Australian lender fails in bid to avoid High Court in case taken by Commerce Commission
Thursday, 8 January 2026
Australian lender Solvar has failed in a bid to get itself removed from a High Court case being taken by the Commerce Commission.
The commission alleges Solvar’s New Zealand subsidiary Go Car Finance, which specialised in making loans to people buying second hand cars, failed to comply with lender responsibility principles under the Credit Contracts and Consumer Finance Act (CCCFA) in loans it made in 2019, 2020, 2021 and 2022.
The commission alleges Go Car failed to make adequate enquiries as to whether the lending would be suitable for a borrower’s requirements and objectives, and failed to ensure that borrowers would be able to make repayments without suffering substantial hardship.
In its case, the commission is seeking orders for Go Car Finance to pay statutory damages to borrowers, and the waiving of any outstanding amounts owed by borrowers where their vehicles have been repossessed.
Read More:
ComCom’s new list of lenders under investigation includes ASB and ANZ
Australian car loan company facing ComCom action stops lending in NZ
Go Car Finance is no longer lending after complaints from financial mentors representing struggling borrowers sparked the commission’s action.
Among the things mentors complained about was Go Car’s use of remotely-activated immobilisers which the lender could use to render unusable cars on which borrowers had failed to make scheduled repayments.
But in a hearing in June, Solvar asked the High Court to remove it from the commission’s action, telling the court that while it was the parent company of Go Car, the mere fact that Go Car is its wholly-owned subsidiary does not establish the requisite relationship required for the CCCFA to apply “extra-territorially” to it in Australia.
Solvar told the court the commission had to demonstrate Solvar intentionally directed, agreed or consented to Go Car’s alleged failures to abide by responsible lending rules.
The commission argued that Solvar controlled Go Car, and was directly involved in many aspects of Go Car’s business, including being “entirely” responsible for its credit and risk function.
The commission also told the court it was concerned Solvar might be attempting to “structure its way out of liability by selling or transferring Go Car’s loan book, leaving Go Car with no assets to meet any penalties or damages that may be imposed”.
In a ruling issued late last month, Auckland High Court Justice Paul Cogswell said: “I consider that the Commission has demonstrated a plausible and not speculative claim that Solvar controlled Go Car’s lending function to a sufficient degree that there is a factual basis for arguing the legal issue.”
Cogswell said: “Solvar may still be liable for Go Car’s conduct in New Zealand if it is found to have directed, consented or agreed to that conduct.”
He said: “It is arguable that Go Car was acting at the direction of or with the consent or agreement of Solvar in its lending functions in New Zealand.”
In November, Solvar announced to investors on the ASX Australian sharemarket, where its shares are traded, that it has sold its New Zealand loan book for A$8 million, though that could rise by $1.4m depending on the amount of money the unnamed buyer is able to get from the borrowers on the loans.
Solvar managing director Scott Baldwin said the New Zealand loan book had been written down in value to zero on Solvar’s books, so the sale was an “excellent outcome”.