Federal Court of Australia

Australian Securities and Investments Commission v BSF Solutions Pty Ltd (Costs) [2026] FCA 686

ORDERS

THE COURT ORDERS:

1.    The respondents pay the applicant’s costs of and incidental to the proceeding on a party-party basis.

2.    The respondents are jointly and severally liable for the payment of ASIC’s costs pursuant to Order 1.

3.    The costs be payable by way of lump sum order.

4.    The applicant file and serve any affidavits and short written submissions on the amount of the lump sum costs order by 3 July 2026.

5.    The respondents file and serve any affidavits and short written submissions on the amount of the lump sum costs order by 17 July 2026.

6.    The applicant file and serve any affidavits and short written submissions in reply on the amount of the lump sum costs order by 31 July 2026.

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

REASONS FOR JUDGMENT

JACKMAN J:

1    On 24 May 2024, I gave judgment in these proceedings in relation to issues of liability: Australian Securities and Investments Commission v BSF Solutions Pty Ltd (Liability) [2024] FCA 553. In that judgment, I reserved the question of the costs of the liability phase of the proceeding. On 17 April 2026, I gave judgment in relation to penalty: Australian Securities and Investments Commission v BSF Solutions Pty Ltd (Penalty) [2026] FCA 450. At [114], I expressed a preliminary and tentative view to the effect that ASIC was entitled to an order for costs against the respondents in relation to the penalty stage of the proceedings, and I set a timetable for the filing of submissions and affidavits in the event that the parties were unable to agree on the appropriate order.

2    ASIC submits that I should now make an order for costs in its favour in relation to the proceedings as a whole on the usual party-party basis, and on the basis that the respondents are jointly and severally liable for the payment of ASIC’s costs. ASIC also seeks that its costs be awarded on a lump sum basis.

3    The respondents submit that I should make the following orders as to costs:

(a)    the first and third respondents pay:

(i)    the applicant’s costs of the claims for relief against them in paras 1, 2, 5, 11, 13 and 18 of the Originating Application in respect of the liability hearing; and

(ii)    50% of the applicant’s costs (or such other percentage the Court considers appropriate) of the claims for relief against them in paras 7, 9 and 14 of the Originating Application in respect of the penalty hearing.

(b)    the second and fourth respondents pay:

(i)    the applicant’s costs of the claims for relief against them in paras 3, 4, 6, 12, 15 and 17 of the Originating Application in respect of the liability hearing; and

(ii)    50% of the applicant’s costs (or such other percentage the Court considers appropriate) of the claims for relief against them in paras 8, 10 and 16 of the Originating Application in respect of the penalty hearing.

4    In sum, the respondents submit that the first and third respondents (the BSF Respondents) should be liable for the costs awarded to ASIC in respect to the claims against them, and the second and fourth respondents (the Cigno Respondents) should be liable for the costs awarded to ASIC in respect of the claims against them. The respondents also submit that there should be a 50% reduction in ASIC’s costs of the penalty hearing.

5    Dealing first with the issue as to whether there should be an apportionment of costs between the respondents and a separation of liability for costs between the BSF respondents and the Cigno respondents, in my view there are no special circumstances warranting a departure from the usual position that the respondents be jointly and severally liable for ASIC’s costs. On the contrary, the overwhelming degree of commonality between the respondents reinforces the usual approach. The No Upfront Charge Loan Model, which was the subject of the proceedings, was a model that was jointly designed and implemented by the respondents in a collaborative and integrated way. The changes which had been made to the respondents’ earlier business model were made in conjunction between them. The respondents’ contraventions were of the same provisions of the National Consumer Credit Protection Act 2009 (Cth) (the Credit Act), as a consequence of their joint operation of the No Upfront Charge Loan Model. The number of contraventions by all of the respondents was of the same order of magnitude, and the contraventions of both s 29(1) and s 32(1) of the Credit Act were interrelated. The respondents did not conduct separate and distinct defences which could be characterised as not having been attributable to the joint conduct of the respondents in defending the claims against them.

6    Turning to the issue as to whether there should be a discount of 50% (or other amount) of ASIC’s costs of the penalty hearing, the respondents submit that ASIC obtained penalties amounting to only 4.69% of the total penalties which it sought of $149,100,000. The respondents further submit that ASIC’s pursuit of that large amount necessarily affected how the parties conducted their case, including the costs incurred in prosecuting and defending the penalty stage of the proceeding, adding that ASIC’s claim presented a practical impediment to the parties agreeing on an appropriate penalty and exposed the individual respondents to the risk of financial ruin. Further, the respondents draw attention to ASIC’s failure to obtain the wide permanent injunctions which they sought against Mr Harrison and Mr Swanepoel. The respondents rely on ASIC’s failure to secure penalties beyond a small fraction of what had been claimed as being due to two important issues, namely the significance of legal advice and the measure of benefits obtained.

7    I do not regard the respondents’ submissions as a sufficient basis to depart from the usual position that the unsuccessful respondents should pay ASIC’s costs of the penalty stage of the proceedings. ASIC was successful in obtaining the principal remedy which it sought, namely pecuniary remedies against each of the four respondents, in substantial amounts. ASIC needed to approach the court with sufficient material to justify the award of substantial penalties, and it does not seem to me that the costs incurred by ASIC would have been reduced to any significant degree if it had sought penalties in lower amounts, and had not sought the permanent injunctions.

8    Although the respondents submit that I should infer, based on ordinary experience, that the respondents incurred greater costs than they otherwise would have done if ASIC had sought penalties in lower amounts, there is no evidence to that effect, and it does not seem to me in all the circumstances that the inference is appropriate in this case. The penalty hearing took up less than one day of Court time in circumstances where the respondents adduced no evidence, and both sets of parties conducted the penalty hearing (and the proceeding more generally) in a regular and efficient manner. I do not regard the respondents’ success on the legal advice issue or the measure of benefits issue as either sufficiently distinct or sufficiently weighty to warrant a reduction in the entitlement to costs of ASIC as the successful party.

9    Accordingly, I make orders as sought by ASIC, and I have also set a timetable for the filing and service of material concerning the amount of a lump sum costs order. I am willing to decide the amount of the lump sum costs order myself, rather than burdening a Registrar (who would likely be unfamiliar with the proceedings) with that task. I anticipate deciding the issue of quantum of costs on the papers.

Associate:

Dated:    16 June 2026

SCHEDULE OF PARTIES