RICHARD MEADOWS Stuff.co.nz 31 July 2013
Documents filed with the High Court have laid out the basis of allegations that ANZ Bank has charged its customers millions of dollars in unfair fees.
ANZ is the first of the major retail banks to be taken to court by Fair Play on Fees, a lobby group headed by Auckland lawyer Andrew Hooker.
A 152-page statement of claim lays out the nature of the plaintiffs' complaints and what sort of compensation they are seeking.
It names four plaintiffs, who are representing a broader pool of more than 14,000 ANZ and National Bank customers in the country's largest class action-style lawsuit.
The dispute centres on whether "exception" fees, charged for overdrafts, failed payments and late payments, are penalties or a fair reflection of costs incurred by the banks.
While Hooker has claimed the cost is closer to a few cents rather than the typical $10 to $20 charged, ANZ has said its data justified the fees.
The plaintiffs are seeking a declaration that the exception fees are void and unenforceable, and an order that ANZ repays them, or the amount by which they exceeded its costs.
It also wants ANZ to repay any penalty interest charged to the plaintiffs and group members, as well as interest on the recovered fees, and court costs.
Fair Play on Fees has enlisted Bruce Gray, QC, as its lead lawyer, assisted by barrister Daisy Williams.
The legal action is being bankrolled by litigation funder Litigation Lending Services (NZ), which will take a 25 per cent cut of the proceeds if successful.
Over the next few months, proceedings are also expected to be launched against Westpac, ASB, BNZ and Kiwibank.
The four causes of action that Fair Play on Fees will rely on are:
1. Penalty imposed upon breach of contract
This alleges that the fee's amount was not an agreed sum but dictated by the dominant party to the contract - ANZ.
Any change to the fees arose "by diktat of the defendant" rather than by a genuine agreement, it alleges.
The fees were claimed to be "extravagant and unconscionable" compared with the loss that would result from the breach of contract.
2. Penalty in equity
Fees were charged regardless of whether the amount was trifling or the overdrawn payment was the result of an accident or mistake, the plaintiffs claim.
They also occurred regardless of whether the customer had funds in other accounts to cover the overdrawn amount, it is alleged.
They also claim that the amount of the overdraft fees was "exorbitant and out of all proportion" to the true amount of loss, damage or costs the bank suffered.
3. Breach of implied term
The bank's terms and conditions gave it the right to change fees, but any amendments had to be fair and reasonable.
The statement of claim argues that any changes were solely up to ANZ, breaching the condition that they were meant to be fair. As a consequence, plaintiffs had suffered loss and damage, it said.
4. Exception fees are unreasonable default fees
The bank's fees are allegedly "unreasonable", breaching section 41 of the Credit Contracts and Consumer Finance Act.
The relevant section of the law says that if the court is satisfied that a credit fee or default fee is unreasonable, it may order that the fee be annulled or reduced.
No date has yet been set for the court case.