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Last month, the full Federal Court dismissed the Australian Securities and Investments Commission’s (ASIC) appeal against Justice Nye Perram’s decision to overturn its responsible lending case against Westpac Group, which has since been dubbed the “wagyu and shiraz” case.
Two out of three judges in the Full Federal Court upheld the court’s initial decision that sided with the major bank.
The case focused on Westpac’s reliance on expense benchmarks, such as the Household Expenditure Measure (HEM), in serviceability assessments used for home loan applications through an automated decision system (ADS).
ASIC had alleged that by failing to separately assess declared living expenses, Westpac fell short of obligations under the National Consumer Credit Protections Act.
Following the full Federal Court’s dismissal, ASIC said it would consider its next steps, with the regulator entitled to pursue the matter in the High Court.
Appearing before the Senate parliamentary joint committee, corporations and financial services on Wednesday (15 July), ASIC chair James Shipton revealed that the regulator is set to make an imminent announcement regarding whether it will further pursue the matter in the courts.
“We’re currently taking advice on the decision of the full Federal Court,” he said.
“That advice is coming in from external council, and we will be reviewing that advice in the coming days and deciding our next steps in this matter.
“I can only assure you that we are taking this decision extremely seriously and will [give] all due care that is appropriate for an important decision like this.”
Mr Shipton added: “The deadline is in the coming days because there is a time limitation for lodging appeals to the High Court, so that decision will be made in the coming business days.”
ASIC has previously claimed that its decision to appeal the court’s initial verdict was designed to address “uncertainty” in the lending space.
However, committee chair and Liberal senator James Paterson questioned whether a move to take the matter to the High Court would be counterintuitive.
“As we’ve discussed in this case previously, it’s ASIC’s aspiration to have clarity in the law and that’s what you said the appeal could provide,” he said.
“Obviously, that clarity could also be provided by ASIC accepting the court’s ruling of what the law is.
“Now that you’ve appealed once and been unsuccessful, is it really wise for ASIC to create further uncertainty with another appeal?”
But Mr Shipton declined to comment, stating: “I would pause in responding because it will be premature of me to comment on any action that ASIC may or may not take, given [a decision] on our next steps hasn’t been taken yet.
“I’m only just receiving external advice on this matter and that needs to be digested.”
ASIC’s decision is due to be announced as early as Friday (17 July).