Justice Michelle Gordon of the Federal Court raised the possibility yesterday that evidence presented in the ANZ exception fees case might indicate that the bank's internal controls "aren't too good".The A$57 million class action against the bank, organised by Maurice Blackburn on behalf of 43,500 customers, is likely to turn on whether the exception fees fit a legal definition of "penalties".Michael Lee, for the plaintiffs, argued on Monday that the bank levied exception fees as punitive measures, rather than to merely recoup the costs of managing late payments and dishonour events.The second day of hearings in the exception fees test case opened with ANZ's counsel, Alan Archibald, outlining the bank's legal defence against claims that it unconscionably used its fee structure as a vehicle to grow revenue. Archibald fired his opening salvo against Lee's characterisation of the fees as penalties for breaches of contract.In a complex presentation of legal arguments to the court, Archibald rejected the claim that the bank's fees had penalised customers.A key plank of ANZ's defence is that late payments, overdraws and dishonoured transactions do not constitute breaches under the bank's contracts with customers.Archibald told the court that events such as late payments and dishonoured transactions were not breaches because they were not prohibited under the terms and conditions for the bank's products.A corollary of this argument is that the exception fees levied on customers for such events could not, therefore, be understood or characterised in law as "penalties"."Either you have in the contract something which is prohibited or you don't have a prohibition," Archibald told the court.Justice Gordon alerted the bank's counsel to internal ANZ documents, cited on Monday by Michael Lee for the plaintiffs, which were used to characterise the exception fees as penalties.The judge's remarks prompted the following exchange with the Silk:MR ARCHIBALD: Well, perhaps the most important and useful thing to come out of the working through these documents, your honour, was the focus upon - and the addressing by the bank - of the revenue stream.HER HONOUR: I accept that.MR ARCHIBALD: And the  HER HONOUR: The flipside of that was that the internal controls aren't too good.MR ARCHIBALD: Leave aside criteria in other things, your honour, but the focus on the revenue stream is the very antithesis of the penalty concept, because the penalty concept is: "I don't want the money; I want the observance  "HER HONOUR: Really?  I think it's called chicken and egg, Mr Archibald.MR ARCHIBALD: Well  HER HONOUR: If you've been able to charge a fee and it has provided an income stream, the last thing you want to do is lose it.A special evening session was called to hear evidence via video-conference from a UK-based banking expert, Dr Helen Jenkins, who is the managing director of Oxera Consulting.Jenkins told the court that dishonour fees conveyed benefits to consumers.Lee alerted the expert witness to internal ANZ documents from 2006 which stated that the bank's customers disliked dishonour fees because of a lack of perceived service.He then tried