notice of filing...2014/06/18 · ccpl, a wholly owned subsidiary of cc international. 6. the...

NOTICE OF FILING

This document was lodged electronically in the FEDERAL COURT OF AUSTRALIA (FCA) on

14/06/2018 5:17:22 PM AEST and has been accepted for filing under the Court’s Rules. Details of

filing follow and important additional information about these are set out below.

Details of Filing

Document Lodged: Defence - Form 33 - Rule 16.32

File Number: NSD900/2015

File Title: Sean Lynch v Cash Converters Personal Finance Pty Ltd ACN 110 275 762

& Anor

Registry: NEW SOUTH WALES REGISTRY - FEDERAL COURT OF

AUSTRALIA

Dated: 14/06/2018 5:17:29 PM AEST Registrar

Important Information

As required by the Court’s Rules, this Notice has been inserted as the first page of the document which

has been accepted for electronic filing. It is now taken to be part of that document for the purposes of

the proceeding in the Court and contains important information for all parties to that proceeding. It

must be included in the document served on each of those parties.

The date and time of lodgment also shown above are the date and time that the document was received

by the Court. Under the Court’s Rules the date of filing of the document is the day it was lodged (if

that is a business day for the Registry which accepts it and the document was received by 4.30 pm local

time at that Registry) or otherwise the next working day for that Registry.

NOTICE OF FILING

This document was lodged electronically in the FEDERAL COURT OF AUSTRALIA (FCA) on 14/06/2018 5:17:22 PM AEST and lias been accepted for filing under the Court’s Rules. Details of filing follow and important additional information about these are set out below.

Details of Filing

Document Lodged: Defence - Form 33 - Rule 16.32File Number: NSD900/2015

File Title: Sean Lynch v Cash Converters Personal Finance Pty Ltd ACN 110 275 762& Anor

Registry: NEW SOUTH WALES REGISTRY - FEDERAL COURT OFAUSTRALIA

Dated: 14/06/2018 5:17:29 PM AEST Registrar

Important Information

As required by the Court’s Rules, this Notice has been inserted as the first page of the document which has been accepted for electronic filing. It is now taken to be part of that document for the purposes of the proceeding in the Court and contains important infonnation for all parties to that proceeding. It must be included in the document served on each of those parties.

The date and time of lodgment also shown above are the date and time that the document was received by the Court. Under the Court’s Rules the date of filing of the document is the day it was lodged (if that is a business day for the Registry which accepts it and the document was received by 4.30 pm local time at that Registry) or otherwise the next working day for that Registry.

Form 33 Rule 16.32

Se€Oftd-Ihird Further Amended DefenceAmended on £3-14 October June 204^2018 pursuant to the order of Justice Gleeson dated 24

Ao&ust-2Q42-29 Mav 2.018

No. NSD900 of 2015Federal Court of Australia

District Registry: New South Wales

Division: General

Sean Lynch

Applicant

Cash Converters Personal Finance Pty Ltd (ACN 110 275 762) and another named in the Schedule

First Respondent

Capitalised terms have the same meaning as set out in the Second Further Amended

Statement of Claim dated 44 September 2-917-29 Mav 2018 unless otherwise stated.

In answer to the Second Further Amended Statement of Claim dated

Mav 2018. the respondents plead as follows:

A. THE GROUP MEMBERS

1. In answer to paragraph 1, the respondents:

a. admit that the applicant brings this proceeding as a representative proceeding in

his own right and on behalf of the Group Members; and

b. otherwise do not know and cannot admit paragraph 1.

Filed on behalf of (name & role of party)Prepared by (name of person/lawyer)Law firm (if applicable) Herbert Smith Freehills Tel Email

Cash Converters Personal Finance Pty Ltd ACN 110 275 762 (Respondent)Safrock Finance Corporation (QLD) Pty Ltd ACN 098 566 520 (Respondent)Peter Butler

+61 2 9225 5000 Fax +61 2 9322 4000P eter. But I e [email protected]

Address for service(include state and postcode)

C/- Herbert Smith Freehills, 161 Castlereagh St, Sydney NSW 2000

[Form approved 01/08/2011]

2

B. THE PARTIES


a. admit paragraph 2(b); and

b. do not know and cannot admit the allegations in paragraphs 2(a) and 2(c).

3. The respondents admit paragraph 3 and further say that prior to 15 November 2004 CC

Personal Finance was called ‘Saflend Pty Ltd’.

4. The respondents admit paragraph 4.

C. CASH CONVERTERS BUSINESS STRUCTURE & SYSTEM

5. The respondents admit paragraph 5, save that the respondents say that

all franchise operations, including those internationally, have been and are operated by

CCPL, a wholly owned subsidiary of CC International.



a. admit paragraph 7(a) save that they say that until at least 31 August 2010 Bak

operated the personal finance centre within the Cash Converters branded store

at Shop 2, 2 William St, Goodna OLD 4300; and

b. admit paragraphs 7(b), 7(c) and 7(d).


a. say that the personal finance centre within the Cash Converters branded store at

Shop 2, 2 William St, Goodna OLD 4300 (Cash Converters Goodna) was

operated by:

i. Bak prior to 31 August 2010;

ii. either Bak or CC Cash Advance from 1 September 2010 until 30 June

2011;

iii. CC Cash Advance from 1 July 2011 until 30 June 2013; and

b. otherwise deny the allegations in that paragraph.

Particulars

49799279

3

On 31 August 2010, CC Cash Advance purchased the shares in Ebak, which

involved an ‘earn out’ period. As such, the best particulars that the

respondents can provide at this stage is that, from 1 September 2010 until 30

June 2011, the personal finance centre within Cash Converters Goodna was

operated by either CC Cash Advance or Bak (as a wholly owned subsidiary

of CC Cash Advance).




a. admit that at all material times from 1 July 2010, they were required to comply

with the Credit (Commonwealth Powers) Act 2010 (Old) (Qld Act);

b. rely on the full terms of the Qld Act including sections 30 to 34; and

c. otherwise deny the paragraph.


a. admit that since at least October 2007, there has been loan administration

software and an internet platform provided by CC Personal Finance (previously

Safrock Finance Group Pty Ltd) (Safrock System), which, in relation to loans

styled as personal loans:

i. enabled the Qld Franchisee or Qld Franchisee Broker to conduct a

preliminary assessment of the unsuitability of the proposed loan for the

consumer for submission to Safrock and/or CC Personal Finance;

ii. enabled the generation of documents including the documents entitled:

1. Appointment of Broker’; and/or (from on or around 3 October

2011) ‘Quote for Providing Credit Assistance’;

2. ‘Contract - Part 1 Schedule’ or ‘Loan Contract’ (including pages

headed The Schedule’); and

3. (from on or around 3 October 2011) 'Credit Proposal’;

49799279

4

iii. was used by the Qld Franchisee or Qld Franchisee Broker and Safrock

and/or CC Personal Finance to formulate the amounts and schedules for

repayment of principal and the payment of interest by consumers;

iv. enabled Safrock and/or CC Personal Finance to conduct and document a

final assessment of the unsuitability of the proposed loan for the

consumer;

v. enabled Safrock and/or CC Personal Finance to check all necessary

documentation and to verify the data contained therein;

vi. in conjunction with Safrock and/or CC Personal Finance, caused direct

debits to occur directly to a consumer’s bank account;

vii. arranged fees and/or commissions payable by Safrock and/or CC

Personal Finance (if any) to be set and effected; and

viii. enabled reporting as to each individual loan taken by a consumer to be

accessible by entities including Safrock and/or CC Personal Finance;

b. say that:

i. the Safrock System is a customer relationship management system used

to store and display data on customers and their loan arrangements,

perform calculations and generate documentation relevant to loans;

ii. in the period prior to 1 July 2009, the loan administration software and

internet platform provided exclusively by Mon-e (Mon-e System) was

used in relation to loans styled as cash advances, which are not the

subject of these proceedings;

iii. in the period prior to 1 July 2009, the Safrock System was used in relation

to loans styled as personal loans;

iv. from 1 July 2009, the Mon-e System was incorporated into the Safrock

System, and from that date, the Safrock System, provided by CC

Personal Finance in combination with Mon-e, was used in relation to

loans styled as personal loans and loans styled as cash advances;

49799279

5

v. at all material times the Safrock System was used in relation to the Qld

Loan Contracts;

c. deny that the Mon-e System was used in relation to the Qld Loan Contracts; and

d. otherwise deny the allegations in that paragraph.

Particulars

In respect of sub-paragraphs 12(a)(i) - (ii): The relevant employee of the Qld

Franchisee or Qld Franchisee Broker conducted a verbal interview with the

consumer to verify that the consumer met identified qualifying criteria (age,

residency status and income status) and if these criteria were met, obtained

supporting documentation from the consumer and used the Safrock System to:

1. print pro forma documents for the consumer to complete;

2. upload completed documents;

3. input the loan amount sought and repayment term; and

4. submit the proposed loan documentation and supporting documentation

to Safrock and/or CC Personal Finance for consideration and processing

with a preliminary assessment of unsuitability for the consumer.

This process is outlined in the following documents:

• Document entitled ‘Guidelines for Personal Finance Operators

(Queensland and Western Australia)’.

• Document entitled 'Guidelines for Personal Finance Operators’.

• Document entitled ‘Personal Finance Centre Policies and Procedures’

dated 22 February 2011.

• Document entitled ‘Personal Finance Centre Policies and Procedures’

dated 28 September 2011.

In respect of sub-paragraph 12(a)(iii): The Safrock System calculated the

amounts and schedules for repayment of principal and the payment of interest by

consumers for the Qld Franchisee or Qld Franchisee Broker based on the loan

amount and loan term forming part of the loan application and, where applicable,

49799279

6

reformulated those amounts for Safrock or CC Personal Finance based on any

changes made to the loan amount and loan term by Safrock or CC Personal

Finance.

In respect of sub-paragraph 12(a)(iv): The Safrock System included the

following data fields:

1. a processing notes facility, which allowed the relevant employee of

Safrock and/or CC Personal Finance to manually record notes relevant

to the application process for Personal Loans; and

2. a history field, which created a system generated audit trail when the

relevant employee of Safrock and/or CC Personal Finance completed

the tasks for each stage of the application process.

In respect of sub-paragraph 12(a)(v): The relevant employee verified the data,

as recorded in the Safrock System, by:

1. averaging the income contained in bank statements over the period of

the statement;

2. confirming bank details; and

3. conducting employment checks.

13. The respondents deny paragraph 13, and repeat the matters at paragraph 12.


a. admit that the entities referred to in paragraphs 14(a) to (d) have:

i. since at least October 2007, been required by CCPL (either directly or

indirectly), when offering unsecured loans styled as personal loans

through a personal finance centre in any Cash Converters branded store

in Queensland or online to Queensland residents to use the Safrock

System in order to originate those loans;

ii. since at least October 2007 until 1 July 2009, been required by CCPL

(either directly or indirectly), when offering unsecured loans styled as

cash advances through a personal finance centre in any Cash Converters

49799279

7

branded store in Queensland or online to Queensland residents to use

the Mon-e System in order to originate and administer those loans; and

ill. since 1 July 2009, been required by CCPL (either directly or indirectly),

when offering unsecured loans styled as personal loans or as cash

advances through a personal finance centre in any Cash Converters

branded store in Queensland or online to Queensland residents to use

the Safrock System in order to originate and administer those loans;

b. repeat the matters at paragraph 12; and

c. otherwise deny the allegations in that paragraph.

D. LOANS TO THE APPLICANT

D1. First Lynch Loan



a. admit paragraph 16(a);

b. admit that the First Lynch Appointment of Broker contained an acknowledgment

by the applicant that Cash Converters Goodna acted exclusively for Safrock and

did not seek to obtain credit from any other credit providers;

c. admit that a term of the First Lynch Appointment of Broker was that the applicant

would pay Cash Converters Goodna a Broker’s Fee of $210 (First Lynch

Brokerage Fee);

d. further say that the applicant was provided with the following documents at or

around the same time as he signed the First Lynch Appointment of Broker:

i. Cash Converters Brokers’ Booklet, comprising:

1. Information Statement;

2. Standard Terms and Conditions;

3. Client Service Agreement; and

4. Useful Information;

ii. Loan Application Form;

49799279

8

iii. Contract - Part 1 Schedule;

iv. [deleted]

v. [deleted]

vi. [deleted]

vii. [deleted]; and

viii. Direct Debit Request; and

e. otherwise deny the paragraph and rely on the full terms of the First Lynch

Appointment of Broker, and the documents referred to in sub-paragraph d above.

Particulars

1. Document entitled ‘Guidelines for Personal Finance Operators

(Queensland and Western Australia)’, steps 3 - 5 of “Procedures:

Unsecured Loans”.

2. Document entitled ‘Guidelines for Personal Finance Operators’,

steps 3 - 5 of “Procedures: Unsecured Loans”.

3. Cash Converters Brokers’ Booklet, comprising:

a. Information Statement;

b. Standard Terms and Conditions;

c. Client Service Agreement; and

d. Useful Information;

4. Loan Application Form signed by the applicant and dated 26

August 2010;

5. Contract - Part 1 Schedule signed by the applicant and dated 26

August 2010; and

6. [deleted]

7. [deleted]

8. [deleted]

9. [deleted]

10. Direct Debit Request signed by the applicant.

49799279

9

11. The Safrock System records that employees of Safrock involved

with the processing of the First Lynch Loan were Jamie Dunne,

Lynette Ware and Sam Roughead.

12. The Safrock System records that Lynette Ware approved the First

Lynch Loan.

Further particulars will be provided following discovery and the issue

of subpoenas and notices to produce.


a. admit that on 26 August 2010, the applicant signed a document entitled ‘Contract

- Part 1 Schedule’ pursuant to which he offered to enter into a contract with

Safrock on the terms and conditions set out in that document (First Lynch

Contract Form);

b. admit that the First Lynch Contract Form provided that the annual percentage

rate which applied was 48.00%;

c. repeat paragraph 16.d and the particulars of paragraph 16 in respect of the First

Lynch Contract Form; and

d. otherwise deny the paragraph and rely on the full terms of the First Lynch

Contract Form, and the documents referred to in paragraph 16.d above.


a. admit that the applicant received $810 representing the ‘Amount of credit’ defined

in the First Lynch Contract Form;

b. otherwise deny paragraph 18; and

c. further say that pursuant to a licence agreement dated 30 July 2008 between

Cash Converters Goodna, Safrock and CCPL, Safrock remitted:

i. an amount of $88.50 to Cash Converters Goodna, comprising the First

Lynch Brokerage Fee less an amount payable by Cash Converters

Goodna to CCPL in respect of a licence fee, by electronic bank transfer,

as part of a payment in or around September 2010; and

49799279

10

ii. an amount of $121.50 to CCPL, comprising an amount payable by Cash

Converters Goodna to CCPL in respect of a licence fee, by electronic

bank transfer, as part of a payment in or around September 2010.

Particulars

Licence Agreement dated 30 July 2008.

D2. Second Lynch Loan




b. admit that the Second Lynch Appointment of Broker contained an

acknowledgment by the applicant that Cliffview Pty Ltd t/a Cash Converters Inala

(Cash Converters Inala) acted exclusively for CC Personal Finance and did not

seek to obtain credit from any other credit providers;

c. admit that a term of the Second Lynch Appointment of Broker was that the

applicant would pay Cash Converters Inala a Broker’s Fee of $210 (Second

Lynch Brokerage Fee);

d. further say that the applicant was provided with the following documents at the

same time as he signed the Second Lynch Appointment of Broker:

i. Cash Converters Brokers' Booklet, comprising:






iii. Contract - Part 1 Schedule;

iv. Credit Assistance Consumer Acknowledgement;

v. Quote for Providing Credit Assistance;

vi. Credit Guide for Cash Converters Inala;

49799279

11

vii. Credit Proposal; and


e. otherwise deny the paragraph and rely on the full terms of the Second Lynch


Particulars

1. Document entitled ‘Guidelines for Personal Finance Operators

(Queensland and Western Australia)’, steps 3 - 5 of “Procedures:

Unsecured Loans”.

2. Document entitled 'Guidelines for Personal Finance Operators’,

steps 3 - 5 of “Procedures: Unsecured Loans".

3. Document entitled ‘Personal Finance Centre Policies and

Procedures’ dated 28 September 2011, sections 1.3 and 3.1.






5. Loan Application Form signed by the applicant and dated 1 June

2012;

6. Contract - Part 1 Schedule signed by the applicant and dated 1

June 2012;

7. Credit Assistance Consumer Acknowledgement signed by the

applicant and dated 1 June 2012;

8. Quote for Providing Credit Assistance signed by the applicant and

dated 1 June 2012;

9. Credit Guide for Cash Converters Inala;

49799279

12

10. Credit Proposal between Cash Converters Inala, CC Personal

Finance and the applicant; and

11. Direct Debit Request signed by the applicant and dated 1 June

2012.

12. The Safrock System records that employees of Cash Converters

Inala involved with the Second Lynch Loan were Shona Carran

and Chris Robinson.

13. The Safrock System records that employees of CC Personal

Finance involved with the processing of the Second Lynch Loan

were Bruce Tupicoff, Jenipher Tupicoff, Travis Irons, Lisa Ryan,

Vithna Tickner, Byron Davey and Kellie Bowie.

14. The Safrock System records that Bruce Tupicoff approved the

Second Lynch Loan.




a. admit paragraph 21;

b. repeat paragraph 20.d and the particulars of paragraph 20 in respect of the

Second Lynch Loan Quote; and

c. rely on the full terms of the Second Lynch Loan Quote, and the documents

referred to in paragraph 20.d above.


a. admit that on 1 June 2012, the applicant signed a document entitled ‘Contract -

Part 1 Schedule’ pursuant to which he offered to enter into a contract with CC

Personal Finance on the terms and conditions set out in that document (Second

Lynch Contract Form);

49799279

13

b. admit that the Second Lynch Contract Form provided that the annual percentage


c. repeat paragraph 20.d and the particulars of paragraph 20 in respect of the

Second Lynch Contract Form; and

d. otherwise deny the paragraph and rely on the full terms of the Second Lynch


22A. In answer to paragraph 22A, the respondents deny that paragraph and say that on or

around 1 June 2012, a credit proposal was prepared in respect of the Second Lynch

Loan that addressed the matters pleaded in paragraphs 22A(a) - 22A(d) of the Second

Further Amended Statement of Claim and say that the credit proposal was generated

from the Safrock System and not the Mon-e System.

22B. The respondents admit paragraph 22B.


a. admit that the applicant received $810 representing the 'Amount of credit’ defined

in the Second Lynch Contract Form;


c. further say that CC Personal Finance remitted:

i. an amount of $88.50 to Cash Converters Inala, comprising the Second

Lynch Brokerage Fee less an amount payable by Cash Converters Inala

to CCPL in respect of a licence fee, by electronic bank transfer, as part of

a payment in or around June 2012; and


Converters Inala to CCPL in respect of a licence fee, by electronic bank

transfer, as part of a payment in or around June 2012.

D3. Third Lynch Loan




49799279

14

b. admit that the Third Lynch Appointment of Broker contained an acknowledgment

by the applicant that Cash Converters Goodna acted exclusively for CC Personal

Finance and did not seek to obtain credit from any other credit providers;

c. admit that a term of the Third Lynch Appointment of Broker was that the applicant

would pay Cash Converters Goodna a Broker’s Fee of $210 (Third Lynch

Brokerage Fee);

d. further say that the applicant was provided with the following documents at the

same time as he signed the Third Lynch Appointment of Broker:

i. Cash Converters Brokers’ Booklet, comprising:






iii. Loan Contract, including pages headed The Schedule’;

iv. Credit Assistance Consumer Acknowledgement;

v. Quote for Providing Credit Assistance;

vi. Credit Guide for Bak Property Ltd;

vii. Credit Proposal; and


e. otherwise deny the paragraph and rely on the full terms of the Third Lynch


Particulars

1. Document entitled 'Guidelines for Personal Finance Operators

(Queensland and Western Australia)’, steps 3 - 5 of "Procedures:

Unsecured Loans”.49799279

15

2. Document entitled 'Guidelines for Personal Finance Operators’,

steps 3-5 of “Procedures: Unsecured Loans”.

3. Document entitled ‘Personal Finance Centre Policies and

Procedures’ dated 28 September 2011, sections 1.3 and 3.1.






5. Loan Application Form signed by the applicant and dated 27

October 2012;

6. Loan Contract, including pages headed The Schedule’, signed by

the applicant and dated 27 October 2012;

7. Credit Assistance Consumer Acknowledgement signed by the

applicant and dated 27 October 2012;

8. Quote for Providing Credit Assistance signed by the applicant and

dated 27 October 2012;

9. Credit Guide for Bak Property Ltd; and

10. Credit Proposal between Cash Converters Goodna, CC Personal

Finance and the applicant; and

11. Direct Debit Request signed by the applicant and dated 27

October 2012.

12. The Safrock System records that employees of CC Personal

Finance involved with the processing of the Third Lynch Loan

49799279

16

were Lynette Ware, Krystine Crutcher, Debra Lanham and Jake

Becroft.

13. The Safrock System records that Lynette Ware approved the

Third Lynch Loan.




a. admit that on 27 October 2012, the applicant signed a document entitled ‘Quote

for Providing Credit Assistance’ (Third Lynch Loan Quote);

b. say that the reference in the Third Lynch Loan Quote to CC Personal Finance

acting as broker was incorrect and, consistently with the Third Lynch

Appointment of Broker, Cash Converters Goodna in fact acted as the broker;

c. admit that Cash Converters Goodna offered to provide credit assistance to the

applicant on the terms of the Third Lynch Loan Quote which included terms that:

i. the maximum amount of credit would be $810;

ii. the maximum term of the credit would be 6 months; and

iii. the applicant would pay to the broker a Broker’s Fee of $210;

d. repeat paragraph 25.d and the particulars of paragraph 25 in respect of the Third

Lynch Loan Quote; and

e. otherwise deny the paragraph and rely on the full terms of the Third Lynch Loan

Quote, and the documents referred to in paragraph 25.d above.


a. admit that on 27 October 2012, the applicant signed a document entitled 'Loan

Contract’, pursuant to which he offered to enter into a loan contract with CC

Personal Finance on the terms and conditions set out in that document (Third


b. admit that the Third Lynch Contract Form provided that the annual percentage


49799279

17

c. repeat paragraph 25.d and the particulars of paragraph 25 in respect of the Third

Lynch Contract Form; and

d. otherwise deny the paragraph and rely on the full terms of the Third Lynch


27A. In answer to paragraph 27A, the respondents deny that paragraph and say that on or

around 27 October 2012, a credit proposal was prepared in respect of the Third Lynch

Loan that addressed the matters pleaded in paragraphs 27A(a) - 27A(d) of the Second

Further Amended Statement of Claim and say that the credit proposal was generated

from the Safrock System and not the Mon-e System.

27B. The respondents admit paragraph 27B.


a. admit that the applicant received $810 representing the 'Amount of credit’ defined

in the Third Lynch Contract Form;


c. further say that CC Personal Finance remitted:

i. an amount of $88.50 to Cash Converters Goodna, comprising the Third

Lynch Brokerage Fee less an amount payable by Cash Converters

Goodna to CCPL in respect of a licence fee, by electronic bank transfer,

as part of a payment in or around November 2012; and


Converters Goodna to CCPL in respect of a licence fee, by electronic

bank transfer, as part of a payment in or around November 2012.

E. BREACH OF THE OLD CODE BY SAFROCK WITH REGARD TO THE APPLICANT


a. admit that the First Lynch Contract Form was, upon execution by Safrock, a

contract within the meaning of Schedule 1 of the Old Code (Executed First


Particulars

49799279

18

An employee of Safrock (being one of the employees referred to in

the particulars to paragraph 16) caused the First Lynch Contract

Form to be executed by Safrock by inserting the electronic signature

of Peter Wessels, on or around 26 August 2010 following receipt of

the First Lynch Contract Form signed by the applicant.

b. admit that the Executed First Lynch Contract Form formed part of the credit

contract between the applicant and Safrock within the meaning of section 5 of the

Qld Code;

c. deny that the First Lynch Appointment of Broker formed part of the credit contract

between the applicant and Safrock because:

i. Safrock was the credit provider and was not party to the First Lynch

Appointment of Broker;

ii. Cash Converters Goodna did not provide the credit and was not the credit

provider;

iii. Cash Converters Goodna, as the broker, provided services to the

applicant for a fee and the brokerage arrangement between the applicant

and Cash Converters Goodna was separate to the credit contract

between the applicant and Safrock and formed no part of it; and

d. otherwise deny paragraph 29.

30. The respondents deny paragraph 30, repeat their response to paragraph 29 and further

say that:

a. the provision for the payment of the First Lynch Brokerage Fee was not a

provision in the credit contract between the applicant and Safrock within the

meaning of section 5 of the Qld Code; and

b. the First Lynch Brokerage Fee was not a credit fee and charge under the credit

contract within the meaning of section 32(4) of the Qld Act and therefore did not

have to be included in calculating the annual percentage rate; and49799279

19

c. the applicant was entitled to pay the First Lynch Brokerage Fee to Cash

Converters Goodna separately.


say that:

a. the provision for the payment of the First Lynch Brokerage Fee was not a

provision of the credit contract between the applicant and Safrock within the

meaning of section 5 of the Old Code;

b. the First Lynch Brokerage Fee was not a fee or charge exceeding the amount

that may be charged consistently with the Old Code; and

c. the interest charge under the credit contract between the applicant and Safrock

did not exceed the amount that may be charged consistently with the Old Code

because:

i. the First Lynch Brokerage Fee was not a credit fee and charge under the

credit contract within the meaning of clause 3 of the Old Regs; and

ii. therefore did not have to be included in calculating the annual percentage

rate under that clause.

32. The respondents deny paragraph 32 and repeat their response to paragraphs 29-31.


a. deny that the applicant is entitled to the relief claimed in paragraph 33;

b. repeat their response to paragraphs 29-32;

c. say that the Court ought not to exercise its discretion in section 102(2) of the Qld

Code to order that Safrock pay an amount as a civil penalty;

d. rely on section 102(4) of the Qld Code; and

e. otherwise deny paragraph 33.

Particulars

49799279

20

In respect of paragraph 33(d),* the respondents refer to the particulars to

paragraph 35.

Further particulars will be provided following discovery, the issue of subpoenas

and notices to produce and the trial of common issues.

F. CONTRAVENTION OF THE ASIC ACT BY SAFROCK WITH REGARD TO THE

APPLICANT



a. deny paragraph 35;

b. say that the First Lynch Brokerage Fee was not paid to the respondents but was

paid to Cash Converters Goodna bv Safrock. on the direction of the applicant,

out of the 'Amount of credit’ defined in the First Lvnch Contract Form:

c. deny that the services provided by Cash Converters Goodna to the applicant in

acting as a broker were illusory, and say that the brokerage fee represented

valuable consideration in return for services provided by Cash Converters

Goodna, as follows:

i. Cash Converters Goodna explained Safrock’s money lending products

and the process for obtaining them to the applicant;

ii. Cash Converters Goodna interviewed the applicant to determine whether

he satisfied Safrock’s qualifying criteria;

iii. Cash Converters Goodna took reasonable steps to ensure that any

application forms or other forms associated with a money lending

transaction required by Safrock were properly and legibly completed by

the applicant;

49799279

21

iv. Cash Converters Goodna obtained information and documentation

required by Safrock in order to consider the applicant’s eligibility for a

money lending product, including:

1. employment status;

2. income;

3. residential status;

4. bank statements;

5. proof of identity;

6. recent payslips;

7. proof of address; and

8. emergency contact information;

v. Cash Converters Goodna took reasonable steps to ensure that such

information as was provided was true and correct to the best of the belief

of Cash Converters Goodna;

vi. Cash Converters Goodna formed a view in relation to the applicant’s

eligibility for Safrock’s money lending products and made a

recommendation to Safrock that the applicant be considered for one of

such products;

vii. Cash Converters Goodna confirmed the identity of the applicant by

sighting and keeping copies of all documents confirming the applicant’s

identity pursuant to the provisions of the Financial Transactions Reports

Act 1988 (Cth);

viii. Cash Converters Goodna forwarded the applicant’s offer to enter into a

credit contract with Safrock to Safrock, which required Cash Converters

Goodna to, amongst other things:

49799279

22

1. upload documents to Safrock’s website; and

2. mail originals of signed documents to Safrock;

ix. Cash Converters Goodna provided the applicant with the ability to make

an application for a loan product from Safrock at a location convenient to

him, in an environment with which he was familiar, and from an entity with

which and employees with whom he had existing business relationships;

x. the services at paragraphs 35.c.i - 35.c.ix above represented a cost to

Cash Converters Goodna including:

1. the cost of setting up and maintaining processes to provide the

services at paragraphs 35.c.i - 35.c.ix above, and ensuring

ongoing compliance with those processes;

2. the cost of employing and training staff to provide, amongst other

things, the services at paragraphs 35.c.i - 35.c.ix above;

3. the share of operational costs, including the cost and maintenance

of computer and telecommunications hardware, incurred by it in

providing the services at paragraphs 35.c.i - SS.c.ix above; and

4. the cost of creating documentation in relation to the applicant’s

credit contract with Safrock; and

d. rely on section 12CC(1) of the ASIC Act, in particular sub-sections (c), (e), (f),

and (I).

Particulars

In respect of sub-paragraph (c)(ii):

Safrock’s qualifying criteria included that the applicant:

1. be over 18 years of age;

2. be an Australian resident; and

49799279

23

3. have a regular and sufficient income stream to service the

loan.

In respect of sub-paragraphs (c)i - (c)vii:

Licence Agreement between CCPL, Safrock and Cash Converters Goodna

dated 30 July 2008;

Document entitled ‘Guidelines for Personal Finance Operators (Queensland

and Western Australia)’; and

Document entitled ‘Guidelines for Personal Finance Operators’.

In respect of sub-paragraph (c)ix:

The Applicant resided at Oxley Pines Caravan Park, 82 Kimberley Street,

Durack Queensland 4077.

In addition to the First, Second and Third Lynch Loans, the applicant

obtained:

1. a further loan styled as a ‘Personal Loan' from Cash

Converters Inala;

2. 39 loans styled as ‘Cash Advance’ loans, 10 of which from

Cash Converters Goodna and 12 from Cash Converters Inala;

3. 33 pawnbroking loans from Cash Converters Goodna and 22

pawnbroking loans from Cash Converters Inala; and

4. 1 sale and 1 purchase from Cash Converters Goodna.

In respect of sub-paragraph (d):

The relevant employee of Cash Converters Goodna provided copies of

relevant documents concerning the loan to the applicant prior to the loan

application being made, and the applicant was apparently able to understand

those documents.

49799279

24

The terms on which the applicant acquired the First Lynch Loan were

substantially the same as the terms on which he would have acquired an

equivalent loan from a person other than Safrock.

Safrock’s conduct was consistent with its conduct in the provision of similar

loans to individuals in similar circumstances to the applicant.

Safrock acted in good faith in connection with the First Lynch Loan.

Further particulars will be provided following discovery and the issue of

subpoenas and notices to produce.


a. repeat their response to paragraph 35;

b. deny that the applicant suffered any loss or damage;

c. say that the provision of money lending products using the brokerage fee model

was adopted by other commercial providers of money lending products in

Queensland; and


Particulars

If the applicant had sought to borrow funds of a similar amount, it is likely the

loan would have been on substantially similar terms as the First Lynch

Loan.A substantially similar model to the brokerage fee model was adopted

by Cash Store Australia Holdings Inc, City Finance (Brisbane) Pty Ltd and

Spot Loans Pty Ltd, commercial providers of money lending products in

Queensland in or around the same time as the First Lynch Loan.

Further particulars will be provided following evidence, discovery and the

issue of subpoenas and notices to produce.

49799279

25

G. BREACH OF THE OLD CODE BY CC PERSONAL FINANCE WITH REGARD TO THE

APPLICANT AND THE SECOND LYNCH LOAN


a. admit that the Second Lynch Contract Form was, upon execution by CC

Personal Finance, a contract within the meaning of Schedule 1 of the Qld.Code

(Executed Second Lynch Contract Form);

Particulars

An employee of CC Personal Finance (being one of the employees

referred to in the particulars to paragraph 20) caused the Second

Lynch Contract Form to be executed by CC Personal Finance by

inserting the electronic signature of Peter Wessels, on or around 1

June 2012 following receipt of the Second Lynch Contract Form

signed by the applicant.

b. admit that the Executed Second Lynch Contract Form formed part of the credit

contract between the applicant and CC Personal Finance within the meaning of

section 5 of the Old Code;

c. deny that the Second Lynch Appointment of Broker or the Second Lynch Loan

Quote formed part of the credit contract between the applicant and CC Personal

Finance because:

i. CC Personal Finance was the credit provider and was not party to the

Second Lynch Appointment of Broker or the Second Lynch Loan Quote;

ii. Cash Converters Inala did not provide the credit and was not the credit

provider;

iii. Cash Converters Inala, as the broker, provided services to the applicant

for a fee and the brokerage arrangement between the applicant and Cash

Converters Inala was separate to the credit contract between the

applicant and CC Personal Finance and formed no part of it; and49799279

26



say that:

a. the provision for the payment of the Second Lynch Brokerage Fee was not a

provision in the credit contract between the applicant and CC Personal Finance

within the meaning of section 5 of the Qld Code;

b. the Second Lynch Brokerage Fee was not a credit fee and charge under the

credit contract within the meaning of section 32(4) of the Qld Act and therefore

did not have to be included in calculating the annual percentage rate; and

c. the applicant was entitled to pay the Second Lynch Brokerage Fee to Cash

Converters Inala separately.


say that:

a. the provision for the payment of the Second Lynch Brokerage Fee was not a

provision of the credit contract between the applicant and CC Personal Finance

within the meaning of section 5 of the Qld Code;

b. the Second Lynch Brokerage Fee was not a fee or charge exceeding the amount

that may be charged consistently with the Qld Code; and

c. the interest charge under the credit contract between the applicant and CC

Personal Finance did not exceed the amount that may be charged consistently

with the Qld Code because:

i. the Second Lynch Brokerage Fee was not a credit fee and charge under

the credit contract within the meaning of clause 3 of the Qld Regs; and




49799279

27





Code to order that CC Personal Finance pay an amount as a civil penalty;



Particulars

In respect of paragraph 41(d), the respondents refer to the particulars to

paragraph 35, as applicable to the Second Lynch Loan.



H. CONTRAVENTION OF THE ASIC ACT BY CC PERSONAL FINANCE WITH REGARD TO

THE APPLICANT AND THE SECOND LYNCH LOAN


43. As to paragraph 43, the respondents:


b. say that the Second Lynch Brokerage Fee was not paid to the respondents but

was paid to Cash Converters Inala bv CC Personal Finance, on the direction of

the applicant, out of the ‘Amount of credit’ defined in the Second Lvnch Contract

Form:

c. deny that services provided by Cash Converters Inala to the applicant as a

broker were illusory, and say that the brokerage fee represented valuable

consideration in return for services provided by Cash Converters Inala, as

follows:

49799279

28

i. Cash Converters Inala explained CC Personal Finance’s money lending

products and the process for obtaining them to the applicant;

ii. Cash Converters Inala interviewed the applicant to determine whether he

satisfied CC Personal Finance’s qualifying criteria;

iii. Cash Converters Inala took reasonable steps to ensure that any


transaction required by CC Personal Finance were properly and legibly

completed by the applicant;

iv. Cash Converters Inala obtained information and documentation required

by CC Personal Finance in order to consider the applicant’s eligibility for a

money lending product, including:


2. income;


4. bank statements;


6. recent payslips;



v. Cash Converters Inala took reasonable steps to ensure that such


of Cash Converters Inala;

vi. Cash Converters Inala formed a view in relation to the applicant’s

eligibility for CC Personal Finance’s money lending products and made a

49799279

29

recommendation to CC Personal Finance that the applicant be

considered for one of such products;

vii. Cash Converters Inala confirmed the identity of the applicant by sighting

and keeping copies of all documents confirming the applicant’s identity

pursuant to the provision of the Financial Transactions Reports Act 1988

(Cth);

viii. Cash Converters Inala forwarded the applicant’s offer to enter into a

credit contract with CC Personal Finance to CC Personal Finance, which

required Cash Converters Inala to, amongst other things:

1. upload documents to CC Personal Finance’s website; and

2. mail originals of signed documents to CC Personal Finance,

ix. Cash Converters Inala provided the applicant with the ability to make an

application for a loan product from CC Personal Finance at a location

convenient to him, in an environment with which he was familiar, and from

an entity with which and employees with whom he had existing business

relationships;

x. the services at paragraphs 43.c.i - 43.c.ix above represented a cost to

Cash Converters Inala including:


services at paragraphs 43.c.i - 43.c.ix, and ensuring ongoing

compliance with those processes;


things, the services at paragraphs 43.c.i - 43.c.ix above;

3. the share of operational costs, including the cost and maintenance

of computer and telecommunications hardware, incurred by it in

providing the services at paragraphs 43.c.i -43.c.ix above; and

49799279

30


credit contract with CC Personal Finance; and

d. rely on section 12CC(1) of the ASIC Act, in particular sub-sections (c), (e), (f),

and (I).

Particulars

The respondents refer to the particulars to paragraph 35, as applicable to the

Second Lynch Loan.

Document entitled ‘Personal Finance Centre Policies and Procedures’ dated

22 February 2011.

Further particulars will be provided following evidence, discovery and the issue







Queensland; and


Particulars


loan would have been on substantially similar terms as the Second Lynch Loan.

A substantially similar model to the brokerage fee model was adopted by Cash

Store Australia Holdings Inc, City Finance (Brisbane) Pty Ltd and Spot Loans Pty

Ltd, commercial providers of money lending products in Queensland in or around

the same time as the Second Lynch Loan.

49799279

31



I. BREACH OF THE OLD CODE BY CC PERSONAL FINANCE WITH REGARD TO THE

APPLICANT AND THE THIRD LYNCH LOAN


a. admit that the Third Lynch Contract Form was, upon execution by CC Personal

Finance, a contract within the meaning of Schedule 1 of the Old Code (Executed

Third Lynch Contract Form);

Particulars

An employee of CC Personal Finance (being one of the employees

referred to in the particulars to paragraph 25) caused the Third Lynch

Contract Form to be executed by CC Personal Finance by inserting

the electronic signature of Peter Wessels, on or around 27 October

2012, following receipt of the Third Lynch Contract Form signed by

the applicant.

b. admit that the Executed Third Lynch Contract Form formed part of the credit

contract between the applicant and CC Personal Finance within the meaning of

section 5 of the Old Code;

c. deny that the Third Lynch Appointment of Broker or the Third Lynch Loan Quote

formed part of the credit contract between the applicant and CC Personal

Finance because:

i. CC Personal Finance was the credit provider and was not party to the

Third Lynch Appointment of Broker or the Third Lynch Loan Quote;

ii. Cash Converters Goodna did not provide the credit and was not the credit

provider; and

49799279

32

iii. Cash Converters Goodna, as the broker, provided services to the

applicant for a fee and the brokerage arrangement between the applicant

and Cash Converters Goodna was separate to the credit contract

between the applicant and CC Personal Finance and formed no part of it;

and



say that:

a. the provision for the payment of the Third Lynch Brokerage Fee was not a

provision in the credit contract between the applicant and CC Personal Finance

within the meaning of section 5 of the Old Code;

b. the Third Lynch Brokerage Fee was not a credit fee and charge under the credit

contract within the meaning of section 32(4) of the Old Act and therefore did not

have to be included in calculating the annual percentage rate; and

c. the applicant was entitled to pay the Third Lynch Brokerage Fee to Cash

Converters Goodna separately.


say that:

a. the provision for the payment of the Third Lynch Brokerage Fee was not a

provision of the credit contract between the applicant and CC Personal Finance

within the meaning of section 5 of the Old Code;

b. the Third Lynch Brokerage Fee was not a fee or charge exceeding the amount

that may be charged consistently with the Qld Code; and

c. the interest charge under the credit contract between the applicant and CC

Personal Finance did not exceed the amount that may be charged consistently

with the Qld Code because:

49799279

33

i. the Third Lynch Brokerage Fee was not a credit fee and charge under the

credit contract within the meaning of clause 3 of the Qld Regs; and








Code to order that CC Personal Finance pay an amount as a civil penalty;



Particulars

In respect of paragraph 49(d), the respondents refer to the particulars to

paragraph 35, as applicable to the Third Lynch Loan.



J. CONTRAVENTION OF THE ASIC ACT BY CC PERSONAL FINANCE WITH REGARD TO

THE APPLICANT AND THE THIRD LYNCH LOAN


51. As to paragraph 51, the respondents:


b. say that the Third Lynch Brokerage Fee was not paid to the respondents but was

paid to Cash Converters Goodna bv CC Personal Finance, on the direction of the

applicant, out of the ‘Amount of credit’ defined in the Third Lvnch Contract Form:

49799279

34

c. deny that the services provided by Cash Converters Goodna to the applicant in

acting as a broker were illusory, and say that the brokerage fee represented

valuable consideration in return for services provided by Cash Converters

Goodna as follows:

i. Cash Converters Goodna explained CC Personal Finance’s lending

products and the process for obtaining them to the applicant;

ii. Cash Converters Goodna interviewed the applicant to determine whether

he satisfied CC Personal Finance’s qualifying criteria;

iii. Cash Converters Goodna took reasonable steps to ensure that any


transaction required by CC Personal Finance were properly and legibly

completed by the applicant;

iv. Cash Converters Goodna obtained information and documentation

required by CC Personal Finance in order to consider the applicant’s

eligibility for a money lending product, including:


2. income;


4. bank statements;


6. recent payslips;



v. Cash Converters Goodna took reasonable steps to ensure that such


of Cash Converters Goodna;

vi. Cash Converters Goodna formed a view in relation to the applicant’s

eligibility for CC Personal Finance’s money lending products and made a

49799279

35

recommendation to CC Personal Finance that the applicant be

considered for one of such products;

vii. Cash Converters Goodna confirmed the identity of the applicant by

sighting and keeping copies of all documents confirming the applicant’s

identity pursuant to the provisions of the Financial Transactions Reports

Act 1988 (Cth);

viii. Cash Converters Goodna forwarded the applicant’s offer to enter into a

credit contract with CC Personal Finance to CC Personal Finance, which

required Cash Converters Goodna to, amongst other things:

1. upload documents to CC Personal Finance’s website; and

2. mail originals of signed documents to CC Personal Finance;

ix. Cash Converters Goodna provided the applicant with the ability to obtain

CC Personal Finance’s money lending product at a location convenient to

him, in an environment with which he was familiar, and from an entity with

which and employees with whom he had existing business relationships;

x. the services provided at paragraphs 51 .c.i - 51 .c.ix above represented a

cost to Cash Converters Goodna including:


services at paragraphs 51 .c.i - 51 .c.ix above, and ensuring

ongoing compliance with those processes;


things, the services at paragraphs 51 .c.i - 51 .c.ix above;

3. the share of operational costs, including the cost of computer and

telecommunications hardware, incurred by it in providing the

services at paragraphs 51.c.i - 51.c.ix above; and


credit contract with CC Personal Finance; and

49799279

36

d. rely on section 12CC(1) of the ASIC Act, in particular sub-sections (c), (e), (f) and

(!)■

Particulars

The respondents refer to the particulars to paragraph 35, as applicable to

the Third Lynch Loan.

Document entitled 'Personal Finance Centre Policies and Procedures’

dated 28 September 2011.

Further particulars will be provided following evidence, discovery and the

issue of subpoenas and notices to produce.






Queensland; and


Particulars


loan would have been on substantially similar terms as the Third Lynch Loan.

A substantially similar model to the brokerage fee model was adopted by Cash

Store Australia Holdings Inc, City Finance (Brisbane) Pty Ltd and Spot Loans Pty

Ltd, commercial providers of money lending products in Queensland in or around

the same time as the Third Lynch Loan.



K. CLAIMS OF GROUP MEMBERS

53. The respondents do not know and cannot admit paragraph 53.

53A. In answer to paragraph 53A, the respondents:

49799279

37

a. say that before on or around 3 October 2011, Group Members were not provided

with a “Credit Proposal” document; and

b. otherwise admit paragraph 53A.

54. The respondents repeat paragraphs 29-32, 35, 37-40, 43, 45-48 and 51 above and

otherwise deny paragraph 54.


a. deny that the Group Members are entitled to the relief pleaded in paragraph 55;

b. repeat paragraphs 33, 41 and 49 above;

c. say that the Court ought not to exercise its discretion in section 102(2) of the Old

Code to order that the respondents pay an amount as a civil penalty;

d. rely on section 102(4) of the Old Code; and


56. The respondents repeat paragraphs 36, 44 and 52 above and otherwise deny that the

Group Members are entitled to the relief pleaded in paragraph 56.

Date: 23....Qst6b6r-2Q4714 June 2018

Signed by Peter Butler AM RFD Lawyer for the Respondents

This second further amended pleading was settled by Elizabeth Collins SC, Sera

Mtfzabeg+afilmtiaz Ahmed and Chris McMeniman of counsel.

49799279

38

Certificate of lawyer

I Peter Butler certify to the Court that, in relation to the defence filed on behalf of the

Respondent, the factual and legal material (including the judgment of the Court in this matter

dated 19 December 2016) available to me at present provides a proper basis for:

(a) each allegation in the pleading; and

(b) each denial in the pleading; and

(c) each non admission in the pleading.

Date: 23-Qeteber 204^14 June 2018

Signei , DLawyer for the Respondents

49799279

39

Schedule

No. NSD900 of 2015Federal Court of Australia

District Registry: New South Wales

Division: General

Respondents

Second Respondent: Safrock Finance Corporation (Qld) Pty Ltd ACN 098 566 520

46188565

notice of filing...2014/06/18 · ccpl, a wholly owned subsidiary of cc international. 6. the...

Documents