Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Subject to this Part, if a court is satisfied on the application of a borrower, mortgagor or guarantor that:
(a) an establishment fee or charge in respect of the relevant contract, mortgage or guarantee; or
(b) a fee or charge payable on early termination of the relevant contract, mortgage or guarantee; or
(c) a fee or charge for a prepayment of an amount under the relevant contract, mortgage or guarantee;
is unconscionable, the court may annul or reduce the fee or charge and may make ancillary or consequential orders.
(2) In determining whether an establishment fee or charge is unconscionable, the court is to have regard to whether the amount of the fee or charge is equal to the credit provider's reasonable costs of determining an application for credit and the initial administrative costs of providing the credit or is equal to the credit provider's average reasonable costs of those things in respect of that class of contract.
(3) For the purposes of this section, a fee or charge payable on early termination of, or a prepayment of an amount under, the relevant contract, mortgage or guarantee is unconscionable if, and only if, it appears to the court that it exceeds a reasonable estimate of the credit provider's loss arising from the early termination or prepayment, including the credit provider's average reasonable administrative costs in respect of such a termination or prepayment.