Federal Court of Australia

Simpson v Taylors Business Pty Ltd (in Liq) (No 4) [2026] FCA 1101

ORDERS

THE COURT DECLARES THAT:

A.    Pursuant to s 33Z(1)(c) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), s 39B(1) of the Consumer Credit (Victoria) Act 1995 (Vic) (CCV Act), ss 179 and 180 of the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act), and s 12GM of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), the pawn contracts the Respondent entered into with the Applicant and Group Members from 15 November 2022 to 26 October 2023 (Pawn Contracts) are and have been at all times void and unenforceable.

THE COURT ORDERS THAT:

1.    Pursuant to s 33Z(1)(g) of the FCA Act, s 177 of the NCCP Act, and s 12GD of the ASIC Act, there be an injunction restraining the Respondent from enforcing any term of any of the Pawn Contracts or exercising any right said to accrue from any of the Pawn Contracts.

2.    Pursuant to s 33Z(1)(f) of the FCA Act, there be an award of damages in the amount of $159,903.78 payable by the Respondent to the Applicant and Group Members, with interest.

3.    Pursuant to s 33Z(4) of the FCA Act, the damages be paid to Group Members in accordance with the calculations in the affidavit of Lucas Rutten affirmed on 1 July 2026.

4.    The common questions in the Further Amended Originating Application dated 22 May 2025 be answered as follows:

(a)    Yes.

(b)    Yes.

(c)    Inappropriate to answer.

(d)    Inappropriate to answer.

(e)    Inappropriate to answer.

(f)    Yes, and yes.

5.    Pursuant to s 33ZB of the FCA Act, the following persons are bound by the above declarations and orders:

(a)    the Applicant;

(b)    the Respondent;

(c)    the Group Members as defined in the Second Further Amended Statement of Claim dated 22 May 2025.

6.    The Respondent pay the Applicant’s costs of the proceeding, to be fixed by way of a lump sum.

7.    Pursuant to s 33Z(1)(g) of the FCA Act, the scheme first approved by the Court on 19 September 2025 and subsequently amended be further amended such that it be replaced with the Scheme at Annexure LR-86 of the affidavit of Lucas Rutten affirmed on 30 July 2026.

8.    The amount of $33,176.45 presently being held on trust by the Applicant’s solicitors, be paid to the office account of the Consumer Action Law Centre, to then be distributed pursuant to clause 19I of the Second Further Amended Scheme for the Return, Sale or Disposal of Pawned Goods.

THE COURT DIRECTS THAT:

9.    Subject to paragraph 10, within 14 days from the date of these orders, the parties file any agreed minute of proposed orders fixing a lump sum in relation to the Applicant’s costs.

10.    In the absence of any agreement pursuant to paragraph 9 of these orders, within 21 days from the date of these orders the Applicant file and serve an affidavit constituting a Costs Summary in accordance with paragraphs 4.10 to 4.12 of the Courts Costs Practice Note (GPN-COSTS).

11.    Within a further 14 days, the Respondent file and serve any Costs Response in accordance with paragraphs 4.13 to 4.14 of the Costs Practice Note (GPN-COSTS).

12.    In the absence of any agreement having been reached within a further 14 days, the matter of an appropriate lump sum figure for the Applicant’s costs be referred to a Registrar for determination on the papers unless otherwise ordered.

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

ORDERS

THE COURT ORDERS THAT:

1.    Under rule 39.05(g) of the Federal Court Rules 2011 (Cth), the amount referred to in order 8 of the orders made by Justice Bennett on 3 August 2026, being $33,176.45, be amended to $33,167.45.

2.    Pursuant to s 471B of the Corporations Act 2001 (Cth), the Applicant has leave, nunc pro tunc, to proceed in her proceeding on her own behalf and on behalf of the Group Members against the Respondent in proceeding VID891/2023.

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

REASONS FOR JUDGMENT

BENNETT J:

Introduction

1    This matter has a long history. Proceedings were commenced on 25 October 2023. By statement of claim, the Applicant, on behalf of the Group Members, impugned certain pawn contracts entered into during the Relevant Period, being between 15 November 2022 and 23 October 2023 (Pawn Contracts). Goods that were subject to the Pawn Contracts will be referred to as the Pawned Goods.

2    Taylors Business Propriety Limited (the Respondent or Taylors) is a company which operated a pawnbroking business in the Melbourne suburb of Delahey. The Respondent was in the business of providing funds to individuals under pawnbroking agreements.

3    It was alleged that, during the Relevant Period, the Respondent was not licensed to operate as a pawnbroker pursuant to the Second-Hand Dealers and Pawnbrokers Act 1989 (Vic). Thus, it was said by the Applicant that the Respondent was subject to the terms of the National Consumer Credit Protection Act 2009 (Cth) and Schedule 1 to that Act, being the National Credit Code. In addition, the remaining provisions of the Consumer Credit (Victoria) Act 1995 (Vic) were said to be in issue by reason of the rate of interest charged.

4    Before any defence was filed, on 9 November 2023, following an interlocutory application, the Court issued an injunction restraining the Respondent and third parties from dealing with any of the goods offered as security for the Pawn Contracts. That order was expressly made on the basis that it did not prevent the Respondent from returning the Pawned Goods to the Group Members at the Respondent’s expense without requiring payment of any charges under the Pawn Contracts.

5    Orders concerning the form, content and distribution of opt-out notices under s 33Y of the Federal Court of Australia Act 1976 (Cth) (FCA) were made on 23 August 2024. Pursuant to FCA s 33J, the time and date for group members to opt out of the proceeding was 4.00 pm on 27 September 2024. Those orders also stated certain separate questions which were to be considered by this Court.

6    In late December 2024, a freezing order was sought in respect of the funds held by the Respondent. The freezing order was made on 19 December 2024 by Neskovcin J before being extended by me on 20 January 2025. For the limited purpose of responding to the issues raised in relation to the interlocutory application, I granted Mr Grainger, the sole director of the Respondent, leave to represent the Respondent at the hearing of 20 January 2025. Following evidence and calls for documents, there was a further hearing about the nature of the claims and the nature of the contracts in dispute. This gave rise to a number of concerns about compliance with the freezing order that I need to make no concluded findings about.

7    In a second further amended statement of claim dated 22 May 2025, a claim was added to the effect that Taylors had abandoned the property the subject of the Pawn Contracts. No defence was filed to that claim, and for the reasons that I explained in Simpson v Taylors Business Pty Ltd (No 2) [2025] FCA 1119, I granted default judgment in respect of that part of the claim. At the same time, for the reasons that I then published, a scheme was established by which group members would be notified of the declaration, and to establish a process by which they were able to reclaim their goods or to make provision for unclaimed goods.

8    There then followed a further hearing on the separate questions that had been earlier set. The answers to the separate questions were set out in my reasons of 11 December 2025 in Simpson v Taylors Business Pty Ltd (No 3) [2025] FCA 1546 (Simpson No 3) and the conclusion of the separate questions involved the identification of the following next steps:

(1)    There should be an injunction preventing the enforcement of the Pawn Contracts.

(2)    There should be a declaration that the Pawn Contracts are void and unenforceable.

(3)    There should be an award of damages for the amount of interest and other costs paid by the Applicant or Group Members under the Pawn Contracts.

9    I ordered the parties to provide further submissions as to whether there was a need for further orders concerning the return of goods (and the appropriateness of any proposed orders) and whether damages should be awarded collectively to the Group Members or on an individual basis. The final hearing was set down for 3 August 2026, a time which was selected to allow for all necessary communications with Group Members for the review and return of goods where possible and, as will become apparent, that was a process of considerable complexity.

10    On 2 June 2026, the Deputy Commissioner of Taxation commenced a Federal Court proceeding seeking to have Taylors wound up in insolvency. On 8 July 2026, this Court ordered that Taylors be wound up.

11    A process for auctioning items, notifying the owners and otherwise dealing with significant complexities arising from dealing with over 4000 Pawned Goods continued to take place. Shortly before the matter was to return for final hearing, a liquidator was appointed to Taylors.

12    The liquidator was informed of the present proceedings and indicated by correspondence that he did not consent nor oppose to leave being granted for the matter to proceed. The liquidator has elected not to appear at the hearing today and, I understand, was provided with a copy of the court book prior to the hearing commencing.

LEave to proceed

13    First, I have considered whether it is appropriate to grant leave to proceed. This is based on an interlocutory application from the Applicant for leave to continue to proceed against Taylors pursuant to s 471B of the Corporations Act 2001 (Cth) (Corporations Act) dated 23 July 2026. That application is supported by the affidavit of Lucas Rutten, affirmed on the same date.

14    Section 471B of the Corporations Act relevantly provides that while a company is being wound up in insolvency, a person cannot “proceed with… a proceeding in a court against the company” except with leave of the Court. In broad terms, the purpose of s 471B is to prevent a company’s assets from being dissipated by unnecessary litigation (J & J Richards Super Pty Ltd (Atf The J & J Richards Superannuation Fund) v Linchpin Capital Group Ltd (In Liq) [2020] FCA 1772 (J&J Richards) at [8] (Derrington J)).

15    The court has a broad discretion in determining whether to grant leave (J&J Richards at [8] (Derrington J)).

16    In general, the applicant must demonstrate it is more appropriate for the particular claim to proceed by way of action, rather than by submitting a proof of debt with the liquidator.

17    Relevant factors to the grant of leave include whether the claim has a solid foundation and gives rise to a serious question to be tried, the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved, and the stage to which the proceedings may have progressed (J&J Richards at [8] (Derrington J); Commissioner of the NDIS Quality and Safeguards Commission v Irabina Autism Services (in liq) [2024] FCA 1468 at [17] (Horan J)).

18    In this circumstance, I am satisfied that it is appropriate for the claims to be finalised through this proceeding rather than proof of debt in the liquidation. That is principally because,

(1)    The proceeding benefits a large number of group members who have been through a relatively drawn-out process to demonstrate their entitlement to relief, such that there would be a degree of inefficiency in requiring such a high volume of small claims to each be individually proven in liquidation. The present proceedings have reached a point, after a number of years, where much of the complexity of the claims has been worked through and the evidence has been presented and evaluated by this Court. There is therefore clear utility in allowing its continuation in this forum, rather than bringing it to a premature close.

(2)    The Court has already heard and determined the substantive issues going to entitlement.

(3)    The current orders sought involve funds that have been subject to various trust obligations with amounts being held by the Consumer Action Law Centre (CALC). It is inefficient to require them to continue to hold those funds with an indeterminate pathway for dealing with them in the future.

19    Finally, the Applicant’s claim has merit for the reasons I have explained in the previously published reasons accompanying these proceedings. Moreover, the quantum is significant, even though on each individual basis it may be small, and the evidence that I have received in this matter makes clear that the Group Members can be generally understood as people with significant financial and social vulnerability. In that sense, I consider it generally in the interests of justice to reduce further impediments to the recovery of funds and goods to which they are entitled. I accept there is some complexity in the issues, but those are generally of the kind that have already been addressed by the Court. Given the long history of the matter, it is appropriate this Court have the “final say” on all claims and, in doing so, it is appropriate to note that the Court has effectively already answered the questions in previous occasions.

20    It is relevant that the liquidators do not oppose this course of action.

21    The solicitors also argue that they may owe fiduciary obligations to Group Members which compels them to seek to proceed in the present way. Those obligations may well exist, but they do not necessarily impact upon whether or not relief should be granted, and I therefore do not accord that factor much weight.

22    Nonetheless, it is appropriate for the reasons I have identified that leave to proceed be granted, and I will therefore make an order in the form provided.

the apprOACH TO CALCULATION OF LOSS

23    The Court’s reasons of 11 December 2025 at [121] set out the way in which damages are to be calculated:

(1)    for each person who repaid the entire principal, the difference between the amount they repaid and the amount they were loaned (which it can be inferred represents the interest or other costs paid);

(2)    for each person who did not repay the entire principal, any part of the payments which were paid as interest, but not the part of the payment which were paid partially to repay the principal.

24    That methodology has been applied by Mr Rutten to each Pawn Contract, using the pawnbroking data produced by Taylors and provided before me in evidence. The calculations show three categories.

(1)    where the ticket of a Group Member has been redeemed: In these cases, the amount of damages, consistent with the Court’s previous ruling, is the amount of all repayments less the principal, the difference representing interest paid. The total of these repayments, less principal, is $131,040.65.

(2)    where the ticket of a Group Member has not been the subject of any repayments, the damages is zero.

(3)    where the ticket of a Group Member has not been redeemed, but some payments have been made: This category is divided into two subcategories.

(a)    First, where no individual payments have been made which exceeded the monthly interest. In these cases, it can be inferred that the entire amounts repaid are payments of or in partial satisfaction of interest only. The total such repayment is $23,220.73, and the damage is therefore all of these repayments.

(b)    Second, where there have been individual payments made which exceed the interest due under the contract. In these cases, a question arises whether the excess payments should be categorised as payments of interest or partial repayments of principal. This question of characterisation was left open by my previous reasons in Simpson (No 3).

25    There are 18 tickets in the category referred to at [24(3)(b)] above. The terms of the Pawn Contracts make no provision for part-payment of principal nor prepayment of interest. Ordinarily, under a loan whose terms are silent as to prepayments, where no statute operates, the borrower is not entitled to make advance repayments since the lender is entitled to interest over the life of the loan (Hyde Management Services Pty Ltd v FAI Insurances Ltd (1979) 144 CLR 541 at 543-4 (Mason J)). However, this cannot be applied to pawnbroking because there is no loan term (the contract being extendable indefinitely at the borrower’s election). Similarly, loans without a fixed term are at common law treated as repayable on demand with interest calculated at the time of demand, but in pawnbroking no demand can be made of the borrower.

26    No authorities have been identified which have examined the priorities for accelerated payments in the pawnbroking context. Applying an analysis grounded in first principles, if the pawnbroker never had an expectation of a stream of interest lasting for a known fixed term, and the secured amount could be paid at any time at the election of the borrower, then it stands to reason that any payment above the monthly interest charge should be regarded as a part payment of principal (provided there is no outstanding accrued interest).

27    On an approach where excess payments are treated as payments towards the principal, $5642.40 has been paid in interest. The other approach is to treat all payments as if they were interest, either as due or prepayments, in which case the interest repayments are $5772.00.

28    Comparing the two approaches, the aggregate difference of the 18 tickets is the relatively trivial amount of $129.60. The Applicant submits that the former approach, treating excess payments as repayments of principal, is to be preferred. They submit, and I agree, that it would be irrational for a borrower to prepay interest when they have the option to have the sum treated as part payment of principal and, from Taylors’ perspective, it had no contractual right to receive interest early.

29    Overall, I therefore consider it appropriate to proceed on the basis that the accelerated repayments should be treated as if the excess payments were repayments of principal.

30    Adding the three categories identified at paragraph [24] above, results in the conclusion that the total interest repayments which constitute damages in accordance with the Court’s earlier reasons for judgment in the separate questions is $159,903.78.

31    As to the form of order, the Applicant submits, and I accept, that this is an outcome which is amenable to an award of damages under s 33Z(1)(f) of the FCA. In this respect, the Court is now able to do what it could not do at the time of the separate questions, which is evaluate evidence as to the size of the class, permitting it to make a reasonably accurate assessment of the aggregate damages. The size of the class is finite and known because the number of Pawn Contracts are known. For each Pawn Contract, the amount of interest and other charges paid is known and so loss suffered by each Group Member is now known.

32    As the words “reasonably accurate” in s 33Z(3) indicate, and consistent with the reasoning in Schutt Flying Academy (Australia) Pty Ltd v Mobil Oil Australia Ltd [2000] VSCA 103; 1 VR 545 (considering a similar provision in the Victorian context), perfect calculation is not required. More generally, it has long been the case that even in ordinary inter partes litigation that “[w]here precise evidence is not available, the court must do the best that it can” in assessing the damages (Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 (Mason CJ and Dawson J)).

33    For the foregoing reasons, I am satisfied that it is appropriate that the amount of $159,903.78 be awarded in aggregate.

answers to the common questions

34    The common questions in the further amended originating application dated 22 May 2025 mirror, to a large extent, the separate questions answered in Simpson (No 3), being the answers to the separate questions, or questions that no longer arise because of the forensic decisions made by the Applicant. Answers to those questions should therefore formally be made in the following way:

(1)    Yes.

(2)    Yes.

(3)    Inappropriate to answer (because the issues are no longer pursued by the Applicant).

(4)    Inappropriate to answer (because the issues are no longer pursued by the Applicant).

(5)    Inappropriate to answer (because the issues are no longer pursued by the Applicant).

(6)    Yes and Yes.

GOODS NOT RETURNED TO ONWERS

35    The affidavit of Mr Rutten affirmed on 30 July 2026 (the 30 July Rutten Affidavit) provided a detailed account of how a freight company came to be engaged, the steps taken by CALC to provide that freight company with the list of goods for delivery, the later discovery of the termination of the employment of the person which the company had engaged to do the deliveries, and the discovery of what appears to have been some kind of misappropriation of goods and subsequent police involvement. I am not invited to, nor is it appropriate for me to make any concluded findings in relation to those matters save to observe that the 30 July Rutten Affidavit satisfies me that:

(1)    CALC acted appropriately in the inquiries that it carried out and in engaging the transport provider; and

(2)    CALC followed up the apparent irregularities with significant proactivity once an issue became identified and, indeed, even before the full scope of the issue became identified and, in this respect, it has acted in an exemplary manner.

36    Despite the immunity given to the CALC in clause 4 of the scheme that I had previously approved for the return of goods, I am informed by 30 July Rutten Affidavit and the submissions of counsel that CALC intends to offer ex gratia payments to Group Members who respond confirming that they have not had their goods delivered to them, in recognition of

(1)    the likely disappointment of them becoming aware that their Pawned Goods were lost or otherwise dealt with, having first been notified that the goods had been recovered; and

(2)    the likely prejudice to them that would be caused by any further delay in negotiations or enforcement against the contractor, noting the already long history of delays in having their goods returned.

37    The Applicant’s lawyers have carried these proceedings. Consistent with their duty to the group, in the 30 July Rutten Affidavit, CALC have put forward a remediation proposal for Group Members whose goods were supposed to have been returned but have not been. The remediation proposal attempts to strike a balance between providing long-awaited closure to Group Members and allowing police a reasonable time to continue their investigations.

38    Counsel for the Applicant have sought, and I consider it appropriate, to grant a degree of flexibility in the administration of the scheme to permit investigations and further steps to be taken by the administrator as the facts suggest are appropriate.

39    The Administrator seeks recovery of its own costs only after Group Members have been paid out in accordance with the estimation regime in the proposed scheme amendment.

funds yielded by sale of uncollected goods

40    The Administrator’s report filed with the Court identifies that $33,167.45 was raised from the sale of uncollected Pawned Goods, net of commission charged by third-party auction service ME Auctions.

41    CALC has incurred substantial costs in administering the scheme, as detailed in the report provided ahead of this hearing. The amount of money incurred in administering the scheme far exceeds the money raised through the sale of uncollected goods. Nonetheless, as I have already identified, CALC proposes and the Applicant instructs that the funds be made available to fund part of the ex gratia payments proposed in relation to the non-returned Pawned Goods above, instead of being used to pay legal costs as had been previously foreshadowed.

42    This approach would, on one view, favour those whose goods were lost by the delivery of the contractor over those goods never found in the commingled abandoned goods from Taylors. However, the applicant submits, and I accept, that this is not favouring when properly understood - those goods were already lost and the individuals never stood to receive anything (apart from a possible entitlement to a distribution of any fund yielded from the sale of abandoned goods), whereas those whose goods were found were supposed to receive something (namely, their goods) and had a legitimate expectation that they would because notices under the scheme had told them that this would occur.

43    I am therefore satisfied it is appropriate to make the orders sought for the distribution of the funds. It is commendable that the solicitors for the Applicant have foregone their own entitlement to costs, at least temporarily, to enable the Group Members to recover. They were not forced to do so and I consider it to be in the best traditions of a community legal service that they have proceeded on that basis.

conclusion

44    As I have observed above, this matter has involved the management and distribution of thousands of items pawned by various individuals over the Relevant Period. The Applicant and her lawyers have all faced significant challenges: unhappy landlords, an obstructionist business owner and significant logistical difficulties consistent with identifying hundreds of individuals who entered into Pawn Contracts with Taylors in the Relevant Period. Thousands of items have been sold or disposed of. On the material before me, the solicitors themselves have taken it upon themselves to sort goods and to be actively involved in the return of goods in a manner which demonstrates significant commitment to their clients. The Administrator (being CALC) generously accept that it will recover last, permitting its clients to recover funds well ahead of them. It is an approach that is commendable and is in the best interests of those clients.

45    The perseverance of all involved in reaching this outcome is not to be understated. It is a considerable achievement undertaken by a community legal centre over a number of years and facing, as I have observed, a number of challenges and logistical difficulties. I commend them and their counsel for their efforts in reaching this outcome today.

46    It is otherwise appropriate that I make the directions as to costs that is foreshadowed in the order handed up and provided by the Applicant.

47    These reasons were delivered ex tempore and were revised in accordance with Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 [2021] HCA 6; 272 CLR 329 at [30]-[31] (Steward J, Kiefel CJ, Keane, Gordon and Edelman JJ agreeing).

Associate:     

Dated:    11 August 2026