The Australian Securities & Investments Commission has prevailed in two Full Federal Court appeals in its proceedings against small amount lender Sunshine Loans, confirming that the lender contravened the National Credit Code by entering into small amount credit contracts containing an unlawful fee and charging that fee to customers. The Court unanimously dismissed Sunshine Loans’ appeal from Justice Derrington’s 12 April 2024 liability decision and criticised the way the appeal was conducted. In ASIC’s separate appeal, Justices Colvin and Bromwich (Perram J dissenting) overturned Justice Derrington’s decision to recuse himself from the penalty phase, holding that the error was treating the penalty hearing as separate and distinct from the liability hearing such that views formed in the first hearing could not be carried into the second. The matter will return to Justice Derrington for a hearing on the appropriate penalty to be paid by Sunshine Loans.
Australian Securities & Investments Commission 2025-03-24
Australian Securities & Investments Commission wins Full Federal Court appeals in Sunshine Loans unlawful fee case, clearing the way for a penalty hearing
The Australian Securities & Investments Commission (ASIC) won two Full Federal Court appeals against Sunshine Loans, confirming the lender's violation of the National Credit Code by imposing an unlawful fee. The Court dismissed Sunshine Loans' appeal against the liability decision and criticized its conduct. In a separate appeal, ASIC successfully challenged Justice Derrington's recusal from the penalty phase, ruling that the penalty hearing should not be distinct from the liability hearing. The case will return to Justice Derrington for penalty determination.