[2005] VCAT 1989

1 The questions set out in Appendix 1 to the reasons for decision are answered:

1

(a) No.

(b)

No.

(c)

(i) No.

2

(a) No.

(b)

No.

(c)

(i) No.

Mr David Robertson of counsel, instructed by Nick Hufton, solicitor.

Mr A C Archibald QC and Mr P Bingham of counsel, instructed by Clayton Utz, Lawyers

1 This proceeding requires the tribunal to address two related questions concerning the operation of the Consumer Credit (Victoria) Code.[1] First, in the context of a consumer credit relationship, are certain establishment and like fees to be regarded as "interest"? Second, if these fees are not interest, is there an obligation to avoid imposing unconscionable fees?

2 The proceeding is brought by the Director of Consumer Affairs Victoria ("the Director"), who is a Government Consumer Agency within the meaning of the Code.[2]

3 City Finance Franchising Pty Ltd has licensed various credit providers to conduct business in Victoria using proprietary business systems. These credit providers carry on business as "City Finance Loans and Cash Solutions". The respondents are credit providers who carry on business under this name. Each credit provider is allocated a particular area of operation: for example, the first named respondent, JLL Pty Ltd, operates in the Moreland area.

4 The Director has brought two types of proceedings in the tribunal[3] against the credit providers. The present proceeding seeks civil penalties against the credit providers for breach of key requirements of the Code. The other proceeding relates to the registration of the credit providers and is to be heard in the Occupational and Business Regulation List of the tribunal.

5 The parties have sought answers to specific questions on the basis of specific assumptions. The questions and assumptions are set out in Appendix 1. These questions refer to a standard contract. The key portions of this contract are set out in Appendix 2. The questions have been posed in the following circumstances. The respondents applied to strike out the proceeding. After a hearing lasting a day, I indicated a reluctance to decide substantive issues on this basis and indicated that the key issues could be decided on a final basis before detailed evidence was prepared. As a consequence, questions that could resolve the proceeding, were prepared by the parties.

6 The central proposition underpinning the Director's first contention is that certain fees charged by the credit providers are really interest. If this is correct, it is apparent that the credit providers may be in breach of the law which limits the amount of interest that may be charged on a consumer loan.

7 Although the detailed assumptions are set out in Appendix 1, the following is an abbreviated summary. The credit providers provide loans to consumers, generally in sums of hundreds of dollars, for periods of months. The nominated interest rate is typically 30% per annum. The credit providers also charge various fees: a $20 loan application fee; a loan maintenance fee, generally of $2 per week; and an establishment fee. The size of the establishment fee varies: it is $200 for an amount loaned of $300 to $500; $350 for amounts of $600 to $1,300; and $375 for amounts of $1,400 to $2,000. I am also to assume that the credit provider's average reasonable costs of establishing a loan is less than the establishment fee. Hence I am to assume that part of the profit earned by the credit provider is from fees.

8 The question requires me to consider whether any of the fees are, in substance and in fact, interest within the meaning of the Code. The principal definitions of terms used in the Code are set out in Schedule 1 of the Code. This schedule does not contain a definition of "interest". However the schedule does contain a definition of "credit fees and charges". This is defined to mean "fees and charges payable in connection with a credit contract or mortgage, but does not include" inter alia "interest charges (including default charges)".[4]

9 Although the word "interest" is not defined in the Code, the concept plays an important role in the operation of the Code. Section 4 of the Code identifies that "credit" is provided if, under a contract, a person (the debtor) incurs a deferred debt to another (the credit provider).[5] The clause then provides that the "amount of credit" is the amount of the debt actually deferred. However it specifically states that the "amount of credit" does not include either any interest charge under the contract or any fee or charge that is to be or may be debited after credit is first provided under the contract and that is not payable in connection with the making of the contract or the making of a mortgage or guarantee related to the contract. It can be seen that the Code is setting up a distinction between three concepts: the amount of credit (that is, the principal), interest charges, and fees.

10 The distinction between these concepts is carried through in Part 2 of the Code, which deals with credit contracts.[6] For example, section 15 sets out matters that must be included in a contract document. These matters include the amount of credit, the annual percentage rate or rates, the calculation of interest charges, the total amount of interest charges payable, and a statement of the credit fees and charges that are, or may become, payable under the contract. This distinction is followed through with further requirements in Divisions 3 and 4 of Part 2 of the Code. Division 3 is headed "Interest charges" and contains a number of definitions relating to interest: such as "annual percentage rate" and "daily percentage rate". Section 26 of the Code then makes provision for the maximum amount of an interest charge that may be imposed or provided for under a credit contract. Division 4, which is headed "Fees and charges" provides that the regulations may specify credit fees or charges, or classes of credit fees or charges, that are prohibited for the purposes of the Code.[7] The Division also deals with the circumstances in which fees or charges may be passed on to other parties.

11 Although the Code clearly distinguishes between the amount of credit, interest charges and fees and charges - and this is relevant to what is meant by "interest" - the term is intended to carry its natural meaning.

12 Although the word "interest" has been considered by courts and tribunals on many occasions, I think an appropriate starting point is with dictionary definitions. The Macquarie Dictionary defines the word, relevantly, as:

13. Commerce a. payment, or a sum paid, for the use of money borrowed (the principal), or for the forbearance of a debt. b. the rate per cent per unit of time represented by such payment.

The Shorter Oxford Dictionary relevantly defines the word as follows:

10 Money charged for the use of money lent or for not having to repay a debt, according to a specified ratio.

These definitions would seem to require two elements: first, that interest is charged in relation to a principal sum; and, second, that interest is charged for the use of the principal sum by the borrower. The second element suggests a relationship with the time during which the borrower had use of the principal sum. The definitions also suggest, or at least hint at, a third element: namely that the amount charged for the use of the principal sum is usually to be expressed by a ratio.

13 A classic statement in relation to the concept of interest is that of Rand J in a Canadian case where he said:

Interest is, in general terms, the return or consideration or compensation for the use or retention by one person of a sum of money, belonging to, in a colloquial sense, or owed to, another.

But the definition, as well as the obligation, assumes that interest is referrable to a principal in money or an obligation to pay money. Without that relational structure in fact and whatever the basis of calculating or determining the amount, no obligation to pay money or property can be deemed an obligation to pay interest.[8]

This approach is consistent with the first, if not also the second, of the two elements identified above.

14 The approach taken by Lord Wright in Riches v Westminster Bank Limited[9] is not dissimilar_,_ although that case was more concerned with the distinction between "interest proper" and "interest on damages". A few years earlier Lord Greene MR had also considered the character of interest in Lomax (Inspector of Taxes) v Peter Dixon & Son Limited[10] and commented that there can be no general rule that any sum which a lender receives over and above the amount which he lends ought to be treated as income. He added:

Each case must, in my opinion, depend on its own facts and evidence dehors[11] the contract must always be admissible in order to explain what the contract itself usually disregards, namely, the quality which ought to be attributed to the sum in question.

15 Of course, context is everything. This is illustrated by the New Zealand case of Adams v Paul's Properties Limited[12] where Woodhouse J thought that the meaning of "interest" in the New Zealand Money Lenders' Act included any amount payable, in excess of the principal, however called, if it was not a payment for or on account of costs, charges or expenses. He said:

It cannot have been intended that some artificially produced label might disguise the real character of what was in truth an interest payment.

Earlier in his judgment Woodhouse J had observed that any amount charged for expenses must be reasonable in the circumstances and contain no element of bonus or additional consideration for the loan.[13] In his 1965 publication "The Law of Money Lenders in Australia and New Zealand"[14] C L Pannam cited Woodhouse J in support of the proposition that the real character of a payment could not be disguised by some artificially produced label. Mr Pannam commented:

In Tasmania and New Zealand the Acts do not attempt any statutory clarification of the meaning of "interest". The matter is left to be resolved as a matter of general principle. This is notoriously difficult as payments which are in fact compensation for the lender risking his principal can easily be disguised under the vague titles "fees", "charges" or "expenses" which are said to be incurred by a lender in connection with the loan. These sums can substantially increase the amount of interest if in fact they have not been bona fide incurred by the money lender.

16 But what of the situation in relation to the Code? In Australian Finance Direct Limited v Director of Consumer Affairs Victoria, Kaye J accepted that the term "interest", where used in the Code, should be understood as meaning:

the return or compensation for the use or retention by one person of a sum of money belonging or owed to another.[15]

This meaning encapsulates the first two elements outlined above. The Australian Finance Direct case was concerned with loans where an amount of the loan was held back by the lender ("AFD"), effectively for the purpose of subsidising the rate of interest payable. Typically the interest rate had been 14% and the principal sum held back had been the equivalent of another 10%. The decision of Kaye J overturned a decision of the tribunal[16] in which Deputy President McKenzie had held that it was necessary to characterise the true purpose of a payment and that this may not coincide with the way the parties had characterised the matter in a contract. Deputy President McKenzie had found that the holdback amount, being used as an interest subsidy, had interest as its true purpose and should be characterised accordingly. Kaye J held that the holdback was a concession which enabled the lender to make the loan at a lower nominal rate to the borrower than it otherwise would have. He then posed the question of whether the payment by the borrower of the amount of the loan equivalent to the amount of the holdback constituted the payment by the borrower of interest. He said the answer to that question is to be found in the terms of the relevant contract. He held that under the terms of the relevant contract the payment of the amount of the holdback was a payment of principal and not interest. He observed:

There is an essential distinction between, on the one hand, the fact that the amount repaid by the borrower included an amount equivalent to the holdback, and, on the other hand, the correct contractual characterisation of that component of the amount of the loan so paid by the borrower to AFD. The fact that AFD did not remit that amount to [a third party], but rather retained it to subsidise a lower interest rate charged to the borrower, could not and did not convert that amount, as between AFD and the borrower, into interest. Under the contract between AFD and the borrower, the amount repaid by the borrower was and remained a repayment of principal.[17]

I am bound to apply the decision of Kaye J. In any event, in the context of the Code, I would regard the concept of interest as involving two elements: first, a relation to a principal sum; and, second, a charge for the use of the principal sum by the borrower. Moreover, in the context of the Code, interest would normally be expressed by a ratio.

17 I wish to stress that the provisions of the Code reinforce what I would regard as essential components of a sum to be characterised as "interest". The Code contemplates that interest will be expressed as a ratio, related to both the principal sum and the period during which the borrower has use of that sum. The Code makes separate provision for fees; and contemplates that charges having this characterisation should be regarded as fees, not as interest.

18 Mr Archibald QC pointed out that the $20 loan application fee was a fixed amount, not calculated by reference to either the principal sum or the duration of a loan. Further, he pointed out that this fee is payable before the loan is made; indeed, it is payable even if a loan is not made. He submitted - and I agree - that this fee bears none of the characteristics of interest. Rather the fee is payable for the purpose of rewarding the credit provider for assessing whether a person's circumstances would enable a loan to be provided.

19 The establishment fee, which is payable on the establishment of a loan, is said to be a fee payable for the initial administrative steps involved in providing credit. On the assumptions, it carries a profit margin; in some cases a very healthy profit margin. The Director's case seems to be predicated on the notion that profit can only be earned by interest and that fees should only be levied to recover costs. I am unable to discern this intention from the Code; but even if this were the case it would not require the establishment fee to be characterised as interest.

20 A typical characteristic of the establishment fee will be that it is not actually paid by the borrower before credit is advanced, but is taken out of the principal sum. But in either case it remains true that the fee is payable on the establishment of the loan. It is not a fee that depends on the time the borrower has the use of the principal sum. Further, although there is some relationship between the size of the fee and the principal sum, it is not a relationship that can be represented by a universal percentage rate.

21 Moreover it is a type of impost that the Code clearly contemplates to be a fee or a charge: see, for example, section 72(1)(b) of the Code.

22 The loan maintenance fee has one attribute of interest: it is related to time. However it does not have the other essential attribute of interest: a relationship with the principal sum. Hence I find that it is not interest for the purposes of the Code.

23 I find that none of the fees are "interest" under the Code. Consequently, all of the first series of questions must be answered in the negative. Further, this is so whether one is confined to the contract or one is entitled to consider the true character of the payments by reference to all the assumed circumstances.

If the fees are interest, are they payable under the contract?

24 The respondents submitted that, even if it were possible to characterise a fee as being interest, that would not, of itself, justify a conclusion that section 15 of the Code had been breached. I note that each of sub-sections 15(C)(a), 15(D) and 15(E) require disclosure of rates or interest charges payable "under the contract". As pointed out by Kaye J in the Australian Finance Direct case[18] the phrase "under the contract" has been used selectively in section 15. The respondents contended that if the contract correctly states the amount payable under the contract, section 15 is complied with even if, as a matter of law, the amount payable is other than as provided for under the contract: Custom Credit Corporation Limited v Gray[19], Westpac Banking Corporation v Donald-Murrell[20], Avco Financial Services Limited v Abschinski[21] and the Australian Finance Direct case.[22] In the circumstance, I find it unnecessary to deal with this submission.

Is there an obligation to avoid charging unconscionable fees?

25 Section 72 of the Code is concerned with the review of unconscionable interest and other charges. It provides, relevantly, that the tribunal may "if satisfied on the application of a debtor or guarantor that ... an establishment fee or charge ... is unconscionable" annul or reduce the fee or charge and make ancillary or consequential orders. Section 72 then provides:

(3) In determining whether an establishment fee or charge is unconscionable, the Court is to have regard to whether the amount of the fee or charge is equal to the credit provider's reasonable costs of determining an application for credit and the initial administrative costs of providing the credit or is equal to the credit provider's average reasonable costs of those things in respect of that class of contract.

Section 72 is to be found in a suite of provisions dealing with changes to obligations under credit contracts on grounds of hardship and unjust transactions. Within this suite there are provisions enabling a debtor to seek changes to a credit contract on the ground of hardship[23] and a power to reopen a contract and provide relief in relation to unjust transactions.[24] An application in relation to these matters, but not under section 72, may not be brought more than two years after the relevant credit contract is rescinded, discharged or otherwise comes to an end. An application under section 72 may not be brought more than two years after the relevant fee or charge is charged under the credit contract or the credit contract is rescinded or discharged or otherwise comes to an end.[25] Significantly the various powers vested in the tribunal in Division 2 of Part 4 of the Code are predicated upon an application being made by a limited range of persons, such as a debtor.[26]

26 Section 21(1) of the Code provides:

(1) A credit contract must not impose a monetary liability on the debtor -

(a) in respect of a credit fee or charge prohibited by this Code; or

(b) in respect of an amount of a fee or charge exceeding the amount that may be charged consistently with this Code; or

(c) in respect of an interest charge under the contract exceeding the amount that may be charged consistently with this Code.

27 The Director contends that the effect of section 21(1)(b), combined with section 72(1)(a) and (3) of the Code, is that a credit contract must not impose fees that are unconscionable; and, in particular, must not impose an establishment fee which is greater than the credit provider's reasonable costs of determining an application for credit and the initial administrative costs of providing the credit, or the average of these costs in respect of a class of contract. Further he claims a civil penalty as a result of such a breach.[27]

28 The Director submitted that it was not logical to suppose that a credit fee or charge which is unconscionable for the purposes of the Code may, nevertheless, be charged "consistently" with the Code. The Director pointed to a comment by the authors Anthony Duggan and Elizabeth Lanyon "Consumer Credit Law"[28] to the effect that section 72 of the Code is directed to truth in lending objectives. According to the authors:

The purpose is to prevent a credit provider from loading credit charges into an establishment fee to reduce the size of the annual percentage rate.

But, assuming this is the case, does it mean that there is an implied obligation to refrain from charging an unconscionable establishment fee? Or does it simply mean that a lender is at risk if it charges an unconscionable establishment fee?

29 In my opinion, the latter proposition is to be preferred; with the consequence that it cannot be said that the establishment fees (or for that matter any of the fees) the subject of this proceeding could be regarded as breaching the requirement of section 21(1)(b) of the Code. Essentially I reach this conclusion for the reasons advanced by the respondents.

30 Section 21(1)(b) of the Code is essentially concerned with the amount of fees. By contrast, section 72 of the Code is concerned about whether a fee is unconscionable. These are two different concepts. It is true that the amount of a fee is one factor which would inform the tribunal in determining whether the fee was unconscionable. But there is likely to be other factors: in particular, the circumstances of each party. Unconscionability focuses on whether one party has taken advantage of the other and has exploited the comparative advantage.[29]

31 Typically, in determining whether a party has engaged in unconscionable conduct, factors that will be relevant will include:

•

the relative bargaining strengths of the parties;

•

the need for parties to protect their legitimate interests;

•

the ability of the parties to understand the documentation used;

•

the use of any undue influence, pressure, or unfair tactics;

•

the cost of the good or service the subject of the bargain if purchased from another supplier in similar circumstances;

•

the extent to which a party has acted in a different manner than it has acted in relation to other transactions;

•

any unreasonable failure to disclose relevant matters, including risks which may not be apparent to the weaker party; and

•

whether a party has acted in good faith.

These factors go well beyond the amount of a charge or fee. And, for a charge or fee of a given amount, the charge or fee may or may not be unconscionable, depending on the circumstances.

32 It is also to be observed that the role of section 72(3) is not to make a fee unconscionable if it exceeds the credit provider's reasonable costs (or reasonable average costs) in relation to the establishment of a loan. Rather the role of the provision is to require such a comparison in determining the question. Cases will no doubt arise where other considerations are also relevant, particularly considerations about the comparative circumstances of the parties. Thus the question of whether or not a fee is unconscionable can only be ascertained in the context of a particular transaction.

33 In my opinion, it is unlikely that the obligation to only impose an amount of a fee or charge, that may be charged consistently with the Code, would vary according to the circumstances of the parties. This is especially so having regard to the high penalties that may be attracted by a failure to comply with section 21 of the Code. Rather I prefer the submission of the respondents that section 72 is designed to provide relief to a debtor or guarantor in particular circumstances, even if the establishment fee is consistent with the Code.

34 Even if I am wrong in this analysis, it must be true that the Director's argument must fail in respect of the loan maintenance fee. This is not a fee that could be regarded as an establishment fee.

35 Further, on the assumptions, even if the $20 loan application fee is part of an establishment fee, it is such a small amount that it is difficult to see how it could be regarded as unconscionable.

36 For the reasons given, all the questions must be answered in the negative. In the circumstances, it would seem appropriate that I dismiss the proceeding. Because this matter does not appear to have been directly raised at the hearing, I will defer making such an order for one month to provide the parties to make any written submissions to the contrary.

By agreement between the parties the tribunal must determine the following questions:

A 1 Whether, on the assumptions set out below all or any part of:

(c) the amount of the establishment fee in excess of:

referred to in the contract document is in substance and in fact interest within the meaning of the Consumer Credit (Victoria) Code ("the Code") with the consequence that (i) s.15(C)(a); (ii) s.15D; (iii) s.15(E); (iv) s.21(1)(c); or (v) s. 26(1)(a) was thereby breached?

2 Whether, on the assumptions set out below, the inclusion in the contract of all or any part of:

(c) the amount of the establishment fee in excess of:

constituted a breach of the requirement contained in section 21(1)(b) of the Code because the fees or excess fees are fees or charges which cannot be charged consistently with the Code and therefore constituted a contravention by the relevant credit provider of the key requirement set out in s.100(1)(i)?

B For the purpose of determination of the questions set out in A above, it shall be assumed by the tribunal that:

is the credit provider's reasonable costs of determining the application for credit and the initial administrative costs of providing the credit or the amount that is equal to the credit provider's average reasonable costs of those things in respect of that class of contract.

C For the purpose of the determination of the questions set out in A above, it shall be assumed by the tribunal that all contract documents entered into by the respondents were, in all respects material to these questions, the same as the attached contract document marked "A" between the tenth respondent and Nicole Pring of 17 April 2002, except that:

(d) the size of the establishment fee, which was $200 for an amount loaned of $300 to $500; $350 for amounts of $600 to $1,300 and $375 for amounts of $1,400 to $2,000;

(e) the loan application fee of $20 was not charged in relation to some transactions; and

(f) before 6 December 2000 in relation to the first and tenth respondents and before 1 December 2000 in relation to the second and third respondents, the stated annual percentage rate in the contract documents was 43;

(g) before 7 May 2001 in relation to the first and tenth respondents and before 20 April 2001 in relation to the second to ninth respondent, the loan maintenance fee of $2 per week was not charged, but was charged on all contracts after these dates;

(h) the total interest and amounts repayable due to varying principal and establishment fee and the imposition of a loan application fee;

(j) the loan maintenance fee was charged as a result of the reduction of the annual percentage rate from 43 to 30.

(Amount to the benefit of the Debtor is $600.00) $950.00

(b) Credit Fees and Charges to be paid to the credit

(c) AMOUNT OF CREDIT total of items 1(a) and 1(b) $950.00

(a) Establishment fees retained by the Credit Provider

(b) Those fees and charges specified in 1(b) payable when

(c) Bills of Sale registration of satisfaction fee retained

balance under this Loan Contract is repaid by the Debtor $0.00

(d) Loan Application Fee retained by the Credit Provider

On dishonouring of any direct debit or cheque amount

Amount charged to the Credit Provider by its bank plus $20 administration fee

On charges being made by the Credit Provider's bank for provisions of stationery relating to loan

The moneys owing under this Loan Contract are payable by 36 equal consecutive repayments of $29.27 each. The first repayment is payable on Wednesday, 24 April 2002 and all subsequent repayments are payable on the same day at successive weekly intervals thereafter, provided that if any repayment falls due on a day which is not a business day the repayment is due on the next following business day.

I have been expressly warned not to apply for or obtain any credit if I am unable to repay it.

The period over which the repayments are to be paid is: Loan Term - '252' days (36 weeks).

TOTAL AMOUNT OF REPAYMENT IS $1,053.72 plus a loan maintenance fee of $2.00 accruing at the completion of each 7 day period.

6 GUARANTEE a Guarantee of the Debtor's obligations under this Loan Contract is not required.

The Debtor will grant to the Credit Provider a mortgage being a Bill of Sale over the Mortgaged Property consisting of

(a) The second-hand goods described in the schedule hereto including any attachments, equipment and accessories to the goods already in existence or acquired during the term of the Loan Contract ("the Goods") and all replacements of the same.

(b) Any payments made or payable by an insurer to the Debtor relating to the goods (if any).

(c) The Goods that are presently situated at and/or intended to be situated at the address of the Debtor shown on the table above, otherwise at the address shown below.

Location of Goods : 1/17 LEWIS ST SEBASTOPOL VIC 3356

No commissions are payable by or to the Credit Provider for the introduction of credit business or business financed by this Loan Contract.

No insurances are provided as part of the amount of credit.

All information in this schedule is disclosed as at 17/4/2002.

The Credit Provider will provide statements of account to the Debtor when requested by the Debtor in accordance with the Code.

The attached clauses and Mortgage form part of and are integral to this offer.

THE DEBTOR ACKNOWLEDGES RECEIVING A COPY OF THIS OFFER BEFORE SIGNING THIS OFFER.

THE DEBTOR AGREES TO BE BOUND BY THE PROVISION OF THIS OFFER AND THE BILL OF SALE.

1 The whole of the amount of credit set out in item 1 of the table is to be provided on the same day:

(a) Interest shall be paid on such of the amount of credit as may be owing from time to time at the annual percentage rate specified in item 2 of the table. The interest shall be calculated by applying the daily percentage rate to the unpaid balances of the amount of credit at the end of each day, (but not on any unascertainable credit fees and charges disclosed above), such calculations commencing the next day after the provision of the amount of Credit. Interest shall be debited to the Debtor's account immediately after the End of the Day in which the Debtor makes any repayment under this Loan Contract.

(b) Interest will also be debited to the debtor's account with the credit provider immediately -

(i) before the balance under this loan contract is repaid by the debtor;

(ii) before the balance owing under this Loan Contract becomes due upon any default by the Debtor under this Loan Contract; and

(iii) after the end of the day in which the credit provider debits a fee or charge to the debtor's account.

(c) Interest debited on a day will not include interest relating to that day.

(d) For the purposes of this loan contract "daily percentage rate" means the annual percentage rate in item 2 of the table, divided by three hundred and sixty five (365).

(e) For all purposes under this loan contract the end of the day shall be midnight at the capital city in the state in which you reside.`

17 This loan contract will be construed so as to comply with the provisions of the Consumer Credit Code and any other applicable laws. To the extent that any provisions or parts are inconsistent with same, such provisions or parts are deleted from this loan contract to the extent only of such inconsistency.

[1] The Consumer Credit Code is an appendix to the Consumer Credit (Queensland) Act 1994 of Queensland. By reason of section 5 of the Consumer Credit (Victoria) Act 1995 the Code is in force in Victoria and is referred to as the Consumer Credit (Victoria) Code. In these reasons I will refer to the instrument as "the Code".

[2] Section 9 of the Consumer Credit (Victoria) Act 1995.

[3] Under section 10 of the Consumer Credit (Victoria) Act 1995 VCAT has jurisdiction in relation to the Code.

[4] The word "interest" is defined in Part 3 of Schedule 2 of the Code, but only in the context of an interest in land or other property.

[5] This definition also provides that credit is provided if under a contract payment of a debt owed by one person (the debtor) to another (the credit provider) is deferred.

[6] See, also, sections 158 and 159 of the Code.

[7] My attention was not drawn to any relevant regulations made pursuant to this power.

[8] In the matter of a reference as to the validity of section 6 of the Farm Security Act 1944 of the Province of Saskatchewan [1947] SCR 394 at 411-2.

[9] [1947] AC 390, at 399 to 401.

[10] [1943] KB 671.

[11] Outside of; not within the scope of.

[12] [1965] NZLR 161; this case was approved in Marac Finance Ltd v Virue [1981] 1 NZLR 586.

[13] [1965] NZLR 161, at 163.

[15] [2004] VSC 526, at [82], citing 27 Halsbury's Laws of England 3rd ed. 7, Adams v Paul's Properties Limited [1965] NZLR 161 at 169 (Woodhouse J) and Consolidated Fertilisers Limited v Deputy Commissioner of Taxation [1992] FCA 224; (1992) 107 ALR 456 at 461-2 (per Cooper J).

[16] Director of Consumer Affairs Victoria v Australian Finance Direct Limited [2004] VCAT 1515.

[17] [2004] VSC 562, at [87]. I was informed that this decision is subject to appeal.

[18] [2004] VSC 526 at paragraph [92].

[19] [1992] VicRp 36; [1992] 1 VR 540.

[20] [1992] VicRp 72; [1992] 2 VR 417.

[21] [1994] VicRp 76; [1994] 2 VR 659.

[22] [2004] VSC 526 at paragraphs [90] to [98].

[26] In some instances the application can also be made by a mortgagor or a guarantor. What is important is that these types of applications cannot be made by a third party, such as the Director.

[27] See sections 102(2) and 100(1)(i), which have the effect of making a breach of section 21(1)(b) a breach of a "key requirement" which may attract a civil penalty.

[29] Commonwealth v Verwayen (1990) 170 CLR 394, at 441 (Deane J); Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, at 461 (Mason J).