Paciocco v ANZ Banking Group Ltd (Full Federal Court)

Whether a contractual sum (here a bank's credit-card late-payment fee) is an unenforceable penalty is to be judged ex ante, by comparing the stipulated sum against the greatest loss that could conceivably flow from the breach as assessed when the contract was made, not by an ex post comparison with the actual loss caused by the particular breach; on that approach the late-payment fees were not penalties.