondent in each proceeding. Some group members will not have a claim against each respondent. 35 In the Personal Loan Proceeding, Ms Gray has a claim against each respondent. The proceeding is properly constituted. The fact that there might be (and probably will be) group members with a claim against either Safrock or CC Personal Finance does not alter that conclusion. 36 The Cash Advances Proceeding is structured differently. The group members are described as including natural persons who had advanced to them $1,000 or less from a lender which was either a franchisee where CCPL was the franchisor or CC Cash Advance: see [3] above. There are three respondents to the proceeding. CCPL, the franchisor of the Cash Converters franchise in Australia, and CC International, the parent entity of CCPL, are joined on the basis that they were involved in the contraventions by the relevant franchisee and were thereby accessories to its unconscionable conduct. The third respondent, Ja-Ke, advanced the monies to Ms Gray. No other franchisee (or the other named entity, CC Cash Advance) that advanced $1,000 or less to a group member is a respondent to the proceeding. 37 The fact that the other franchisees and CC Cash Advance (who made cash advances to some group members) are not respondents to the proceeding cannot and does not alter the conclusion that the proceeding is properly constituted under Pt IVA of the FCA. Ms Gray and six other persons have claims against each respondent. The threshold requirements of s 33C have been satisfied. 38 The nature of the claims made in the proceeding (see [36] above), and the questions common to the group members' claims (see the Annexure to these Reasons for Judgment), demonstrate why this is an appropriate representative proceeding. The size of each claim is small and the answers to the common questions will determine a large number of those small claims. Whether the other franchisees and CC Cash Advance should be joined as necessary parties is a question of joinder, not one raised by the proper construction of s 33C of the FCA.

conclusion and orders 39 For those reasons, we would grant Cash Converters leave to appeal from the orders made by the primary judge on 2 May 2014. The question of the proper construction of s 33C was a matter that was necessary to be addressed by a Full Court. However, we would dismiss the appeal from the orders made by the primary judge on 2 May 2014, with costs. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jacobson, Middleton and Gordon.

Associate: Dated: 1 September 2014 ANNEXURE CASH ADVANCES PROCEEDING COMMON QUESTIONS

1. Whether the provision in each Gray Cash Advance Contract [as defined in paragraph 11 of the Amended Statement of Claim (ASOC)] and NSW Cash Advance Contract [as defined in paragraph 1 of the ASOC] for the payment of the deferred establishment fee is void pursuant to cl 5(2) of Sch 3 of the [Credit] Act?
2. In the circumstance where the CAERE [Cash Advance Early Repayment Election] is signed and given to the provider of credit or its agent: (a) on the same occasion as; or (b) prior to; the provision of credit, is the deferred establishment fee "ascertainable" for the purposes of the calculation in cl 7(2) of Sch 3 of the [Credit] Act?
3. If the answer to question 1 is "yes", was the payment of the deferred establishment fee·by Ms Gray and each of the Group Members unconscionable within the meaning of s 12CB(l) of the ASIC Act?
4. Where the signed Contract Form and the CAERE were given by the borrower to the credit provider at the same time, was the term of the cash advance the term provided for by the CAERE such that no deferred establishment fee was payable?
5. If the answer to question 4 is "yes", in such cases was the receipt and retention of the deferred establishment fee by the credit provider unconscionable within the meaning of s 12CB(l) of the ASIC Act?
6. Whether CC International and CCPL had effective control over the conduct of Ja-Ke Holdings, NSW Franchisees [as defined in paragraph 1 of the ASOC] and CC Cash Advance as pleaded in paragraphs 26 and 37 of the [ASOC]?
7. Whether CC International and CCPL required or encouraged Ja-Ke Holdings and NSW Franchisees and CC Cash Advance to act as pleaded in paragraphs 27, 28, 38 and 39 of the [ASOC]?
8. Whether CC International and CCPL had the knowledge alleged in paragraphs 29 and 40 of the [ASOC]?
9. Whether either of: (a) CC International; or (b) CCPL; was involved in the contraventions of s 12CB(l) of the ASIC Act by the NSW Franchisees within the meaning of s 12GF(l) of the ASIC Act?
10. Whether CC International was involved in the contraventions of s 12CB(l) of the ASIC Act by CC Cash Advance within the meaning of s 12GF(l) of the ASIC Act? PERSONAL LOANS PROCEEDING COMMON QUESTIONS
11. Whether Safrock and/or CC Personal Finance had any entitlement to debit or retain fees other than those specifically provided for by the written terms of the personal loan, and specifically, fees designated as "Administration Fee" or "nAdmin" fee?
12. Whether the debiting and retention by the Safrock and/or CC Personal Finance of the: (a) "Administration Fee"; or (b) "nAdmin" fee; is unconscionable and in contravention of s 12CB(l) of the ASIC Act in circumstances where the written terms of the loan made no provision for them?
13. Whether the respondents had a system or practice which required consumers to repay their credit contracts early for the purpose of causing them to incur the "Deferred Establishment Fee"?
14. Whether a "Deferred Establishment Fee" is ascertainable for the purposes of clause 7(?) of Schedule 3 of the [Credit] Act, in circumstances where, prior to the making of the personal loan, the common intention of Safrock or CC Personal Finance and the consumer (Ms Gray and the Group Members) was that the loan would be repaid in an ascertained period of less than 2 years?
15. Whether it is unconscionable and in contravention of s 12CB(l) of the ASIC Act for Safrock or CC Personal Finance to debit or retain a "Deferred Establishment Fee", in circumstances where prior to the making of the personal loan the common intention of Safrock or CC Personal Finance and the consumer (Ms Gray and Group members) was that the loan would be repaid in an ascertained period of less than 2 years?
16. Whether in the circumstances in question 4, the provision in each of the credit contracts of each of Ms Gray and the Group Members imposing the Deferred Establishment Fee is void pursuant to clause 5(2) of Sch 3 of the [Credit] Act?
17. Whether a Deferred Establishment Fee in the order 35% of the amount of the loan, payable if the loan is repaid in approximately 7 months rather than over two years, is unconscionable within the meaning of s 78(4) of the [National Credit] Code and should be annulled or reduced pursuant to s 78(1)(c) of the [National Credit] Code?
18. Whether each of the allegations in paragraphs 72, 73, 74 and 76 of the [Amended] statement of claim is correct.
19. Whether Safrock or CC Personal Finance debited the "nAdmin" fee and the "Administration Fee" from consumers accounts by using the system developed and provided by MON-E and/or CC Personal Finance?
20. Whether CC International was involved in the contraventions by Safrock and CC Personal Finance within the meaning of s 12GF(l) of the ASIC Act?