(b) issues to the person a new set of terms and conditions relating to the credit contract.
(3) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
74 Changes by court
(1) If the credit provider does not change the credit contract as a result of a hardship notice by the debtor, the debtor may apply to the court to change the terms of the credit contract.
(2) The court may, after allowing the applicant, the credit provider and any guarantor a reasonable opportunity to be heard:
(a) by order change the credit contract (but not so as to reduce the amount ultimately payable by the debtor to the credit provider under the contract), and make such other orders as it thinks fit; or
(b) refuse to change the credit contract.
(3) The court may, if it thinks it appropriate in the circumstances, stay any enforcement proceedings under the credit contract, and make such other orders as it thinks fit, until the application has been determined.
75 Credit provider may apply for variation of change
(1) A credit provider under a credit contract that has been changed by an order under subsection 74(2) may apply to the court for an order varying or revoking the order.
(2) A credit provider subject to a stay of enforcement proceedings or other order under subsection 74(3) may apply to the court for an order varying or revoking the stay or order.
(3) On an application under this section, the court may vary or revoke the order or stay to which the application relates as it thinks fit, or may refuse the application.
76 Court may reopen unjust transactions
Power to reopen unjust transactions
(1) The court may, if satisfied on the application of a debtor, mortgagor or guarantor that, in the circumstances relating to the relevant credit contract, mortgage or guarantee at the time it was entered into or changed (whether or not by agreement), the contract, mortgage or guarantee or change was unjust, reopen the transaction that gave rise to the contract, mortgage or guarantee or change.
Matters to be considered by court
(2) In determining whether a term of a particular credit contract, mortgage or guarantee is unjust in the circumstances relating to it at the time it was entered into or changed, the court is to have regard to the public interest and to all the circumstances of the case and may have regard to the following:
(a) the consequences of compliance, or noncompliance, with all or any of the provisions of the contract, mortgage or guarantee;
(b) the relative bargaining power of the parties;
(c) whether or not, at the time the contract, mortgage or guarantee was entered into or changed, its provisions were the subject of negotiation;
(d) whether or not it was reasonably practicable for the applicant to negotiate for the alteration of, or to reject, any of the provisions of the contract, mortgage or guarantee or the change;
(e) whether or not any of the provisions of the contract, mortgage or guarantee impose conditions that are unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interests of a party to the contract, mortgage or guarantee;
(f) whether or not the debtor, mortgagor or guarantor, or a person who represented the debtor, mortgagor or guarantor, was reasonably able to protect the interests of the debtor, mortgagor or guarantor because of his or her age or physical or mental condition;
(g) the form of the contract, mortgage or guarantee and the intelligibility of the language in which it is expressed;
(h) whether or not, and if so when, independent legal or other expert advice was obtained by the debtor, mortgagor or guarantor;
(i) the extent to which the provisions of the contract, mortgage or guarantee or change and their legal and practical effect were accurately explained to the debtor, mortgagor or guarantor and whether or not the debtor, mortgagor or guarantor understood those provisions and their effect;
(j) whether the credit provider or any other person exerted or used unfair pressure, undue influence or unfair tactics on the debtor, mortgagor or guarantor and, if so, the nature and extent of that unfair pressure, undue influence or unfair tactics;
(k) whether the credit provider took measures to ensure that the debtor, mortgagor or guarantor understood the nature and implications of the transaction and, if so, the adequacy of those measures;
(l) whether at the time the contract, mortgage or guarantee was entered into or changed, the credit provider knew, or could have ascertained by reasonable inquiry at the time, that the debtor could not pay in accordance with its terms or not without substantial hardship;
(m) whether the terms of the transaction or the conduct of the credit provider is justified in the light of the risks undertaken by the credit provider;
(n) for a mortgage—any relevant purported provision of the mortgage that is void under section 50;
(o) the terms of other comparable transactions involving other credit providers and, if the injustice is alleged to result from excessive interest charges, the annual percentage rate or rates payable in comparable cases;
(p) any other relevant factor.
Representing debtor, mortgagor or guarantor
(3) For the purposes of paragraph (2)(f), a person is taken to have represented a debtor, mortgagor or guarantor if the person represented the debtor, mortgagor or guarantor, or assisted the debtor, mortgagor or guarantor to a significant degree, in the negotiations process prior to, or at, the time the credit contract, mortgage or guarantee was entered into or changed.
Unforeseen circumstances
(4) In determining whether a credit contract, mortgage or guarantee is unjust, the court is not to have regard to any injustice arising from circumstances that were not reasonably foreseeable when the contract, mortgage or guarantee was entered into or changed.
Conduct
(5) In determining whether to grant relief in respect of a credit contract, mortgage or guarantee that it finds to be unjust, the court may have regard to the conduct of the parties to the proceedings in relation to the contract, mortgage or guarantee since it was entered into or changed.
Application
(6) This section does not apply:
(a) to a matter or thing in relation to which an application may be made under subsection 78(1); or
(b) to a change to a contract under this Division.
(7) This section does apply in relation to a mortgage, and a mortgagor may make an application under this section, even though all or part of the mortgage is void under subsection 50(3).
77 Orders on reopening of transactions
The court may, if it reopens a transaction under this Division, do any one or more of the following, despite any settlement of accounts or any agreement purporting to close previous dealings and create a new obligation:
(a) reopen an account already taken between the parties to the transaction;
(b) relieve the debtor and any guarantor from payment of any amount in excess of such amount as the court, having regard to the risk involved and all other circumstances, considers to be reasonably payable;
(c) set aside either wholly or in part or revise or alter an agreement made or mortgage given in connection with the transaction;
(d) order that the mortgagee takes such steps as are necessary to discharge the mortgage;
(e) give judgment for or make an order in favour of a party to the transaction of such amount as, having regard to the relief (if any) which the court thinks fit to grant, is justly due to that party under the contract, mortgage or guarantee;
(f) give judgment or make an order against a person for delivery of goods to which the contract, mortgage or guarantee relates and which are in the possession of that person;
(g) make ancillary or consequential orders.
78 Court may review unconscionable interest and other charges
(1) The court may, if satisfied on the application of a debtor or guarantor that:
(a) a change in the annual percentage rate or rates under a credit contract to which subsection 64(1) or (4) applies; or
(b) an establishment fee or charge; or
(c) a fee or charge payable on early termination of a credit contract; or
(d) a fee or charge for a prepayment of an amount under a credit contract;
is unconscionable, annul or reduce the change or fee or charge and may make ancillary or consequential orders.
(2) For the purposes of this section, a change to the annual percentage rate or rates is unconscionable if and only if it appears to the court that:
(a) it changes the annual percentage rate or rates in a manner that is unreasonable, having regard to any advertised rate or other representations made by the credit provider before or at the time the contract was entered into, the period of time since the contract was entered into and any other consideration the court thinks relevant; or
(b) the change is a measure that discriminates unjustifiably against the debtor when the debtor is compared to other debtors of the credit provider under similar contracts.
(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.
(4) For the purposes of this section, a fee or charge payable on early termination of the contract or a prepayment of an amount under the credit contract is unconscionable if and only if it appears to the court that it exceeds a reasonable estimate of the credit provider’s loss arising from the early termination or prepayment, including the credit provider’s average reasonable administrative costs in respect of such a termination or prepayment.
79 Applications by ASIC
(1) This section applies if ASIC considers that it is in the public interest to make an application under this Division.
(2) ASIC may make an application under this Division and has standing to represent the public interest.
(3) The application:
(a) may apply to any one or more credit contracts; and
(b) may apply to all or any class of credit contracts entered into by a credit provider during a specified period (for example, all credit contracts entered into during a specified period that are affected by a specified matter for which relief is sought).
80 Time limit
(1) An application (other than an application under section 78) may not be brought under this Division more than 2 years after the relevant credit contract is rescinded or discharged or otherwise comes to an end.
(2) An application under section 78 may not be brought more than 2 years after the relevant change takes effect or fee or charge is charged under the credit contract or the credit contract is rescinded or discharged or otherwise comes to an end.
81 Joinder of parties
(1) If it appears to the court that a person other than a credit provider or a mortgagee (a third party) has shared in the profits of, or has a beneficial interest prospectively or otherwise in, a credit contract or mortgage that the court holds to be unjust, the court may make an order about the third party that the court considers appropriate.
(2) However, before making an order about the third party, the court must:
(a) join the third party as a party to the proceedings; and
(b) give the third party an opportunity to appear and be heard in the proceedings.
Part 5—Ending and enforcing credit contracts, mortgages and guarantees
Division 1—Ending of credit contract by debtor etc.
Subdivision A—Paying out contract etc.
82 Debtor’s or guarantor’s right to pay out contract
(1) A debtor or guarantor is entitled to pay out the credit contract at any time.
(2) The amount required to pay out a credit contract (other than a continuing credit contract) is the total of the following amounts:
(a) the amount of credit;
(b) either:
(i) for a credit contract that is not a small amount credit contract—the interest charges and all other fees and charges payable by the debtor to the credit provider up to the date of termination; or
(ii) for a small amount credit contract—all fees and charges payable by the debtor to the credit provider up to the date of termination, excluding any unexpired monthly fee;
(c) reasonable enforcement expenses;
(d) early termination charges, if provided for in the contract;
less any payments made under the contract and any rebate of premium under section 148.
83 Statement of pay out figure
(1) A credit provider must, at the written request of a debtor or guarantor, provide a written statement of the amount required to pay out a credit contract (other than a continuing credit contract) as at such date as the debtor or guarantor specifies. If so requested, the credit provider must also provide details of the items which make up that amount.
(2) The statement must also contain a statement to the effect that the amount required to pay out the credit contract may change according to the date on which it is paid.
(3) A credit provider must give a statement, complying with this section, within 7 days after the day the request is given to the credit provider.
Criminal penalty: 50 penalty units.
(4) In the case of joint debtors or guarantors, the statement under this section need only be given to a debtor or guarantor who requests the statement and not, despite section 194, to each joint debtor or guarantor.
(5) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
84 Court may determine pay out figure if credit provider does not provide a pay out figure
(1) If the credit provider does not provide a statement of the amount required to pay out a credit contract (other than a continuing credit contract) in accordance with this Part after a request is duly made by a debtor or guarantor, the court may, on the application of the debtor or guarantor, determine the amount payable on the date of determination, the amount by which it increases daily and the period for which the determination is applicable.
(2) The credit contract is discharged if an amount calculated in accordance with the determination is tendered to the credit provider within the applicable period.
85 Surrender of mortgaged goods and goods subject to sale by instalments
General principle
(1) If:
(a) a credit contract takes the form of a sale of goods by instalments and title in the goods does not pass until all instalments are paid; or
(b) the credit provider has a mortgage over goods of the debtor or guarantor;
the debtor or mortgagor may give written notice of an intention to return the goods to the credit provider or, if the goods are in the credit provider’s possession, require the credit provider in writing to sell the goods.
Delivery of goods
(2) A debtor or mortgagor may return the goods to the credit provider at the credit provider’s place of business during ordinary business hours within 7 days of the date of the notice or within such other period or at such other time or place as may be agreed with the credit provider.
Notice of value
(3) The credit provider must, within 14 days after a debtor or mortgagor returns the goods or requires the credit provider to sell the goods, give the debtor or mortgagor a written notice containing the estimated value of the goods and any other information required by the regulations.
Return or sale of goods
(4) If the debtor or mortgagor, within 21 days after the notice under subsection (3) is given, requests by written notice return of the goods to the debtor or mortgagor or withdraws the requirement to sell the goods (and the debtor is not in default under the terms of the credit contract), the credit provider must return to the debtor or mortgagor any goods returned by the debtor or mortgagor and must not comply with the requirement.
Nominated purchaser
(5) The debtor or mortgagor may, within 21 days after the notice under subsection (3) is given, nominate in writing a person who is prepared to purchase the goods from the credit provider at the estimated value or at any greater amount for which the credit provider has obtained a written offer to buy the goods. The credit provider must offer to sell the goods to that person for the estimated value or, if there is a written offer to buy the goods for a greater amount, that amount.
Sale of goods by credit provider
(6) The credit provider must, if the goods are not required to be returned under subsection (4), as soon as reasonably practicable (or at such other time as the credit provider and the debtor or mortgagor agree) sell the goods in accordance with subsection (5) or, if no buyer is nominated or the nominated buyer under that subsection does not buy the goods, for the best price reasonably obtainable.
Amount to be credited to debtor or mortgagor
(7) The credit provider must credit the debtor or mortgagor with a payment equivalent to the proceeds of the sale less any amounts which the credit provider is entitled to deduct from those proceeds. On the sale of the goods, the amount required to pay out the contract becomes due.
Deductions from proceeds
(8) A credit provider that sells mortgaged goods under this section is entitled to deduct from the proceeds of that sale only the following amounts:
(a) the amount currently secured by the mortgage in relation to the credit contract or guarantee, not being more than the amount required to discharge the contract or guarantee;
(b) the amount payable to discharge any prior mortgage to which the goods were subject;
(c) the amounts payable in successive discharge of any subsequent mortgages to which the goods were subject and of which the credit provider had notice;