Australia & New Zealand Banking Group Ltd, Re [1995] QSC 84

IN THE SUPREME COURT OF QUEENSLAND O.S. No. 769 of 1994 Brisbane Before the Hon Justice G N Williams IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 770 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 771 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 772 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ -- 1 of 38 -- O.S. No. 773 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 774 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 775 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 776 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ -- 2 of 38 -- O.S. No. 777 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 778 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 779 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 780 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) -- 3 of 38 -- ________________________________________ O.S. No. 781 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 782 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 783 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 784 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited -- 4 of 38 -- (ACN 005 357 522) ________________________________________ O.S. No. 785 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) JUDGMENT - G N WILLIAMS J Judgment delivered 19/04/1995 CATCHWORDS: BANKING - ss. 38, 44, 86 87, 87A and Schedules 4 and 8 of the Credit Act 1987 considered - whether "minor errors" - discharge amount - total amount financed - date of signature - name of life insurer - name of consumer credit insurer - whether commission payable - by whom commission payable - multiple errors - refinancing errors. Counsel: S Thompson for applicant/ANZ Bank Ms Atkinson for respondent/Registrar Collins for respondents/Harris and others Solicitors: Mallesons Stephen Jaques for applicant/ANZ Bank Crown Solicitor for respondent/Registrar Paul O'Shea for respondents/Harris and others Hearing dates: 28 November 1994 and 22 February 1995 -- 5 of 38 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 769 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 770 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 771 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 772 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ -- 6 of 38 -- O.S. No. 773 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 774 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 775 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 776 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ -- 7 of 38 -- O.S. No. 777 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 778 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 779 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 780 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ -- 8 of 38 -- O.S. No. 781 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 782 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 783 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ O.S. No. 784 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) ________________________________________ -- 9 of 38 -- O.S. No. 785 of 1994 IN THE MATTER of the Credit Act 1987 AND: IN THE MATTER of the Application of Australia and New Zealand Banking Group Limited (ACN 005 357 522) JUDGMENT - G N WILLIAMS J Judgment delivered 19/04/1995 As can be readily implied from its name, the Australia and New Zealand Banking Group Limited, the applicant, has entered over the years into numerous transactions which are subject to regulation by the provisions of the Credit Act 1987, which came into force 1 May 1989. In that period many of those loan contracts have been a "regulated loan contract" within the meaning of Part 3 of the Act. Section 38(1), so far as is relevant, provides that such a loan contract shall include the following: "(a) The date on which the contract, or an offer to enter into the contract, was signed by the debtor; and (b) A statement of the amount financed in accordance with Schedule 4; and . . . (h) If a commission charge is payable - a statement to that effect and, except insofar as the information is not known by the credit provider or is not readily available to the credit provider, a statement of the person to whom and the person by whom the commission charge is payable;" Further, so far as is relevant, Clause 1 of Schedule 4 provides that a statement of the amount financed shall state:; "(a) the amount agreed under the contract to be lent (other than amounts referred to in paragraphs (b) to (f)); -- 10 of 38 -- 2 and shall include statements showing separately such amounts as, under the contract, are payable by the debtor to the credit provider (otherwise than as part of the credit charge) whether or not the credit provider pays, or has paid, those amounts to another person and are - (b) amounts payable in respect of contracts of insurance (if any), entered into in relation to the contract showing separately in respect of each such contract the name of the insurer and - . . . (e) amounts that are the consideration, or part of the consideration, for the discharge of the liability to the debtor to the credit provider under a contract in force before the relevant date, other than consideration referred to in a preceding paragraph; and . . . and shall state the amount financed, being the sum of the amounts referred to in the preceding paragraphs." Section 44(1)(b) of the Act then provides that, subject to ss. 86 and 87, where the loan contract is not "in accordance with s. 38" the debtor "is not liable to pay to the credit provider the credit charge under the contract". Section 86 empowers the credit provider, where for example there has been a failure to comply with s. 38 resulting in a loss of entitlement to credit charges, to apply to the Court "for an order increasing the liability of the debtor to the credit provider". On such an application the credit provider may rely on the provisions of s.87. If recourse is had to that section the court may make a determination under s. 86 in relation to all regulated contracts or all such contracts of a specified class entered into by the credit provider during a specified period. When that procedure is adopted the debtors need not be -- 11 of 38 -- 3 identified, but the court may require an amendment to identify the debtors and may also, where it is considered appropriate, require notice to be given to the debtors. Further the credit provider must comply with the procedural requirements of para.(4). The Act was amended in June 1991 (the amendments taking effect from 15 July 1991); so far as is relevant s. 87A and Schedule 8 were inserted. Section 87A is in these terms: "(1) In this section - 'minor error' means a contravention or failure to comply with this Act which is unlikely to disadvantage the debtors concerned in any significant respect. (2) If a credit provider makes an application to a court under section 87 and requests the court to deal with the application under this section, the following provisions have effect - (a) notice of the application must be served on the registrar but (unless the court otherwise directs) is not required to be served on any other person; (b) if the court is satisfied that all the contraventions or failures to which the application relates are minor errors and ought reasonably to be excused - the court may make a determination under section 86 that debtors under all regulated contracts entered into during the period concerned which are affected by those minor errors are liable to pay the whole of the credit charges under those contracts; (c) if the court is not so satisfied - the court must direct that notice of the application be given to the debtors concerned, either personally or in accordance with section 87." Schedule 8 could be regarded as the corollary of s. 87A; it applies to loan contracts entered into before its commencement. Clauses 2, 3 and 4 are relevant for present purposes. It is not necessary to quote them in full; the following summary is -- 12 of 38 -- 4 sufficient. If a document was given to or shown to the debtor before or at the time the debtor entered into the loan contract, which document contained the necessary statements as to the insurance commission charge and the name of the insurer, s. 44 will not operate to disentitle the credit provider to receive payment of credit charges merely because the loan contract did not include a statement, or contained an inaccurate statement, about the insurance commission charge, or because it did not disclose, or contained an inaccurate statement of, the name of the insurer. The applicant has carried out a random sampling of the many thousands of relevant loan contracts it has entered into since 1 May 1989. That sampling discloses that there have been, or that there is a possibility that there have been, breaches of the provisions of s. 38 quoted above. Because of the enormity of the task in identifying each regulated loan contract containing a possible technical breach, particularly in circumstances where the debtor is still quite happily repaying the loan (or may even have fully repaid the loan), the applicant has asked the Court in the originating summonses particularised above to declare that certain of the failures to comply constitute "minor errors" within s. 87A (or to declare in some instances that there has in law been no breach) so that future conduct of proceedings under ss. 86, 87 and 87A can be simplified. Such a course will enable the applicant to confine the scope of material that will be required when the court is determining the question whether or not the minor errors ought to be excused under s. 87A and the credit charges re-instated. -- 13 of 38 -- 5 It will also narrow the scope of those proceedings under ss. 86 and 87 wherein it will be necessary to give notification to the debtors affected by other than minor errors. It follows that all the Court is asked to do on this application is to determine the extent to which regulated loan contracts may not comply with s. 38 and then to determine which of those failures to comply are "minor errors" within s. 87A. O.S. No. 770 - Discharge Amount This application relates to those loan contracts which do not contain a statement showing separately that part of the amount financed which was applied to discharge a previous loan as required by cl. 1(e) of Schedule 4. The applicant conceded that the omission of that statement constituted a failure to comply with the requirements of the Act. However, the practice of the applicant was to prepare a Personal Loan Prepayment Record calculating the discharge amount. The forms for that used during the relevant period are to be found at Tab 36 and Tab 37 of the affidavit of J H Stevens. It was the preparation of that record which enabled the discharge amount to be determined for purposes of the new loan contract. The debtor was given the original of that document and the applicant kept the carbon copy. Where that procedure was in fact followed then the debtor had all the information required pursuant to cl. 1(e) of Schedule 4 at or before the time of entering into the relevant loan contract. The submissions by counsel for the Registrar essentially amounted to a concession that there would be a "minor error" where there was evidence that the borrower was provided with a -- 14 of 38 -- 6 copy of the Prepayment Record form at or before the time of entering into the relevant loan contract. It was also conceded that there would be evidence of that having been done where the duplicate was on the applicant's file. It follows that if there is no file note evidencing the providing of such a copy at or before the relevant loan contract was entered into, or no copy of such a record on the file, then the individual debtor should be served with notice of the application. In submissions in reply, counsel for the applicant accepted that position. He was clearly correct in doing so. I am satisfied that the debtor would be unlikely to be disadvantaged in any significant respect by the breach in those circumstances. In the circumstances I am prepared to make a declaration that where the debtor received a loan Prepayment Record form disclosing the consideration for the discharge of the liability of the debtor to the bank under the earlier contract on or before the relevant date as defined in cl. 2 of Schedule 4, the failure of the bank to include in the loan contract the statement in compliance with cl. 1(e) of Schedule 4 was a minor error. O.S. No. 771 - Total Amount Financed This application relates to loan contracts which do not contain a statement showing separately the total amount financed, being the aggregate of the amounts referred to in para. 1(a) to (f) of Schedule 4. The applicant concedes that such omission constituted a failure to comply with the Act. Counsel for the Registrar submitted that it was important -- 15 of 38 -- 7 that the borrower know the total amount of liability pursuant to the loan contract and that an error in that regard could not be described as a minor error. There is really no dispute about that. But, as was pointed out by counsel for the applicant, the contracts the subject of this application are limited to those where the document specifies everything, including the total of the total of amount financed (that is, advanced) and credit charge, but omits the subtotalling of items specified by paragraphs subcl. 1(a) to (f) of Clause 1 of Schedule 4, though the individual items are specified. In the light of that the requirement submitted by the Registrar to be important is satisfied. All that is omitted is a subtotal figure of particular components, where all items are specifically stated, as is the grand total. The failure to state that sub-total would be unlikely to disadvantage the debtor in any significant respect. In those circumstances I am prepared to make a declaration that this omission was a minor error. O.S. No. 769 - Date of Signature As noted above s. 38(1)(a) requires the contract to include the date on which either the contract or the offer to enter into it was signed by the debtor. As is made clear by the endorsement on this originating summons, the error involved here is the omission of the date on which the offer to enter into the contract was signed by the borrower. Counsel for the applicant submitted that where the certification and acceptance by the applicant of the offer were -- 16 of 38 -- 8 dated the same date as the date on which the debtor signed the offer, there was no error. I agree with the submission of counsel for the Registrar that one cannot know the date on which the debtor signed the loan offer if the date is omitted. That could only be determined by the receipt of oral evidence relating to the circumstances of each particular case. There is no basis for inferring that the offer to enter into the contract was signed by the debtor on the date of certification and acceptance by the bank. Where there has been an omission of the date on which the debtor signed the offer there has been a failure to comply with s. 38(1)(a). The question is whether or not it is a "minor error". The act of signing is the act of the debtor, and in consequence when it was done is something which ought readily be known by the debtor. The failure to insert the date in those circumstances can hardly significantly disadvantage the debtor. In her submissions counsel for the Registrar on this issue referred to the compliance behaviour of the applicant, but in my view that is something which is more relevant to whether or not the error ought be excused (something I am not concerned with) rather than the question whether or not the omission constitutes a "minor error". In the circumstances I am prepared to make a declaration that the omission of the date on which the debtor signed the loan offer was a minor error. O.S. No.772 - Name of Life Insurer -- 17 of 38 -- 9 As noted above, cl.1(b) of Schedule 4 required the loan documentation to include a statement showing "the name of the insurer". This summons deals with those cases where there was some inaccuracy in the statement of the name of the life insurer; that includes those situations where the name of that insurer was not included in the loan documentation. From 1 May 1989 when the Act commenced relevant life insurance was underwritten by ANZ Life Assurance Company Limited. That was the correct name of the company after 6 December 1988, when Greater Pacific Life Assurance Company Limited changed its name pursuant to the applicable company law to ANZ Life Assurance Company Limited. Some insurance forms still using the name Greater Pacific Life Assurance Company Limited were used after 1 May 1989; a sample form is to be found at Tab 12 of the affidavit of J H Stevens. From the commencement of the Act, until the introduction of computer loan contracts in November 1992, the loan forms used by the applicant provided a box within which the applicant's staff were to write the name of the relevant insurer. The various forms contained only one box although generally the name of a life insurer and a consumer credit insurer had to be provided. Also covered by this application would be those instances, if any, where the old forms were used after November 1992. Notwithstanding the change of name referred to above, the first instruction after the Act came into force to the applicant's employees was that the name "Greater Pacific Life -- 18 of 38 -- 10 Assurance Company Ltd" should be inserted in that box. There was at least a technical error there because of the use of "Ltd" instead of "Limited". That instruction continued in force until about 30 April 1990 when the instruction was changed to require the insertion of the name ANZ and later ANZ Life Assurance Company Ltd; again the use of the abbreviation Ltd should be noted. A sampling of the loan agreements between 1 May 1989 and November 1992, has shown that a variety of names, or more correctly abbreviations of or corruptions of the names, of the life insurer have been used; a comprehensive list is found at Tab 42 of Stevens' affidavit. As that list shows on a number of occasions the name of the consumer credit insurer only was inserted in the box; that is the name of the life insurer was omitted. I am satisfied on the evidence that all debtors were provided with insurance documentation at or before the time the loan contracts were entered into, and that such insurance documentation correctly stated the name of the life insurer. I am also satisfied that on all occasions the debtor then signed a declaration acknowledging receipt of the policy of life insurance. It follows that on all occasions documents containing the correct name of the life insurer were given to the debtor at or before the time the loan contract was entered into. Given those findings, cl.1(4) of Schedule 8 would apply to all loan contracts entered into prior to 15 July 1991 and s.44 of the Act would not relieve the debtor from liability to pay credit charges because of either the omission to state the name -- 19 of 38 -- 11 of the life insurer or some inaccuracy in the statement of the name of that insurer. The material does not make it clear whether or not there were instances between 15 July 1991 and November 1992 when there was a reference to the company by its former name; that certainly occurred in the period immediately after the Act came into force. Given the provisions of the Corporations Law it seems clear that a reference to the former name is in law to be taken as a reference to the company in its changed name, (cf. s.382(4) of the Corporations Law). Clearly before 15 July 1991, where full insurance documentation was handed to the debtor at or before the time of entering into the loan agreement, Schedule 8 would apply so that there was no loss of entitlement to credit charges even though the life insurer was referred to by its former name or some abbreviation thereof. If the former name was used after 15 July 1991, I would hold that there was a breach but that it was a minor error. I would only classify so doing as a breach because of the time lapse since the name change and the fact there was a failure to comply with an instruction. It would be a minor breach only because, particularly in view of the provisions of the Corporations Law, the debtor was unlikely to be disadvantaged thereby to any significant respect. I have come to the conclusion that the requirement to state the name of the insurer is satisfied if the loan contract contains such a description of the insurer as would enable a person of ordinary intelligence to identify the insurer. Brooking J. in Westpac Banking Corporation v. Donald - Murrell -- 20 of 38 -- 12 (1992) V.R. 429 at 437 used the test of the "person of ordinary intelligence" in determining whether or not there had been compliance with the statue. I agree with that. Not every technical error in stating the name would constitute a breach of the requirement. For example, using abbreviations such as Ltd or Co when the full word constituted the registered name would not constitute a breach; it would be absurd to suggest otherwise. I have had occasion previously to consider a similar question. In Re Avco Financial Services Limited (1993) A.S.C. 56-251 I concluded that the words "Hallmark Insurance" were a legally sufficient statement of the names of Hallmark General Insurance Co Limited and Hallmark Life Insurance Co Limited and there was no breach. In the course of my reasons I said at 58,564: "Most ordinary borrows would, in my view, themselves refer to those two legal entities by using an expression such as 'Hallmark Insurance'." If one looks at the insurance documentation at Tabs 12 and 13 of Stevens' affidavit it is clear that the full and correct name of the life insurer (both before and after the change of name) was expressly abbreviated for purposes of the documentation. In my view, where such an abbreviation was provided for in that documentation, a similar abbreviation could validly be used in the loan documentation without there being a breach. It will be noted that in the case of Greater Pacific Life Assurance Co Limited, it was referred to in the documentation as "G.P.L." and ANZ Life Assurance Co Limited (as it was therein named)was referred to as "ANZ Life Assurance". -- 21 of 38 -- 13 Before proceeding to consider the list of abbreviations or corruptions of names collected at Tab 42 of the affidavit of Stevens it should be noted that the consumer credit insurer throughout the relevant period was Western Underwriters Insurance Limited. That explains why there is a reference to such a name (or some abbreviation or corruptions thereof) in the list. Where its name only appears there has been an omission to state the name of the life insurer. Having regard to the list at Tab 42, and in the light of the foregoing discussion, I hold that the following versions of the description of the life insurer were an insufficient statement of the name: Car Loan INCE CCI Commercial Union Consumer Credit Loan Insurance Loan Ins. (I have included Commercial Union though of course the debtor may have chosen an insurer with such a name.) In all the circumstances use of each of those expressions would not constitute a sufficient statement of the name of the life insurer and to that extent there would be a breach of the Act. But the use of each would, in my view, constitute only a minor error provided that accurate insurance documentation was delivered to the debtor at or before the time the loan agreement was entered into. In those circumstances the debtor would be unlikely to be disadvantaged to any significant -- 22 of 38 -- 14 respect. That would also be the case where the name of the life insurer was omitted but the debtor received documentation containing that name at or before the time the loan agreement was entered into. To the extent referred to in the preceding paragraph I am of the view that there are here instances of minor errors requiring further consideration; but apart from those instances I would hold that there was such a description of the life insurer included in the contract as would enable a person of ordinary intelligence to identify that insurer. It is, of course, easier to come to that conclusion when full and accurate insurance documentation had previously been provided to the debtor. OS. No. 773 - Name of Consumer Credit Insurer From 1 May 1989, Consumer Credit Insurance was underwritten by Western Underwriters Insurance Limited. There was an agency agreement between the applicant and that insurer. As noted in the preceding section the form of the loan offer in use from 1 May 1989 until November 1992 contained a box in which the applicant's employees could write in the name of the consumer credit insurer. I am satisfied that at all material times all debtors were provided with consumer credit insurance documentation at or before the time the loan contracts were entered into and that such insurance documentation correctly stated the name of the consumer credit insurer. The debtor then signed a declaration acknowledging receipt of the policy of consumer credit insurance. It follows that on all occasions documentation -- 23 of 38 -- 15 containing the correct name of the consumer credit insurer was given to the debtor at or before the loan contract was entered into. As is evident from the sample at Tabs 12 and 13 of Stevens' affidavit the "dictionary" for that documentation provided that therein Western Underwriters Insurance Limited would be referred to as Western Underwriters. In consequence of that the abbreviation Western Underwriters was regularly used in loan agreements. The use of that description would not, in my view, constitute a failure to state the name of that insurer in the loan agreements. The sampling of loan agreements has disclosed that on occasions there has been an omission when using the forms in regular use prior to November 1992 to name the consumer credit insurer (for example where only the name of the life insurer was stated) or there has been the use of an abbreviation or corruption of the name which gives rise to the question whether or not the name of that insurer has been stated. Given my findings as to the insurance documentation provided to debtors, where the alleged error occurred prior to 15 July 1991, I am satisfied that the situation is covered by Cl.1(4) of Schedule 8 and that the applicant is not deprived of the right to credit charges because of that alleged error. It is not necessary to say anything further about the period prior to 15 July 1991. I have considered all of the relevant descriptions of the consumer credit insurer found in the list at Tab 42 of the affidavit of Stevens. The same principles apply here as apply -- 24 of 38 -- 16 in relation to the life insurer and, in my view, where a person of ordinary intelligence would readily be able to identify the relevant insurer from the name or description given there is no error. But there would be a breach where there either was a total omission to state the name or where the description given did not readily identify the insurer. The following would in my view constitute a breach of the obligation to state the name of the consumer credit insurer: Car Loan INCE CCI Commercial Union Consumer Credit In all the circumstances use of each of those expressions would not constitute a sufficient statement of the name of the consumer credit insurer and to that extent there would be a breach of the Act. That would also be the case where the name of the consumer credit insurer was omitted. But in all those instances there would only be a minor error provided that accurate insurance documentation was given to the debtor at or before the time the loan agreement was entered into. In those circumstances the debtor would be unlikely to be disadvantaged to any significant respect. To the extent referred to in the preceding paragraph I am of the view that there are here instances of minor errors requiring further consideration; but apart from those instances I would hold that there was such a description of the consumer credit insurer as would enable a person of ordinary intelligence to identify that insurer. It is, of course, -- 25 of 38 -- 17 easier to come to that conclusion when full and accurate insurance documentation had previously been provided to the debtor. O.S. No. 774 - C.C.I. Commission - by whom payable This application deals primarily with regulated loan contracts entered into between 1 May 1989 and 26 October 1990. The form of loan contract used during that period contained the following statement in relation to commission: "A commission charge is payable by the insurance companies named above to the bank if the consideration for insurance is included in amount financed." The expression "named above" was a reference to the box mentioned in the preceding sections of this judgment wherein the names of the relevant insurers were to be inserted. As noted above, s.31(1)(h) required the loan contract to contain a statement of "the person by whom the commission charge is payable". The concern here is with those agreements in which there was disclosure that a commission charge was payable but there was either an omission of the name of the consumer credit insurer from the appropriate box or there was some abbreviation or corruption of the name of that insurer placed therein which gives rise to the question whether the name of the person paying the commission was stated. It will immediately be seen that the answer is largely dependent upon that given above with respect to the sufficiency of stating the name of the consumer credit insurer. It has been said that the requirement to disclose the person by whom a commission charge is payable arises because -- 26 of 38 -- 18 the debtor is entitled to know of any commercial association between the insurer and the credit provider (see for example Westpac Banking Corporation v. Various Respondents (No. 1) (1992) A.S.C. 56-175 at 57,737.) I am satisfied (as recorded previously herein) that at or before the time each loan agreement was entered into each debtor was provided with copies of the insurance documentation and those debtors signed a document acknowledging receipt of that material and other specified matters. One of those other matters was notification that the applicant Bank would receive a commission. On the evidence I find that at or before the time of entering into the loan agreement the debtor was provided with written information stating the name of the person by whom the commission was payable. As the loan agreements now in question were entered into prior to 15 July 1991 those facts are sufficient to make Schedule 8 applicable and in consequence s.44 would not operate to relieve the debtor from liability to pay credit charges. In the circumstances it is not necessary to make any further findings as to the alleged breach. O.S. No. 784 - Life Insurance Commission - by whom payable This application is the corollary of that dealt with in the preceding section hereof. Here the concern is with the failure to state the name of the life insurer by whom commission was payable, or the use of an abbreviation of or corruption of the name of the life insurer in making that statement. The period in question is the same, namely that from 1 May 1989 to 26 October 1990. The only significant -- 27 of 38 -- 19 factual difference is that on 28 January 1986 Greater Pacific Life Assurance Company Limited appointed the applicant bank as its agent on a nil commission basis. Since that time no commission has been payable or paid with respect to life insurance; there was no alteration to that when the change of name occurred. But because the acknowledgment of receipt of the insurance documentation at or before the time the debtor entered into the loan agreement prima facie covered both the consumer credit insurance and the life insurance it suggested that a commission was payable with respect to both. Once the new name was used the inclusion of the letters A.N.Z. clearly indicated to any reasonable person or person of ordinary intelligence that there was some relationship between the insurer and the applicant Bank. Given that here the concern is with the period prior to 15 July 1991 I am satisfied that if there be any breach (and in the light of the above I am by no means satisfied that there was) it was covered by Schedule 8 so that the debtor was not thereby relieved from paying credit charges. It is not necessary to say anything further. O.S. No. 775 - Consumer Credit Commission - by whom payable This application relates to regulated loan contracts entered into between 27 October 1990 and 14 July 1991. The position with this group of agreements is identical with that considered in dealing with O.S. 774. It is only the period that is different; a slightly different form was then being used. -- 28 of 38 -- 20 But what is important is that the period is still prior to 15 July 1991, and in consequence Schedule 8 applies so that the debtor would not be relieved from paying credit charges even if there be an error. I am satisfied that full information as to the person by whom commission was payable with respect to consumer credit insurance was provided in documentary form at or before the time the loan agreements were entered into. In the circumstances it is not necessary to say more. O.S. No. 783 - Life Insurance Commission - by whom payable This application relates to loan agreements entered into in the period 27 October 1990 to 14 July 1991. The problem is identical with that considered with respect to O.S. 784 except that the period is different, and a slightly different form was then in use. By what again is important is that the period is prior to 15 July 1991. For the reasons given in relation to O.S. 784 Schedule 8 would apply here so that the debtor was not relieved from paying terms charges even if there was a breach of the statute. O.S. No. 776 - Consumer Credit Commission - "is/is not" and by whom payable Again this application relates to loan agreements entered into during the period 27 October 1990 to 14 July 1991. To the extent that there is an alleged breach in stating the identity of the person by whom commission is payable the position is identical with that considered with respect to O.S. 774 and O.S. 775. Those matters need not be canvassed again, but there is an additional matter which has to be considered. -- 29 of 38 -- 21 The forms in question contained the following statement in relation to commission: "A commission charge is/is not* payable by the insurance companies named above to the Bank if the consideration for insurance is included in the amount financed. (*delete as appropriate)" The problem requiring consideration arises because the applicant's staff on some occasions failed to make any deletion of the "is/is not", or inappropriately deleted all three words, or made an incorrect deletion. In each of those three instances there was a breach of the statutory requirement that the loan documentation contain a statement to the effect that a commission charge was payable where that was in fact the case. I am satisfied that each relevant debtor was provided with documentation relating to the consumer credit insurance at or before the time of entering into the loan agreement. That documentation on the evidence disclosed that commission was payable by the consumer credit insurer to the bank. Indeed from February 1991 onwards the relevant insurance contract and proposal form included the following statement: "I am/We are aware that the Australia and New Zealand Banking Group Limited (ACN 005 357 522) will receive commission from the Underwriters in relation to this policy." In those circumstances I am of the view that cl.1(2) of Schedule 8 covered the situation and the debtor would not be relieved, because of any of those failures to comply with the Act, from liability to pay credit charges. This was a clear situation where full and accurate written information was given to the debtor at or before the time of entering into the agreement. In the circumstance it is not necessary to say more -- 30 of 38 -- 22 about this application. O.S. No. 782 - Life Insurance Commission - "is/is not" and by whom payable This application also relates to loan agreements entered into during the period 27 October 1990 to 14 July 1991. The only distinction between issues raised by this application and those raised in application O.S. 776 is that here the concern is with commission payable with respect to life insurance. Again the problem arises because of there being no deletion or an inappropriate deletion of the "is/is not". As noted above with respect to O.S. 784 no commission was in fact payable or paid with respect to life insurance, but some of the written information provided to the debtor could have suggested otherwise. For the reasons given in dealing with O.S. 776 where there was either no deletion or an inappropriate deletion there was in consequence a failure to comply with the provisions of the Act. As all accurate information was available to the debtor from the written information as to insurance provided at or before the time of entering into the loan agreement cl.1(2) of Schedule 8 would apply so that the debtor was not relieved from the obligation to pay credit charges. In the circumstances it is not necessary to say anything further about this matter. O.S. No. 777 - Consumer Credit Commission - by whom payable This application is concerned with loan contracts with a print date 4/91 entered into between 15 July 1991 and 20 August 1993. The importance of this application is that, because of the period involved, Schedule 8 is no longer relevant. -- 31 of 38 -- 23 The basic concern is with the situation where either the name of the consumer credit insurer was omitted or some abbreviation of or corruption of the name was inserted in the appropriate space. As noted above the test to be applied is whether or not a person of ordinary intelligence would be able to identify the insurer. If the answer to that question was "yes" then in my view there would be no failure to comply with the requirements of the Act. It is, as noted above, easier to arrive at that conclusion where full insurance documentation was delivered to the debtor at or before the time of entering into the loan agreement. To the extent indicated in the section dealing with O.S. 773 there was a breach in stating the name of the consumer credit insurer. But, given that there was accurate insurance information provided to the debtor at or before the time of entering into the loan agreement I am of the view that such a failure to comply with the Act constituted only a "minor error"; the debtor would in all the circumstances be unlikely to be disadvantaged to any significant respect thereby. O.S. No. 778 - Consumer Credit Insurance Commission - "is/is not" and by whom payable This application deals with the same problems as were dealt with in O.S. 776 but within the period 15 July 1991 to 20 August 1993. In other words Schedule 8 can have no application to this situation. The peculiar problem here arises because of an omission to make a deletion of or because an inappropriate deletion was made with respect to the words "is/is not". Where there has been either a failure to delete or an -- 32 of 38 -- 24 inappropriate deletion made there has been, in my view, a failure to comply with the provisions of the Act. But, particularly where full insurance information was provided in writing at or before the time of entering into the loan agreement, I am of the view that the failure to comply would be a "minor error" because the debtor was unlikely to be disadvantaged to any significant extent. Clearly if all insurance information is known, and it is otherwise made clear that a commission is payable, the erroneous treatment of the "is/is not" statement would not be likely to disadvantage the debtor at all. With respect to such matters I would hold that there was a "minor error". O.S. No. 781 - Life Insurance Commission - by whom payable The only difference between the issues raised by this application and those raised in O.S. 777 is that here the concern is with the life insurance commission rather than the consumer credit commission. Essentially this raises the same issues as discussed with respect to O.S. No. 772, but with respect to a period to which Schedule 8 has no application. For the reasons given when discussing O.S. 772 I hold that there has been no failure to comply with the Act where a person of ordinary intelligence would be able to identify the insurer from the abbreviation or corruption of the name inserted into the loan agreement. Those versions of the description of the life insurer particularised when dealing with O.S. 772 as constituting a failure to comply with the provisions of the Act would also be breaches of the Act for present purposes. Where -- 33 of 38 -- 25 written information as to the insurance was given to the debtor at or before the time of entering into the loan agreement, and that information accurately stated the name of the life insurer, I am of the view that this would only be a "minor error". As on the evidence in all cases such insurance information was given at the time referred to, that means that in all instances the breach under consideration here would constitute only a "minor error". The debtor would be unlikely to suffer any significant disadvantage thereby. O.S. No. 780 - Life Insurance Commission - "is/is not" and by whom payable This raises the same issue as considered when dealing with O.S. 778, save that here the relevant insurer was the life insurer. For the reasons previously given I would conclude that the omission to make a deletion or the making of an inappropriate deletion would constitute a failure to comply with the requirements of the Act. Again it must be remembered that there was never at any time any commission payable or paid with respect to the life insurance. Further, it must have been obvious to any person of ordinary intelligence, because of the use of the letters A.N.Z. in the name of the life insurer, that there was some association between it and the applicant bank. In all the circumstances the failure to comply with the requirements of the Act in these instances constitutes only a "minor error". I can see no basis on which it could be said that there was any significant disadvantage suffered by the debtor in consequence of these errors. -- 34 of 38 -- 26 O.S. No. 779 - Life Insurance Commission - by whom payable This application deals with the use of forms 3/92 and 8/92 in entering into loan agreements between 15 June 1992 until approximately 20 August 1993. These were forms manually created where the computerised forms were apparently not available. The question is precisely the same as that raised pursuant to O.S. 784, but Schedule 8 is not applicable. Particularly given the fact that on all occasions full and accurate insurance information was provided to the debtor at or before the time of entering into the loan agreement this failure to comply with the Act would only constitute a "minor error". In all the circumstances no debtor would be disadvantaged to any significant respect in consequence of the failure to comply. O.S. No. 785 - Credit Consumer Insurance Commission - by whom payable This application relates to the period March to August 1992. The issues raised are identical to those raised with respect to O.S. 779, save that here it is the consumer credit insurance rather than life insurance which is involved. For reasons already given any failure here to comply with the requirements of the Act would be "minor error"; there is no basis on which a finding could be made that a debtor would be likely to be disadvantaged in any significant respect by the breach. Multiple Errors Many of the applications involve situations where there has been more than one failure to comply strictly with the -- 35 of 38 -- 27 requirements of the legislation. Where I have, for reasons given, concluded that the failure constituted a "minor error", the question now raised is whether or not there is still only a "minor error" where there is more than one such failure to comply with the Act in a particular loan agreement. In my view once it has been held that a particular failure is a "minor error" then that finding remains with respect to that particular matter regardless of whether or not there are other breaches to be found in the particular loan agreement. As already noted I am only concerned on these applications with the question whether or not the failure to comply with the Act can be classified as a "minor error". Where such a finding is made there is still another step to be taken before the credit provider is entitled to recover credit charges; pursuant to s. 87A(2)(b) the Court must also be satisfied that the errors are such that they "ought reasonably to be excused". I am not concerned with that particular issue. In my view the correct analysis is that a multiplicity of errors in the one loan agreement gives rise to a question whether or not they "ought reasonably be excused". The fact that there happens to be a multiplicity of errors does not convert what is, on a proper analysis, a "minor error" into something more serious. Further, it is at the stage when the Court is considering whether the error "ought reasonably be excused" that regard may be had to the compliance behaviour of the credit provider. In my view, the multiplicity of errors is more relevant to "compliance behaviour" than to the categorisation of the particular error. -- 36 of 38 -- 28 Refinancing Errors In a number of instances where I have found above that there was a minor error, a second transaction has been entered into between the parties. That is to say a fresh regulated loan contract was entered into wherein the principal was wholly or in part calculated by reference to the amount owing under the original agreement. In some cases, because of a minor error in the original contract at the time the new contract was entered into the Bank had no entitlement to credit charges under the original contract. As those credit charges were taken into account in calculating the new principal the question arises whether or not a subsequent determination that the errors were minor and ought to be excused automatically results in the later contract being fully validated so that the credit provider is entitled to all credit charges thereunder. Counsel for the applicant argued that where the original failure to comply with the Act was a minor error and unlikely to disadvantage the debtor in any significant respect, the debtor could not be in any way more disadvantaged by the original loan being refinanced. The respondent Registrar relied heavily on a decision of Mackenzie J in Re National Australia Bank Limited (unreported, Motions 326, 327, 328 and 329 of 1994, judgment delivered on 2 December 1994). His Honour's reasons there indicate that he was unable to come to the conclusion that the calculation of the amount refinanced was "unlikely to disadvantage the debtors concerned in any significant respect". He so concluded because "the reality of the situation in respect of the refinancing -- 37 of 38 -- 29 contracts is that the debtors are on the face of it exposed to a significantly greater liability and in the circumstances there is no assurance that the contravention is unlikely to disadvantage the debtors in any significant respect". An appeal has been lodged against that part of his Honour's decision, but the Court of Appeal has not yet delivered its judgment. In the circumstances there is no point in my delaying judgment herein further because of that. I would merely say that I have some doubts as to the validity of his Honour's reasoning as a general proposition. At least in some cases it is difficult to see how the initial minor error could result in some significant disadvantage to the debtor merely because there was a refinancing. In this case, as already noted, there has to be a second hearing at which time consideration will be directed to whether or not the "minor errors" ought reasonably to be excused. By the time that stage is reached the Court of Appeal judgment should be known and the transactions involving refinancing can then be appropriately addressed in the light of what has been determined on the appeal. Orders Counsel should submit orders giving effect to the findings I have recorded in these reasons. -- 38 of 38 --