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Money3 ‘roving’ for inconsistencies in ASIC claims, court told
The Federal Court heard a car finance provider was “fishing for inconsistent information” to fight against allegations it entered into unsuitable loans with First Nations people.
Naomi Neilson
The Australian Securities and Investments Commission (ASIC) strongly opposed Money3 Loan’s request for discovery of further documents, telling Justice Shaun McElwaine the application “at best appears to be some sort of roving exercise”.
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ASIC’s counsel, Suresh Senathirajah, said there is “no mystery” to be found by the car financier and it has already been “transparent and proactive” in providing it with all the relevant documentation.
“There is no attempt by ASIC in the least to withhold (information) in the material it’s got, and that was done so everybody, including Your Honour, was aware of it,” Mr Senathirajah said.
The regulator filed civil proceedings against Money3 in May last year, alleging it had breached its responsible lending obligations when it provided finance for the purchase of second-hand vehicles.
The trial, to be set down for later this year, will hear Money3 allegedly entered into loans for second-hand vehicles with certain borrowers, including First Nations people, without properly assessing whether they could meet their repayment obligations.
The customers were either receiving Centrelink payments as their sole income or were on low incomes, ASIC alleged.
ASIC said the loans of particular concern showed a purchase price of $8,000 with additional fees of around $3,000.
ASIC deputy chair Sarah Court said that in some cases, a vehicle broke down, leaving the borrower with “an unusable car and a loan they couldn’t afford, compounding the detriment”.
Counsel for Money3 said it was “important as a matter of fairness” it was granted further discovery.
But Justice McElwaine said “discovery is not a right” and told Money3 there had to be a “justifiable reason to order discovery” so it is not used as an “oppressive tool” in the proceedings.
Justice McElwaine added it appeared Money3 “want[ed] to go fishing for inconsistent information”.
Given it did not meet the threshold requirement, and particularly in light of ASIC’s existing transparency and voluntary disclosure of documents already, Justice McElwaine dismissed the application.
