FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Channic Pty Ltd (No 4) [2016] FCA 1174

File number:

QUD 536 of 2013

Judge:

GREENWOOD J

Date of judgment:

30 September 2016

Catchwords:

CONSUMER LAW – consideration of contended contraventions of ss 113, 114, 115, 116, 117, 118, 121 and 123 of the National Consumer Credit Protection Act 2009 (Cth)

CONSUMER LAW – consideration of contended contraventions of ss 128, 129, 130, 131 and 133 of the National Consumer Credit Protection Act 2009 (Cth)

CONSUMER LAW – consideration of contended contraventions of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth)

CONSUMER LAW – consideration of contended contraventions of s 76 of the National Credit Code, Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth)

Legislation:

National Consumer Credit Protection Act 2009 (Cth), ss 113, 114, 115, 116, 117, 118, 121, 123, 128, 129, 130, 131 and 133

National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth), ss 167 and 169, Schedule 1

Australian Securities and Investments Commission Act 2001 (Cth), ss 12CB, 12CC

Acts Interpretation Act 1901 (Cth), s 36

Cases cited:

Paciocco v Australia and New Zealand Banking Group Limited (2016) 90 ALJR 835; [2016] HCA 28

Maxwell v Murphy (1957) 96 CLR 261

Jones v Dunkell (1959) 101 CLR 298

Hamilton v Whitehead (1988) 166 CLR 121; (1989) 7 ACLC 34

Yorke v Lucas (1985) 158 CLR 661

Re Waterfront Investments Group Pty Ltd (in liq) (2015) 105 ACSR 280; [2015] NSWSC 18

Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 5) (2014) 98 ACSR 347.

Date of hearing:

1 December 2014 to 10 April 2015

Date of last submissions:

10 April 2015

Registry:

Queensland

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Category:

Catchwords

Number of paragraphs:

1850

Counsel for the Applicant:

Mr R Derrington QC and Mr S Seefeld

Solicitor for the Applicant:

Mr H Copley, Australian Securities and Investments Commission

Counsel for the Respondents:

Dr R Spence

Solicitor for the Respondents:

Dr R Spence, Integrity Criminal Legal

ORDERS

QUD 536 of 2013

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Applicant

AND:

CHANNIC PTY LTD (ACN 141 145 753) (and others named in the Schedule)

First Respondent

JUDGE:

GREENWOOD J

DATE OF ORDER:

30 SEPTEMBER 2016

THE COURT ORDERS THAT:

1.    The applicant is directed to submit to the Court within 14 days proposed declarations and orders to be made in conformity with the findings in the reasons for judgment published today.

2.    The costs of and incidental to the proceeding are reserved for later determination.

3.    The parties are directed to file submissions in relation to the costs of the proceedings within 21 days.

4.    The question of the determination of a pecuniary penalty in respect of the various contraventions is to be determined in a separate proceeding.

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

REASONS FOR JUDGMENT

GREENWOOD J:

PART 1: The Statutory Background

1    In 2009, the Commonwealth Parliament enacted the National Consumer Credit Protection Act 2009 (Cth) (the “NCCP Act”). Schedule 1 to the NCCP Act is the National Credit Code.

2    Sections 3 to 337 of the NCCP Act (essentially the entirety of the NCCP Act) and the National Credit Code (having effect as a law of the Commonwealth; s 3, NCCP Act) commenced on 1 April 2010 (by Proclamation), subject to transitional arrangements contained in the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) (the “Transitional Provisions Act).

3    Prior to the enactment of the NCCP Act and the Transitional Provisions Act, the States and Territories had made provision for, put simply, a statutory regime for the regulation of transactions and arrangements concerning the provision of credit or advice about credit, to consumers, described in s 4(1) of the Transitional Provisions Act, as the “old Credit Code”. The object of Schedule 1 of the Transitional Provisions Act is to provide a “smooth transition” from the old Credit Code “of a referring State or Territory” to the new National Credit Code under the NCCP Act whilst accommodating the principles set out at Item 2(1)(a) and (b) of Schedule 1 of the Transitional Provisions Act.

4    That transition was effected by Schedule 1 to the Transitional Provisions Act. Relevantly for present purposes, Items 1 to 21 of Schedule 1 commenced on 1 April 2010. Item 19 of Schedule 1 provides that Chapter 3 of the NCCP Act, which addresses the topic of “responsible lending conduct” applies on and after 1 January 2011 being a date described as the “Chapter 3 start date” (rather than 1 April 2010). Notwithstanding the Chapter 3 start date of 1 January 2011, Item 19(2) of Schedule 1 provides that 31 sections of Chapter 3 of the NCCP Act apply in relation to particular conduct in the period commencing on 1 July 2010 and ending on 1 January 2011 (when Chapter 3 generally starts).

5    Thus, the relevant interim transitional period is 1 July 2010 to January 2011.

6    Relevantly for present purposes, ss 128, 129, 130, 131 and 133 of Chapter 3 applied from 1 July 2010 in relation to particular conduct and so too ss 115, 116, 117, 118 and 123 of Chapter 3 from 1 July 2010.

7    Sections 113, 114 and 121 apply from 1 January 2011.

8    Chapter 2 of the NCCP Act casts an obligation on all persons who engage in “credit activities” to be licensed under the NCCP Act and in general a person cannot engage in a credit activity if the person does not hold an “Australian credit licence” within the meaning of s 35 of the NCCP Act.

9    Schedule 2 to the Transitional Provisions Act addresses the topics of transitional authorisation of persons to engage in credit activities and prohibitions upon engaging in credit activities in the period 1 July 2010 to 31 December 2010 and also from 1 January 2011 to 30 June 2011. Part 3 of Schedule 2 addresses the topic of registration of persons who engage in credit activities and the application process for registration in the period 1 April 2010 to 30 June 2010 (among other matters).

10    Item 36(2) of Schedule 2 provides that ss 128, 129, 130, 131 and 133 of the NCCP Act apply to a “registered person” during the period 1 July 2010 to 1 January 2011 as if all references to a licensee in those provisions were references to a registered person or a licensee and, on the same footing, s115, 116, 117, 118 and 123 apply in the same period to a registered person.

11    Sections 113, 114 and 121 apply from 1 January 2011.

12    It is now necessary to say something about these provisions, in context, as they applied at the time of the conduct in issue.

13    The NCCP Act was introduced to prescribe conduct of relevant participants where: “credit products in the market has made it much less straightforward for consumers to determine whether a product is suitable for their needs and [has] increased their dependence on intermediaries” and “[a]s a result there are considerable information asymmetries that justify regulatory intervention”: Revised Explanatory Memorandum for the National Consumer Credit Protection Bill 2009 (the “REM”), p 28.

14    As to the obligations cast upon credit providers by the NCCP Act, the REM for the Bill at [3.25] says this:

The primary obligations in relation to the provision of credit (for example, lending); or the provision of credit assistance (for example, suggesting a particular credit contract or assisting with a particular credit contract) are: to make an assessment that the loan is not unsuitable for the consumer; and to assess that the consumer has the capacity to meet the financial obligations under the contract without substantial hardship.

15    As already mentioned, Chapter 3 of the NCCP Act is concerned with the topic of “responsible lending conduct” and Part 3-2 applies to licensees who are credit providers. Section 128 provides that a licensee must not enter into a credit contract with consumer, who will be the debtor under that contract, on a day (called the “credit day”) unless the licensee has, within 90 days before the credit day: made an assessment that accords with s 129 and covers the period in which the credit day occurs; and made the inquiries and verification required by s 130. The words in italics represent the essential elements of the section.

16    A credit contract is a contract under which credit is or may be provided to which the National Credit Code applies: s 5, NCCP Act; ss 4 and 5, National Credit Code. It is uncontroversial in these proceedings that each loan contract as recited at [73] of these reasons is a credit contract. It is also uncontroversial that the borrower described at [73] of these reasons is a consumer: s 5, NCCP Act.

17    The assessment required by s 128 of the NCCP Act is an assessment that specifies the period the assessment covers and one that assesses whether the credit contract, if entered in that period, will be unsuitable for the consumer: s 129(a) and (b), NCCP Act.

18    As to the inquiries required by s 128, the licensee must do five things before making the assessment in accordance with s 129. Those five things, by s 130(1)(a) to (e) are:

(a)    make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and

(b)    make reasonable inquiries about the consumer’s financial situation; and,

(c)    take reasonable steps to verify the consumer’s financial situation; and

(d)    make inquiries prescribed by the regulations about any matter prescribed by the regulations; and

(e)    take any steps prescribed by the regulations to verify any matter prescribed by the regulations.

19    The assessment of whether the credit contract is unsuitable for the consumer is in some respects taken out of the hands of the licensee (or is, at least, the subject of additional statutory considerations) as s 131 provides that the licensee “must assess” the credit contract as unsuitable for the consumer if, at the time of assessment, it is likely, that, relevantly, the consumer will be unable to comply with the consumer’s financial obligations under the contract or could only comply with those obligations with substantial hardship (if the contract is entered in the period covered by the assessment); or the contract will not meet the consumer’s requirements or objectives if entered in the period covered by the assessment: s 131(2).

20    Section 131(4) sets out the only information to be taken into account for the purposes of s 131(2).

21    If the consumer requests a copy of the assessment before entering into the credit contract, the licensee must give a copy of it to the consumer before entering into the contract: s 132.

22    A credit contract with a consumer “is unsuitable” for the consumer if, at the time it is entered, relevantly: it is likely that the consumer will be unable to comply with his or her financial obligations under it or could only comply with those obligations with substantial hardship; or, the contract does not meet the consumer’s requirements or obligations: s 133(2). If, having regard to s 133(2), a credit contract is unsuitable for a consumer (who will be a debtor under it), the licensee must not enter into the contract: 133(1).

23    In determining whether the credit contract is unsuitable under s 133(2), the only information to be taken into account is information that satisfies both of the following integers: (a) the information about the consumer’s financial situation, requirements or obligations; (b) the information the licensee had reason to believe was true or would have had reason to believe was true if the licensee had made the inquiries or verification under s 130: 133(4).

24    Apart from obligations cast upon credit providers, Division 4 of Chapter 3 (Part 3-1) casts obligations upon credit assistance providers.

25    A person provides credit assistance to a consumer if, by dealing directly with the consumer (or his or her agent) “in the course of, as part of, or incidentally to”, a business carried on by the person (or another person), the person, relevantly: suggests that the consumer apply for a particular credit contract with a particular credit provider (s 8(a), NCCP Act); or assists the consumer to apply for a particular credit contract with a particular credit provider (s 8(d), NCCP Act)).

26    The obligations cast upon such a person are very similar to the obligations cast upon a credit provider.

27    By s 115(1) a licensee must not provide credit assistance to a consumer on a day (called the “assistance day”) by, relevantly, suggesting that the consumer apply, or assisting the consumer to apply, for a particular credit contract with a particular credit provider (s 115(1)(a)) unless the licensee has within 90 days before the assistance day: made a preliminary assessment which accords with s 116(1) and which covers the period proposed for the entering of the contract (s 115(1)(c)); and made the inquiries and undertaken the verification in accordance with s 117 (s 115(1)(d)).

28    The preliminary assessment must specify the period the assessment covers (s 116(1)(a)) and assess whether the credit contract, if entered into, will be unsuitable for the consumer (s 116(1)(b)).

29    As to the inquiries and verification required by s 115(1)(d), the licensee must, before making the preliminary assessment do five things required by s 117(1) and they are:

(a)    make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and

(b)    make reasonable inquiries about the consumer’s financial situation; and

(c)    take reasonable steps to verify the consumer’s financial situation; and

(d)    make inquiries prescribed by the regulations about any matter prescribed by the regulations; and

(e)    take any steps prescribed by the regulations to verify any matter prescribed by the regulations.

30    The credit contract will be unsuitable for the consumer if, at the time of the preliminary assessment, it is likely that, relevantly: the consumer will be unable to comply with the consumer’s financial obligations under the contract or could only comply with them with substantial hardship (s 118(2)(a)); or the credit contract will not meet the consumer’s requirements or objectives (s 118(2)(b)), if, in either case, the contract is “entered in the period proposed for it to be entered”.

31    If the credit contract will be unsuitable for the consumer, by reason of the s 118(2) factors, the licensee “must”, for the purposes of the preliminary assessment under s 116(1), “assess that the contract will be unsuitable for the consumer”: s 118(1).

32    The credit contract also will be unsuitable for the consumer if at the time the licensee provides the credit assistance it is likely that, relevantly, first, the consumer will be unable to comply with the consumer’s financial obligations under the contract or could only comply with those obligations with substantial hardship, or, second, the contract will not meet the consumer’s requirements or obligations, if in either case, the contract is entered into in the period proposed for it to be entered: 123(2)

33    Section 123(1) provides that a licensee must not provide credit assistance to a consumer by suggesting that the consumer apply, or by assisting the consumer to apply, for a particular credit contract with a particular credit provider if the credit contract will be unsuitable for the consumer under s 123(2): 123(1).

34    Sections 113, 114 and 121 of Chapter 3 of the NCCP Act commenced on 1 January 2011. Section 113(1) provides that a licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to provide credit assistance to a consumer in relation to a credit contract, give the consumer the licensee’s credit guide in accordance with s 113(2). Section 113(2) sets out approximately 16 matters the licensee’s credit guide must address.

35    Section 114 provides that a licensee must not provide credit assistance of the kind described, relevantly, at s 114(1)(a), unless the consumer has been given a quote in accordance with s 114(2), the consumer has signed and dated the quote or otherwise accepted it and has been given a copy of the “accepted quote”.

36    Section 121 provides that the licensee must at the same time as providing credit assistance to a consumer (by, relevantly, suggesting that the consumer apply, or by assisting the consumer to apply, for a particular credit contract with a particular credit provider), give the consumer a credit proposal disclosure document that satisfies the mandatory requirements of s 121(2).

37    Section 76(1) of the National Credit Code provides, relevantly, that the Court may, if satisfied on the application of a debtor or mortgagor, that, in the circumstances relating to the relevant credit contract or mortgage at the time it was entered into, the contract or mortgage was unjust, re-open the transaction that gave rise to the contract or mortgage. Section 76(2) provides, relevantly, that in determining whether a term of a particular credit contract or mortgage 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 16 matters set out at (a) to (p) of s 76(2), including “any … relevant factor”. In determining whether a credit contract is unjust, the Court is not to have regard to any injustice arising from circumstances that were not reasonably foreseeable when the contract was entered into: s 76(4).

38    The position in relation to the application of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (the “ASIC Act”) requires a little elaboration. In the period, relevantly, 2010 and up to and including 31 December 2011, s 12CB of the ASIC Act provided that a person must not, in trade or commerce, in connection with the supply (or possible supply) of financial services to a person, engage in conduct that is, in all the circumstances, unconscionable: s 12CB(1). Financial services in this section is a reference to financial services of a kind ordinarily acquired for personal, domestic or household use: s 12CB(6). The statutory “requirement” of s 12CB(1) requires the Court to consider the conduct of the supplier of the financial service in all the circumstances”: Paciocco v Australia and New Zealand Banking Group Limited (2016) 90 ALJR 835; [2016] HCA 28, Keane J at [294]. See, however, the circumstances falling within s 12CB(4)(a), below.

39    Without limiting the matters to which the Court may have regard for the purpose of determining whether a supplier of a financial service to a consumer has contravened s 12CB(1), s 12CB(2) sets out five matters to which the Court may have regard. They are these:

(a)    the relative strengths of the bargaining positions of the supplier and the consumer; and

(b)    whether, as a result of conduct engaged in by the supplier, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)    whether, the consumer was able to understand any documents relating to the supply or possible supply of the services; and

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the services; and

(e)    the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent services from a person other than the supplier.

40    For the purpose of determining whether a person has contravened s 12CB(1), the Court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention: s 12CB(4)(a).

41    So far as the supply of financial services is concerned, s 12CC(1) prohibits (as the section stood up to and including 31 December 2011) a person from engaging in conduct that is, in all the circumstances, unconscionable, in connection with the supply (or possible supply) of those services to another person (other than a listed public company), where the acquisition of the service is or would be for the purpose of trade or commerce (that is, a business transaction rather than a consumer transaction): s 12CC(1)(a) and s 12CC(6).

42    Without “in any way” (a phrase not present in s 12CB(1)) limiting the matters to which the Court may have regard in determining whether a person has contravened s 12CC(1), the Court may have regard to 12 matters set out at s 12CC(2)(a) to (k). Apart from the particular matter of the business capacity of the recipient of the service for the purposes of s 12CC(1), the factors at s 12CC(2)(a) to (e) are in the same terms as the factors recited at s 12CB(2)(a) to (e) in relation to consumer transactions.

43    However, ss 12CB and 12CC were amended effective from 1 January 2012 giving rise to the “new s 12CB” and the “new s 12CC” of the ASIC Act, with the result that the earlier provisions were, in effect, unified in a single statutory prohibition upon unconscionable conduct.

44    The new s 12CB prohibits a person from engaging in conduct, in trade or commerce, that is, in connection with the supply of financial services (relevantly for these proceedings), unconscionable, in all the circumstances.

45    The new s 12CB and the prohibition within it no longer retains the prior distinction between the supply of financial services “of a kind ordinarily acquired for personal, domestic or household use” (a consumer transaction: the old ss 12CB(1) and 12CB(5)) on the one hand, and the supply of financial services in business transactions (the old ss 12CC(1) and 12CC(6)) on the other hand.

46    Although the language of the new s 12CB(1), as to the supply of financial services, is in similar terms to the earlier s 12CB(1), it is nevertheless an entirely new provision not limited to what might loosely be called consumer transactions yet applying to them according to the integers of the new section and also other supply circumstances.

47    The new s 12CC(1) sets out 12 matters to which the Court may have regard in determining whether a person has contravened the new unified s 12CB(1) in the supply of financial services, without limiting the matters to which the Court may have regard. In other words, the 12 matters recited at s 12CC(1) are non-exhaustive. The 12 matters set out in the new s 12CC(1)(a) to (l) are essentially in the same terms as those set out in the earlier s 12CC(2)(a) to (k) although those earlier factors were expressly considerations relevant to possible contraventions of the bifurcated version of the prohibition as it applied to financial supply transactions to business recipients.

48    As mentioned, that distinction is now gone.

49    The new s 12CB(4) sets out the intention of the Parliament with respect to the new s 12CB.

50    The new s 12CB(3) provides (like the earlier s 12CB(4)(a)), that in determining whether a person has contravened s 12CB(1), the Court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention. The new s 12CB(3)(b) provides that in determining whether a person has contravened the new s 12CB(1), the Court “may have regard to conduct engaged in, or circumstances existing, before the commencement of this section” [emphasis added]: that is, prior to 1 January 2012. The earlier s 12CB contains s 12CB(4)(b) which is in the same terms as s 12CB(3)(b) except, of course, that subsection operates by reference to the commencement date of the earlier s 12CB.

51    Orthodoxy requires that the relevant prohibition (as a matter of substantive law) against which the conduct of Channic is to be considered is s 12CB as it stood (in relation to conduct up to 31 December 2011) at the time of the contended contraventions informed by the matters at s 12CB(2) as it stood, among any other considerations the Court regards as relevant to the conduct, in all the circumstances. The new ss 12CB(1) and 12CC(1) apply to the conduct of the first respondent occurring on and from 1 January 2012. Section 7(2)(b) and (c) of the Acts Interpretation Act 1901 (Cth) provide that if an Act amends an Act or part of an Act, the amendment does not affect the previous operation of the affected Act (or part) or affect any liability accrued or incurred under the amended Act. The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect liabilities which the law had defined by reference to past events (leaving aside the application of the difficult distinction between substantive rights and liabilities on the one hand and procedural and remedial matters on the other hand): Maxwell v Murphy (1957) 96 CLR 261 at 267, Dixon CJ.

52    Having regard to new s 12CB(3)(b), a question arises of whether the new ss 12CB and 12CC evince a parliamentary intention to apply retrospectively to conduct prior to 1 January 2012. Obviously enough, the new s 12CB in some respects looks back to earlier facts or events in the sense that s 12CB(3)(b) enables the Court to have regard to conduct engaged in, or circumstances existing before 1 January 2012. This provision does not mean, however, that the content of the prohibition in the new s 12CB(1) applies to conduct prior to 1 January 2012. It simply means that in determining whether a person has contravened the new s 12CB(1) by engaging in unconscionable conduct, in all the circumstances, on and from 1 January 2012, the Court may have regard to conduct occurring before that date or circumstances existing before that date.

53    There is no express or inferential intention to apply the new s 12CB or s 12CC to facts or events prior to 1 January 2012.

54    That being so, a further question arises, in relation to the application of the pre-amendment provisions, of whether the seven further factors set out in s 12CC(2) as applying to “business transactions” nevertheless relevantly inform the question of whether a person has contravened s 12CB(1), as the five factors set out at s 12CB(2) (see [39] of these reasons) are non-exhaustive considerations which do not operate to limit the matters to which the Court may have regard for the purpose of determining whether a person has engaged in unconscionable conduct in the supply of financial services.

55    It seems to me that those additional seven factors at s 12CC(2) may well be matters to which the Court may have regard in determining whether a contravention of s 12CB(1) has occurred in all the circumstances of the case. Those matters may give “guidance” as to the content of the notion of unconscionability. They may assist in setting a framework for the values that lie behind the notion of the relevant conscience of the supplier of the financial service to a consumer. In that regard, see the observations of Allsop CJ in Paciocco v Australia and New Zealand Banking Group Limited (2015) 236 FCR 199; [2015] FCAFC 50 at 285. Allsop CJ also took the view that the factors contained in the new s 12CC(1) also inform the content of the notion of the relevant conscience of the parties. As already mentioned, the 12 factors in the new s 12CC(1) are in substantially the same terms as the 12 factors in the earlier provision, s 12CC(2)(a) to (k). The statute, by s 12CB(2) gives particular attention to the five factors identified at [39] of these reasons although those matters, do not limit, expressly, the matters to which the Court may have regard for the purpose of determining whether a person, in trade or commerce, has engaged in unconscionable conduct in the supply of financial services. Those other matters that might be taken into account include the additional matters mentioned at s 12CC(2)(f) to (k) where relevant and material having regard to the circumstances of engagement between the supplier of the financial service and the individual consumer. These reasons are arranged in the following way according to the following topics:

PART

SUBJECT MATTER

PAGE

Part 1

The statutory background

1

Part 2

The originating application and some related matters

12

Part 3

The position reached by the parties on the face of the pleadings

17

Part 4

The questions to be addressed so far as the NCCP Act is concerned

37

Part 5

The admissions

40

Part 6

The evidence of Ms Adele Kingsburra

46

Part 7

The Kingsburra documents

72

Part 8

The evidence of Mr Kevin Humphreys

79

Part 9

The evidence of Ms Prunella Kathleen Harris

96

Part 10

The evidence of Ms Kerryn Gerthel Smith

122

Part 11

The evidence of Mr William Damien Noble (called “Damien”) and Ms Joan Cecily Noble

146

Part 12

The evidence of Ms Charlotte Mudu

169

Part 13

The evidence of Ms Donna Gayle Yeatman

186

Part 14

The evidence of Ms Muriel Grace Elizabeth Dabah

201

Part 15

The evidence of Ms Rhonda Lorraine Brim

215

Part 16

The evidence of Mr Vance Henry Gordon and Ms May Estell Stanley

235

Part 17

The evidence of Ms Leandrea Rose Raymond

245

Part 18

The precision in the evidence and the conduct of the proceedings

258

Part 19

The evidence of Mr Colin Hulbert

259

Part 20

The evidence of Mr Hulbert given in cross-examination

279

Part 21

The evidence of Mr Kevin Foo

310

Part 22

The evidence of Mr Michael Southon

311

Part 23

The evidence of Ms Tegan Green

323

Part 24

The evidence of Mr Shayne Muldoon and Ms Felilta Sky Eckermann

335

Part 25

The evidence of Ms Heidi Stafford

344

Part 26

The evidence of Ms Marnie Toohey

353

Part 27

The evidence of Ms Bobbie-Jo Lourie

365

Part 28

The evidence of Ms Angel Pokia

374

Part 29

The evidence of Mr Wayne McKenzie

382

Part 30

The evidence of Ms Georgina Bataillard

394

Part 31

The evidence of Mr Haydn Cooper

399

Part 32

The evidence of Mr Spiro Vasilakis

400

Part 33

Assessment of the evidence and conclusions on the questions in issue

427

PART 2: The Originating Application and some related matters

56    By its originating application, the applicant, the Australian Securities and Investments Commission (ASIC) seeks the following declarations, injunctions and orders against the respective respondents.

57    The first respondent is Channic Pty Ltd (Channic).

58    As against Channic, ASIC seeks three declarations.

59    First, a declaration pursuant to s 166 of the NCCP Act that Channic has contravened ss 128, 130, 131 and 133 of the NCCP Act.

60    Second, a declaration that credit contracts entered into by Channic with consumers as described in the statement of claim were unjust within the meaning of s 76 of Schedule 1 to the NCCP Act otherwise described as the National Credit Code: as to the credit contracts see [73] of these reasons.

61    Third, a declaration that Channic, by engaging in the conduct recited in the statement of claim, engaged in unconscionable conduct in contravention of s 12CB of the ASIC Act.

62    The first two declarations form the basis upon which ASIC seeks the imposition of civil pecuniary penalties pursuant to s 167 of the NCCP Act on Channic for contraventions of ss 128, 130, 131 and 133 of the NCCP Act.

63    ASIC seeks an injunction pursuant to s 177 of the NCCP Act to restrain Channic from further contraventions of those sections of the NCCP Act and an injunction pursuant to s 12GD of the ASIC Act to restrain Channic from further engaging in unconscionable conduct within the meaning of s 12CB of the ASIC Act in relation to Channic’s credit contracts with the consumers described in the table at [73] of these reasons or in relation to Channic’s entry into any future credit contracts.

64    ASIC also seeks orders pursuant to s 76 of the National Credit Code that each of the credit contracts made between Channic and the borrowers described at [73] of these reasons be reopened and the borrowers be further relieved of any liability to Channic in relation to the credit contracts, the credit contracts be set aside ab initio and/or Channic repay to each of the borrowers the amounts paid by each of them under the respective credit contracts.

65    The second respondent is Cash Brokers Pty Ltd (CBPL).

66    As against CBPL, ASIC seeks a declaration that CBPL has contravened ss 113, 114, 115, 117, 118, 121 and 123 of the NCCP Act.

67    ASIC also seeks the imposition of civil pecuniary penalties pursuant to s 167 of the NCCP Act on CBPL for contraventions of ss 113, 114, 115, 117, 118, 121 and 123 of the NCCP Act. ASIC seeks an injunction under s 117 of the NCCP Act to restrain CBPL from further contravening these provisions in relation to the entry by CBPL into any future credit contracts.

68    The third respondent is Mr Colin William Hulbert.

69    At the time of the pleaded conduct, Mr Hulbert was the sole shareholder, sole director and controlling mind of Channic. He was also the duly authorised agent of that entity. He was the sole director of and a shareholder in CBPL. He was the controlling mind of that company and its duly authorised agent. As against Mr Hulbert, ASIC seeks a declaration that Mr Hulbert has contravened ss 113, 114, 115, 117,118, 121, 123, 128, 130, 131 and 133 of the NCCP Act. ASIC also seeks the imposition of civil pecuniary penalties on Mr Hulbert for contraventions of those sections of the NCCP Act. ASIC seeks an injunction restraining Mr Hulbert from further contravening those sections of the Act.

70    The originating application is supported by an extensive statement of claim (220 pages) setting out all of the material facts concerning the contended conduct contraventions. The allegations made by ASIC fall into three categories. ASIC describes, as the “principal category”, those contended contraventions consisting of breaches of the responsible lending obligations under Chapter 3 of the NCCP Act by Channic and CBPL and the involvement of Mr Hulbert in those contraventions.

71    The second category consists of allegations of unconscionable conduct under s 12CB of the ASIC Act by Channic.

72    The third category consists of allegations that the loan contracts were “unjust transactions” under s 76 of the National Credit Code.

73    By its statement of claim, ASIC contends that contravening conduct occurred on the part of Channic in connection with steps taken (or not taken) by it in relation to transactions concerning the following consumers (in the order of the pleading) who entered into loan contracts (credit contracts) with Channic on the following dates in relation to the purchase of the following motor vehicles and that contravening conduct occurred on the part of CBPL in the provision of credit assistance to those consumers (except for Leandrea Rose Raymond) concerning those credit contracts:

Borrower

Vehicle

Loan Contract Date

Adele Dorothea Kingsburra

1997 Hyundai Elantra SE Sedan

13 July 2010

Prunella Kathleen Harris

1997 Ford Fairmont Ghia EL Sedan

20 September 2010

Vance Henry Gordon & Estell May Stanley

1993 Holden Barina Hatchback

29 September 2010

Rhonda Lorraine Brim

1990 Ford Spectron Station Wagon

22 September 2010

Kerryn Gerthel Smith

2001 Holden Commodore VX Station Wagon

15 April 2011

Joan Cecily Noble & William Damien Noble

1995 Mitsubishi Pajero GLX

2 March 2011

Muriel Grace Elizabeth Dabah & Estelle Harris

1998 Toyota Camry Conquest V2OR Sedan

16 July 2010

Charlotte Mudu & Aaron Elliott

1994 Holden Apollo Sedan

14 December 2010

Donna Gayle Yeatman & Farren Yeatman

1997 Holden Commodore Executive VT Sedan

16 September 2010

Leandrea Rose Raymond

1996 Hyundai Excel Hatchback

25 June 2012

74    All the vehicles were purchased by the consumers from an entity called ANG Hulbert & Associates Pty Ltd (“ANG”) trading as either “SuperCheap Auto” or “SuperCheap Car Sales” which conducted the business of selling used motor vehicles initially from premises at 484 Mulgrave Road, Earlville (a suburb of Cairns) in Queensland and then from 132 Spence Street, Parramatta Park (Cairns) in Queensland. Mr Hulbert was the sole director, sole shareholder and controlling mind of ANG.

The early history of the matter

75    The history of the matter is a little unusual in the following sense.

76    The respondents are represented (and were represented in the conduct of the trial) by Dr Robert Spence who conducts practice as a solicitor under the description “Integrity Criminal Legal” of Elizabeth Street, Sydney. On 3 October 2013, Dr Spence wrote an open letter to ASIC in which he said this in relation to these proceedings framed by the originating application and the statement of claim:

I confirm that I am the solicitor acting for the Respondents in this matter. Mr Anthony Collins, barrister-at-law has a received a brief to appear in this matter.

Mr Hulbert has confirmed on behalf of the Respondents that they do not wish to contest any of the orders set out in the application filed in the Queensland Federal Court by the Applicant.

I am obliged for your co-operation in agreeing to communicating directly with Mr Collins in relation to these proceedings.

77    On 8 October 2013 the matter came before the Court for the first time for directions. All of the respondents were represented by Mr A.P.J. Collins of counsel. ASIC was represented by Mr Derrington QC. An affidavit was read by ASIC’s counsel exhibiting Dr Spence’s letter of 3 October 2013: affidavit Scott Edward Seefeld sworn 8 October 2013. ASIC also relied on an affidavit of Jamie William Black sworn 3 October 2013.

78    Mr Derrington observed that the statement of claim had been served (on 20 August 2013) but no defence had been filed and that it appeared that the respondents did not intend to file a defence as they had chosen not to contest the matters of fact set out in the statement of claim: T, p 3, lns 5-10; T, p 2, lns 22-23, 8 October 2013. Thus the matter would proceed to a hearing in which the questions of fact were to be uncontested. Mr Derrington correctly described the statement of claim as “both long and complicated” (T, p 3, ln 30). That is so because it asserts a lengthy factual matrix against the respondents involving all claims in respect of all consumers coupled with an accessorial liability claim against Mr Hulbert in respect of the Channic contraventions. It was contemplated that a less complicated statement of agreed facts would be formulated upon which the Court could and would rely. The statement of agreed facts was to be supported by written submissions. A discussion took place about possible dates for hearing the matter, preferably over a single day. Mr Collins seemed to embrace those propositions and suggested that the matter would conclude inside one day, on the footing as suggested.

79    Thereafter, the parties attempted to agree upon a statement of facts to be put to the Court. It seems that a document of approximately 123 pages had been formulated on behalf of ASIC setting out all the relevant factual matters. Mr Collins described the document as containing approximately 800 facts based on a pleading containing over 400 paragraphs. Emphasis was placed by ASIC upon the earlier unqualified unequivocal acceptance of the statement of claim with no defence having been filed.

80    Mr Collins explained at the further directions hearing on 4 February 2014 that there were aspects of the statement of claim and aspects of the proposed agreed statement of facts that were perceived by the respondents to be not “strictly accurate”. Mr Collins observed that since agreement had not been reached about the proposed statement of facts, ASIC had proposed, prior to the directions hearing, that the respondents put on a defence: T, p 6, lns 30-33, 4 February 2014. As to the statement of claim, Mr Collins observed that “the vast majority are accepted, some are accepted but with slight nuances or qualifications”. Mr Collins also observed that he did not “want it to be said that there’s some sort of about-face” because “the vast majority will be accepted”: T, p 8, lns 8-9; 17-18. Proposed directions were then discussed for the filing of a defence. The scope of the matters which would then be in issue would be revealed.

81    As things transpired, Mr Collins ceased to act for the respondents.

82    DSpence thereafter acted for them.

83    A defence was put on by DSpence. It was struck out as being embarrassing in the technical sense with leave given to re-plead in conformity with the Federal Court Rules 2011. An amended defence was then filed. By the defence, DSpence pleaded to not only the material facts but each of the individual particulars in the lengthy and complicated statement of claim. Accordingly, the amended defence is also a lengthy and complicated document.

84    By the amended defence a range of matters are admitted by the respondents. Many other matters are denied or the subject of a contention that the matters are not within the knowledge of the respondents. Statements were put on. All of ASIC’s witnesses were required for cross-examination by DSpence. The proceeding proceeded to trial.

85    It is now necessary to address aspects of the factual matters which are admitted on the pleadings and identify the range of questions now in controversy. In doing so, I will simply recite the relevant matters without attributing each of them to paragraphs of the respective pleadings.

PART 3: The position reached by the parties on the face of the pleadings

86    Unless otherwise mentioned, the following matters (relevant to all material times in the proceeding) are admitted and thus not in issue.

87    ASIC has standing to bring the proceeding for the relief it seeks.

88    ANG engaged in the business of selling used motor vehicles. It advertised under the prominent name “SUPER CHEAP” followed by the words “Car Sales” (“Supercheap”). Mr Hulbert was its sole director, sole shareholder and controlling mind. Supercheap operated its used car sales business from at least 16 June 2010 to 20 September 2011 at and from premises at 484 Mulgrave Road, Earlville Cairns (the “first premises”) and from 21 September 2011 at and from premises at 132 Spence Street, Parramatta Park, Cairns (the “second premises”).

89    Channic engaged in the business of providing credit for profit. It did so as trustee for the “AHA New Start Finance Trust”. Mr Hulbert was the sole director, controlling mind and authorised agent of Channic. The company search shows that Mr Hulbert was Channic’s sole shareholder.

90    CBPL was engaged in the business of brokering credit for profit. Mr Hulbert was the sole director, controlling mind and authorised agent of CBPL. The company search shows that he was CBPL’s sole shareholder.

91    Channic and CBPL conducted their respective business undertakings at and from the first premises until 20 September 2011 and then at and from the second premises.

92    The usual operation of those three businesses involved used cars being offered for sale or sold to members of the public by Supercheap. The sale of the cars would usually be financed by loans. Supercheap would be the seller and would convey title to the vehicle to the consumer. Channic would provide loans to customers to buy the vehicles. ASIC contends that CBPL would “purport” to broker a loan from Channic to assist a customer to purchase the vehicle. The respondents contend that CBPL “actually” brokered such loans from Channic. ASIC says that CBPL only arranged loans from Channic. The respondents say that CBPL arranged loans with other credit providers and that Supercheap sold cars financed by other lenders.

93    Mr Kevin Humphreys was either an employee of, or contractor to, Supercheap. He was Supercheap’s agent. He was also either an employee of, or a contractor to, CBPL. He was CBPL’s agent. The respondents deny he was an employee or an agent of, or a contractor to, Channic.

94    Supercheap took out written advertisements by which it said that finance was offered to buyers: with a 20 minute on-site approval; to persons in receipt of Centrelink income; to persons with bad credit histories; and to ex-bankrupts. Supercheap advertised its business by means of a large sign outside its business premises visible to passers-by as set out below (Applicant’s Tender Bundle, Vol 1, Tab 4):

95    The respondents deny that the business activities of Supercheap, Channic and CBPL were likely to attract persons who were: unable to obtain or unlikely to seek loans from major banking institutions due to a poor credit history or because they perceived themselves or perceived as having a poor credit history; in need of an inexpensive vehicle and an inexpensive loan; lacking in commercial experience; unlikely to understand or appreciate legal documentation not drafted in simple English; unlikely to be able to evaluate whether the terms of any loan were fair or commercial.

96    On or about 16 June 2010, Channic made an application for registration and was registered as a credit provider under the Transitional Provisions Act. On 13 December 2010, Channic applied for an Australian Credit Licence under the NCCP Act and on 31 January 2011 that licence was granted. Chapter 3 of the NCCP Act applied to Channic, in the period relevant to these proceedings, either as if it was a licensee or because it was a licensee Each loan contract entered into by Channic with each borrower described in the statement of claim (and described at [73] of these reasons) constituted the provision of credit for the purposes of s 5 of the NCCP Act. See also s 3(1) of the National Credit Code.

97    On or about 18 June 2010, CBPL made an application for registration and was registered as a credit assistance provider under the Transitional Provisions Act. On 22 December 2010, CBPL applied for an Australian Credit Licence under the NCCP Act and on 24 February 2011 that licence was granted. Chapter 3 of the NCCP Act applied to CBPL, in the period relevant to these proceedings, either as if it was a licensee or because it was a licensee.

98    As to the credit broking activities of CBPL, each buyer of a car with whom CBPL dealt, was a consumer within the meaning of the NCCP Act. CBPL dealt directly with each buyer in the course of or as part of its business. Each “loan contract” in respect of which CBPL provided credit assistance to the borrower was a credit contract within the meaning of 4 of the National Credit Code. As to the credit providing activities of Channic, each buyer of a car with whom Channic dealt was a consumer within the meaning of the NCCP Act. Channic provided credit by the provision of a loan to the buyer of the car.

99    I propose to now illustrate the position in relation to the first of the consumer buyers of a car, Ms Kingsburra, who engaged with Channic and CBPL, by identifying the pleaded position (admissions and matters in contention) concerning her circumstances and then examine the evidence of Ms Kingsburra and the particular documents immediately relevant to Ms Kingsburra (which, in the main, characterise the method adopted by CBPL and Channic in the conduct of their respective undertakings). I will then examine the evidence of the respondents.

Ms Adele Dorothea Kingsburra

100    As to the pleaded position, the following facts are admitted except where otherwise indicated.

101    Ms Kingsburra attended the first business premises (484 Mulgrave Road) on 6 July 2010 for the purpose of purchasing a car for one of her sons, paying a deposit as part of the purchase price and paying the remaining part of the purchase price by instalments. At the first business premises on 6 July 2010, Mr Humphreys for Supercheap, showed Ms Kingsburra a 1997 Hyundai Elantra Sedan. ASIC contends that Mr Humphreys told her that he had used the car, sometimes, for his own personal purposes; it had no problems; and the existing paint damage to it could be fixed cheaply. The respondents say that they have no knowledge of what was said by Mr Humphreys to Ms Kingsburra.

102    ASIC says that Mr Humphreys told Ms Kingsburra that the purchase price was $8,990.00, a deposit of $1,500.00 would be required and if Ms Kingsburra wanted “mag wheels” an extra $200.00 deposit would be required. These matters, however, are admitted by the respondents even though these matters also fall within the knowledge of Mr Humphreys.

103    Ms Kingsburra agreed, with Mr Humphreys, to buy the car for $8,990.00 by paying a deposit of $1,500.00 (plus $200.00 for the mag wheels) with the balance to be paid by instalments. The respondents say the deposit was $1,700.00 for the car and it included mag wheels.

104    On 10 July 2010, Ms Kingsburra returned to the first business premises. ASIC says she paid a deposit of $1,500.00 plus $200.00. The respondents say she paid a deposit of $1,700.00. ASIC says Mr Humphreys told Ms Kingsburra she would have to return to the premises on another day to collect the vehicle.

Ms Adele Dorothea Kingsburra and Cash Brokers Pty Ltd

105    ASIC says that on 6 July 2010, Mr Humphreys inquired of Ms Kingsburra as to various aspects of her financial situation. On 6 July 2010, Mr Humphreys substantially completed or filled out a “Credit Application Form” in the name of Ms Kingsburra. ASIC says this was done, by CBPL, by Mr Humphreys. ASIC says that Mr Humphreys “caused” Ms Kingsburra to sign the Credit Application Form. The point of distinction pleaded by the respondents is that they say that the Credit Application Form was “offered” to Ms Kingsburra (by CBPL) “for her signature” and “she signed it”.

106    ASIC says that Mr Humphreys advised Ms Kingsburra to obtain a statement from Centrelink showing the amount of her regular Centrelink social security payments so as to support the application for credit for the purchase of the car and advised her to obtain also a letter from her partner stating that he paid her board of $150.00 per fortnight, to further support the credit application. The respondents plead that they have no knowledge of these matters although Mr Hulbert pleads that he believes that the person paying board to Ms Kingsburra was not her partner.

107    ASIC contends that Mr Humphreys told Ms Kingsburra that her weekly repayment instalment would be $120.00; did not advise Ms Kingsburra of any brokerage payable to CBPL or that she was entering into a brokerage agreement with CBPL; did not tell Ms Kingsburra that brokerage payable to CBPL would be added to the amount of the credit which she would be obtaining; and, did not tell Ms Kingsburra that there was a legal entity, CBPL, acting as a broker, separate from the lender, Channic, and the seller of the car, Supercheap. As to each of these matters, the respondents do not admit the facts and say that the matters are not within their knowledge.

108    ASIC says that on 6 July 2010, Mr Humphreys for CBPL prepared a document called a “Preliminary Test” which purported to be a preliminary assessment in accordance with s 115 of the NCCP Act of whether a loan to Ms Kingsburra of $7,290.00 would be unsuitable for her and which purported to analyse the capacity of Ms Kingsburra to repay a loan of $7,290.00. The respondents admit these matters except that they say that the Preliminary Test document is dated 7 July 2010.

109    The respondents also admit that Mr Humphreys for CBPL: did not include any brokerage fee in the amount of the credit assumed by the Preliminary Test; wrote a letter to Channic, on behalf of Ms Kingsburra, applying for a loan of $7,290.00 with weekly repayments of $119.45 (accepted, for the purposes of the admission, as the “Cash Brokers/Kingsburra Proposed Loan”; also referred to later in these reasons as “CB/KPL”); and delivered the Preliminary Test, Credit Application Form and the letter to Channic, to Channic, thereby applying for that loan on behalf of Ms Kingsburra.

110    ASIC says that by doing the things described at [108] and [109] of these reasons, CBPL “suggested” to Ms Kingsburra that she “apply” for a “particular” credit contract with a “particular” credit provider. The respondents say that this matter is not within their knowledge.

111    The respondents, however, admit that: CBPL “assisted” Ms Kingsburra to apply for a particular credit contract (the Cash Brokers/Kingsburra Proposed Loan) with a particular credit provider (Channic) and on 6 July 2010 CBPL provided “credit assistance” to Ms Kingsburra within the meaning of s 8 and s 115 of the NCCP Act.

112    On 13 July 2010, subsequent to providing credit assistance to Ms Kingsburra on 6 July 2010, CBPL, by Mr Humphreys, received from Ms Kingsburra a copy of a Centrelink Statement dated 12 July 2010 and a signed statement from Mr Garry Gilmartin that he paid board each week to Ms Kingsburra of $150.00.

113    ASIC asserts that at no time prior to purporting to make a preliminary assessment, if any, in relation to Ms Kingsburra on 6 July 2010 did CBPL make any or any reasonable inquiries as to Ms Kingsburra’s requirements and objectives in relation to the Cash Brokers/Kingsburra Proposed Loan. CBPL, it is said, failed to inquire as to the amount of the loan which Ms Kingsburra required; the interest rate which she required; the length of time over which Ms Kingsburra intended that any credit provided would be repaid; and whether or not Ms Kingsburra required the loan for a purpose of paying brokerage of any kind which would be chargeable on the loan transaction. The respondents do not admit these matters and say that each matter is a fact not within the knowledge of the respondents.

114    ASIC also asserts that at no time prior to purporting to make a preliminary assessment, if any, in relation to Ms Kingsburra on 6 July 2010 did CBPL make any reasonable inquiries as to Ms Kingsburra’s financial situation. CBPL, it is said, failed to inquire as to the usual weekly, fortnightly or monthly expenses of Ms Kingsburra; the amount of money which Ms Kingsburra usually had available each week, fortnight or month which might be available for repaying a loan. The respondents do not admit these matters and say that each matter is a fact not within the knowledge of the respondents. CBPL, it is said, also failed to inquire as to Ms Kingsburra’s “actual living expenses” but instead applied an amount of $2,925.00 as her monthly expenses in the Preliminary Test document using a “standardised formula”, as set out in the Preliminary Test document, of $1,300.00 per month for a de facto or married couple and $325.00 for each of Ms Kingsburra’s five dependents. The respondents do not admit these factual matters and say that each of them is not within their knowledge.

115    However, the respondents admit that CBPL “used a standardised formula as particularised”.

116    It is also said that at no time prior to 6 July 2010 when purporting to make a preliminary assessment did CBPL take any reasonable steps to verify Ms Kingsburra’s financial situation. This matter is denied by the respondents.

117    However, the respondents admit that CBPL could not have undertaken any or any reasonable steps to verify Ms Kingsburra’s financial situation as the preparation of the Preliminary Test and the provision of credit assistance to Ms Kingsburra occurred on July 2010 but the Centrelink statement and the statement from Mr Gilmartin were not obtained by CBPL until, at the earliest, 13 July 2010: para 25.3 and para 25.3(a) of the statement of claim and the amended defence. I mention, on this occasion, the paragraph references because it seems to me that DSpence was probably seeking to deny a failure by the respondents to take any reasonable steps to verify Ms Kingsburra’s financial situation but admit, simply, the facts about CBPL having received the Centrelink Statement and Mr Gilmartin’s statement no earlier than 13 July 2010.

118    The respondents deny that CBPL did not otherwise obtain information which would evidence or support (that is to say, verify) the information provided by Ms Kingsburra as to her financial situation.

119    ASIC says that CBPL did not verify Ms Kingsburra’s actual living expenses but instead applied an amount of $2,925.00 as her monthly living expenses for the purposes of the Preliminary Test using the standardised formula of $1,300.00 per month for de facto or married couple and $325.00 for each of Ms Kingsburra’s five dependents. The respondents deny that CBPL failed to verify Ms Kingsburra’s actual living expenses. The respondents admit that CBPL used a standardised formula as alleged by ASIC but say that that use “did not supplant the verification that [CBPL] made in respect of Yeatmans’ actual living expenses”. I proceed on the basis that the respondents were intending to refer to Ms Kingsburra at this point in their pleading.

120    The respondents deny that CBPL contravened s 117 of the NCCP Act.

121    However, the respondents admit that at the time of the provision by CBPL of credit assistance to Ms Kingsburra, CBPL had not, within 90 days before the day on which the credit assistance was provided, or at all, made any preliminary assessment that was in accordance with s 116(1) of the NCCP Act and that the Preliminary Test did not specify the period it covered. Although there is a misdescription at para 27.1b of the amended defence (which refers to para 27.1a of the statement of claim rather than para 27.1b), it seems clear enough that the respondents also admit that the preliminary test did not contain an assessment of whether the Cash Brokers/Kingsburra Proposed Loan would be unsuitable: para 27.1b, amended defence.

122    There is no misdescription as to para 27.2a and the respondents admit that CBPL had not, within 90 days before the day on which credit assistance was provided, or at all, made any preliminary assessment that covered the period that was proposed for the entering into the credit contract”. They admit that the period which should have been covered by any preliminary assessment was the period during which it was proposed the credit contract would be entered into. The respondents seem to admit (although there may be another misdescription of para of the statement of claim in the amended defence), that CBPL had not within 90 days before the day on which the credit assistance was provided, or at all, undertaken the inquiries and verification required by s 117 of the NCCP Act.

123    The respondents also admit that CBPL, by providing credit assistance to Ms Kingsburra, contravened s 115(1) of the NCCP Act.

124    ASIC says that the Cash Brokers/Kingsburra Proposed Loan was unsuitable for Ms Kingsburra because at the time CBPL provided credit assistance it was likely that Ms Kingsburra would be unable to comply with her financial obligations under the loan or would only be able to comply with those obligations with substantial hardship; Ms Kingsburra’s accounts were regularly overdrawn; the accounts were rarely in credit; and in the ordinary course, any social security payments paid into Ms Kingsburra’s account were withdrawn on or about the day on which the money was deposited. All of these matters are denied by the respondents. The respondents also deny that Ms Kingsburra had a number of recurring expenses such as repayments of cash advances made to her by “Cash Converters”. The respondents deny that Ms Kingsburra had a number of recurring expenses but admit that Ms Kingsburra was making payments on a loan previously provided by Cash Converters.

125    The respondents admit that in purporting to assess the unsuitability of the Cash Brokers/Kingsburra Proposed Loan, CBPL failed to take into account the cost per month of the motor vehicle insurance that Ms Kingsburra would be required to obtain pursuant to any loan agreement she entered into with Channic and also failed to take into account an estimate of the additional costs Ms Kingsburra would incur due to owning and maintaining a motor vehicle.

126    The respondents deny that the CB/KPL did not meet Ms Kingsburra’s requirements and objectives. They deny that CBPL failed to make reasonable inquiries about Ms Kingsburra’s requirements and objectives in relation to any finance she would obtain to assist in the completion of the purchase of the car and they deny that they “could not have been aware of” Ms Kingsburra’s requirements and objectives for that purpose. They deny that the CB/KPL ought to have been assessed as “unsuitable” for Ms Kingsburra and deny that in failing to do so they contravened s 118(1) of the NCCP Act. They deny that CBPL contravened s 123(1) of the NCCP Act by suggesting that Ms Kingsburra apply for the CB/KPL and by assisting Ms Kingsburra to apply for that loan.

Ms Adele Dorothea Kingsburra and Channic

127    The respondents admit that on 6 July 2010, Channic prepared a document called a “Credit Suitability Assessment” (“CSA”) which: stated that it was made on 6 July 2010; was purportedly made in accordance with ss 128 and 129 of the NCCP Act; purported to assess the suitability of a loan to Ms Kingsburra from Channic in an amount of $8,301.50 for a period of 110 weeks at an interest rate of 48% (called the “Kingsburra Proposed Loan”); purported to assess that a loan in such terms was not unsuitable for Ms Kingsburra and that it met her needs and objectives during the period of the loan; and which stated that the period covered by the assessment was from 6 July 2010 to 6 August 2010.

128    The respondents admit that Ms Kingsburra returned to the first premises on 13 July 2010 where she completed a contract to purchase the car with the assistance of credit from Channic.

129    The respondents admit that on 13 July 2010, Ms Kingsburra entered into a loan agreement (the “Kingsburra Loan”) with Channic in writing comprising a document entitled Consumer Loan Contract and Mortgage No: 5030 (also called in these reasons the “Credit Contract”).

130    The respondents admit that pursuant to the Kingsburra Loan, Channic agreed to lend and Ms Kingsburra agreed to borrow an amount of $8,301.50 at an annual interest rate of 48% over a loan period of 110 weeks with amounts payable each week of $119.45 and a final payment of $114.30 with the first repayment to be made on 19 July 2010 and that on settlement of the loan, a sum of $990.00 would be paid to CBPL as brokerage and the sum of $7,290.00 would be paid to Supercheap for the purchase of the 1997 Hyundai Elantra motor vehicle.

131    ASIC says that at no time prior to preparing the Kingsburra CSA on 6 July 2010 (or at all) did Channic make any or any reasonable inquiries as to Ms Kingsburra’s requirements and objectives in and for the proposed Kingsburra Loan. Channic failed, it is said, to inquire as to the amount of the loan Ms Kingsburra required; the interest rate she required; the length of time over which she intended that any credit provided would be repaid; and whether or not Ms Kingsburra required the loan for a purpose of paying brokerage of any kind which would be a charge on the loan transaction. As to all of these matters, the respondents do not admit the facts and say that each fact is not within the knowledge of the respondents and they further say, as to each fact, that “Kevin Humphreys prepared the Credit Suitability Assessment in respect of Ms Kingsburra”.

132    As to the question of inquiries, ASIC also says that at no time prior to preparing the Kingsburra CSA on 6 July 2010 or otherwise did Channic make any reasonable inquiries as to Ms Kingsburra’s financial situation. Channic, it is said, failed to inquire as to: Ms Kingsburra’s weekly, fortnightly or monthly expenses; the amount of money which Ms Kingsburra usually had available at the end of each week, fortnight or month which might be available for repaying a loan; Ms Kingsburra’s actual living expenses and instead relied upon the Preliminary Test prepared by CBPL which applied an amount of monthly expenses of $2,925.00 based on the standardised formula contained in the Preliminary Test as earlier mentioned. As to each of these matters the respondents again say that these matters of fact are not within their knowledge and that Mr Humphreys prepared the Kingsburra CSA. As to the matter of applying the monthly amount of $2,925.00 based on the formula rather than conducting an inquiry into Ms Kingsburra’s actual living expenses, the respondents say that Mr Humphreys prepared the Kingsburra CSA and thus any failure to inquire into actual living expenses is not within the knowledge of the respondents but, nevertheless, the respondents admit that Channic used a standardised formula [as alleged]”.

133    As to the question of verification, ASIC says that at no time prior to preparing the Kingsburra CSA on 6 July 2010 or at all did Channic take any reasonable steps to verify Ms Kingsburra’s financial situation. Channic, it is said, first, could not have undertaken any or any reasonable steps to verify Ms Kingsburra’s financial situation as the CSA was completed on 6 July 2010 but the Centrelink Statement and the statement from MGilmartin were not obtained by Channic until 13 July 2010. Second, Channic did not otherwise obtain information or material which would evidence or support the information provided by Ms Kingsburra as to her financial situation. Third, Channic did not verify Ms Kingsburra’s actual living expenses but instead relied on the Preliminary Test prepared by CBPL which applied a standardised formula as earlier described.

134    As to the matters at [133], the respondents deny that Channic failed to take any reasonable steps to verify Ms Kingsburra’s financial situation. They deny that the CSA was completed on 6 July 2010 and say that it was completed on 7 July 2010. They do not admit that the Centrelink Statement and Mr Gilmartin’s statement were not obtained by Channic until 13 July 2010 and add that that is not a matter of fact within the knowledge of the respondents. They deny that Channic did not otherwise obtain information in verification of Ms Kingsburra’s financial situation. They do not admit that Channic failed to verify Ms Kingsburra’s actual living expenses although that is said to be a matter not within their knowledge because Mr Humphreys prepared the Kingsburra CSA. The respondents admit, however, that Channic “had reference to a standardised formula”, as particularised, but say that reference to the formula “was not such that it supplanted the verification undertaken by [Channic].

135    The respondents deny that Channic contravened s 130(1) of the NCCP Act.

136    The respondents admit that at the time of provision by Channic of credit to Ms Kingsburra, Channic had not, within 90 days before the day on which the credit was provided, or at all, undertaken the inquiries and verification required by s 130 of the NCCP Act. The respondents also admit that Channic, by providing credit to Ms Kingsburra, contravened s 128 of the NCCP Act.

137    ASIC says that Ms Kingsburra was a person who would be unable to comply with her financial obligations under the Kingsburra Proposed Loan or would only be able to comply with those obligations with substantial hardship for the reasons described in para 40.1 of the statement of claim (which repeats the matters at para 29 of the statement of claim) which are those matters described at [124] of these reasons.

138    The respondents deny that the Kingsburra Proposed Loan did not meet Ms Kingsburra’s requirements and objectives. They deny that Channic had not made reasonable inquiries about Ms Kingsburra’s requirements and objectives in relation to any finance obtained by her from Channic to assist in the completion of the purchase of the car. They deny that they could not have been aware of Ms Kingsburra’s requirements and objectives for the finance. They deny that the requirements and objectives of Ms Kingsburra for the loan were that the loan be for an amount of $7,290.00 representing the difference between the cost of the car at $8,990.00 and the amount of $1,700.00 which was paid as a deposit. They deny that the requirements and objectives of Ms Kingsburra for the loan did not include any amount to be used to pay brokerage in obtaining the loan from Channic. They deny that the Kingsburra loan was for $8,301.50 in circumstances where Ms Kingsburra only required a loan of $7,290.00. They deny that Ms Kingsburra did not require or seek an amount of $990.00 to be included in the loan for brokerage. They deny that Ms Kingsburra was unaware that the loan amount included brokerage of $990.00. Although there is a misdescription at para 40.2(e) of the amended defence (which refers to 40.2(d) of the statement of claim rather than 40.2(e)) it seems clear that the respondents also deny para 40.2(e) of the statement of claim.

139    As to the notion that Channic, in making its assessment, relied upon the Preliminary Test prepared by CBPL and in doing so took into account a formula or standardised amount “as representing” Ms Kingsburra’s actual living costs and expenses resulting in an applied amount of $2,925.00 comprising $1,300.00 per month for a de facto or married couple and an additional $325.00 per month for each of Ms Kingsburra’s five dependents, the respondents say this. They deny that matter. However they then admit that CBPL made reference to a standardised formula as asserted but say that the use of that formula did not result in the Preliminary Test “being not referrable to the actual living costs and expenses of Ms Kingsburra”. As to the numbers, the respondents deny the formulation of the numbers pleaded against them and say that the formula used was based on Ms Kingsburra being a single person and not in a de facto relationship and they say that the relevant numbers derived from the formula were $2,575.00 being $950.00 per month for a single person and $325.00 for each dependent.

140    The respondents deny that they failed to take into account only the information which satisfied integers (a) and (b) of s 131(4) of the NCCP Act.

141    The respondents deny that Channic should have assessed the Kingsburra Proposed Loan as being unsuitable for Ms Kingsburra as a loan which would not have met Ms Kingsburra’s requirements and objectives. They deny that, in failing to assess the loan as unsuitable, they contravened s 131(1) of the NCCP Act. They deny that the loan was unsuitable. They deny that Channic contravened s 133(1) of the NCCP Act by entering into the Kingsburra Loan.

The unconscionable conduct aspects of the matter

142    The respondents deny that the provision of the loan to Ms Kingsburra by Channic was the provision of a “financial service” as that expression is used in s 12BAB of the ASIC Act.

143    The respondents admit that the Kingsburra Loan was entered into by Channic in the course of trade and commerce and they admit that Ms Kingsburra was desirous of acquiring a car and had, as her only source of income, the receipt of social security payments.

144    The respondents do not admit and have no knowledge of whether Ms Kingsburra had the care of eight children or was a person of limited education, as alleged.

145    They admit that Ms Kingsburra was a resident of the Yarrabah Aboriginal Community.

146    They have no knowledge of whether, as alleged, Ms Kingsburra had very limited ability to negotiate and to protect her own interests when dealing with people outside of her community.

147    As to the contention that Ms Kingsburra had limited knowledge of, or experience in relation to, financial transactions, the respondents deny that matter and say that Ms Kingsburra had some experience in financial transactions as she had previously obtained personal loans from a credit provider, Cash Converters.

148    As to whether Ms Kingsburra was not aware of the market values of used motor vehicles, as alleged, the respondents say that that is not a matter of fact within their knowledge. As to whether Ms Kingsburra was unable to ascertain for herself whether or not a motor vehicle was or was not in a reasonable condition, the respondents say that that is not a matter of fact within their knowledge. Two other matters are asserted by ASIC to which the respondents have pleaded the same response. The first is that Ms Kingsburra was not used to reading and understanding transactional documents relating to loans and purchases and second, she would require advice and explanations to be given in relation to the effect of commercial documents.

149    The respondents deny that Channic, by Mr Humphreys and/or Mr Hulbert, was aware of or believed that persons in the position of Ms Kingsburra were unlikely to be able to acquire a loan from any mainstream bank, building society or other similar financial institutions. The respondents admit that Channic, by Mr Humphreys or Mr Hulbert, held expertise in the selling of motor vehicles. The respondents deny that that they were aware that the vehicle being sold to Ms Kingsburra was worth substantially less than the amount which Ms Kingsburra had agreed to pay for it.

150    The respondents admit that the vehicle was sold by Supercheap to Ms Kingsburra for an amount of $8,990.00 in circumstances where Supercheap had acquired the vehicle for $500.00 and had expended $1,091.00 on reconditioning it, representing total expenditure by Supercheap of $1,591.00. Although the respondents admit those matters, they say that the overheads per vehicle sold by Supercheap were between $3,000.00 and $4,000.00.

151    The respondents deny that Channic was in a substantially superior bargaining position to Ms Kingsburra in the negotiation of the sale and purchase of motor vehicles and the financing of the purchase of a motor vehicle.

152    The respondents admit that on 13 July 2010, at the time when the Kingsburra loan was entered into, Mr Hulbert placed a 22 page document (as earlier described), the Kingsburra Loan Contract, in front of Ms Kingsburra. As to the notion that Mr Hulbert turned the pages of the document without giving Ms Kingsburra any proper opportunity to read any of the pages, Mr Hulbert admits that he turned the pages of the loan contract but denies that Ms Kingsburra was not given any proper opportunity to read any of the pages. Mr Hulbert further says that prior to turning the pages, he told Ms Kingsburra that she should read the loan contract and that she could read the loan contract at the premises (the first premises) or take the loan contract away from the premises to read. Mr Hulbert says that Ms Kingsburra declined, in the exercise of her free will, to read the document at the premises or elsewhere.

153    As to the notion that Mr Hulbert instructed Ms Kingsburra to initial the foot of each page of the contract (which she did), the respondents deny that any such instruction was given but say that the loan contract was offered to Ms Kingsburra (although at this point of the pleading there is a mistaken reference to Ms Harris) for her to initial each page and they admit that she did initial each page.

154    As to the notion that Mr Hulbert instructed Ms Kingsburra as to where to place her signature on pages 8, 9 and 22 (which she did), the respondents deny any such instruction and say that the loan contract was offered to Ms Kingsburra for her signature at those pages and she signed on those pages.

155    As to the notion that Mr Hulbert did not explain the document to Ms Kingsburra or did not fully explain it to her, the respondents deny that matter and say that Mr Hulbert referred Ms Kingsburra to the following matters contained within the loan contract: the amount of credit; the annual percentage rate; the amount of interest payable; the number of repayments; the amounts of repayments; the date of the first and last repayments; the frequency of the payments; the total amount of repayments; the comparison interest rate; the term of the loan; the amount of the brokerage fee; the amount of the “REVS” encumbrance fee; the amount of direct debit fees; the missed payment fee; the default notice fee; the debt recovery fee; the details as to the vehicle the subject of the loan; the “Important Note” to borrowers and the two “boxed” warnings to the borrower, immediately above the location for the borrowers and witness signature. Mr Hulbert pleads that he provided Ms Kingsburra with a summary of the key provisions of the loan contract and told her that if there was anything in the contract which she did not understand, it would be explained to her.

156    As to the notion that Mr Hulbert did not advise Ms Kingsburra to read the document or to seek legal advice in relation to it, the respondents deny that matter and Mr Hulbert pleads, again, that he advised Ms Kingsburra to read the loan contract and that he said she could read it at the premises or take it away to read but that Ms Kingsburra elected not to read the document at the premises or elsewhere. Mr Hulbert says that he told Ms Kingsburra that she should seek legal advice about the contents of the loan contract but that she declined to obtain such legal advice, in the exercise of her free will.

157    As to the notion that Mr Hulbert did not explain the interest rate of 48% per annum, did not identify the amount being borrowed, did not identify the total amount that would be repaid and did not identify an amount representing brokerage forming part of the loan, all such matters are denied.

158    ASIC contends that the terms of the loan were harsh and unconscionable having regard to these considerations: the contended circumstances in which it was entered; the amount borrowed was more than the amount which Ms Kingsburra sought or required in order to purchase the Hyundai Elantra; all Ms Kingsburra wanted to borrow to complete the purchase of the car was $7,290.00; the interest rate was 48% per annum “despite the fact that Ms Kingsburra was paying above the market value for the [car]; the total amount of the repayments under the agreement was $13,134.35; Ms Kingsburra agreed or undertook that should she default in making the loan repayments she would consent to the car being repossessed and would remain liable for any shortfall in the loan repayments; Channic knew that the loan related to the purchase of a car by Ms Kingsburra which was worth substantially less than the amount she had agreed to pay for it (and that was so because: the sale price of the car was substantially more than the price of a similar car of that kind generally available on the market; the car had a number of defects including cracked wheels which were required to be replaced at a cost of $180.00 each; the front passenger door did not open and, once repaired, the window winder was broken; the car had paint damage for which Ms Kingsburra received a repair quote of $800.00; and the spare tyre of the car was flat).

159    As to these various matters, the respondents admit that the interest rate was 48% per annum and that total repayments under the agreement amounted to $13,134.35. They admit that Ms Kingsburra undertook to consent to repossession of the vehicle should she default and that she would remain liable for any shortfall in loan repayments. They say that the vehicle was security for the loan and that such a term is a standard term in many loan contracts relating to the purchase of second-hand motor vehicles.

160    They say that the car was sold at market value for such a vehicle having regard to the second-hand vehicle market in the Cairns area. They deny that the price was substantially higher than a comparative similar vehicle. As to the first two defects described earlier, the respondents say that these are matters of fact not within the knowledge of the respondents but in any event the defect could have been repaired under the warranty if the defect occurred during the warranty period. As to the paint damage, the respondents admit that the car had “some paintwork which was faded” but say that otherwise the factual matter is not within the knowledge of the respondents. The respondents assert the same response to the matter of the spare tyre being flat but say that the defect would have been repaired under the warranty at no cost to Ms Kingsburra.

161    ASIC says that Channic, by entering into the loan contract with Ms Kingsburra, took advantage of her vulnerability in relation to the transaction.

162    The respondents deny that by entering into the Kingsburra loan, Channic engaged in unconscionable conduct within the meaning of s 12CB of the ASIC Act.

The matter of whether the Channic Loan Contract is an unjust contract under s 76 of the National Credit Code

163    ASIC says that the Channic loan to Ms Kingsburra was an unjust contract within the meaning of s 76 of the National Credit Code for a number of reasons. Having regard to the way I have broken up these paragraphs, I will attribute a principal paragraph number to each set of contentions.

164    First, Ms Kingsburra had substantially less bargaining power than Channic as she had very little experience with car finance and much less experience than Mr Hulbert on behalf of Channic: 53.1.

165    Second, her income was derived from Centrelink social security payments and she had few other options for obtaining finance to purchase a vehicle: 53.1.

166    Third, she suffered from vulnerabilities (in terms of the factual matters described at [143] to [148] of these reasons in addressing the amended defence of the respondents) whereas Channic had the benefit of the advantage of being familiar with transactions in relation to the purchase of cars and related financial lending transactions: 53.1.

167    Fourth, the terms of the loan to Ms Kingsburra and the conduct of Channic were not justified in light of the risks undertaken by Channic. That is said to follow because the risks undertaken by Channic were “minimal” having regard to four factors and they are: Supercheap bought the car for $500.00 and expended $1,091.00 reconditioning it; Ms Kingsburra had paid Supercheap a deposit of $1,700.00; of the loan to Ms Kingsburra of $8,301.50, $8,280.00 was disbursed to Supercheap and CBPL; and, Supercheap and CBPL were owned and controlled by Mr Hulbert, as was Channic: 53.2.

168    As to these four matters, the respondents deny that the Channic loan was an unjust contract. They deny that Ms Kingsburra had substantially less bargaining power than Channic and say that Ms Kingsburra voluntarily and freely entered into the loan contract and that she had an opportunity to buy a vehicle elsewhere, to take out a loan elsewhere and to seek legal advice about the terms of the contract. They admit that Ms Kingsburra had “much less experience with car finance” than Mr Hulbert but do not admit that Ms Kingsburra had “very little experience with car finance”. The respondents admit that Ms Kingsburra’s only source of income was her Centrelink social security payments but say that Ms Kingsburra had other options for obtaining finance including four other “non-mainstream” credit providers in the Cairns area.

169    As to the allegation that the Channic loan was not justified having regard to the risks undertaken by Channic, the respondents deny that matter and repeat that although they admit the financial statistics, they say that Supercheap’s overheads were between $3,000.00 and $4,000.00 per vehicle. As to the amount of the loan, the respondents admit that out of a loan of $8,301.50, $8,280.00 was disbursed to Supercheap and CBPL but deny that those matters demonstrate that Channic’s risks were minimal. As to the control by Mr Hulbert, the respondents admit that Supercheap, CBPL and Channic were owned and controlled by Mr Hulbert but say that those facts are not probative of Channic’s risk being minimal.

170    Fifth, ASIC also says that the Channic loan to Ms Kingsburra was an unjust contract because the interest rate of 48% per annum was not reasonably necessary for the protection of Channic’s legitimate interests and that an interest rate of 48% was unreasonably high: 53.3. The respondents deny those matters.

171    Sixth, ASIC also says that the Channic loan contract to Ms Kingsburra was an unjust contract because the combined effect of the price of the car (above market value) and the interest rate of 48% per annum were not justified in light of the risk taken by Channic and were not necessary to protect Channic’s legitimate interests. Moreover, Channic knew that the value of the car sold to Ms Kingsburra was above market value as the sale price was substantially more than a similar car of that kind generally available on the market and the car had a number of defects which rendered its value less than the market value of a car of that type and age: 53.4. All of these matters are denied by the respondents.

172    Seventh, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because Ms Kingsburra’s undertaking that upon default she would consent to repossession of the car while remaining liable for any shortfall in loan repayments was not reasonably necessary for the protection of Channic’s interests in circumstances where Channic knew that the loan related to the purchase of a car by Ms Kingsburra which was worth substantially less than the amount of the loan: 53.5. The respondents say, again, that the overheads per Supercheap vehicle were between $3,000.00 and $4,000.00 per vehicle and that the vehicle in question was not repossessed by Channic and the loan was written off by Channic on 27 June 2013.

173    Eighth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because at the time Channic entered into the Kingsburra Loan, its provisions were not the subject of negotiation between Ms Kingsburra and Channic: 53.6. The respondents admit the factual matter (but not the conclusion) and say that Ms Kingsburra was able to exercise “her free choice as to whether to negotiate the terms of the loan, and to enter the loan or not”.

174    Ninth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because it was not reasonably practicable for MKingsburra to negotiate for the alteration of the terms or rejection of any of the provisions of the loan contract: 53.7. The respondents deny this matter.

175    Tenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because the loan contract was in a form that was not readily understandable by Ms Kingsburra because it was 22 pages in length and written in complex legal style: 53.8. The respondents deny this matter although they admit that the contract was 22 pages in length.

176    Eleventh, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because Channic failed to explain accurately or at all the provisions of the loan document to Ms Kingsburra. ASIC says that Channic failed to explain that: Ms Kingsburra was borrowing an amount of $990.00 to be paid to CBPL; the existence of CBPL; that CBPL was providing a brokerage service or that CBPL and Channic were owned by Mr Hulbert; the interest rate was 48% per annum which was, or was close to, the maximum rate allowable under legislation: 53.9. The respondents deny these matters except to say that Mr Hulbert admits he did not explain that the interest rate of 48% was close to the maximum rate allowable under legislation.

177    Twelfth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because Ms Kingsburra did not understand the provisions of the loan contract or their effect. ASIC says that that follows because of the earlier matters taken together with the contention that Ms Kingsburra was not aware that there was a brokerage fee of $990.00 to be paid to CBPL included in the amount of credit advanced to her or that the interest rate was 48% per annum and, she was not aware, that the total repayments would be $13,134.35 or aware that those repayments would be in addition to the deposit she had already paid of $1,700.00: 53.10. The respondents deny these matters.

178    Thirteenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because the loan to Ms Kingsburra included an amount of $990.00 payable to CBPL upon disbursement of the funds in circumstances where Ms Kingsburra was not informed of the service performed by or the fee charged by CBPL: 53.11.

179    Fourteenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because Ms Kingsburra did not obtain independent legal advice prior to entering into the loan and Channic did not give her an opportunity to do so. ASIC says this result follows having regard to the earlier matters and the circumstance that Ms Kingsburra, at page 9 of the document, signed a statement to the effect that she had had the opportunity to obtain legal advice but had chosen not to do so, in circumstances where Ms Kingsburra was not aware of, and therefore did not understand, the implications of the statement at page 9 of the document: 53.12. The respondents admit that Ms Kingsburra did not obtain independent legal advice prior to entering into the loan contract but do not admit that she was not given a real opportunity to do so. Mr Hulbert says that he told Ms Kingsburra that she could take the loan contract away and seek legal advice about it but she chose not to seek legal advice and acknowledged that she did not wish to seek legal advice. They admit that Ms Kingsburra signed the statement at page 9 of the document.

180    Fifteenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because Channic engaged in unfair tactics in relation to Ms Kingsburra in that the brokerage fee was not orally disclosed to Ms Kingsburra and nor was it disclosed to her in writing until it was included in a loan disbursement at page 2 of the 22 page document Ms Kingsburra signed in the factual circumstances contended for by ASIC outlined earlier (and in the context of the amended defence put on by the respondents): 53.13. As to these matters the respondents admit that the brokerage fee was not disclosed to Ms Kingsburra in writing until it was included as a loan disbursement at page 2 of the 22 page document put before Ms Kingsburra to be signed. The respondents say that Ms Kingsburra was orally told by Mr Hulbert of the existence of the brokerage fee in the course of Mr Hulbert explaining the loan contract to Ms Kingsburra.

181    Sixteenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because at the time the loan was entered into with Ms Kingsburra, Channic knew or could have ascertained by reasonable inquiry that Ms Kingsburra could not pay in accordance with its terms, or could not pay without substantial hardship: 53.14. The respondents deny that matter but admit that Ms Kingsburra’s accounts were regularly overdrawn; that Ms Kingsburra’s accounts were rarely in credit; that in the ordinary course, any social security payments which were paid into Ms Kingsburra’s account were withdrawn on or about the day on which the money was deposited; and Ms Kingsburra had a number of recurring expenses such as cash advances from Cash Converters.

182    The respondents deny that it was unlikely that Ms Kingsburra would be able to make the repayments under the Channic loan to her and, as to that, they say that Ms Kingsburra in fact made a total of $13,427.00 in payments in respect of the loan contract.

183    Seventeenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because the bargain between Channic and Ms Kingsburra was unjust because to Channic’s knowledge the value of the car was substantially less than the amount of the loan (with the same particulars repeated); the interest rate was unreasonably high; and the brokerage fee of $990.00 was unreasonably high: 53.15. The respondents deny these matters.

184    Nineteenth, ASIC says that the Channic loan to Ms Kingsburra was an unjust contract because the loan has not been discharged or otherwise come to an end: 53.16. As to this matter the respondents deny the contention and say that Mr Hulbert did not seek to repossess the vehicle and “wrote the loan off as a bad debt”.

185    ASIC says that the loan to Ms Kingsburra should be reopened by the Court under s 76 of the National Credit Code as an unjust contract. The respondents oppose reopening the contract and say that the vehicle was not repossessed and was retained by Ms Kingsburra.

PART 4: the questions to be addressed so far as the nccp act is concerned

186    The questions are these, so far as CBPL is concerned:

1.    Did CBPL provide credit assistance to the relevant borrower, on a day, by suggesting that the borrower apply, or assisting the borrower to apply, to Channic for a particular credit contract?

2.    If so, did CBPL within 90 days of that day make a preliminary assessment that purports to comply with s 115(1)?

3.    If so, does it specify, as required by s 116(1)(a) the period the assessment covers?

4.    Does the preliminary assessment, if made, assess, as required by116(1)(b) whether the credit contract with Channic will be unsuitable for the consumer if he or she enters into the credit contract in the period of the assessment?

5.    If no to either 3 or 4, CBPL fails to comply with s 115(1)(c)(i).

6.    If a preliminary assessment is made, is it likely, at the time of the preliminary assessment, that the consumer will be unable to comply with his or her financial obligations under the contract if the credit contract is entered into with Channic in the period proposed for it to be entered?

7.    If the consumer will be able to comply with those obligations, is it likely that such compliance could only be achieved by the consumer with substantial hardship?

8.    Is it likely, at the time of the preliminary assessment, that the contract with Channic will not meet the consumer’s requirements or objectives if the contract is entered into with Channic in the period proposed for it to be entered?

9.    If yes to any of 6, 7 or 8, the credit contract will be unsuitable by reason of s 118(2). If unsuitable by reason of s 118(2), CBPL must assess, by reason of s 118(1), the Channic credit contract as unsuitable for the consumer, in making the assessment required by 115(1)(c)(i) and s 116(1)(b).

10.    Also, does the preliminary assessment cover, as required by 115(1)(c)(ii), the period proposed for the entering of the contract?

11.    Did CBPL make reasonable inquiries as required by 115(1)(d) and 117(1)(a) about the consumer’s requirements and objectives concerning a contract with Channic?

12.    Did CBPL make reasonable inquiries as required by s 115(1)(d) and s 117(1)(b) about the consumer’s financial situation?

13.    Did CBPL take reasonable steps to verify the consumer’s financial situation as required by s 115(1)(d) and s 117(1)(c)?

14.    If no to any of 2, 3, 4, 10, 11 12 or 13 (or yes to any of 6, 7 or 8), CBPL fails to satisfy s 115(1)(c) or (d) and must not provide credit assistance to the consumer by suggesting or assisting him or her to apply to Channic for the particular credit contract: s 115(1).

15.    Apart from the questions arising out of the operation of s 115 going to the preliminary assessment, is it likely, at the time CBPL provides credit assistance to the consumer, that he or she will be unable to comply with his or her financial obligations under the Channic contract if the contract is entered into in the period proposed for it to be entered?

16.    As to 15, if it is not likely that the consumer will be unable to comply with those obligations, is it likely that the consumer could only comply with such obligations with substantial hardship?

17.    In any event, is it likely, at the time CBPL provides credit assistance to the consumer, that the credit contract will not meet the consumer’s requirements or objectives, if the contract is entered into in the period proposed for it to be entered?

18.    If yes to 15, 16 or 17, the credit contract will be unsuitable for the consumer by reason of s 123(2).

19.    If unsuitable by reason of s 123(2), CBPL must not provide credit assistance to the consumer by suggesting that the consumer apply, or by assisting the consumer to apply for the particular credit contract with Channic: s 123(1).

20.    Did CBPL, at the same time as providing credit assistance to the consumer, give the consumer a credit proposal disclosure document in accordance with s 121(2)?

187    The questions so far as Channic is concerned are these.

1.    It is uncontroversial that Channic entered into a credit contract with the consumers described at [73] of these reasons.

2.    Did Channic, within 90 days of the day of entry into the credit contract (the credit day) make an assessment that purports to comply with s 128(c)?

3.    If so, does the assessment specify the period the assessment covers, as required by s 129(a)?

4.    If Channic has made an assessment, does it assess whether the contract will be unsuitable for the consumer if the contract is entered into in the period the assessment covers, as required by s 129(b)?

5.    Is it likely, at the time of the assessment required by s 128(c)(i) and s 129(b), that the consumer will be unable to comply with the consumer’s financial obligations under the contract if the credit contract is entered into in the period covered by the assessment?

6.    As to 5, if it is not likely that the consumer will be unable to comply with those obligations, is it likely that the consumer could only comply with those obligations with substantial hardship?

7.    Is it likely, at the time of the assessment required by s 128(c)(i) and s 129(b), that the credit contract will not meet the consumer’s requirements or objectives if the credit contract is entered into in the period covered by the assessment?

8.    If the answer to 5, 6 or 7 is yes, Channic must assess that the credit contract will be unsuitable for the consumer by reason of s 131(1).

9.    Also, does the assessment cover the period in which the credit day occurs, which for present purposes is the date of entry into the Channic contract: s 128(c)(ii)?

10.    Has Channic, before making its assessment, made reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract: s 128(d) and s 130(1)(a)?

11.    Has Channic, before making its assessment, made reasonable inquiries about the consumer’s financial situation: s 128(d) and s 130(1)(b)?

12.    Has Channic, before making its assessment, taken reasonable steps to verify the consumer’s financial situation: s 128(d) and s 130(1)(c)?

13.    If the assessment does not cover the period in which the credit day occurs, or if Channic has failed to do the things contemplated by 9, 10 and 11, Channic has failed to comply with s 128(d).

14.    In the event that Channic fails to comply with s 128(c) or (d), it must not enter into a credit contract with a consumer who will be the debtor under the contract: 128(a).

15.    Apart from any question concerning the making of an assessment as required by s 128, is it likely, at the time the credit contract is entered into, that the consumer will be unable to comply with his or her financial obligations under the contract: s 133(2)(a)?

16.    As to 15, if it is not likely that the consumer will be unable to comply with those obligations, is it likely that the consumer could only comply with those obligations with substantial hardship: s 133(2)(a)?

17.    Is it likely, at the time the credit contract is entered into, that the credit contract does not meet the consumer’s requirements or objectives: s 133(2)(b).

18.    If the contract is unsuitable by reason of s 133(2), Channic must not enter into the credit contract with a consumer who will be the debtor under the contract: s 133(1).

PART 5: THE ADMISSIONS

188    In relation to the case made against them concerning each of the consumers, the respondents have made a number of admissions. Many other factual matters are contested. The admissions in relation to Ms Kingsburra have already been noted. I propose, however, to now note the admissions made by the respondents (drawn from the amended defence) in respect of the claims made against them concerning each consumer. I will also note the relevant paragraphs of the pleading.

As to Ms Kingsburra

189    The respondents admit that CBPL provided credit assistance to her for the purposes of ss 8 and 115 of the NCCP Act: para 23.

190    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 27.1.

191    They admit that no inquiries and verification as required by s 117 of the NCCP Act was undertaken by CBPL: para 27.3. Although there is a misdescription at para 27.3 of the amended defence (which refers to 27.2(a) of the statement of claim rather than 27.3) it seems clear that the respondents also admit para 27.3 of the statement of claim.

192    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 28.

193    They admit that Channic failed to undertake reasonable inquiries and verification as required by s 130 of the NCCP Act: para 38.

194    They admit that Channic failed to discharge its obligation to assess unsuitability for the purpose of s 128 of the NCCP Act: para 39.

195    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions contravened by Channic: para 414.4.

196    All other matters are in issue.

As to Ms Prunella Kathleen Harris

197    The respondents admit that CBPL provided credit assistance to her for the purposes of ss 8 and 115 of the NCCP Act: para 59.

198    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 63.

199    All other matters are in issue.

As to Mr Vance Henry Gordon and Ms May Estell Stanley

200    The respondents admit that CBPL provided credit assistance to them for the purposes of ss 8 and 115 of the NCCP Act: para 95.

201    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 98.1.

202    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 99.

203    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions contravened by Channic: para 414.4.

204    All other matters are in issue.

As to Ms Rhonda Lorraine Brim

205    The respondents admit that CBPL provided credit assistance to her for the purposes of ss 8 and 115 of the NCCP Act: para 133. Although there is a misdescription at para 133 of the amended defence (which refers to 132.2(b) of the statement of claim rather than 133) it seems clear that the respondents also admit para 133 of the statement of claim.

206    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 136.1.

207    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 137.

208    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions of the NCCP Act contravened by Channic: para 414.4.

209    All other matters are in issue.

As to Ms Kerryn Gerthel Smith

210    The respondents admit that CBPL provided credit assistance to her for the purposes of ss 8 and 115 of the NCCP Act: para 170.

211    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 179.1.

212    Because the respondents failed to plead to para 179.3 of the statement of claim, they are taken to have admitted that no inquiries or verification as required by s 117 of the NCCP Act was undertaken by CBPL: para 179.3.

213    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 180.

214    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions of the NCCP Act contravened by Channic: para 414.4.

215    All other matters are in issue.

As to Ms Joan Cecily Noble and Mr William Damien Noble

216    The respondents admit that CBPL provided credit assistance to them for the purposes of ss 8 and 115 of the NCCP Act: para 214.

217    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 223.1. They admit that no inquiries and verification as required by s 117 of the NCCP Act was undertaken by CBPL: para 223.3.

218    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 224.

219    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions of the NCCP Act contravened by Channic: para 414.4.

220    All other matters are in issue.

As to Ms Muriel Grace Dabah and Ms Estelle Harris

221    The respondents admit that CBPL provided credit assistance to them for the purposes of ss 8 and 115 of the NCCP Act: para 259.

222    They admit that no inquiries and verification as required by s 117 of the NCCP Act was undertaken by CBPL: para 261. They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 262.1(a).

223    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 263.

224    They admit that Channic failed to undertake reasonable inquiries and verification as required by s 130 of the NCCP Act: para 273.1.

225    They admit that Channic failed to discharge its obligation to assess unsuitability for the purpose of128 of the NCCP Act: para 274.

226    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions contravened by Channic: para 414.4.

227    All other matters are in issue.

As to Ms Charlotte Mudu and Mr Aaron Elliott

228    The respondents admit that CBPL provided credit assistance to them for the purposes of ss 8 and 115 of the NCCP Act: para 298.

229    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 301.1(a)-(b).

230    They admit that no inquiries and verification as required by s 117 of the NCCP Act was undertaken by CBPL (para 301.3) although the respondents also deny a contravention of s 117 of the NCCP Act: para 300.

231    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 302.

232    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions contravened by Channic: para 414.4.

233    All other matters are in issue.

As to Ms Donna Gayle Yeatman and Mr Farren Yeatman

234    The respondents admit that CBPL provided credit assistance to them for the purposes of ss 8 and 115 of the NCCP Act: para 338.

235    They admit that no preliminary assessment as required by s 116(1) of the NCCP Act was made by CBPL due to the relevant period not being specified: para 341.1.

236    They admit that CBPL contravened the prohibition upon providing credit assistance in applying for a credit contract to Channic without a preliminary assessment having been done, and inquiries and verification having been undertaken, in contravention of s 115(1) of the NCCP Act: para 342.

237    Mr Hulbert admits that, by operation of s 169 of the NCCP Act, he is taken to have contravened the provisions contravened by Channic: para 414.4.

238    All other matters are in issue.

As to Ms Leandrea Rose Raymond

239    The respondents admit that the original loan to Ms Raymond as varied by the “Raymond First Variation” and/or the “Raymond Second Variation” is a “Credit Contract” for the purposes of ss 4 and 204 of the NCCP Act: para 388.

240    The respondents failed to plead to para 392 of the statement of claim and thus they are taken to have admitted that Channic failed to make reasonable inquiries about Ms Raymond’s requirements and objectives for the purposes of s 130(1) of the NCCP Act: para 392.

241    The respondents admit that Channic failed to make reasonable inquiries and verification required by s 130 of the NCCP Act: para 393.3.

242    The respondents admit that Channic failed to discharge its obligation to assess unsuitability for the purposes of s 128 of the NCCP Act: para 394.

243    Although, of course, the facts concerning the circumstances relevant to each of the consumers recited in the Table at [73] of these reasons must be considered individually, the case made against the respondents concerning Ms Kingsburra illustrates, fundamentally, the nature of the case made against the respondents in respect of each of the other consumers and the business method adopted by Supercheap, CBPL and Channic.

244    It is now necessary to consider, the evidence of Ms Kingsburra.

part 6: The evidence of Ms ADELE DOROTHEA Kingsburra

245    Ms Kingsburra was born on 10 October 1972. She was almost 38 years of age when she engaged with the respondents between 6 July and 13 July 2010.

246    Ms Kingsburra lives within the Aboriginal Community at Yarrabah as part of what is called “Yarrabah Aboriginal Community Housing”. Ms Kingsburra has lived in the community for approximately 30 years. Ms Kingsburra lives in a de facto relationship with Mr Garry Gilmartin. Ms Kingsburra has eight children aged, at the date of her affidavit, 8, 10, 11, 13, 16, 22, 24 and 25. She lives with Mr Gilmartin and her five youngest children. On 6 July 2010 when she went to Supercheap she was then living with Mr Gilmartin and her eight children: T, p 594, lns 34-38; T, p 619, lns 42-43. Mr Gilmartin suffers from depression and anxiety. Ms Kingsburra is his carer. Ms Kingsburra’s 11 year old son, Lemac, has special needs as he suffers from a condition described as “absency seizure”.

247    Ms Kingsburra attended the Slade School in Warwick as a boarder. She left that school in 1988 after Year 11. She was at the school for two years in 1987 and 1988.

248    After leaving school, Ms Kingsburra returned to the Yarrabah community. For brief periods of approximately six months or so, she lived outside the community in places such as Blackwater or Toowoomba. She undertook a general computer course at the Yarrabah Training Centre about two or three years ago although she has not undertaken any further study. She thinks that her English is “pretty good” and she says that she can read and write “pretty well”. She says that sometimes she does not understand the meaning of some words. In giving her evidence Ms Kingsburra was well-spoken. She does not speak any other languages. Ms Kingsburra says that she has “done some casual work before”. In about 2011, Ms Kingsburra was employed doing casual work as part of the Commonwealth Government Census but that work endured for only six weeks. In doing that work, she was required to “knock on people’s doors and fill out census forms for people in Yarrabah. Ms Kingsburra says that she has not done any other paid work since she left school.

249    Ms Kingsburra elaborated upon these matters in the course of cross-examination. She agreed with counsel for the respondents that she had worked as a Postmistress at Yarrabah for “maybe two years” and in undertaking that work she was doing “CDEP two days a week”, that is, a “work for the dole thing”. Ms Kingsburra says that she was handling the mail in the sense of “just giving mail – handing mail out”. Ms Kingsburra says that she was not responsible for “filling out any paperwork or finance or anything, just handling the mail”: T, p 626, lns 36-47; T, p 627, lns 4-5. Ms Kingsburra accepted that this work approached something like 200 days of work assuming the period was about two years.

250    Ms Kingsburra also agreed that she lived for about two years in Blackwater. She was unemployed and lived there with her in-laws: T, p 627, lns 21-31. She also lived for a year prior to 2010 in Toowoomba. She was again unemployed and living with her in-laws: Tp 627, lns 33-35.

251    Ms Kingsburra says that in July of each year she usually receives a bonus from Centrelink as a “family tax benefit”. Ms Kingsburra says she knew she was going to receive a benefit of about $2,000.00 or $3,000.00 in July 2010. Ms Kingsburra says that one of her sons had an 18th birthday coming around in October and she wanted to buy a car for him with some of the Centrelink benefit. She did not want to use “the whole lot”. She had promised him a car if he graduated from school for her and since his birthday was in about three months’ time, she thought she would try and “get him a car”: T, p 595, lns 1-2. Ms Kingsburra said that she did not know where she was going to get the car from at the time but she spoke to a “couple of ladies” whose names she could not recall and they referred her to Supercheap: T, p 595, lns 10-16.

252    In her affidavit, Ms Kingsburra says that the people recommending Supercheap told her that she could “go down to see a guy named Colin at Super Cheap Auto in Cairns” [and as] long as you can come up with a deposit for them you can sign for the car and drive off. They also said that a “deposit for a small car would be $1,500.00 and a bigger car would be $2,000.00”.

253    Ms Kingsburra thought she could afford a deposit of $1,500.00 because she knew she was going to be receiving some money in July from Centrelink. She did not want to spend too much on the car because she knew she could not “afford too much”: T, p 595, lns 18-24. She knew that she would have to make some payments on the car other than the deposit but, by this stage, she had not thought about how much the other payments might be. Ms Kingsburra said that “roughly, like, anything under 10,000 really, you know” was something she may have had in mind: T, p 595, lns 28-29.

254    Ms Kingsburra says that in July 2010 she went to the Supercheap car yard on Mulgrave Road on a Tuesday (6 July) and spoke to a “tall bloke there” whose name was Kevin. This was Mr Humphreys although in the context of Ms Kingsburra’s evidence I will continue to refer to him as Kevin. He worked in the car yard. In response to Kevin’s question of whether he could help her, Ms Kingsburra said that she just wanted to see if she would be able to get a car for one of her sons as his 18th birthday was coming up. Ms Kingsburra said that since he would be 18, he would want something “sporty-looking”. Kevin pointed out some cars. Ms Kingsburra thought that a teenager would not like those cars. Kevin pointed out a car parked outside the car yard and asked “what about that one there”? Ms Kingsburra thought that car looked “okay” and looked “sporty”. Ms Kingsburra says that Kevin said: “well, that car runs well, because I know because I drive it to and from work, and also I took it for a drive up on the Atherton Tablelands and it drives pretty well up there on – on the Tablelands”: T, p 595, lns 46-47; T, p 596, lns 1-2.

255    In her affidavit, Ms Kingsburra, in the context of the reference to the Atherton Tableland, thought that Kevin also said this: “it is pretty good out on the range and has no problems”. That observation is consistent with the remark that: “I took it for a drive up on the Atherton Tablelands and it drives pretty well up there on on the Tablelands”.

256    In her affidavit Ms Kingsburra thinks that she noticed and pointed out to Kevin some paint damage on the back bumper bar of the car. It was peeling and Kevin said that Ms Kingsburra “could get that fixed for pretty cheap” and “it won’t cost you much for a paint job” and “you could just get some spray paint and paint it yourself”.

257    Ms Kingsburra had a conversation with Kevin about the price. She asked how much the car would cost and he said $8,990.00. Ms Kingsburra thought: “Wow, I can afford this. I can afford this car. It’s a nice sporty car for my boy’s 18th: T, p 596, lns 1-5. In cross-examination, Ms Kingsburra rather thought that she did not have a conversation with Kevin about how much the car would cost. Her recollection was that there was a sign on the front windscreen marked $8,990: T, p 614, lns 44-47; T, p 615, lns 1-4. Kevin then said that Ms Kingsburra would need to “come up with $1,500.00 deposit”. Ms Kingsburra said that she did not have the deposit with her but would have it on Saturday. Kevin said he would hold the car until Saturday. Ms Kingsburra says that Kevin “also asked me to pay another 200 – [an] extra $200 for a new set of mags to go on the car”. Ms Kingsburra says Kevin told her that “it’s going to cost him 400 but he just want[ed] me to pay $200 for the cost of the mags”: T, p 596, lns 44-45; T, p 597, lns 1-4.

258    Ms Kingsburra says she then went to “[something] just like an office with a door” and Kevin introduced her to “a bloke named Colin”. This was Mr Hulbert although in the context of Ms Kingsburra’s evidence I will continue to refer to him as Colin. Kevin said to Colin “she’s looking for a car for her son’s 18th birthday”: T, p 596, ln 11. Kevin then told her to come back on Saturday with the deposit and a Centrelink statement and an identification photo as well. Ms Kingsburra says that she did not have a discussion with anyone on that day about her income or her expenses. That was going to be discussed on the following Saturday, when she was to return to the car yard with the deposit, the Centrelink statement and identification although she was also asked to bring with her a letter from her partner Garry Gilmartin stating that he paid her board of $150.00 each fortnight towards food.

259    Ms Kingsburra says that she had the discussion as to these requirements with Kevin.

260    In her oral evidence, Ms Kingsburra rather thought that she did not have any discussion about expenses on the Tuesday and that this discussion was to occur on the following Saturday. There must have been some discussion about some aspects of her financial circumstances because Ms Kingsburra was asked by Kevin to bring the Centrelink statement and Mr Gilmartin’s statement to the car yard the following Saturday. That explains the circumstance referred to in Ms Kingsburra’s affidavit that she was asked by Kevin on the Tuesday about her Centrelink payments and her rental income. Kevin asked her whether she was on Centrelink payments. She said yes. She was asked whether she had to pay rent and she said yes, in an amount of $250.00 per fortnight deducted out of Centrelink payments. She was asked whether she had any other income and she said that she received $150.00 per fortnight board from Mr Gilmartin as a contribution towards the cost of groceries.

261    Kevin then asked Ms Kingsburra to produce a Centrelink statement and evidence of the payments by Mr Gilmartin.

262    At some point there was a discussion of loans with other people.

263    Ms Kingsburra says she was asked, by Kevin, whether she had other loans and she said that she had a loan with “Safrock”, that is, Cash Converters and also with GE Finance. Ms Kingsburra said that the loan from Cash Converters was still outstanding at this time and the GE Finance loan had been “put towards the debt collector” because “I wasn’t able to afford to pay them these instalments”: T, p 597, lns 18-26. Kevin said that he would obtain a “credit check” concerning Ms Kingsburra.

264    In her affidavit, Ms Kingsburra says that she told Kevin that her monthly repayments to GE Finance were $200.00 although she was not making any repayments at that time and she said: “The loan with Cash Converters has three more fortnightly payments to go and I owe them about $800.00”.

265    Ms Kingsburra was taken to a three page document at Tab 2 to her affidavit. On page 1, it bears the heading “Credit Application Form”. Under that, it has “loan purpose”. That space is blank. The next line is “Credit Terms”. The word “vary” is inserted there. The next section is headed “Deal Basics (Office Use)”. It has no entries. The next section, in a box, is headed “Personal Details”. It has handwritten details. The last section, in a box, is headed “Notes”. It has no entries. As to the handwritten information in the “Personal Details” box, Ms Kingsburra says that those handwritten inserted details are not her handwriting. In the Personal Details box someone has noted in handwriting that Ms Kingsburra has five dependants and apart from details of Ms Kingsburra’s name, date of birth, current address, time at that address and whether Ms Kingsburra rents the premises, someone has noted that Ms Kingsburra’s current employer is “Centrelink” and as to “income”, three figures are noted: $462, $106 and $528 amounting to $1,096. Those amounts reconcile to amounts recited in a Centrelink statement dated 12 July 2010. The amount of $528 is the combination of a carer payment and a pension supplement ($485.60 and $42.90). The amount of $106 is a carer allowance. The amount $462 represents the total of the remaining benefits, namely $887.18 less Centrelink deductions of $425.62, which amounts to $461.56.

266    Page 2 contains two boxes. The first box is headed “Financial Information” and the second is headed “References”. The handwriting in the “References” box is that of Ms Kingsburra. She remembers filling out that part of the form on page 2 and says that she filled it out on the day that she went to pick up the car. She thinks that when she was filling out that part of the form she may have spoken to Colin: T, p 598, lns 1-8.

267    Ms Kingsburra says that the handwriting in the “Financial Information” box is not her handwriting. On the last page there is a space for the signature of the applicant, the printing of the applicant’s name and a date. Ms Kingsburra says that she signed the document on page 3, wrote in her name and wrote in the date, “06-07-10”. Ms Kingsburra says that she did this on the day of her first visit to the car yard, namely the Tuesday.

268    In her affidavit Ms Kingsburra says that at the time of going to buy the car she was “doing okay moneywise” and although she had some loans to pay off, she thought she could afford to put a deposit on the car having regard to the Centrelink bonus payment. Apart from the bonus payment, Ms Kingsburra says that her regular fortnightly Centrelink payments were about $1,500.00. Deductions had to come out of that sum. She was also receiving $150.00 per fortnight from Mr Gilmartin.

269    At the time of buying the car, her expenses were these (as set out at para 58 of her affidavit):

(a)    my rent, which was $250 a fortnight to Yarrabah Community Housing, that was deducted through Centrepay;

(b)    my electricity bill, which I pay through Centrepay, I was paying about $150 a fortnight;

(c)    my gas bill, which was about $170 a quarter, which I pay in cash;

(d)    my food and groceries, [on] which I spent about $120 a week on food for me and the family, it’s a bit more now;

(e)    my pre-paid mobile phone, which I got in July 2010, [on which] I spend about $30 a week on recharges;

(f)    school fees for the kids of about $400 per year, which I pay in January, and then whatever they need for books, uniforms, stationery and shoes through the year;

(g)    repayments on my loan with Cash Converters … of about $200 per fortnight; and

(h)    instalments on an advance I have from Centrelink (“Centrelink Advance”) of about $25 per fortnight.

270    Ms Kingsburra says that at the time of buying the car her debt to GE Finance was $1,700.00 and she had stopped making the payments. The debt to Cash Converters was about $800.00 and the collection of that debt was also in the hands of a debt collector.

271    Returning to page 2 of the Credit Application Form, Ms Kingsburra thinks that at the time she wrote the information in the “References” box, it was probably Colin who was asking her about her expenses. Ms Kingsburra cannot recall whether anything was written in the “Financial Information” box when she was filling the “References” box. In the “Financial Information” box, the first line asks the question: “do you have any know[n] Credit Defaults?” Ms Kingsburra says that she was not asked to fill in anything in answer to that question and added the observation (about the Financial Information box) that: “they’re not my handwriting”: T, p 598, lns 15-24. Ms Kingsburra says that none of the handwriting in this box is her handwriting. The next information line is “Rent/Mortgage” with a space at the end of the line, of “$             per week”. Each information line ends in that way to enable the insertion of an amount.

272    In the Rent/Mortgage line the words “already taken” are inserted which Ms Kingsburra understands to be a reference to Centrelink deductions for the payment of rent and electricity: see para 58(a) and (b) recited at [269] of these reasons. The next line is “Credit Card(s)” and there is no entry of an amount for that item. The next line is “Food” and an amount of $480 is inserted with the word “week” crossed out and “Mt” added. The next two lines are “Phone (H)/Mobile” and “Vehicle Expenses”. No amount is entered on either line. The next line is “Personal Loan(s)” and an entry appears there of “Cash Converters (3 = Finalised) $807” (followed by the standard words “per week”). The next line is “Utilities” and the words inserted there are “already taken”. The next line is “Child Support” and no entry appears. The next line is “Other” and on that line there is an entry “GE”. An amount is entered on that line of $200 (and the pro forma words “per week”) and then the amount is crossed out. The total expenses (“Exp”) are shown as $1,487.00. Plainly they are not weekly expenses. Total income (“Inc”) is shown as $2,374.66. Under that, two figures appear on two separate lines in this way:

DSR    54%

DSR    28%

273    The difference between total income and total expenses (as recited in the box) is $887.66. The weekly repayments under the Channic Loan Contract with Ms Kingsburra are $119.45. That represents approximately $477.80 per month. That monthly repayment as a proportion of Ms Kingsburra’s residual income (as calculated in the box, amounting to $887.66) is 53.82% or approximately 54%.

274    As already mentioned, Ms Kingsburra says that she signed page 3 of the document with Kevin on the Tuesday and that she later went to the premises and she filled out the names of family members in the References box. She signed and dated page 3. She says that Kevin filled out the first page and the information in the “Financial Information” box.

275    In her affidavit, Ms Kingsburra says that after she signed the document, she had a conversation with Kevin about obtaining the documents earlier mentioned and bringing them to the car yard on the following Saturday. Kevin had already said that the car would cost $8,990.00 and that the deposit would be $1,500.00. There had also been the discussion about $200.00 for the mag wheels. Ms Kingsburra says she asked Kevin how much the instalments would be after the payment of the deposit. Ms Kingsburra says that Kevin said: “roughly $120 a week for about 2 years”. Ms Kingsburra says that at the time she thought that she could afford such a payment and was surprised that it was “so easy to get a car”. She says that “[w]ith all my problems with finance in the past and the debt collectors I thought it would be a lot harder”. In her oral evidence, Ms Kingsburra thought that she discussed the weekly payment with Colin.

276    Ms Kingsburra then left the car yard premises.

277    She returned the following Saturday, 10 July 2010.

278    The mag wheels had been put on the car. Kevin was at the car yard. Ms Kingsburra says that she told Kevin she had the deposit. She was asked whether she had a Centrelink statement and a copy of her identification card. She had neither of those things. Kevin told her that she could not take the car “because you don’t have your Centrelink statement or your ID and the contract isn’t ready yet either”. Ms Kingsburra was also told that she would need to bring the letter from Garry saying that he pays $150 a fortnight board to Ms Kingsburra towards food.

279    Ms Kingsburra says she was told to come back on Monday with those things.

280    The Centrelink statement provided to Kevin is dated 12 July 2010. Ms Kingsburra says that on Monday morning, (which was 12 July), Ms Kingsburra went to the Centrelink Office in Yarrabah and obtained the Centrelink statement and a Rent Deduction Statement. Ms Kingsburra’s daughter-in-law and niece borrowed a car and drove Ms Kingsburra into Cairns to the car yard to pick up the car and sign a contract. She had with her a copy of her ID, the letter from Garry and the Centrelink statement dated 12 July 2010. At para 29 of her affidavit (and following), Ms Kingsburra says that her third visit to the car yard occurred on the Monday following the second visit on the Saturday which, in turn, followed the first visit on the Tuesday. Those dates are 12 July, 10 July and 6 July 2010, respectively. The Credit Contract was signed on the third visit. It, however, is dated 13 July 2010 and the respondents admit that it was signed on 13 July 2010. The third visit must have been on Tuesday not Monday. Presumably, Ms Kingsburra obtained the Centrelink statement on Monday, 12 July 2010. She must have then gone to the car yard for the third visit the next day.

281    In her oral evidence, Ms Kingsburra says that she was also asked to provide a bank statement and on that third visit she did provide a bank statement.

282    Page 2 of the Centrelink statement contains information under the heading “Future regular entitlements and payments”. Ms Kingsburra says that these were the entitlements and payments she was receiving. They are:

Payment Type

Amount

Date to be paid

Carer Payment

$485.60

19 July 2010

Pension Supplement

$42.90

19 July 2010

Carer Allowance

$106.70

26 July 2010

Family Tax Benefit Part A

$801.50

26 July 2010

Family Tax Benefit Part B

$49.98

26 July 2010

Large Family Supplement

$33.18

26 July 2010

Rent Assistance

$2.52

26 July 2010

283    These fortnightly payments amount to $1,522.38. On a monthly basis the payments amount to approximately $3,044.76. The statement shows that Centrepay deductions were made from Ms Kingsburra’s entitlements. The first deduction is an amount of $400.00 which represents the rent payment of $250.00 and the electricity payment of $150.00: see para 58(a) and (b) at [269] of these reasons. The second deduction is a fortnightly amount of $25.82. Monthly payments, after those deductions, amount to $2,593.52. Ms Kingsburra also received $150.00 a fortnight from Mr Gilmartin.

284    The letter from Mr Gilmartin is Tab 5 to Ms Kingsburra’s affidavit. Apart from the documents already mentioned, Ms Kingsburra was not asked for any other documents nor any documents in relation to the GE loan or the Cash Converters loan.

285    On the front page of the Centrelink statement there is a handwritten amount of $3276.65. Ms Kingsburra says that this is not her handwriting and she does not recognise it.

286    Ms Kingsburra says that when she and her daughter-in-law and her niece arrived at the car yard they went up to Kevin. He took them into the office. Ms Kingsburra gave the document she had brought with her to Kevin. Kevin gave the documents to Colin. Colin and Ms Kingsburra then sat at a desk and Colin “pulled out the contracts for me to start signing: T, p 603, ln 7.

287    In her affidavit, Ms Kingsburra says that Colin showed her the contract and said words to the effect: “please sign this”. Ms Kingsburra was shown a document by ASIC’s counsel described as “Consumer Loan Contract and Mortgage No: 5030” (the “Credit Contract”). She said that she did not know what the “mortgage part was about”: T, p 603, ln 17. Ms Kingsburra identified her initials on page 1 next to the place marked “Borrower(s) To Initial Here”. She also identified her initials on page 2 and also next to some figures in the Schedule on page 2. She also identified her initials on page 3 and so on throughout the document in the place provided for the borrower to initial the document. Ms Kingsburra acknowledged her signature on pages 8 and 9 of the document and also at the end on page 22 of the document.

288    In her affidavit, Ms Kingsburra says that she did not get a chance to read the Credit Contract before signing it. She says that Colin “did not explain anything about the Credit Contract to me” and “Colin just turned the pages and pointed to where I had to sign”: para 41. At para 42, Ms Kingsburra says that when she signed the Credit Contract she understood that the car was “going to be $8,990” which is what “I agreed with Kevin on the Tuesday and that was everything I was going to pay for the car”. Ms Kingsburra says, at para 42, that she had paid a deposit of $1,700.00, “so I thought I was borrowing the rest for the car and would pay that back in instalments”. She also thought that the instalments would be $120.00 a week over two years as Kevin had told her. Weekly payments, on that footing, over two years, would amount to $12,480.00.

289    In cross-examination Ms Kingsburra gave evidence that the formulation of $120.00 per week over two years did not alert her to the fact that she was going to be paying a lot more money back than the price that was displayed on the vehicle: T, p 621, lns 42-44. Ms Kingsburra says that she was not concerned to try and work out some idea of the total amount she was going to have to pay: T, p 622, lns 5-6. Ms Kingsburra says that it never dawned on her in the week between the first time she went to Supercheap and was told by Kevin that the instalments would be $120.00 per week over two years and the signing of the contract that she was going to be paying more than the advertised price of the car, “because I was so excited of getting this car for my son’s 18th birthday: T, p 626, lns 15-21.

290    In her oral evidence, Ms Kingsburra explained the circumstances in which she signed the Credit Contract in this way at T, p 604, lns 10-24:

… at the time I was very anxious for a car, as you can tell by my story in the statement, and I didn’t quite understand the contract and as we were going through, … because Colin didn’t go [into] details – you know, it was just quickly – briefly of what’s on the page, and for me to sign and initial where needed. And, yes, I thought it was – it wasn’t right, because it was too quick that the contract was signed off with so many pages. [I] think we must have done it in, like, 15-20 minutes, or something. And I didn’t know about – is it broker – broker or something [like] that … that I had to pay Kevin the salesman $900 as well as my contract, and I didn’t know what 48 per cent was at the time. Well, no, I still don’t – don’t know the amount for 48 per cent. And I didn’t know I was going to be paying [$13,000] for this car, because I knew it was second-hand and used, and if I had known that at the time, I wouldn’t have went ahead with the contract and signed any papers. And knowing that I’ve got to pay someone else $900 too, well, I wouldn’t have done it.

291    Page 1 of the Credit Contract contains a financial table in these terms:

FINANCIAL TABLE

Amount of credit of the loan

$8,301.50

Annual percentage rate

48% per annum

Total amount of interest payable

$4,832.85

Interest free period

The maximum duration of any interest free period under the contract is

0 weeks

Repayments

Total number of repayments

110

consisting of 109 repayments each of

$119.45

Plus a Final Repayment of

$114.30

Total amount of repayments

$13,134.35

Date of first repayment

19/07/2010

Frequency of repayment

Weekly

Credit fees and charges retained by us

None

Nil

Disclosure Date - The information as shown is current as at this date

13/07/2010

Note

Subject to the General Conditions, we may change the way we calculate interest or how often we debit interest, the amount or frequency of any fees and charges (including the addition of new fees and charges) and the amount or frequency or time for payment or method of calculation of your repayments without your consent by giving you notice of such changes. Where we make such a change, we will notify you.

End of Financial table

292    At the end of the Financial Table, there is a reference to a Comparison Rate in these terms:

Comparison Rate                    47.4631% per annum

This rate is calculated on the $8,301.50 credit amount over a 110 week term with the ascertainable credit fees and charges (if any) and repayment amount(s) and date(s) as stated in the Schedule.

293    In oral evidence, Ms Kingsburra was taken to the Financial Table and the amount of the loan of $8,301.50. She said that she thought that this was the amount that was “supposed to be left”, “without the deposit”. She said: “that’s all I thought I was going to be paying”: T, p 604, lns 42-43; T, p 605, ln 1. Ms Kingsburra was then taken by ASIC’s counsel to the elements of the transaction and agreed that the purchase price of the car was $8,990.00 and that she had paid a deposit of $1,500.00 plus $200.00 for the mag wheels. Thus, the purchase transaction balance was $7,290.00. Ms Kingsburra acknowledged that the recited amount of the loan of $8,301.50 was more than the purchase transaction balance. Ms Kingsburra said that she did not realise that the amount of the loan was more than the purchase transaction balance until it was pointed out to her by ASIC although Ms Kingsburra seemed to attribute the difference to the interest rate of 48%.

294    Ms Kingsburra said that nobody told her, at the time, that the interest rate was 48%: T p, 605, ln 16.

295    Ms Kingsburra was also taken to the total amount of repayments entry in the Financial Table of $13,134.35 and gave evidence that nobody had pointed out to her, at the time, that the repayments were going to be that amount: T, p 605, lns 19-20. Ms Kingsburra gave evidence, in response to a question from counsel, for ASIC that she did not appreciate that the amount of $13,134.35 did not include the deposit she had paid of $1,500.00. She said that she did not appreciate that, in fact, she would be paying $14,600.00 (the accurate amount being, on that footing, $14,634.35) and, in answer to the question “if you had been told that at the time, what would you have [done]?, Ms Kingsburra also said, “I wouldn’t have bought the car”: T, p 605, lns 18-26.

296    Apart from Ms Kingsburra’s oral evidence just described, Ms Kingsburra addressed these matters in her affidavit. At para 46, she says that ASIC pointed out to her that under the Credit Contract she was borrowing $8,301.50; that she would be paying interest of $4,832.85 and making total repayments of $13,134.35. As to the amount of $8,301.50, she says that she did not know she was borrowing this amount and thought that she was borrowing the price of the car less the deposit. As to the interest of $4,832.85 she says that she did not know that she was “going to be paying that much in interest”. As to the total repayments of $13,134.35 she says that she “did not know that”. At para 47, she repeats that at the time she signed the Credit Contract, her “understanding was that the total amount of repayments would be $8,990.00 less the deposit and she adds that “if they wanted to charge me $13,134.35, I do not understand why they didn’t put that price on the car”.

297    The first page of the Credit Contract recites this:

We, Channic Pty Ltd, ATF trading as AHA New Start Finance Trust, ABN No: 60 141 145 753, (we, us, the Lender) of [the Earlville address]

offer to enter into a loan contract with:

Adele Dorothea Kingsburra (you, Borrower/Mortgagor No. 1) [Address]

On the terms set out in the Schedule below [pages 2 to 9 inclusive of the contract] and the General Conditions [pages 10 to 22] contained in this document. This offer replaces any previous offer made following your credit application. Any such previous offer is cancelled. The lender is treating this offer as being regulated by the National Credit Code.

298    Ms Kingsburra was taken to the above opening part of the contract and gave evidence that she was not told at the time who Channic was: T p 605, ln 32.

299    The Schedule on page 2 sets out further information in a schedule. The top four boxes of the schedule are set out in the following way:

Schedule

Offer date

13/07/2010

Loan Draw Down Date

13/07/2010

Loan term commencing from the Draw Down Date

110 weeks

Amount of credit to be paid on the Drawdown Date as follows:

1.    To us for payment of all loan establishment fee(s) and charge(s)

$21.50

2.    To Cash Brokers Pty Ltd for Brokerage

    Paid by EFT to BSB 0 Account 0

$990.00

3.    To CHANNIC PTY LTD for Car Purchase SUPERCHEAP CAR SALES

    Paid by EFT to BSB 0 Account 0

    for the purpose of Car Purchase

$7,290.00

Payment Due Dates

As per Schedule 1

Interest is calculated in accordance with Clause 5 of the General Conditions.

300    In this part of the Schedule, a line is crossed through Channic Pty Ltd and Supercheap Car Sales is handwritten in. Ms Kingsburra’s initials appear next to that change to Item 3 in the Schedule.

301    As to CBPL, Ms Kingsburra was asked whether anyone told her “who Cash Brokers were” and she answered: No. She was asked whether anyone had told her “about brokerage being paid” and she answered: No. She was asked whether anyone had told her “about any other fees or expenses associated with the transaction and she answered: No: Tp 605, lns 28-44.

302    In her affidavit Ms Kingsburra says that she does not remember any business called Cash Brokers and says: “I never wanted to borrow any money to pay an extra $990.00 to anyone”. She adds that she could not afford to do that and says that she does not know what brokerage is. She adds that no-one told her about “about this before I purchased the car”: para 52. Ms Kingsburra also refers to a document at Tab 7 of her affidavit which is an invoice from CBPL to Channic concerning Ms Kingsburra. The invoice is for brokerage of $990.00 representing a brokerage fee of $900.00 and GST of $90.00. Ms Kingsburra says that she had not seen this document before being shown it by an ASIC officer and adds that until she was informed of the brokerage component she was unaware that she had been charged a brokerage fee of $990.00: para 53. She adds: “if I had seen this document at the time of buying the car, I would have asked what I was paying $990.00 for.

303    She was also asked, did you know who was giving you the finance on the car or who was giving you the credit to pay off the car” and answered that she thought she was “just buying it [the car] off Colin – the car yard people who were selling the car”: T, p 606, lns 1-3.

304    Ms Kingsburra’s second visit to the car yard was on Saturday, 10 July 2010. She knew she would be returning to the car yard to sign a written contract on Monday. She thought that she would be going to the car yard just to “sign the contract” and “take the car home”: T,   622, lns 34-35. She says that she was not “interested to know about the writing on the paperwork, the contract”: T, p 622, lns 40-41. That was so because she thought “it was too easy to get this car”: T, p 622, lns 43-44. Ms Kingsburra says that no-one had told her, leading up to her first visit to the car yard, that if she wanted to borrow money to buy a car from Supercheap, she would have to pay interest: T, p 623, lns 8-10. Ms Kingsburra accepted that the bank statement shows an ATM fee of $2.00 for making a withdrawal and that it shows an entry on 1 March of “debit INT to 25 February of $1.84”. Ms Kingsburra did not know that the entry represented a debit of interest: T, p 623, lns 38-46.

305    Ms Kingsburra accepted that the bank statement shows a range of fees such as account fees, overdraft fees and ATM fees. Ms Kingsburra said that she looked at the bank statements simply to check the balance and did not actually look at any of the entries. She said that she was not aware of the charges the banks might render as shown in the bank statement: T, p 624, lns 38-46.

306    As to GE Finance and Cash Converters, Ms Kingsburra said that those companies did not send her statements about her loans. She said that GE Finance did not send any statements to her even when default had occurred and it did not send her a letter about the default: T, p 625, lns 5-15. Sometime in 2013, Ms Kingsburra received a letter from a debt collector for GE Finance stating that she was in debt in an amount of $1,700: T, p 625, lns 21-23.

307    Ms Kingsburra gave evidence that when speaking with Kevin on the first day she went to Supercheap she told him that the GE Finance loan had been referred to a debt collector and that she was not making any repayments on the loan at that time. She says she has never heard from them, subsequently: T, p 620, ln 31. She told Kevin that she owed Cash Converters approximately $800.00 and thus there were three more fortnightly payments to go, at least at that time. She did not make the payments because she could not afford to pay it back. That matter was put in the hands of debt collectors as well and Ms Kingsburra has not heard from them since, either: T, p 620, lns 33-47.

308    Ms Kingsburra also gave evidence that nobody spoke to her about getting legal advice about the contract and nor did anybody suggest that she should read the document: T, p 606, lns 18-21.

309    It is necessary to say some further things about the Credit Contract.

310    Schedule 1 (page 5 of the Credit Contract) sets out a list of the dates of payment for each weekly instalment.

311    Page 8 contains a box under the heading “IMPORTANT” in these terms:

BEFORE YOU SIGN

IMPORTANT

THINGS YOU MUST KNOW

    READ THIS CONTRACT DOCUMENT so that you know exactly what contract you are entering into and what you will have to do under the contract

    Once you sign this contract document, you will be bound by it. However, you may end the contract before you obtain credit, or a card or other means is used to obtain goods or services for which credit is to be provided under the contract, by telling the credit provider in writing, but you will still be liable for any fees or charges already incurred.

    You should also read the information statement: “THINGS YOU SHOULD KNOW ABOUT YOUR PROPOSED CREDIT CONTRACT”

    You do not have to take out consumer credit insurance unless you want to. However, if this contract document says so, you must take out insurance over any mortgaged property that is used as security, such as a house or car

    If this contract document says so, the credit provider can vary the annual percentage rate (the interest rate), the repayments and the fees and charges and can add new fees and charges without your consent.

    If you take out insurance, the credit provider cannot insist of any particular insurance company

    Get a copy of this contract document

    Fill in or cross out any blank spaces

    Do not sign this contract document if there is anything you do not understand

    If this contract document says so, the credit provider can charge a fee if you pay out your contract early.

A Kingsburra

Signature of Borrower

Hulbert

Signature of Witness

Date    13.7.2010

312    Ms Kingsburra signed page 8 immediately under the box in the space provided. That page also says this:

You should retain the additional copies of this document for your records.

(a)    PLEASE ALSO ENSURE THAT YOU COMPLETE BOX A OR BOX B. YOU SHOULD COMPLETE BOX A IF YOU CHOOSE TO OBTAIN LEGAL ADVICE OR ALTERNATIVELY, COMPLETE BOX B IF YOU CHOOSE NOT TO OBTAIN LEGAL ADVICE.

(b)    WE STRONGLY RECOMMEND THAT YOU OBTAIN INDEPENDENT LEGAL AND FINANCIAL ADVICE REGARDING YOUR LOAN CONTRACT BEFORE YOU SIGN YOUR LOAN CONTRACT.

313    Page 9 contains Box A and Box B. Box A is crossed out. Box B is signed by Ms Kingsburra and, in plainly different handwriting, contains the date 13th July 2010. Box B is in these terms:

BOX B

THIS BOX MUST BE COMPLETED IF YOU CHOOSE NOT TO OBTAIN LEGAL ADVICE. IF YOU HAVE ANY DOUBTS OR WANT MORE INFORMATION, DO NOT SIGN THE CONTACT [sic] UNTIL YOU ARE SATISFIED WITH THE RESPONSES OR HAVE SOUGHT LEGAL ADVICE

We recommend you obtain legal advice

I/WE CERTIFY THAT:

    I/we have been handed a copy of the loan contract (“Documents”) and Information Statement.

    I/we have read this certificate and understand this is the credit provider’s standard agreement upon which it intends to rely. I/we have been advised that for my/our own benefit and protection, I/we should read the entire loan contract and the conditions under which I/we have been granted the loan carefully before signing them. I/we have also been advised that if I/we do not understand any point that I/we should ask for further information and to make sure I am/we are satisfied with the credit provider’s responses.

    I am/we are all the borrower(s) (and if applicable), the mortgagor(s)) named in the Documents.

    I/we have been given the opportunity to obtain legal advice on the nature and effect of the Documents but have chosen not to do so of our own accord.

    I/we have been advised that prior to signing the Documents, I/we should satisfy myself/ourselves that I/we understand the full nature and effect of my/our liabilities to the credit provider and obtain appropriate advice, legal or otherwise, if I am/we are at all uncertain of my/our position and I/we do not require the Documents to be translated into another language.

    There are obligations and risks involved in signing the Documents and I/we understand this.

    I/we sign the Documents freely, voluntarily and without pressure from anyone.

Please delete any statement that does not apply

DATED: the 13th day of July 2010.

SIGNED:

A Kingsburra                        (borrower(s) signature)

ALL BORROWERS MUST SIGN

314    Page 22 of the Credit Contract is also signed by Ms Kingsburra as the signatory of an account recited in a document described as a “Direct Debit Request”. By that document Ms Kingsburra authorised and requested debit payments to be made to her account with the CBA Bank through the “PayGate Direct Debit Billing System”, by reference to a particular user ID number, by “AHA New Start Finance Trust”. The Credit Contract, of course, is entered into by Channic as trustee of that trust.

315    Ms Kingsburra was taken by ASIC’s counsel to a document called “PAMD Form 37a” under the Property Agents and Motor Dealers Act 2000 (Qld) (the “PAMD Act”). Form 37a is concerned with important pre-purchase information relating to a cooling off period. Ms Kingsburra signed an acknowledgement on page 2 that she had received the form and Appendix A to it.

316    Ms Kingsburra was also taken to Form 38a-1, a notice of statutory warranty, under the PAMD Act. Ms Kingsburra also signed an acknowledgement on that form of her obligation to give Supercheap written notice within the warranty period should she wish to access the warranty. Form 38a-1 sets out a “Class B” warranty for the vehicle which, put simply, recognises a warranty for one month from the date of sale or a distance travelled of 1,000 kilometres after sale, whichever happens first. Clause 5 sets out a warranty that the vehicle is “free from defects (other than the defects not covered by the Statutory Warranty) at the time of sale and for the warranty period and that any defects in the vehicle reported in writing during the warranty period will be repaired by the warrantor [ANG trading as Supercheap] free of charge. A vehicle has a “defect”, for the purposes of the warranty, if part of the vehicle does not perform its intended function or has deteriorated to an extent where it cannot reasonably be relied on to perform its intended function. Clause 6, however, sets out the defects not covered by the warranty.

317    Ms Kingsburra was also taken to a document entitled “Contract to Buy a Motor Vehicle”. Ms Kingsburra signed that document as buyer and signed a delivery receipt.

318    Ms Kingsburra was also taken to Form 38a-2 under the PAMD Act which is concerned with the dealer giving notice of the statutory warranty period applicable to the vehicle. It recites that the warranty starts on 12 July 2010 and ends on 12 August 2010. Ms Kingsburra signed page 1 of that document which recites that she took delivery of the vehicle on 13 July 2010.

319    Ms Kingsburra was also taken to Form 63 of the PAMD Act which is concerned with a guarantee of title to the buyer by the motor dealer. Clause 7 contains a declaration signed by Ms Kingsburra that she took delivery of the vehicle and received a copy of Form 63 and a “security interest certificate” for the vehicle.

320    As to Form 37a, Ms Kingsburra says that she could not recall whether she was given any explanation of “what that document was”: T, p 606, lns 39-40. She could not recall when she signed the document.

321    As to the Form 38a-1, Ms Kingsburra says that she could not recall whether anyone gave her an explanation of that document: T, p 607, lns 8-9.

322    As to the Contract to Buy a Motor Vehicle document, Ms Kingsburra says that that document was not explained to her when she signed it: T, p 607, lns 19-20.

323    As to the Form 38a-2, Ms Kingsburra says that she could not recall whether anyone talked to her about the statutory warranty period: T, p 607, ln28-29. Ms Kingsburra says that she has no knowledge of, or cannot recall, anyone telling her about a warranty for the car that she had or may have had: T, p 607, lns 31-41.

324    As to the declaration signed by Ms Kingsburra on Form 63, Ms Kingsburra says that this document was not explained to her at the time and, at the time of giving evidence, she still did not understand what it meant: T p 607, lns 43-47.

325    Ms Kingsburra was asked whether, when she left Supercheap with the car she had any copies of the documents just described. Ms Kingsburra says that she was given a manila folder and her belief is that Colin put copies of the papers that had been signed in the folder: T, p 608, lns 9-22. At para 43 of her affidavit, Ms Kingsburra says that there was a “lot of paperwork” in the folder but Colin did not explain to her “what it was”. Ms Kingsburra says that she does not have the folder anymore as it was burnt “when there was fire at my place”. Ms Kingsburra says that she did not read any of the documents in the folder: para 43. Ms Kingsburra assumes that the signed Credit Contract was in the folder as she had just finished signing it and taking possession of the car: T, p 637, lns 1-8. As to the PAMD Act documents, Ms Kingsburra agrees that Mr Hulbert signed those documents. Ms Kingsburra disagreed with counsel for the respondents that Mr Hulbert explained the documents to her. She initially said that she could not remember his doing that. When asked: “are you saying that he never explained [the documents] to you or are you saying you don’t know, Ms Kingsburra responded, “I can’t remember”. Ms Kingsburra does not know whether the PAMD Act documents were in the manila folder. She agrees that she did not read any of the documents in the folder.

326    Ms Kingsburra says that she had issues with the car from the very outset. Ms Kingsburra’s daughter-in-law was the driver of the car when leaving the car yard. At the outset, the car had virtually no petrol in it and they immediately had to put $15.00 (all they had) of petrol into it. More particularly, when driving the vehicle home to Yarrabah and going over any bumps, the passenger side back wheel kept bumping up into the inside of the wheel compartment of the car. Also, the front passenger door could not open from the inside. When taking possession of the car, Ms Kingsburra pointed out to Kevin that paint was peeling off the back bumper bar and also at the front. Ms Kingsburra asked Kevin whether these things would be fixed and how much would it cost. Kevin said it would be “pretty cheap” and that Ms Kingsburra could buy spray paint and spray paint over that”. When Ms Kingsburra arrived home and could not open the front passenger door, she made a telephone call to Kevin who said: “we can get that fixed, but we just can’t at the moment”. Ms Kingsburra says she called him again and was told that he was “pretty flat out still”. Ms Kingsburra says that Supercheap fixed the door but then the window winder would not operate. Kevin said that he would not be able to fix that problem as well because he was “pretty flat out”.

327    The other problem was that the mag wheels were too big for the car. The mag wheels kept bumping up on the inside of the car making the tyres go flat. Ms Kingsburra had to buy a new set of tyres. Ms Kingsburra says that the tyres for the mag wheels cost $180.00 each and she had to “replace it three times” at a total cost, I infer, of $540.00. Mrs Kingsburra’s son bought a new set of mag wheels to properly fit the vehicle for $1,600.00.

328    Another problem was that the spare tyre in the car when purchased was “old and rusted and flat”.

329    At to the paint damage, Ms Kingsburra obtained a quote of $800.00 to repair the paint damage. She decided not to have that work done because she regarded the quote as not cheap.

330    The first instalment under the Credit Contract of $119.45 was due on 19 July 2010, according to the Schedule. By December 2010, Ms Kingsburra was having problems paying the weekly instalments and a tow truck arrived and took the car. Colin held the car until Ms Kingsburra paid the arrears. Ms Kingsburra says she paid $800.00 “over a couple of fortnights and I got the car back”. However, Ms Kingsburra fell behind again. Just before Christmas 2011, Colin telephoned Ms Kingsburra and told her that she was $1,200.00 behind on her repayments and that he was going to “come and get the car”. Ms Kingsburra told him that she was struggling at the time and had to travel to her brother-in-law’s funeral. Colin told her that when she returned she would “have to come in and make some payments, no excuses”. Ms Kingsburra says that she told him: “ICAN is onto it and some lawyers were coming to speak to me” to which Colin said: “I don’t care what you do”.

331    Ms Kingsburra says that Colin did not call her again. However, the direct debits kept coming out of her bank account until February 2013. Ms Kingsburra says that she spoke to Kevin because she wanted to change the direct debit payments to a Tuesday night as her Centrelink payments were made on Tuesday evening. Ms Kingsburra wanted to do that because the repayment was taken out on Wednesday evening and by then sometimes there was no money left in the account. Ms Kingsburra says that Colin refused to change the repayment date.

332    Ms Kingsburra was asked whether she was “still paying for the car”. She says that the payments stopped being made and she thinks that happened after the first time ASIC came to see her. Ms Kingsburra says that her son gave the car back to her and she is “trying to get it repaired”: T, p 611, lns 4-18.

333    Ms Kingsburra says that she has never received a statement from anyone showing how much she has paid in relation to the car or how much she might owe although she does remember receiving a letter from Colin asserting that one of her direct debits had not “come out [of the account]”.

334    Ms Kingsburra gave evidence that one of the documents she brought to the car yard and gave to either Kevin or Colin was a bank statement she had obtained. The bank statement in the ASIC trial bundle is Ms Kingsburra’s bank statement for the period 27 February 2010 to 31 May 2010. The bank statement, obviously enough, shows the pattern of payments received and expenses or debits incurred throughout the period. To take the month of March, for example, the Centrelink revenue in that month was this:

Date

Transaction

Amount

1 March 2010

EDU payment

261B9537 etc

$377.00

1 March 2010

Carers

221B954 etc

$468.00

8 March 2010

AUS GOV FAMILIES

FB1B962 etc

$87.36

8 March 2010

AUS GOV FAMILIES

841B962 etc

$621.72

8 March 2010

Carers

441B96154 etc

$106.70

12 March 2010

AUS GOV FAMILIES

841B96854 etc

$134.14

15 March 2010

EDU payment

261B9697 etc

$377.00

15 March 2010

Carers

221B97054 etc

$468.00

19 March 2010

Communities

6000-00022 etc

$148.44

22 March 2010

AUS GOV FAMILIES

FB1B97814 etc

$87.36

22 March 2010

AUS GOV FAMILIES

841B97814 etc

$356.74

22 March 2010

Carers

441B97754 etc

$106.70

29 March 2010

EDU payment

261B98574 etc

$377.00

29 March 2010

Carers

221B98654 etc

$469.57

335    These amounts add up to $4,185.73 for the month of March. The payments into the account on 1 March 2010 ($845.00) may well represent payments for the month of February, in which event the monthly payment is $3,340.00 which is consistent with the Centrelink statement.

336    In cross-examination, Ms Kingsburra agreed with these propositions having regard to the bank statement. Ms Kingsburra was receiving, at the relevant time, five separate kinds of benefits from Centrelink. The first was a: “sampling education (EDU payment)” of $377.00 being “Abstudy” (living away from home allowance) for Ms Kingsburra’s son. That money ultimately went to him. The second payment was a carer payment for $468.00 which went to Ms Kingsburra. The third payment was a Families payment of $87.36. The fourth payment was another Families payment of $621.72 and the fifth payment was a carer’s payment of $106.70. Including the Abstudy payment for Ms Kingsburra’s son, the total of those payments amounts to $1,660.78: T, p 618, lns 23-45; T, p 619, lns 1-6. That sum less the Abstudy payment is $1,283.78, each fortnight or $2,567.56 each month. Ms Kingsburra gave evidence that her son would withdraw the Abstudy payment from the account. He was doing his schooling in Townsville.

337    Apart from those amounts, Ms Kingsburra agreed that she was receiving $150.00 each fortnight from Mr Gilmartin for board. Ms Kingsburra also agreed that with eight children living in the house, she and Mr Gilmartin were finding it a bit of a struggle especially with newborn babies and so three of the elder children were also paying board “if they could but if they couldn’t afford it … some time(s) they won’t”. Ms Kingsburra said that sometimes they will [pay board] and if they don’t give her “money in hand, they will offer to buy a bit of food, and I will do the rest”: T, p 619, lns 37-45; T, p 620, lns 1-8. Ms Kingsburra seemed to accept the three eldest children paid $100 board each a fortnight “when they could”. It was always cash but sometimes they would buy food or other necessaries for the home: T, p 627, lns 42-46; T. p 628, lns 1-2.

338    The statement shows a pattern of expenditure along these lines.

339    The account received $845.00 on 1 March 2010. By 2 March 2010, an amount of $862.84 had been drawn or debited to the account which caused the account to be overdrawn by $81.95. By 5 March 2010, the account was overdrawn $399.93 or a further amount of $317.98. Then on 8 March 2010, $815.26 was credited to the account from Centrelink which resulted in a credit of $415.33 except that on 8 March 2010 there were debits and withdrawals of $410.00 resulting in a credit of approximately $5.33. Between 12 March and 15 March 2010, Centrelink payments of $979.14 were paid into the account and by 16 March 2010, $929.00 was either debited or withdrawn (cash withdrawals) from the account, again overdrawing the account to approximately $79.00.

340    The pattern is clear enough. As soon as funds were deposited into the account by Centrelink, the monies were either immediately withdrawn or debits made to the account such that within a day or two of the Centrelink payments, the account was again overdrawn. In fact, the account shows that the cash advances were such that the account fell into overdraft in amounts of $210.26 and $551.94 and then $349.60 and then $358.83. It can be seen that there is virtually no latitude in the immediate demands made upon the revenue credited to the account. It is expended or withdrawn virtually immediately funds are received. Ms Kingsburra is entirely dependent upon the Centrelink receipts and exhausts each payment virtually immediately.

341    As to the pattern, some examples are these. An amount of $845.00 was deposited into the account on 1 March 2010 and on the same day $470.00 was withdrawn to buy groceries “being at home with eight kids”: T, p 611, lns 36-37. An amount of $300.00 was, unusually, withdrawn on that day to pay her son part of the Abstudy payment as the credit card was not working in Townsville. It would otherwise have been taken out by him in Townsville in an amount of $377.00. A Credit Corp debit of $50.00 was made to the account on 2 March 2010 and it appears as a weekly debit throughout the statement. Ms Kingsburra did not know what that debit was about: T, p 611, lns 39-44. Ms Kingsburra said that the regular cash withdrawals each week were for the “same thing” – buying groceries, other expenditures for the children, petrol, car repairs and other such matters: T, p 612, lns 11-20. These cash withdrawals would be spent at the time of the withdrawals: T, p 612, lns 24-38.

342    Ms Kingsburra was also taken to two other documented cash advances. The first has a contract date of 26 June 2010 in an amount of $1,078.12 (Cash Converters). The statement shows that four weekly payments of $269.69 were to be paid and they were paid on 16 July, 23 July, 30 July and 31 July 2010 of that year. At 13 July 2010, the entire contract amount was the subject of future payments. The second cash advance has a contract date of 31 July 2010 in an amount of $709.66 with four weekly repayments of $177.52 to be made in reduction of the advance. Those repayments were made on 13 August, 20 August, 21 August and 21 August 2010. Ms Kingsburra could not recall the second advance. The first advance contemplated payments in July and the second contemplated payments in August. Ms Kingsburra described these loans as “payday advances” which are to be paid off over four weeks and they are not regarded in any sense as long term loans: T, p 613, lns 11-15.

343    I have addressed a number of aspects of the cross-examination of Ms Kingsburra already. However, it is necessary to mention some further aspects of Ms Kingsburra’s evidence given in cross-examination.

344    Ms Kingsburra gave evidence that when she went to buy the car, she did not understand finance and did not know she would be borrowing money. She thought she was “just paying the money in instalments for the car” and did not know that she was “actually borrowing from someone” because she thought she was just “paying [Colin] off money for the car”: T, p 32-36. Ms Kingsburra agreed that at the time when she signed the Credit Contract, she had two existing loans: one was with GE Finance and the other with Cash Converters. The statement shows weekly debits made to “Cash Stock” of $5.00. Ms Kingsburra did not know whether that loan was almost paid off or not. Ms Kingsburra did not know whether the Credit Corp loan was almost paid out or not at 13 July 2010. Nor did she know what the loan was for.

345    Ms Kingsburra said that she was not aware that interest was payable on the money she had borrowed from Cash Stock or Credit Corp. She said that she had never looked at a loan contract in relation to either loan: T, p 617, lns 7-14.

346    Ms Kingsburra accepted that she had from time to time made a loan of some monies to friends without charging any interest. Ms Kingsburra recognised that there is a difference between a personal loan between friends where no interest is charged and a commercial loan where a person borrows from a finance company. She observed that “with business you’ve got to pay interest” but “when it’s family and friends you don’t pay interest”: T p617, lns 21-28.

347    Nevertheless, Ms Kingsburra gave evidence that when she took out the Credit Contract to buy the vehicle, she was not aware that interest would be payable: T, p 617, lns 30-31.

348    In the course of her cross-examination, Ms Kingsburra was pressed quite a number of times with the same topics and she became confused about some matters having regard to the way the questions were framed. On one occasion, Ms Kingsburra asked if she could have a five minute break. She later suggested that she might need another break. On the second occasion, Ms Kingsburra said that she was “starting to get a bit stressed here” and, in context, Ms Kingsburra seemed to be giving truncated answers to simply try and bring the cross-examination to an end. Nevertheless, it was proper for DSpence to examine the topics about which questions were asked but it was a little unfortunate that DSpence kept coming back to those topics repeatedly in a way which was plainly causing Ms Kingsburra some distress causing her to simply try and bring the cross-examination to an end. Nevertheless, given the nature of the allegations, I extended some latitude to Dr Spence in his cross-examination.

349    On the important topic of Ms Kingsburra’s evidence that she did not get a chance to read the Credit Contract before she signed it and that Mr Hulbert did not explain anything about it to her and simply turned the pages pointing to where she had to sign, Ms Kingsburra accepted that she had previously described the event as one in which Mr Hulbert had the contract facing towards her and, as Ms Kingsburra had described it, Mr Hulbert would say to her “this is blah blah blah” and “this is blah blah blah” but Ms Kingsburra could not recall Mr Hulbert going through the full details of the contract. Ms Kingsburra was pressed with the notion that in giving her affidavit version and oral evidence of the signing of the contract, she had forgotten that Mr Hulbert had said a number of things about the contract which she had described as “blah blah blah”. Ms Kingsburra said that Mr Hulbert “wasn’t specific on the contract” and added “like, he didn’t explain the whole contract to me on the page”: Tp 630, lns 10-26. Ms Kingsburra said she could remember (although the contrary was put to her) “because there was so much papers to sign and it was so quick”: T, p 630, lns 28-29. Ms Kingsburra was asked why she thought it was so quick and said: “I know it was quick for that much paperwork to be signed”.

350    It was put to Ms Kingsburra that her earlier reference to “blah blah blah” indicated that she did have a conversation with Mr Hulbert about the contents of the loan contract. She said, however, that when she went through the contract with ASIC, she did not know the things that were in the contract (T, p 630, lns 37-41) and thus in her view at least she was not told about the content of the contract.

351    At this point, Ms Kingsburra observed that she is not an educated person and that big words would need to be broken down so that she could understand the question. Ms Kingsburra was taken to her statement of 10 January 2012 given to ASIC. Ms Kingsburra said that at the time of giving that statement she could remember the earlier events (“like, from before”) but she could not remember “like, up until now”. It was suggested to Ms Kingsburra that her memory of things that occurred on 13 July 2010 was not very clear. She responded by saying: “Because my memory is not really too good. It comes and goes, you know”.

352    Ms Kingsburra was then pressed with the notion that she did not have a clear memory of what happened in mid-July 2010, when she signed her initial statement on 10 January 2012. Ms Kingsburra was taken to an apparent inconsistency between her affidavit and the earlier statement of 10 January 2012 (the credit check point) but that matter was not pressed when it became clear that there was no inconsistency.

353    Ms Kingsburra was again then pressed with the suggestion that her memory was not very good, on 10 January 2012, concerning the events that happened on 13 July 2010. A sequence of exchanges occurred between Ms Kingsburra and Dr Spence on that topic which resulted in the witness becoming confused and, in fact, very, very confused: T, p 634, lns 15-44.

354    Dr Spence asked Ms Kingsburra a number of further questions. Ms Kingsburra asked Dr Spence to explain the questions a bit more slowly for her so that she might understand what was being asked of her. Dr Spence suggested to Ms Kingsburra that she had been given a chance to read the Credit Contract and that Mr Hulbert had said to her that she could read the contract if she wanted to. Ms Kingsburra said: “Well, like I said, I can’t recall if I – if Colin ask me if I wanted to read it – [if] I’ve got a chance to read it”: T, p 635, lns 25-28. Dr Spence asked: “so you do agree that he might have told you you could read the contract”? Ms Kingsburra answered: he might have. I don’t know. I can’t recall: T, p 635, lns 30-31.

355    Ms Kingsburra said that Mr Hulbert did not explain the details of the contract: T, p 635, ln 37.

356    Dr Spence returned to the references to “this is blah blah blah” etcetera and suggested that Mr Hulbert was explaining the contract. Ms Kingsburra said that she did not know about [the content] but also said “well I can’t remember”: T, p 635, lns 39-44.

357    Ms Kingsburra was again pressed with the “blah blah blah” reference and was again pressed with the notion that this was an explanation of the content of the contract. She answered: “It could have been. But when I spoke to ASIC and they pointed out the contract, I didn’t know what that was about” and although it was put to her that she had exercised a choice not to read the contract she answered: “Well, I don’t recall being explained the contract”: T, p 636, lns 4-5.

358    Ms Kingsburra was again pressed with the “blah blah blah” reference and the notion that Mr Hulbert was explaining the contents of the contract. Ms Kingsburra answered: “Well, I can’t remember, like I’m saying”: T, p 636, lns 13-15. Ms Kingsburra added: “I really know for a fact that he didn’t explain each and every details on the contract to me”: T, p 636, lns 18-19.

359    Ms Kingsburra also added, in answer to another proposition: “Well, I see what you mean. But [what] I’m saying is I didn’t know that I was going to pay that [amount] – them things would stand out to me. Me buying a broker and this 48 per cent thing. I didn’t know about them things – I still don’t know today what they are” [emphasis added]: T, p 636, lns 24-27. Dr Spence put the proposition to Ms Kingsburra that those things would have stood out if she had taken the time to read the contract before signing it. She answered: “Well, I never had the time to sign it that day, [b]ecause I was too excited [about] getting this car. So quick and easy for my son”: T, p 636, lns 33-35.

360    As to the signing, Ms Kingsburra was asked: “generally did you not see anything that was written on the pages of that contract when you were in the process of initialling the document?” She answered: “No I just kept initialling it”: T, p 638, lns 37-39. As to obtaining legal advice, the proposition was put to Ms Kingsburra that Mr Hulbert did take her to the contents of page 9 containing Box A and Box B and said to her that she could get legal advice. Ms Kingsburra answered: I can’t remember that. He might have said it or done it, but I can’t recall just now”: T, p 639, lns 1-3. Ms Kingsburra accepted that Mr Hulbert could have told her that she could obtain legal advice although Ms Kingsburra could not remember: T, p 639, lns 5-9. At this point, Ms Kingsburra asked Dr Spence how many more questions he had for her and observed that she was “starting to get a bit stressed here”.

361    As to the repayments, Ms Kingsburra rather thought that she did make 110 payments but was not sure and could not remember: T, p 639, lns 26-27.

362    Ms Kingsburra was taken back to the interest question and the suggestion was put to her that she knew that when she went to get the car she knew that she was going there to borrow money and that the borrowing involved the payment of interest. She answered: “Yes. I knew interest but I didn’t know, like, how it works. I had heard of the word interest”:  Tp 639, lns 35-36.

363    Finally, Ms Kingsburra was asked in re-examination this: “if, when you signed the contract, you were told that you were going to pay back $13,134.00, do you think you would have remembered that. She answered: “I would have remembered that if I was told that”.

PART 7: the kingsburra documents

364    The documents relating to Ms Kingsburra’s purchase of the car, her dealings with CBPL and her dealings with Channic generally reflect the methodology adopted by Supercheap, CBPL and Channic in their dealings with the consumers the subject of these proceedings. The content of the material is, of course, different in each case. I will illustrate the documents by reference to Ms Kingsburra’s transaction and later address the position concerning each consumer. The documents in the case of each consumer are contained within the trial bundle. There is a CBPL file and a Channic Loan file.

365    As to the CBPL file, the position is this.

366    Ms Kingsburra attended the car yard on Tuesday, 6 July 2010. On 6 July 2010, Mr Humphreys, under the description “Credit Representative” for CBPL, produced a letter addressed to the “Credit Manager” of Channic in which he said this:

Please find attached an application for Adele Dorothea Kingsburra

1)     Completed Finance application

2)     Signed Privacy Act Authority

3)     Positive ID copies

4)     Income verification Centrelink Statements

5)     AHA preliminary assessment test completed

Client was interviewed in person today, they requested a loan for $7,290.00 they have requested a repayment of approximately $119.45 per week, could you please advise the term of the loan and advise if approval can be issued.

367    The completed finance application is the document referred to as the “Credit Application Form”. The signed “Privacy Act Authority” is a document described as the “AHA Finance” Privacy Policy. It is signed by Ms Kingsburra and dated 6 July 2010. The ID document is a copy of Ms Kingsburra’s Driver’s Licence and a “Converter’s Finance” Card. The income verification Centrelink Statements are the Centrelink statement of 12 July 2010 and the Centrelink Community Housing Rental Payment Statement, obtained by Ms Kingsburra.

368    Tab 9, the “AHA Preliminary Assessment Test” is a document signed by Mr Humphreys. It bears the title Preliminary Test and also, at the top, the name Channic Pty Ltd.

369    It contains the following information:

Channic Pty Ltd

PRELIMINARY TEST

Date:                        6/07/2010

Client Name:

Adele Dorothea Kingsburra

Broker:

Cash Brokers Pty Ltd

Loan Purpose:

Motor vehicle purchase

8990

Cash Deposit

1700

Capacity:

Borrower 1 NET monthly income

$3,298.49

Son board

$325.00

Maintenance

$0.00

total monthly income

$3,623.49

Expenses

Rent/Mortgage

Deducted

Safrock Loan

$0.00

To Be Finalised Prior To Purchase

Living expenses

$2,925.00

Single $950; Married/De facto $1,300; Each child $325

Sper OSR

$43.30

Centrelink Advance

$55.51

GE Money

$0.00

Finalised

repayment this loan

$520.00

total expenses

$3,543.81

Surplus/Deficit

$79.68

I confirm the information input in this assessment

is accurate based on the information I have been provided

K Humphreys

Broker Signature

370    Mr Humphreys has signed the document next to the statement: I confirm the information input in this assessment is accurate based on the information I have been provided.

371    The next document on the CBPL file is a letter from Channic addressed to CBPL dated 6 July 2010 in these terms:

Dear Kevin

Application Acknowledged/Credit Suitability Assessment for credit contract Kingsburra

Please be advised the assessment we made to decide the credit contract referred to above was not unsuitable for the client/s.

You will note we have contacted the client and made arrangement for signing of documents, an appointment has been made for the 06/08/2010.

Please provide us with an invoice for your Brokerage Fees and a copy of the Contract from the Dealership for the vehicle purchased and being used as security.

If you have any questions in relation to the assessment, please contact [details inserted].

Yours faithfully

Colin William Hulbert

Director/Credit Manager

372    The next document is an invoice from CBPL to Channic dated 6 July 2010 for brokerage fees of $990.00.

373    As to the Channic Loan file, the documents are these.

374    The file contains a copy of the letter from Mr Humphreys dated 6 July 2010; a copy of the Credit Application Form; a copy of each ID; a copy of the signed Privacy Policy Statement and a copy of the two Centrelink Statements. It also contains a copy of Mr Gilmartin’s statement about rental and a copy of the CBPL Preliminary Test.

375    The file contains a document described as Credit Suitability Assessment. It says that it is made in accordance with ss 128 and 129 of the NCCP Act by Channic. It recites that it was made on 6 July 2010 and the period covered by the assessment is described as “from the date of this assessment until 06/08/2010”. The document then sets out the details of the customer.

376    Under the heading Inquiries it says this (original emphasis):

We made reasonable inquiries about the customer’s financial situation and needs and objectives. The attached Loan Inquiry Checklist confirms the inquiries we made. We have also attached a copy of the loan application form.

377    Under the heading Verification, it says this (original emphasis):

We then took reasonable steps to verify the consumer’s financial situation. The attached Verification Checklist confirms the steps taken by us.

378    Under the hearing Customer’s financial situation, it says this (original emphasis):

Based on the information from our inquiries, which we have taken reasonable steps to verify and which we have reason to believe is true, we consider that the customer has available income as follows to repay the credit during the period covered by this assessment. This takes into account special circumstances (if any) listed below that we found when making our inquiries:

Available income: $3,623.49

Per: Month

379    Under the heading, Customer’s needs and objectives, it says this (original emphasis):

After making reasonable inquiries about the customer’s needs and objectives, we concluded that the customer is seeking credit with the following features:

Amount of credit: $8,301.50

Timeframe for which credit is required: 110 Weeks

Purpose for which credit is sought: Purchase Vehicle

Particular product features: Daily Reducible

We further concluded that the customer understands any costs or additional risks associated with any product features specified above.

380    Under the heading, Product offered, it says this (original emphasis):

Amount of credit: $8,301.50

Type of loan: Secured Motor Vehicle Loan (Bill of Sale)

Loan term: 110 Weeks

Annual percentage rate: 48% per annum

Security: Motor vehicle

Other features: No early payout penalty

381    As to the assessment itself, the document says this:

In our assessment, the product offered to the customer is not unsuitable for the customer as of the date of this assessment because:

    we consider that the customer has capacity to repay the credit without substantial hardship during the period covered by the assessment, because the amount of loan repayments is within the amount of available income to the customer to repay the credit; and

    we consider that the product offered meets the customer’s needs and objectives during the period covered by the assessment, as determined by us after making reasonable inquiries.

382    The document is signed by Mr Hulbert as a Director of Channic.

383    The next document is the Loan Inquiry Checklist.

384    Part A recites the customer’s details. Part B is concerned with the “Customer’s financial situation”. It consists of a series of boxes to be ticked, as appropriate, by reference to 12 topics. The document contains five other columns with boxes adjacent to each of the 12 topics and these boxes identify how the inquiry was made. The methods of inquiry are described as:

How we made the inquiry

Loan application form

Personal interview

Supporting documents from customer

Contacting other people

Searches

385    Each of those five sources has a box under it with the words “via broker”. It may be that in any relevant case, any one or more of those inquiries have been made by the broker. In Ms Kingsburra’s case the Loan application form came to Channic from the broker. So too did the supporting documents from the customer. The inquiries ticked as having been done were these:

Current amount and source of income or benefits

Fixed expenses

Variable expenses (and drivers of variable expenses)

Credit history

Liabilities, including nature and value

386    The fixed and variable expenses and liabilities were taken from the Loan application form. The current amount and source of income or benefits was drawn from the customer’s supporting documents.

387    Part C deals with the topic of the “Customer’s requirements and objectives”. Part D contains a certification signed by Mr Hulbert. Part C has a series of boxes to be ticked if the relevant topic is addressed. In Ms Kingsburra’s case, five topics were addressed and the document identifies what Channic found in doing so, as follows:

Part C:    Customer’s requirements and objectives

Done

Requirement or objective

What we found

Amount of credit needed or maximum amount of credit sought

Sufficient To Settle Purchase

Timeframe for which credit is required

Sufficient To Settle Loan

The purpose for which the credit is sought and the benefit to the consumer

Purchase Vehicle

Particular product features or flexibility sought

Direct Debit

Customer understands the costs of these features and any additional risks

Yes

Part D:    Certification

I certify that I have made reasonable inquiries about the customer’s financial situation and requirements and objectives, as described above.

Hulbert

Signature

Print name:    Colin William Hulbert

Position:    Director / Credit Manager

Date:        06/07/2010

388    The date of the certification of the document is 6 July 2010.

389    The next Channic document is the Verification Checklist.

390    Part A sets out the customer’s details.

391    Part B bears the heading “Verification”. This Part consists of a matrix made up of: the sources of information used to verify information; a column for the details derived from those sources; a date upon which verification occurred; and, under the heading “What was verified from this source?, nine categories of possible information are identified. The categories of possible information that might be verified are these:

What was verified from this source?

Personal details

Employment/other income source

Other loans and payouts

Income and expenses

Credit history

Assets and liabilities

Personal circumstances

Foreseeable changes

Other factors

392    Those categories are cross-referenced in the matrix to the sources of information used to identify information relating to those topics. The matrix recites 26 possible sources of information which might produce data relating to any one of the nine categories described at [391]. The various columns simply contain a box to be ticked. An example of Part B of the Verification Checklist can be seen in the Verification Checklist forming part of the documents at Schedule 1.

393    Part C consists of a certification signed by Mr Hulbert and dated 6 July 2010 in these terms: “I certify that I have taken reasonable steps to verify the customer’s financial situation, as described above”.

394    The next document on the Channic file is a copy of the Channic letter to CBPL dated 6 July 2010 quoted at [371] of these reasons.

395    The next document is the Consumer Loan Contract and Mortgage No: 5030” otherwise described as the Credit Contract. Aspects of that contract are described earlier in these reasons. The information set out in the Financial Table on page 1 and other aspects of page 1 are set out at [291] and [292] of these reasons. Other information drawn from page 1 and financial information in the Schedule on page 2 is set out at [297] and [299] of these reasons. Other important parts of the document are described and quoted at [310] to [314].

396    The next two documents on the Channic file are a copy of a VEDA individual consumer and commercial report concerning Ms Kingsburra’s credit history, dated 6 July 2010 and a copy of the CBPL invoice to Channic for brokerage fees of $990.00 also dated 6 July 2010. The final document on the Channic file is a copy of an invoice from Supercheap to Ms Kingsburra dated 12 July 2010 for the sale of the car in a total amount of $8,990.00. That invoice does not recite the payment by Ms Kingsburra of a deposit.

PART 8: the evidence of mr kevin humphreys

397    It is now necessary to consider the evidence given by Mr Humphreys.

398    Mr Humphreys appeared in response to a subpoena issued to him by ASIC.

399    Mr Humphreys gave his evidence by video link as he suffers from diabetes and other medical conditions which made it difficult for him to travel to Cairns, the place of the trial. Mr Humphreys was not taken to the detail of each of the transactions with those particular consumers, relevant to these proceedings, with whom he dealt. Rather, his evidence was directed to an explanation of the usual practices adopted by him in discharging the roles he performed in the period in which he was engaged by Supercheap and CBPL.

400    Mr Humphreys commenced working for Supercheap in approximately October 2009 and ceased doing so in February 2012. Prior to joining Supercheap, Mr Humphreys had worked in the mortgage broking industry. He also had a “caryard background”: T, p 587, ln 25.

401    As to the consumers in issue in these proceedings, Mr Humphreys recalls Ms Donna Yeatman and Mr Farren Yeatman and has some recollection of conversations with them although “not entirely”. He does not recall Ms Muriel Dabah. He recalls Ms Prunella Harris although he has no specific recollection of conversations with her. He recalls Ms Rhonda Brim although he has no specific recollection of conversations with her either. He recalls the name, Adele Kingsburra, although “not much about” her. He recalls Mr Vance Gordon although he has no specific recollection of conversations with him. He does not recall Charlotte Mudu, Karen Smith or Joan Noble although he thinks he recalls another person by the name of Noble.

402    The role of Mr Humphreys at Supercheap was to present the cars for sale, answer inquiries and show people the cars. Mr Humphreys was a salesperson not the manager. He received direction from Mr Hulbert. Mr Humphreys understood Mr Hulbert to be the “dealer principal” of Supercheap and as the “business proprietor”: T, p 545, ln 42; T, p 546, lns 5-8. His role later became one of “discussing financial options as well”: T, p 545, ln 30.

403    In working for Supercheap (and later, CBPL as well), Mr Humphreys worked from offices and premises at Mulgrave Street and then Spence Street. In the office, he and Mr Hulbert each had a desk reasonably close to each other although they had separate offices close to each other in the Spence Street premises. Although Mr Hulbert occasionally played golf, he was regularly at the office, Monday to Friday.

404    Mr Humphreys was paid, by Supercheap, on a commission basis only, of $300.00 for each car sold, although Mr Humphreys thought that the commission might possibly have been $400.00. He did not receive a wage. Later, he was also paid a finance commission by CBPL as well. He sold about 10 cars per month. In his additional role he also assisted people with finance applications. The majority of the sales were purchased using finance (T, p 547, ln 13) and perhaps as many as 80% of the sales were the subject of finance applications.

405    The prices for the cars were set in discussions with Mr Hulbert (and possibly some others). Ultimately however, the price was a decision for MHulbert: T, p 547, lns 34-38; T, p 548, lns 5-9. Mr Humphreys could not recall any use of a “previous valuation sheet” in deriving the price of the cars: T, p 580, lns 35-37. Mr Humphreys normally asked Mr Hulbert (T, p 548, ln 35) what deposit was required. The deposit varied, in part according to the circumstances of the customer.

406    Mr Humphreys gave evidence that he was aware of and had seen documents described as PAMD Act Form 37a (the “cooling-off” period document); PAMD Act Form 38a-1 (Notice of Statutory Warranty); PAMD Act document “Contract to Buy a Motor Vehicle”; PAMD Act Form 38a-2 (Statutory Warranty Period); PAMD Act Form 63 (Title Guarantee); and PAMD Act document “Buyers Obligations under the Statutory Warranty”. Mr Humphreys gave evidence that he understood that these documents were used in the purchase of a motor vehicle. However, it was not the role of Mr Humphreys to prepare these documents and he did not sign them for Supercheap: T, p 550, lns 9-10; lns 15-16; lns 23-24. Mr Humphreys could not recall whether any buyers of cars were offered an extended warranty although he said he was sure “Colin had them as well”, like other car yards in Queensland: T, p 580, ln 46; T, p 581, lns 32-35.

407    Mr Humphreys explained that his initial role was to assist Supercheap in selling cars. However, Mr Hulbert “had a finance system that he operated from the dealership” (T, p 550, lns 33-34) and Mr Humphreys assisted in taking “applications for credit review”: T, p 550, ln 34.

408    Mr Humphreys was a credit representative for CBPL, a company he understood to be a finance brokerage company, from 1 July 2010. His appointment ceased on 24 August 2012.

409    For every finance application that proceeded to settlement, Mr Humphreys was paid a commission of $100. Thus, Mr Humphreys was receiving $300.00 commission on each of approximately 10 car sales per month and $100.00 commission on “maybe” 80% of those sales resulting in a commission income of up to $3,800.00 per month.

410    Mr Humphreys cannot recall the documents CBPL required an applicant for finance to provide although the documents were concerned with proof of income, proof of expenditures, proof of residence and proof of identification. Mr Humphreys believes that he received instruction on the documents required to be gathered by CBPL. He thought there was a list of the required documents. Mr Humphreys recalled that Mr Hulbert used software either called, or supplied by, “Minute Software”, for the preparation of finance contracts. This software was installed on the office computer. Mr Humphreys did not use it as he did not prepare the contracts. That was not his job: T, p 552, lns 41-47; T, p 553, ln 1.

411    Mr Humphreys was taken to the documents relating to the transactions with Mr William (Damien) Noble and Ms Joan Noble for the purpose of examining with him the process Mr Humphreys undertook for CBPL when dealing with a potential borrower purchasing a car. The questions put to Mr Humphreys were not designed to test Mr Humphreys about the particular content of the documents or conversations specific to these buyer/borrowers. The focus of the questions was the general practice, procedure and processes adopted by CBPL.

412    Mr Humphreys was taken to the Credit Application Form (already addressed in these reasons in the context of Ms Kingsburra’s evidence). Mr Humphreys recognised the form. He did not draw it up, as a form. It was provided to him. He could not recall whether he was given any instructions on what was needed to be done to complete the form. He observed that there was “certainly no book that came with it”. He could not recall whether it was filled out “as per follow bouncing ball” or not: T, p 553, lns 40-41.

413    The process he described was one in which the applicant borrower would sit at a desk and “as it looked like [in] this one [the example] the client would fill it in”. If the client “needed assistance, I would fill it in”. The client would sign it and the documents would be collected: T, p 553, lns 44-46. Mr Humphreys gave evidence that if he did fill the form in, he would do so, “probably in every case”, in accordance with the information told to him by the client: T, p 582, lns 2-3. Mr Humphreys also gave evidence that every applicant was the subject of a “Veda” credit check “done by me” or “by some office staff”: T, p 582, lns 10-14; ln 18.

414    In the example put to Mr Humphreys, the “Personal Details” section of the Credit Application Form (for Ms Joan Noble) shows income per month in the handwriting of Mr Humphreys of $2,954.31. The separate application form for Mr Damien Noble shows income per month of $918.66 in the handwriting of Mr Humphreys. The top of the separate form for Mr Noble shows a vehicle retail price of $10,990.00 and a buyer deposit of $3,000.00 in the handwriting of Mr Humphreys: T, p 554, lns 6-25. Each form is signed and dated 2 March 2011. The CBPL file contains a Centrelink statement dated 2 March 2011 addressed to Mr Damien Noble on which Mr Humphreys accepts that he has written $918.66 on page 1. The Centrelink statement shows a Newstart allowance of $415.86 and a GST component of $8.14. Mr Humphreys says that he cannot remember whether he was given any instructions on what to do with figures recorded in such an income statement and he cannot recall how the figure of $918.66 came about.

415    The Centrelink statement for Ms Joan Noble shows on page 1 an amount of $2,954.31 in the handwriting (he accepts) of Mr Humphreys. It also shows on page 2 deductions made by Centrelink from the recipients benefits, of $100 and $71.50.

416    Mr Humphreys says that he cannot be sure whether he was given any instructions about what he needed to do with deductions shown on such a statement although he assumed that those items would need to be brought into the expenses of the applicant borrower.

417    As earlier discussed, page 2 of the Credit Application Form has a box for inserting “Financial Information”. As to the process of filling out this part of the form, Mr Humphreys thought that in the example before him (Tab 3, the form concerning Ms Joan Noble), the applicant had filled it out. The information provided is this: “any known Credit Defaults? – “No.”; “Credit Card(s) $110.00” (per week); “Food – $200” (per week); “Personal Loan(s) C.B.A.$54.80 per M”. The change from per week to per M is a reference to “per month”. Mr Humphreys thought that these figures “should have been checked and totalled off”: Tp 555, lns 38-39.

418    Mr Humphreys says that the information in answer to the question: “do you have any known Credit Defaults” (line 1 of the Financial Information box) came from “just simply asking the client” although in the case of Ms Joan Noble before him, Mr Humphreys thought that the applicant had “probably answered the question”.

419    In the example of Ms Joan Noble, other lines in the Financial Information box are left blank: “Rent/Mortgage; Phone (H)/Mobile; Vehicle Expenses; Utilities; Child Support; Other; Total”. Mr Humphreys says that he thinks he was not required to complete every line in the Financial Information box because “there was an amount that was allowed for a living allowance which would have taken out some of those amounts”: T, p 556, lns 6-10.

420    As to whether Mr Humphreys received any instructions about what he “needed to do to fill out” the Financial Information box on the form, Mr Humphreys thought that the “people at Minute” had given Mr Hulbert information on the living expenses that “were allowed”, that is, a set amount to cover living expenses. As to the expenses of the applicant on “Utilities” (electricity, gas, water and such matters) Mr Humphreys was asked whether he was required to obtain documents from an applicant about those expenses. He thought that “there was an amount to cover living expenses which included utilities”: T, p 556, lns 7-10; lns 21-22. Mr Humphreys thought that there was “some other figure” which would incorporate “those things”: T, p 556, lns 24-25.

421    Page 3 of each Credit Application Form contains a statement:

Vehicle Insurance

Please tick the following box if you would like a trained insurance professional to provide you with a competitive quote; [box].

422    Mr Humphreys gave evidence that it was requirement of Channic (T, p 557, lns 1-2) to have the vehicle insured although he never really discussed insurance with the customer as he is not a qualified insurance consultant. He thinks that insurance was organised with the customer when the vehicle was picked up. His understanding came from Mr Hulbert: Tp 557, lns 4-5.

423    Page 3 of the form has a heading: “Supporting Documents (if applicable)” followed by a list of documents with an adjacent box to be ticked. In the example before Mr Humphreys (Ms Joan Noble) two boxes are ticked adjacent to: “Photocopy of Driver’s Licence (front and back)”; “Photocopy of Centrelink income statement”. Mr Humphreys was asked whether there was a minimum requirement for the documents that he was required to provide in support of an application. Mr Humphreys thought that the ticked boxes reflected the documents the applicant may have had with them at the time of the application and there may have been requests for the production of other documents that they didn’t have with them “at the time of this sitting” and “quite often clients used to come back with more paperwork”: T, p 557, lns 12-18.

424    Mr Humphreys was asked whether he “ever received” bank statements from clients. He said that he was “fairly sure” that he did.

425    As to whether he was given any instructions about what he needed to do with bank statements, Mr Humphreys gave evidence that the “process was to identify any deductions out of bank accounts, and any income coming into bank accounts”: T, p 558, lns 11-12. Mr Humphreys says that he does not remember “exact instructions” but thinks that this “would have been part of the process of taking the information”: T, p 558, lns 28-30.

426    Mr Humphreys was taken to the bank statement for Ms Brim (at Vol 11, Tab 23, ASIC trial bundle) which shows multiple Centrelink benefits paid into the account and a pattern of immediate withdrawals of those amounts resulting in debit balances. Mr Humphreys recalled engaging with Ms Brim: T, p 583, ln 18.

427    As to that pattern of Centrelink money in, and then all Centrelink money out, within the course of a day, Mr Humphreys was asked whether he had observed that pattern with clients of CBPL. Mr Humphreys could not recall observing such a pattern. He accepted that he could see amounts as cash withdrawals but could not say that he had observed a pattern of such behaviour with clients of CBPL, although he could not remember: T, p 559, lns 12-14.

428    Mr Humphreys thinks that he did not receive any instructions “about looking for that pattern”: T, p 559, lns 20-22.

429    Mr Humphreys was taken to the Preliminary Test document in the CBPL file records for Mr Noble and Ms Noble (Vol 9, Tab 8).

430    Mr Humphreys recognised the document and identified his signature on it for the broker. As to the usual practice concerning how this document was used, Mr Humphreys gave evidence that, from what he could remember, the income was put into the document. The Preliminary Test document was a calculator which had “some sort of built-in formula” such that information concerning income and expenses would be entered and then “at the bottom it would illustrate whether they have a surplus or deficit according to this form”: T, p 560, lns 8-12.

431    The income seems to have been taken from the credit application forms of $918.66 and $2,954.31 (in the example in question).

432    The expenses column identifies seven categories of expenses and then a monthly amount for “repayment of this loan”. As to the “living expenses” category, the entry in the case of Mr Noble and Ms Noble is:

$2,925.00 Single $950; Married/De facto $1,300 Each child $325.

433    Mr Humphreys was asked what that entry meant and he said this at T, p 560, lns 30-35:

I don’t know where it came from. It was supplied to Colin Hulbert from somebody in the industry or the software company or somebody, but, to me, my opinion right now, today, it represents what a single person would need to live on, what a married or de facto person would need, and then each child would be an additional amount. If they had two children it would be twice times $325.

434    Mr Humphreys accepted that he would need to find out how many children an applicant had and that the figure of $2,925.00 was derived from using the figures set out next to that amount “in a formula of some sort”.

435    Mr Humphreys did not write the formula: T, p 560, lns 40-45.

436    As to whether Mr Humphreys received any instructions about how to operate the formula, Mr Humphreys gave evidence that he believed the formula was in the calculator although he could not remember whether it was “in the calculator, or calculated based on information that was given by a customer”: T, p 561, lns 5-6. Mr Humphreys gave evidence that he did not know whether this same calculator was used by Channic when it made its assessment: Tp 583, lns 42-44. Mr Humphreys recognised that the Preliminary Test has Channic’s name at the top of it. However, he gave evidence that it was a form used by CBPL and signed by him. Mr Humphreys suspected that “Colin may have used the same form … because he would have had to arrive at the same answers, I would imagine: T, p 584, lns 13-15.

437    In this example of the Preliminary Test, there is an entry to this effect: “Repayment this loan $400.00”. Mr Humphreys was asked how the repayment calculation was made. He said he could not remember. However, he thought that there was “another screen that worked out the price of the car less the deposit” and it may have been within “this calculator although there may have been “another calculator which “worked it out”. Mr Humphreys thought that “sometimes the client would specify what they felt they wanted to pay” and the time over which the repayments would be made: T, p 561, lns 15-23.

438    Mr Humphreys accepted that the interest rate would have “some bearing on the repayments” and that the interest rate was 48%.

439    Mr Humphreys thought that that rate was “set into the calculator” although he could not remember the function of the calculator. Mr Humphreys could not “ever remember calculating and punching in an interest rate to bring up this figure”: T, p 561, lns 32-33.

440    Mr Humphreys was asked whether it was his “usual practice” to discuss the interest rate with the client to which he said (at T, p 561, lns 36-39):

I’m not sure. I think I discussed payment, term and interest rate, but I couldn’t tell you exactly. I don’t know whether we just gave them a copy of this [the Preliminary Test] – I mean, I am talking three, four years ago.

441    The Preliminary Test has an entry: “Surplus/Deficit” and in the example concerning Mr Noble and Ms Noble the Test shows a surplus of $16.51. Mr Humphreys gave evidence that his recollection was that if all the expenses, including the living expenses, were taken into account and the test showed a surplus, then the application was “worthy to send to the finance company”, by which Mr Humphreys said he meant, Channic. Mr Humphreys gave evidence that the Surplus/Deficit line “had to be positive, not negative, to be worthy to send it through for assessment” [emphasis added] to Channic, and by positive, Mr Humphreys meant, “more than zero”: T, p 562, lns 12-23.

442    Dr Spence put a proposition to Mr Humphreys that notwithstanding the use of the calculator, he still had a discretion as to whether he would refer a loan application to Channic. Mr Humphreys gave evidence that because “[i]t was a very small office … Colin and I did have conversation[s] as well as documentation [sic] (T, p 585, lns 19-24), and thus it was difficult for Mr Humphreys to answer the question.

443    In answer to Dr Spence’s proposition that the result derived from the calculator/formula was not necessarily decisive of whether a loan application would be referred to Channic, Mr Humphreys said this (at T, p 584, lns 36-38):

It was too long ago for me to make a statement to say that there was a variation in my thoughts when I looked at these applications Colin was very close in the office to me, and there was quite often conversation and discussion. ... I wouldn’t agree or deny your question. I would just simply ... say I’m not sure.

444    As to the term “worthy”, Mr Humphreys said this (at T, p 585, lns 10-12):

I’m fairly sure [that] if there was a – a surplus amount, then it would have been one of the criteria to move to the next stop. If there was a negative amount, I don’t think it would move further.

445    Mr Humphreys was then taken to the example of the letter from CBPL to Channic making an application for a loan and attaching five identified documents. The five documents are precisely the same documents recited in the letter from Mr Humphreys to Channic dated 6 July 2010 on behalf of Ms Kingsburra: see [371] of these reasons. The amounts in the second paragraph, of course, differ. The letter in the Noble example (and Kingsburra) is signed by Mr Humphreys.

446    Mr Humphreys recognised the letter and his signature. He described the letter as “a template”. He said that “we would change the name and the relative figures to the relevant customer and attach it to a submission”. Mr Humphreys recalled filling in these letters. He could not recall whether the template was provided to him. The practice was to attach the five nominated documents to the letter.

447    In the case of the Noble letter, the loan sought was $7,990.00. Mr Humphreys said that it made mathematical sense to him that they were seeking a loan in that amount as the price of the car was $10,990.00 and the deposit was $3,000.00.

448    Mr Humphreys accepted that the second office out of which Supercheap, CBPL and Channic operated was small. Mr Humphreys and Mr Hulbert were thus close at hand to each other. Mr Humphreys could not recall whether this formal process of writing a loan application letter to Channic was something he was told to do or whether he chose to do it or whether it was part of a manual to be complied with: T, p 563, lns 1-3; lns 7-8; lns 40-42.

449    Mr Humphreys was then taken to the CBPL documents relating to Ms Donna Yeatman and Mr Farren Yeatman as a further example of the method adopted by CBPL at least as Mr Humphreys might recall it.

450    The Credit Application Form for MrYeatman records, in handwriting which is not that of Mr Humphreys, that her current employer is the Yarrabah Council; her employment term with the Council is 12 months; her occupation is a “Care Assistant” and that her income is $711.00 per fortnight. In the case of Mr Farren Yeatman, MrYeatman’s husband, the Credit Application Form records, in handwriting which is not that of Mr Humphreys, that Mr Yeatman’s occupation is a Manager Night-Watchman; his current employer is a Substance Abuse Centre; his employment term with that employer is four years; and his income is $1,600.00 per fortnight.

451    Mr Humphreys was then taken to the template loan application letter to Channic (signed by him) which records the five standard attachments. In the case of the Yeatman letter, the document at Item 4 (“Income Verification by Centre link statement”) has a handwritten note (which is in the handwriting of Mr Humphreys) next to it, “not supplied”. In the case of the Yeatmans, there was no other document identifying their income in support of the two income amounts written on each Credit Application Form. Having regard to those circumstances, Mr Humphreys was asked whether he had received instructions from Mr Hulbert about how to proceed in submitting (or not) an application to Channic for assessment where there was no documented support for the income.

452    Mr Humphreys said that he could not remember specifically any instructions but he rather thought that the point of his writing “not supplied” on the Yeatmans’ application letter was to alert Mr Hulbert to the circumstance that he would need to verify the amount by phone or in some way. The note was an alert that an income statement was not supplied and therefore the income would need to be verified, although, Mr Humphreys said, not by him.

453    Mr Humphreys gave evidence that his usual practice was that once the template loan application letter was done and the available documents attached to it, the letter was then given to Mr Hulbert: T, p 565, lns 32-33.

454    Mr Humphreys does not know, specifically, what Mr Hulbert did with the documents. Mr Humphreys speculated in evidence that Mr Hulbert would probably go through them “with a mind of looking at the creditworthiness of the applicant: T, p 565, lns 37-38. Mr Humphreys did not regard it as part of his role to carry out that assessment: T, p 565, lns 41-45. Mr Humphreys was asked whether it was part of his role to carry out a creditworthiness assessment for Channic. Mr Humphreys responded: “No. I don’t believe I operated for Channic. I believe I collected data and information” (T, p 566, lns 17-19). Mr Humphreys was asked whether it was part of his role at CBPL to verify the clients’ statements about income and expenses. He said: “I don’t think it was my duty, but I think that I did collect the data that verified it” (T, p 572, lns 39-40).

455    That topic was further examined by counsel for ASIC in this way (T, p 572, lns 42-47; T, p 573, ln 1):

Q.    Okay. So you saw your role as collecting the data?

A.    Yes. I don’t think it was my duty to do that, but I think it was – I did collect data that would verify that, if that makes sense.

Q.    Do you see it as part of your role to carry out your own verifications of that data?

A.    I can’t remember that … My feeling is to say yes, but I would only be speculating.

                                [emphasis added]

456    Dr Spence, in cross-examination, pursued this topic in the following exchange (T, p 585, lns 27-30):

Q.    Do you remember that part of your role was not only to make a preliminary assessment as to an applicant’s suitability for a loan, but also to verify the information they gave you in support of their application?

A.    No. I don’t remember that. I’m sorry. I – it would sound logical to me.

                                [emphasis added]

457    Mr Humphreys was taken to an example of a Credit Suitability Assessment document of Channic drawn up for the purposes of ss 128 and 129 of the NCCP Act (the example from the Noble Channic documents, Vol 9, Tab 21). Mr Humphreys gave evidence that he did not specifically recognise that document or documents of that kind. When asked whether it was part of his role to complete this sort of document, he said: “I don’t think so but – again I don’t know” (T, p 567, ln 21).

458    Mr Humphreys was then taken to an example of Channic’s Loan Inquiry Checklist (Vol 9, Tab 22, Noble). Mr Humphreys was asked whether it was part of his role to complete the document for Channic. Mr Humphreys gave evidence that he did not recognise the document or the type of document.

459    Mr Humphreys had the same answer when taken to an example of Channic’s Verification Checklist (Vol 9, Tab 23, Noble). When asked again whether this was a type of document that he was required to complete as part of his role, Mr Humphreys said that “there were some documents, but I don’t remember this specific [one – the Verification Checklist] or the other one[s] you asked me to look at” (T, p 567, lns 46-47).

460    As to the example of the Channic assessment letter (Vol 9, Tab 24, Noble – an example of which is set out at [371] of these reasons in case of Ms Kingsburra) in response to the CBPL loan application letter, Mr Humphreys gave evidence that the usual practice was that the letter from Mr Hulbert was “a formality” because there were “discussions [and] Colin would simply say that, you know, the loan is okay. I think this – was just a formality”: T, p 568, lns 16-18.

461    Mr Humphreys was then taken to an example of the Channic Credit Contract (Vol 9, Tab 25, Noble). Mr Humphreys gave evidence that he recognised this type of Channic document. He gave evidence that these document were prepared by someone in the office. He thought that the software programme generated the document. He said he did not believe it was a document that he ever “generated at all” and nor was it part of his role to present the document to clients: T, p 568, lns 35-37; lns 39-40. Mr Humphreys was taken to the “Financial Table” in the Noble example before him of the credit contract which recites the “[a]mount of credit of the loan” as $8,561.50, notwithstanding that Mr Humphreys’ CBPL loan application letter for the Nobles, seeks a loan of $7,990.00 being the balance of the car purchase price after payment of a $3,000.00 deposit. Mr Humphreys accepted that the difference between the two amounts was represented by a brokerage fee of $550.00 payable to CBPL and a loan establishment fee charged by Channic of $21.50 as set out in the Schedule at the top of page 2 to the contract.

462    Mr Humphreys was then taken to the CBPL brokerage fee invoice to Channic (Vol 9, Tab 27, Noble) of $550.00. Mr Humphreys gave evidence that he recognised this type of document. He said it was a type of document that he prepared. As to whether the brokerage fee was always $550.00 during his period at CBPL, Mr Humphreys thought it might have been $500.00 “but $550 rings a bell with me”: T, p 570, lns 24-25. Mr Humphreys gave evidence that he did not decide how much the brokerage fee would be. That was a matter decided by Mr Hulbert: T, p 570, lns 27-36. Mr Humphreys was then asked: “so in your role at Cash Brokers was it your usual practice to tell the client about the amount of the brokerage fee?” He responded (T, p 570, lns 39-41):

I think it was Mr Seefeld. Yes. I can’t – can’t remember this client. In general, I’m pretty sure it was. I’m sure that was – would have been my role, considering I had the client in front of me.

                                [emphasis added]

463    Mr Humphreys was then asked whether it was also his usual practice to tell the client that the brokerage fee “would be added on to their loan”. He answered: “I would imagine so. Yes.” [emphasis added] (T, p 570, lns 43-44). This topic was further explored by counsel for ASIC in this way (T, p 571, lns 1-14):

Q.    So you say you would imagine so. Do you specifically recall that?

A.    I don’t specifically recall that. I’m just saying logic would tell me that it would be my role and …

Q.    Did you receive instructions about what you needed to do?

A.    Again, I would imagine so. I wouldn’t have just [decided] what had to happen. Yes. I would imagine that, you know, it would have been an amount that was decided in the office and it was my role, sitting in front of the person, to tell the client. Logic would tell me that.

Q.    Can you please explain …?

A.    If the client was …

Q.    Sorry. Go on. I cut you off?

A.    No. I was just going to say – if I was sitting in front of the client, I would imagine I would be the only person that was able to tell them that.

                                [emphasis added]

464    Dr Spence, in cross-examination, explored this topic further in the following exchange (T, p 585, lns 35-46):

Q.    When you were working for Cash Brokers, was it the case that you generally advised [the] applicant that your employer was a brokerage firm?

A.    I don’t think I could confirm or deny that. I think in the initial stages of meeting and greeting a customer, I represented SuperCheap Autos, until they, perhaps, picked a car. And then I am fairly sure I would have said to them that I could assist them with credit also ...

…I think that was the process.

Q.    Did you generally advise loan applicants that there was a fee for brokerage involved in their obtaining a loan?

A.    During the process of an application, I’m fairly sure – and I can’t swear under oath, because I just don’t absolutely 100 per cent remember, but I’m fairly sure that that point was raised with clients.

                                [emphasis added]

465    As to the amount of the brokerage fee, Dr Spence asked Mr Humphreys whether he would agree that the brokerage fee had been reduced from $990.00 to $500.00. Mr Humphreys thought it had been reduced from that amount to an amount “around the $500 to $550 mark”.

466    Mr Humphreys gave evidence that in his period at CBPL he did endeavour, on occasions, to arrange a loan for a client from a lender other than Channic. He said that there was another brokerage firm that Mr Hulbert dealt with. Mr Humphreys could not remember the name of the other finance brokerage company that he dealt with. He recalls that he faxed applications to that company. He could not recall how many times he attempted to arrange finance from another financier. He could not recall whether any such applications were successful. Mr Humphreys was asked to explain what guided his usual practice when deciding whether to apply to Channic or another financier, for a client. He answered (T, p 571, lns 37-40):

I don’t remember what was the dividing factor. If I was to sit here now and think about why I would do that – I guess different finance companies would have different guidelines. I don’t remember the dividing factor … .

467    Mr Humphreys was asked whether it was ever the case that he had applied to financiers other than Channic for clients who were “only on Centrelink benefits”. Mr Humphreys said: “I don’t think so, but I think one of the other finance companies – who I can’t recall – did take family allowance into account, but I’m not sure if they took Newstart. But I’m not sure” (T, p 572, lns 21-23).

468    Mr Humphreys was then taken to a series of CBPL documents all dated 14 November 2010 which is a date that falls within the period of Mr Humphreys’s employment with CBPL (1 July 2010 to 24 August 2012).

469    The first document is entitled Representatives Policies and Procedures (Vol 22, Tab 5). The document recites at cl 1 that its purpose is to set out CBPL’s policy and procedures in relation to the appointment, supervision, training and competence of its representatives. Mr Humphreys gave evidence that he had no specific recollection of receiving the document (T, p 573, lns 24-25).

470    The second document is entitled Loan Inquiry Checklist. The document recites at cl 1 that its purpose is to provide a form that confirms “we made reasonable inquiries about a loan applicant’s financial situation and requirements and objectives”. The document attaches at Appendix 1 a “Loan Inquiry Checklist” which recites that the checklist is to confirm that CBPL has made reasonable inquiries about the financial situation and requirements and objectives of the customer referred to below” in connection, relevantly, with an application for credit by the customer. The checklist contains a table earlier described in these reasons at [384] and [387]. Mr Humphreys gave evidence that he thought that he did use this document in his role at CBPL. He could not remember whether he received any instructions about how to use the document (T, p 574, lns 2-4; lns 6-7).

471    The third document is entitled Verification Checklist (Vol 22, Tab 13). The document recites at cl 1 that its purpose is to provide a form that confirms “we have taken reasonable steps to verify a loan applicant’s financial situation”. The document attaches at Appendix 1 a Verification Checklist and recites that the checklist is to confirm that CBPL “has taken reasonable steps to verify the financial situation of the customer referred to below” in connection with, relevantly, an application for credit by the customer. Mr Humphreys gave evidence that he thought he did use this form in his role at CBPL although he could not remember the form specifically (T, p 574, lns 26-27).

472    The fourth document is entitled Suitability Assessment Form (Vol 22, Tab 14). The document recites at cl 1 that its purpose is to provide a form that can be used to conduct an assessment of suitability of credit for a customer, and to provide to the customer on request”. The document attaches at Appendix 1 a Credit Suitability Assessment and recites: “This is a credit suitability assessment made in accordance with sections 115 and 116 of the [NCCP Act] by [CBPL]”. Mr Humphreys gave evidence that he thought that in his role at CBPL he did use this form.

473    On the topic of whether Mr Humphreys in his role at CBPL had assisted clients of CBPL to obtain finance from a lender other than Channic, Mr Humphreys was taken to an answer he gave in the course of an examination by ASIC officers (Ms Egan and Mr Saad) on 11 January 2012 (Vol 25, Tab 4; T, p 36 ln 9) in these terms to a question at lns 5-8:

Q.    Just thinking back let’s say to 1 July 2010, could you tell me how many people you’ve assisted in arranging finance through GE Money or Esanda or a similar company?

A.    Look, there wouldn’t be anybody, I would imagine.

474    Having been taken to that answer, Mr Humphreys was asked: “ it’s true, isn’t it, that there was not a single successful application to another credit provider that you arranged while you were at Cash Brokers?” Mr Humphreys responded: “I couldn’t say that was correct. I can’t remember if that was true” (T, p 576, lns 5-6). Mr Humphreys was again taken to the reference “GE Money or Esanda or a similar company” and his response that there would not have been anybody that he would have assisted with such entities, he imagined, and added: “I don’t remember saying that, to be honest, but – I don’t know the answer to your question” (T, p 576, lns 24-25). Mr Humphreys also added this (T, p 576, lns 35-40):

I don’t remember saying Esanda. I would have thought GE Money would have loaned to – some customers. I don’t remember specific applications or clientele but I do remember there was one broker that loans were submitted to. Can’t think of their name. I don’t remember making this statement is my problem, in those exact words.

475    The answer given by Mr Humphreys at ln 9 was the subject of immediate expansion at lns 11-25 in which he says that some buyers paid cash to settle a sale and in respect of some of those buyers Mr Humphreys said in his expanded answer that he thinks he may have suggested to them to go and talk to their own bank.

476    Leaving aside cash buyers who by definition did not need finance from or through CBPL, Mr Humphreys’s recollection on 1 January 2012 seems to have been that he imagined (that is thought) that there would not have been any people assisted by him in arranging finance with GE Money, Esanda or a similar company in his period with CBPL stretching back to 1 July 2010.

477    Mr Humphreys gave evidence that he was not aware that virtually all of the buyers of motor vehicles involved in the present proceedings are indigenous people who live at Yarrabah. Mr Humphreys gave evidence that it was not uncommon for applicants for loans to say that they had found out about Supercheap because other loan applicants had referred them to Supercheap.

478    Mr Humphreys also gave evidence that “quite a lot” of the applications for loans were not referred by him to Channic and Mr Hulbert. Mr Humphreys thought that “Colin would have a draw full of cancelled applications”. He said that, definitely, “not everybody got [a] loan approved” and the ratio of approval to rejection may have been 50/50 or 60/40. It is not entirely clear from this answer whether Mr Humphreys was not sending on these applications to Mr Hulbert or whether the applications showed a positive surplus yet Mr Hulbert was not approving them. Mr Humphreys was not able to comment, from his own knowledge, on the factors which might have led to a rejection of an application because he “didn’t make those decisions”: T p 587, lns 2-3. However, this notion that Mr Hulbert may have kept cancelled applications was entirely a theory on the part of Mr Humphreys based upon an assumption: T, p 591, lns 1-3. The respondents were unable to produce any such documents when called upon to do so.

479    Counsel for ASIC sought to clarify the ambiguity inherent in Mr Humphreys’ earlier answer concerning the rejection of applications in the ratio 50/50 or 60/40 by this exchange (Tp 591, lns 27-45):

Q.    Now, I want to be clear here. Were you talking about Cash Brokers – i.e. applications that you didn’t even bother to send through to Mr Hulbert for Channic because they weren’t going to be approved – or were you talking about finance applications which were rejected by Channic, ultimately?

A.    Can – Mr Seefeld, can I just answer by saying that there would have been a percentage that didn’t have a surplus – that, I guess, “rejected” would be a bad word – but I probably wouldn’t have sent them through to Channic. And I would imagine there would be a percentage that Channic had rejected off their own steam because they didn’t want to do the business. But the ones I was talking about [were the] ones that didn’t, I guess, have a surplus on their – on the calculator, I think. And ... I think that’s what I’m trying to say, Mr Seefeld.

Q.    And just to be clear, by “surplus”, do you mean that number at the bottom of the preliminary test, ... [where, if the number is more than zero it’s a surplus]?

A.    Yes. That’s what I was referring to when I commented. But, as I said, I would imagine there would be some [applications] on the other side of the fence that you referred to that were declined by Channic as well – I would imagine.

                                [emphasis added]

480    As to the steps that were taken to ensure that a car was roadworthy before it was on-sold by Supercheap, Mr Humphreys gave this evidence of the process (T, p 588, lns 1-10):

This is my understanding of what happened. ... Colin would buy a car. It would go into his workshop. He had ... maybe two mechanics at any one time. ... I think those mechanics would give Colin a report, and sometimes verbalise things that were wrong with [the] cars. Those cars were attended to. Colin had a very good skill of running around getting parts. And … the roadworthy process was done independently [of] that workshop. I was sometimes involved in driving a car somewhere and picking the car up, or picking up a part when I was driving somewhere else.

481    As to the two sites and office locations for Supercheap, CBPL and Channic, Mr Humphreys gave evidence that the two locations (Mulgrave Road and Spence Street) had “a very different layout”. At Mulgrave Road, the workshop was on-site. The office was “very open plan”. Mr Hulbert’s desk was in the open plan office and Mr Humphreys felt that he “could have hit him with a paperclip”. In the Spence Street office, Mr Hulbert was in a separate office behind a wall with something like a one-way mirror so he could see out. If the door was open, he would quite often yell around the corner and Mr Humphreys would also be able to yell around the corner. Occasionally, Mr Humphreys saw Mr Hulbert in his office speaking to customers. Most of the customers who came into the car yard would have approached Mr Humphreys to purchase a car in the first instance. Mr Hulbert would have dealt with them, from Channic’s point of view, in the second instance on another occasion.

482    As to the Credit Contract type of document, Mr Humphreys gave evidence that on every occasion, except one (when Mr Hulbert possibly had a medical appointment), Mr Hulbert spoke to the loan applicant about the signing of the contract. As to whether Mr Humphreys overheard conversations between Mr Hulbert and the purchaser of the car concerning the signing activities, Mr Humphreys gave evidence that “most of the time Colin would come into the main office to execute those documents”. He added: “I don’t remember a lot of detail, but Colin would spend a fair amount of time with those people and – I don’t remember detail. I’m sorry”: Tp 589, lns 22-31.

483    When asked to elaborate upon the notion that Mr Hulbert would spend a fair amount of time with the applicant buyer, Mr Humphreys said this (T, p 589, lns 34-36):

It would be complete speculation, but I would say – I could be wrong – I could be totally wrong – but I would say it would generally take somewhere between half an hour to an hour.

484    The qualifications upon that answer essentially reduced the answer to zero in terms of probative value. That caused the Court to ask Mr Humphreys this: “Mr Humphreys, have you got any actual recollection of that or it just something that you are speculating about ...” … He answered (T, p 589, lns 43-46):

No. I couldn’t give specific times, your Honour. But, to me, it seemed to take a while. But I couldn’t quote time in terms of 30 minutes – half an hour – 40 minutes – 45 – I couldn’t be exactly – but it did seem to take a while.

485    It is now necessary to consider the evidence of each of the other consumers concerning their individual transactions and then consider the evidence of Mr Hulbert. I will consider the evidence of the consumers in the order in which they gave evidence.

PART 9: THE EVIDENCE OF MS PRUNELLA KATHLEEN HARRIS

486    Ms Harris gave a statement to ASIC dated 29 November 2011. She also swore an affidavit in the proceeding on 17 June 2014. Her earlier statement is Tab 1 of Ex PKH-1 to her affidavit.

487    Ms Harris was born on 30 March 1977. She was 33 years of age when she first engaged with Supercheap and Channic (and possibly CBPL). Ms Harris completed secondary schooling in 1992 after reaching Year 10. After leaving school she completed a First Aid course sometime after 2010; a course on construction in 2010; a course on chemicals in 2010 and a literary and numeracy course in 2010 at the Training Centre at Yarrabah. Ms Harris also completed a two week training course in Hospitality in 2010. In 2011 and 2012, she completed a course called “Introduction to Technology” in Yarrabah at the Training Centre with “Skill Choice Australia”. Ms Harris has also undertaken a course, part time, in child safety, day care and working with children. In about late August or early September 2010, Ms Harris worked as a landscaper and housekeeper at the resort on Fitzroy Island on a casual basis, “week on, week off”. She was paid casual hourly rates for her week on and nothing for the week off. She says she earned an income for the “week on”, depending upon the number of hours worked, of approximately $500: T, p 284, lns 20-47; para 11 of her affidavit. Ms Harris can read and write English well. She is single.

488    In September 2010, Ms Harris lived with her seven children then aged 3, 4, 5, 9, 12, 14 and 16. At para 9 of her affidavit she says that she was also a carer for her mother who lived with her. Her brother also lived with her. In 2010, all of her children were financially dependent on her. Ms Harris lives at Yarrabah in Aboriginal Community Housing and has lived there almost all of her life. She rents her home within the Yarrabah community.

489    In her affidavit evidence, Ms Harris says that she heard about Supercheap in early September 2010 or so, through her “cousin-brother” (who is her cousin), Mr Hilary Harris. I will refer to Mr Harris as Hilary, as Ms Harris did in the course of her evidence. He mentioned Supercheap to her and said he would accompany her to the car yard to have a look at cars. Ms Harris wanted to buy a “bigger car” than the car she already owned. She wanted a car capable of carrying her whole family. Hilary said that he would take Ms Harris to see “a fellow named Colin” who could “probably help her with the finance for a bigger car”: T, p 210, lns 45-47. Hilary had previously purchased a green V6 Commodore from Supercheap. He too had problems with that vehicle.

490    Ms Harris says that on 10 September 2010, she, with Hilary, went to Supercheap. Hilary “ended up having a yarn to Colin in the office” and Ms Harris had a look at the cars. She then went inside and spoke with Colin about getting a car on finance: T, p 211, lns 6-9. I will continue to use the description “Colin” as used by Ms Harris in the course of her evidence.

491    In examining Ms Harris’s evidence, it is also important to note that the essential propositions put to her in cross-examination by Dr Spence were that on her first visit to Supercheap, Ms Harris actually met with Mr Humphreys rather than Mr Hulbert; Ms Harris is confused and has a poor recollection of what occurred on her visits to Supercheap and when they occurred; she was in a hurry and chose not to read any of the documents; Mr Hulbert spent some time explaining the contents of the documents; and an examination of her Centrelink statement and the relevant bank statement shows considerable income in addition to her other earnings in the relevant period and thus a capacity to service the Channic Credit Contract.

492    A number of these propositions were put to her many times over: T, p 283, lns 14-18. She plainly became distressed and, ultimately, confused about some things. It fell to the Court to ask Ms Harris questions about the sequence of events. It will be necessary to examine some of these factors. Overall, Ms Harris comprehended the questions and the propositions put to her by counsel for each side. Ms Harris was reasonably confident about her recollections on most things although she said that she could not remember aspects of some of the events as put to her. She clearly became a little weary in giving evidence.

493    In terms of the cross-examination, I extended a considerable degree of latitude to Dr Spence as it was legitimate for him to test the accuracy of Ms Harris’s recollections. She was, however, tested quite extensively on some of these issues.

494    As to her engagement with Colin on 10 September 2010, Ms Harris says that she was looking for a “wagon” or a “bus or something”: T, p 211, lns 17-19. She looked at the cars. Hilary then asked her to go into the office as Colin wanted to talk to her: para 19, affidavit. She went inside and spoke to Colin. Colin said: “So, you’re looking for a bigger car on finance?” She said: “Yes”. He said: “I don’t have a bigger car at the moment but you can take the Ford Fairmont”. Ms Harris said: “Okay”: para 19, affidavit. Ms Harris says that Colin also asked her a few questions including: “How much rent do you pay?” She said: “$302 per fortnight”. She says that Colin was making notes on one of the forms he had before him. She says that Colin asked her to sign a number of forms. One form was headed “AHA Finance”. She signed it at the end of the form. Ms Harris says that Colin told her the price of the car was $8,500: T, p 212, lns 7-10. On the first day that Ms Harris went to Supercheap, Colin told her that the deposit would be $1,500: T, p 216, lns 3-5. Ms Harris says that she did not drive the Ford Fairmont on that day. She says she knows a little bit about cars although she does not know much about value. She says that she did not “even look at the car”, nor did she know how far the car had travelled: T, p 216, lns 7-12.

495    Ms Harris was taken to the Credit Application Form.

496    She says that none of the handwriting on the first page is her handwriting.

497    The front page notes a vehicle retail price of $8,990 and a deposit of $1,500. It records the name, address and contact details for Ms Harris and records that: she rents premises at Yarrabah; has done so for 33 years; her current employer is Centrelink; and her gross income is $4,223 per month. The References box on p 2 was completed by Ms Harris. Ms Harris signed the form on p 3. Above her signature is a list of seven matters (a) to (g) including statements that all handwritten information on the document including handwritten information by persons other than Ms Harris is true and accurate; and the declared income and expenses represent an accurate assessment of the applicant’s financial position. Above that list of seven matters is the heading “Declaration”. Ms Harris says that she did not read what was written there. Nor did anyone, she says, “tell her what it was about”: T, p 213, lns 35-40.

498    The Financial Information box on p 2 of the form only has three entries out of 10 possible expense entries completed. The completed entries are: “Rent/Mortgage: $300 per M”; “Personal Loan(s): Rentlo $300 per M”; and “Total: $600 per M”. There are no entries completed for “Credit defaults, credit card(s), food, phone/mobile, vehicle expenses, utilities, child support, other”. Nor is there an entry in the “Surplus/Deficiency” line (for income of $4,223 per month and expenses of $600 per month).

499    Ms Harris says that in the office that day Colin asked her about her rent ($302) and she pointed out to him that his entry of $300 on the form was not correct. She also told him she was paying electricity expenses, expenses for her children’s schooling and repayments to Radio Rentals and Chrisco. Ms Harris says she was paying off, at the time, a loan for a “sofa as well as a … television”: T, p 213, lns 29-30.

500    As earlier mentioned, p 3 of the form has boxes to be ticked for “Supporting Documents (if applicable)”. Six possibilities are listed including bank statements and Centrelink statements. None of the boxes are ticked on the form she signed. Nor is the box ticked concerning the provision of a competitive insurance quote for the car.

501    Ms Harris says that she was asked to bring in a Centrelink statement and a bank statement. She did not have those documents with her and was asked to get them and bring them in. Ms Harris was taken by counsel for ASIC to a Centrelink statement dated 10 September 2010. She says that this is the Centrelink statement that she obtained “at the time”: T, p 214, lns 2-3. A schedule of her entitlements to particular benefits is recited on p 1. It says that she was receiving a maximum rate carer payment (for looking after her father), a maximum Family Tax Benefit and support at 100% for six children. At 10 September 2010, the statement records that her previous regular entitlements and payments were these:

Previous regular entitlements and payments

Payment Type

Amount

Date Paid

Carer Payment

$644.20

8 Sep 2010

Pension Supplement

$56.90

8 Sep 2010

Govt Housing Authority Concessional amt**

$60.00

Family Tax Benefit Part A ($1,009.96)*

$1,009.96

1 Sep 2010

Family Tax Benefit Part B ($136.36)*

$136.36

1 Sep 2010

Large Family Supplement ($44.24)*

$44.24

1 Sep 2010

* Note:    These payments, in brackets, are your current legislated maximum entitlements. In some cases the payments reported will be different to the amounts you actually receive.

** Note:    This figure is included in the Pension Payment Amount and is for Government Housing Authority purposes only.

502    The Centrelink statement records that her future regular entitlements and payments are these:

Future regular entitlements and payments

Payment Type

Amount

Date Paid

Carer Payment

$645.21

22 Sep 2010

Pension Supplement

$56.96

22 Sep 2010

Govt Housing Authority Concessional amt**

$60.00

Family Tax Benefit Part A ($1,009.96)*

$1,009.96

15 Sep 2010

Family Tax Benefit Part B ($136.36)*

$136.36

15 Sep 2010

Large Family Supplement ($44.24)*

$44.24

15 Sep 2010

* Note:    These payments, in brackets, are your current legislated maximum entitlements. In some cases the payments reported will be different to the amounts you actually receive.

** Note:    This figure is included in the Pension Payment Amount and is for Government Housing Authority purposes only.

503    The Centrelink statement also shows that deductions were being made by Centrelink from Ms Harris’s entitlements and the deductions were these:

Deductions from your payment

Payment Type

Deduction

Amount

Date Paid

Carer Payment

Centrepay Deductions

$278.00

8 Sep 2010

Family Tax Benefit

Centrepay Deductions

$65.50

1 Sep 2010

504    All of these payments seem to be paid fortnightly except for the concessional amount which is otherwise included in a benefit payment ($60.00). The fortnightly future regular entitlements as at 10 September 2010 amount to $1,952.73 or $3,905.46 per month, less the Centrepay deductions of $343.50 (which seems to be a fortnightly deduction) resulting in monthly Centrelink payments of $3,218.46 subject to the “* Note” in the first two tables above. Ms Harris gave evidence that she did not know what the fortnightly deductions of $343.50 “were about”: T, p 214, lns 44-45. If her “week-on” earnings were approximately $500.00, her monthly income from work at the Resort on Fitzroy Island would amount to approximately $1,000.00 resulting in total income of $4,098.46 subject to the Note. I will return to the content of these entitlements later in these reasons.

505    At para 29 of her affidavit, Ms Harris says that her “Centrelink income statement” shows that she was receiving benefits each month amounting to $4,230.91. She says that she was receiving less than that at the time (10 September 2010) although she is not really sure. The document, however, that shows an income figure of $4,230.91 is not her Centrelink income statement but the Preliminary Test document. Ms Harris was taken to that document which she says she first saw when ASIC presented a copy of it to her. It says this:

Channic Pty Ltd

PRELIMINARY TEST

Date:                        10/08/2010

Client Name:

Prunella Kathleen Harris

Broker:

Cash Brokers Pty Ltd

Loan Purpose:

Motor vehicle purchase

8990

Cash Deposit

1500

Capacity:

Borrower 1 NET monthly income

$4,230.91

Borrower 2 NET monthly income

$0.00

Maintenance

$0.00

total monthly income

$4,230.91

Expenses

Rent/Mortgage

$300.00

Mobile Phone

Prepaid

Living expenses

$2,900.00

Single $950; Married/De facto $1300

Each child $325

Credit Card

$0.00

Min 3% of Limit or $75 if no Credit Card

Centrelink Advance

$0.00

Radio Rentals

$0.00

Finalised

repayment this loan

$650.00

total expenses

$3,850.00

Surplus/Deficit

$380.91

I confirm the information input in this assessment

is accurate based on the information I have been provided

Signature

Broker Signature

506    Ms Harris says, as already mentioned, that the rent item is incorrect. She also says that the zero payments to Radio Rentals are incorrect. So too is the Centrelink advance at zero, incorrect, as she was paying $38.00 each fortnight to Centrelink in repayment of an advance. Her expenses in September 2010 were these (as she described them at para 12 of her affidavit):

(a)    approximately $302 per fortnight for rent;

(b)    approximately $150 per fortnight for electricity;

(c)    approximately $60 per fortnight for my mobiles for credit;

(d)    approximately $550 per fortnight on groceries;

(e)    approximately $18 per fortnight for Oxfam;

(f)    approximately $60 per fortnight for Classic Portrait for photography services;

(g)    approximately $112.96 per fortnight for Chrisco for a Christmas hamper;

(h)    approximately $20.77 per fortnight for Viptel to buy my mobile phone;

(i)    approximately $95.90 per fortnight to Radio Rentals;

(j)    approximately $4.62 and $63.60 per fortnight for authorised payments, although I don’t know what these were for;

(k)    approximately $80.00 per fortnight into my Christmas savings;

(l)    approximately $38 per fortnight in repayments to Centrelink for an advance payment;

(m)    insurance, I think I had third party insurance but I am not sure, registration, petrol and maintenance for the car I had then, which was a Daewoo Leganza, which included about $390 for 6 months registration [$32.50 per fortnight] and approximately $70 per week in fuel [$140 per fortnight]. I spent this much on fuel because I had to drive my kids to school and to Cairns to get groceries and get to Fitzroy Island.

507    These fortnightly expenses amount to $1,728.35 or $3,456.70 per month.

508    As to the bank statement, Ms Harris says that she obtained a copy of a bank statement for her “Streamline e-Access” account with the Commonwealth Bank which she describes as her “normal” account. She gave it to Mr Hulbert: T, p 216, lns 29-30; lns 38-40; lns 42-47. Ms Harris also has an “AwardSaver” account with the Commonwealth Bank which is her Christmas savings account. The only bank statement given to Mr Hulbert was for the Streamline account. As to the Streamline account, Ms Harris says that she understands what the numbers and letters mean on the statement. The statement comprises eight pages. It commences on 1 May 2010 and ends on 21 July 2010.

509    The Streamline account reflects a certain pattern in the transactions. On 4 May 2010, a Centrelink payment was received of $187.20. The account was then overdrawn by $69.40. On the same day, three “authorised payments” were debited to the account. A Yarrabah debit occurs on the same day. These debits amount to $116.30. On 5 May 2010, a Centrelink payment was received of $396.60. On that day there was a Chrisco debit of $56.45 and a cash withdrawal of $390.00. Other fees and charges were debited to the account between 5 May 2010 and 11 May 2010. On 12 May 2010, there were three benefit payments to the account amounting to $1,197.83. On 12 May 2010, there were two major cash withdrawals and other debits amounting to $1,117.34. A similar pattern of benefit credits to the account and immediate withdrawals can be seen throughout the operation of the account. In particular, Ms Harris made significant cash withdrawals. These amounts were used for groceries and expenditures on her children generally and for their schooling. She did not have a practice of carrying around significant amounts of cash.

510    Ms Harris says that after she gave Mr Hulbert a copy of her Centrelink statement, she did not receive the car. She says she was told that the car was not ready that day. She was asked to return “in a couple of weeks”. She says that at that time she was working at the Resort on Fitzroy Island and so she called her mother and asked her to “go and pick the car up”: T, p 218, lns 21-24.

511    Ms Harris gave evidence that: “I signed all the paperwork before I went back to work”.

512    In her affidavit, Ms Harris says, in the context of the discussion of the events which occurred on 10 September 2010 when engaging with Colin, that Colin gave her “a few documents to sign”. She says that he “just turned the pages and pointed to where he wanted me to sign”. She says that she did not understand “what the documents were for and he didn’t explain them to me”: para 20. At para 36, Ms Harris says that she went across the road to the bank and took out $1,500.00 in cash. She then went to Centrelink and obtained a Centrelink income statement. That statement is dated 10 September 2010. She says she then returned to the car yard and paid $1,500.00 in cash to Colin for the deposit and handed Colin the Centrelink income statement dated 10 September 2010. Colin also took a copy of her driver’s licence. At para 38, she says that Colin took the deposit, the Centrelink income statement and returned to her the driver’s licence. At para 39, Ms Harris says that there was a second visit to the car yard on or about 20 September 2010. She returned to the car yard. She cannot recall whether she spoke to Colin or Mr Kevin Humphreys. She says she spoke to one of them. One of them put a long document in front of her and asked her to: “Please initial each page and sign here”. She signed and initialled the document. She says that she did not have a chance to read the document before she signed it. The document she is speaking about is the Credit Contract with Channic. She says she signed it on or about 20 September 2010: paras 36 to 42.

513    In her oral evidence, Ms Harris was then asked by counsel for ASIC to explain the events that occurred on the occasion when she went to the car yard to sign all the papers.

514    In answering that question, Ms Harris was taken to a copy of the document described as Consumer Loan Contract and Mortgage No: 5085 (the Credit Contract). Ms Harris gave evidence that she did not know what a mortgage was. She gave evidence that her initials were at the foot of p 1 and pp 6 and 7. She acknowledged that Box A at the top of p 7 is crossed out. She gave evidence that Colin crossed out Box A: T, p 219, lns 1-3. She says that she did not read any of the writing on that page and that no-one explained any of it to her. She says that Colin “just asked me to sign”. As to the signing, she says that: “He just wanted to flick through the pages and wanted me to sign my signature and initial every page down the bottom”: T, p 219, lns 10-12. Ms Harris signed the document in Box B and signed the document on p 6. She initialled each page at the foot.

515    Ms Harris was asked whether Mr Hulbert was also signing the document when she was signing it. Ms Harris said that he “was there as well” but that she could not remember whether he was “also signing the document”: T, p 219, lns 24-27.

516    The Credit Contract between Channic and Ms Harris contains this information in the Financial Table:

FINANCIAL TABLE

Amount of credit of the loan

$8,501.50

Annual percentage rate

48% per annum

Total amount of interest payable

$3,466.85

Interest free period

The maximum duration of any interest free period under the contract is

0 weeks

Repayments

Total number of repayments

40

consisting of 39 repayments each of

$299.24

Plus a Final Repayment of

$297.99

Total amount of repayments

$11,968.35

Date of first repayment

29/09/2010

Frequency of repayment

Fortnightly

Credit fees and charges retained by us

None

Nil

Disclosure Date - The information as shown is current at this date

29/09/2010

Note

Subject to the General Conditions, we may change the way we calculate interest or how often we debit interest, the amount or frequency of any fees and charges (including the addition of new fees and charges) and the amount or frequency or time for payment or method of calculation of your repayments without your consent by giving you notice of such changes. Where we we [sic] make such a change, we will notify you.

End of Financial table

517    As to the Financial Table, Ms Harris says that she was not told about how much money she was going to borrow. She was asked: “Did you want to borrow money at this time?”, and answered: “Well, no. No one explained to me anything”. She was taken to the interest rate of 48% and was asked: “Did you know then what that meant?” She said: “I don’t know”. She was asked: “Do you know now what it means?” She said: “No. I still don’t know”. She was asked: “Did someone – anyone tell you about how much you were going to pay back in terms of the total amounts of payments?” She said: “No”. She was taken to the amount of the total repayments of $11,968.35 and was asked: “Did anyone tell you that that was how much you were going to pay back?” She said: “No”. Ms Harris said that she had paid a deposit of $1,500.00 and it was put to her that taking into account the deposit, her total payments would then be $13,468.35. She was asked: “Would you have been happy to buy the car at that price?” She said: “No. I wanted something less. I didn’t expect that”. She said that there was no discussion about how much she would be repaying for the purchase of the car: T, p 219, lns 29-46; T, p 220, lns 1-14.

518    Ms Harris was then taken to the reference to the “Comparison Rate” at the foot of the table which says this:

Comparison Rate                    46.9597% per annum

This rate is calculated on the $8,501.50 credit amount over a 80 week term with the ascertainable credit fees and charges (if any) and repayment amount(s) and date(s) as stated in the Schedule.

519    Ms Harris gave evidence that she does not know what a Comparison Rate is: T, p 220, ln 20.

520    Page 2 contains a schedule setting out a range of information. The top four boxes of the schedule are in these terms:

Schedule

Offer date

20/09/2010

Loan Draw Down Date

20/09/2010

Loan term commencing from the Draw Down Date

80 weeks

Amount of credit to be paid on the Drawdown Date as follows:

1.    To us for payment of all loan establishment fee(s) and charge(s)

$21.50

2.    To Cash Brokers Pty Ltd for Brokerage

    Paid by EFT to BSB 0 Account 0

$990.00

3.    To Supercheap Car Sales for Car Purchase

    Paid by EFT to BSB 0 Account 0

    for the purpose of Car Purchase

$7,490.00

Payment Due Dates

[This box contains a repayment schedule which sets out the due date for repayments from No. 1 to No. 40 and the amount payable for the first 39 instalments of $299.24 and an amount of $297.99 for the 40th repayment]

Interest is calculated in accordance with Clause 5 of the General Conditions.

521    Ms Harris says that a Loan Establishment Fee of $21.50 was not explained to her by anyone. As to the brokerage, she was asked: “Did you know what brokerage was?” She said: “No, I don’t”. She says that she did not know anything about Cash Brokers until ASIC spoke to her about it. She says that she did not have any conversations with anyone about paying brokerage to anyone or an amount of $990.00. She was asked: “Did you have a discussion with anyone about when you would pay off the finance that you had?” She answered: “No”. As to the column of figures in the schedule setting out the 40 repayments and the repayment dates, she was taken to the last payment on 28 March 2012 and was asked this: “Did you know that you were paying off the loan at that time?” She answered: “No, I didn’t know that – how long it was”. She was asked whether she read the document “at all” as it was before her when signing it. She said: “No, I didn’t”. She was asked: “Did anyone tell you to read it or …?” She answered: “No, no one asked me to read it”. Ms Harris was asked this: “And, Ms Harris, by signing [the Credit Contract] – when you signed that document – do you know what that document was for?” She answered: “No, I don’t”.

522    Ms Harris was then taken to a document described as “Acknowledgement and Consent for Receipt of Electronically Transmitted Documents” (Tab 8 of her affidavit). Ms Harris signed that document. She was asked: “Did anyone explain to you what that – signing that page was about?” She answered: “No”.

523    In her affidavit, Ms Harris says that neither Colin nor Kevin talked to me about being able to get legal advice before I signed the document. Although p 7 of the contract says that Ms Harris might choose to obtain legal advice before signing the Credit Contract, she says that she did not read this before she signed the document and she did not obtain legal advice before signing the document.

524    The Credit Contract bears the signature of Mr Hulbert. A date is endorsed on the contract of 20 September 2010.

525    Ms Harris was then asked about the car and the problems with it. She says that when she took possession of the car there was “a nail sticking out of (the tyre)”. There was no fuel in the car and the radiator kept overheating and breaking down. She says she made telephone calls to Colin to get these things fixed. Colin said that if there was a problem with the car he would see to it straightaway. She says that Colin did not return her calls. Her son changed the tyre. Ms Harris says she continued to call Colin about having the radiator fixed. The car eventually stopped completely. She telephoned Colin. He sent a tow truck to pick it up in March 2011 and Ms Harris has not seen the car since. She continued to telephone Colin about it “but every time I phoned up, Colin wasn’t in the office”: T, p 221, lns 33-45; T, p 222, lns 1-23.

526    As to the loan repayments, Ms Harris says that she stopped paying them. She says that she thought she would be able to make the repayments when she got the loan although she was not really confident about it. She says there had been problems with the direct deposits from her bank account and therefore she had been making the payments in cash at the car yard. She says that from the next payment which was due after the car was towed away in March 2011, she stopped making the repayments. She says that while she was making the repayments on the loan it was very difficult for her financially: paras 62 to 66 of her affidavit. Also at para 66, she says that due to the repayments, these events occurred:

I got about $1,000 behind on my electricity bill due to all my expenses. I cut down on the food that I bought for my family. I had to cut back on recharging my prepaid phone. The kids had to stop having pocket money. I didn’t have the money to pay for new school shoes for the kids. I had been helping my son with money. He is on a football scholarship and I usually send him some money, but I couldn’t do this.

527    Tab 12 to her affidavit is a copy of an agreement between Radio Rentals and Ms Harris dated 24 January 2008. The document is described as a lease for a period of 18 months with 18 payments of $110.33 comprising a rental amount of $94.89 and fees of $15.44. The total amount payable over the lease period is $1,985.94. The leased goods are a lounge and footstool.

528    Tab 13 to her affidavit is a copy of an agreement between Radio Rentals and Ms Harris dated 18 May 2010. The document is a lease for 36 months with 36 payments of $97.48 comprising a rental amount of $86.47 and fees of $11.01. The leased goods seem to be a Daewoo LCD Full Screen Television.

529    Ms Harris says that neither Mr Hulbert nor anybody else at the car yard asked her to obtain documents in relation to her agreements with Radio Rentals.

530    At the outset of the cross-examination of Ms Harris, Dr Spence put this to her: “… and the day you first went there [Supercheap], that was 20 September 2010, was it?” Ms Harris said: “Yes”. In the context of Hilary accompanying Ms Harris, Dr Spence asked this: “And he went there with you on 20 September 2010?” She said: “Yes, he did”: T, p 225, lns 24-25; ln 43. Ms Harris, in her affidavit evidence and in her oral evidence, had spoken about a first visit to Supercheap and then a second visit. She described the first visit as having occurred on 10 September 2010. Dr Spence, however, put to her at the outset that she first went there, with her cousin, on 20 September 2010. This may well have introduced, innocently, a degree of confusion in the mind of Ms Harris because her earlier evidence had not suggested that the first visit to the car yard was on 20 September 2010.

531    Dr Spence then directed the attention of Ms Harris to Mr Hulbert who was sitting behind him. Ms Harris was asked: “Do you know if that was the man that he [Hilary] had a conversation with?” She answered: “Yes”. Dr Spence suggested that Hilary had spoken to a different man. Ms Harris disagreed. Dr Spence suggested that on the first occasion that Ms Harris went to the car yard, she had a conversation with Mr Kevin Humphreys. Ms Harris was asked: “Does that sound familiar?” She answered: “I remember Kevin, but he wasn’t the one that … I spoke to on the first day I went there”. Ms Harris was then asked this: “And then, on that day – do you say it was the same day, 20 September 2010, you signed the contract?” She answered: “On the same day”: T, p 226, lns 1-7; lns 27-32.

532    Dr Spence then drew attention to that part of her affidavit which says that Ms Harris went with her cousin to the car yard on 10 September 2010. Ms Harris responded: “The first day I went to the car yard is when I signed the papers”: T, p 226, lns 34-35. Dr Spence then asked this: “So you agree now – was it 10 September you went there? It was 10 September 2010, not the 20th?” She answered: “I know it was in September. I can’t remember exact”: T, p 227, lns 1-3.

533    Ms Harris confirmed again that she did not have a conversation with Mr Humphreys on that first day. Rather, she spoke to “the man sitting behind” Dr Spence, Mr Hulbert. Ms Harris said that she knew who Dr Spence was talking about and understood that that person was Mr Hulbert. She said that she did not speak to Mr Humphreys at all that day but did so “on the second time I went around”: T, p 227, lns 7-17. Ms Harris says that she was told on that first day that she would need to come back later as the car was not ready.

534    Dr Spence took Ms Harris to the Credit Contract and drew attention to p 6 which contains her signature. Dr Spence put this to Ms Harris: “So would you agree that you must have gone back to the car yard on 20 September 2010 and that’s when you signed that document?” She answered: “That’s all I got to do, is sign on that day, but I didn’t put the date in”: T, p 228, lns 22-24. Dr Spence put to Ms Harris that the date must have been 20 September 2010. Ms Harris seemed to agree with that observation by reference to her periods of work at Fitzroy Island. She said that on the day the car was ready to be picked up, members of her family went back to the car yard to collect the vehicle as Ms Harris was on the Island.

535    Dr Spence then put to Ms Harris, somewhat confusingly, this: “So – and you took the car away on 20 September – that day that you signed the contract. Is that right?” She answered: “No”: T, p 229, lns 3-4.

536    She agreed that the car still had to be repaired as at 20 September 2010. She was asked whether she went back after 20 September 2010. She said: “Yes”. She was asked when that occurred and she said that she was not really sure. However, the suggestion was then put to her that maybe a week or two after 20 September 2010 she went back to the car yard and that was when she picked up the car. She was asked whether that would be right. She answered: “The car was already home”. Ms Harris had given evidence about her mother having picked up the car due to the working arrangements at Fitzroy Island. When asked how the car was already at home, Ms Harris said: “Well, the car got picked up from my mother and my son. I was on the island when the car got picked up”.

537    Ms Harris was taken to p 20 of the Credit Contract which contains a “PayGate Direct Debit Request”. Ms Harris accepted she had signed that document. It is dated 20 September 2010. She gave evidence that she was having problems with direct debits from her bank account for the car so she had made repayments in cash. The following exchange then occurred (at T, p 230, lns 24-31):

Q:    Can I just take you to that direct debit request. Do you see where your signature is? You agreed you signed it. Am I right about that?

A:    Yes.

Q:    And then it has a date on it which looks like 20/9/10. Is that right?

A:    Yes.

Q:    Do you remember now signing that on that date?

A:    Yeah. I went in the office and I just signed all the papers all in the one hit.

538    In the context of the two dates of 10 September and 20 September 2010, Dr Spence put this proposition to Ms Harris: “Ms Harris, I want to suggest to you – I’m not trying to trick you – I want to suggest to you, you didn’t see this man sitting behind me [Mr Hulbert] on 10 September 2010; you saw Kevin Humphreys”. She answered: “No”. Dr Spence then said: “And I want to suggest to you that when you went back on 20 September 2010, that’s when you had a conversation with Mr Hulbert, behind me?” She answered: “No” and added: “No. On the first day I went to the car yard, that’s when I spoke with Kevin – Colin. On the second day, it was Kevin – not [the] second day, but the second time I went there. … It was Kevin”: T, p 231, lns 34-46.

539    Dr Spence returned to this topic in the context of Ms Harris having said in her affidavit at para 20 that Colin had given her a few documents to sign on the first occasion that she went to the car yard. This exchange occurred at T, p 232, lns 24-27:

Q:    See, I suggest to you that you’ve got a bit confused and that it was 20 September 2010 that Colin gave you a few documents to sign and not 10 September. Do you think that you might be a little bit confused about that?

A:    I may be. I’m not too sure, but I remember that he did give me a few forms that I had to sign … without reading.

540    Ms Harris said that it was on the first visit that she talked about getting finance for the car and at this visit she was asked to go and get a Centrelink statement and get a bank statement as well as the deposit: T, p 232, lns 45-46; T, p 233, lns 5-6. Ms Harris signed an initial statement given to ASIC, on 29 November 2011. In that statement she asserts her meeting with Mr Hulbert on 10 September 2010 and the notion that Colin gave her a few documents to sign. She says that those documents were the “AHA Finance” form and the “Credit Application Form”. She says that on 20 September 2010 she went back to the car yard and spoke to either Colin or Kevin. The Credit Contract was put in front of her and she was asked to sign it. As to this earlier statement, Dr Spence put this to Ms Harris at T, p 233, lns 32-37:

Q:    … Thank you. So, when you signed that, do you think your memory might have been a little bit fuzzy about what happened on 10 September 2010 and what happened on 20 September 2010?

A:    No.

Q:    It wasn’t? You could still remember?

A:    I – I am a bit confused, but I – like I remember what happened back – back then.

541    Ms Harris was taken to the Credit Application Form by Dr Spence. This exchange occurred at T, p 236, lns 19-34:

Q:    I suggest to you that the person that filled out that document was a man called Kevin Humphreys and not Colin Hulbert, and that was on 10 September 2010; does that help you at all about who you spoke with on 10 September 2010?

A:    No. No, I don’t remember that, but all I know is that is not my writing.

Q:    And I suggest to you that Mr Humphreys asked you some questions about your income on 10 September 2010, the first day you went there.

A:    Yes, I’m thinking. But no, that – I don’t remember that.

Q:    Do you mean you don’t remember whether he filled out this document or …?

A:    Yes, I don’t remember he filled [it] out – I don’t know – I don’t remember if he filled this document out.

Q:    Do you remember that [that] document was filled out on 10 September 2010?

A:    No.

542    Ms Harris identified her signature on p 3 of the Credit Application Form. She was asked: “So would you agree you signed this document on 10 September 2010?” She said: “Like I said, I didn’t put the date and that in. I just signed all the papers”.

543    Ms Harris was then taken to the Credit Contract. She recalled signing her initials in the corner of each page and signing it on the back page. She recalled that she was speaking to Mr Hulbert at the time she was signing the contract. The proposition was put to Ms Harris that Mr Hulbert showed her the “Information Statement” at pp 18 to 20 of the Credit Contract. She said: “I didn’t get the chance to read the papers at all or go through them. He just asked me to sign. … I didn’t get a chance to read through any of the paperwork at all”: T, p 238, lns 1-10.

544    As to the signing, Ms Harris was asked this (T, p 238, lns 12-14): “When you talked to Mr Hulbert – around the time you signed this contract … how long did that take?” She answered: “About 45 minutes to an hour …” Ms Harris says that they talked about the car. As to the contract, “he just asked me to sign some papers, and that’s it”. When asked how long it took Ms Harris to sign the papers, Ms Harris said that she signed the papers and at the same time she was there she went looking for her cousin Hilary who was also there on 20 September 2010: T, p lns 20-27. Dr Spence suggested that other conversations occurred with Mr Hulbert in the course of signing the Credit Contract and they were concerned with Mr Hulbert taking Ms Harris “through a whole lot of things that are written down in that contract”. Ms Harris said: “He never explained to me about the legal situation and whatever else”. Ms Harris was referring to the arrangements about legal advice. Ms Harris was again asked: “How much of the 45 minutes to an hour that you were with Mr Hulbert on 20 September 2010 do you say was spent signing documents?” She answered: “Well I – most of it, yes … well, I was signing, and my cousin was there and looking around, as well as Colin was there, talking”.

545    As to the Credit Contract, this exchange occurred at T, p 241, lns 1-17:

Q:    Are you saying that you signed this and initialled it all, only you didn’t look at any of it?

A:    No, I didn’t.

Q:    Well, what did you think it was about? What did you think the document was about?

A:    Just paying off a car.

Q:    So it was about paying off a car?

A:    Yes.

Q:    … Did you think that it might set out what you had to do to pay off the car?

A:    No.

Q:    You didn’t have any idea what was in it at all?

A:    I only knew about the total price was supposed to be a hundred – 8,500, and I was paying a deposit [repayments] of 300 fortnightly.

Q:    After you left the office, you took a copy – on 20 September 2010, you took a copy of that document home, didn’t you?

A:    I did grab a copy, but I didn’t take it – end up taking it home with me. It got lost in the car somewhere.

546    Dr Spence returned to the question of the conversations with Mr Hulbert extending for three-quarters of an hour, and this exchange occurred at T, p 242, lns 21-29:

Q:    I suggest, Ms Harris, you’ve forgotten a great deal of the conversation that happened in the three-quarters of – 45 minutes to an hour that you say you were with Mr Hulbert on 20 September 2010 … I’m suggesting you’ve forgotten a lot of the conversation.

A:    I’m not sure. I’m not sure. I can’t remember that far back. Yes.

Q:    You can’t remember that far back?

A:    Yes, that’s four years ago.

547    Dr Spence took Ms Harris to the Financial Table on p 1 of the Credit Contract. He took Ms Harris to the 39 repayments of $299.24 fortnightly and suggested that Mr Hulbert had told her that these were the repayments she had to make each fortnight. Ms Harris said that she could remember Mr Hulbert saying something about the repayments. She then said that she was “not sure” whether he had told her about the amount because she had been paying $300 in cash. Dr Spence asked Ms Harris whether she could recall Mr Hulbert telling her that the amount of credit being provided by the loan was $8,501.50. She said that she remembered him telling her that the total price for the car was $8,501.50: T, p 244, lns 30-34. Ms Harris re-affirmed her evidence that Mr Hulbert did not tell her about the interest rate of 48%. She said that she did not remember Mr Hulbert telling her that the total number of repayments was 40, although Ms Harris then said that she could not remember that matter, that is, whether or not he told her about that matter. However, there may have been some confusion on this issue because Dr Spence then sought to clarify the issue and put this to her at T, p 245, lns 38-40:

Q:    Yes, but you can’t remember whether he told you about what’s on the document, that there were 39 repayments of $299.24? You can’t remember whether he told you that or he didn’t; is that right?

A:    I can’t remember that he said that to me.

548    In other words, Ms Harris seemed to be asserting an affirmative recollection that Mr Hulbert did not tell her about that matter. Ms Harris also said that Mr Hulbert did not explain to her the amount of the total repayments of $11,968.35. Ms Harris said she was “sure” about that matter and that Mr Hulbert had never told her that “the total pricing of the car would cost that much … $11,968.35”: T, p 246, lns 1-12.

549    Ms Harris was taken to the schedule. Dr Spence put to her that the actual price of the car was $7,490.00, not $8,500.00. Ms Harris said that she was told that the total amount for the car was $8,501.50. She thought the car cost $8,500.00. She could not recall whether she was told that on 10 September or 20 September 2010 “but yes, I know I got told that”: T, p 246, lns 30-41.

550    The relevance of these matters goes to the recollections of Ms Harris more generally. The respondents admit that Ms Harris completed a contract to purchase the Ford Fairmont at Supercheap for a cost of $8,990.00 with the assistance of credit from Channic. A deposit of $1,500.00 results in a balance payable of $7,490.00.

551    Dr Spence then returned to the topic of the time spent by Ms Harris with Mr Hulbert and suggested to her that she had spent about five to 10 minutes signing the documents and that the remaining part of the “45 minutes to an hour” involved Mr Hulbert talking to Ms Harris “about what was on that contract”. Ms Harris responded by saying that if Mr Hulbert had explained the contract to her, she would have known what it was about “but I didn’t know what the contract was about”: T, p 249, lns 13-25. Ms Harris gave evidence that Mr Hulbert said “just sign it [the contract] here so you can get your contracts done”. Ms Harris said Mr Hulbert was in a hurry and although she could have taken the documents home and read them, that was not “how it happened”: T, p 250, ln 1; ln 8; ln 19; ln 23. Dr Spence suggested many times to Ms Harris that she in fact was in a hurry. An example is the following exchange:

Q:    So could it be you were in a hurry to get back to Yarrabah because you had stayed overnight and … your relatives were doing you a favour to drive you back to Yarrabah?

A:    No, why would I be in a hurry?

Q:    I’m just asking you?

A:    No, I wasn’t in a hurry.

Q:    Well then, why didn’t you have a read of that contract before you signed it?

A:    Because I didn’t get the chance to read the contract.

Q:    What do you mean you didn’t get the chance?

A:    I had to just flick through the pages.

Q:    But you could have taken it with you without signing it, couldn’t you?

A:    Yes, I know that.

Q:    And you knew that that day?

A:    No, [I] didn’t know it on that day.

Q:    What, you didn’t know that you didn’t have to sign it that day?

A:    No, I didn’t know anything about finance. This is the first finance that I went through. I don’t know anything about finance.

Q:    I’m just asking you why, if you wanted to know what was in that written contract, you didn’t insist on reading it before you signed it?

A:    I didn’t read the contact before I signed it because Colin was in a hurry, like I said, and I had to just put my signature and I sat it there on the table.

Q:    But what did it matter whether Colin was in a hurry? If you weren’t in a hurry, why couldn’t you just take it home and come back another day?

A:    Well, he wanted the paperwork. He didn’t want me to take it.

Q:    Did he say to you, did he, “you have to sit here and you have to sign this or you are not getting a car”. Is that what he …

A:    No, he didn’t say that to me.

Q:    Well then, you could have walked out with the contract without signing it, couldn’t you?

A:    I suppose I could have.

Q:    I suggest to you that you can’t really remember what happened that day?

A:    I remember what happened; that’s why I – like, bits and pieces.

552    On the issue of the interest, Dr Spence put this question to Ms Harris: “So you expected you were going to get the money to buy a car without having to pay interest; is that right?” She answered: “No. I know I was paying the car off, but I didn’t – I don’t know about interest and whatever”.

553    Dr Spence then again returned, after asking further questions about events that occurred on 10 September and 20 September 2010, to the topic that Ms Harris had forgotten the content of the conversation with Mr Hulbert. Dr Spence put this proposition to Ms Harris:

And I’m suggesting to you that you’ve forgotten the conversation Mr Hulbert had with you about the contents of the loan contract on 20 September 2014 because your focus was all about getting the car and not finding out – and not listening to Mr Hulbert telling you what was in the contract.

554    At this point it was clear that the witness was distressed. She declined to take a break and said that she wanted to “just get it over and done with”.

555    Dr Spence pressed Ms Harris with the notion that she was desperate to get the car and was, in effect, taking all steps necessary to get the car quickly and was thus not interested in reading the documents. In this context, Dr Spence began to put to Ms Harris that she obtained the Centrelink statement and her bank statement at some time after 10 September 2010 and that she went back to the car yard with those documents and the deposit on 20 September 2010. Ms Harris said that those things occurred before 20 September 2010 and Dr Spence pressed her with the notion that they occurred on 20 September 2010. Ms Harris reasserted that those things occurred before 20 September 2010. This exchange then occurred: “So are you saying you went back to the car yard between the 10th and the 20th of September?” Ms Harris said “No” and re-asserted that these things had occurred on the first occasion that she went to the car yard. Dr Spence then put to Ms Harris that she had said earlier that it was after the 10th that she went and obtained the deposit and the Centrelink Statement. This was not the earlier evidence and it must have been confusing for Ms Harris. Ms Harris expressed the view that she was confused: T, p 258, lns 33-34. She had earlier said that she obtained the Centrelink Statement, the deposit and the bank statement all on 10 September 2010.

556    These exchanges continued to this point at T, p 258, lns 42-46; and T, p 259, lns 1-15:

Q:    I’m talking to you about the fact that you went there [Supercheap] on the 10th, you were asked to get the deposit, you were asked to get the Centrelink?

A:    Yes, I was asked.

Q:    You were asked to get a bank statement on the 10th?

A:    Yes, I was asked.

Q:    And it was after that you got those documents and then you came back on the 20th?

A:    Yes.

Q:    Do you agree with all of that?

A:    Not really.

Q:    That’s because you can’t really answer?

A:    I can’t – like I said first time to you, I can’t really recall everything.

Q:    You can really remember what happened?

A:    Remember ... I can remember taking all those things in, but I can’t remember the exact date.

Q:    That’s why you’re getting confused: because you can’t really remember what happened when; is that fair?

A:    Yes.

557    It is clear from this exchange which came at the end of lengthy similar exchanges that Ms Harris was becoming confused and would agree with one proposition and then disagree with it again. Accordingly, the following exchange occurred between the Court and Ms Harris:

HH:    So, Ms Harris, can I just ask you a couple of questions, because I’m concerned that you’re being pressed greatly about these things and being asked the same question over and over again.

A:    Yes.

HH:    So the position is that you have a recollection that you went to the car yard on a particular day, the very first day, and you went there with your family member to look at the possibility of purchasing a larger car for your family, correct?

A:    Yes.

HH:    Okay. And you were interested and concerned and keen to buy a larger car, because you needed a larger car for the family?

A:    Yes.

HH:    Right. And, when you went there, you were shown a particular car and offered a particular car, and you talked about the price that was suggested for that vehicle. That’s on the first occasion?

A:    Yes.

HH:    Yes. And on that first occasion, you were then told that you would need to go and obtain a Centrelink statement and obtain a deposit and obtain some bank statements?

A:    Yes.

HH:    Right. And what did you do next? Did you go away that day and get that material, or did you go away …?

A:    Yes, I did.

HH:    Do you remember going away that day to get those things?

A:    Yes.

HH:    So is it right to say that on that very first day, whatever the date was – let’s leave to one side – but on that first date when you went there and you were told that you would need to get the Centrelink statement, the bank statement and the deposit, you went away that day and what did you do? Do you remember what you actually did?

A:    I went and got those things and I went back to the car yard.

HH:    So for the deposit did you go to an automatic teller machine or something?

A:    No. I walked into the Commonwealth Bank and made a withdrawal … over the counter.

HH:    And how much did you withdraw?

A:    $1,500.00.

HH:    Right. Okay. So that was one thing you did that day and what about getting the Centrelink statement? What did you do to get the Centrelink statement?

A:    I walked into the Centrelink office in Earlville … I had to walk into the Centrelink office in Earlville to get the income statement.

HH:    So where is Earlville?

A:    Earlville in Cairns … I walked over. The car yard was only just next door.

HH:    Okay. So you then went from the car yard to Centrelink and you got the Centrelink statements that you needed?

A:    Yes.

HH:    And what was the next thing – did you go to the bank to get the bank statements?

A:    I went across to the bank first … then came back to Centrelink.

HH:    And that was the Commonwealth Bank?

A:    Yes.

HH:    And where’s the Commonwealth Bank?

A:    It was straight across the road next to the pet shop.

HH:    Is it very far from the car yard?

A:    It wasn’t far across the road from …

HH:    So you walked over there?

A:    Yes, I walked.

HH:    And how long did it take you to get the Centrelink statements and the bank statements …?

A:    Well – when you wait in a line, it’s not more than, like, half an hour.

HH:    And so that was at Centrelink? A half an hour or so at Centrelink?

A:    Yes.

HH:    And sort of how much time at the bank did you spend there getting the [statements]?

A:    Not more than 10 minutes.

HH:    And then you went back to the car yard; is that right?

A:    Yes.

HH:    And what happened when you went back to the car yard?

A:    I was asked to sign the forms.

HH:    And?

A:    The paperwork.

HH:    And so you were asked to sign the forms, the paperwork that you had been looking at in that folder, on the first day that you went to the car yard?

A:    Yes, some paperwork I did sign on that day.

HH:    The first day?

A:    Yes.

HH:    And you paid the deposit on the first day?

A:    On the first day, as well.

HH:    And who did you give the deposit money to?

A:    On the first day I went there, I only spoke with Colin, the first day, because Hilary is my cousin. He introduced us, yes.

HH:    And did you physically give the deposit monies to Colin?

A:    Yes, he was on the other side of the table … and I was sitting on this side of the table … I put it on the table with my income statements and bank statements.

HH:    So three things happened: you put the deposit money on the table with the Centrelink statements and the bank statements?

A:    Yes.

HH:    And – so this would have been about 45 minutes to an hour after you had been there for the first time?

A:    Yes.

HH:    You went away and came back?

A:    Yes.

HH:    And is it then that you signed … some of the documents or all of the documents?

A:    Some of them, yes.

HH:    And then the car, as you understood it, would need some repairs and wouldn’t be available?

A:    Yes.

HH:    And then you left?

A:    Yes.

HH:    [When you came] back a second time do you remember: was that a week later? Two weeks later? Do you have any idea of how much later?

A:    I’m pretty sure, yes, because I was busy with my kids – spending time with my kids as well as working … I did get told the first time I went there [that] the car won’t be ready until two weeks maybe.

HH:    Did you go back about two weeks later?

A:    No, I was working at that time, so I came back later.

HH:    So that was the second time you went to the car yard, was it?

A:    Yes.

HH:    And did you sign more documents then?

A:    Yes, I had to.

HH:    You did? And who did you meet with on the second occasion?

A:    I don’t really remember exactly who it was.

HH:    And then do you remember what happened on the second occasion. What did you do? You signed some documents but what else happened?

A:    And the car still wasn’t ready for being picked up.

HH:    And do you remember who told you the car wasn’t ready?

A:    Whoever I spoke with that day … yes and they said it wouldn’t be ready for another couple of days, maybe … by that time came around, I had to go back to work so my Mum, Mrs Fisher … she was home and I asked her to go … my mother and my eldest son.

HH:    Went to pick up the car?

A:    Yes … they took the car – they ended up getting it to Yarrabah … I wasn’t [at Yarrabah], I was on Fitzroy Island.

HH:    When did you first see the car? After it was picked up?

A:    When I got home to Yarrabah.

558    At para 27 of her affidavit, Ms Harris says that she was earning between $2,600 and $2,800 per month which, I assume, is intended to be a statement of her earnings at or about September 2010 (on a forward-looking basis; see [502] of these reasons). Although Ms Harris agreed (without being “sure” about it; T, p 268, lns 33-34) with Dr Spence’s proposition that her earnings of $500 per week meant that she would have been earning $2,000 per month from the Resort work, her later evidence was that she was not paid for the “week-off” in each two week cycle. Thus, her Resort earnings would have been $1,000 per month. I have noted the Centrelink benefits at [501] and [502] of these reasons and the Centrepay deductions at [503].

559    The bank statement shows that the following payments were made into the account which seemed to be benefit payments received by Ms Harris:

Date in 2010

Transaction

Amount

4 May

Centrelink EDU Payment

$187.20

5 May

Centrelink Carers

$396.60

12 May

Aus Gov Families

$131.43

12 May

Aus Gov Families

$959.70

12 May

Centrelink Carers

$106.70

18 May

Child Support

$110.59

19 May

Child Support

$8.77

19 May

Centrelink Carers

$396.60

24 May

Child Support

$13.65

26 May

Aus Gov Families

$131.56

26 May

Aus Gov Families

$900.69

26 May

Centrelink Carers

$106.70

28 May

Child Support

$13.65

560    As at May 2010, the fortnightly Carer payments were $396.60 and $106.70 amounting to $503.30 or $1,006.60 per month. The Part A Families Benefit for that month was $959.70 and $900.69 amounting to $1,860.39 for the month. The Part B Families Benefit was $262.99 for the month. There were also Child Support payments. The value of the benefit entitlements for that month was $3,129.98, based on the bank statement. However, the Credit Contract was entered into four months later on 20 September 2010.

561    If the Carer Benefit was $644.20 (as the Centrelink Statement shows at [501]) and $278.00 was deducted through Centrepay (as [503] of these reasons shows) the net credit to the account would have been approximately $366.20 which is the approximate credit on 5 May and 19 May 2010. The Centrepay Family Tax Benefit deduction was $65.50 (as [503] of these reasons shows). That would result in a net credit for Part A of approximately $944.46 which approximates the fortnightly net credits to the account on 12 May and 26 May 2010.

562    The safest guide to the income Ms Harris was receiving from Centrelink Benefits is the Centrelink Statement of future regular entitlements and payments as set out in the Centrelink letter of 10 September 2010. There is, however, a reasonable degree of reconciliation between those payments and the payments Ms Harris seems to have been receiving under the Statement of Benefits (at [501] of these reasons) when compared with the bank statement.

563    The documents in evidence contained in the ASIC trial bundle include Vol 5 which contains the documents relating to Ms Harris within the CBPL file and the Channic loan file.

564    Ms Harris, of course, gave evidence that when she first went to Supercheap on 10 September 2010, she did not deal with Mr Humphreys. She dealt with Mr Hulbert. Mr Humphreys was a representative of Supercheap and CBPL.

565    However, in the CBPL file (Document 1), is a copy of the standard letter signed by Mr Kevin Humphreys (as described at [366] of these reasons) as the credit representative for CBPL to Channic making application for a loan on behalf of Ms Harris in an amount of $7,490.00 with a request for repayments of approximately $300.00 per fortnight.

566    That letter, oddly enough, is dated 10 August 2010 which is the same date endorsed on the CBPL Preliminary Test, as earlier mentioned (Document 6).

567    The invoice from CBPL to Channic for brokerage fees of $990.00 (Document 8) is also dated 10 August 2010.

568    The Channic file contains a copy of the CBPL application letter dated 10 August 2010. The Credit Application Form (Document 10) bears the date 10 September 2010. The AHA Finance document (Document 11) bears the date 10 August 2010. The file contains a copy of the Centrelink statement of 10 September 2010 (Document 13) and a copy of the CBPL Preliminary Test (Document 14). The Channic Credit Suitability Assessment (Document 15) recites that the assessment was made on 10 August 2010. It is signed by Mr Hulbert. The Channic Loan Inquiry Checklist (Document 16) is also dated 10 August 2010 and signed by Mr Hulbert. The Channic Verification Checklist (Document 17) is also dated 10 August 2010 and signed by Mr Hulbert. The Channic letter, acknowledging CBPL’s loan application letter on behalf of Ms Harris and advising CBPL that Channic’s assessment is that the Credit Contract is not unsuitable for her (Document 18), is also dated 10 August 2010 and signed by Mr Hulbert. The Credit Contract (Document 19) is, as already mentioned, signed by Ms Harris. Pages 6, 7 and 20 bear an endorsed date of 20 September 2010. The Veda credit search (Document 21) is endorsed with a report date of 10 September 2010. The Supercheap Car Sales Tax Invoice (Document 23) addressed to Ms Harris for the sale of the car in an amount of $8,990 is dated 20 September 2010.

PART 10: THE EVIDENCE OF MS KERRYN GERTHEL SMITH

569    Ms Smith swore an affidavit in the proceeding on 17 June 2014.

570    In that affidavit, she sets out the following matters. I will also make reference to Ms Smith’s oral evidence.

571    Ms Smith was born on 8 September 1983. She was 28 years of age when she first engaged with Supercheap about buying a car. She completed schooling to Year 12 level at Gordonvale State High School. She left school in 2000. Immediately after leaving school she obtained a job with “Community Development Employment Projects”. She had that role for about a year. She had a child in 2003. Since then, she has been engaged in home duties apart from a period from about February 2013 to March 2014 when she had a job with the Education Department as a cleaner. Ms Smith can read and write English “perfectly well”. She also speaks English well. It is the only language she speaks. At the time that she decided to buy a car, she was living in a rental property owned by her parents at Yarrabah. She was paying board of about $200 a fortnight. At that time, she had three children living with her and she was pregnant with her fourth child. Her parents were also living with her. She has five children and she now rents her own house with her partner. The five children aged between two and 11 years live with her and her partner.

572    Because Ms Smith had young children and did not own a car, she decided to buy a car.

573    On or about 6 April 2011, she decided to go to Cairns with her younger brother, Yasserie, to look for a car. Yasserie was then aged 26. He was a bit of a “bush mechanic” who worked on cars. Ms Smith says that they tried a number of different car yards including “Federation” at Portsmith. Ms Smith says that the car yards they went to were not able to provide finance to a buyer of a car who was relying upon pensions or Centrelink payments for his or her income. In Ms Smith’s oral evidence she says that they only went to one car yard (the Federation site at Portsmith) before she saw the Supercheap sign: T, p 327, lns 38-39.

574    Ms Smith says that she and her brother were driving through Cairns and they saw the Supercheap sign that said that 20 minute approvals were possible for people receiving Centrelink income (and had bank statements available). Ms Smith decided to go into the car yard. Ms Smith says that “[o]ther people had warned me not to go to SuperCheap and I’d heard stories but I thought it was my only way of getting a car”.

575    Ms Smith says that before leaving Yarrabah to look for a car, she thought that she would probably be able to find a “private sale” of a car in Cairns for about $2,000. She did not expect to have to borrow any money to buy a car. She thought she could simply spend the money she had in the bank which was about $2,000 to $3,000. She was looking for a five door sedan which she describes in this way: “… just a small car because it was my first time buying a car”.

576    Ms Smith says that when she and her brother walked into the Supercheap car yard, they both had a look at the cars and decided upon a white sedan which Ms Smith “really liked”. A man named “Kevin” (see also T, p 306, ln 22) came over while they were looking at the sedan and had a conversation with Ms Smith to this effect:

KEVIN:    Are you alright?

MS SMITH:    I’d like to buy the white sedan.

KEVIN:    Do you have any children?

MS SMITH:    Yes. I’ve got 4.

KEVIN:    You don’t want the white car. You want this 8 seater Commodore wagon. I’ll give you that because you’ll need it for the kids.

577    Ms Smith says that she remembers the conversation clearly: T, p 322, lns 39-41. She says she felt “a bit pressured by Kevin to buy the wagon” which she “really didn’t want”. Ms Smith says that Kevin kept emphasising (“rubbing it in”) that the “wagon” would be more suitable for her and the children: T, p 324, lns 35-47; T, p 325, lns 1-4. Ms Smith accepted that the wagon would have accommodated her and her family better than the sedan but she did not want it as it was damaged: T, p 324, lns 11-14. Ms Smith felt that she: “… had to take it because of the way he was going on”. She also says that she “could tell by looking at the car that it wasn’t good, there were dints in the boot and the seats [were] ripped, but Kevin really told me it was a great car for me”. It did not have a radio. She felt she could not just walk away because she needed a car and lived a long way away from Cairns. Kevin then said: “Do you want to try for finance, it will only take 15-20 minutes?” Ms Smith says that she did not really know what to do. She looked at her brother and he said that it was her money so it was up to her to decide whether to try and obtain finance. Kevin asked her: “How much deposit have you got?” She said: “I want to pay $1,000 deposit, I’ve got another $1,000 in the bank but I want to spend that on the kids”. He said: “$1,000 won’t be enough. You need to give me $2,000”.

578    Ms Smith said that she did not want to spend that much because she had a baby due in the middle of April and had clothes and baby things on lay-by including clothing, a pram, a cot and baby seats. She wanted to spend the money on those things. She says that Kevin asked her if she could “… run back over to the Shopping Centre to get another $1,000 out of the bank”. Ms Smith did so and returned to the car yard with an additional $1,000: T, p 306, lns 44-46; T, p 307, lns 1-11. She asked Kevin how much the wagon would cost. He said he “wasn’t exactly sure but he thought that it would be around $6,000” or “six to seven thousand” dollars: T, 306, lns 37-38.

579    Ms Smith did not see any prices on the cars in the car yard. Ms Smith says that she does not really know much about cars and that is why she went to Supercheap with her brother, Yasserie. Ms Smith says that she does not know much about the value of cars or how much cars should cost: T, 307, lns 24-28.

580    Kevin then asked Ms Smith to “come inside” and they sat down “to do the paperwork”. Ms Smith says that Kevin just “told me to come, sit down and wait. He did the paperwork with me”: T, p 306, lns 30-31. Kevin asked her to provide a copy of her Centrelink statement and a bank statement. Ms Smith already had a copy of her Centrelink statement and a bank statement with her because she was intending to look around to try and buy a car. Ms Smith knew that she would need to provide a Centrelink statement and a bank statement in order to purchase a car. When she first went into Cairns to look for a car, she first went to Centrelink to get the statement and then went to the bank: T, 307, lns 42-46. She handed Kevin the Centrelink statement and bank statement.

581    The Centrelink statement is a three page document dated 5 April 2011. On the front page of the document it records that she is receiving the maximum rate Family Tax Benefit, the maximum rate Parenting Payment Single Benefit and in relation to three children she is receiving benefits assessed at 100%. The Centrelink statement contains this information concerning her previous regular entitlements and payments:

Previous regular entitlements and payments

Payment Type

Amount

Date Paid

Parenting Payment Single

$604.51

5 Apr 2011

Pharmaceutical Allowance

$6.00

5 Apr 2011

Pension Basic Supplement

$20.39

5 Apr 2011

Family Tax Benefit Part A ($480.90)*

$480.90

29 Mar 2011

Family Tax Benefit Part B ($136.36)*

$136.36

29 Mar 2011

Large Family Supplement ($11.06)*

$11.06

29 Mar 2011

Rent Assistance ($123.42)*

$123.42

29 Mar 2011

* Note:    These payments, in brackets, are your current legislated maximum entitlements. In some cases the payments reported will be different to the amounts you actually receive.

582    The Centrelink statement contains this information concerning her future regular entitlements and payments:

Future regular entitlements and payments

Payment Type

Amount

Date Paid

Parenting Payment Single

$605.50

19 Apr 2011

Pharmaceutical Allowance

$6.00

19 Apr 2011

Pension Basic Supplement

$20.40

19 Apr 2011

Family Tax Benefit Part A ($480.90)*

$480.90

12 Apr 2011

Family Tax Benefit Part B ($136.36)*

$136.36

12 Apr 2011

Large Family Supplement ($11.06)*

$11.06

12 Apr 2011

Rent Assistance ($122.78)*

$122.78

12 Apr 2011

* Note:    These payments, in brackets, are your current legislated maximum entitlements. In some cases the payments reported will be different to the amounts you actually receive.

583    The Centrelink statement contains information concerning deductions from payments to which Ms Smith is entitled. The deductions set out in the statement are these:

Deductions from your payment

Payment Type

Deduction

Amount

Date Paid

Family Tax Benefit

Centrepay Deductions

$25.50

29 Mar 2011

Family Tax Benefit

Lump Sum Advance Repayment

$25.62

29 Mar 2011

Parenting Payment Single

Centrepay Deductions

$30.00

5 Apr 2011

Parenting Payment Single

Lump Sum Advance Repayment

$38.50

5 Apr 2011

584    As to these deductions, Ms Smith thought that the first item of $25.50 was probably a repayment of a Centrelink advance. As to the second item of $25.62, Ms Smith was “not too sure what that one …” was about. As to the third item of $30.00, that amount represents repayments of a partnering payment loan (a Family Tax Benefit loan) and the fourth item of $38.50 is another such loan. Ms Smith gave evidence that all four amounts were automatically deducted from her account.

585    It is not entirely clear from Ms Smith’s evidence how regularly the deductions occurred (although they occurred fortnightly): T, p 308, lns 3-31.

586    The Centrelink statement also contains data concerning details of Ms Smith’s income apart from Centrelink payments, in this way:

Details of your Income (Not including Centrelink payments)

Income Type

Amount

Frequency

Date of Effect

Financial Investment Income

$0.06

Annually

20 Mar 2010

Maintenance Income

$2,046.85

Annually

20 Nov 2010

587    This was the Centrelink statement that Ms Smith handed to Kevin.

588    Assuming that the entitlements are fortnightly payments, the benefits set out at [581] amount to $1,382.64 per fortnight or $2,765.28 per month. On the same assumption, the benefits set out at [582] amount to $1,383.00 per fortnight or $2,766.00 per month. Having regard to the deductions at [583] which amount to $239.24 per month, the net monthly income benefit in respect of the entitlements at [581] amounts to $2,526.04 and the net monthly income benefits in respect of the entitlements at [582] amount to $2,526.76.

589    The bank statement she handed to Kevin is a statement from the Queensland Teachers’ Credit Union dated 5 April 2011. Ms Smith only had one bank account. The statement is a nine page document showing transactions in the period 4 January 2011 to 5 April 2011.

590    As to the bank statement, Ms Smith gave evidence that the first entry on 4 January 2011 of $652.24 is the Centrelink Families payment (which may be an aggregation of the Part A and Part B entitlements plus the Large Family Supplement and the Pension Basic Supplement). On 4 January, Ms Smith withdrew $150.00 at the Yarrabah Supermarket ATM to buy bread, milk and groceries etc, and another $70.00 at the same place on the same day. She also withdrew $450.00 at the Shopping Centre at Earlville on 4 January to buy things for the children. On 5 January the Cash Converters direct debit of $35.17 came out of the account. The account was then overdrawn by $32.34. On 11 January, the Centrelink Pension amount of $537.90 was paid into the account. That amount seems to approximate the Parenting Payment Single amount of $604.51 less the two Parenting Payment Single deductions of $68.50 which results in a net payment of $536.01. In any event, on the same day, Ms Smith withdrew $200.00 at the service station in Edmonton (Portsmith) and $200.00 at the Stockland Shopping Centre, Earlville. On 12 January, the Cash Converters repayment of $35.17 was debited to the account. By then, the account was again in overdraft in an amount of $47.81. On 13 January, the account was credited with $2,200.00 referenced in the transactions as “Swift-Centrelink”. Ms Smith does not know what the reference is or what it means: T, p 309, lns 1-46, T, p 310, lns 1-5.

591    Having examined the pattern of transactions reflected in the bank statement, counsel for ASIC asked Ms Smith about her practice in relation to taking money out of the account. She was asked: “After you take some amount of money out, do you spend it usually at the time you’re taking it out or do you carry it around with you?” She said: “Yes. … - I won’t hold money on me for long”. The pattern seems to be that money is expended by Ms Smith virtually immediately after it is received. It seems to happen through cash withdrawals which are then immediately expended on food, clothing, necessities, items for the children and such matters.

592    Ms Smith says that after she handed Kevin the two documents, he said “great” and “handed me the paperwork to buy the car straightaway”. She also says this at paras 31 and 32 of her affidavit:

31    He had me there for about an hour or two hours. While I was inside filling out the paperwork I realised the car wasn’t $6,000 it was more than $10,000. I was really worried and I told my brother. I no longer recall exactly what I said to my brother but I do recall that he was worried too.

32    I no longer recall what I said but when I raised it with Kevin he told me it meant that all the car and the suspension and everything was under warranty. I really needed the car so I decided to keep filling the forms out anyway.

                                [emphasis added]

593    Ms Smith says at para 33 of her affidavit that once she had finished “filling out the paperwork” with Kevin he said words to this effect: “You’ll have to wait a while for Colin to have a look at the paperwork and approve it”. Ms Smith says: “Colin came out about 20 minutes later and gave me the thumbs up”. She says he said words to this effect:

Everything is fine but you won’t be able to take the car today because I have to get it registered and get a roadworthy certificate done on it. I will give you a call in a couple of days when it is ready.

                                [emphasis added]

594    At para 31 of her affidavit, Ms Smith says that Kevin was with her for about an hour to two hours. By that reference she means that the total time from when she went to the dealership to when she left was between an hour or two hours: T, p 319, lns 1-3. She says that she was “just talking [with Kevin] and doing the paperwork all in that time”: T, p 319, lns 5-6. Ms Smith says that the paperwork was done inside the office. She was sitting at a desk. Kevin was sitting with her. She says that she signed more than one piece of paper when with Kevin: T, p 328, lns 4-7.

595    She says that on the second time that she went to the car yard she did not sign any documents – “only the first time”.

596    Ms Smith was taken to the Credit Application Form by Dr Spence. Ms Smith affirmed her earlier evidence that she signed that form on that first day.

597    Ms Smith says that after the form had been filled out, Kevin told her to wait for 20 minutes until Colin came. Colin then came out of the office and “just gave me the thumbs up”, the “okay”: T, p 311, lns 30-32. Ms Smith was asked how did Colin give her the “thumbs up” and she replied that Colin “came out of one little room” and “just sat down and talked about the car” and “what to do next”. Ms Smith says that she was told to “just wait” and that she “probably wouldn’t get an answer till the next day, the car will be ready” or wait “a week”: T, p 311, lns 30-44. Ms Smith says that she did not fill out “any more forms after that day”: T, p 311, ln 46.

598    She also said that she has not seen the Preliminary Test document before: T, p 328, lns 29-31.

599    The following exchange then occurred between the Court and Ms Smith (T, p 319, lns 34-47; T, p 320, lns 1-14):

HH:    And what happened? Did he [Colin] walk out of the office into the car yard, or did he walk to the stair, or did you go back in the office, or how did that all happen?

A:    Just sat down and check the paperwork properly.

HH:    But that’s what Colin was doing, you think?

A:    Yes, Colin checked it over.

HH:    But did he check it in front of you, or were you somewhere else? Were you with him when he was checking it?

A:    Just, yes, sitting down there.

HH:    You were still sitting down in the office were you?

A:    Yes.

HH:    And was Colin physically there looking at the documents while … you were there?

A:    Yes.

HH:    So the two of you were together in the room?

A:    Yes.

HH:    Is that right? And the person you’re describing as Colin is he in court today?

A:    Yes. [Ms Smith pointed out Mr Hulbert]

HH:    And then Colin gave you the thumbs up and told you, you said, that the car needed to get a road worthiness certificate and registration and things?

A:    Yes.

HH:    And then you left the dealership after that. Is that right?

A:    Yes.

HH:    And then, later on, you went back to pick up the vehicle?

A:    Yes.

600    As to para 31 and Ms Smith’s realisation that the car was more than $10,000 rather than $6,000, Ms Smith says she cannot recall what Kevin actually said to her about the price of the car or other conversations she may have had with Kevin that day: T, p 330, lns 3-12. Ms Smith gave evidence that she and Yasserie were worried about the price of the car: para 31; T, p 331, lns 4-14. As to para 32, Ms Smith gave evidence that she kept signing the forms because she needed a car as no other family member had one. When asked by Dr Spence whether Kevin was doing anything at this stage (the signing stage) to pressure Ms Smith into buying the car, Ms Smith said she could not remember. She was asked the same question again and answered: “No” (T, p 331, lns 34-45; T, p 332, lns 1-3).

601    Ms Smith says that on or about 15 April 2011, Kevin made a telephone call to her and said that the car was ready. She and her brother went to the car yard to pick up the vehicle. She walked inside and spoke to Kevin. He told her that she “would have to wait a little while because they were still down with the car at the tyre shop”.

602    The car was then brought back to Supercheap. Kevin gave Ms Smith the keys. Ms Smith’s brother drove the car out of the car yard with Ms Smith in the passenger seat. Ms Smith says this at paras 36 and 37:

36    We’d been barely driving for 20 minutes from Earlville to Woree and the car just started to shake. My brother pulled over on the side of the road and checked the wheel nuts and he reckoned that about six were missing. We looked at the car and we realised there was no wheel spanner in the car, there was a jack but no handle so my brother ran across to the phone booth to ring SuperCheap. He told them about the nuts and everything and Colin said he would come down to fix it.

37    When Colin arrived my brother said we were missing some wheel nuts. Colin had a look and went back to the yard and gave us some wheel nuts which my brother put on the car.

                                [emphasis added]

603    Ms Smith experienced other difficulties with the vehicle.

604    She gave evidence that her sister came to visit her in the hospital. When her sister went back to the car to go home having borrowed the car, she found a note under the windscreen saying that all the coolant had leaked out of the radiator: T, p 316, lns 15-18. Ms Smith describes, in her affidavit, other difficulties she had with the vehicle. At paras 39 to 42 she says this:

39    A couple of days after I had my baby we were driving the car to Cairns to do some shopping and the head gasket on the car went. We were broken down on the side of the highway so I called Colin and he sent a tow-truck to pick it up from the side of the road. He said my gasket was gone and he said that they would replace it with a new one for me.

40    I got my car back about a week later with a new gasket. From then I still had problems. My brother, Yasserie, is a bit of a bush mechanic and he told me words to the effect “the car has been overheating because your fan for the radiator doesn’t work”.

41    When I first bought my car Kevin had told me that I needed to bring it to him for its first service about three months later. From about three months after I got the car, I could not drive it at all because of problems with the car. Because of all the problems I’d had with the car I decided I wasn’t going to take it back to Kevin. I wanted to get a different person to look at it with a proper mechanic to find out what all the problems with the car actually were.

42    About three months after I got the car, I took my car to a mechanic at Edmonton to be serviced. It was taken to Edmonton on a tow truck. When I went to pick up the car the lady at the mechanic’s reception gave me a piece of paper with all the things wrong with the car. She showed me all the problems and some they could fix and some they couldn’t fix there at Edmonton. The list was almost a whole page long with the things wrong with the car. It gave me a real fright and I wanted to show Colin all the paperwork to see if some of the stuff was on warranty. I never got around to showing him, one of the reasons I didn’t take it back was because I was really worried that if I took the car to him he might not give it back.

605    Ms Smith also gave evidence that the fuel pump became faulty. Ultimately, the fuel pump failed. That occurred “a while after the gasket, possibly two or three months later”. Ms Smith bought a new fuel pump and installed it. However, it would not work. Ultimately, Ms Smith elected to take the car to a mechanic at Edmonton to be serviced as described at para 42 quoted at [604] of these reasons. Ms Smith says that she could not afford to fix all the problems with the vehicle: T, p 317, lns 11-13. Ms Smith accepted in oral evidence that when she called Colin to tell him that the car she had just collected was now stopped by the roadway because one of the wheels was not affixed to the car by wheel nuts, Colin came and had a look and then returned with wheel nuts. Yasserie then put the wheel on the car properly. She also accepts that Colin fixed the radiator problem. As to the head gasket problem “a couple of days after that”, Ms Smith accepts that Colin also fixed that problem. It took a week. However, the car was still overheating: T, p 333, lns 41-47; T, p 334, lns 1-26.

606    Ms Smith says that when she took the car to Edmonton, she had been late in making payments a number of times. However, as soon as she had the money, she would take $100 or $200 to the Supercheap sale yard and “give it to them to make up the payments”. Every time she missed a payment, a lady from Supercheap would make a telephone call to her and tell her that she had missed payments. Ms Smith would tell her that she would pay some money towards the repayments “next week”. Ms Smith says that “just before Christmas 2011”, she was told (by someone whose name she can no longer recall) that investigations were being made into “problems with [Kevin]” and that she ought to “stop [her] payments”. She says that that statement (whatever the truth of it) caused her to take all of her money out of her bank account. She says that she was not contacted by Supercheap after she stopped making payments. She says that she was again told by “some girls in the community” that Supercheap was the subject of investigations.

607    In or about April or May 2012, while Ms Smith was moving house, her mother went to the new house and told Ms Smith that someone called “Ashley” had taken the car away. Ms Smith says that she knew Ashley to be one of “Colin’s workers”. She says she has not seen the car since. She says that she did not receive any paperwork warning her that the car would be taken away and nor did she receive any paperwork about the car having been taken away. Apart from the repossession of the car by Ashley, Ms Smith had previously fallen behind in her payments which resulted in the car being repossessed. She made up the payments ($1,000) and got the car back: T, p 347, lns 35-37; T, p 348, lns 1-2.

608    Ms Smith says that when she was with Kevin in the office on 6 April 2011, “they told me they wanted me to pay $200 a week in repayments”. Ms Smith told Kevin that she would not be able to afford $200 and that she could only pay $100 each week. Ms Smith says that she thought she would be able to afford to pay $200 a fortnight. However, “down the track it was getting a bit hard to keep up”. She says that she had to pay board and she needed food and clothes for herself and her children. At that time, she had three children in school and was paying for their lunches and “school stuff”. She says that she likes her children to take a packed lunch to school so that they do not have to buy food from the tuckshop. She says that after she paid for “all this and the school fees and everything” there “just wasn’t much money left to pay for the car anymore”. Ms Smith also added this: “If I’m trying to keep up with the car payments sometimes I would have to go a week without buying any food and I hate doing that because I’ve got kids”.

609    Ms Smith says that at the time she decided to buy the car she had the following expenses:

(a)    Board of $200 a fortnight which also covered food;

(b)    Electricity Bill of approximately $100 a fortnight;

(c)    Cash Converters Loan of approximately $70 a fortnight;

(d)    I did not have a mobile phone at the time;

(e)    Clothing for myself and my children of about $200 to $300 per month;

(f)    A Centrelink loan of approximately $28 a fortnight.

610    These expenses amount to approximately $523.00 per fortnight or $1,046.00 per month.

611    Ms Smith says that her payments to Cash Converters were for a loan (an advance) she had taken out on 8 November 2010 for $810.00. She was making repayments of about $70.00 a fortnight although she had missed some payments. She would try to make up for those missed payments after her next pay. The loan was paid out in full in May 2011. At the time she decided to buy the car, she did not have many assets. She had a stereo and a television which she thinks was worth about $500.00.

612    As to the documents, the Centrelink statement of 5 April 2011 contains a handwritten number on the front page of $2,995.72.

613    As to the Credit Application Form, Ms Smith says that this document was filled out by “Kevin and I” on “6 April 2011”: para 51; T, p 311, lns 27-28. She says that looking at the document now, the front page seems to contain a change to the amount written in as the vehicle retail price. Page 1 of the form shows a retail price for the car of $11,990.00, a deposit of $2,000.00 and a weekly repayment of $100.00 per week. Ms Smith says that the handwriting concerning the price of the car and the deposit is not her handwriting: T, p 310, lns 30-36. She says that when she “did the paperwork” the retail price was not filled in: T, p 310, lns 41-42.

614    Page 1 of the Credit Application Form shows that Ms Smith’s current employer is Centrelink; her occupation is “Home Duties” and her gross income is $2,995.72 per month. As to this document, Ms Smith says that the words “Smith” and “Kerryn” are in her handwriting. The name “Gerthel” is not in her handwriting. Her address is in her handwriting.

615    The details as to her employer and income are not in her handwriting.

616    She says she does not recall seeing anyone fill in those details. She says the writing in the “References” box on p 2 is her handwriting.

617    The writing in the “Financial Information” box on p 2 is not her handwriting. Ms Smith thinks that she recalls Kevin filling in this box while she was with him. She says that she does not understand what the Credit Application Form is. She says no-one explained it to her.

618    As mentioned earlier, there are 10 items against which financial information might be written. Three of them are filled out in the case of Ms Smith. It shows: “Rent/Mortgage: $216.00 per week”; “Personal Loan(s): Centrelink $55.51 per week”; and “Other: Cash Converters $173.33 per week”. The total is shown as $444.84 per week. The document is signed on p 3 by Ms Smith and bears the date 6 April 2011. In terms of possible supporting documents within the categories recited on p 3 only, two documents are ticked, namely, the Centrelink Income Statement and the Bank Statement.

619    As to the handwritten entries in the “Financial Information” box, Ms Smith does not recall how those figures came to be entered into the document: T, p 311, lns 6-7. As to the rental amount of $216.00, Ms Smith says that she was boarding with her parents at the time. She was paying them $100.00 to help with electricity costs and $200.00 for food for the children. Ms Smith cannot recall having any conversation with anyone at the car yard in relation to her expenses, whether weekly or monthly expenses: T, p 311, lns 4-19. Ms Smith says she did not have a conversation with anyone about any loans that she had at the time: T, p 311, ln 21.

620    As to the Preliminary Test document, it shows this:

Channic Pty Ltd

PRELIMINARY TEST

Date:                        6/04/2011

Client Name:

Kerryn Gerthel Smith

Broker:

Cash Brokers Pty Ltd

Loan Purpose:

Motor Vehicle Purchase

$11,990

Cash Deposit

$2,000

Capacity:

Borrower 1 NET monthly income

$2,996.50

Borrower 2 NET monthly income

$0.00

Maintenance

$170.57

total monthly income

$3,167.07

Expenses

Rent/board monthly

$216.00

Living expenses

$1,925.00

Single $950; Married/De facto $1,300; Each child $325

Credit Cards

$0.00

Min 3% of Limit or $75 if no Credit Card

Centrelink Advance

$136.92

Other Finance

$173.33

Contract Payments

$0.00

Mobile Phone

Prepaid

Repayment this loan

$433.33

total expenses

$2,884.58

Surplus/Deficit

$282.49

I confirm the information input in this assessment

is accurate based on the information I have been provided.

K Humphreys

Broker Signature

621    As to this document, Ms Smith says that her monthly income “looks like more than I actually get”. The income also shows that Ms Smith was receiving $170.57 per month in maintenance payments.

622    Ms Smith says that she does not remember receiving the amount of $2,046.85 each year recorded as “Maintenance Income” in “November 2010” in the Centrelink statement. The annual amount of $2,046.85 represents $170.57 per month which may be the source of the Maintenance Income entry in the Preliminary Test.

623    Ms Smith says that she does not recall Kevin asking her anything about her expenses.

624    As to the Credit Contract, the Financial Table in the case of Ms Smith is in these terms:

FINANCIAL TABLE

Amount of credit of the loan

$10,561.50

Annual percentage rate

48% per annum

Total amount of interest payable

$16,845.36

Interest free period

The maximum duration of any interest free period under the contract is

0 weeks

Repayments

Total number of repayments

260

consisting of 259 repayments each of

$105.51

Plus a Final Repayment of

$79.77

Total amount of repayments

$27,406.86

Date of first repayment

19/04/2011

Frequency of repayment

Weekly

Credit fees and charges retained by us

None

Nil

Disclosure Date - The information as shown is current at this date

15/04/2011

Note

Subject to the General Conditions, we may change the way we calculate interest or how often we debit interest, the amount or frequency of any fees and charges (including the addition of new fees and charges) and the amount or frequency or time for payment or method of calculation of your repayments without your consent by giving you notice of such changes. Where we make such a change, we will notify you.

End of Financial table

625    The Comparison Rate entry is in these terms:

Comparison Rate                    47.1976% per annum

This rate is calculated on the $10,561.50 credit amount over a 260 week term with the ascertainable credit fees and charges (if any) and repayment amount(s) and date(s) as stated in the Schedule.

626    The entries from the top section of the schedule on p 2 of the Credit Contract are in these terms:

Schedule

Offer date

15/04/2011

Loan Draw Down Date

15/04/2011

Loan term commencing from the Draw Down Date

260 weeks

Amount of credit to be paid on the Drawdown Date as follows:

1.    To us for payment of all loan establishment fee(s) and charge(s)

$21.50

2.    To Cash Brokers Pty Ltd for Brokerage

    Paid by EFT to BSB 0 Account 0

$550.00

3.    To Supercheap Car Sales for Car Purchase

    Paid by EFT to BSB 0 Account 0

    for the purpose of Car Purchase

$9,990.00

Payment Due Dates

As per Schedule 1

Interest is calculated in accordance with Clause 5 of the General Conditions.

627    Ms Smith says that she was asked to initial the Credit Contract at the bottom of each page on the day that she “filled in the paperwork for my car”. As to the interest rate, Ms Smith says this at para 56 of her affidavit: “The first page of the document indicates that I was paying 48% interest. I know that interest is money that I have to pay on top. I didn’t really know whether a 48% interest rate was good or bad when I signed the contract”.

628    As to the total amount of repayments of $27,406.86, Ms Smith says that she did not know “at all” that her total repayments would be that amount. She says she first understood that her repayments were of that order when it was drawn to her attention by an ASIC representative in January 2012. She says this at para 57 of her affidavit:

It makes me really shocked. I thought I would only be paying $10,000. If I had of known it was going to cost me $27,000 I wouldn’t have ever got the car. I would probably have been better off waiting till I could afford a private sale.

629    As to the page of the Credit Contract dealing with obtaining legal advice that contains Box A or Box B, one of which must be completed, Ms Smith says that she recalls Kevin crossing out Box A and telling her to fill in Box B on the second half of the page. Box A is completed if the consumer chooses to obtain legal advice. Box B is completed if the consumer chooses not to obtain legal advice. Ms Smith says that she did not know that this page was concerned with the topic of obtaining legal advice. She says that Kevin did not tell her that she could get legal advice.

630    The Credit Contract is signed by Mr Hulbert. It bears the date 15 April 2011. It appears to have Ms Smith’s signature above that of Mr Hulbert. Her signature is also in Box B. She has also signed the direct debit form.

631    In oral evidence, Ms Smith acknowledged that she had initialled each page of the Credit Contract. She acknowledged that she signed the page of the contract which contains the box headed Important   Before You Sign   Things You Must Know. She says that when she signed that page there was no other writing on the page. That page, as exhibited to her affidavit, and as it appears in the Channic loan file, also bears the signature of Mr Hulbert and the date “15/4/11”. She says the date was not on the page when she signed it. The next page of the contract contains Box A and Box B which is concerned with obtaining legal advice. Ms Smith acknowledged that she signed in Box B. She says that when she did so, the document was not dated. It bears the date 15th April 2011. She says it was not already there. She says that she signed the Credit Contract on the first day that she went to Supercheap, namely, 6 April 2011: T, p 312, lns 4-30.

632    As to the circumstances in which Ms Smith signed the document, she says that she thinks that Colin gave her the document and told her to “flick through and do [her] signature at the bottom of each page”. She was asked by ASIC’s counsel: “And did anyone there talk to you about what was in this document?” She answered: “No”: T, p 312, lns 41-42.

633    Ms Smith was then taken to p 1 of the Credit Contract and the reference to the title Consumer Loan Contract and Mortgage No: 5164. She was asked whether anyone had told her what a mortgage was. She answered: “No”. She was asked: “Did you know what a mortgage is?” She answered: “No, not at that time”. She was taken to the reference to “Channic Pty Ltd” and asked: “Did you know who or what Channic was?” She answered: “No”. She was taken to the amount of credit being lent, $10,561.50, and was asked: “Was there any discussion between you and anyone about you borrowing that sort of money?” She answered: “No”. She was taken to the reference to 48% interest per annum and was asked: “Did you know what 48% interest rate meant at that time?” She answered: “No, not at that time”. She was taken to the reference to “Total Amount of Interest Payable” of $16,845.36 and was asked whether anyone had told her that the total amount of interest she was going to be paying on the loan was that amount. She said: “No”. She also said that no-one had told her that she would be paying total repayments of $27,406.86. The proposition was put to her that if the deposit of $2,000.00 is taken into account, the total amount paid by her would be $29,406.86. She was asked whether anyone had told her that she would be paying that amount for the car. She said: “No”. She said that if she had been told that information, she would not have bought the car: T, p 313, lns 1-46.

634    Ms Smith was taken to the “Comparison Rate” on p 1. She said that she did not know what a comparison rate is. As to the Schedule on p 2, she gave evidence that she did not know what the draw-down date was. She said that no-one had told her about the fees of $21.50 she would have to pay for a loan: T, p 314, lns 3-21.

635    Ms Smith gave evidence that she did not know what or who Cash Brokers was or were. Nor did she know what brokerage was or what the term meant. She gave evidence that no-one talked to her about paying $550.00 in relation to “getting finance”. She gave evidence that she did not “read any of the document” when she was signing it: T, p 314, lns 23-37.

636    As to the CBPL invoice for brokerage fees dated 6 April 2011 for $550.00, Ms Smith says this at para 59 of her affidavit: “I don’t think I got a copy of this document on or before 15 April 2011”. She says this at para 60 of her affidavit about the document:

I don’t understand what this document is and no-one told me anything about it. I don’t know what brokerage means. I was never spoken to about any company called Cash Brokers Pty Ltd by Colin or Kevin. I thought both Colin and Kevin worked for SuperCheap. The only company I know of is SuperCheap. I did not know I was borrowing any money to pay for brokerage. If I knew I had to borrow money for Brokerage I wouldn’t have. This is shocking, Kevin never explained any of this to me he just rushed me and told me to sign the pages. I even tried to sign my full name but he just told me “just initials is quicker.

637    Returning to the Credit Contract, Ms Smith was taken to Box B which she signed. That box suggests that Ms Smith had chosen not to obtain legal advice. Ms Smith gave evidence that she did not draw a line through Box A, which would have been completed had she chosen to obtain legal advice. Ms Smith gave evidence that she could not recall anything being said about obtaining legal advice. Ms Smith gave evidence that no-one talked to her about getting legal advice before entering into the agreement. She said that no-one talked to her about taking the agreement away and reading it.

638    Ms Smith again confirmed that she signed the document on the first day that she went to the car yard: T, p 314, lns 39-46; T, p 315, lns 1-11.

639    Ms Smith was again taken to the Credit Contract by Dr Spence. He took her to her signature on it and the date written on the document of 15/4/11. Dr Spence then put this question: “So you signed the contract, did you, on that day – 15 April 2011?” She said: “Yes”: T, p 333, ln 37. Dr Spence returned to this topic again later in the cross-examination. He took Ms Smith to the number of repayments and the amount of each repayment ($105.51) and then asked: “Did you have a conversation with Colin on 15 April at about the time you signed the contract?” She answered: “Yes, but I didn’t – I can’t remember talking about this [the repayments]”: T, p 336, lns 19-31. Ms Smith seems to have been responding, in this answer, to the point of whether a conversation occurred although the question asserts a signing by her on 15 April 2011.

640    The topics discussed by Ms Smith and Mr Hulbert were examined by Dr Spence with Ms Smith. I have already noted that Dr Spence’s questions proceeded on the footing that exchanges occurred on 15 April 2011 and that Ms Smith signed the contract on that date. Ms Smith gave evidence that she had a conversation with Colin that day. He asked her to “initial all the papers down the bottom”. She cannot recall how long she was with Colin. She thinks it was “20 minutes” although “it could have been up to an hour, say”: T, p 336, lns 36-45; T, p 337, lns 1-6.

641    Ms Smith accepted that after she signed the contract she knew that each repayment was $105.51 because “we discussed it” and that was something Colin had told her: T, p 337, lns 16-22.

642    Ms Smith could not remember Colin telling her of the amount of credit under the contract of $10,561.50. Nor could she remember Colin talking to her about the 48% annual interest rate although she said: “He could have. I just don’t remember”: T, p 337, lns 42-47.

643    She could not remember Colin talking to her about the total amount of interest payable of $16,845.36. In re-examination, Ms Smith accepted that Mr Hulbert “might have” told her of the 48% interest rate but she could not remember: T, p 361, lns 9-10. Nor could she recall Colin talking to her about the total repayments under the contract being an amount of $27,406.86. Ms Smith was asked in re-examination this: “… if they had told you [of the $27,406.86], do you think you would remember being told that?” She answered: “No”: T, p 360, lns 39-46; T, p 361, lns 1-4.

644    Ms Smith could not remember Colin talking to her about a brokerage fee payable to Cash Brokers of $550.00: T, p 338, lns 27-36. Ms Smith gave evidence that she could not recall these conversations put to her by Dr Spence although she embraced Dr Spence’s proposition that she could nevertheless recall that she “… just went into the office and virtually straightaway signed and initialled the contract”. She said in response: “Yes. I don’t remember a conversation, just doing the paperwork”: T, p 339, lns 10-14.

645    Dr Spence suggested to her that Mr Hulbert took her “through the things that are written down in that loan contract before [she] signed and initialled it”. She said she could not remember although “it could have been like that”. She accepted that the document was “sitting on a table so that [she] could initial it and sign it” and she did so in two places and turned over every page to initial each page on the corners: T, p 339, lns 16-35.

646    Ms Smith says she had a quick read through the document: T, p 340, ln 1.

647    Ms Smith says she does not remember Mr Hulbert telling her, as Dr Spence put to her, that she “could take some time to read the contract if [she] wanted to” although she accepted that he “could have said that to her”: T, p 340, lns 7-10. Ms Smith rejected and denied the proposition that Mr Hulbert told her she could take the contract away and have a look at it at home and come back another day: T, p 340, lns 12-18.

648    Ms Smith has no recollection of Mr Hulbert telling her, as put to her by Dr Spence, that she “could get some advice about the contract if [she] wanted to and [she could] come back later”: T, p 340, lns 20-21.

649    Ms Smith agreed that there could have been a lot of conversation with Mr Hulbert. She said that she “just does not remember”: T, p 340, lns 27-28.

650    Ms Smith was taken to pp 34 and 35 of her affidavit (Tab 7), where the Credit Contract is exhibited, which set out a schedule showing the weekly date for each payment and the amount of each payment of $105.51 (except for the payment on 8 October 2013 which is $79.77). Ms Smith thinks that she saw these pages when she initialled each of them. She accepted that she realised that the same figure, all the way down each column, was the payment she had to make: T, p 341, lns 1-2. Ms Smith accepted that it may have been a “good idea” to have had a “good look” at the contract before signing it. She said, however, that she did not do so: T, p 341, lns 14-19. Nor did she have a “good look” at the contract after signing it when she was at home. Ms Smith agreed with Dr Spence that Mr Hulbert told her it would be a good idea for her to read the contract although when then immediately asked whether she was agreeing with that proposition, she answered: “Not too sure”: T, p 342, lns 14-18.

651    Ms Smith then accepted the next proposition put to her by Dr Spence that if she had a conversation with Mr Hulbert about the contract “it would be reasonable that he might have told [her]” to “read the contract”. She added, however, that she did not read it, in fact: T, p 342, lns 24-25.

652    Ms Smith was then taken to the Information Statement in the contract (at p 45 of her affidavit (Tab 7)). It contains a sub-heading: The Contract. That section sets out information about the contract. Ms Smith was taken by Dr Spence to the statements at points 1 to 9 and was simply asked to note the matters set out there.

653    The Information Statement also contains a sub-heading: Mortgages. Ms Smith accepted that the points made under that sub-heading explain what a mortgage is, although she did not read the contract.

654    Ms Smith was taken to the content under the further sub-heading: General and the statement at point 25 under that sub-heading: “You should also READ YOUR CONTRACT”. Dr Spence then again put to Ms Smith that Mr Hulbert had “suggested” she should read the contract and that he had “said” to her that she should read the contract. Ms Smith agreed with both propositions (T, p 344, lns 30-36) although she immediately then agreed with Dr Spence’s next proposition: “But you can’t remember whether he told you that or not, in this case” [emphasis added]: T, p 344, ln 38.

655    It should be noted that the reference, at point 25 under the sub-heading General, directing the reader that, he or she should also read your contract, is, of course, a statement made in the context of an answer to the question posed in the document: “Do I have any other rights and obligations?” [emphasis added] At point 25, the document answers the question by saying that apart from those rights and obligations imposed by law, the answer can be found by reading the contract.

656    Dr Spence also put to Ms Smith that the “things written” under the sub-heading General were “things that Colin told you about when you were talking”: T, p 346, lns 38-40. The “things” written under that sub-heading consist of: first, four points What do I do if I can not make a repayment?; What if my credit provider and I can not agree on a suitable arrangement?; Can my credit provider take action against me?; Do I have any other rights and obligations?; second, complaints about the credit provider; third external dispute resolution.

657    As to the proposition that she had been told about the things so written, Ms Smith said: “No, I don’t remember” although he “might have … yes, but I don’t remember”: T, p 346, lns 42-46.

658    Dr Spence then returned to the nine points made under the sub-heading The Contract to which he had taken Ms Smith and asked her: “Is the situation the same – you can’t remember whether Colin had conversation with you about these things … or not? Is that your evidence?” [emphasis added]: T, p 347, lns 5-8. Ms Smith answered: “Yes, I don’t remember”: T, p 347, lns 6-8.

659    At points 1 to 9, quite specific questions are asked in the document coupled with a textual discussion of the answer to each question. Implicit in Dr Spence’s question to Ms Smith is the proposition that Mr Hulbert, in conversation, told Ms Smith about the things written at points 1 to 9. In other words, Mr Hulbert’s case is that he put these things to Ms Smith.

660    The final document Ms Smith exhibits to her affidavit is a document described as “AHA New Start Finance Trust: Loan Ledger for Loan 5164”.

661    Ms Smith says that this document sets out the repayments she made in relation to the loan she obtained to buy the car. The document shows direct debit payments of $150.00 in the period 19 April 2011 to approximately 7 June 2011. Thereafter the direct debits in the main seem to be in amounts of $105.00. The weekly repayment under the Credit Contract is $105.51.

662    As to the documents on the CBPL file, these things should be noted.

663    The standard loan application letter (Document 1) from Mr Humphreys for CBPL to Channic is dated 6 April 2011. It says that Ms Smith has requested a loan for $9,990.00 and she has sought repayments of approximately $100.00 per week.

664    Document 2 is a copy of the Credit Application Form.

665    Document 3 is a copy of the AHA Finance privacy policy statement signed by Ms Smith and dated 6 April 2011. The file contains identification documents (Document 4).

666    The next document is the Centrelink statement (Document 5).

667    Document 6 is the CBPL Preliminary Test.

668    The next document (Document 7) is a letter dated 6 April 2011 from Mr Hulbert for Channic to CBPL advising that Channic has made an assessment that the Credit Contract proposed for Ms Smith is not unsuitable for her.

669    The final document (Document 8) is the CBPL invoice addressed to Ms Smith dated 6 April 2011 for brokerage fees in an amount of $550.00.

670    As to the Channic loan file, it contains a copy of the loan application letter, the Credit Application Form, the AHA finance privacy policy form, identification material and the Centrelink statement of 5 April 2011. It also contains a copy of the bank statement Ms Smith says she gave to Kevin (Document 14). It contains a copy of the CBPL Preliminary Test. It contains a Veda credit check report dated 6 April 2011.

671    The Channic Credit Suitability Assessment is dated 6 April 2011. It recites that Channic made reasonable inquiries about the customer’s financial situation and needs and objectives. It recites that the Loan Inquiry Checklist confirms the inquiries made by Channic. It recites that Channic took reasonable steps to verify the consumer’s financial situation in accordance with the Verification Checklist. The document recites available income per month of $3,167.07. It recites that the customer is seeking credit of $10,561.50 over a period of 260 weeks at an annual interest rate of 48%, in order to purchase the motor vehicle. The document is signed by Mr Hulbert.

672    As to the Loan Inquiry Checklist, Pt B records that inquiries were made by examining the loan application form obtained “via broker”. As to that source, seven inquiries were made. They are: Ms Smith’s current amount and source of income or benefits; the nature or length of her employment; her fixed expenses; her variable expenses; her circumstances in terms of age, number of dependents; her assets including their nature and value; and her liabilities including their nature and value. The supporting documents from the customer (which are the bank statement and the Centrelink statement) are the source of inquiries concerning Ms Smith’s income and benefits. Searches are the source of the inquiry concerning Ms Smith’s credit history (which is the Veda search).

673    As to Pt C concerning the requirements and objectives of Ms Smith, the document says that the requirements or objectives of Ms Smith were concerned with the amount of credit she needed; the time frame for which the credit was required; the purpose of obtaining the credit and the benefit to her of obtaining it; particular product features; and the objective of ensuring that the customer “understands the costs of these features and any additional risks”. That document dated 6 April 2011 is signed by Mr Hulbert.

674    The next document is the Verification Checklist. It recites that data relating to six topics were verified from the loan application form (which is the Credit Application Form). The topics verified were: personal details; employment and other income sources; other loans and payouts; income and expenses; assets and liabilities; and Ms Smith’s personal circumstances. The Centrelink statements were the source of verification of Ms Smith’s sources of income and expenses and employment. The Veda credit report provided information about Ms Smith’s credit history. That document is dated 6 April 2011 and signed by Mr Hulbert.

675    Channic’s letter to CBPL of 6 April 2011 advising of Channic’s assessment that the Credit Contract is not unsuitable for Ms Smith is Document 20.

676    Document 21 is the Credit Contract and Document 22 is Supercheap’s invoice of 15 April 2011 for the sale of the car to Ms Smith for $11,990.00. A copy of the CBPL brokerage fee invoice is also held on file (Document 23).

677    As to the bank statement, Ms Smith gave evidence that she was receiving two Centrelink payments at the time she engaged in these events. The first was the “Families” benefit which is described as “Aus Gov Families” in the transactions line in the statement, of $652.24 (4 January 2011). It varied as, on 1 February 2011, it was $651.10. More significantly, the Families payment two weeks after the 4 January payment (18 January) was $982.33. However, the fortnightly payments regularly appear thereafter as $651.10. The Families benefit amount includes a supplement and essentially relates to the children the recipient is supporting. It was paid fortnightly.

678    The second benefit was the Parenting Payment Single” benefit described in the transaction line as “Ctrlink Pension” at $537.90. It was also paid fortnightly. The bank statement shows a balance on 5 April 2011 of $4,409.67 and then a cash withdrawal of $2,000.00. Ms Smith says that this withdrawal was the money she used for the deposit on the car. The account also shows a credit of $5,000.00 on 4 April 2011. It was an insurance payout for damage to white goods caused by Cyclone Yasi.

679    Ms Smith, however, agreed with Dr Spence that she had previously said that her fortnightly income was between $1,660.00 and $1,760.00: T, p 358, lns 20-22.

680    As to her expenses, Ms Smith says at para 54 of her affidavit that she does not recall Kevin asking her anything about her expenses. Dr Spence took Ms Smith to the “Personal Loan(s): Centrelink $55.51” entry in the Credit Application Form and suggested to her that she was in fact receiving “a lot more” from Centrelink.

681    This entry, however, is a loan repayment expense not a benefit receipt.

682    Dr Spence then took Ms Smith to her signature at p 3 of that document and the date of “6-4-11” and asked her to agree that p 2 does have some expenses entries in it. The issue, on the evidence however, was whether there were any entries in the “Financial Information” box when she signed it.

683    As to the “Cash Converters” entry of $173.33 per week, Ms Smith was asked in re-examination whether she was paying “anything close to that per week”. She said: “No”. Her earlier evidence was that she was paying $70.00 per fortnight to Cash Converters: T, p 359, lns 7-14; para 11 of her affidavit.

684    In re-examination, however, Ms Smith gave evidence that she signed documents on two occasions that she went to the car yard. There were three in all including the collection of the vehicle. She could not remember which of the two occasions they were: T, p 359, lns 36-39. She was also questioned about the date of signing the Credit Contract. Ms Smith had agreed with Dr Spence in cross-examination that she had signed it on 15 April 2011. Ms Smith had no recollection, apart from the date written on the contract, of whether she signed it on that date.

685    She gave evidence that she recalled that the date was “on the contract” when she signed it: T, p 361, lns 42-47; T, p 361, lns 1-3.

686    One final topic remains.

687    Ms Smith was taken to the PAMD Act documents. She accepted that she had signed the sequence of documents at Ex 20. However, Ms Smith gave evidence that she did not remember when she signed them although it was on one of the occasions when she was at the car yard. Ms Smith said she did not know what a “statutory warranty” is: T, p 359, lns 16-27; T, p 361, lns 22-26.

PART 11: THE EVIDENCE OF mr WILLIAM DAMIEN NOBLE (CALLED “DAMIEN”) AND ms JOAN CECILY NOBLE

688    Joan Cecily Noble swore an affidavit in the proceedings on 16 June 2014. In that affidavit, she says this. I will also make reference to Mrs Noble’s oral evidence.

689    She was born on 13 October 1966. She was 44 years of age when she first engaged with Supercheap. She is unemployed and receives Centrelink payments. She has never had a job, and as she puts it, “not even casual work. She relies upon Centrelink benefits. She went to school “up until Year 10”. She says that she can speak English “alright”. She can read and write but she needs to wear glasses. She says that if she has something long to read such as a letter, she usually gets someone else to read it to her to help her understand it. She is married to William Damien Noble and together they have 10 children. The five youngest children live with Mr and Mrs Noble and at the date of her affidavit their children were aged 17, 12, 11, 10 and 7. Her 25 year old son is profoundly deaf.

690    Mr and Mrs Noble and the five youngest children live at Yarrabah in Aboriginal Community Housing.

691    Mrs Noble has essentially lived there all her life.

692    In March 2011, Mrs Noble received about $3,000.00 which was a refund she received from the Djarragun School. The school had been charging Mrs Noble amounts since 2006 for one of her daughters who attended the school. However, Mrs Noble’s daughter had not been attending that school for some time as she had been receiving her schooling in Yarrabah. Accordingly, a refund was due to Mrs Noble. The refund was deposited into Mrs Noble’s bank account. Shortly after receiving that money, Mr and Mrs Noble deci