Federal Court of Australia

Plus500AU Pty Ltd v AghaeiRad [2026] FCAFC 125

ORDERS

THE COURT ORDERS THAT:

1.    Each appeal be dismissed.

2.    Each appellant pay the respondent’s costs of its appeal.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LEE J:

A    INTRODUCTION AND PRELIMINARY OBSERVATIONS

1    The applications for leave to appeal in this matter arose from the determination of two interlocutory applications by which the applicants (Plus500AU and Plus500 Limited) sought referral to arbitration and a stay of a representative proceeding commenced by Mr AghaeiRad.

2    The stay applications were made principally under s 8(1) of the Commercial Arbitration Act 2010 (NSW) (CAA), or alternatively pursuant to the Court’s power under s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act). It was common ground that, if the claim against Plus500AU were referred to arbitration and stayed, the claim against Plus500 Limited should be dealt with in the same way.

3    They were heard together in August 2025 and, in December 2025, the primary judge published reasons in AghaeiRad v Plus500AU Pty Ltd (Stay Application) [2025] FCA 1602 (PJ) and made separate orders dismissing each interlocutory application with costs.

4    The stay applications failed because the primary judge held that the arbitration agreement was “null and void, inoperative or incapable of being performed” within the proviso to s 8(1) of the CAA. His Honour reached that conclusion on two independent bases: first, the arbitration term was void as an unfair contract term under s 12BF of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and secondly, the enforcement of the term in the circumstances would constitute unconscionable conduct contrary to s 12CB of the ASIC Act.

5    The applications for leave to appeal were not opposed. Leave was granted at the commencement of the hearing and hereafter I will refer to the applicants for leave as the appellants.

6    It is worth foreshadowing, by way of introduction, why these appeals, at first glance, appeared to bring into conjunction important principles concerning objective contractual assent, statutory regulation of standard form consumer contracts, the legislative policy supporting arbitration, and representative procedure.

7    The objective theory of contract stands in command of the field: Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 (at 428–9 per Mason ACJ, Murphy and Deane JJ). Its ascendancy was the product of a long history of competing explanations, but its practical operation is now familiar and means that contractual rights and obligations ordinarily depend upon the objective manifestations of assent rather than upon uncommunicated intention, with the consequence that a person may be bound by contractual terms which have not been read or understood. The same objective principles apply to contracts formed electronically.

8    The certainty promoted by the objective theory is indispensable to commerce, although exceptions have long been recognised whereby the ordinary consequences of a bargain may be qualified. Equity developed doctrines responding to catching bargains, fraud, undue influence, and unconscionable dealing and, particularly since the enactment of the Trade Practices Act 1974 (Cth) and the Contracts Review Act 1980 (NSW), Australian legislatures have supplemented the general law with overlapping statutory protections directed to circumstances in which insisting upon contractual rights, or upon particular contractual terms, may produce consequences upon which the law will not permit a contracting party to insist.

9    One such intervention is the statutory regime regulating unfair terms in standard form consumer contracts. Its practical importance has increased with a transformation in the quotidian business of contracting. Modern life is awash with contracts concluded electronically and upon terms drafted entirely by one party. A consumer wishing to obtain goods or services is very commonly presented with a screen requiring acceptance of standard terms, often contained in lengthy documents accessible by hyperlink, and manifests assent by clicking a box before proceeding with the transaction. The unfair contract terms legislation operates in the world in which a term may undoubtedly form part of a binding contract although it was neither negotiated nor read (and was never the subject of any conscious consideration by the consumer).

10    These appeals concern an arbitration provision contained in a contract formed in this way. Mr Ali AghaeiRad opened an account which allowed him to trade contracts for difference (CFDs), on an electronic platform operated by Plus500AU. In doing so, he manifested his assent to a User Agreement containing a dispute resolution clause which ultimately required disputes to be submitted to arbitration. Although Mr AghaeiRad did not read the User Agreement, the arbitration provision was incorporated into his contract with Plus500AU.

11    The fact that the impugned term is an agreement to arbitrate is significant. Australian law accords importance to the freedom of parties to choose arbitration and to the enforcement of that choice. The commercial arbitration legislation enacted throughout Australia gives legislative expression to a policy favouring the resolution of disputes by arbitration, a policy described by the High Court in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; (2013) 251 CLR 533 (at 558–9 [45] per Hayne, Crennan, Kiefel and Bell JJ) as recognising and encouraging private arbitration as a valuable means of settling disputes. This policy can be seen in s 1C(1) of the CAA, which states that the paramount object of the Act is to facilitate the “fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense”. The importance of this policy was a prominent feature of the case advanced on appeal.

12    There is then Pt IVA of the FCA Act, which provides a procedural mechanism by which numerous claims sharing the requisite characteristics may be advanced in a representative proceeding. The intersection between that regime and agreements to arbitrate can arise in very different circumstances. Class actions can comprise vastly different types and extents of classes. An arbitration agreement apparently binding potential members of a class may be the product of considered negotiation between a relatively small and defined number of sophisticated commercial parties who have selected the forum in which disputes between them will be resolved; equally, it may appear among standard terms presented electronically to an array of a class of consumers as a condition of obtaining a service. As already noted, the present appeals fall into the latter category.

13    There is a further feature which distinguishes the contractual arrangements in this case from a provision simply requiring all disputes to proceed directly to arbitration. Clause 23 of the User Agreement provided for a staged dispute resolution process, and customers also had available the external dispute resolution mechanism administered by the Australian Financial Complaints Authority (AFCA). The relationship between those processes and access to a court also formed an important part of the argument on appeal. The precise terms of the dispute resolution arrangements, together with the circumstances in which Mr AghaeiRad entered into the User Agreement and the findings made concerning their practical operation, are therefore necessary to understanding the questions which arise.

14    Despite this context, the resolution of the present appeals calls for the application of well-established principle and, as I will explain, the relief sought in the stay applications was misconceived when one has proper regard to the representative aspect of the proceeding.

15    Before turning to the primary judge’s reasoning and the grounds upon which it is challenged, it is necessary to identify the relevant facts. Some of the factual findings made below are themselves challenged on appeal (a fact which assumes some importance given the way in which the grounds were formulated and subsequently developed). I will identify those matters when setting out the facts and return later to whether the challenges to them are properly open or necessary to resolve.

B    BACKGROUND FACTS AND PROCEDURAL HISTORY

16    Plus500AU is part of a global multi-asset fintech group operating various technology-based trading platforms. Its parent company, Plus500 Limited, is incorporated in Israel. Plus500AU’s principal business involves the provision of an online platform upon which customers trade over-the-counter CFDs, being contracts under which the parties exchange the difference in the value of an underlying financial instrument between the opening and closing of the contract: PJ (at [1]). The platform was advertised broadly to non-professional investors and consumers, who could open trading accounts with deposits as small as $100. The primary judge recorded that approximately 80% of non-professional investors lost money: PJ (at [2]).

17    Mr AghaeiRad began trading on the Plus500 platform in August 2020 and, by June 2021, had lost the $111,948 deposited into his account: PJ (at [6]). Before he was permitted to trade, he completed an online registration process by which he was presented with links to several documents and checked a box confirming that he had read, understood and agreed to their terms. One of those documents was the User Agreement and, as noted above, Mr AghaeiRad did not open or read the User Agreement before checking the box: PJ (at [3]).

18    The User Agreement contained the dispute resolution regime in cl 23. Clause 23.1 required reasonable endeavours to resolve disputes; cl 23.2 provided for referral to senior officers where applicable; cl 23.3 provided for mediation and, if the dispute remained unresolved 30 days after referral to mediation, that it “shall be and is hereby submitted to arbitration” under the Resolution Institute Arbitration Rules; and cl 23.4 preserved any applicable right of a customer to take a dispute to an external dispute resolution scheme of which Plus500AU was a member, which included AFCA: PJ (at [4]–[5]).

19    The primary judge held that, if an arbitration took place, it would be a “commercial arbitration” within the meaning of the CAA, that the claims advanced by Mr AghaeiRad fell within the scope of the arbitration agreement, and that his individual claim was arbitrable: PJ (at [37]–[66], [79]–[82], [86]–[103]).

20    In November 2023, Mr AghaeiRad commenced the present proceeding under Pt IVA of the FCA Act on his own behalf and on behalf of group members: PJ (at [7]). The amended originating application and amended statement of claim allege, in broad terms, misleading or deceptive conduct, unconscionable conduct and, against Plus500AU, breach of contract arising from the marketing and operation of the CFD trading platform and the contractual arrangements governing customers’ use of it: PJ (at [7]–[8]). The merits of those claims have not, of course, been determined.

21    Although estimates were given as to the potential number of group members, no final or “closed” number has been identified. The proceeding is therefore to be understood in the ordinary Pt IVA sense as one brought on behalf of all persons answering the pleaded group definition, subject to the operation of the opt-out procedure.

22    In December 2024, Plus500AU and Plus500 Limited each filed an interlocutory application seeking orders for referral to arbitration and a stay. The precise formulation of the relief is the subject of a preliminary point dealt with in Section C below.

23    The applications were heard together over two days and included evidence from Mr AghaeiRad, representatives of litigation funders and arbitration experts.

24    As noted above, numerous factual findings are challenged on appeal. At the direction of the Full Court, Plus500AU belatedly provided a schedule identifying 18 findings said to fall within the existing grounds of appeal. I will return to this issue after identifying the grounds of appeal.

C     AN IMPORTANT PRELIMINARY POINT

25    As foreshadowed, there is a preliminary point concerning the relief sought by the appellants below which should be identified and explained before turning to the grounds of appeal.

26    The two interlocutory applications filed were expressed somewhat differently.

27    Plus500 Limited sought an order in the following terms:

Pursuant to section 8(1) of the Commercial Arbitration Act 2010 (NSW) or alternatively, s 23 of the Federal Court Act 1976 [sic] (Cth), the claim made in the Amended Originating Application and Amended Statement of Claim dated 18 October 2024 in Proceeding NSD 1405 of 2023 be referred to arbitration and stayed.

28    Plus500AU, by contrast, sought an order that:

… the proceeding NSD 1405 of 2023 be stayed and referred to arbitration until further order, pursuant to section 8 of the Commercial Arbitration Act 2010 (NSW) or, alternatively, pursuant to the Court’s general powers in section 23 of the Federal Court of Australia Act 1976 (Cth).

29    The reference in Plus500 Limited’s application to “the claim made in the Amended Originating Application and Amended Statement of Claim” has some ambiguity if considered in isolation. Mr AghaeiRad did not, of course, bring the claim merely in an individual capacity. The amended originating application expressly stated that, on the grounds contained in the amended statement of claim, he claimed relief “on his own behalf and on behalf of group members” and included claims for damages or compensation and orders for damages or compensation to be paid on an aggregated basis pursuant to Pt IVA. The amended statement of claim similarly commenced by pleading that the proceeding was brought under Pt IVA by Mr AghaeiRad “on his own behalf and on behalf of all persons” answering the group definition. Thus, the “claim made” in those documents was not simply Mr AghaeiRad’s claim which existed prior to the commencement of the proceeding.

30    In any event, any potential uncertainty arising from the language of the original interlocutory applications was removed when the applications were advanced at the hearing before the primary judge. By that stage, the appellants had put forward the proposed orders, together with undertakings by both appellants dealing with the conduct of the arbitrations.

31    The applications were expressly advanced upon the basis that the representative proceeding was to be stayed and the parties referred to arbitration. Unsurprisingly, that was the basis upon which the primary judge dealt with them. At PJ (at [9]), his Honour recorded that “Plus500 seeks orders that Mr AghaeiRad’s representative proceeding be permanently stayed and that the parties be referred to arbitration”, and at PJ (at [10]) identified the question for determination as whether an order should be made “staying the proceeding and referring the parties to arbitration under s 8(1)”.

32    There can be no doubt about this because the matter was expressly confirmed during the appeal. When senior counsel for Plus500AU took the Court to the undertakings which had been proffered below, I asked whether the document (at AB-C, tab 59, pp 2700–2701) contained “the proposed orders that you sought on the basis that you could proffer those undertakings”. Senior counsel for Plus500AU answered in the affirmative.

33    That circumstance explains, at least in part, why the primary judge made several findings which were not confined to the circumstances of Mr AghaeiRad but addressed the position of Plus500 customers more generally, including persons who might be group members. These included findings concerning the likelihood of customers reading the User Agreement and appreciating the significance of the arbitration term; the likely value of customer claims and the economics of individual arbitration; the likelihood of group members commencing arbitrations; and the practical consequences of denying customers the ability to participate in a representative proceeding. All this should be seen in the context of the fact that his Honour was being asked to make an order which would stay the whole class action.

34    This forensic choice of the appellants assumes some significance. Although the application for relief was directed to the whole class action (which involves a combination of claims based on numerous contracts), the statutory questions concerning the arbitration term necessarily arise in relation to the particular contract in which the term is contained.

35    As the appellants accepted during argument, whether a term is unfair for the purposes of s 12BG is not determined by asking whether the term would be unfair to persons who are strangers to the particular contract. It requires attention to the term as part of the contract between the parties to it and to the statutory criteria as they bear upon those parties. Although the inquiry under s 12CB is expressed more broadly and requires consideration of all the circumstances, the allegation in this case concerns the enforcement of the arbitration term against Mr AghaeiRad and necessarily directs attention to the circumstances relevant to the relationship between the contracting parties.

36    This distinction is far from arid, as the result of the inquiry required by statute may turn on the individual characteristics of the person upon whom the term operates and the bespoke circumstances in which it came to govern the relationship between the parties. An agreement to arbitrate deliberately made between sophisticated commercial parties will present considerations vastly different from an arbitration term contained in standard terms accepted by a simple person with no commercial nous whatsoever.

37    At points in the reasons below, the individual and representative aspects of the matter appear to have become elided. Given the relief which the appellants themselves sought, it is not difficult to understand how that occurred.

38    The difficulty became apparent during the hearing of the appeal. Consistently with the relief sought below, each draft notice of appeal (which became notices of appeal upon the grant of leave), expressly sought a stay of the whole proceeding in the event the appeals were allowed. During the course of argument, I raised the possibility of a quite different application: an application under ss 23 or 33ZF of the FCA Act to stay Mr AghaeiRad’s individual claim and refer that claim to arbitration while leaving the Pt IVA proceeding on foot, with the possibility that another group member might come forward as representative applicant.

39    In reply, senior counsel for Plus500AU, Mr Darke SC, sought to meet the difficulty by submitting that a stay of Mr AghaeiRad’s individual claim was “all that we have done”. It was pointed out to him that this was not so: what had been sought was “a stay of the proceeding”. Mr Darke then said, “If there is a need to refine the relief we will do it”. But whatever may have been the appellants’ underlying forensic objective, that was not the application which the primary judge was asked to determine. To repeat, his Honour understood the relief sought to be a stay of the class action and determined the applications accordingly.

40    Notably, the appellants did not pursue any applications to amend the notices of appeal to change the orders sought (if the appeals were granted). In any event, it is far too late now to recast the dispute as if the appellants had sought the different relief of separating Mr AghaeiRad’s individual claim from the balance of the class action and referring only his individual claim to arbitration, thus leaving the Pt IVA proceeding on foot. Apart from anything else, had that course been taken from the outset, with appropriate notification to group members, the application Plus500AU now says it wishes to make concerning Mr AghaeiRad’s claim alone may well have been rendered otiose. Another group member with entirely different characteristics may have sought substitution as representative applicant. Moreover, upon substitution, Mr AghaeiRad may have wished to become a passive group member and not presently advance his individual claim, with the result that any controversy concerning arbitration of Mr AghaeiRad’s individual claim could have been deferred until after an initial trial (if it ever became necessary to determine, once the common questions had been resolved).

41    The appeals must be determined by reference to the applications made and determined. At the same time, the question of whether the arbitration term was unfair must be addressed by reference to the contract to which Mr AghaeiRad was a party.

D    THE REASONING OF THE PRIMARY JUDGE IN SUMMARY

D.1    Threshold Issues

42    The primary judge first rejected the threshold arguments by which Mr AghaeiRad sought to avoid the operation of s 8(1) of the CAA. His Honour concluded that, if the claims were arbitrated, the arbitration would be a “commercial arbitration”; that the arbitration term had been incorporated into the User Agreement; that the claims fell within its scope; and that Mr AghaeiRad’s individual claim was arbitrable: PJ (at [37]–[66], [68]–[78], [79]–[82], [86]–[103]). The applications therefore turned upon whether the arbitration agreement fell within the proviso in s 8(1) because it was “null and void, inoperative or incapable of being performed”. As noted above, his Honour concluded that it did, for two independent reasons.

D.2    Unfair Contract Terms

43    The first concerned the unfair contract terms provisions in ss 12BF and 12BG of the ASIC Act. It was common ground that the User Agreement was a consumer contract, a standard form contract and a contract for the supply or possible supply of financial services. The question under s 12BF was therefore whether the arbitration term was “unfair”: PJ (at [104]–[107]). His Honour treated the transparency of the term as informing the assessment of each of the three requirements in s 12BG(1), rather than as a separate statutory requirement: PJ (at [109]–[110]).

44    As to transparency, his Honour accepted that the term was legible and readily accessible electronically, but concluded that it did not convey its effect in reasonably plain language or by clear presentation: PJ (at [111]–[124]). His Honour referred, among other things, to the location of cl 23 in a 50-page User Agreement, the absence of any reference to it on the summary page, the way in which the arbitration provision appeared within the mediation provision, the qualification at the commencement of cl 23.1 concerning inconsistency with legislative or regulatory regimes, and the absence of any express statement that the effect of arbitration would be to prevent recourse to a court or participation in a representative proceeding. His Honour considered that the literal requirement to submit a dispute to arbitration was relatively clear, but that many or most customers would not appreciate those consequences: PJ (at [113]–[124]).

45    His Honour next concluded that the arbitration term would cause a significant imbalance in the parties’ rights and obligations within s 12BG(1)(a): PJ (at [125]–[161]). He rejected the submission that the facial symmetry of the clause answered the statutory question, reasoning that a term which applied equally to both parties might nevertheless have an asymmetrical practical effect upon their contractual rights and obligations: PJ (at [134]–[143]). His Honour identified three principal features of the imbalance: (a) the term prevented Mr AghaeiRad and customers from having recourse to a court; (b) arbitration was, in his Honour’s view, “theoretical only” for Mr AghaeiRad and most customers because of its cost relative to the likely value of claims; and (c) it prevented Mr AghaeiRad and customers from bringing or participating in a class action: PJ (at [145]–[148]).

46    The practical position of Plus500AU was, in his Honour’s view, materially different. The primary judge considered it unlikely that Plus500AU would ever need to bring a claim against a customer and noted there was no evidence that it had done so. The contractual arrangements gave Plus500AU extensive powers to protect its position, including powers relating to margin calls, closing transactions, deducting funds from customer accounts, cancelling withdrawal requests, suspending trading in volatile instruments, voiding transactions involving manifest error and freezing or deducting funds in certain circumstances. His Honour also observed that, although cl 23.3 prevented a customer from bringing or participating in a representative proceeding, Plus500AU would have no occasion to bring a representative proceeding against a customer: PJ (at [148]).

47    The primary judge took account of the other dispute resolution mechanisms in cl 23, including internal dispute resolution (IDR), mediation and AFCA, but considered that they ameliorated rather than removed the imbalance. The difficulty arose once those processes had been exhausted and the customer wished to pursue the matter further. His Honour found that the cost of arbitration, including arbitrator’s fees and the possibility of advance security, would be an insurmountable obstacle for many consumers with modest claims: PJ (at [149]–[152]). The evidence concerning the actual operation of the dispute resolution arrangements was that, between 1 September 2017 and 31 March 2021, Plus500AU received 566 complaints through its website; 277 were resolved through its internal dispute resolution process and the remaining 289, or 51.06%, were escalated to AFCA. There was no evidence of any complaint having proceeded to commercial arbitration: PJ (at [153], [173]). His Honour concluded that the practical operation of cl 23.3 was weighted heavily in Plus500AU’s favour because it provided Plus500AU with a mechanism to prevent court proceedings in circumstances where customers were unlikely ever to arbitrate: PJ (at [155]).

48    As to the second requirement in s 12BG(1), his Honour held that Plus500AU had not proved that the arbitration term was reasonably necessary to protect its legitimate interests: PJ (at [162]–[179]). Plus500AU relied upon interests in complying with its obligations as the holder of an Australian financial services licence, facilitating the final, fair, efficient and cost-effective resolution of disputes, and providing a common procedure and forum. The primary judge accepted the legitimacy and utility of IDR, mediation and AFCA, but considered that those matters did not establish the reasonable necessity of the arbitration component of cl 23.3. There was no evidence of any actual arbitration; his Honour considered that the arbitration term was not a practical means of resolving typical low-value complaints; and he rejected the contention that it was reasonably necessary to secure a common forum or procedure, including because other means were available and because arbitral seat and procedure could themselves vary: PJ (at [164]–[177]). The primary judge concluded that the interests relied upon were not sufficiently compelling to overcome the detriment produced by the term and that Plus500AU had failed to discharge the statutory onus: PJ (at [178]–[179]).

49    The third requirement, detriment, was dealt with shortly. His Honour considered there was “no real question” that it was satisfied because enforcement of cl 23.3 would deprive Mr AghaeiRad of the ability to prosecute his claim in an appropriate court and of the advantages of the class action procedure. IDR, AFCA and the prospect of individual or consolidated arbitration did not remove that detriment: PJ (at [180]–[182]). The primary judge accordingly concluded that the arbitration term was unfair and void under s 12BF, with the consequence that relief under s 8(1) of the CAA was to be refused: PJ (at [183]).

D.3    Statutory Unconscionability

50    His Honour then considered the separate contention that enforcement of the arbitration term would constitute statutory unconscionability contrary to s 12CB of the ASIC Act: PJ (at [184]–[232]). He first rejected Plus500AU’s reliance upon s 12CB(2)(b). The primary judge construed that provision as excluding from s 12CB the mere step of referring a dispute to arbitration, in the sense of instituting an arbitration, but held that Plus500AU’s conduct was different: it was seeking, “defensively”, to enforce cl 23.3 by obtaining a permanent stay of the proceeding and a referral to arbitration. His Honour further considered that the complaint extended beyond the bare act of referral and included the effect of the term and the circumstances in which it had been agreed: PJ (at [190]–[204]).

51    In undertaking the assessment required by ss 12CB and 12CC, his Honour placed substantial weight upon the practical effect of enforcement. He found, among other things, that Mr AghaeiRad would not pursue an unfunded individual arbitration, that litigation funding of such an arbitration was not economically feasible, and that multiple or consolidated arbitrations involving group members were unlikely. The primary judge also considered the availability of AFCA, the circumstances in which the User Agreement was made and understood, and the interests relied upon by Plus500AU in support of the arbitration provision: PJ (at [205]–[226]).

52    Upon a global assessment, his Honour concluded that reliance upon or enforcement of cl 23.3 was outside the norms of acceptable commercial behaviour contemplated by the ASIC Act and contrary to the statutory conception of conscience: PJ (at [227]). Having considered the evidence of the arbitration experts and litigation funders, his Honour rejected as “at best highly unlikely, and at worst, fanciful” the prospect that the claims might be dealt with through funded and consolidated arbitrations, and concluded that enforcement of the arbitration term would contravene s 12CB: PJ (at [228]–[232]).

53    Either conclusion was sufficient to defeat the applications. The arbitration agreement could not support the mandatory referral and stay sought under s 8(1) because the term was void as an unfair contract term and, independently, its enforcement would constitute statutory unconscionability. The interlocutory applications were therefore dismissed with costs: PJ (at [183], [232]–[233]).

E    THE APPEAL

E.1    The Grounds of Appeal

54    There are, of course, two appellate proceedings because of the separate interlocutory applications. Plus500 Limited adopted Plus500AU’s submissions on the substantive issues below and has taken the same course on appeal; its grounds of appeal are identical to those advanced by Plus500AU, although its separate submissions supplement the arguments advanced by Plus500AU in several respects.

55    The notices of appeal advance four grounds. The notice filed by Plus500AU (Part A (AB-A), tab 9, pp 244–245) states them as follows:

(1)    The primary judge erred in holding that the arbitration agreement in clause 23.3 of the User Agreement between the appellant and the first respondent was an unfair contract term within the meaning of s 12BF(1)(a) of the [ASIC Act] (PJ [183]) on the grounds that the arbitration agreement:

(a)    was not transparent (PJ [111]-[124]);

(b)    would cause a significant imbalance in the parties’ rights and obligations arising under the User Agreement (PJ [125]-[155]);

(c)    was not reasonably necessary to protect the legitimate interests of the appellant (PJ [162]-[179]); and

(d)    would cause detriment to the first respondent if it were to be applied or relied on (PJ [180]-[182]).

(2)    The primary judge erred in holding that reliance on or enforcement of the arbitration agreement in cl 23.3 of the User Agreement was unconscionable conduct, contrary to s 12CB(1) of the ASIC Act (PJ [205]-[232]).

(3)    The primary judge erred in holding that s 12CB(2)(b) of the ASIC Act did not preclude a finding of unconscionable conduct (PJ [191]-[204]).

(4)    The primary judge erred in concluding, on the holdings the subject of appeal grounds 1-3, that the arbitration agreement in clause 23.3 of the User Agreement was “null and void, inoperative or incapable of being performed” within the meaning of s 8(1) of the [CAA] and, thus, that a stay of the proceedings and referral to arbitration could not be granted.

56    As can be seen, challenges are made to the conclusions or intermediate conclusions identified in those grounds. The grounds do not separately identify challenges to particular primary factual findings or state the alternative factual findings for which the appellants contend.

57    Following the hearing, and at the direction of the Full Court, Plus500AU provided a schedule identifying 18 factual findings which it says are challenged within Grounds 1(a), 1(b), 1(c) and 2. Plus500AU’s position is that these are subordinate or basic findings falling within the paragraphs of the primary judgment already identified in the grounds, and that the schedule therefore narrows and identifies the factual controversy rather than adding new grounds. In its further submissions it relied upon the distinction between an appeal ground directed to an intermediate conclusion and the subordinate facts by reference to which that ground is argued.

58    Mr AghaeiRad takes a different position. He submits that the notices of appeal challenge only four evaluative conclusions identified and that an assertion of error in those conclusions did not put every underlying factual finding in issue. He contends that the schedule amounts, in substance, to 18 new grounds of appeal, for which leave has neither been sought nor granted (and this is made worse by reason of some of the factual challenges not being squarely raised in Plus500AU’s written submissions).

59    There is some further controversy as to how many of those challenges had in fact been foreshadowed before the schedule was provided. Mr AghaeiRad submitted that five had not been raised in the written submissions at all, identifying in particular PJ at [176], [210]–[212], [115], [118] and [217]. Plus500AU responded that only three items in the schedule had not been specifically addressed in its written submissions, namely the challenges concerning PJ (at [176], [210]–[212] and [115]), and maintained that the challenges to PJ (at [118] and [217]) had already been advanced in substance.

60    Whether these factual challenges are properly open on the notices of appeal and whether they are all appropriate or necessary to determine are matters to which I now turn.

E.2    The Factual Challenges

61    The challenged findings can conveniently be grouped by reference to the aspects of the primary judge’s reasoning to which they relate.

62    As to transparency, the challenges concern findings in PJ (at [115], [117]–[121]), including the likely manner in which a reasonable customer would read or digest the User Agreement, the presentation of the arbitration provision within cl 23, and what Mr AghaeiRad and customers generally would have understood about its effect.

63    As to significant imbalance, the challenges concern, among other things, the findings that arbitration was practically or economically unavailable for claims of the kind likely to arise; the findings concerning the cost of arbitration relative to likely claim values; the finding that Plus500AU was unlikely to need to sue customers; the significance attributed to the alternative mechanisms of IDR, mediation and AFCA; and the conclusion drawn from the absence of any evidence of customer disputes having proceeded to arbitration: PJ (at [146(b)], [148], [150]–[152], [173]–[174]).

64    As to reasonable necessity, the challenges include the findings that the asserted interest in a common procedure or common forum could be achieved by other means, including an exclusive jurisdiction clause, and that cl 23.3 did not in any event secure a common seat or common procedure because arbitral procedure was flexible and the seat could vary: PJ (at [176]–[177]).

65    A number of the remaining factual challenges were advanced in connexion with Ground 2 and concerned the primary judge’s findings as to the practical consequences of enforcement, including access to justice, the availability of funding and consolidated arbitration, the adequacy of AFCA, the prevalence of arbitration clauses in analogous consumer contracts and Mr AghaeiRad’s understanding of cl 23.3. For the reason explained below, it is unnecessary finally to determine those challenges except to the extent that the same matters bear upon Ground 1.

66    As can be seen from their terms, the grounds of appeal are expressed at a high level of generality. The lack of clarity in isolating the findings the subject of challenge until oral submissions is suboptimal. It was not apparent from the notices of appeal themselves that an appeal involving challenges to anything approaching 18 separate factual findings was contemplated. The full extent of the factual attack only became clear at the heel of the hunt and, ultimately, when the schedule was provided at the direction of the Full Court after the hearing. As I have noted, the parties disagree as to precisely how many of the challenges had not previously been identified, but whichever count is adopted, the fact that such a debate arose at all is regrettable.

67    Plus500AU asserts the grounds are directed to intermediate conclusions said to be erroneous and identify the passages of the reasons in which those conclusions were reached. Its submission, relying upon SunshineLoans Pty Ltd v Australian Securities and Investments Commission [2025] FCAFC 34; (2025) 308 FCR 474 (at 498–499 [130]–[135] per Perram, Bromwich and Colvin JJ), is that an appellant is not required to formulate a separate ground in respect of every subordinate or basic factual finding upon which an intermediate conclusion depends, and may develop a properly formulated ground by submissions directed to the underlying facts and findings. That is true up to a point, but the whole point of identifying factual challenges with specificity in advance of an oral hearing is to provide procedural fairness to one’s opponent.

68    Despite this, and not without some hesitation, I consider the appellants should be permitted to advance the factual challenges identified in the schedule to the extent they are relevant to the disposition of the appeal. This is largely because the expanded arguments have been adequately addressed. Mr AghaeiRad has ultimately not suffered such forensic prejudice as would warrant refusing to entertain them.

69    That conclusion does not mean that the way a particular factual contention was advanced is irrelevant when its merits are considered. Some of the challenges amount to an assertion that the primary judge ought to have drawn a different inference from evidence which was before him; others depend upon evidence or possibilities which Plus500AU says the primary judge insufficiently appreciated; and some were not clearly identified until oral argument. Mr AghaeiRad’s answer, put broadly, is that the findings were available on the evidence before the primary judge, that many involved assessments of practical reality reached after hearing the evidence from Mr AghaeiRad, representatives of the litigation funders and the arbitration experts, and that the appellants’ arguments frequently amount to selecting pieces of evidence favourable to them and inviting the Full Court to undertake the factual evaluation afresh.

70    It would serve no useful purpose to deal with the 18 challenges seriatim. To the extent that the challenged findings bear upon transparency, significant imbalance or reasonable necessity, their significance, and any asserted error in making them, can best be assessed in considering Ground 1. As already noted, it is unnecessary separately to determine those challenges advanced only in support of Ground 2.

F    GROUND 1: UNFAIR CONTRACT TERM

F.1    The Appellants’ Submissions

71    Plus500AU submits that the primary judge erred in relation to his analysis of transparency, significant imbalance and reasonable necessity. It does not press any separate challenge to the finding of detriment, accepting that such a challenge could not succeed unless it first succeeded on significant imbalance or reasonable necessity, with the relevant matters assessed at the time of contracting. As to this issue of timing, in oral argument, Mr Darke identified that date as 16 August 2020 (being the date borne by the applicable version of the User Agreement) but the evidence, and Plus500AU’s submissions below, identify 19 August 2020 as the date upon which Mr AghaeiRad completed the registration process and assented to the User Agreement. Nothing turns on the precise date.

F.1.1    Transparency

72    As to transparency, Plus500AU accepts that the primary judge correctly found that the arbitration term was legible and readily available, but submits that his Honour erred in finding that it was not expressed in reasonably plain language or presented clearly. It emphasises that the User Agreement was itself an important document governing the terms upon which customers traded CFDs; that customers were required expressly to declare that they had read and understood it; that its opening pages drew attention to its importance and directed customers to read it carefully; and that cl 23 appeared beneath the prominent heading “DISPUTE RESOLUTION” and set out a sequential process for the resolution of disputes. It submits that the language of cl 23 was neither arcane nor technical and that the arbitration provision was located where a reader would expect to find it.

73    In that context, Plus500AU challenges the findings in PJ (at [115], [118], [120]–[122]) and, as ultimately particularised, PJ (at [117] and [121]). It submits that the primary judge wrongly approached transparency on the footing that a reasonable customer might not read the User Agreement or might digest only provisions appearing prominently or in a summary; that s 12BG(3) does not require a term to be presented in the clearest possible manner or separately highlighted; and that, because cl 23.3 plainly stated that an unresolved dispute was to be submitted to arbitration, it was unnecessary expressly to spell out that the same dispute could not also be pursued in court or by way of a representative proceeding. It further submits that there was no evidentiary basis for supposing that a reasonable customer would read the opening qualification in cl 23.1 and assume that some unidentified legislative or regulatory regime preserved a right to litigate notwithstanding the arbitration requirement.

74    Mr Darke submitted that it was wrong to assess transparency upon an assumption that customers who had expressly declared that they had read and understood the User Agreement would not in fact read it, and that requiring Plus500AU to elevate the arbitration provision above other provisions would involve hindsight as to what later became contentious. When it was suggested to him in argumento that the statutory question of transparency was one of degree and did not itself determine unfairness, Mr Darke accepted that proposition and further accepted that, even if the challenge to PJ (at [115]) failed, that would not be fatal to Ground 1 if Plus500AU succeeded on significant imbalance or reasonable necessity.

F.1.2    Significant imbalance

75    As to significant imbalance, Plus500AU submits that the primary judge’s analysis in PJ (at [146]) was erroneous in each of its principal respects. Its starting point is that s 12BG(1)(a) is concerned with the balance of rights and obligations arising under the contract, rather than with adverse practical consequences considered at large, and that cl 23.3 was symmetrical because both parties were required to arbitrate disputes falling within it. The fact that arbitration foreclosed recourse to a court could not itself constitute a significant imbalance, it submits, because that is the ordinary consequence of any arbitration agreement; treating that consequence as sufficient would sit uneasily with the uniform commercial arbitration legislation.

76    Plus500 Limited made a further point. It responded to the contention that cl 23.3 did not make clear that the arbitration agreement might be relied upon in relation to claims brought against Plus500 Limited, notwithstanding that it was not a party to the User Agreement. It submitted that its entitlement to invoke the arbitration agreement arose from the extended meaning of “party” in s 2(1) of the CAA as a person claiming “through or under” Plus500AU, and that it would be unrealistic to require the User Agreement to explain the operation of that statutory provision, the authorities concerning “through or under”, or the range of third parties who might in future be sued and entitled to invoke it.

77    Plus500AU next challenged the finding in PJ (at [146(b)]) that arbitration was “theoretical only” for Mr AghaeiRad and most customers. It relied in writing upon evidence estimating arbitrator fees for Mr AghaeiRad’s individual claim at between $8,939 and $20,794 plus counsel fees, and submitted that his 50% upfront share of arbitrator fees would have been substantially less than the approximately $112,000 value of his claim. It also challenges PJ (at [152]), submitting that the evidence did not establish that the costs of arbitrating a small claim would necessarily far exceed the costs of proceedings in the small claims division of a local court, particularly given the procedural flexibility available in arbitration, including determination on the papers.

78    That factual challenge was developed further orally. Mr Darke accepted that an arbitrator’s fees would no doubt exceed the filing fees in the small claims jurisdiction, but submitted there was no evidence permitting a comparison of the total costs of the two forms of dispute resolution and relied upon the evidence concerning the capacity of arbitrators to adopt streamlined procedures, decide matters on the papers and dispense with cross-examination. He maintained that even the narrower finding concerning small claims was not open in the absence of comparative evidence of total costs.

79    Plus500AU also challenges the reliance placed in PJ (at [146(c)]) upon the loss of the ability to commence or participate in a class action. It submits that the inquiry had to be undertaken prospectively as at the date of contracting when Mr AghaeiRad’s dispute had not arisen, and that there was no finding that a future dispute was then likely to be of a kind suitable to attract litigation funding and a class action. It distinguishes the clause considered by the High Court in Karpik v Carnival plc [2023] HCA 39; (2023) 280 CLR 640 (per Gageler CJ, Gordon, Edelman, Gleeson and Jagot JJ) on the basis that the term there was itself a class action waiver, whereas cl 23.3 selected arbitration as the forum for dispute resolution and only contingently had the consequence that a funded class action would not be available.

80    The appellants place particular reliance upon the wider dispute resolution structure in cl 23. Plus500AU submits that IDR, mediation and AFCA provided appropriate and cost-effective means for resolving smaller claims and were therefore relevant counterbalances to any disadvantage produced by arbitration. In oral argument, Mr Darke placed substantial emphasis upon AFCA, including its accessibility, procedural fairness, information-gathering powers, capacity to deal with systemic issues and the binding effect of an accepted determination, and submitted that Parliament had required Plus500AU to participate in precisely such a scheme to address the problem that smaller financial claims might otherwise be uneconomic to pursue.

81    Plus500AU additionally challenges the factual reasoning in PJ (at [173]–[174]). It submits that the fact that 566 complaints had been dealt with through IDR or AFCA, with none proceeding to arbitration, did not establish that the arbitration provision had prevented dissatisfied customers from taking matters further. The evidence instead indicated, it was said, that customers had been satisfied by the processes they had used and had no need or wish to proceed further. It also relied upon the fact that Mr AghaeiRad had not used the dispute resolution procedures.

82    During oral argument, however, the limits of that submission became evident. Mr Darke initially described the complaints as having been “successfully resolved” by IDR or AFCA, but fairly accepted that he could not say that each of the 289 complainants whose complaints had gone to AFCA had accepted the outcome. He maintained that there was no evidence of anyone proceeding further and that the evidence therefore did not support the finding that the arbitration term had operated to prevent dissatisfied customers from pursuing their claims.

83    Plus500AU also challenges the finding in PJ (at [148]) that it was unlikely to have any need to sue its customers. It points to contractual provisions capable of giving rise to claims by Plus500AU against customers, including obligations concerning interference with its systems, infringement of intellectual property and market misconduct. It submits that cl 23.3 therefore operated substantively upon both parties and was not merely symmetrical in form.

F.1.3    Reasonable necessity and statutory coherence

84    On reasonable necessity, Plus500AU submits that “reasonably necessary” does not require absolute necessity or establish a single permissible contractual solution. It identifies legitimate interests in the final, fair, efficient, confidential and cost-effective determination of disputes and in securing, so far as practicable, a common procedure and common forum for disputes with customers. It relies upon features of arbitration including finality, procedural flexibility, efficiency, cost control, expertise and confidentiality.

85    It challenges the findings in PJ (at [172]–[178]). The submission concerning PJ (at [173]–[174]) is the one already described: the absence of any arbitration did not demonstrate that customers had been prevented from pursuing unresolved disputes. It further submits that it was erroneous to conclude that arbitration was uneconomic for claims likely to arise, for the same reasons relied upon in relation to significant imbalance, and erroneous to compare the arbitration provision with the availability of a funded class action when there was no particular likelihood, viewed at the date of contract, of a claim of that kind arising and attracting funding.

86    Finally, Plus500AU challenges PJ (at [176]–[177]). It submits that the arbitration provision was apt to secure a substantial degree of commonality because disputes with Australian customers would have an Australian seat and all arbitrations would proceed under the Resolution Institute Arbitration Rules, themselves based upon the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). The fact that procedure could be adapted to particular disputes did not deprive Plus500AU of an interest in having disputes dealt with within that common arbitral framework. It submits that the possibility of an exclusive jurisdiction clause did not establish that arbitration was not reasonably necessary, because the suggested alternative had not been shown to be an obvious and compelling alternative which was equally practicable and imposed a significantly lesser burden on customers.

87    Plus500 Limited advanced a somewhat broader argument based upon coherence. It contends that the statutory standards by reference to which “unfairness” is assessed must themselves be informed by legislative choices made in cognate areas of law. The recognition and encouragement of commercial arbitration by the uniform arbitration legislation, and Parliament’s establishment of AFCA as a low-cost dispute resolution mechanism for retail financial consumers, are therefore said to form part of the statutory setting in which the evaluative concepts in s 12BG are given content. On that footing, it submits that the loss of access to curial procedures (including Pt IVA), being an ordinary consequence of choosing arbitration, cannot, without more, provide a basis for treating an arbitration agreement as unfair. Plus500 Limited further submits that the absence from the uniform arbitration legislation of a representative procedure analogous to Pt IVA itself reflects a legislative choice which should not be circumvented through the evaluative standards in s 12BG, and points to the availability of consolidation as capable, at least in some circumstances, of approximating aspects of representative procedure.

88    Plus500 Limited also emphasises two related matters. First, the AFCA scheme itself contains a deliberate statutory asymmetry: determinations are binding upon scheme members but not upon complainants; the scheme is free to complainants and does not ordinarily require paid representation; and provision is made for AFCA to identify and report systemic issues. Clause 23.4 expressly preserves the customer’s entitlement to resort to external dispute resolution. Secondly, it distinguishes Karpik both legally and factually. The term there was an express class action waiver operating in conjunction with an exclusive jurisdiction clause, whereas cl 23.3 selects arbitration as the forum and accepts the incidents of that forum as the law provides them. It also points out that the transaction in Karpik was the one-off purchase of a cruise, whereas Mr AghaeiRad deposited $111,948 and engaged repeatedly in CFD trading. Those matters, it submits, reinforce the error in treating the practical consequences of arbitration as themselves indicative of unfairness.

F.2    Consideration

89    Much of the appellants’ argument correctly emphasises matters which must form part of the statutory assessment, including the time at which unfairness is to be assessed, the importance of considering the whole contract, the availability of AFCA and other dispute resolution mechanisms, and the legitimate place of arbitration in Australian law. The difficulty is that those propositions do not demonstrate error in the conclusion reached by the primary judge when the arbitration term is considered in the circumstances of the particular contract between Plus500AU and Mr AghaeiRad.

90    I begin with transparency. There is no error in the primary judge’s approach at PJ [115]. The statutory inquiry is not conducted in an artificial world in which a reasonable consumer is assumed to read every word of a lengthy standard form electronic contract merely because the consumer has clicked a box asserting that this has occurred. The question was whether the term was presented clearly and expressed in reasonably plain language, considered in its contractual setting. In assessing that question, it was open to his Honour to take account of the length and structure of the User Agreement, the material selected for particular prominence, the location and drafting of cl 23.3 and the manner in which the contract was presented to consumers.

91    Nor is there error in the finding that cl 23.3 did not clearly convey the consequence that the customer would be unable to proceed in court or participate in a class action. The clause stated that the dispute was to be submitted to arbitration, but the primary judge was entitled to distinguish between the direct statement of the arbitral mechanism and the significant consequences which followed from it, especially having regard to the opening qualification in cl 23.1 and the wider terms of the User Agreement.

92    The appellants’ submission that a reasonable consumer must infer those consequences because otherwise arbitration would be pointless assumes a degree of legal understanding which the statutory criterion of transparency does not require the Court to impute to the consumer. The primary judge’s findings in PJ at [117]–[122] were available on the contractual documents themselves. I would not, however, regard the absence of an explanation that the statutory extended definition of “party” might permit a non-contracting person claiming through or under Plus500AU to invoke the arbitration agreement as contributing to any want of transparency. In that respect I accept the submission of Plus500 Limited. The transparency difficulty identified by the primary judge does not depend upon that matter.

93    As to significant imbalance, I accept the appellants’ submission at the level of principle that the mere fact that an arbitration agreement excludes recourse to a court cannot, standing alone, render the term unfair. Such an approach would sit unhappily with the legislative recognition and encouragement of arbitration and would tend to condemn arbitration agreements simply because they operate according to their ordinary legal effect. But the statutory inquiry does not require arbitration agreements of every description, whatever their provenance and practical operation, to be forced upon the same Procrustean bed.

94    An agreement to arbitrate resulting from considered negotiation between sophisticated commercial parties and an arbitration term forming part of a standard form consumer contract may have the same legal character, but their practical operation and the circumstances attending their formation will be different. The primary judge’s reasoning recognised that difference. His Honour assessed the practical effect of this term in this contract, including the cost of the dispute resolution mechanism relative to claims likely to arise, the availability of other mechanisms, the effect upon the respective contractual positions of the parties and the inability to invoke a representative procedure.

95    The appellants’ reliance upon symmetry does not answer that analysis. Section 12BG(1)(a) requires attention to whether the term would cause a significant imbalance in the parties’ rights and obligations arising under the contract. A term may impose the same formal obligation upon each party and nevertheless operate very differently upon their respective contractual positions. That is the point made by the primary judge in PJ at [142]–[145], where his Honour explained that the statutory inquiry invites comparison of the relative effect of the term upon the parties rather than stopping once formal symmetry has been identified.

96    The factual challenges concerning the economics of arbitration substantially invite this Court to reassess the evidence in a manner more favourable to Plus500AU. The fact that one estimate of arbitrator fees for Mr AghaeiRad’s claim was below the amount of his claimed loss did not establish that arbitration was a practical or economic mechanism for the range of claims likely to arise under the User Agreement. The primary judge was entitled to have regard to the evidence concerning modest customer deposits and complaints, the hourly cost of an arbitrator, the potential requirement for security and the practical relationship between those costs and claims of modest value. The submission that his Honour could not compare such costs with the ordinary costs of bringing a small claim without specific comparative expert evidence is unpersuasive.

97    Nor do I accept that the possibility of consolidation or litigation funding displaced the primary judge’s conclusion. The evidence relied upon by Plus500AU established that consolidation mechanisms may be available in some circumstances but did not establish that: group members would commence the individual arbitrations necessary to engage such mechanisms; the necessary conditions for consolidation would be satisfied; or that funding would in practice be available. The primary judge was correctly concerned with what was likely to occur in the world of fact, rather than with what could be made to occur in the world of legal possibility.

98    The respondent’s evidence, accepted below, was that Mr AghaeiRad would not pursue an unfunded individual arbitration and that the funders would not fund the proposed individual or multiple arbitrations because doing so was not economically viable. The existence of a legal mechanism capable of consolidating arbitrations did not require his Honour to disregard that evidence.

99    The same difficulty attends the challenge concerning PJ at [173]–[174]. The evidence that complaints had been dealt with by IDR or AFCA did not establish that all complainants had been satisfied with the result. Indeed, as became clear in oral argument, Mr Darke could not say that each of the 289 customers whose matters had proceeded to AFCA had accepted the determination. The absence of evidence of subsequent proceedings did not compel the inference that every dispute had been finally and satisfactorily resolved. It was therefore open to the primary judge to regard the complete absence of any commercial arbitration, in the context of the other evidence concerning cost and claim size, as relevant to the practical operation of the clause.

100    There is more force in the criticism of the statement that Plus500AU was unlikely ever to have a claim against a customer. The User Agreement did contain provisions which could conceivably give rise to claims by Plus500AU, as the appellants identify. But the significance of PJ at [148] did not depend upon establishing that a claim by Plus500AU was legally impossible. His Honour was considering the practical balance created by the contractual arrangements, including the extensive self-help powers available to Plus500AU and the absence of evidence that it had needed to sue a customer. The hypothetical examples identified on appeal do not establish material error in that assessment.

101    The appellants’ reliance upon AFCA is also important but does not answer the significant imbalance inquiry.

102    The primary judge did not ignore AFCA or treat it as valueless. His Honour expressly recognised it as a beneficial and low-cost dispute resolution mechanism.

103    I do not overlook Plus500 Limited’s point that AFCA is itself the product of a deliberate legislative scheme, including its asymmetrical binding effect in favour of complainants, or that cl 23.4 expressly preserved access to that scheme. But the question arises as to what occurs if the customer remains dissatisfied and wishes to pursue legal rights further. The availability of AFCA plainly ameliorated the practical burden imposed by cl 23.3, but it did not remove the fact that the contractual term prescribed arbitration as the ultimate adjudicative mechanism. Whether that remaining burden was sufficient to amount to a significant imbalance was a matter to be assessed with all the other circumstances, not answered merely by identifying AFCA as an available process.

104    I do not accept the submission that the primary judge impermissibly treated the unavailability of Pt IVA as itself sufficient to establish imbalance. The loss of a representative procedure was one feature of the practical operation of cl 23.3. As already explained, an agreement to arbitrate made by sophisticated commercial parties who consciously choose that forum may stand in a very different position. It does not follow that the practical consequence of excluding representative procedures is ignored when assessing a standard form consumer term. The error in the appellants’ submission is to move from the proposition that every arbitration agreement excludes ordinary curial processes to the proposition that the consequences of doing so can never bear upon the statutory assessment of unfairness.

105    The reliance upon Karpik does not alter this conclusion. It is true that the clause in Karpik was an express class action waiver and that cl 23.3 is an arbitration agreement rather than a term expressed in those terms. The primary judge did not equate the two provisions. The primary judge drew upon Karpik (at 673–674 [53]–[54] per Gageler CJ, Gordon, Edelman, Gleeson and Jagot JJ) in considering the practical significance of depriving a consumer of a mechanism by which an otherwise uneconomic claim might be vindicated. The difference between the contractual mechanisms is relevant, but it does not make the practical consequence of cl 23.3 irrelevant.

106    I would also reject the challenge concerning reasonable necessity. The interests identified by Plus500AU are legitimate interests. There can be no difficulty in recognising interests in finality, efficiency, procedural flexibility, confidentiality and a degree of procedural and forensic consistency in the resolution of disputes. The question posed by s 12BG(1)(b), however, was whether cl 23.3 was reasonably necessary to protect those interests. Plus500AU bore the relevant onus on that issue.

107    The primary judge was entitled to conclude that Plus500AU had not discharged it. The evidence that no customer dispute had proceeded to arbitration, together with the findings concerning the likely economics of claims, bore directly upon whether mandatory arbitration was reasonably necessary to achieve the asserted interest in efficient and cost-effective resolution. Similarly, the availability of IDR, mediation and AFCA demonstrated that significant aspects of those interests could be protected without mandatory arbitration.

108    As to the asserted interest in a common forum and procedure, the appellants are correct that reasonable necessity does not mean absolute necessity and that the availability of another conceivable contractual mechanism does not of itself prove that the impugned term was unnecessary. But the primary judge also considered whether cl 23.3 itself achieved the claimed commonality and noted the variability of arbitral procedure and seat. The appellants’ submission that the Resolution Institute Rules provided a meaningful common framework is a relevant consideration, but it does not demonstrate that his Honour was bound to find that the mandatory arbitration term was reasonably necessary to protect the asserted interest.

109    The coherence argument advanced by Plus500 Limited should be accepted, but only to a point. I accept its premise that, in applying evaluative statutory standards such as those contained in s 12BG, the Court does not disregard legislative choices made in related areas of law. The recognition and encouragement of commercial arbitration by the uniform arbitration legislation is therefore relevant to the content and application of those standards. So too, in the present context, is the legislative provision made for AFCA. The ASIC Act must not be applied on the footing that arbitration is inherently inferior or that an arbitration agreement is suspect merely because it excludes court proceedings or Pt IVA.

110    That said, there is no incoherence in applying the unfair contract terms provisions to an arbitration agreement according to their terms, including by considering the practical operation and consequences of the particular term where the statute requires those matters to be assessed. Legislative support for arbitration does not immunise every arbitration clause from generally applicable statutory protections concerning the circumstances and contractual setting in which the clause operates. Nor does the absence of a procedure analogous to Pt IVA from the uniform arbitration legislation amount to a legislative direction that the practical consequences of an arbitration term are irrelevant to the separate statutory inquiry required by s 12BG.

111    For the reasons given above, I am not persuaded that the appellants have demonstrated error in his Honour’s conclusion that cl 23.3 was an unfair term.

112    Before leaving Ground 1, I would make a more general observation concerning arbitration, transparency and the practical significance of excluding resort to Pt IVA, particularly because the contractual setting in which this case arises is now so commonplace. Nothing in these reasons should, of course, be understood as suggesting that an agreement to arbitrate is void or unenforceable merely because its operation prevents a contracting party from participating in a representative proceeding. Karpik (at 676–677 [61]–[64] per Gageler CJ, Gordon, Edelman, Gleeson and Jagot JJ) makes clear that Pt IVA does not, of itself, invalidate a contractual term which has the effect of excluding participation in a representative proceeding. But where claims are individually modest, the availability of Pt IVA may make the difference between rights which are capable of practical vindication and rights which, although legally sound, will never sensibly be pursued. The practical effect of insulating a potential respondent from claims because the cost of pursuing them individually makes their prosecution economically irrational is a matter of real significance.

113    This does not admit of a blanket rule. As I have already explained, Pt IVA class actions vary enormously in their scale and composition. At one end of the spectrum may be a relatively small and identifiable group of sophisticated commercial parties who have deliberately agreed, perhaps after negotiation and with legal advice, that disputes are to be resolved by arbitration. At the other end may be a vast class of consumers, each of whom has acquired an ordinary good or service upon standard terms presented electronically on a take-it-or-leave-it basis. Between those poles lie innumerable possibilities. The protean character of representative proceedings makes any rule which treats the exclusion of Pt IVA as having an invariant significance inapposite. What matters is the nature of the contract, the persons to whom the term is directed and the practical consequence of the term in the circumstances in which it operates.

114    There is, moreover, an air of fairyland about an approach to transparency which assumes that an ordinary consumer, by clicking a box recording agreement to lengthy standard terms, will ordinarily have read those terms and appreciated consequences which may be apparent to a lawyer. The point was explored during oral argument by reference to empirical work concerning the extent to which consumers read and understand electronic terms before signifying assent to them. One striking study involved 543 participants asked to join a fictitious social networking service. 93% agreed to the terms of service, although those terms included deliberately inserted “gotcha clauses” concerning, among other things, the provision of a first-born child as payment for access to the service. 98% of participants failed to identify the “gotcha clauses”. The terms of service were estimated to require 15 to 17 minutes to read, whereas participants spent an average of 51 seconds considering them: Jonathan A Obar and Anne Oeldorf-Hirsch, “The Biggest Lie on the Internet: Ignoring the Privacy Policies and Terms of Service Policies of Social Networking Services” (2020) 23(1) Information, Communication & Society 128–147.

115    Senior counsel for Mr AghaeiRad also drew attention during argument to empirical work directed specifically to consumers’ understanding of pre-dispute arbitration agreements. The published study to which counsel referred surveyed 1,071 adults in the United States and found, among other things, that only five of the 946 respondents who answered all of the relevant questions correctly understood the effect of the arbitration agreement upon all of the procedural rights examined, including access to a court, jury trial, participation in a class action and avenues of appeal: Roseanna Sommers, “What do consumers understand about predispute arbitration agreements? An empirical investigation” (2024) 19(2) PLoS ONE e0296179.

116    The statutory inquiry into transparency is, of course, objective and does not turn upon survey evidence. I do not rely upon the studies to establish any adjudicative fact. But they illustrate why a court must be chary of proceeding from the contractual consequence of clicking a box acknowledging terms to an assumption that the practical legal consequences of an arbitration provision have thereby been made transparent to the consumer.

117    None of this, of course, is inconsistent with the objective theory of contract discussed at the outset of these reasons. That theory explains why a consumer may be bound by terms which were not understood, but the statutory concern with transparency is directed differently. In my view, where a supplier chooses to include in a standard form consumer contract an arbitration provision which will have the practical effect of preventing a consumer from obtaining the benefits of a class action under Pt IVA, the extent to which that consequence is brought squarely to the consumer’s attention and explained in readily comprehensible terms may bear significantly upon transparency. In a lengthy electronic contract accepted by clicking a box, language sufficient to create a binding arbitration agreement may not, without more, transparently convey that an important practical consequence is the loss of the ability to participate in a class action and, with it, potentially the only economically viable means of vindicating a modest claim.

118    The degree of prominence necessary will depend upon the circumstances. To repeat, the variety of contractual relationships and of proceedings capable of being brought under Pt IVA makes a categorical rule inappropriate. But where the practical effect of the term is potentially to convert otherwise viable aggregated claims into a collection of claims which will never rationally be pursued individually, that consequence bears directly upon the statutory concern with transparency. A supplier seeking the considerable benefit of such a term in a mass standard form consumer contract may need to do more than leave its practical significance to be discovered by those atypical consumers so idiosyncratically patient to work it out for themselves.

119    For completeness, it is appropriate to make two further points concerning the context of representative proceedings.

120    First, caution is necessary in drawing upon the experience in the United States, where the interaction between arbitration agreements and aggregate litigation has generated sustained controversy, particularly following the decisions of the Supreme Court of the United States in AT&T Mobility LLC v Concepcion 563 US 333 (2011), and American Express Co v Italian Colors Restaurant 570 US 228 (2013). The enforcement of arbitration provisions which preclude class or collective proceedings has had significant consequences for the availability of aggregate litigation and has generated debate concerning the practical vindication of consumer claims: see, for example, Myriam Gilles and Gary Friedman, “After Class: Aggregate Litigation in the Wake of AT&T Mobility v Concepcion” (2012) 79(2) University of Chicago Law Review 623; Myriam Gilles, “Killing Them with Kindness: Examining Consumer-Friendly Arbitration Clauses after AT&T Mobility v Concepcion” (2012) 88(2) Notre Dame Law Review 825.

121    But the United States experience arises in a very different statutory setting. The present question is not whether arbitration agreements which have the consequence of excluding representative procedures are enforceable or unenforceable. The Australian unfair contract terms regime requires attention to the particular term, the contract as a whole and the statutory criteria prescribed by ss 12BF and 12BG of the ASIC Act. The American position is therefore instructive as to the practical consequences which may attend the widespread use of arbitration provisions in consumer contracts, but provides no additional assistance as to the application of the Australian statutory standard.

122    Secondly, and directly related to Pt IVA, it was common ground in the present appeals that the question whether cl 23.3 was an unfair term fell to be determined by reference to the contract between Plus500AU and Mr AghaeiRad and was, in that sense, an individual issue arising between the parties to that contract. It should not be assumed, however, that every issue concerning the operation of an arbitration provision in a class action must be individual in character. It is readily conceivable that a question concerning, for example, the proper construction of an arbitration term, might itself constitute a common question capable of final determination for the purposes of Pt IVA. If such a question were determined on a final basis, an order under s 33ZB could bind those group members who had not opted out. The distinction between a heterodox “declaration” sought in interlocutory process and the final determination, at an intermediate stage of a proceeding, of a discrete aspect of the controversy is well established: see Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896; (2017) 252 FCR 150 (at 156–157 [25]–[31]). In a representative proceeding, that distinction assumes particular importance because s 33ZB gives binding effect to a judgment upon group members other than those who have opted out. Ordinarily, therefore, if a party sought to bind absent group members to the resolution of such a common question, the procedural steps by which that determination was reached would need to accommodate the opt-out regime in s 33J (given that, prior to notice, group members may be unaware that the proceeding has been commenced on their behalf).

123    Ground 1 should be rejected.

G    ADDITIONAL GROUNDS: GROUNDS 2, 3 AND 4

124    Grounds 2 and 3 concern the primary judge’s alternative conclusion that reliance upon or enforcement of cl 23.3 would constitute unconscionable conduct contrary to s 12CB(1) of the ASIC Act. Ground 2 challenges that substantive conclusion. Ground 3 invokes s 12CB(2)(b), which provides that s 12CB does not apply to conduct engaged in only because a person “refers to arbitration a dispute or claim”. Ground 4 is consequential and proceeds on the footing that, if the conclusions challenged by the preceding grounds are set aside, there is no basis for concluding that the arbitration agreement is “null and void, inoperative or incapable of being performed” within s 8(1) of the CAA.

125    Given my conclusion on Ground 1, it is unnecessary to determine Grounds 2 and 3. I have concluded that the appellants have failed to demonstrate error in the conclusion of the primary judge that cl 23.3 was an unfair contract term. The void term cannot provide the foundation for the stay and referral sought by the appellants irrespective of whether his Honour was also correct to conclude that its enforcement would be unconscionable.

126    There is also a degree of artificiality in proceeding further. Grounds 2 and 3 necessarily require consideration of the alternative basis of decision upon the hypothesis that cl 23.3 is otherwise a valid and enforceable contractual term. But that hypothesis is contrary to the conclusion reached on Ground 1. The artificiality is heightened because several of the circumstances relied upon in the unconscionability analysis overlap with matters already considered in determining whether the term was unfair. Although the primary judge was quite properly required to determine the alternative case advanced before him, there is no occasion for this Court to decide an issue which can have no effect upon the disposition of these appeals.

127    It is nonetheless appropriate to identify briefly the substance of the arguments, given they were fully developed. Ground 2 was directed principally to the primary judge’s conclusion that enforcement of cl 23.3 would deny or substantially limit access to justice. The appellants contended that his Honour gave insufficient weight to the several dispute resolution mechanisms available to Mr AghaeiRad, particularly AFCA, and excessive significance to the practical economics of individual arbitration and the availability of litigation funding. They relied also upon the legal possibility of multiple or consolidated arbitrations, the undertakings proffered below, Mr AghaeiRad’s own education, financial circumstances and trading experience, and the legislative recognition of arbitration as a legitimate means of dispute resolution.

128    One particular point was that the primary judge found that Mr AghaeiRad would not pursue an unfunded individual arbitration, rather than that he could not afford to do so, and that a conclusion of statutory unconscionability should not depend upon the commercial preference of a litigation funder not to fund an arbitration. But during reply, Mr Darke expressly accepted that Plus500AU did not challenge the finding that Mr AghaeiRad would not go to arbitration and did not challenge the finding that a funder would not fund his particular arbitration. There were therefore substantial questions as to the significance properly to be attached to those accepted practical consequences when undertaking the evaluative inquiry required by ss 12CB and 12CC. They need not be resolved.

129    Ground 3 raised a more discrete issue of statutory construction. The appellants submitted that an application under s 8(1) of the CAA seeking a stay and referral is conduct engaged in because the applicant “refers to arbitration a dispute or claim” within s 12CB(2)(b). They criticised the distinction drawn by the primary judge between commencing or instituting an arbitration and invoking an arbitration agreement defensively after curial proceedings have commenced, and submitted that the exclusion could not depend upon which party first invoked a forum. They further submitted that the words “only because” were satisfied because no ulterior or collateral purpose for enforcement had been alleged or established.

130    I would only observe that there is, with respect, some force in the criticism of any rigid distinction between instituting an arbitration and applying under s 8(1) for a stay and referral. The applications before the primary judge expressly sought referral to arbitration, and it may be artificial to say that a party invoking s 8(1) and asking a court to refer the dispute is not, in any relevant sense, referring a dispute to arbitration. Whether the primary judge’s distinction was ultimately material, and the proper operation of the additional words “only because”, raise questions which it is unnecessary to decide.

131    Ground 4 may be disposed of shortly. It is expressly consequential upon the preceding grounds. The rejection of Ground 1 is itself sufficient to sustain the conclusion that cl 23.3 is void and therefore falls within the proviso to s 8(1) of the CAA. Ground 4 accordingly fails irrespective of the matters raised by Grounds 2 and 3.

H    THE NOTICE OF CONTENTION

132    Mr AghaeiRad relies upon two grounds of contention. The first is that an arbitration of his claims would not be a “commercial arbitration” within the meaning of the CAA; the second is that the claims advanced in the representative proceeding are not capable of settlement by arbitration. Neither contention arises for determination, because they were advanced as alternative grounds for upholding the orders below. In deference to the arguments presented, however, I will indicate briefly that I would not have been persuaded by either contention.

133    As to the first, the primary judge approached the question of whether the proposed arbitration was “commercial” by reference to the character of the claims, the underlying transactions and the relationship between the parties. In doing so, his Honour was entitled to have regard to the direction in the note to Art 1(1) of the UNCITRAL Model Law that “commercial” be given a wide interpretation, the express inclusion of “investment” among the examples of commercial relationships, and the nature and extent of Mr AghaeiRad’s repeated speculative CFD trading undertaken with the object of making money. The circumstance that he was a consumer, or that the User Agreement was a consumer contract for another statutory purpose, did not compel a different characterisation.

134    The second contention is also unpersuasive. As the High Court explained in Karpik (at 676 [62] per Gageler CJ, Gordon, Edelman, Gleeson and Jagot JJ), Pt IVA provides a procedural mechanism for the grouping of existing claims. Arbitrability is concerned with the substantive subject matter of the controversy, rather than the procedural form in which the claims are advanced. The representative character of the proceeding therefore does not of itself render Mr AghaeiRad’s underlying claims incapable of settlement by arbitration.

135    I would therefore have rejected both grounds of contention.

I    THE FORM OF RELIEF SOUGHT

136    Before leaving the matter, it is appropriate to return to the fact that the form of relief sought below would have brought the class action to a halt.

137    I have not been able to identify any submission made below on behalf of Mr AghaeiRad that the applications should be dismissed simply because an order staying the class action would affect the interests of group members who were not before the Court. No one raised the issue of notification of group members in relation to a proposed stay of the class action, in which they were represented persons. The relevant point was not identified in the notice of contention or written submissions as a separate basis upon which the orders below should be upheld. It only emerged during oral argument, when the Court raised the interaction between the relief sought and the protective provisions of Pt IVA. This was the case notwithstanding that the draft notices of appeal (served prior to the hearing) sought the same relief if leave were granted and the appeals allowed. Ordinarily, those matters may provide a powerful reason for declining to decide a point which was neither determined below nor properly raised by a respondent seeking to uphold the orders on an additional ground.

138    The present point is different, however, because it concerns the operation of Pt IVA and the interests of persons who, although absent from the courtroom, are persons for whose benefit and protection the representative procedure exists (and in respect of whom the Court has an important supervisory and protective role).

139    Part IVA confers upon the Court functions which go beyond the resolution of the dispute between the named parties. Group members need not consent to their inclusion in the proceeding and, subject to opting out, their claims may be affected by its conduct and disposition. The Part therefore contains a series of provisions directed specifically to the protection of their interests. A representative proceeding cannot be settled or discontinued without the approval of the Court: s 33V(1). If a representative party wishes to settle an individual claim and withdraw as representative party, the Court may permit another group member to be substituted, but before allowing the withdrawal, the Court must be satisfied that notice has been given to group members in sufficient time to seek substitution and that any such application has been determined: s 33W(2)–(4). Notice must similarly be given of an application by a respondent to dismiss a class action for want of prosecution, and the Court may at any stage direct that notice of any other matter be given to group members: s 33X(1)(b), (5).

140    All those provisions reflect a concern that the fate of a class action should not be determined adversely to group members simply because of something occurring in relation to the personal position of the applicant, without affording group members an opportunity to protect their own interests. Consistently with these protections, s 33T permits substitution of another group member where the existing applicant is unable adequately to represent the group, and s 33ZF empowers the Court, including on its own motion, to make any order it considers appropriate or necessary to ensure that justice is done in the proceeding.

141    The orders sought by the appellants (both below and on appeal) would have produced a result of considerable consequence for group members. The position of individual group members under any arbitration agreements to which they themselves may have been parties had not been adjudicated; they had not appeared on the applications; and no procedure had been adopted by which they were notified that the proceeding brought on their behalf might be brought to an end, in practical terms, by the relief sought. Further, the relief proposed, even on appeal, contemplated no opportunity being provided for a group member to come forward and seek to be substituted so that the class action could continue.

142    So significant an effect upon the interests of absent group members should not occur in that way. The statutory provisions concerning withdrawal, substitution and notice are instructive. It would be wholly incongruous if a respondent to a class action could obtain an order staying it because of an obligation affecting the applicant personally, without notice to group members and without affording a group member an opportunity to seek to carry on the class action.

J    CONCLUSION

143    Even apart from my conclusion on Ground 1, in furtherance of the protective role of the Court, I would have refused the orders sought by the appellants. Put simply, the form of relief sought could not have been granted consistently with the protective and supervisory role of the Court in relation to absent group members.

144    As noted above, leave was granted at the commencement of the oral hearing and the draft notice of appeal in each proceeding was ordered to stand as the notice of appeal. Each appeal should now be dismissed, with each appellant to pay the respondent’s costs of its appeal.

Associate:

Dated:    16 September 2026

REASONS FOR JUDGMENT

BANKS-SMITH AND STEWART JJ:

145    We have had the considerable advantage of reading, in draft, the reasons for judgment to be handed down by Lee J.

146    We agree that both appeals should be dismissed with costs.

147    We agree with the reasons of Lee J as to why appeal ground 1 should fail and why it is not necessary, and would be somewhat artificial, to deal with appeal grounds 2 and 3. We also agree that appeal ground 4 is consequential on grounds 1 to 3; the rejection of ground 1 is thus dispositive of ground 4. The matters raised by Mr AghaeiRad’s notice of contention do not arise. We prefer to express no view on them, or on appeal grounds 2 and 3.

Associate:

Dated:    16 September 2026