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19-136MR High Court dismisses ASIC appeal in APY Lands book up case
The High Court of Australia has today dismissed ASIC’s appeal against the decision of the Full Federal Court in an ASIC action against Mr Lindsay Kobelt, former owner and operator of Nobby's Mintabie General Store in the remote South Australian APY Lands.
Mr Kobelt provided a system of book up to his customers, most of whom were Aboriginal residents of the APY Lands (Anangu people), which allowed them to purchase goods and second hand motor vehicles on credit. In return, Mr Kobelt required his customers to provide him with their debit cards, PINs and details of their income, which he then used to withdraw all, or nearly all, of the customer’s money from their bank account on or around the day they were paid.
Four Judges of the High Court (Kiefel CJ, Bell, Keane and Gageler JJ) found that Mr Kobelt’s book up system was not unconscionable. The remaining three Judges (Nettle, Gordon and Edelman JJ) dissented.
The finding of the Federal Court that Mr Kobelt engaged in unlicensed credit activity stands.
In their joint judgment today, Kiefel CJ and Bell J said:
“… determinative of the appeal is the absence of unconscientious advantage obtained by Mr Kobelt from the supply of credit to his Anangu customers under his book-up system.” 
“The difficulty with ASIC's system case of statutory unconscionability lies in identifying any advantage that Mr Kobelt obtained from the supply of book-up credit that can fairly be said to be against conscience.” 
Kiefel CJ and Bell J found that no feature of Mr Kobelt’s conduct exploited or otherwise took advantage of the customer’s lack of education and financial acumen. Keane J found that ASIC:
“…did not establish that the respondent exploited his customers' socio-economic vulnerability in order to extract financial advantage from them.” 
ASIC will continue to work collaboratively on book up law reform and to educate book up providers and consumers on fair and legal ways in which book up can be provided.
On 9 November 2016, the Federal Court found at first instance that:
- Mr Kobelt’s system of providing book up was unconscionable; and
- Mr Kobelt had engaged in unlicensed credit activity when selling motor vehicles on book up (16-383MR).
Mr Kobelt appealed the November 2016 judgment and on 15 February 2018 the Full Federal Court upheld the original finding that Mr Kobelt engaged in unlicensed credit activity when selling motor vehicles on book up, but otherwise found that Mr Kobelt’s system of providing book up was not unconscionable (18-047MR).
On 17 August 2018, the High Court granted ASIC special leave to appeal from the Full Federal Court’s finding that Mr Kobelt had not engaged in unconscionable conduct.
On 4 December 2018, the High Court refused Mr Kobelt special leave to appeal from the Full Federal Court’s finding that he engaged in unlicensed credit activity. This means that the finding that Mr Kobelt engaged in unlicensed credit activity stands.
ASIC’s Indigenous Outreach Program
ASIC’s Indigenous Outreach Program (IOP) engages with Indigenous communities and external stakeholders working with
Indigenous Australians, to enhance the impact and effectiveness of the ASIC’s work to increase the financial wellbeing of Indigenous consumers.
The IOP provides specialist advice, insight and support across the agency to ensure the needs of Indigenous consumers and investors are addressed effectively and appropriately.
Resources, including information designed specifically for Aboriginal and Torres Strait Islander people, can be found on ASIC's MoneySmart website.
ASIC also offers a dedicated help line to assist Indigenous consumers with financial issues (Phone: 1300 365 957 or by Email: IOP@asic.gov.au).