Burge v Commonwealth Bank of Australia - [2016] TASSC 60

[2016] TASSC 60

COURT: SUPREME COURT OF TASMANIA

CITATION: Burge v Commonwealth Bank of Australia [2016] TASSC 60

PARTIES:  BURGE, Susan
  v
  COMMONWEALTH BANK OF AUSTRALIA

FILE NOS: 2717/2016

2720/2016

DELIVERED ON:  10 November 2016
DELIVERED AT:  Hobart
HEARING DATE:  4 November 2016
JUDGMENT OF:  Blow CJ

CATCHWORDS:

Appeal and New Trial – Appeal – Practice and procedure – Tasmania – When no appeal lies – Judgment or order made by consent – Orders made by Associate Judge.

Supreme Court Civil Procedure Act 1932 (Tas), ss 43(a), 191B(1).
Aust Dig Appeal and New Trial [385]

REPRESENTATION:

Counsel:
             Applicant:  P E King
             Respondent:  P L Jackson SC, P J F Lunn
Solicitors:
             Respondent:  Simmons Wolfhagen

Judgment Number: [2016] TASSC 60
Number of paragraphs: 61

Serial No 60/2016
File Nos 2717/2016
2720/2016

SUSAN BURGE v COMMONWEALTH BANK OF AUSTRALIA

REASONS FOR JUDGMENT BLOW CJ

10 November 2016

The applicant, Susan Burge, has applied for a number of orders extending the time for appealing from orders made in proceedings between her and the respondent, the Commonwealth Bank of Australia ("the CBA"). She has also applied for orders as to the case management of the proposed appeals, and interlocutory injunctions relating to the sale or proposed sale of a property in Newstead.

Background

The applicant became a customer of the CBA in 2008. The history of her relationship with the CBA is unfortunate and complicated. I will go into detail in relation to her dealings with the CBA only to the extent necessary to determine the applications that are before me.
In 2008 she entered into a credit contract with the CBA and obtained loan funds amounting to $300,000. She and her former husband secured the loan by mortgaging a property in Kings Meadows.
In 2010 she and her former husband entered into a second credit contract, under which a further $500,150 was advanced. She or they gave the CBA mortgages over properties in Abbott Street, East Launceston, and Elphin Road, Newstead.
The applicant encountered financial difficulties. In September 2012 she approached Financial Ombudsman Service Limited ("the FOS") with a request that it investigate and determine a dispute between her and the CBA. In August 2014 the FOS made a determination recommending that she be given a substantial reduction in the amount that she was obliged to pay the CBA pursuant to the two credit contracts. In September 2014 she signed a form accepting the FOS determination, but added the words "under duress" next to her signature.
In April 2015, the CBA commenced proceedings under s 146 of the Land Titles Act 1980 in this Court, seeking orders for the possession of the Abbott Street and Elphin Road properties.
On 2 June 2015, the applicant commenced an action for damages against the CBA in this Court (action 532/2015).
On 17 June 2015, the applicant filed an interlocutory application in that action, seeking an interlocutory injunction restraining the CBA from taking possession of the Abbott Street and Elphin Road properties, and seeking a stay of the possession proceedings.
That interlocutory application and the CBA's possession application both came before Holt AsJ on 22 June 2015. The applicant and the CBA were each represented by counsel. Discussions took place between the parties' lawyers. As a result of those discussions, consent orders were sought and made. Those orders can be summarised as follows:
·     The applicant was ordered to give the CBA possession of the Abbott Street property within 90 days after service of that order on her, unless in the meantime she had paid all money due under the mortgage of the Abbott Street and Elphin Road properties to the CBA.
·     A similar order was made in relation to the Elphin Road property, to take effect 150 days after service, not 90 days after service.
·     The applicant's statement of claim in action 532/2015 was struck out, but liberty was granted for her to file and serve an amended statement of claim.
The applicant is now seeking extensions of time for appeals from each of those three orders.
Those orders were formally served on the applicant on 2 July 2015.
On 30 July 2015 the applicant filed an amended statement of claim in action 532/2015. In that pleading she alleged that the CBA had engaged in unconscionable conduct in trade or commerce in relation to both of the 2008 and 2010 credit contracts, contrary to s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth); that in relation to both contracts the CBA had breached par 25 of the Code of Banking Practice; that in relation to the second credit contract the CBA had contravened ss 115, 116 and 118 of the National Consumer Credit Protection Act 2009 (Cth); and that in relation to that second contract the CBA had breached "RG 209.3 of the Regulatory Guide 209: Credit licensing: Responsible Lending Conduct, as published by the Australian Securities and Investments Commission". Her claims in the action were for damages, a declaration that the second credit contract was null and void, and costs.
On 7 October 2015, the CBA obtained a writ of possession in respect of the Abbott Street property. On 6 November 2015, it took possession of that property.
On 28 January 2016, the applicant filed an interlocutory application in action 532/2015, seeking an interlocutory injunction restraining the CBA from selling the Abbott Street property, from taking possession of the Elphin Road property, and from selling that property. That application was dismissed by Holt AsJ on 10 February 2016.
On 12 February 2016 the Abbott Street property was sold at auction. That sale was subsequently completed. I infer that the transfer to the purchaser must have been registered by now. The purchaser of that property must therefore now have an indefeasible title: Land Titles Act, s 40.
On 26 February 2016 the CBA took possession of the Elphin Road property. It did so pursuant to a writ of possession.
A preliminary issue in action 532/2015 was listed for trial before Pearce J on 7 March 2016. Both parties were represented by counsel that day. There were discussions which resulted in the parties executing a Deed of Settlement and Release, and obtaining consent orders. The deed read as follows:
"THIS DEED OF SETTLEMENT AND RELEASE is made the 7^th day of March 2016 BETWEEN Commonwealth Bank of Australia (ABN 48 123 123 124) ('the Bank') AND SUSAN BURGE ('Burge')
WHEREAS the parties are in dispute in respect of Burge's alleged liabilities to the Bank and the Bank's alleged liabilities to Burge.
Without any admission of liability by either party the parties have agreed to fully and finally settle all disputes between them on the terms of settlement set out in this deed of settlement and release.
1    Burge is to consent to a direction or order that judgment be entered for the Bank in Supreme Court of Tasmania action No 532 of 2015 ('the action') together with costs:
(a)That are agreed in the sum of $50,000.00 in the event that payment is made in accordance with clause 2 hereof; or
(b)Are to be taxed in the event that it is not.
2    On or before 18 April 2016 Burge will pay to the Bank the sum of $452,469.71 (which sum will include $50,000.00 for the agreed costs of the action) less the net proceeds of sale of the property known as 15 Abbott Street East Launceston.
3    If Burge does not pay the amount referred to in clause 2 on or before 18 April 2016 then the Bank will exercise its power of sale in respect of the property known as 127 Elphin Road Newstead and the amount that Burge is to pay to the Bank will become:
·$402,469.71 (together with the defendant's costs of the action as taxed or agreed, and the defendant's costs of Supreme Court proceedings No 256 of 2015 in accordance with the loan agreement and the mortgage);
·Together with interest on the sum of $335,628.37 at the rate of 5.87% per annum from 8 March 2016 until payment; and
·Together with the costs of the sale in accordance with the loan agreement and mortgage in respect of that property;
·Less the proceeds of the sale of the properties known as 15 Abbott Street East Launceston and 127 Elphin Road Newstead.
4   The Bank undertakes that it will not take any steps to have judgment entered pursuant to the direction or order referred to in clause 1 before 18 April 2016.
5   Burge releases and forever discharges the Bank from all and any liability past, present or future and from all claims suits demands actions or proceedings arising out of or connected with:
(a)Any and all loan accounts conducted with the Bank by her either alone or in conjunction with any other person or entity at any time at or before the date of this deed;
(b)Any and all securities given to the Bank by her either alone or in conjunction with any other person or entity at any time at or before the date of this deed.
6    Burge will withdraw any complaint made to the Financial Ombudsman Service, the OAIC, ASIC, Tasmania Police, the Australian Federal Police, and any State or Federal authority and will not make any further complaint to any State or Federal authority in respect of any of the matters referred to in clause 5.
7    The Bank and Burge will keep the provisions of this deed of settlement and release and all negotiations resulting in the deed confidential save as either may be required to disclose such matters to their legal or financial advisers or as otherwise required by law.
8    Neither Burge nor the Bank will disparage or denigrate the other.
9    The laws of Tasmania govern this deed and each party agrees to submit to the jurisdiction of the Courts of Tasmania."
At 4.19pm on that day, counsel for both parties appeared before Pearce J and obtained consent orders that there be judgment for the CBA in the action, and that the applicant pay the CBA's costs of the action in the event that the costs were not agreed.
The applicant did not make the payment required by cl 2 of the Deed of Settlement and Release to the CBA on or before 18 April 2016.
Judgment was formally entered for the CBA in action 532/2015 on 20 April 2016. The applicant is now seeking an extension of time for an appeal from that judgment.
On 6 July 2016 or thereabouts, the CBA removed the applicant's possessions from the Elphin Road property. An auction of the property was arranged for 23 September 2016.
On 6 September 2016, the applicant commenced proceedings in the High Court of Australia seeking declarations, prerogative writs, injunctions and damages against the CBA and other defendants. On 15 September 2016, Gordon J dismissed those proceedings.
On 21 September 2016, the applicant applied to the Federal Court of Australia seeking declarations, prerogative writs, injunctions, damages or compensation, interest and costs. The respondents to those proceedings included the CBA and the FOS. In those proceedings she made an interlocutory application seeking interlocutory orders to stop the sale of the Elphin Road property and to "protect" her "interest in her real property and in her remaining personalty in the possession of the First Respondent [the CBA]". On 22 September 2016, Foster J dismissed that interlocutory application.
In this Court, the applicant filed her applications for extensions of time on 16 September 2016.
On the same day, she sought to file an interlocutory application in the possession proceedings, seeking an injunction restraining the CBA from selling the Elphin Road property pending her proposed appeal. The District Registrar in Launceston did not accept that interlocutory application for filing because the property proceedings had been concluded.
On 3 November 2016, the applicant lodged another interlocutory application for filing, seeking orders in the following terms:
"1   That the defendant is urgently restrained from transferring title of 127 Elphin Road, Newstead in Tasmania until further order of this Court or agreement between the plaintiff and the defendant
2 That the Plaintiff be granted the right to a fair trial prior to the transfer of title in regards to the property at 127 Elphin Road. Supporting evidence on this matter show [sic] that there is a serious question to be tried and that the plaintiff had not had the right to show cause under the Lands Title Act [sic] Section 146 point 2.
3    Any further orders that seem appropriate to the Court
4    Costs".
The applications for extensions of time came on for hearing before me on 4 November 2016. At that stage the interlocutory application lodged the previous day had neither been accepted for filing nor rejected. I proceeded as if the injunction applications of 16 September 2016 and 3 November 2016 were both before me. I asked senior counsel for the CBA whether he wished to take any technical point about either of those applications. He neither took any technical point nor waived the right to do so. I proceeded as if both applications were properly before me. Counsel for the applicant conceded that both of those injunction applications would have to fail if extensions of time were not granted.

Extensions of time for appealing

Section 191B(2) of the Supreme Court Civil Procedure Act 1932 makes provision for appeals from orders or decisions of the Associate Judge. Under s 191B(2)(a), an appeal from an interlocutory order or decision goes to a single judge. Under s 191B(2)(b), an appeal from any other judgment, order or decision goes to the Full Court.
The possession orders made by Holt AsJ on 22 June 2015 were final orders. Such orders ordinarily give rise to rights of appeal to the Full Court. Under r 680A(3)(a) of the Supreme Court Rules 2000, any such appeal is to be instituted within 21 days after the "final judgment".
The order relating to the statement of claim was not a final judgment. Under r 680A(3)(b), the time for appealing from that order was 10 days.
The time for appealing to the Full Court from a final order of a judge dismissing an action is 21 days: Supreme Court Rules, r 659.
Each of these time limits may be extended by a judge under r 52(1) of the Supreme Court Rules. Ordinarily the factors that are taken into account in deciding whether to exercise the discretion to extend time are the length of the delay, the reason for the delay, whether the applicant has an arguable case, and the extent of any prejudice suffered by the respondent. See, for example, Jackamarra v Krakouer [1998] HCA 27, 195 CLR 516 at [5].

Appeals from consent orders

Section 43(a) of the Supreme Court Civil Procedure Act provides as follows:
"No appeal shall lie to a Full Court from any judgment, order, or other determination of a judge, whether sitting in court or in chambers —
(a) given or made by the consent of the parties".
Counsel for the CBA submitted to me that s 43(a) precludes the applicant from appealing from all the orders made by Holt AsJ on 22 June 2015, as well as the consent judgment of 20 April 2016. He submitted that Holt AsJ was a "judge" for the purposes of s 43(a).
In 1831 the Charter of Justice made provision for there to be an officer of this Court called "the Master and Keeper of Records". When the Supreme Court Civil Procedure Act was enacted in 1932, that office had been vacant since 1857. Its next incumbent was appointed in 1960. The title "Associate Judge" was introduced with effect from 1 March 2008 by the Supreme Court Amendment Act 2007. However that legislation changed only the title of the Master and Keeper of Records, not his status. The incumbent of that office was not a judge of this Court in 1831. The incumbent in 2008 did not become a judge as a result of the change in title.
However s 191B(1) of the Supreme Court Civil Procedure Act provides as follows:
"(1) Subject to the Rules of Court, any order or decision made or given by the Associate Judge sitting in chambers or in court in the exercise of a power conferred on him or her by this Act is as valid and binding on, and is enforceable in the same manner against, all parties concerned as an order or decision made or given by a judge sitting in chambers or in court."
That subsection makes it clear that "any order … made … by the Associate Judge … is as valid and binding on … all parties concerned as an order … made … by a judge sitting in chambers or in court". It follows that a consent order made by the Associate Judge is just as binding on all parties concerned as a consent order made by a judge. By virtue of s 43(a), a consent order made by a judge is so binding that no party may appeal to the Full Court from it. It follows that the possession orders made by Holt AsJ on 22 June 2015 were so binding that neither party may appeal to the Full Court from them.
When there is a right of appeal from a consent order, the approach to be taken by the appellate court depends on whether the order evidences a contract between the parties to the proceedings. When that is the situation, the appeal cannot succeed unless there are grounds that warrant interference by the Court with the parties' contract: Huddersfield Banking Co Limited v Henry Lister & Son Limited [1895] 2 Ch 273 at 280; Harvey v Phillips (1956) 95 CLR 235 at 243-244; Harris v Caladine (1991) 172 CLR 84 at 104-105; Sky-Ridge Pty Ltd v Burlington Pty Ltd (1995) 4 Tas R 485 at 493-495.
In my view the orders for possession made by Holt AsJ on 22 June 2015 evidenced a contract made between the parties. When an order for the possession of premises is made in favour of a mortgagee under s 146 of the Land Titles Act, s 146(5) empowers this Court to order that possession be given by the mortgagor to the applicant "on or before such day, not being less than 4 weeks from the day of hearing, as the Supreme Court thinks fit to specify, unless within that period all the money due and costs are paid". It is clear that it was agreed between the parties that, in consideration of the applicant consenting to orders for the possession of the two properties, the CBA would consent to a 90-day order in respect of the Abbott Street property and a 150-day order in respect of the Elphin Road property. It follows that an appeal from either of the possession orders could succeed only on a basis upon which a contract might be impugned, such as fraud, duress, undue influence, or unconscionable conduct.
Similarly, it is clear from the terms of the Deed of Settlement and Release that the consent judgment of 20 April 2016 was the product of a contract made between the applicant and the CBA.
It follows that, if I am wrong about the applicability of s 43(a), appeals in relation to the possession orders and the consent judgment could only succeed on a basis that would warrant interference with a contract.

Economic duress

Economic duress is a recognised category of duress which, when established, will result in a contract being voidable. McHugh JA (as he then was) explained the law in relation to economic duress in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40. His Honour said at 46:
"The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate? Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress."
The applicant has sworn an affidavit in which she explains her reasons for consenting to the various orders from which she now wishes to appeal. There is nothing in that affidavit about the orders of 22 June 2015 to suggest that her will might have been overborne by economic duress on that day. She explained that her counsel advised her that day that the only way forward was to negotiate a longer sale period, and that she hoped to have her complaints about the CBA's conduct dealt with in her action, 532/2015. There is nothing in her affidavit to suggest that she might have given in to illegitimate pressure from the CBA or its representatives on that day.

Her description of the events that led up to the signing of the Deed of Settlement and Release on 7 March 2016 contains evidence of the application of pressure by representatives of the CBA. Her evidence as to their conduct can be summarised as follows:
·     Initially Pearce J adjourned the trial so that the parties could conduct a round table conference. At that conference, the CBA legal team refused to mediate or discuss "any matter other than the Trial we were there for".
·     Mr Lunn, junior counsel for the CBA, stated that the applicant owed an amount that was more than $30,000 greater than figures she had been provided with. However, after discussions in her absence, her counsel later advised her that he had caused that additional sum to "go away".
·     The CBA's representatives refused to explain to her how the amount in the deed had been worked out. However the amount ($402,469.71) was lower than the figure that the CBA initially seemed to want (over $450,000).
·     Mr Jackson SC, senior counsel for the CBA, said words to the effect that hers was a precedent case; that the CBA and "the Banking Association" had stated that they would throw any amount of money at her trial to win it; that even if she won the CBA would appeal; and that the CBA would continue to appeal until it won.
·     Later, after her counsel had threatened to withdraw, Mr Jackson SC said words to the effect of, "I am sorry that you are the precedent case but we are just trying to save you money as the bank and the Banking Association have access to endless amounts of funds to throw at this matter. If you don't sign the deed you will basically have nothing left because we would continue to appeal until we won."
If those threats were made, I do not think that they were improper or illegitimate. Obviously the applicant was in a position of extreme financial disadvantage. However the representatives of the CBA went no further than to threaten to exercise, and keep on exercising, the CBA's rights as a litigant.
If I am wrong as to the effect of s 43(a) of the Supreme Court Civil Procedure Act, appeals from the possession orders and the consent judgment would be unlikely to succeed because it is unlikely that the applicant would be able to establish economic duress, as distinct from the exertion of legitimate pressure in pre-contractual negotiations.

Miscellaneous arguments as to an arguable case

Counsel for the applicant submitted to me that s 146 of the Land Titles Act required Holt AsJ to give his client an opportunity to show cause why orders for possession should not be made, but that his Honour had failed to give her such an opportunity. In my view that argument is untenable. The applicant had that opportunity on 22 June 2015 but, with legal advice, chose instead not to seek to show cause, but to negotiate an agreement for consent orders that gave her much longer than four weeks to pay out the CBA.
Counsel for the applicant submitted to me that Holt AsJ erred by requiring the applicant to pursue a separate action against the CBA, rather than raising her claims against it in the possession proceedings. Possession proceedings are ordinarily proceedings without pleadings. The nature of the applicant's claims against the CBA was such that it was reasonable to conclude that the appropriate vehicle for the litigation of her claims was an action with pleadings. Even if the course suggested or required by Holt AsJ was inappropriate, it is a complete answer to any such complaint that the applicant subsequently chose to conclude the possession proceedings by agreeing to the orders of 22 June 2015.
On 10 February 2016, when the applicant's interlocutory injunction application of 28 January 2016 was before Holt AsJ, Mr Jackson SC made a concession that there was a serious question to be tried in action 532/2015. He said, "… if the plaintiff were to prove every fact that she alleges, then she may well have a successful claim for damages". Counsel for the applicant relied heavily on that concession. He made submissions to me to the effect that it was a concession that the applicant had good claims against the CBA. However Mr Jackson had not made any concession that the applicant would be able to prove any of the facts that she alleged. Further, it is a complete answer to any such argument that the applicant's claims were extinguished by the Deed of Settlement and Release.

Delay and prejudice

The applications for extension of time were filed nearly 15 months after the possession orders were made by Holt AsJ. During that period the Abbott Street property was sold, and an auction was arranged for the Elphin Road property.
The applications were filed nearly five months after the entry of the consent judgment on 20 April 2016.
It appears that the applications may have been prompted by observations by Gordon J on 15 September 2016 as to appeals not having been instituted. The applicant is not a lawyer. She has had legal representation and advice only intermittently since 22 June 2015. However most people understand that there are rights of appeal from decisions and orders of courts. Ignorance is not a strong excuse for an unrepresented litigant in the applicant's position delaying for months before seeking an extension of time to appeal.
There is no evidence to suggest that, as a result of the applicant's delays in seeking to appeal, the CBA might be disadvantaged in resisting an appeal or in conducting any litigation. However the sale of the Abbott Street property would appear to be irreversible since the purchaser must now have an indefeasible title.
The situation in relation to the sale of the Elphin Road property is less simple. At the start of the hearing before me, it appeared to be common ground that the CBA has entered into a contract to sell that property, and that it is a term of that contract that completion is to take place on 22 November 2016. However, when Mr Jackson later sought to rely on the existence of such a contract for the purpose of a submission he was making on behalf of the CBA, the applicant's counsel took the point that there was no evidence before me as to any such contract having been entered into. He was right about that. The only evidence is that an auction was arranged for 23 September 2016. I will proceed on the basis that the CBA might or might not be bound by a contract for the sale of the Elphin Road property.

Conclusion

The orders for possession of the Abbott Street and Elphin Road properties were consent orders. The judgment of 20 April 2016 was a consent judgment. Because of the provisions of ss 43(a) and 191B(1) of the Supreme Court Civil Procedure Act, there was no right of appeal to the Full Court from any of those orders. There is therefore no time limit in relation to them that can be extended.
If I am wrong as to that in relation to any or all of those orders, then I think extensions of time should be refused because each consent order was entered into pursuant to a contract, and there appears to be insufficient prospects of any such contract being avoided on the basis of economic duress or any other basis, and also because the applicant does not have a good explanation for her delay.
An extension of time in relation to the possession order relating to the Abbott Street property would be futile because the purchaser of that property must now have an indefeasible title to it.
An extension of time in relation to the order striking out the statement of claim in action 532/2015 would be futile because that action was dismissed on 20 April 2016, and cannot be revived.
For these reasons I have decided to dismiss the applications for every extension of time. As counsel for the applicant conceded, it would not be appropriate to grant either of her injunction applications in these circumstances.
In par 2 of her interlocutory application of 3 November 2016, the applicant sought "the right to a fair trial". That part of her application must fail because she has no pending proceedings in this Court.
The two originating applications (2717/2016 and 2720/2016), and the interlocutory applications filed on 16 September 2016 and 3 November 2016 are all dismissed.