The Law Relating to Penalties

Bar News: The Journal of the NSW Bar Association, Vol. Spring, pp. 28-31, 2016

Sydney Law School Research Paper No. 16/96

5 Pages Posted: 1 Nov 2016

See all articles by John Eldridge

John Eldridge

The University of Sydney - Faculty of Law

Date Written: November 1, 2016

Abstract

On 27 July 2016, the High Court handed down the latest in a series of significant decisions on the scope and content of the rule against penalties (‘the penalty rule’). Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28 (Paciocco) involved a challenge to the enforceability of credit card late payment fees charged by the ANZ. The fees were impugned on two independent bases. It was first contended that the fees offended the general law rule against penalties. It was further argued that the charging of the fees contravened the statutory proscription of unconscionable conduct and that the relevant terms of the credit card contracts were unjust and unfair within the meaning of a number of statutory provisions. The court (constituted by French CJ, Kiefel, Gageler, Keane and Nettle JJ) rejected both of these contentions by 4:1 (Nettle J dissenting). This note summarised the reasoning of the court and places the decision in its broader context.

Keywords: Contract, Equity, Rule Against Penalties, Common Law Divergences, Bank Fees, Class Actions, Law Reform

JEL Classification: K10, K30

Suggested Citation

Eldridge, John, The Law Relating to Penalties (November 1, 2016). Bar News: The Journal of the NSW Bar Association, Vol. Spring, pp. 28-31, 2016, Sydney Law School Research Paper No. 16/96, Available at SSRN: https://ssrn.com/abstract=2862274

John Eldridge (Contact Author)

The University of Sydney - Faculty of Law ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

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