EQUITY AND FINANCIAL RISK ALLOCATION LAW

Equity and Financial Risk Allocation Law

Equity and Financial Risk Allocation Law

Introduction

In this paper, the author will conduct a discussion of some the legal issues arising from the case (John Andrews & Ors v Australian and New Zealand Banking Group Limited) in so far as they relate to the law of penalties. The purpose of this study is to expand the boundaries of the author's knowledge by exploring some relevant facts related to the role of equity as a potential mechanism for allocating risk in commercial transactions. Since, the case primarily related to breach of contract, the author will examine the case in the light of contract law and commercial and business law. Commercial law is a set of legal rules designed for service of commodity circulation and regulating the relationship between professional entrepreneurs (Millett, 1998, pp. 214-270). Commercial law is a set of rules of private law. It regulates the relations between employers or their participation in the implementation of the recent business activities. The subject of commercial law regulates the professional activities of trade, commercial relations, relations between subjects of purchase and sale of the trade. The method of regulation - the ways and means for regulating relations between the actors, taking into account the distinctive features of the objects of legal regulation. For a typical commercial law, there is more permissive method of regulating trade relations. For some relations, which is governed by commercial law, is characterized by an imperative method. It presupposes the existence of relations between subjects of power and subordination, and the availability of legal norms that are binding. In prescriptive method, for example, trading activity is regulated in the public sphere (Mele, 2005, pp. 89-90).

This is a critical review of Justice Gordon's decision, analyzing the reasons for her conclusions, and whether Her Honour identified the applicable legal principles and correctly applied those principles to the facts presented to her. Furthermore, the author will also consider the extent to which the outcome in the original decision may have been different if the unfair contract term provisions or the unconscionable conduct provisions of the Australian Securities and Investments Commission Act 2001 (th) had been in operation at the time of the events considered by the Court.

Judgment was handed down late last year by Gordon J in John Andrews & Ors v Australian and New Zealand Banking Group Limited [2011] FCA 1376. This judgment dealt with the declarations sought by the applicants that the arrangements between ANZ and the applicants in relation to ANZ charging an exception fee on the accounts in question are void and unenforceable as they amount to a penalty, and required the determination of Separate Questions which identified certain specific Exception Fees charged by ANZ to account holders in relation to an identified ANZ account.The applicants in the proceedings were customers of ANZ seeking declarations that Honour Fees, Dishonour Fees, Over-limit Fees, Non-Payment Fees and Late Payment Fees (Exception Fees) charged by ANZ on a ...