The High Court of Australia has today ruled that unfair bank fees can be considered penalties, in a class action being run by law firm Maurice Blackburn Lawyers.
The High Court decision allows the number of ANZ fees being allowed in a class action against the bank to be expanded.
ANZ Australia chief executive Philip Chronican said the action is still in its early stages. He said the High Court decision does not provide a resolution for the class action participants.
But Maurice Blackburn class actions principal Andrew Watson said the decision clears the way for Maurice Blackburn to return to the Federal Court and argue that the fees are penalties, and therefore void and refundable.
The Court today allowed an appeal by 38,000 ANZ customers against an earlier federal Court ruling that limited the number of bank charges that could be regarded as penalties.
"This High Court action represented an important moment in this case for the 170,000 customers currently involved in the class actions we are trying to recover a total of $223 million," Watson said.
"We say the fees are excessive and extravagant - far beyond the actual cost of administration to the banks.
In December the Federal Court ruled late payment fees were capable of being penalties and could be considered excessive and therefore illegal. But charges such as those for overdrawn account were ruled to be fees and not penalties.
The High Court’s decision rejects the Federal Court ruling that penalities only relates to actions that breach a contract.
"This is an important point of law today, which has expanded the doctrine of penalties, so that the courts will now focus on the reality of these sorts of fees."