Couanis v Australia and New Zealand Banking Group Ltd
[2021] WASCA 70
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: COUANIS -v- AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD [2021] WASCA 70
CORAM: MURPHY JA
VAUGHAN JA
HEARD: 16 APRIL 2021
DELIVERED : 16 APRIL 2021
PUBLISHED : 23 APRIL 2021
FILE NO/S: CACV 56 of 2020
BETWEEN: PANAGIOTIS COUANIS
Appellant
AND
AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: ARCHER J
Citation: AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD -v- COUANIS [2020] WASC 125
File Number : CIV 2290 of 2014
Catchwords:
Practice and procedure - Interim order - Application for stay - Judgment for possession and payment of debt in respect of default under loan agreement - Where appellant contended stay required because appeal would be rendered nugatory - Balance of convenience - Stay not in the interests of justice
Legislation:
Nil
Result:
Application for stay dismissed
Category: B
Representation:
Counsel:
| Appellant | : | In person |
| Respondent | : | C H Thompson |
Solicitors:
| Appellant | : | In person |
| Respondent | : | Dentons Australia |
Case(s) referred to in decision(s):
Australia and New Zealand Banking Group Ltd v Couanis [2020] WASC 125
Beeck v Kohlen [2013] WASCA 134
Duckworth v Commonwealth of Australia [2013] WASCA 24
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161
Palmer v Permanent Custodians Ltd [2009] VSCA 164
Raysun Investments Pty Ltd v Caruso [2013] WASCA 13
Tradesman Technologies Pty Ltd v Ameduri [2012] WASCA 168
REASONS OF THE COURT:
Introduction
This matter came to hearing on 16 April 2021 by way of a registrar's notice to attend dated 12 March 2021 to consider the appellant's application in an appeal filed 10 March 2021.
The appellant's application sought (1) a stay of the orders made by Archer J on 23 April 2020 pending the outcome of the appeal, and (2) no order as to costs.
We dismissed the appellant's application for a stay, and said we would provide reasons. These are our reasons.
Background
The appeal is against orders made by Archer J on 23 April 2020 ordering the appellant (Mr Couanis) (1) to pay Australia and New Zealand Banking Group Ltd (ANZ) the amount of $1,152,150.83, being the amount owing under loan agreements with ANZ as at the date of judgment, plus interest, and (2) to give possession to ANZ of a property located at 380 Newcastle Street, West Perth (West Perth Property). Written reasons for the decision were published: Australia and New Zealand Banking Group Ltd v Couanis[1] (primary decision).
[1] Australia and New Zealand Banking Group Ltd v Couanis [2020] WASC 125.
In the primary proceedings, ANZ sought to recover money it lent to Mr Couanis pursuant to two loan agreements secured over the West Perth Property.
Mr Couanis purchased the West Perth Property about 30 years ago.[2] The property is comprised of a retail shop with an apartment above.[3] When he brought the property, he lived in the apartment above the shop. There was a tenant in the shop running a lunch bar. He bought the business and operated the lunch bar himself for a period of time.[4] Subsequently, Mr Couanis leased the shop to a business.[5]
[2] Primary decision [95].
[3] Primary decision [18].
[4] Primary decision [95] - [96].
[5] Primary decision [18].
The first loan agreement with ANZ was for $500,000 and was entered into on about 23 December 2008.[6] Over half of this was used to pay off an earlier loan with P&N Credit Society.[7]
[6] Primary decision [17].
[7] Primary decision [4].
In June 2012, Mr Couanis sought to refinance his existing ANZ loan to pay off a number of short-term loans he had from Quantum Asset Management Pty Ltd.[8] He asked ANZ for a loan of $690,000, being an additional $190,000 on top of the original $500,000 under the first loan agreement. Mr Couanis indicated that he intended to sell the West Perth Property.[9]
[8] Primary decision [6], [8].
[9] Primary decision [8].
ANZ agreed to refinance the first ANZ loan.[10] The second loan agreement for an amount of $690,000 was entered into on about 5 July 2012.[11] The second loan agreement was for a term of one year, interest only.[12] Mr Couanis defaulted on his obligation to pay out the second loan agreement within the one year period.[13] The default was not rectified and ANZ instituted proceedings to recover under the loan agreements.[14]
[10] Primary decision [9].
[11] Primary decision [40].
[12] Primary decision [41].
[13] Primary decision [58].
[14] Primary decision [64].
In the primary proceedings, Mr Couanis denied that ANZ was entitled to recover the money, saying that ANZ engaged in unconscionable conduct in the course of arranging the loans.[15]
[15] Primary decision [1].
Mr Couanis counterclaimed against ANZ. He claimed, in effect, that ANZ's unconscionable conduct caused him various health problems and to resume smoking. He also claimed damages for the financial loss he alleged he suffered by entering into the second loan agreement. He claimed general damages in the sum of $532,000 and aggravated damages in the sum of $6 million.[16]
[16] Primary decision [67] - [79].
Archer J found that ANZ had established its claim.[17] Her Honour also found that Mr Couanis had not established a special disability for the purposes of unconscionable conduct,[18] and, in any event, ANZ did not unconscientiously take advantage of any special disability.[19]
[17] Primary decision [287].
[18] Primary decision [222] - [234].
[19] Primary decision [235] - [262].
Mr Couanis' counterclaim was dismissed and he was ordered to pay ANZ's costs of the action.
The appellant's case
Mr Couanis filed an appellant's case on 22 September 2020 containing five 'grounds' under which Mr Couanis sets out 50 alleged errors of fact and law.
Ground 1 is titled 'I was a self-represented litigant' and sets out six alleged errors of fact and law.
Ground 2 is titled 'The ANZ loans were unconscionable and I suffered financial loss' and sets out 21 alleged errors of fact and law.
Ground 3 is titled 'The forgery had been admitted by ANZ and the form was relevant' and sets out 14 alleged errors of fact and law.
Ground 4 is titled 'Justice Archer was biased against me and I have been denied natural justice' and sets out seven alleged errors of fact and law relating to various issues, including the primary judge's alleged failure to direct that witnesses remain out of court before giving their evidence and the primary judge's rejection of Mr Couanis' evidence.
Ground 5 is titled 'The expert evidence confirms that it was ANZ's conduct that was the potential cause of these issues'. Ground 5 alleges, in effect, that Archer J erred in law in not awarding Mr Couanis an amount for his health problems given that she accepted expert evidence of Dr Oyefeso to the effect that ANZ's conduct in commencing the proceedings was a potential cause of his health problems.
Mr Couanis' stay application
Mr Couanis' affidavit dated 5 March 2021, filed 10 March 2021, annexed a copy of a letter from the solicitors for ANZ dated 19 May 2020 which stated, in effect (1) that Mr Couanis lodging an appeal does not prevent ANZ from seeking to enforce the orders of 23 April 2020, and (2) ANZ would not take steps to enforce the orders of 23 April 2020 while the residential apartment in the West Perth Property remains occupied by a tenant and the Western Australian Government's moratorium on residential tenant evictions remains in place. The letter indicated that the moratorium was, at that time, anticipated to be in place until 30 September 2020.[20]
[20] Affidavit of P Couanis dated 5 March 2021, PC2.
In the affidavit dated 5 March 2021, filed 10 March 2021, Mr Couanis stated, in effect, that:
1.Around September 2020, the State Government announced that it would extend the moratorium for renters to 28 March 2021.
2.He is 'very concerned' that ANZ may take steps to enforce the orders of 23 April 2020. He has not heard anything further since the letter from ANZ about whether it intends to enforce the judgment prior to the determination of the appeal.
3.He is single, has no children and is a 76‑year‑old pensioner. He has health problems including stress, depression, skin irritation, sciatica, back pain, kidney problems, bladder problems, insomnia, headaches, chronic migraines and dental problems.
4.He does not have the funds that would be required to satisfy the orders of 23 April 2020. In that regard:
(a)His only sources of income are approximately $500 per week in pension payments and $300 per week in rent from the apartment in the West Perth Property, which is tenanted. However, he is also responsible for the payment of expenses such as water rates, shire rates, building insurance, strata fees and management fees in relation to that property which amount to around $190 per week.
(b)His expenses are (1) $250 in rent per week for the share house in Morley where he is currently residing, (2) at least $200 per week for living expenses, and (3) other expenses for court filing fees and funding the appeal.
(c)He does not have any other material assets save for some shares valued at $2,000. Nor does he have any savings or personal belongings of significant value.
(d)Without the rental income from the West Perth Property, it will be difficult for him to meet his ongoing expenses.
5.It does not appear to Mr Couanis that there would be any prejudice to ANZ if a stay were granted, however, he would be significantly prejudiced if a stay were not granted.
Mr Couanis filed a further affidavit in support of the application for a stay dated 31 March 2021. In that affidavit, Mr Couanis, in addition to repeating matters raised in his earlier affidavit, said, in effect, that:
1.On 24 March 2021, he received an email from ANZ informing him that ANZ will seek to enforce the judgment but not until after the hearing of the stay application.
2.In response to him making applications for financial hardship, he has received (1) a letter dated 25 February 2021 from the City of Vincent confirming that it considers him to be in financial hardship and that there will be a deferral of payment of the council rates owing for the West Perth Property for six months from the due date of the annual notice,[21] and (2) an email from the Water Corporation providing that there will be a pause on his account until 8 June 2021. This means that he will have some additional funds that he can put aside for the purpose of engaging a lawyer to assist him with documents to be filed in the appeal.
3.He will be 'significantly prejudiced' and at unfair disadvantage in comparison to ANZ if he is unable to obtain legal assistance and, in order to obtain legal assistance, he requires the rental income from the West Perth Property.
[21] Affidavit of P Couanis dated 31 March 2021, PC1.
Mr Couanis annexed screenshots of information from his 'NetBank' online banking with the Commonwealth Bank of Australia. The first page showed an account called 'CDIA' containing a balance of $66.52 and another account titled 'PSY.AX', containing a balance of $1,944.21.[22] The annexure also included a list of transactions on the CDIA account for the period of 3 March 2021 - 26 March 2021.[23]
[22] Affidavit of P Couanis dated 31 March 2021, page 5.
[23] Affidavit of P Couanis dated 31 March 2021, pages 6 - 8.
The submissions filed by Mr Couanis on 31 March 2021, in substance, contended that:
1.There are special circumstances to justify the court departing from the ordinary rule that the successful party is entitled to enforce judgment, pending an appeal hearing.
2.The grant of a stay is necessary having regard to the orders sought by him, including that he not be required to give up possession of the West Perth Property. If the application for a stay were refused, the orders sought may not be able to be effected, thereby rendering the appeal nugatory.
3.The appeal has reasonable prospects of success such that he could be granted some or all of the relief sought in the orders wanted.
4.The balance of convenience lies in his favour as refusal to grant a stay will result in hardship to him. In contrast, the grant of the stay will not result in hardship to ANZ as it is in a much better financial position than him.
5.His financial circumstances demonstrate that it is appropriate for a stay to be granted.
6.The contents of his affidavits confirm that 'serious consequences' will flow to him if he is not able to obtain legal advice in relation to the documents relating to the appeal.
Mr Couanis filed a further affidavit on 13 April 2021, which he said was in response to the affidavit of Ms Strack sworn 6 April 2021 (referred to below). In his affidavit filed 13 April 2021, Mr Couanis stated, in effect, that:
1.The valuation at the time of the First Loan (as defined in the pleadings in the primary proceedings) was $820,000.
2.The commercial tenant vacated the commercial premises of the West Perth Property on 10 February 2020, and those premises have remained vacant since that time. The current 'for lease' sign was placed in the window of those premises in about mid‑January 2021.
3.The West Perth Property is 'heritage listed therefore the property is irreplaceable or of such special significance'.
4.He has looked at the Department of Mines, Industry Regulations and Safety website, which indicates that the period during which an eligible tenant can request rent relief or commence dispute resolution under the Commercial Tenancies (COVID‑19) legislation has been extended until 60 days after the end of the emergency period, being 27 May 2021.
5.He reiterated that he wished to utilise the rental income from the West Perth Property to obtain legal assistance in relation to the appeal 'as and when required', and that 'had it not been for [his] ability to use that income it would not have been possible for [him] to have sought and obtained legal advice [in the primary proceedings and in the appeal]'.
In further submissions filed 13 April 2021, Mr Couanis submitted that pars 2(e) and (f) of Ms Strack's affidavit sworn 6 April 2021 should be struck out on the basis that they contain inadmissible hearsay.
Mr Couanis also submitted that:
1.As the hearing of the appeal appeared to be imminent, it would be a waste for ANZ to take action to enforce the judgment.
2.ANZ does not have a current valuation, and therefore has no evidence that the sale of the West Perth Property 'can satisfy the judgment debt'.
3.Any prejudice to ANZ is 'very minimal as the interest rate per day is only about $220'.
4.He does not know if additional documents are required to be filed for the appeal; however, he will need funds for anticipated legal assistance.
5.The 'disruption and inconvenience' to Mr Couanis significantly outweighs any inconvenience to ANZ.
6.The rule in Inglis v Commonwealth Trading Bank of Australia,[24] as identified in the respondent's submissions, 'should not be applied'. Mr Couanis referred to an article by Bryson J in the Australian Bar Review in that regard.[25]
[24] Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161, 169.
[25] Bryson J, 'Restraining Sales by Mortgagees and a Curial Myth', (1993) 11(1) Australian Bar Review 1.
ANZ's opposition to the stay application
On 6 April 2021, ANZ filed an affidavit of Ms Strack, a solicitor for ANZ, in opposition to Mr Couanis' stay application.
Ms Strack deposed:
1.She is informed by Mr Weaver, an officer of ANZ, that (1) as at 30 March 2021, the full judgment debt ($1,152,150.83) remained outstanding and interest continues to accrue on the judgment debt at a rate of 7.10% per annum, (2) the last full valuation that ANZ holds for the West Perth Property was conducted on 8 February 2017 and estimated the market value to be $700,000,[26] (3) on 30 March 2021, Mr Weaver requested ANZ's valuer to complete a desktop valuation of the West Perth Property, (4) on or about 6 April 2021, Mr Weaver was advised that a desktop valuation could not be completed because the West Perth Property is mixed use, and (5) on 23 March 2021, ANZ's mercantile agent attended the West Perth Property and observed that the commercial premises on the ground floor is vacant with a 'For Lease' sign in the window by XCEED Commercial Real Estate.
2.The moratorium on tenant evictions under the Residential Tenancies (COVID-19 Response) Act 2020 (WA) ended on 28 March 2021 and ANZ has instructed that, subject to Mr Couanis' stay application, it intends to take steps to serve a notice to vacate on the occupant of the residential apartment and enforce the order for possession of the West Perth Property.
[26] A copy of this valuation is annexure TES1 of the affidavit of T Strack dated 6 April 2021.
Ms Strack's affidavit also annexed a copy of an email sent to Mr Couanis on 25 September 2020, advising, in effect, that ANZ would not take steps to enforce the judgment during the moratorium on tenant evictions which had been extended to 28 March 2021.[27]
[27] Affidavit of T Strack dated 6 April 2021, TES2.
On 6 April 2021, ANZ filed submissions in opposition to Mr Couanis' application in the appeal. ANZ submitted:
1.The appeal will not be rendered nugatory if a stay is not granted because (1) there is no evidence that the West Perth Property is irreplaceable or of such special significance that damages would not be adequate compensation in the event of a successful appeal, and (2) even if the appeal were to succeed and the transaction was to be set aside, Mr Couanis would not be entitled to retain the benefit of the transaction and would be required to repay the principal amount that was advanced together with interest at a reasonable rate.
2.The prospects of success of the appeal are addressed in the respondent's answer on 3 December 2020.
3.There is prejudice to ANZ if a stay is granted due to the continuing accrual of interest on the judgment debt with no prospect of payments being made by Mr Couanis and no real prospect of recovering the debt that will remain owing following the sale of the West Perth Property.
4.Mr Couanis has not identified what additional documents he anticipates filing in the appeal having already filed his appellant's case and having been informed by the Associate to the Court of Appeal Registrar on 18 January 2021 that the court will prepare the appeal books for the hearing.
5.Any disruption, inconvenience and disappointment experienced by Mr Couanis, including the loss of any income derived from the West Perth Property, while unfortunate, is the inevitable consequence of the order for delivery up of possession of the West Perth Property to Mr Couanis.
6.The rule in Inglis should be applied.
Principles
The general principles in relation to a stay pending the determination of the appeal were not in dispute. In general terms:[28]
1.The successful litigant is ordinarily entitled to enforce a judgment pending the determination of any appeal.
2.It is for the applicant for a stay to move the court to a favourable exercise of its discretion. Under s 15(3) of the Civil Judgments Enforcement Act 2004 (WA) this court may only make a suspension order if there are 'special circumstances' that justify doing so and in an application for a stay under the Supreme Court (Court of Appeal) Rules 2005 (WA) this is also a usual requirement.
3.The central issue will be whether the grant of a stay is perceived to be necessary to preserve the subject matter or the integrity of the litigation or whether a refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal. This may shortly be described as requiring the court to consider whether the right of appeal will be rendered nugatory if a stay is not granted.
4.If it can be demonstrated that the right of appeal will be rendered nugatory if a stay is not granted, the stay will generally still be refused unless it can be established that the appeal has ultimately reasonable prospects of success.
5.Finally, a stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant where, for example, the grant of a stay will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted.
[28] Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 [9]; Tradesman Technologies Pty Ltd v Ameduri [2012] WASCA 168 [22].
Disposition
We dismissed the appellant's objection to pars 2(e) and (f) of Ms Strack's affidavit. The evidence was admissible pursuant to O 37 r 6(2) of the Rules of the Supreme Court 1971 (WA).
Having considered both parties' submissions and the evidence, it appeared to us that it was not in the interests of justice for a stay to be granted. The following matters appeared to us to be the most significant.
Although we had, on a necessarily preliminary and provisional basis, some reservation as to the strength of the appeal, particularly in its challenge to the findings as to the absence of a special disability, we were nevertheless prepared to assume, without deciding, that the grounds of appeal have reasonable prospects of success in the sense required on a stay application.
By the time the appeal is heard, the West Perth Property may have been sold and will not be recoverable. In that sense, the appeal would likely be rendered nugatory if a stay were not granted. However, the significance of this is tempered by the fact that, as a preliminary impression, even if Mr Couanis succeeded on the appeal and had the transaction set aside, there would be the prospect that it would be conditioned on the payment of the principal sum and at least some interest to ANZ, which may be greater than the value of the property - a matter also relevant to the balance of convenience.[29]
[29] cf Duckworth v Commonwealth of Australia [2013] WASCA 24 [5].
As to the balance of convenience, further delay will prejudice ANZ because any amount over and above the amount recovered from the sale of the property is not likely to be recovered.
In relation to an application to stay orders for possession, one of the considerations which may be taken into account in assessing where the balance of convenience lies is whether the property in question has irreplaceable value such that damages would not be adequate compensation in the event of a successful appeal.[30]
[30] Beeck v Kohlen [2013] WASCA 134 [19]; Palmer v Permanent Custodians Ltd [2009] VSCA 164 [62]; Raysun Investments Pty Ltd v Caruso [2013] WASCA 13 [15].
Although Mr Couanis has previously lived in the apartment in the West Perth Property, the premises are at least in part commercial premises (the shop). It does not appear to be his family home and there is nothing in the evidence to suggest that it has irreplaceable value such that damages would not be adequate compensation in the event of a successful appeal. There is no admissible evidence that the West Perth Property is 'heritage listed', but even if it were, that is not a matter which would bear upon, in these circumstances, a stay of orders for possession and the payment of a debt.
Further, as to the contention that Mr Couanis requires rental income from the West Perth Property to fund legal expenses, it is to be noted that Mr Couanis conducted the primary proceedings without a lawyer on the record, he instituted the appeal without a lawyer on the record, and has conducted the appeal thus far without a lawyer on the record. Whilst in his most recent affidavit he has said, in effect, that he has had the benefit of legal assistance both in the primary proceedings and in the appeal, that evidence, insofar as it deals with the position at trial, is difficult to reconcile with his first ground of appeal, which is in the following terms:
1.Justice Archer made an error of fact in saying that I 'was getting legal advice and assistance behind the scenes' (Reasons - see paragraph 2). … I was self‑represented[.]
Moreover, there was no admissible evidence as to when Mr Couanis had received legal assistance in respect of the appeal, the terms of the retainer and the fees incurred to date and likely to be incurred for the remainder of the appeal. Whilst it may be accepted that the appellant has prepared his appellant's case with the benefit of legal advice from lawyers not on the record, there was no suggestion that he would instruct lawyers to get on the record to further prosecute the appeal. In particular, there was no suggestion that he would have lawyers on the record to argue the appeal at the oral hearing. Further, the Court of Appeal office has offered to prepare the appeal books on the appellant's behalf. Also, there appeared no further interlocutory disputes in prospect. In the circumstances, we were not satisfied that the appellant required rental income from the West Perth Property for the further prosecution of the appeal.
We also took into account Mr Couanis' complaints of physical illness, but regarded them as of relatively little weight in the present circumstances and in the context that a successful litigant, particularly following a trial on the merits, is ordinarily entitled to the fruits of its judgment.
Insofar as any COVID‑19 legislation might affect any tenancy of the West Perth Property in a manner which prevented or hampered ANZ from taking possession of the property and selling it, the legislation would operate according to its terms. There is no reason to suppose that ANZ would not deal with the West Perth Property other than in accordance with the relevant legislation.
Taking everything into account, in all the circumstances we were not persuaded that it was in the interests of justice to grant a stay as sought by Mr Couanis.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RK
Research Orderly to the Honourable Justice Murphy
23 APRIL 2021
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