Parliamentary select committee decides against disrupting class action against ANZ and ASB with retrospective law change

The group behind a class action against ANZ NZ and ASB is cheering a parliamentary select committee's decision to not apply a proposed retrospective law change to their case against the banks.

ANZ, on the other hand, is disappointed.

Earlier this month ASB agreed to pay more than $135 million to settle the class action for alleged breaches of the Credit Contracts and Consumer Finance Act (CCCFA) relating to home and personal loans between June 2015 and June 2019. ASB CEO Vittoria Shortt described it as a pragmatic way to settle the matter.

The Finance and Expenditure Committee says it ultimately decided the class action against ANZ and ASB should be explicitly excluded from the effects of a retrospective provision in the Credit Contracts and Consumer Finance (Amendment) Bill.

"We heard from submitters that no proceedings have been brought against other lenders relying on the historical law at issue in the class action against ANZ and ASB, and we see no reason to expect such proceedings while the Bill is before the House," the final select committee report says.

Scott Russell, a lawyer from the Banking Class Action group, said the group welcomes the Select Committee’s decision that Parliament should not intervene in an active court case.

"This was in the face of extensive lobbying by the banking sector to have the retrospective change apply to the Banking Class Action," Russell said.

"This recommendation preserves the rights of consumers to have their claims against ANZ properly determined by the courts under the law as it stood when the relevant events occurred."

"Every justification for making the proposed change has proven to be false," Russell added.

"We commend the Committee for recognising that fairness and the rule of law must come before corporate interests, and we urge Parliament to take on board their recommendations."

'Unfair'

However, ANZ NZ CEO Antonia Watson said the carve-out proposed by the Select Committee for the case was unfair. 

"It’s good that MPs agree the law is potentially unfair and want to change it for the period from 2015 to 2019. But to be consistent they should have changed it for all," Watson said. 

"It’s surprising that MPs are saying it’s okay for a court case to go ahead under what was recognised as potentially bad law by Parliament in 2019, and confirmed again by the Select Committee."

"It sets a poor precedent to exclude a claim against one entity from legislative amendments. Whatever happened to the fundamental legal principle that everyone should be treated equally before the law?" Watson asked.

"Under the CCCFA, according to one interpretation which ANZ NZ doesn’t agree with, a lender could be required to refund all the fees and interest on a loan if it got the smallest of details wrong in its disclosure to a customer for the 2015 to 2019 period. For example, if a loan letter got a customer’s middle name wrong in that period the lender could potentially face having to pay back all the fees and interest on a loan."

ANZ NZ says the class action against the bank relates to 17,000 customers who underpaid their mortgages by $2 a month on average between 2015 and 2016.

"ANZ NZ found the issue, told the Commerce Commission and treated customers as though the underpayments had been made. The litigation funders claim that due to this customer underpayment issue, ANZ NZ must provide free loans to those 17,000 customers from 2015 to 2016," said Watson.

"The Select Committee has ignored the fact that the ‘just and equitable’ clause in the Bill does not extinguish anyone’s rights."

Claims against ANZ are due to be heard in the High Court in March 2026. Watson said the bank remains confident of its position, and looks forward to having the matter determined by the Court.

The Select Committee's report says MPs received submissions from 1,543 individuals or organisations opposing the retrospective change. They included submissions from members of the class action lawsuit, plus legal professionals, academics, and experts in constitutional law submitting as concerned individuals. They also received submissions from 15 individuals and organisations in support of the retrospective changes.

MPs said their decision to carve out the existing proceedings against ANZ and ASB is not intended to have any effect on the ASB settlement.