Judge dubs outcome sought by ANZ borrowers in High Court class action ‘pretty extreme’
Tuesday, 24 March 2026
Borrowers are seeking refunds of millions of dollars of fees and interest they paid to New Zealand’s largest bank in a class action lawsuit being heard at the High Court in Auckland.
A group of about 17,000 ANZ borrowers are seeking the return of fees and interest they paid on their home loans during a period between 2015 and 2016 in which the bank failed to meet its legal disclosure obligations under lending laws introduced in 2014.
They also want statutory damages of up to $6000 each, and potentially penalty interest as well.
ANZ is defending the class action, arguing Parliament did not intend for small, accidental errors by lenders to result in borrowers paying “no interest at all on their loans”.
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During the first day of the trial on Monday, Justice Geoffrey Venning dubbed the “outcome” sought by the borrowers in the class action as “pretty extreme”, however, he said Parliament may have anticipated lenders would fix disclosure issues in a short period of time.
ASB was originally named in the class action, but last year it settled for $135.6 million without admitting liability.
The multimillion-dollar class action is being taken under 2014 amendments to the Credit Contracts and Consumer Finance Act (CCCFA) 2003, introduced under Prime Minister John Key, who went on to become chair of ANZ in New Zealand after he left office.
Counsel for the borrowers Davey Salmon KC argued the 2014 amendments were designed to “fortify” lending laws to ensure borrowers were not misled over how much their loans would cost, and the terms of their loan contracts.
Salmon said accurate disclosure was a “gateway” requirement for lenders to “play in the market”, and the “extreme and harsh” consequence of having to repay fees and interest was exactly what Parliament intended.
Salmon said banks had lobbied for the 2014 amendments to be changed, and their lobbying documents showed ANZ and other banks understood that to be true.
He referred to a May 2016 letter to Government from the Banking Association, the political lobbying body for the banking industry of which ANZ was a member.
The letter said under the 2014 amendments “any” errors in disclosure left a bank liable to repay all interest and fees regardless of the materiality or impact on the debtor.
Salmon also referred to a letter dated March 2017, also from the Banking Association, but signed by bank executives, including then ANZ chief executive David Hisco.
It reiterated the position that “a creditor must refund all interest and fees if a creditor has failed to comply with the disclosure requirements, no matter how immaterial”.
ANZ has acknowledged it made disclosure errors, but did not accept that Parliament intended to give borrowers free loans even when errors were extremely minor, and did not cause harm to borrowers.
ANZ’s counsel, Stephen Hunter KC, argued the plaintiffs were claiming that when even a 1 cent error in a loan repayment calculation was discovered, it left a lender liable to repay all fees and interest it had charged on the loan.
He said that would be harsh and disproportionate, and cited a legal precedent that held the more unreasonable the result, the less likely that Parliament intended it.
The bank said there were very strong indications in the CCCFA that a claim for refund of the full cost of borrowing in the case of a minor error was not supported by the act
He argued that the court had discretion over any awards for errors in disclosure.
Hunter argued that there was also a de minimis principle in the law, which held that the law was not troubled with with extremely small things.
Hunter told the court that ANZ’s errors happened only in cases of loan variations, when the bank and borrowers agreed to changes in loans.
In every case these resulted in the bank setting borrowers’ loan repayments slightly too low.
Hunter referenced a representative borrower in the class whose repayments were set in error at $2.34 a month below where they should have been.
“We can say confidently that $2.34 is de minimis,” Hunter said.
A media release in October said the average borrower in the 17,000-strong class action had underpaid their mortgages by just $2 a month between 2015 and 2016.
Hunter said the bank had refunded the small amount of additional interest borrowers incurred as a result.
The court heard that ANZ identified the errors in mid-2016 following customer complaints, but only told the Commerce Commission in June the following year, and did not tell borrowers until mid-2018.
The hearing continues on Tuesday.
The case was launched in 2021 by solicitor Scott Russell, and has been funded by litigation lender LPF.
It is an “opt out” class action, so any borrower on whose loan the bank made disclosure errors is included, unless they explicitly asked to be left out.
Class actions remain a rarity in New Zealand, with only three dozen or so ever taken.