No knockout blow in bank fees class actions (Paciocco v ANZ)

OVERVIEW

Both sides claimed victory when Justice Gordon of the Federal Court of Australia delivered her decision in the bank fees litigation, Paciocco v Australia and New Zealand Banking Group Limited [2014] FC 35 (Paciocco v ANZ) and both sides are contemplating their respective positions in terms of an appeal. Therefore, the much anticipated clarity around the doctrine of penalties may be shortlived.

Justice Gordon found that ANZ's credit card late payment fees are 'penalties' and are unenforceable. A necessary element of this finding was that her Honour considered the late payment fees were extravagant and unconscionable. However, it is important to note that Her Honour commented that '...there was no allegation of dishonesty, oppression or abuse of a commercially powerful position and none existed.'

Her Honour found that ANZ's other fees such as dishonour fees, overdrawn and over limit fees are not penalties and are therefore enforceable. The decision, in practical terms, is the same as her Honour's decision in Andrews v Australia and New Zealand Banking Group Ltd (2011) 211 FCR 53 (Andrews v ANZ). In that case her Honour found that only the late payment fees were penalties and that the other fees were not. However, her decision in the Paciocco case is informed by the High Court's subsequent judgment in Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30 (Andrews HC).

HISTORY OF THE BANK FEES CLASS ACTIONS

22 September 2010: First bank fees class action filed against ANZ.

5 December 2011: Justice Gordon in the Federal Court finds that late payment fees are capable of being penalties, but finds for ANZ on other fees.

16 December 2011: Maurice Blackburn appeals adverse findings in Justice Gordon's December judgment.

18 April 2012: Class action filed against Bankwest.

11 May 2012: High Court grant leave to appeal Justice Gordon's judgment of 5 December 2011.

14 August 2012: High Court hears appeal from Justice Gordon's judgment of 5 December 2011.

6 September 2012: High Court rules that bank fees can be considered penalties.

5 February 2014: Justice Gordon in the Federal Court hands down judgment finding that late payment fees on credit cards are penalties and should be repaid, with no retrospective time limitation on claims. Justice Gordon finds for the ANZ on the other fees.

(Source: Maurice Blackburn Press Release 5 February 2014)

In Andrews HC, the High Court expanded the Australian doctrine of penalties, putting the...