Background
This judgment resolved the costs questions arising from ASIC’s successful enforcement action against BSF Solutions Pty Ltd, Cigno Australia Pty Ltd, Brenton James Harrison, and Mark Swanepoel. The underlying proceedings concerned a “No Upfront Charge Loan Model” jointly designed and operated by all four respondents, which the Court found contravened ss 29(1) and 32(1) of the National Consumer Credit Protection Act 2009 (Cth). Liability had been determined in May 2024 (Australian Securities and Investments Commission v BSF Solutions Pty Ltd (Liability) [2024] FCA 553), and penalties were imposed in April 2026 (Australian Securities and Investments Commission v BSF Solutions Pty Ltd (Penalty) [2026] FCA 450).
At the penalty stage, ASIC had sought total penalties of approximately $149.1 million. The Court ultimately awarded penalties amounting to roughly 4.69% of that figure. ASIC had also sought permanent injunctions against the individual respondents, Harrison and Swanepoel, which were not granted. With those outcomes as backdrop, the respondents challenged both the structure of the costs order (arguing the BSF and Cigno respondent groups should bear separate liability) and its quantum (seeking a 50% reduction in costs for the penalty hearing to reflect ASIC’s limited success on penalty quantum).
The Court’s Holding
Justice Jackman ordered that all respondents pay ASIC’s costs of the entire proceeding on a party-party basis, with joint and several liability. The Court rejected the respondents’ submission that costs should be apportioned between the “BSF respondents” (first and third respondents) and the “Cigno respondents” (second and fourth respondents). The contraventions arose from a collaboratively designed and integrated business model, the respondents contravened the same statutory provisions in the same manner and to the same order of magnitude, and they did not run separate or distinct defences. No special circumstances warranted departure from the default position of joint and several liability.
The Court also declined to reduce ASIC’s costs of the penalty hearing by 50% or any other amount. Although the penalties awarded were far below what ASIC had sought, ASIC succeeded in obtaining the principal remedy it pursued — substantial pecuniary penalties against each of the four respondents. The Court found no evidence that ASIC’s costs would have been materially lower had it sought smaller penalties or forgone the injunction applications. The penalty hearing occupied less than one day of court time, the respondents called no evidence, and both parties conducted the proceeding efficiently. The respondents’ partial wins on the legal advice issue and the measure-of-benefits issue were neither sufficiently distinct nor sufficiently weighty to warrant a costs reduction. The Court further directed that costs be assessed by way of lump sum, with a timetable for submissions concluding 31 July 2026, and indicated it would determine the quantum itself rather than refer the matter to a Registrar.
Key Takeaways
- Where multiple respondents jointly design and operate a contravenging scheme, contravene the same provisions to the same degree, and run no separate defences, courts will ordinarily impose joint and several costs liability without apportionment between respondent groups.
- A regulator’s failure to achieve the full penalty amount sought does not automatically reduce its costs entitlement; the relevant question is whether the successful party’s costs would actually have been lower had it moderated its claims — and that requires evidence, not inference alone.
- An efficient, sub-day penalty hearing with no respondent evidence is unlikely to support a finding that inflated penalty claims materially drove up costs on either side.
- Courts may elect to determine lump sum costs quantum themselves where they are familiar with the proceedings, avoiding the cost and delay of referral to a Registrar.
Why It Matters
This decision reinforces that corporate groups operating integrated unlicensed consumer credit schemes face not only shared penalty exposure but shared costs liability, with no refuge in corporate separation at the costs stage. For regulators and regulated entities alike, it signals that ambitious penalty claims — even those that succeed only fractionally — will not automatically attract costs penalties against the regulator, so long as the regulator achieved substantial relief and conducted proceedings efficiently.
The ruling also has practical significance for enforcement litigation strategy: respondents seeking costs reductions based on a regulator’s overreach on quantum must adduce actual evidence that the inflated claim drove up litigation costs, rather than relying on inference from the size of the gap between claimed and awarded penalties.