BFJ Capital Pty Ltd v Financial Ombudsman Service Ltd (in liq)

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMERCIAL COURT

S CI 2017 03256

BFJ CAPITAL PTY LTD (ACN 126 808 151) AND OTHERS	Plaintiffs
v
FINANCIAL OMBUDSMAN SERVICE LIMITED (IN LIQUIDATION) (ACN 131 124 448) AND OTHERS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 NOVEMBER 2018
DATE OF RULING:	21 FEBRUARY 2019
CASE MAY BE CITED AS:	BFJ CAPITAL PTY LTD V FINANCIAL OMBUDSMAN SERVICE LIMITED (IN LIQ)
MEDIUM NEUTRAL CITATION:	[2019] VSC 71

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PRACTICE AND PROCEDURE – Applications for summary judgment – Applications to strike out parts of statement of claim – Further particulars sought - Whether claims have a real prospect of success – Whether claims ought to be struck out - Whether further particulars ought to be ordered - Supreme Court (General Civil Procedure) Rules 2015 (Vic), rr 13.09, 13.10, 13.11, 22.16, 22.22, 23.01, 23.02 - Civil Procedure Act 2010 (Vic) ss 62, 63, 64.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D Christie	M & K Lawyers Group Pty Ltd
For the 1^st and 3^rd defendants	Mr M Wise QC Mr A Solomon-Bridge	Arslan Lawyers
For the 2^nd defendant	Dr C Button Mr E Gisonda	Allens Lawyers

HIS HONOUR:

A. Introduction

The first defendant, Financial Ombudsman Service Limited (in liquidation) (“Ombudsman Service”) refused to review a dispute between the plaintiffs, BFJ Capital Pty Ltd, Finook Pty Ltd and JE International Pty Ltd (“the Plaintiffs”), and the second defendant, Macquarie Equities Limited (“Macquarie”), relating to the appropriateness of financial advice provided by Macquarie to the Plaintiffs between 2010 and 2013 (“the Dispute”). The Plaintiffs make various claims arising out of this refusal.

Following the voluntary liquidation of Ombudsman Service on 28 June 2018, Australian Financial Complaints Authority Limited (“Complaints Authority”), was joined as the third defendant to the proceeding.[1] Complaints Authority effectively operates in Ombudsman Service’s stead.[2] (Ombudsman Service and Complaints Authority collectively, “the Complaints Service”.)
[1]See par 21 below.
[2]See further fn 8 below.

In their statement of claim filed on 2 November 2018 (“the Statement of Claim”), the Plaintiffs allege that, by refusing to consider the Dispute, Ombudsman Service breached contractual obligations to the Plaintiffs and Macquarie, that the decision of Ombudsman Service is amenable to judicial review and that Complaints Authority is now estopped from refusing to consider the Dispute.[3]
[3]Some paragraphs of the Statement of Claim are set out in annexure “A” to these reasons.

The Complaints Service seeks summary judgment on the basis that those parts of the Statement of Claim seeking judicial review and relief founded on estoppel have no real prospect of success.[4] In the alternative, the Complaints Service seeks certain parts of the Statement of Claim be struck out on the basis that the pleading is scandalous, frivolous or vexatious, may prejudice, embarrass or delay the fair trial of the proceeding, or is otherwise an abuse of process of the court.[5]
[4]Pursuant to ss 62 and 63 of the Civil Procedure Act 2010 (Vic) and rr 22.16 and 22.22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). The Complaints Service also seeks, either in addition or in the alternative, judgment pursuant to r 23.01 of the Supreme Court Rules.
[5]Pursuant to r 23.02 of the Supreme Court Rules.

Similarly, on the same basis, Macquarie seeks orders for summary judgment with respect to certain claims, an order that other parts of the Statement of Claim be struck out, or, in the alternative, orders that the Plaintiffs serve particulars to parts of its claim.[6]
[6]Pursuant to r 13.11 of the Supreme Court Rules.

In written submissions filed before the hearing, the Plaintiffs conceded that some aspects of the Statement of Claim ought to be struck out.[7] With respect to the contested issues, for the reasons set out below, summary judgment will be ordered as to some claims, certain paragraphs of the Statement of Claim will be struck out and orders will be made requiring the Plaintiffs to provide particulars.

B. Background

[7]See par 27 below.

B.1 The parties

Ombudsman Service was, until 1 May 2018, an operator of an external dispute resolution scheme known as the Financial Ombudsman Service (“the External Scheme”), regulated by a constitution (“the Constitution”) and terms of reference dated 1 January 2010 (as amended 1 January 2015) (“the Terms of Reference”). Pursuant to a restructure and transition deed, dated 5 March 2018, between Ombudsman Service and Complaints Authority, Complaints Authority took over the operation of the External Scheme and from 1 May 2018, “stood in the shoes” of Ombudsman Service.[8]
[8]Complaints Authority heard complaints under the External Scheme until 1 November 2018, after which time a new scheme commenced, under the administration of the Australian Financial Complaints Authority. As these matters are not in dispute between the parties, it is unnecessary to address them in any further detail.

Macquarie is a provider of financial services in accordance with the Corporations Act 2001 (Cth),[9] the Corporations Regulations 2001 (Cth)[10] and the Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”)[11] and, pursuant to its statutory obligations,[12] is a member of the External Scheme.
[9]See, for example, ss 761A, 766A, 766B, 766C, 912A and 913B.
[10]See, for example, Part 7.6 and 7.7.
[11]See, for example, ss 12BA, 12BAA and 12BAB.
[12]See s 912A of the Corporations Act 2001 (Cth).

The Plaintiffs are related entities, all controlled by Brendan James (“James”). BFJ Capital Pty Ltd carries on a business of providing trustee services to the BFJ Capital Trust; Finook Pty Ltd carries on a business of providing trustee services to the Brendan & Anne James Superannuation Fund; and JE International Pty Ltd carries on a business of investing in securities. Each of them held client accounts with Macquarie. Together, the Plaintiffs provide income and capital to James, his wife and his children.

B.2 The Dispute and Ombudsman Service’s refusal to consider

The Plaintiffs allege that, between August 2010 and December 2013, Macquarie acted as their financial and investment adviser, stockbroker and portfolio manager and provided financial advice with respect to investments in Australian securities.

Following an investigation by the Australian Securities and Investments Commission (“ASIC”) into its practices, Macquarie signed an enforceable undertaking dated 29 January 2013 (“the Enforceable Undertaking”).[13] As a result of the Enforceable Undertaking, Macquarie undertook an internal review to ensure it had complied with its statutory obligations as a financial service provider (“the Remediation Scheme”).
[13]Pursuant to s 93AA of the ASIC Act.

On 15 August 2014, Macquarie wrote to the Plaintiffs, inviting them to request a review of the financial advice given to them (“the Case Assessment”). Further, Macquarie stated that, if the Plaintiffs were dissatisfied with the outcome of the Case Assessment, then they may contact Ombudsman Service.[14]
[14]The communication stated: “If you are not satisfied with the outcome of the review process, you may also contact the Financial Ombudsman Service on 1300 780 808 or fos.org.au”.

The Plaintiffs did not request the Case Assessment until 20 April 2016.[15] The Plaintiffs’ request was acknowledged by Macquarie on the same day. As a result, Macquarie conducted the Case Assessment. On 22 September 2016, Macquarie informed the Plaintiffs that it had been determined that the financial advice provided to the Plaintiffs was appropriate in the circumstances and that Macquarie did not intend to take further action in relation to the Plaintiffs’ accounts. The basis of that determination was provided. The letter included the following:

An information brochure titled “How to resolve your dispute” can be accessed from the [Ombudsman Service] website You can access this by clicking on the “Consumers” tab at the top of the [Ombudsman Service] home page, then selecting “Brochures”.
[Ombudsman Service] is only entitled to consider a Dispute (as defined in its Terms of Reference) if the quantum of the Dispute is below the amount and the Dispute is lodged within the period of time, both as defined in the [Terms of Reference]. Further, any decision by [Ombudsman Service] in relation to the Dispute is limited to the maximum amount defined in the [Terms of Reference]. If after considering this letter, you lodge a Dispute with [Ombudsman Service] in relation to the outcome of our review, we will not require [Ombudsman Service] to apply any of those limits. Of course, [Ombudsman Service] is still required to undertake its task as set out in the [Terms of Reference] and as required by law.
(Emphasis added.)

[15]This is the date given in the Plaintiffs’ request for a review by Ombudsman Service.

Dissatisfied with the outcome of the Case Assessment, on 13 January 2017, the Plaintiffs requested Ombudsman Service review the Dispute. In their application, the Plaintiffs claimed, amongst other things, that Macquarie failed to take proper account of their risk profiles, instructions and objectives, and recommended unsuitable investments. The Plaintiffs claimed they purchased in excess of $17 million worth of shares, and made investments they would not have made had Macquarie provided appropriate financial advice. The application recorded that Ombudsman Service could consider the Dispute even though it exceeded $500,000[16] as “all parties and [Ombudsman Service] agree”.
[16]This is the prescribed maximum: see cl 5.1 in par 16 below.

On 16 June 2017, Ombudsman Service informed the Plaintiffs that it had determined that it would not consider the Dispute, stating, amongst other things, that a court was the more appropriate forum for its resolution.

B.3 The Terms of Reference

The Terms of Reference provide, relevantly:

1.2 Principles that underpin [Ombudsman Service] operations and processes

In dealing with Disputes, [Ombudsman Service]:
a)must do what in its opinion is appropriate with a view to resolving Disputes in a co-operative, efficient, timely and fair manner;
b)shall proceed with the minimum formality and technicality; and
c)shall be as transparent as possible, whilst also acting in accordance with its confidentiality and privacy obligations.

2 [Ombudsman Service] Structure

…

2.2 Powers and duties of the Ombudsmen

a) An Ombudsman has the power to exercise all powers and discretions conferred on [Ombudsman Service] by these Terms of Reference and to carry out all responsibilities attributed to [Ombudsman Service] under these Terms of Reference. An Ombudsman’s duties include:

(i) making Jurisdictional Decisions;

(ii) resolving Disputes by making Determinations …

…

4 Disputes within scope of the Service

…

4.4 Consideration of other Disputes by agreement

Notwithstanding any other paragraph of these Terms of Reference, [Ombudsman Service] may consider a Dispute where all parties to the Dispute and [Ombudsman Service] so agree. …

5 Disputes outside the scope of [Ombudsman Service]

5.1 Exclusions from [Ombudsman Service’s] jurisdiction

The Service may not consider a Dispute:

…

o) where the value of the Applicant’s claim in the Dispute exceeds $500,000; …

5.2 Discretion to exclude Disputes

[Ombudsman Service] may refuse to consider, or continue to consider, a Dispute, if [Ombudsman Service] considers this course of action appropriate, for example, because:

a) there is a more appropriate place to deal with the Dispute, such as a court, tribunal or another dispute resolution scheme or the Privacy Commissioner;

…

e) after the Dispute is lodged with [Ombudsman Service], the Applicant commences legal proceedings against the Financial Services Provider that are related to the Dispute.

5.3 Process for exclusion of Disputes
a) Where a Dispute is lodged with [Ombudsman Service] and:
…
(ii)[Ombudsman Service] decides to exercise a discretion under these Terms of Reference to exclude the Dispute,

[Ombudsman Service] will advise the Applicant (and any other parties that are involved in and have been informed about the Dispute) and provide reasons for this assessment.
b)If … the Applicant objects to an assessment made … in accordance with paragraph a), [Ombudsman Service] will review the matter if [Ombudsman Service] is satisfied that the Applicant’s objection may have substance. If so:
…
(iv)[Ombudsman Service] will review the matter and provide the parties with [Ombudsman Service’s] final decision referred to as a Jurisdictional Decision – this will set out the reasons for the decision.

…
7.        Dispute resolution methods and related matters
7.1      Dispute resolution methods
To resolve a Dispute, [Ombudsman Service] may use one or more of the following methods:
a)        negotiation;
b)        conciliation or mediation; or
c)deciding the Dispute in accordance with the process set out in paragraph 8.

…

8 Deciding Disputes

8.1 Rules of evidence
[Ombudsman Service] is not bound by any legal rule of evidence.

8.2      Dispute resolution criteria
Subject to paragraph 8.1, when deciding a Dispute and whether a remedy should be provided in accordance with paragraph 9, [Ombudsman Service] will do what in its opinion is fair in all the circumstances, having regard to each of the following:
a)        legal principles;
b)        applicable industry codes or guidance as to practice;
c)        good industry practice; and
d)previous relevant decisions … (although [Ombudsman Service] will not be bound by these).

…

8.7 Recommendations and Determinations

…

b) A Determination is a final decision and is binding upon the Financial Services Provider if the Applicant accepts the Determination within 30 days of receiving the Determination.

…

8.9 Consequences of an Applicant refusing to accept a Recommendation or Determination

If an Applicant does not accept a Recommendation or Determination in relation to the Applicant’s Dispute, the Applicant is not bound by the Recommendation or Determination and may bring an action in the courts or take any other available action against the Financial Services Provider.

…

20 Interpretation

20.1 Defined terms

The following words have the following meanings where they appear in these [T]erms of [R]eference: …

“Applicant” means a person who has a Dispute that has been lodged with [Ombudsman Service] and who … is eligible to use the Service; …

“Determination” means a decision by [Ombudsman Service] about a Dispute in accordance with paragraph 8 (which may include a decision as to remedy under paragraph 9);

“Dispute” means an expression of dissatisfaction with a Financial Services Provider. …

“Financial Service” means a product or service that: a) is financial in nature including a product or service which is or is in connection with: … viii) financial or investment advice; …

“Financial Services Provider” means … (a) a provider of a Financial Service that is a Member; …

“Jurisdictional Decision” means a final decision … as to whether, under these Terms of Reference, [Ombudsman Service] is able to consider a Dispute or whether [Ombudsman Service] should exercise its discretion to exclude a Dispute. …

“Member” means a person who is a Member of [Ombudsman Service] as defined in [the] Constitution. …

“Ombudsman” means a person appointed to the position of Ombudsman under paragraph 12 of [the] Constitution …

“Recommendation” means an assessment by [Ombudsman Service] about a Dispute in accordance with paragraph 8 of these Terms of Reference; …

“Service” means the dispute resolution scheme described in these Terms of Reference. …

20.2 General

…

(g) Headings are inserted for convenience only and do not affect the interpretation of these Terms of Reference.

The provisions of the Terms of Reference make it plain that, in deciding a Dispute, Ombudsman Service is not confined to making a decision strictly based on legal rights and obligations.[17]
[17]Patersons Securities Ltd v Financial Ombudsman Service Ltd (2015) 108 ACSR 483, 500 [91] (Mitchell J).

B.4 The Constitution

The Constitution provides, relevantly:[18]
[18]The replaceable rules under the Corporations Act 2001 (Cth), see Part 2B.4, are expressly excluded: cl 1.5.

1 Preliminary

Definitions

1.1 In this Constitution unless the context otherwise requires: …

“Applicable Terms of Reference” means the Terms of Reference that apply to a Member in respect of a dispute; …

“Constitution” means this Constitution as amended from time to time; …

“Financial Services Provider” means a Financial Service Provider as described in the Terms of Reference; …

“Member” means a person approved as a Member …

“Ombudsman” means the Chief Ombudsman or other Ombudsman appointed pursuant to clause 12; …

“Terms of Reference” means the procedures, however described, established from time to time in accordance with this Constitution, for dealing with the resolution of disputes involving Members; …

…

3 Membership

3.1 A person is eligible to be a Member if, and only if, it is a Financial Services Provider.

Approval as a Member

…

3.7 Each Member agrees with the [Ombudsman Service] to be bound by the Applicable Terms of Reference. …

…

12 Ombudsman

…

12.2 An Ombudsman shall, exercise the powers and duties of the Ombudsman as set out in the Applicable Terms of Reference.

…

14 Terms of Reference

…

14.5 The provisions of this Constitution, and of the Applicable Terms of Reference in respect of a dispute, each as in force from time to time, shall form a binding contract between each Member and [Ombudsman Service].

B.5 The Enforceable Undertaking

The Enforceable Undertaking provides, relevantly:

1 Definitions

1.1 In addition to terms defined elsewhere in this undertaking, the following definitions are used: …

“Commencement Date” means the date this undertaking is accepted by ASIC. …

“Independent Expert” means the person appointed as an independent expert pursuant to paragraph 3.19 of this undertaking. …

“Licensee Risk Framework” means the program of work and series of systems, procedures and principles for managing compliance risks applicable to [Macquarie’s business] and as otherwise required by s 912A(1)(h) of the Corporations Act. …

…

2 Background

…

ASIC surveillance

…

2.10 The surveillance conducted by ASIC [between December 2011 and August 2012] under section 912E of the Corporations Act identified various concerns about [Macquarie]’s compliance processes and its Licensee Risk Framework.[19] …
[19]At clause 2.16 of the Enforceable Undertaking, 11 separate concerns of ASIC are listed (“ASIC’s Concerns”), and, pursuant to clause 2.20, Macquarie acknowledged ASIC’s Concerns were reasonably held.

Acknowledgement of Concerns

…

2.24 Subject to [Macquarie’s] compliance with this undertaking and ASIC agreeing to the terms of the Implementation Plan, ASIC will not take or cause to be taken any other action against [Macquarie] in relation to the subject matter of ASIC’s Concerns.

3 Undertakings

…

Licensee Risk Framework Assessment

3.2 [Macquarie] will conduct an assessment of its Licensee Risk Framework against generally accepted standards appropriate to the nature, size and complexity of the business, with particular reference to the obligations it has as the holder of an Australian financial services licence.

…

Implementation Plan

3.4 [Macquarie] is to address ASIC’s Concerns by developing an implementation plan for addressing any unresolved deficiencies in the Licensee Risk Framework … (“Implementation Plan”).[20]
[20]Pursuant to clause 3.6, various requirements with respect to the Implementation Plan are set out.

…

Independent Expert

3.19 Within 30 days of the Commencement Date … [Macquarie] will appoint an Independent Expert, who has expertise in the area of compliance and risk management and who is independent of [Macquarie] … to assess the implementation of enhancements to the Licensee Risk Framework, introduced in accordance with the requirements of this undertaking …

…

Other Undertakings

…

3.28 [Macquarie] undertakes that if, during the course of this undertaking, it becomes aware of instances where a client may have been adversely affected due to the failings of a Representative, [Macquarie] will notify ASIC of its proposal to consider the circumstances (including where appropriate, writing to the client in terms agreed with ASIC) and if found to be adversely affected, [Macquarie] is to remediate the client where appropriate.

…

3.31 [Macquarie] undertakes that it will not seek a variation of its [Australian financial services licence] or its membership of an [external dispute resolution] scheme, unless the Independent Expert provides an assessment of the impact on this undertaking and ASIC is provided with an opportunity to comment.

…

B.6 The proceeding

By an originating motion (“the Originating Motion”) and a supporting affidavit, the Plaintiffs commenced the proceeding on 11 August 2017, seeking:[21]
[21]The prayer for relief in the Statement of Claim repeated these matters, save that the Plaintiffs sought additional declarations on the basis that Ombudsman Service breached a collateral contract by seeking to exercise its power under clause 5.2 of the Terms of Reference.

(1)A declaration that the decision by Ombudsman Service to refuse to consider the Dispute is invalid.

(2) Relief in the nature of certiorari to quash the decision.
(3)Relief in the nature of prohibition to restrain Ombudsman Service from refusing to consider the Dispute.

(4) In the alternative:

(a) A declaration that, pursuant to clause 4.4 of the Terms of Reference, the Plaintiffs, Macquarie and Ombudsman Service agreed that Ombudsman Service would consider the Dispute.

(b) A declaration that, by reason of the tripartite agreement, Ombudsman Service had no discretion to rely on clause 5.2 of the Terms of Reference and refuse to consider the Dispute.

(c) A declaration that by exercising its discretion under clause 5.2 of the Terms of Reference, Ombudsman Service breached the tripartite agreement.

(d) In the alternative to (4)(c), that the decision to refuse to consider the Dispute was such an unreasonable exercise of the power conferred by clause 5.2 of the Terms of Reference, that it constituted a breach of the tripartite agreement.

(e) A declaration that Ombudsman Service is estopped from refusing to consider the Dispute.

(f) An injunction restraining Ombudsman Service from refusing to consider the Dispute.

On 5 October 2018, on the Plaintiffs’ application, orders were made joining Complaints Authority as third defendant to the proceeding and granting the Plaintiffs leave, to the extent leave was necessary, to continue the proceeding against Ombudsman Service.[22]
[22]In written submissions, counsel for Ombudsman Service accepted that the joinder ought to be allowed. It was also submitted that leave was not required to continue the proceeding against Ombudsman Service, but there was no opposition to it being granted. Counsel for Macquarie neither consented to nor opposed the joinder or leave.

During the hearing of the application for joinder and leave to continue, counsel for the defendants submitted the proceeding ought to be the subject of pleadings. This was ultimately accepted by the Plaintiffs’ counsel. The court was further informed that it was likely that, regardless of the contents of any statement of claim, the defendants would be seeking summary judgment against the Plaintiffs. Accordingly, orders were made granting leave to file a statement of claim, with any application for summary judgment to be made returnable on 16 November 2018.[23]
[23]The defendants are yet to file defences to the Statement of Claim.

C. The Complaints Service’s application

The Complaints Service sought orders for summary judgment with respect to paragraphs 45 to 51 of the Statement of Claim, together with paragraphs A to C of the prayer for relief. Those paragraphs are concerned with claims for judicial review of the decision by Ombudsman Service not to consider the Dispute (“the Judicial Review Claim”).

The Complaints Service also sought summary judgment with respect to paragraphs 40, 44 and paragraph D(7) in the prayer for relief. Those paragraphs allege Ombudsman Service was estopped from asserting that it was not obliged to consider, or from refusing to consider, the Dispute (“the Estoppel Claim”).

In the alternative, the Complaints Service sought orders that the following paragraphs be struck out:

(1) 25, 30,[24] 38-40, 42(c), 42(d), 43–51 of the Statement of Claim.[25]
[24]Macquarie explicitly sought orders striking out par 30, but, initially, the Complaints Service did not. However, in written submissions, counsel for the Complaints Service supported Macquarie’s application to strike out that paragraph and, if the court considered it necessary, sought leave to amend the Complaints Service’s summons to include par 30.
[25]Paragraphs 25, 30 and 44 were subsequently struck out by agreement. The remaining paragraphs concerned a “collateral contract” (see pars 68-70 below), an alternative “obligation” (see pars 72-73, 75-76 below), the Estoppel Claim (see pars 57-66 below), and an “unreasonableness” term (see pars 74, 78 below).

(2) A, B, C and D(7) in the prayer for relief of the Statement of Claim.

(3) 1-3, 4(e), 5–10 and 14 of the Originating Motion.[26]

[26]These paragraphs mirrored the prayer for relief, the Judicial Review Claim and the Estoppel Claim pleaded in the Statement of Claim.

D. Macquarie’s application

Similar to the Complaints Service, Macquarie sought orders for summary judgment with respect to the paragraphs concerning the Judicial Review Claim and the Estoppel Claim.[27] Further, Macquarie sought orders striking out paragraphs 25, 30, 38, 39, 42(c), 42(d), 43 and 44 of the Statement of Claim; as well as orders for further particulars of other paragraphs in any event.[28]
[27]Macquarie did not seek orders for summary judgment with respect to paragraph 44 of the Statement of Claim.
[28]Particulars to pars 38, 39, 40(c), 43 and 44 were sought as an alternative to the summary judgment and strike out claims. Particulars to paragraphs 13, 21, 23, 26, 27, 32-35, 37 and 41 were sought in addition to the summary judgment and strike out claims.

E. Issues resolved before the hearing

In written submissions filed before the hearing, the Plaintiffs conceded that paragraphs 25, 30 and 44 of the Statement of Claim ought to be struck out. In light of the defendants’ written submissions, it is plain this concession was properly made. Each of those paragraphs will be struck out.

F. Legal Principles

F.1 Summary judgment

The legal principles that apply to summary judgment applications are well-established.[29] Pursuant to s 63(1) of the Civil Procedure Act 2010 (Cth), summary judgment may be given, amongst other circumstances, if the court is satisfied that a claim, or part thereof, has no real prospect of success.[30] The court is required to consider whether the claim has a “real” as opposed to a “fanciful” chance of success.[31] This is a more liberal test than the “hopeless” or “bound to fail” test.[32] Accordingly, even if a case is not hopeless or bound to fail, summary judgment may still be warranted if the claim has no real prospect of success.[33]
[29]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 40 [35] (Warren CJ and Nettle JA). See also Bodycorp Repairers Pty Ltd v Holding Redlich [2018] VSCA 17, [127] (Whelan and Santamaria JJA and T Forrest AJA); The Gull Lexington Group Pty Ltd v Laguna Bay (Banogill) Agricultural Pty Ltd [2018] VSCA 85, [123] (Santamaria JA and McDonald AJA); Mandie v Memart Nominees Pty Ltd [2016] VSCA 4, [45] (Kyrou, Ferguson and McLeish JJA).
[30]Section 62 of the Civil Procedure Act provides summary judgment applications may be made by defendants in civil proceedings. See also s 63(2)(b).
[31]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 38 [25]-[27], 39 [29] (Warren CJ and Nettle JA).
[32]Cf General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129.5–130.4 (Barwick CJ). See Spencer v Commonwealth (2010) 241 CLR 118, 139-140 [53]-[56] (Hayne, Crennan, Kiefel and Bell JJ) and the High Court’s discussion on the test for summary judgment in earlier cases.
[33]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 38 [25]-[27], 39 [29].

The power to summarily dismiss a proceeding is discretionary. A court ought not dismiss a proceeding summarily if it is not in the interests of justice to do so, or because the dispute is of such a nature that only a full hearing on the merits is appropriate.[34] The court must exercise great care when exercising the power, and should only grant summary judgment if it is clear that there is no real question to be tried.[35] A real question to be tried is a question which may result in the respondent to a summary judgment application succeeding in the substantive proceeding.[36]
[34]Section 64 of the Civil Procedure Act. See also Feldman v Frontlink Pty Ltd [2014] VSCA 27, [63] (Warren CJ, Tate JA and Sifris AJA); Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd (2011) 35 VR 1, 8-9 [18] (Dixon J) .
[35]See Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, 40 [35(d)] (Warren CJ and Nettle JA). Cf Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99.3 (Mason, Murphy, Wilson, Deane and Dawson JJ).
[36]Bodycorp Repairers Pty Ltd v Holding Redlich [2018] VSCA 17, [127(z)] (Whelan and Santamaria JJA and T Forrest AJA).

Upon the hearing of a summary judgment application, the court may give judgment on the claim or part thereof as is appropriate, having regard to the nature of the relief or the remedy claimed.[37]
[37]Pursuant to r 22.22(b) of the Supreme Court Rules. This rule is in Part 3 of order 22 of the Supreme Court Rules and provides that it is subject to Part 4.4 of the Civil Procedure Act. Rule 22.16 provides that an application under s 62 of the Civil Procedure Act shall be made in accordance with Part 3. See also s 63 of the Civil Procedure Act.

Further, where a claim is scandalous, frivolous or vexatious or an abuse of court process, the court may enter judgment in the proceeding generally, or in relation to any claim.[38] By making an application under r 23.01, rather than r 23.02, the moving party necessarily contends that the claim completely lacks foundation and is not amenable to repleading to remedy the deficiency.
[38]Rule 23.01 of the Supreme Court Rules.

F.2Striking out pleadings

The legal principles that apply to strike out applications are also without controversy.[39]
[39]Wheelahan v City of Casey (No 12) [2013] VSC 316, [25] (Dixon J), and the cases there cited. See also Annesley v Westpac Banking Corporation [2016] VSC 323, [70]-[71] (Derham AsJ); Hoh v Frosthollow Pty Ltd [2014] VSC 77, [11]-[20] (Derham AsJ); Vo v Nguyen [2013] VSC 304, [30]-[41] (Derham AsJ), and the cases there cited.

The court may order that the whole or part of a pleading be struck out if, relevantly, a statement of claim: does not disclose a cause of action; is scandalous, frivolous or vexatious; may prejudice, embarrass or delay the fair trial of the proceeding; or is otherwise an abuse of the process of the court.[40] Unlike an application under r 23.01, an application under r 23.02 seeks no more than a striking out or an amendment, rather than judgment ordered summarily.
[40]Pursuant to r 23.02 of the Supreme Court Rules.

The elements of an adequate pleading are straightforward. A pleading must comprise a coherent narrative of material facts which set out and frame the elements of a cause of action. It must be pleaded with sufficient clarity, must not be unintelligible, ambiguous or vague and must not raise allegations that are offensive.[41] Where particulars are relied upon, they ought not be used to “fill material gaps” or “cure a bad statement of claim”.[42] Ultimately, the purpose of a proper pleading is to allow, in the interests of fairness, the opposite party to know what is alleged.[43] Where a pleading is deficient in any of these respects, an application striking out the pleading may be warranted.
[41]See fn 39 above.
[42]Bruce v Odhams Press Ltd [1936] 1 KB 697, 712.7-713.2 (Scott LJ); referred to with approval in numerous cases including Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591, 44,152.9 (col 1) (Goldberg J); McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409, 417-418 [22] (Weinberg J) and Environinvest Limited v Pescott [2011] VSC 325, [23] (Judd J).
[43]Dare v Pulham (1982) 148 CLR 658, 664.3 (Murphy, Wilson, Brennan, Deane and Dawson JJ); Meckiff v Simpson [1968] VR 62, 70.9 (Winneke CJ, Adam and Gowans JJ).

A strike out application, therefore, is distinct from an application for summary judgment in that it is an objection to the manner of expression of the pleading, as opposed to the prospects of the cause of action or defence itself.[44] Again, care must be exercised when ordering that a pleading be struck out.[45]
[44]The aim of which is to secure compliance with the rules of pleading: Meckiff v Simpson [1968] VR 62, 70.9. See also Rowson v Alpass (2017) 53 VR 196, 204 [30] (Derham AsJ).
[45]Rowson v Alpass (2017) 53 VR 196, 204 [31].

F.3 Proper particulars

Every pleading is required to contain the necessary particulars of any fact or matter pleaded.[46] This is to ensure that the litigation is conducted fairly, openly and without surprise.[47] The court may order a party to serve particulars or further and better particulars of a party’s pleading.[48]

G. The summary judgment applications

[46]See Supreme Court Rules, r 13.10(1).

[47]Astrovlanis Compania Naviera SA v Linard [1972] 2 QB 611, 620F (Edmund Davies LJ, with whom Stephenson LJ agreed). See also fn 42 above.

[48]Supreme Court Rules, r 13.11.

G.1 Judicial Review Claim – contentions

The Plaintiffs contend that it is at least arguable that that Ombudsman Service is subject to judicial review, relying on the principle enunciated in R v Panel on Take-overs and Mergers; Ex Parte Datafin plc[49] (“the Datafin Principle”). Further, the Plaintiffs accepted that, in order to succeed on this point, it was necessary to distinguish the decision in Mickovski v Financial Ombudsman Service Ltd.[50]
[49][1987] QB 815 (Donaldson MR, Lloyd and Nicholls LLJ, in 3 separate judgments, where Lloyd LJ agreed with Donaldson MR, and Nicholls LJ agreed with both other members of the court).
[50] (2012) 36 VR 456 (Buchanan and Nettle JJA and Beach AJA).

As to the first of these cases, it involved the decision of a private body, the panel on take-overs and mergers, to dismiss a complaint by an entity bidding in competition with another company for the takeover of a target company. The case reaffirmed the principle that, where the power of a private entity is derived wholly from contract, such as a private arbitration, judicial review is not available.[51] However, where a private entity exercises a degree of public duty or a function with a public element, judicial review may be available. What is required is a consideration of not only the source of the power but the nature of the power. If a private entity exercises a public function which serves the public interest or has public law consequences, then, according to the Datafin Principle, that may “bring the body within the reach of judicial review”.[52] The Datafin approach, therefore, may be a means beyond private law remedies for the court to prevent decisions of private entities, which are performing functions of a public character, being left unchecked.
[51][1987] QB 815, 836F, 837A, 847A.
[52]At 847C.

The later Victorian Court of Appeal decision addressed the Datafin Principle. It concerned a decision by Ombudsman Service to refuse to determine a dispute between the appellant, Mickovski, and an insurer, MetLife Insurance Ltd, for salary back-payments allegedly due to him following a serious workplace injury. Mickovski argued the fact that an entity holding a financial services licence must be a member of an external dispute resolution procedure, approved by ASIC,[53] meant that a sufficient public duty element attached to Ombudsman Service, therefore making it susceptible to judicial review.
[53]Section 912A(1)(g) and (2) of the Corporations Act 2001 (Cth).

The Court of Appeal rejected that argument, finding that Ombudsman Service operated in the private domain and further, that the resolution of private disputes via dispute resolution mechanisms in compliance with statute is a feature of private law and does not constitute a sufficient public function to invoke the Datafin Principle.[54] In so finding, it was stated:[55]

Taken at its widest, it is doubtful that the [Datafin P]rinciple has any application in relation to contractually based decisions and, even if it does, we agree with the judge that the public interest evident in having a mechanism for private dispute resolution of insurance claims of the kind mandated by s 912A [of the Corporations Act] is insufficient to sustain the conclusion that [Ombudsman Service] was exercising a public duty or a function involving a public element in circumstances where [Ombudsman Service’s] jurisdiction was consensually invoked by the parties to a complaint.
(Citation omitted.)

[54]At 466-467 [31]-[33] (Buchanan and Nettle JJA and Beach AJA). See also 462-463 [22].

[55]At 466 [32].

Although it was held that Datafin Principle did not apply to Ombudsman Service, the Court of Appeal made a number of observations upon which the Plaintiffs seek to rely. First, their Honours stated that the Datafin Principle was “appealing” given the “increasing privatisation of governmental functions in Australia”.[56] Secondly, it was observed that there was a necessity for judicial review in relation to a wider range of public and administrative functions in these circumstances.[57] Thirdly, it was stated that the Datafin Principle offered a logical approach towards satisfaction of this necessity, even if still to be perfected.[58] Fourthly, the Court of Appeal was willing to assume, without deciding, that the Datafin Principle had “some operation” in Australia.[59]
[56]At 466 [31].
[57]Ibid.
[58]Ibid.
[59]At 466 [32].

The Plaintiffs submitted that the Enforceable Undertaking and the Remediation Scheme provided a sufficient public law element to the role of Ombudsman Service to attract the Datafin Principle, so that Ombudsman Service’s decision to refuse to consider the Dispute was subject to judicial review. In support of this submission, the Plaintiffs relied upon the regulatory role and enforcement powers of ASIC, which included protecting consumers with respect to misconduct in relation to financial products and services, the ability to ban financial service providers and to seek civil penalties from the courts. Further, with respect to enforceable undertakings, reliance was placed on their enforceability by a court and that, generally speaking, ASIC accepts enforceable undertakings as an alternative to civil court action or other administrative action.[60]
[60]Reference was also made in the Statement of Claim to ASIC’s Regulatory Guide 100, and in particular 100.6 and 100.7: see annexure “A”, par 18.

On this basis, it was submitted that ASIC exercises public duties and has functions involving a public element. The question posed by the Plaintiffs, in circumstances where ASIC had accepted the Enforceable Undertaking which contemplated the ability of proposed clients to benefit from the Remediation Scheme, was:

[W]hether or not the fact that the [Plaintiffs] have made the complaint to [Ombudsman Service] under a scheme set up as part of an Enforceable Undertaking given to ASIC means that [Ombudsman Service] is therefore exercising a public duty or a function involving a public element.

It was submitted this question ought not be determined summarily in circumstances where, but for the Enforceable Undertaking, the Plaintiffs would not have been able to avail themselves of the External Scheme by reason that their claims far exceeded Ombudsman Service’s cap on its jurisdiction of $500,000.

The Plaintiffs also relied collectively upon certain operational and regulatory guidelines and procedures of Ombudsman Service, together with a series of announcements, publications and media releases made by ASIC and Macquarie (“the Publications”),[61] which the Plaintiffs contended signified a public interest element to the contractual role.
[61]At pars 10, 11, 18 and 22–31 of the Statement of Claim: see annexure “A”.

In making these submissions, the Plaintiffs accepted that, by reason of the decision in Mickovski v Financial Ombudsman Service Ltd, had the Enforceable Undertaking not been accepted by ASIC, it would not otherwise be open to the Plaintiffs to challenge the decision of Ombudsman Service by way of judicial review.[62]
[62]See also Matsoukatidou v Commonwealth Bank of Australia [2014] VSCA 229, [27] (Neave and Tate JJA).

Further, the Plaintiffs submitted the fact that the relationship between them, Macquarie and Ombudsman Service was contractual was not a bar to judicial review. They contended that the role Ombudsman Service was undertaking in the particular circumstances of this case meant that Ombudsman Service was discharging a public duty “affecting more than those bound by contract to observe the rules”.[63]
[63]See Australian Stock Exchange Ltd v Hudson Securities Pty Ltd (1999) 33 ACSR 416, 432 [82] (Santow J).

In response, the Complaints Service contended that Ombudsman Service’s decisions are not amenable to judicial review, and that Mickovski v Financial Ombudsman Service Ltd was not distinguishable. Further, it was submitted that, on the facts of this case, the court need not determine whether the Datafin Principle applied in Australia and therefore it should not.[64] In this regard, NEAT Domestic Trading Pty Ltd v AWB Ltd was referred to.[65] Counsel submitted that as the High Court had declined to answer the question of “whether public law remedies may be granted against private bodies”, the court ought to follow the approach taken in Mickovski v Financial Ombudsman Service Ltd.[66]
[64]Referring to Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456, 466 [32] (Buchanan and Nettle JJA and Beach AJA), citing NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277, 297 [49]-[50] (McHugh, Hayne and Callinan JJ) and Gould v Magarey (2007) 231 CLR 350. See also Burge v Commonwealth Bank of Australia (No 3) [2017] FCA 383, [100]-[101], [128] (Foster J); Bilaczenko v Financial Ombudsman Service Ltd [2013] FCA 1268, [39]-[42] (Mansfield J); D’Souza v Royal Australian and New Zealand College of Psychiatrists (2005) 12 VR 42, 58-59 [110]-[112], 59 [118] (Ashley J).
[65](2003) 216 CLR 277.
[66]See also L v State of South Australia (2017) 129 SASR 180, 216-222 [137]-[154] (Kourakis CJ, with whom Parker and Doyle JJ agreed), and the cases there cited; Agricultural Societies Council of NSW Ltd v Christie (2016) 340 ALR 560, 577-578 [89]-[92] (Leeming J), and the cases there cited; Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393, 410-413 [73]-[81] (Basten JA). Cf Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 2) [2018] FCA 978, [63]-[64] (McKerracher J).

In support of the contention that the Datafin Principle did not apply, the Complaints Service relied on the relationship between Ombudsman Service, Macquarie and the Plaintiffs being solely based in contract (as opposed to being constituted by public law). Accordingly, it was submitted there could be no basis for judicial review.

On the issue of contract, it was common ground between the parties that, at the time the Plaintiffs lodged the Dispute with Ombudsman Service, a tripartite agreement formed (“the Tripartite Contract”),[67] obliging the parties to observe the Terms of Reference and the Constitution. For that reason, counsel for the Complaints Service submitted that the Plaintiffs “consensually invoked” Ombudsman Services’ jurisdiction, were under no obligation to use Ombudsman Service and, pursuant to the Terms of Reference, were entitled to take any other available action against Macquarie.[68]
[67]Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456, 467 [35].
[68]See par 16 above. See also Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456, 462-463 [22].

Furthermore, the Complaints Service submitted that neither the Enforceable Undertaking nor the Publications meant that Ombudsman Service served a public duty or imposed a sufficient public function to alter the contractual source of Ombudsman Service’s power, to enable the court to distinguish the present case from Mickovski v Financial Ombudsman Service Ltd.[69] It was submitted that there was “nothing different” about the Plaintiffs’ circumstances by reason of the Enforceable Undertaking. By reference to the terms of the Enforceable Undertaking, it was submitted they were “remarkably bland” in regards to the role of Ombudsman Service, with clause 3.31 being the only term touching upon the External Scheme.[70]
[69](2012) 36 VR 456, 466-467 [33], citing R v Insurance Ombudsman Bureau; Ex parte AEGON Life Assurance Ltd [1995] LRLR 101. See also par 40 above.
[70]See par 19 above.

Macquarie adopted these submissions, and reiterated that the Enforceable Undertaking did not take the role of the Complaints Service out of the ordinary course.

G.2 Judicial Review Claim – ruling

For reasons that will become apparent, it is unnecessary to determine whether the Datafin Principle applies in Australia, or even arguably applies in Australia.[71] For the purposes of this summary judgment application only, I will proceed on the assumption that it does apply.
[71]There are numerous authorities which have suggested the Datafin Principle does apply in Australia: CECA Institute Pty Ltd v Australian Council for Private Education and Training (2010) 30 VR 555, 570-571 [79], 573 [86]-[87], 576 [99]-[100] (Kyrou J); Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd (No 2) (2004) 50 ACSR 554, 559-600 [4]-[7] (Shaw J); MBA Land Holdings Pty Ltd v Gungahlin Development Authority (2000) 206 FLR 120, 147 [220] (Higgins J); McClelland v Burning Palms Surf Life Saving Club (2002) 191 ALR 759, 790-791 [115]-[117] (Campbell J); Australian Stock Exchange Ltd v Hudson Securities Pty Ltd (1999) 33 ACSR 416, 432 [82]-[83] (Santow J); Typing Centre of New South Wales v Toose (unreported, Supreme Court, NSW, Mathews J, 15 December 1998), 17.5-20.7; State of Victoria v Master Builders’ Association of Victoria [1995] 2 VR 121, 160.8-161.6, 162.10-163.4 (Eames J). See further the cases referred in Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456, 466 fnn 17 and 18.

Proceeding on this premise, on the facts of this case and the authorities that bind this court, the Plaintiffs’ application for judicial review is bound to fail. The reasons for this are as follows:[72]
[72]The reasons given are directed to the issue of whether it is arguable that the Datafin Principle might apply, and say nothing on any contractual or estoppel question that may arise in the proceeding.

(1)Paragraph 3.31 of the Enforceable Undertaking[73] provided that Macquarie undertook not to seek a variation of its Australian financial services licence or its membership of an external dispute resolution scheme, unless an independent expert provided an assessment of the impact on this undertaking and ASIC is provided with an opportunity to comment.
(2)The reference to the external dispute resolution in paragraph 3.31 is a reference to the External Scheme conducted by the Complaints Service, and is the only reference to the External Scheme or the Complaints Service in the entire Enforceable Undertaking.
(3)That single reference to the Complaints Service in the Enforceable Undertaking does not alter the contractual nature of the External Scheme.[74]
(4)The Plaintiffs did not have to use Ombudsman Service to have the Dispute considered; the courts were an available option both before and after the Enforceable Undertaking (which, for a period of time, was taken).
(5)The communication from Macquarie to the Plaintiffs on 15 August 2014 cannot be said to amount to an offer that Ombudsman Service would definitely review the Case Assessment.[75]
(6)Further to (5) above, Macquarie’s letter sent 22 September 2016 recorded Macquarie’s agreement to have Ombudsman Service consider the Dispute regardless of the amount of the claims. However, that letter purports to say nothing about Ombudsman Service beyond acknowledging that Ombudsman Service was “still required” to act in accordance with the Terms of Reference and “as required by law”.[76] Beyond that, in substance, it merely stated Ombudsman Service could be contacted.
(7)In these circumstances, Macquarie did not purport to unilaterally impose a purported variation of the Tripartite Contract or any obligation on Ombudsman Service with respect to the basis upon which Ombudsman Service was to conduct any consideration of the Dispute.
(8)Nothing said or published by ASIC or Ombudsman Service purported to change the legal nature of the role to be performed by Ombudsman Service.

[73]See par 19 above.

[74]Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456, 466-467 [32]-[33] (Buchanan and Nettle JJA and Beach AJA).

[75]See par 12 above.

[76]See par 13 above.

To elaborate on paragraph 53(8) above, the existence of the Publications,[77] the fact that ASIC (a public body) accepted the Enforceable Undertaking, the fact that Macquarie was statutorily obliged to be a member of the External Scheme and the fact that Ombudsman Service was bound to operate the External Scheme cannot have any of the consequences for which the Plaintiffs contend. Those facts do not alter the scope or character of Ombudsman Service’s contractual role, and do not result in Ombudsman Service exercising a public law duty or function with a public element. To adopt the approach of the Court of Appeal in Mickovski v Financial Service Ltd,[78] adapting the language used in R v Insurance Ombudsman Bureau; Ex parte AEGON Life Assurance Ltd:[79]

Since [s 912 of the Corporations Act], as before, the public do not have to use the [Ombudsman Service]. They can instead sue [their financial advisers] in the courts. If they go before the [Ombudsman Service], because [it] is not limited to purely legal considerations, in many cases their prospects of success will be better. But they have the choice of forum …
The [Ombudsman Service’s] power over its members is … still, despite the [Corporations Act], solely derived from contract and it simply cannot be said that it exercises government functions. In a nut shell, even if it can be said that it has now been woven into a governmental system, the source of its power is still contractual, its decisions are of an arbitrative nature in private law and those decisions are not, save very remotely, supported by any public law sanction. In light of all these factors, the [Ombudsman Service] is not … a body susceptible to judicial review.

[77]See par 44 above.

[78](2012) 36 VR 456, 467 [33] (Buchanan and Nettle JJA and Beach AJA).

[79][1995] LRLR 101, 105-106 (Rose LJ).

For completeness, the facts of the Plaintiffs’ case are also readily distinguishable from those giving rise to the Datafin Principle itself. In that case, it was held that there was no contractual relationship between the panel (sought to be made the subject of review) and the parties before it.[80] Further, the code under which the panel operated was backed by public law sanctions.[81] Moreover, the powers being exercised by the panel in that case could “only be characterised as powers in the nature of public law powers”.[82]
[80]R v Panel on Take-overs and Mergers; Ex parte Datafin Plc [1987] QB 815, 825C (Donaldson MR, with whom Lloyd and Nicholls LJJ agreed). Cf 850F (Nicholls LJ).
[81]At 826G, 834G, 835F, 848E, 852A.
[82]At 828D. See also 848G, 851B-852B.

For these reasons, paragraphs 45 to 51 of the Statement of Claim and paragraphs B and C of the prayer for relief will be summarily dismissed.[83] There is no real prospect of the Judicial Review Claim succeeding.

G.3 Estoppel Claim – contentions[84]

[83]Paragraph A has not been included because the declaratory relief sought might also be available pursuant to the contractual claim and any estoppel claim.

[84]As noted in par 27 above, a second estoppel claim was pleaded at paragraph 44 of the Statement of Claim, which was struck out by agreement.

As an alternative to its contractual claims, at paragraph 40 of the Statement of Claim,[85] the Plaintiffs allege that they, Ombudsman Service and Macquarie held a mutual assumption that Ombudsman Service would not exercise its discretion contained in clause 5.2 of the Terms of Reference and refuse to consider the Dispute (“the Mutual Assumption”). By way of particulars, paragraphs 10, 11 and 14 to 33 of the Statement of Claim are relied upon.[86]
[85]The corresponding prayer for relief being paragraph D(7).
[86]See annexure “A”.

The Plaintiffs allege that they lodged the Dispute with Ombudsman Service in reliance on the Mutual Assumption, and would suffer detriment if Ombudsman Service and Macquarie were permitted to resile from the Mutual Assumption. The matters raised with respect to detriment are the fact that the Plaintiffs “divulged” the evidence on which they intend to rely to support their claim, together with the cost and inconvenience in requesting the Case Assessment and a review of the Dispute by Ombudsman Service. In those circumstances, the Plaintiffs further allege it would be unconscionable for Ombudsman Service and Macquarie to resile from the Mutual Assumption and are estopped from doing so.

The Plaintiffs submitted the Mutual Assumption was established by reason that: Ombudsman Service conducted the External Scheme; Macquarie was a member of the External Scheme; ASIC accepted the Enforceable Undertaking; Macquarie put in place the Remediation Scheme pursuant to the Enforceable Undertaking; the Plaintiffs invoked the Remediation Scheme and then the External Scheme by reason of the Dispute; and “each of those parties were aware or ought to have been aware of each of the matters pleaded in paragraphs 10, 11 and 14 to 33 of the Statement of Claim”.

Counsel for Macquarie submitted that even if the matters pleaded in paragraphs 10, 11 and 14 to 33 were proven, they were incapable of establishing that Macquarie or Ombudsman Service operated under the Mutual Assumption. Macquarie contended the Plaintiffs had failed to plead any material facts, which, if proven, would demonstrate that each of Macquarie, Ombudsman Service and Macquarie adopted the Mutual Assumption, that they each conducted their relationship on the basis of the Mutual Assumption and that they each knew that the departure from the Mutual Assumption would cause detriment to the Plaintiffs. To make good this submission, Macquarie referred to the elements of a claim based on conventional estoppel:[87]

(1)The plaintiff has adopted an assumption as to the terms of its legal relationship with the defendant(s).
(2)The defendant(s) has (have) adopted the same assumption.
(3)The parties have conducted their relationship on the basis of that mutual assumption.
(4)Each party knows or intends that the other(s) will act on that basis.
(5)Departure from that assumption will cause detriment to 1 of them.

[87]See Sze Tu v Lowe (2014) 89 NSWLR 317, 393 [431] (Gleeson JA, with whom Meagher and Barrett JJA agreed).

Further, counsel for Macquarie submitted that the Plaintiffs’ counsel had misdirected himself in alleging that the parties were “aware or ought to have been aware” of the matters pleaded in paragraphs 10, 11 and 14 to 33 of the Statement of Claim. Furthermore, and in any event, it was pointed out that such an allegation had not been pleaded in the Statement of Claim.

Macquarie’s submissions on this issue were adopted by the Complaints Service.

G.4 Estoppel Claim – ruling

I accept the submissions made by counsel for Macquarie. The matters raised in paragraphs 10, 11 and 14 to 33 of the Statement of Claim[88] cannot substantiate the allegation of a Mutual Assumption. By reason that, at the very least, there is nothing in those allegations referred to which touches upon any assumption adopted by the Plaintiffs with respect to its legal relationship with Ombudsman Service. For completeness, none of the paragraphs identified could, without more, provide a basis for establishing all the parties adopted, and then conducted their relationship on the basis of, the Mutual Assumption or that each party knew or intended that to be the case.
[88]See annexure “A”.

In short, even if the Publications are all proven to have been made, their mere existence does not enable the Plaintiffs to establish that the Estoppel Claim has been made out. The Plaintiffs must go further and plead the relevant material facts relied upon to establish each of the elements of the cause of action. Leaving aside the issue of detriment, this requires the Plaintiffs to identify, with sufficient particularity: the circumstances giving rise to the Mutual Assumption; how it was adopted by each party; how each knew the others were relying on the Mutual Assumption; and how the relationship between the Plaintiffs, Ombudsman Service and Macquarie was conducted on the basis of the Mutual Assumption.

In light of the matters referred to above, paragraph 40, and paragraph 42(d) (which provides that the decision of Ombudsman Service was contrary to the Mutual Assumption), will be struck out.

However, judgment will not be ordered either by way of summary judgment or summary dismissal. Presently, as a result of concessions made and this ruling, there are no estoppel claims extant. Whatever might be the basis for any estoppel claim, having reviewed the materials on these applications, in my view, the Plaintiffs ought to be given the opportunity to revisit these matters (and any others that may exist of which they are aware) to consider whether there is any proper basis to seek relief based on an estoppel claim. This approach is appropriate in circumstances where the Plaintiffs’ counsel properly conceded paragraph 44 of the Statement of Claim ought to be struck out as the claim had not been satisfactorily pleaded and there was no substantive argument as to whether any estoppel claim might be made out.[89]

H. The strike out applications

[89]It goes without saying that this is not an invitation to the Plaintiffs to plead a claim based on estoppel if, on a review of the facts, no claim can be properly pleaded.

H.1 Contractual claims – contentions

The Plaintiffs plead the Tripartite Contract, and its alleged terms. Particulars of the Tripartite Contracts are given as: the Enforceable Undertaking; the offer from Macquarie to conduct the Case Assessment and the acceptance of that offer; certain communications between Macquarie and Ombudsman Service (with the promise of further particulars); communications between Macquarie and Ombudsman Service regarding the “appropriate process in place” as pleaded in paragraphs 26 and 27 of the Statement of Claim (with a promise of further particulars); the Case Assessment; the request of Ombudsman Service for a review of the Dispute; and the Terms of Reference.[90] As to the terms of the Tripartite Contract, the following is alleged:

(a)[Ombudsman Service] would consider the Dispute in accordance with the Terms of Reference; and
(b)the discretion in clause 5.2 of the Terms of Reference otherwise exercisable by [Ombudsman Service] was abrogated.

No particulars of these terms were provided. In oral submissions, the Plaintiffs’ counsel stated that the first term was express and the second term was implied. Counsel accepted that this should be made clear on the face of the pleading.

[90]See annexure “A”.

The Plaintiffs then allege that they, Ombudsman Service and Macquarie are bound by a collateral contract (“the Collateral Contract”), either further to or in the alternative to the Tripartite Contract. Paragraph 38 of the Statement of Claim alleges:

Further and in the alternative to paragraph 37, upon the [P]laintiffs requesting [Ombudsman Service] to review of (sic) the Dispute, there came into existence a tripartite contract between the [P]laintiffs, [Ombudsman Service] and Macquarie (Collateral Contract), collateral to the Tripartite Contract, pursuant to which the parties agreed that [Ombudsman Service] would consider the Dispute notwithstanding:

(a) the ambit of the Dispute conventionally fell outside the Terms of Reference; and

(b) the general discretion of [Ombudsman Service] contained in clause 5.2 of the Terms of Reference to refuse to consider the Dispute.

The Plaintiffs’ counsel accepted that there was a direct inconsistency between what was pleaded in paragraph 38(b) of the Statement of Claim and the term pleaded in paragraph 37(b) concerning the abrogation of clause 5.2 of the Terms of Reference alleged with respect to the Tripartite Contract.[91] In short, it was accepted that, as it stood, the pleading did not make sense. Further, no particulars were provided to paragraph 38. The Plaintiffs’ counsel said that particulars to paragraph 38 were intended to be the same as the particulars to paragraph 36. In this regard, it was also accepted that the pleading in its current form was unsatisfactory. In response, counsel for Macquarie contended that paragraph 38 was deficient and embarrassing for want of particulars and failed to put any of the defendants on notice of the case they have to meet.
[91]Macquarie argued there was no difference in substance between the Tripartite Contract and the Collateral Contract in this regard. In my view, the express abrogation of a term of a contract is materially different to the inclusion of the term, with an agreement it will not be relied upon in the particular circumstances.

H.2 Contractual claims – ruling

Paragraph 38 will be struck out. It does not properly plead the basis of a collateral contract. The Plaintiffs’ counsel properly conceded the obvious deficiencies referred to above. Further, this paragraph contains only 1 material fact, namely, that the Plaintiffs requested Ombudsman Service to review the Dispute. The same material fact was also pleaded at paragraph 36 of the Statement of Claim, and, accordingly, cannot possibly give rise to both the Tripartite Contract and the Collateral Contract.[92] In short, the pleading as it stands is fundamentally flawed. Furthermore, the pleading of inconsistent terms between the Tripartite Contract and the Collateral Contract is problematic in itself.[93]
[92]See, for example, Hoyt’s Proprietary Ltd v Spencer (1919) 27 CLR 133, 139.3 (Knox CJ, with whom Rich J agreed).
[93]Ibid, 146.1–148.2 (Isaacs J, with whom Rich J agreed). See also Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1, 75-77 [239]-[246] (Gordon J); Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, 5.9 (Gibbs CJ), 11.2 (Mason, Wilson and Dawson JJ).

In addition, on the court’s own motion, paragraphs 36 and 37 alleging the Tripartite Contract and its terms will also be struck out. This is not to shut out the Plaintiffs from making a contractual claim, but rather to give them the opportunity to remedy the obvious defects with those 2 paragraphs, as properly acknowledged by counsel during the course of argument. To be clear, any pleading of the Tripartite Contract needs to include particulars identifying whether, and to what extent, it was written, oral, implied or, perhaps, in part imputed. A like observation is made with respect to any alleged terms.

H.3 The “obligation” and “unreasonable” claims – contentions

The Plaintiffs plead at paragraph 39 that, further and in the alternative to the Tripartite Contract and the Collateral Contract, upon the Plaintiffs’ request to review the Dispute, Ombudsman Service “became bound to consider the Dispute” (“the Obligation”) notwithstanding the existence of clause 5.2 in the Terms of Reference. The particulars to paragraph 39 of the Statement of Claim provide:

By reason of the matters alleged in paragraphs 10 to 11 and 14 to 33 above it can be inferred [Ombudsman Service] became bound to consider the Dispute notwithstanding the general discretion of [Ombudsman Service] contained in Clause 5.2 of the Terms of Reference because an objective bystander looking at all the circumstances of the arrangements including the facts alleged in paragraphs 10 to 11 and 14 to 33 above would conclude that the parties intended that [Ombudsman Service] became bound to consider the Dispute notwithstanding the general discretion of [Ombudsman Service] contained in Clause 5.2 of the Terms of Reference.

Further, and in the alternative, the general discretion of [Ombudsman Service] contained in Clause 5.2 of the Terms of Reference to refuse to consider the Dispute was for the benefit of Macquarie and, by its conduct Macquarie, waived the benefit of that discretion.

The Plaintiffs’ counsel explained that the basis for relying on an “objective bystander” in this pleading is that an implied contract was created.[94] In response, counsel for Macquarie submitted that the whole of paragraph 39 is a conclusion and not a proper pleading; that there are no material facts or particulars pleaded as to the nature of the Obligation, how the Obligation arose, or the conduct that gave rise to the alleged waiver.
[94]The Plaintiffs relied on the decision of PRA Electrical v Perseverance Exploration (2007) 20 VR 487, 502-505 [58]-[67] (Ashley JA, with whom Maxwell P and Nettle JA agreed). See also at 489 [3] (Nettle JA).

Further, at paragraph 43 of the Statement of Claim, the Plaintiffs pleaded that, having regard to paragraphs 10, 11 and 14 to 33 of the Statement of Claim, Ombudsman Service breached the Tripartite Contract, alternatively the Collateral Contract, by making a decision which was “so unreasonable that no reasonable decision-maker could have made it”. Counsel for Macquarie submitted that the Plaintiffs sought to plead the breach of a Wednesbury unreasonableness term,[95] however, since neither the term nor the material facts as to why the decision was said to be unreasonable were pleaded, paragraph 43 was embarrassing and vexatious.
[95]Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, cited in Cromwell Property Securities Ltd v Financial Ombudsman Service Ltd (2014) 288 FLR 374, 399-401 [86]-[93] (Warren CJ and Osborn JA), 412 [161]-[163], 433-434 [231]-[233], 440 [251], 441-442 [256] (Tate JA).

H.4 The “obligation” and “unreasonable” claims – ruling

Paragraph 39 will be struck out for a number of reasons. Again, like paragraph 38, it only pleads 1 material fact and does not properly plead what counsel at the hearing said was the basis of the Obligation allegation, namely, an implied or inferred contract.[96] The nature and extent of any such legal obligation must be made clear. Pleading this allegation in the alternative to the contractual claims only heightens the lack of clarity as to the basis upon which the allegation is made. In addition, stating this allegation was “further” to paragraphs 37 and 38 is nonsensical and inconsistent.[97] The authorities demonstrate that an implied or inferred contract may be found to exist when a proposed contract has not been formalised but the parties’ conduct indicates an agreement has been reached. There is no basis for the existence of an implied or imputed contracted if, as is alleged, a formal contract (including, perhaps, a collateral contract) is actually in place.
[96]See also Ormwave Pty Ltd v Smith (2008) Aust Contract Reports 90-286, 96,662-96,663 [70] (Beazley JA, with whom Santow and Ipp JJA agreed).
[97]An inconsistent pleading is impermissible unless it is clearly pleaded in the alternative: Supreme Court Rules, r 13.09(1).

The particulars to paragraph 39 are also deficient. Any allegation of waiver must be founded on material facts that must be properly pleaded. This was accepted by the Plaintiffs’ counsel during the course of the hearing.

Paragraph 42(c), which states that the decision of Ombudsman Service was contrary to the Obligation, must be struck out in light of the matters referred to above.

Paragraph 43 must also be struck out, as was accepted by the Plaintiffs during the course of argument. The Plaintiffs need to plead the term of contract relied upon before being able to plead a breach based on the Wednesbury principle with respect to the “unreasonable” decision alleged. Further, in any amended pleading, particulars of the alleged unreasonableness need to be provided.

H.5 Relevant considerations – contentions

Lastly, counsel for the Complaints Service made submissions with respect to paragraph 47 of the Statement of Claim. Paragraph 47 forms part of the Judicial Review Claim and has been summarily dismissed.[98] However, for completeness, I will briefly set out the contentions of the parties.
[98]See par 56 above.

The Plaintiffs alleged the matters raised in paragraphs 14 to 33 of the Statement of Claim were “relevant considerations” Ombudsman Service was bound, yet failed, to take into account when refusing to determine the Dispute, rendering its decision void.[99] In response, counsel for the Complaints Service submitted that many of the allegations in paragraphs 14 to 33 of the Statement of Claim were of “an entirely abstract nature” (for example, that ASIC regulates Australian companies, financial markets, financial services organisations and professionals …)[100] and that there was nothing in the Terms of Reference or the Constitution, either expressly or by implication, which suggested that a failure to consider those matters rendered Ombudsman Service’s decision a nullity.
[99]Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 39.2-42.7 (Mason J).
[100]See annexure “A”, par 14(b).

H.6 Relevant considerations – ruling

Given that paragraph 47 will be the subject of summary judgment, it suffices to say that the matters referred to in paragraphs 14 to 33 of the Statement of Claim could not all properly be considered to be relevant considerations, much less that they necessarily had to be taken into account for any decision to be valid. Paragraph 47 is too broad and sweeping. Had it not been decided that paragraph 47 must be the subject of summary judgment, orders would have been made striking out the paragraph.

Further particulars

As to the adequacy of particulars generally, to the extent there was a complaint by the Plaintiffs that this was being pursued, the matter was squarely raised in correspondence between the solicitors for the Plaintiffs and the solicitors for Macquarie. Although this was done only shortly prior to Macquarie’s summons being issued on 14 November 2018, the unequivocal rejection by the Plaintiffs of the suggestion that further particulars be provided[101] means the court ought to address the issue now.
[101]Letter from the Plaintiffs’ solicitors dated 13 November 2018.

With respect to the parts of the Statement of Claim that remain standing, Macquarie sought particulars of the following paragraphs:

(1) The financial advice given by Macquarie: 13(a).

(2) The “recommendation” given by Macquarie that the Plaintiffs purchase particular shares: 13(b).

(3) The “buy orders” and “sell orders” processed by Macquarie on behalf of the Plaintiffs: 13(c).

(4) The Remediation Scheme: 21.

(5) The “offering” by Macquarie that Ombudsman Service would review the Case Assessment in conformity with the Enforceable Undertaking: 21(c).

(6) The statement made by ASIC’s deputy president, Peter Kell: 23.

(7) The declaration made by Ombudsman Service during 2014 regarding the Remediation Scheme: 26.

(8) The announcement made by Ombudsman Service in August 2014: 27.

(9) The letter from Macquarie dated 15 August 2014, “sufficient to confirm” whether it constituted an “offer” as contended by the Plaintiffs: 32.

(10) The Plaintiffs accepting the “offer” and requesting the Case Assessment: 33.

(11) Macquarie informing the Plaintiffs of the result of the Case Assessment: 34.

(12) The Plaintiffs seeking a review of the Case Assessment with Ombudsman Service on 13 January 2017: 35.

(13) The determination by Ombudsman Service on 16 June 2017: 41.

Macquarie sought the “usual particulars” of these matters, including the date of the happening of each matter, the documents that constitute each matter, the facts, matters and circumstances said to give rise to each matter and whether such matters were oral, in writing or implied.

The particulars sought by Macquarie as set out in paragraph 83(1), (2), (3), (5), (6), (7) and (8) should be provided in the next iteration of the Statement of Claim. Much of the information sought is within the direct knowledge of the Plaintiffs. In any event, the particulars must be provided in order to properly define the issues for trial. As it will be necessary for the Plaintiffs to replead their claims, the provision of particulars will also be ordered with respect to paragraph 83(10) to (13).[102]
[102]Although this may not be strictly necessary given the evidence before the court discloses the relevant information, in circumstances where a further pleading is necessary, it will be efficient to have the relevant particulars compendiously stated in a single document.

With respect to the particulars referred to in paragraph 83(4), an order will be made requiring the Plaintiffs to provide particulars of the Remediation Scheme, but only insofar as the Plaintiffs contend that the Remediation Scheme affected matters concerning the Plaintiffs. In other words, to the extent that the Remediation Scheme may have involved Macquarie taking steps which in no way affected the Plaintiffs, no particulars of that part or parts of the Remediation Scheme will be ordered as these are not necessary.

Finally, with respect to paragraph 83(9), no particulars will be ordered. It is plain from the Statement of Claim that the Plaintiffs are relying upon the letter from Macquarie dated 15 August 2014. Further, it is unclear what is intended by “sufficient to confirm” in the circumstances. If there is any doubt about whether the letter constituted an alleged offer, that can be addressed in correspondence between the parties.

J. Other matters – ruling

I will deal with some additional matters which have not been addressed above.

Paragraphs 25, 30 and 44 were struck out by agreement.[103] On that basis, paragraph D(7) of the prayer for relief will also be struck out.
[103]See par 27 above.

Lastly, in light of the matters raised above, paragraphs 2 to 3 and 5 to 10 of the Originating Motion, which mirrored the Judicial Review Claim and corresponding prayer for relief, will be dismissed summarily[104] and paragraphs 4(e) and 14, which mirrored the Estoppel Claim and the corresponding prayer for relief,[105] will be struck out.
[104]See pars 52-56 above. Paragraph 1 of the Originating Motion has not been included for the same reason that paragraph A of the prayer for relief in the Statement of Claim was not the subject of summary judgment: see fn 83 above.
[105]See pars 63-66 above.

K. Conclusion

For the reasons set out above, orders will be made summarily dismissing the Judicial Review Claim, striking out other parts of the Statement of Claim, and requiring further particulars be provided. The Plaintiffs will be given leave to serve an amended statement of claim. The parties will be invited to make submissions as to the timing of pleadings going forward.

---

ANNEXURE A

Statement of Claim

…

By operational guidelines to the Terms of Reference published on 1 May 2012, at page 38 [Ombudsman Service] stated:

[Ombudsman Service] will not lightly exclude a Dispute that falls within [Ombudsman Service’s] jurisdiction under the Terms of Reference. It would only exclude if there is a compelling reason for [Ombudsman Service] to conclude it would not be the appropriate forum for resolution of the Dispute.

Factors [Ombudsman Service] considers when deciding whether to exclude a Dispute

[Ombudsman Service] assesses whether it should exercise its discretion to exclude a Dispute after taking into account:

· the nature of the Dispute;

· any special circumstances or factors relevant to the Dispute;

· the principles stated in paragraph 1.2 [of the Terms of Reference]; and

· the requirements of ASIC’s Regulatory Guides 139 and 165.

As part of its operating procedures, [Ombudsman Service] had a Significant Event Response Plan in place to ensure that it responded effectively to significant external events that could result in an increase in potential disputes, with the main objectives as:

(a) to consistently identify and assess the likely impact of significant events as quickly and effectively as possible;

(b) to effectively deal with any disputes arising from a significant event, and to manage and control any impact on [Ombudsman Service] resources and workloads; and

(c) to ensure there is timely and appropriate internal and external communication and stakeholder engagement during the course of a significant event.

…

The Enforceable Undertaking

ASIC:

(a) is an independent Commonwealth Government body which is set up under the ASIC Act;

(b) regulates Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation and insurance; and

(c) Exercises regulatory and enforcement powers which include the following:

(i) grant Australian financial services licences and Australian credit licences;

(ii) make rules aimed at ensuring the integrity of financial markets;

(iii) investigate suspected breaches of the law;

(iv) protect consumers against misleading or deceptive and unconscionable conduct affecting financial products and services;

(v) ban people from engaging in credit activities or providing financial services;

(vi) seek civil penalties from the courts; and

(vii) commence prosecutions.

Pursuant to section 93AA of the ASIC Act, ASIC has the power to receive and accept enforceable undertakings.

An enforceable undertaking is enforceable in a Court.

ASIC receives and accepts enforceable undertakings as an alternative to civil court action or other administrative action, where there has been a contravention of legislation administered by ASIC.

ASIC has published Regulatory Guide 100, which explains ASIC’s approach to accepting enforceable undertakings, which provides, at RG 100.6 and 100.7:

Our power to accept enforceable undertakings enhances our ability to enforce compliance with the law. We see enforceable undertakings as an important component in our array of enforcement remedies to influence behaviour and encourage a culture of compliance for the benefit of all participants in the markets we regulate.

We consider that an enforceable undertaking can sometimes offer a more effective regulatory outcome than could otherwise be achieved through other available enforcement remedies, namely civil or administrative action. We will not enter into an enforceable undertaking that does not offer a more effective regulatory outcome.

On 29 January 2013, Macquarie and ASIC entered into an enforceable undertaking (Enforceable Undertaking).

The Enforceable Undertaking provided, among other things:

(a) ASIC considered that, on occasion, Macquarie may not have complied with certain of its obligations (sic) under the Corporations Act and its Australian Financial Services License (ASIC’s Concerns);

(b) Subject to Macquarie complying with the Enforceable Undertaking, ASIC would not take any other action in relation to ASIC’s Concerns;

(c) Macquarie undertook to appoint an independent expert, at its cost, to ensure compliance with the Enforceable Undertaking;

(d) Macquarie undertook to ensure its appointed representatives would meet with ASIC monthly to ensure compliance with the Enforceable Undertaking;

(e) Macquarie undertook to investigate whether or not any client had been adversely affected by failings of Macquarie and, if so, to remediate the client where appropriate;

(f) Macquarie undertook to provide to ASIC, on request, documents or information requested by ASIC for the purpose of assessing compliance with the Enforceable Undertaking; and

(g) Macquarie undertook that it would not seek a variation of its Australian Financial Services License or its membership of an external dispute resolution scheme, unless approved by the independent expert and ASIC.

Pursuant to and in conformity with its requirements under the Enforceable Undertaking, on 15 August 2014, Macquarie embarked on a remediation scheme (Macquarie Remediation Scheme) which entailed:

(a) writing to current and former clients about possible remediation for flawed financial advice, and offering a case assessment;

(b) during the course of case assessment, upon identification of a client affected by a Macquarie adviser’s failings, remediating that client, including paying compensation; and

(c) offering to have [Ombudsman Service] review the case assessment in the event current or former clients were dissatisfied with the case assessment.

ASIC Involvement

ASIC Regulatory Guide 256, at Regulation 27 states:
“It is important that review and remediation is conducted in a way that is comprehensive, timely, fair and transparent. Consumers should have confidence that any review and remediation in which they are involved is conducted in this way, regardless of the size of the review and remediation or the size of the advice licensee.”
In August 2014, ASIC Deputy President Peter Kell made the following statement in relation to the Macquarie Remediation Scheme:

“I also think that access to the ombudsman scheme is a critical part…[it is] essential [that Ombudsman Service] can consider all matters irrespective of timeframe.

[Ombudsman Service] has agreed to waive any time or monetary limit that usually applies, so they will be able to assess each and every matter that requires further independent assessment”.

By a media release made 6 May 2015 regarding remediation programs conducted by Australian Financial Services Licensees, ASIC stated:

“The process of review and remediation needs to be comprehensive, timely, fair, and transparent. There needs to be clearly defined principles to guide the process and an appropriate governance structure (including appropriate senior involvement).

…

Clients must have free access to processes to review the licensee's assessment of their advice. This will generally be through normal [external dispute resolution] review but licensees may be required to waive any time limit, monetary or other limits that might constrain the [external dispute resolution] scheme's jurisdiction. Licensees should engage with the [external dispute resolution] scheme when establishing the review and remediation program to agree upfront the relevant documentation, timelines and other arrangements to facilitate streamlined consideration, review and decision by the [external dispute resolution] scheme when necessary. Clients should receive clear communication about their [external dispute resolution] options. In many cases it will be appropriate to offer assistance to clients who wish to seek their own independent professional advice to assist their response to a review and remediation program.”

Macquarie’s Public Representations regarding Macquarie Remediation Scheme

[To be struck out by consent]

[Ombudsman Service] Public Representations regarding Macquarie Remediation Scheme

During 2014, [Ombudsman Service] declared the Macquarie Remediation Scheme as a Significant Event and set up a response plan, stating:

“During 2014-2015, a number of [financial service providers] put in place remediation programs largely as a result of financial advice provided to customers. [Ombudsman Service] implemented tailored significant event response plans to support the resolution of Disputes lodged with [Ombudsman Service] that were not resolved through these remediation programs. We also implemented our Significant Event Response Plan for the following events: …

Commonwealth Bank of Australia and Macquarie financial planning remediation plans."

In August 2014, [Ombudsman Service] announced:

“We have ensured we have an appropriate process in place so that any matters [relating to Macquarie and [Commonwealth Bank of Australia]] that are referred to [Ombudsman Service] are quickly identified and their resolution expedited”.

In its submission of March 2015 to the Federal Government 2014 Financial System Inquiry, [Ombudsman Service] stated:

“[Ombudsman Service] considers it would be useful for ASIC to establish industry-wide principles and operating guidelines for the implementation of major remediation programs by [financial service providers], including the independent dispute resolution arrangements … Any such principles and guidelines should include the following to support the credibility of the [financial service provider’s] remediation program in meeting the tests of independence, impartiality, transparency and efficiency: …

· independent review and decision provided by [Ombudsman Service] after a single step internal review process has been completed by the [financial services provider]

· waiver of any technical time, monetary or other limits that might constrain our jurisdiction for dealing with the disputes, including for customers who may have previously entered into confidential settlements.”

In a submission dated March 2016 to the ASIC Review and Remediation Programs Consultation Paper 247, [Ombudsman Service] stated:

"If a client decides to pursue external review by an [external dispute resolution] scheme, the client should make that decision aware of the caps on compensation under the program and the extent to which any caps on compensation under an [external dispute resolution’s] scheme have been waived”;

“To facilitate access to remediation by all affected clients, it may be appropriate to waive time, monetary or other limits that might constrain the jurisdiction of [external dispute resolution] schemes"; and

"If, in a review and remediation program, any limits on the jurisdiction of the [external dispute resolution] scheme are to be waived, we consider that the agreement between the licensee and the scheme should include a clear outline of the waiver and any alternative limits agreed.”

[To be struck out by consent]

In its submission of 10 October 2016 to the Federal Government Independent Expert Panel Review of Financial System's External Dispute Resolution and Complaints Framework [Ombudsman Service] stated:

“Our ability to be agile and responsive to meet immediate and emerging consumer redress requirements is not easily replicated in a tribunal setting. For example, [Ombudsman Service] has worked closely with ASIC and relevant financial firms when ASIC has required a bank or other financial firm to implement a general remediation program to provide redress for affected consumers. This has included agreement by the relevant financial firm for [Ombudsman Service] to waive limits on claims and compensation when appropriate.”

On 15 August 2014 Macquarie wrote to the plaintiffs informing them that, pursuant to the terms of the Enforceable Undertaking, they were entitled to:

(a) seek case assessment in relation to the Financial Advice; and

(b) if dissatisfied with the case assessment, have [Ombudsman Service] review the matter.

(Offer)

On 15 April 2016, the plaintiffs accepted the Offer (Acceptance).

…

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21 FEBRUARY 2019