Dale v Veda Advantage Information Services and Solutions Ltd
[2009] FCA 305
•1 April 2009
FEDERAL COURT OF AUSTRALIA
Dale v Veda Advantage Information Services and Solutions Limited
[2009] FCA 305
DEFAMATION – credit reporting agency’s reports to credit providers – reports allegedly defamatory of applicants in respect of their creditworthiness – allegation that they were refused credit by credit providers who relied on erroneous credit reports – respondent’s computerised database – credit providers who subscribe (respondent’s customers) enter information in the database electronically and extract information from it electronically, in each case without respondent’s intervention – whether respondent credit reporting agency communicated to subscribing credit provider the information that that credit provider extracted electronically – in some cases credit provider’s computer rejects application for credit automatically upon receipt of adverse credit report – essential to cause of action in defamation that the defamatory publication be published to a human mind – whether publication to a human mind proved – qualified privilege – whether credit reports of credit reporting agency attracted defence of qualified privilege.
NEGLIGENCE – credit reporting agency’s reports to credit providers – allegation that applicants refused credit by credit providers who relied on erroneous credit reports – respondent’s computerised database – credit providers who subscribe (respondent’s customers) enter information into the system electronically and extract information from it electronically, in each case without respondent’s intervention – whether respondent credit reporting agency communicated to subscribing credit provider the information that that credit provider extracted electronically – in some cases credit provider’s computer rejects application for credit automatically upon receipt of adverse credit report – whether credit reporting agency owed a duty of care to persons seeking credit to ensure that information stored in database was accurate – if so, whether breach of duty established.
Privacy Act 1988 (Cth) Pt IIIA
Defamation Act 1974 (NSW) ss 9, 22
Defamation Act 1889 (Qld) s 16
Limitation Act 1969 (NSW) ss 14, 14B
Federal Court Rules O 13 rr 2, 3A, 7Adam v Ward [1917] AC 309 cited
Baldry v Jackson [1976] 2 NSWLR 415 cited
Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 followed
Bunt v Tilley [2006] 3 All ER 336 referred to
Cubby, Inc v CompuServe Inc 776 F.Supp. 135 (1991) cited
Dun v Macintosh (1906) 3 CLR 1134 discussed
Godfrey v Demon Internet Ltd [2001] QB 201 cited
Gillett v Nissen Volkswagen [1975] 3 WWR 520; 58 DLR (3d) 104 cited
Howe and McColough v Lees (1910) 11 CLR 361 followedInforma Confidential Reports (Pty) Ltd v Abro [1975] (2) S.A. 760 cited
Jain v Trent Strategic Health Authority [2009] 2 WLR 248 cited
London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 discussed
Macintosh v Dun (1905) 5 SR (NSW) 708 discussed
Macintosh v Dun (1908) 6 CLR 303; [1908] AC 390 distinguished
OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719 discussed
Perre v Apand Pty Ltd (1999) 198 CLR 180 cited
Petition of Retailers Commercial Agency Inc, 174 NE 2d 376 (Mass., 1961) cited
State of Victoria v Commonwealth (1937) 58 CLR 618 cited
Sullivan v Moody (2001) 207 CLR 562 followed
Tame v New South Wales (2002) 211 CLR 317 followed
Toogood v Spyring (1834) 1 Cr M & R 181 (149 ER 1044) discussed
Urbanchich v Drummoyne Municipal Council (1991) Aust Torts Reports ¶81-127 cited
Vintage Developments Pty Ltd v GHD Pty Limited (No 2) [2006] FCA 1437 distinguished
Watt v Longsdon [1930] 1 KB 130 referred to
Weldon v Neal (1887) 19 QBD 394 citedSHANE DALEv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 1994 of 2006
JYE MARKERv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 1996 of 2006
ROBERT STRANGEv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2000 of 2006
DIANNE SHIELDSv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2001 of 2006
TREVOR TAYLOR v VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2002 of 2006
EDDIE FISHERv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2003 of 2006
AARON TYNDALL v VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2004 of 2006
CINDY ADAMSv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2006 of 2006
TIM McGARYv VEDA ADVANTAGE INFORMATION SERVICES
AND SOLUTIONS LIMITED and THE ATTORNEY-GENERAL
FOR THE STATE OF NEW SOUTH WALESNSD 2007 of 2006
LINDGREN J
1 APRIL 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1994 of 2006BETWEEN: SHANE DALE
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 APRIL 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1996 of 2006BETWEEN: JYE MARKER
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 APRIL 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2000 of 2006BETWEEN: ROBERT STRANGE
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 APRIL 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2001 of 2006BETWEEN: DIANNE SHIELDS
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 april 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2002 of 2006BETWEEN: TREVOR TAYLOR
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 april 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2003 of 2006BETWEEN: EDDIE FISHER
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 april 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2004 of 2006BETWEEN: AARON TYNDALL
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 april 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2006 of 2006BETWEEN: CINDY ADAMS
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 april 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2007 of 2006BETWEEN: TIM McGARY
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE OF ORDER:
1 april 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The proceeding be dismissed.
2.The applicant pay the first respondent’s costs except its costs on the constitutional issue.
THE COURT NOTES THAT:
3. There is no order for costs on the constitutional issue.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1994 of 2006BETWEEN: SHANE DALE
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentIN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1996 of 2006BETWEEN: JYE MARKER
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentIN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2000 of 2006BETWEEN: ROBERT STRANGE
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second Respondent
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2001 of 2006BETWEEN: DIANNE SHIELDS
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentIN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2002 of 2006BETWEEN: TREVOR TAYLOR
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentIN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2003 of 2006BETWEEN: EDDIE FISHER
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second Respondent
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2004 of 2006BETWEEN: AARON TYNDALL
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentIN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2006 of 2006BETWEEN: CINDY ADAMS
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentIN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2007 of 2006BETWEEN: TIM McGARY
ApplicantAND: VEDA ADVANTAGE INFORMATION SERVICES AND SOLUTIONS LIMITED
First RespondentTHE ATTORNEY-GENERAL FOR THE STATE OF NEW SOUTH WALES
Second RespondentJUDGE:
LINDGREN J
DATE:
1 april 2009
PLACE:
SYDNEY
Table of Contents
Para
Introduction
[1]
The Privacy Act
[9]
“Consumer Defaults” and “Commercial Defaults”
[70]
Sample Pleading in the Case of Shane Dale
[82]
Veda’s Defences
[107]
The Pleadings in the other Eight Proceedings
[122]
General Nature of the Evidence and the Size and modus operandi
of Veda’s Business
[126]
Some Pervasive Issues
[137]
System-to-System Access and Operator Requested Access
[139]
The Defamation Claim:
1. Publication
(a) Publication by whom?
(b) Publication to whom?
(1) Adams
(2) Dale
(3) Fisher
(4) Marker
(5) McGary
(6) Shields
(7) Strange
(8) Taylor
(9) Tyndall
2. Imputations
[150]
[154]
[162]
[172]
[184]
[195]
[215]
[223]
[249]
[262]
[269]
[277]
3. Qualified Privilege
[278]
4. Limitation Defence to the Defamation Claim
(a) General
(b) Section 14B(2003)
(c) Order 13 rr 2 and 3A of the Federal Court Rules
[329]
[346]
[356]
The Negligence Claim
1. Did Veda owe a duty of care to the applicants in relation to the accuracy of the credit reports?
2. Did Veda commit a breach of any duty of care it owed to the applicants in relation to the accuracy of the credit reports that caused those credit reports to be inaccurate?
(a) What was Veda required to do in order to discharge
its supposed duty of care?(b) Were the respective credit reports inaccurate?
(1) Adams
(2) Dale
(3) Fisher
(4) Marker
(5) McGary
(6) Shields
(7) Strange
(8) Taylor
(9) Tyndall
Summary
[373]
[374]
[418]
[420]
[437]
[444]
[467]
[491]
[492]
[504]
[515]
[532]
[556]
[573]
[589]
Section 109 of the Constitution and the Defamation Act 1974 (NSW)
[590]
Conclusion
[596]
Annexure Mr Champion’s Annexure
REASONS FOR JUDGMENT
Introduction
These reasons for judgment relate to nine proceedings for damages for defamation and negligence that were heard together.
The first respondent, Veda Advantage Information Services and Solutions Limited (Veda), was at all material times a “credit reporting agency” and carried on a “credit reporting business” within the meaning of the Privacy Act 1988 (Cth) (Privacy Act). (Veda has had different names in the past, namely, Credit Reference Association of New South Wales Limited, then Credit Reference Association of Australia Limited, then Credit Reference Limited, then Credit Advantage Limited, then Baycorp Advantage Business Information Services Limited. However, I will refer to it as “Veda” regardless of the point in time in question.) Section 11A of the Privacy Act defines a “credit reporting agency” as a corporation that carries on a credit reporting business. Section 6 defines a “corporation” as, relevantly, a trading or financial corporation formed within the limits of Australia. The definition of “credit reporting business” appears at [18] below.
In its defence (see [114] below) Veda raised a constitutional issue, as a result of which notices under s 78B of the Judiciary Act 1903 (Cth) were given to the Attorneys-General of the Commonwealth and the States and Territories. Only the Attorney-General for New South Wales sought to intervene. On 13 June 2007 I ordered that he be added as second respondent.
Veda’s business centred on its operation of a computerised database. That database recorded information concerning the creditworthiness of individuals. Veda’s customers were credit providers. Credit providers have an obvious interest in obtaining information touching the creditworthiness of persons who seek credit from them. As subscribers to Veda’s system, they:
·electronically entered creditworthiness data concerning individuals to whom they had provided credit, directly into Veda’s database for the benefit of other subscribers; and
·extracted electronically directly from Veda’s database for their own benefit creditworthiness data that had been entered into it by other subscribers concerning individuals to whom the latter had provided credit.
I discuss the modus operandi of Veda’s business in more detail below.
On the negligence claim, each applicant complains, in substance, that Veda supplied to one or more of its subscribers inaccurate information concerning the creditworthiness of that applicant, as a result of which he or she suffered loss or damage by being refused credit or losing the opportunity of obtaining credit on more favourable terms. On the defamation claim, the complaint is that Veda published to one or more of its subscribers material, whether accurate or inaccurate, that conveyed imputations defamatory of the applicant.
The nine proceedings involved some common issues, but the detailed facts were unique to each case. The hearing was limited to the issue of liability, and consequently so are these reasons.
The nine applicants and their respective proceedings are:
Applicant Proceeding (1) Cindy Adams NSD 2006 of 2006 (2) Shane Dale NSD 1994 of 2006 (3) Eddie Fisher NSD 2003 of 2006 (4) Jye Marker NSD 1996 of 2006 (5) Tim McGary NSD 2007 of 2006 (6) Dianne Shields NSD 2001 of 2006 (7) Robert Strange NSD 2000 of 2006 (8) Trevor Taylor NSD 2002 of 2006 (9) Aaron Tyndall NSD 2004 of 2006
The proceedings were commenced in the District Court of New South Wales and were later transferred to the Supreme Court of New South Wales and thence to this Court. This Court’s jurisdiction was attracted by reason of the presence of claims under s 52 of the Trade Practices Act 1974 (Cth) (TP Act). The claims in defamation and negligence were within the “accrued” jurisdiction of the Court. They have continued to be within the Court’s jurisdiction notwithstanding that the claims under s 52 are no longer pressed: see s 65A of the TP Act and my judgment in Bailey v Veda Advantage Information Services and Solutions Ltd (No. 2) [2008] FCA 730.
The Privacy Act
Veda’s credit reporting business is heavily regulated by the Privacy Act. Both the applicants and Veda relied on provisions of that Act as relevant to the claims in defamation and negligence. However, the applicants did not sue Veda on a cause of action on the statute, that is to say, for breach of an actionable statutory duty said to be owed to them by Veda. The parties agreed that Reprint 6 of that Act (reprinted on 20 January 2005) was the applicable version.
The Privacy Amendment Act 1990 (No 116 1990), which commenced on 24 September 1991, inserted new ss 18A and 18B into Pt III, and a new Pt IIIA (ss 18C to 18V) headed “Credit Reporting”. The Privacy Amendment (Private Sector) Act 2000 (No 155 of 2000) inserted the heading “Division 5 – Credit Information” before ss 18A and 18B.
Section 3 of the Privacy Act provides:
It is the intention of the Parliament that this Act is not to affect the operation of a law of a State or of a Territory that makes provision with respect to the collection, holding, use, correction, disclosure or transfer of personal information (including such a law relating to credit reporting or the use of information held in connection with credit reporting) and is capable of operating concurrently with this Act.
The applicants rely on this provision as showing an intention that the Privacy Act was not to exclude the operation of the laws of the States and Territories under which the causes of action in defamation and negligence exist.
The expression “personal information” is defined in s 6 to mean:
information or an opinion (including information or an opinion forming part of a database) whether true or not, and whether recorded in a material form or not, about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion.
Section 18A(1) referred to above provides:
The Commissioner must, by notice published in the Gazette, issue a Code of Conduct concerning:
(a)the collection of personal information for inclusion in individuals’ credit information files; and
(b)the storage of, security of, access to, correction of, use of and disclosure of personal information included in individuals’ credit information files or in credit reports; and
(c)the manner in which credit reporting agencies and credit providers are to handle disputes relating to credit reporting; and
(d)any other activities, engaged in by credit reporting agencies or credit providers, that are connected with credit reporting.
Section 6 states that the Commissioner is the Privacy Commissioner. The office of Privacy Commissioner is established by Pt IV of the Privacy Act.
Subsection (3) of s 18A requires the Commissioner, in preparing the code of conduct, to have regard to:
·the “Information Privacy Principles” and the provisions of Part IIIA;
·the “National Privacy Principles” and the provisions of Part IIIAA; and
·“the likely costs” to credit reporting agencies and credit providers of complying with the Code of Conduct.
The Information Privacy Principles are discussed at [61] below and the National Privacy Principles at [62] below.
Pursuant to s 18A, the Commissioner issued a Credit Reporting Code of Conduct in 1991 (Code). It became fully operational in February 1992. The Code supplements the provisions of Pt IIIA. Part 1 of the Code deals with “Credit reporting agencies” and Pt 2 with “Credit providers”.
Section 18B provides that a credit reporting agency or credit provider must not do an act, or engage in a practice, that breaches the Code. Accordingly, a breach of the Code is a contravention of s 18B.
It is convenient now to address the definitions of some of the expressions used in ss 18A and 18B. They are also used throughout Pt IIIA discussed below.
Sections 6(1) and 11A of the Privacy Act define “credit reporting agency” for the purposes of that Act as a “corporation that carries on a credit reporting business”. Section 6(1) defines “credit reporting business” to mean, relevantly:
a business or undertaking … that involves the preparation or maintenance of records containing personal information relating to individuals (other than records in which the only personal information relating to individuals is publicly available information), for the purpose of, or for purposes that include as the dominant purpose the purpose of, providing to other persons (whether for profit or reward or otherwise) information on an individual’s:
(a) eligibility to be provided with credit; or
(b) history in relation to credit; or
(c) capacity to repay credit;
whether or not the information is provided or intended to be provided for the purposes of assessing applications for credit.The word “record” is defined in s 6(1) to mean, inter alia, “a database (however kept)”. The term therefore encompasses a computerised database of the kind that is maintained by Veda.
It is not in dispute that at all material times Veda was a corporation that carried on a credit reporting business and was therefore a credit reporting agency. It will be noted that the definition of “credit reporting business” is not limited by reference to the form in which the credit information is to be provided to other persons. It therefore embraces the provision of that information by the granting of access to a database containing the information. The granting by Veda of access to its database to credit providers who subscribe to its system forms the basis of the claims made in these proceedings.
The expression “credit”, which occurs four times in the definition of “credit reporting business” set out at [18] above, is defined in s 6(1) to mean:
a loan sought or obtained by an individual from a credit provider in the course of the credit provider carrying on a business or undertaking as a credit provider, being a loan that is intended to be used wholly or primarily for domestic, family or household purposes.
Accordingly, the word “credit” may be conceived of as limited to consumer credit.
Similarly, s 6 (5A) of the Privacy Act provides:
For the purposes of the definition of credit reporting business in subsection (1), information concerning commercial transactions engaged in by or on behalf of an individual is not to be taken to be information relating to an individual’s:
(a) eligibility to be provided with credit; or
(b) history in relation to credit; or
(c) capacity to repay credit.Section 6(1) defines “commercial credit” to mean a loan other than a loan of a kind referred to in the definition of “credit”. The Privacy Act therefore distinguishes between “credit” and “commercial credit”, the former being a loan for consumer purposes and the latter being a loan of any other kind. It therefore seems appropriate to refer to an individual to whom “credit” has been provided as a “consumer”, although the Privacy Act does not use that term.
It follows from the definition of “credit” that credit does not mean a loan sought or obtained by a corporation, or a loan sought or obtained by an individual from an entity other than a credit provider, or a loan sought or obtained by an individual (a natural person) from a credit provider but for commercial purposes. Although the Privacy Act is concerned with consumer credit, this does not mean that the provision of commercial credit is irrelevant to these proceedings. In particular, some of the defaults that were entered in Veda’s database in respect of some of the applicants were defaults under commercial credit arrangements (see [70] ff below).
The expression “loan” is defined in s 6(1) to mean a contract, arrangement or understanding under which a person is permitted to defer payment of a debt, or to incur a debt and defer its payment. The definition also identifies particular forms of transaction that are included within the term “loan”.
Sections 6(1) and 11B define “credit provider”. Relevantly, a “credit provider” includes (s 11B):
(a) a bank; or
(b) a corporation (other than an agency):(iii)a substantial part of whose business or undertaking is the provision of loans (including the provision of loans by issuing credit cards); or
(iv)that carries on a retail business in the course of which it issues credit cards to members of the public in connection with the sale of goods, or the supply of services, by the corporation; or
(v) that:
(A)carries on a business or undertaking involving the provision of loans (including the provision of loans by issuing credit cards); and
(B)is included in a class of corporations determined by the Commissioner to be credit providers for the purposes of this Act; ...
I turn now to Part IIIA (ss 18C-18V) “Credit reporting”
Section 18E(1) provides that a credit reporting agency must not include personal information in an individual’s credit information file unless at least one of the conditions set out in the various paragraphs of that subsection is satisfied. Those conditions that are of immediate relevance are the following:
(b) the information is a record of:
(i) both
(A)a credit provider having sought a credit report in relation to an individual in connection with an application for credit or commercial credit made by the individual to the credit provider; and
(B)the amount of credit or commercial credit sought in the application; or
…
(vi)credit provided by a credit provider to an individual, being credit in respect of which:
(A)the individual is at least 60 days overdue in making a payment, including a payment that is wholly or partly a payment of interest; and
(B)the credit provider has taken steps to recover the whole or any part of the amount of credit (including any amounts of interest) outstanding; or
(vii)a cheque, for an amount not less than $100, that:
(A)has been drawn by the individual; and
(B)has twice been presented and dishonoured; or
(viii)court judgments made against the individual; or
(ix)bankruptcy orders made against the individual; or
(x)the opinion of a credit provider that the individual has, in the circumstances specified, committed a serious credit infringement; or
(ba)the information is a record of an overdue payment by the individual as guarantor under a guarantee given against default by a person (the borrower) in repaying all or any [sic – any part] of an amount of credit obtained by the borrower from a credit provider, and the following subparagraphs apply:
(i)the credit provider is not prevented under any law of the Commonwealth, a State or a Territory from bringing proceedings against the individual to recover the amount of the overdue payment;
(ii)the credit provider has given the individual notice of the borrower’s default that gave rise to the individual’s obligation to make the payment;
(iii)60 days have elapsed since the day on which the notice was given;
(iv)the credit provider has, separately from and in addition to the giving of the notice referred to in subparagraph (ii), taken steps to recover the amount of the overdue payment from the individual.
Of the nine applicants, Mr McGary and Ms Shields were guarantors, and therefore persons to whom para (ba) was relevant. Paragraph (b) was relevant to the remaining seven applicants.
The Code elaborates on subpara (b)(i) of s 18E(1) by stating that a credit reporting agency recording an enquiry made by a credit provider in connection with an application for credit may include, within the record of the enquiry, a general indication of the nature of the credit being sought. Veda’s database recorded enquiries made by credit providers in connection with applications to them for consumer credit or commercial credit by the applicants.
The expression “credit information file” is defined in s 6(1) to mean:
In relation to an individual, … any record that contains information relating to the individual and is kept by a credit reporting agency in the course of carrying on a credit reporting business (whether or not the record is a copy of the whole or part of, or was prepared using, a record kept by another credit reporting agency or any other person).
I referred to the definitions of “record” at [19] above and “credit reporting agency” at [18] above.
The expression “serious credit infringement” is defined in s 6(1) to mean:
“… an act done by a person:
(a)that involves fraudulently obtaining credit, or attempting fraudulently to obtain credit; or
(b)that involves fraudulently evading the person’s obligations in relation to credit, or attempting fraudulently to evade those obligations; or
(c)that a reasonable person would consider indicates an intention, on the part of the first‑mentioned person, no longer to comply with the first‑mentioned person’s obligations in relation to credit.”
Paragraph (c) assumed importance because Veda, and therefore its subscribing credit providers, characterised the act of any individual who had left his or her last known address and could not, after reasonable efforts, be located by the credit provider, as falling within that paragraph.
Section 18E(2) provides that a credit reporting agency must not include in an individual’s credit information file personal information relating to, relevantly at para (f), the individual’s lifestyle, character or reputation.
Section 18E(8) provides:
A credit provider must not give to a credit reporting agency personal information relating to an individual if:
(a)a credit reporting agency is prohibited, under subsection (1), from including the information in the individual’s credit information file; or
(b)the credit provider does not have reasonable grounds for believing that the information is correct; or
(c)the credit provider did not, at the time of, or before, acquiring the information, inform the individual that the information might be disclosed to a credit reporting agency.
Certain aspects of the effect of the provisions of s 18E in the circumstances of the present cases are noteworthy. First, the obligation that s 18E(1) imposes on the credit reporting agency is absolute, even though the credit reporting agency will not ordinarily know the facts of the dealings between the credit provider and the consumer (hence, the “primary” obligation imposed on the credit provider by s 18E(8)).
Second, under s 18E(1) the relevant time is the time when the credit provider enters the personal information in Veda’s database. Under subpara (b)(vi), for example, at that time the personal information must be information that is a record of (consumer) credit that was provided by the credit provider to the individual in respect of which, as at that time, the individual is at least sixty days overdue in making a payment and the credit provider has taken “steps” to recover the whole or any part of the amount of the credit. In the ordinary course, the credit reporting agency will have no way of knowing whether these conditions are satisfied.
Third, under subpara (b)(x), at the time of listing, the information must be a record of an opinion then held by the credit provider who entered the information in Veda’s database that the individual has, in the circumstances specified in the information entered, committed a “serious credit infringement” as defined in s 6(1) (see the definition of “serious credit infringement” set out at [31] above). In the ordinary course, the credit reporting agency will have no way of knowing whether the credit provider did hold the opinion described in s 18E(1)(b)(x).
Fourth, under para (ba), at the time of listing, the personal information must be a record of an overdue payment by the individual as guarantor under a guarantee given against a default by a borrower in repaying all or any part of an amount of consumer credit obtained by the borrower from a credit provider, and all four of the circumstances identified in subparas (i)-(iv) of para (ba) must be satisfied. These include the lapse of sixty days since the day on which the credit provider gave the guarantor notice of the consumer’s default and the taking by the credit provider of other steps to recover the amount of the overdue payment from the guarantor. Again, in the ordinary course the credit reporting agency will have no way of knowing if these conditions are satisfied.
It is important to recall s 6(1)’s definition of “personal information” (see [12] above). It refers to information whether true or not. The reference to the “information” in the opening words of paras (b) and (ba) of s 18E(1) is a reference back to the “personal information” mentioned in the chapeau to that subsection. The word “record” in paras (b) and (ba) does not, therefore, imply correctness. Accordingly, what paras (b) and (ba) except from the general prohibition in s 18E(1) is information, true or false, that satisfies a description in those paragraphs. That is to say, paras (b) and (ba) are directed to kinds, classes or categories of information, whether the actual information is true or false.
Section 18E(1) prohibited Veda from including in its database kinds of information falling outside the kinds described in, relevantly, subpara (b)(vi) and (b)(x) and para (ba) of that subsection. If information, even information that proved to be false, was of those kinds, s 18E(1) did not prohibit Veda from including it in its database.
This construction of s 18E(1) is consistent with Veda’s lack of means of knowledge of the true facts and with the more extensive obligation imposed on credit providers by s 18E(8) referred to above. It is also consistent with the nature of the obligations respectively imposed on credit reporting agencies and credit providers by ss 18F, 18G and 18J referred to below.
The Code provides in cl 1.3 as follows:
To ensure that only permitted information is included in a credit information file, a credit reporting agency must take the following steps:
(a)Where a credit reporting agency receives information from a credit provider for creation of, or inclusion in, a credit information file, and it appears to the credit reporting agency that the information being supplied by the credit provider may not be permitted to be included in a credit information file, the credit reporting agency must:
(i)refuse to accept the information; and
(ii)notify the credit provider, in writing, that the inclusion of the information may be in breach of the Act.
(b)Where a credit reporting agency becomes aware that information supplied by a credit provider and included in a credit information file appears to be of a type not permitted to be included in the file, the credit reporting agency must:
(i)remove the information from the credit information file;
(ii)notify the credit provider in writing that the information may not be permitted to be included in the file; and
(iii)make a written record of its actions in relation to (i) and (ii) above.
Clause 1.3(a) would be enlivened if, for example, it appeared to a credit reporting agency that the information supplied to it by the credit provider may not be of a permitted kind (cf s 18E(1) set out at [28] above). It is an interesting question whether cl 1.3(a) would also be enlivened if it appeared to a credit reporting agency that the credit provider may be prohibited from giving it the information by s 18E(8)(b) or (c).
Clause 1.3(b) is concerned with information already included in a credit information file that appears to the credit reporting agency not to be of a kind permitted to be included, and is therefore referable to the obligation imposed directly on the credit reporting agency by s 18E(1) (see [28]–[40] above).
Clause 1.4 (discussed at [58] below) expressly addresses the inaccuracy of information in the special circumstances described in that clause.
Section 18F(1) provides that a credit reporting agency must delete from an individual’s credit information file maintained by the agency any personal information of a kind referred to in, relevantly, s 18E(1)(b), within one month after the end of the maximum permissible period for the keeping of personal information of that kind. Subsection (2) of s 18F defines the “maximum permissible period”. For s 18E(1)(b)(vi) information, the period is five years, for s 18E(1)(b)(x) information it is seven years, and for s 18E(1)(ba) information it is five years. The commencement date varies according to the category.
Subsection (3) of s 18F obliges a credit provider who has given information to a credit reporting agency that an individual is overdue in making a payment in respect of credit provided by the credit provider, “as soon as practicable” to inform the agency once the individual has ceased to be overdue in making the payment or contends that he or she is not overdue in making it. On being so informed, the credit reporting agency must include in the individual’s credit information file a note to that effect: subs (4).
Subsection (5) of s 18F provides that where a credit provider ceases to be a current credit provider in relation to an individual, the credit provider must, as soon as practicable, give notice of that cessation to any credit reporting agency that was previously informed that the credit provider was a current credit provider in relation to the individual.
Section 18G provides:
A credit reporting agency in possession or control of a credit information file, or a credit provider or credit reporting agency in possession or control of a credit report, must:
(a)take reasonable steps to ensure that personal information contained in the file or report is accurate, up-to-date, complete and not misleading; and
(b)ensure that the file or report is protected, by such security safeguards as are reasonable in the circumstances, against loss, against unauthorised access, use, modification or disclosure, and against other misuse; and
(c)if it is necessary for the file or report to be given to a person in connection with the provision of a service to the credit reporting agency or credit provider, ensure that everything reasonably within the power of the credit reporting agency or credit provider is done to prevent unauthorised use or disclosure of personal information contained in the file or report.
Clearly, what are “reasonable steps” of the kind referred to in para (a) will depend on all the circumstances, including the respective roles played by credit provider and credit reporting agency.
The expression “credit report” is defined in s 6(1) of the Privacy Act to mean:
any record or information, whether in a written, oral or other form, that:
(a) is being or has been prepared by a credit reporting agency; and
(b) has any bearing on an individual’s:(i) eligibility to be provided with credit; or
(ii) history in relation to credit; or
(iii) capacity to repay credit; and
(c)is used, has been used or has the capacity to be used for the purpose of serving as a factor in establishing an individual’s eligibility for credit.
It is not necessary that Veda send a record or information to its subscribing credit providers before it can be said to have supplied them with a credit report. By reference to the definition of “record” as being, inter alia, a database, if Veda “prepares” its database or information and grants access to it to its subscribers, it is in control or possession of a “credit report”. Veda does “prepare” the record (database) or information in question. The record or information that an accessing credit provider obtains is not simply that which another credit provider fed into the database. It is a body of data supplied by credit providers (virtually always in the plural) which Veda’s computer system has combined and arranged in a composite report. The data will have been entered by subscribers, but Veda, through its computer system, will have composed the data into a new form.
Section 18H is directed to ensuring that an individual can obtain access to a credit information file or a credit report concerning him or her. A credit reporting agency in possession or control of such a file must take reasonable steps to ensure that the individual can obtain access to it (s 18H(1)). Similarly, s 18H(2) requires a credit provider or a credit reporting agency that is in possession or control of such a credit report containing personal information concerning an individual to take all reasonable steps to ensure that the individual can obtain access to the report.
Finally, subs (3) provides that an individual’s rights of access under subs (1) and subs (2) may also be exercised by a person (other than a credit provider, mortgage insurer or trade insurer) authorised in writing by the individual to exercise those rights on his or her behalf in connection with:
(a) an application, or a proposed application, by the individual for a loan; or
(b) the individual having sought advice in relation to a loan.A company named DR Capital Pty Ltd (DR Capital), which carried on a business of representing persons in their dealings with credit reporting agencies and credit providers, was so authorised by the nine applicants. Richard George Symes, a director of DR Capital, gave evidence in support of the applicants’ claims.
Section 18J is directed to ensuring that credit information files and credit reports are amended to reflect the true position as known. Subsection (1) of s 18J provides:
A credit reporting agency in possession or control of a credit information file, or a credit provider or credit reporting agency in possession or control of a credit report, must take reasonable steps, by way of making appropriate corrections, deletions and additions, to ensure that the personal information contained in the file or report is accurate, up-to-date, complete and not misleading.
Subsection (2) of s 18J provides that where an individual requests a credit reporting agency or credit provider to make a correction, deletion or addition to personal information contained in a credit information file or credit report but the credit reporting agency or credit provider does not do so, and the individual requests the credit reporting agency or credit provider to include in the file or report a statement provided by the individual of a correction, deletion or addition sought by him or her, the credit reporting agency or credit provider must take reasonable steps to include the statement that has been provided by the individual in the file or report within 30 days after being requested to do so.
Section 18K imposes limits on disclosure of personal information by credit reporting agencies. Relevantly, s 18K(1) provides that a credit reporting agency that is in possession or control of an individual’s credit information file must not disclose personal information contained in the file (disclosure to the individual is excepted) unless:
(a)the information is contained in a credit report given to a credit provider who requested the report for the purpose of assessing an application for credit made by the individual to the credit provider; or
(ab) … ;or
(ac)…; or
(b)the information is contained in a credit report given to a credit provider who requested the report for the purpose of assessing an application for commercial credit made by a person to the credit provider, and the individual to whom the report relates has specifically agreed to the report being given to the credit provider for that purpose; or
…
(my emphasis)As indicated earlier, by allowing its subscribers access to its database, Veda did, in my view, give “credit reports” to them for the purposes of the Privacy Act. Paragraph (a) refers to an application for consumer credit. In that case the prior consent of the individual to disclosure is not required. Paragraph (b) refers to an application for commercial credit. In that case the individual’s prior consent to disclosure is required, and subs (1A) of s 18K provides that the individual’s consent must be in writing unless a certain exception applies.
To be distinguished from s 18K(1) is s 18E(8)(c) referred to at [33] above. One effect of s 18E(8) is that a credit provider must not list a default, whether a consumer default or a commercial default, unless the conditions set out in that subsection are met. One of these is that the credit provider informed the individual, before obtaining information from him or her that, relevantly, a default might be listed with a credit reporting agency. No doubt a desirable precaution would be to obtain the individual’s signed acknowledgment and consent. Apparently this practice is followed by some credit providers. Section 18K(1), on the other hand, is concerned with disclosure by credit reporting agencies, and requires, as one alternative, the individual’s specific consent to a disclosure to a credit provider to whom the individual has applied for commercial credit.
Subsection (2) of s 18K prohibits a credit reference agency from disclosing personal information where, generally speaking, the credit reporting agency would be prohibited by s 18E from including the information in the individual’s credit information file, or would be required by s 18F to delete it from that file.
Subsection (4) of s 18K provides that a credit reporting agency that intentionally contravenes, relevantly, subs (1) or (2) of s 18K, is guilty of an offence punishable, on conviction, by a fine not exceeding $150,000.
Section 18M provides that if a credit provider refuses an application by an individual for credit and the refusal is based wholly or partly on information derived from a credit report relating to that individual that a credit reporting agency has supplied, the credit provider must give the individual a written notice stating that the application has been refused; that the refusal was so based; the name and address of the credit reporting agency; and that the individual has a right under the Privacy Act to obtain access to his or her credit information file maintained by the credit reporting agency.
Section 18R of the Privacy Act provides:
(1)A credit reporting agency or credit provider must not give to any other person or body (whether or not the other person or body is a credit reporting agency or credit provider) a credit report that contains false or misleading information.
(2)A credit reporting agency or credit provider that intentionally contravenes subsection (1) is guilty of an offence punishable, on conviction, by a fine not exceeding $75,000.
Section 18R(1) imposes an absolute obligation on Veda not to make available to its enquiring credit providers information contained in its database that is “false or misleading”. On its face, this provision is to be contrasted with the qualified obligations imposed on the credit reporting agencies by ss 18E(1) and 18G discussed above. However, the provision raises a question of whether information contained in an extract from Veda’s database is false or misleading where the enquiring credit provider, being also a subscriber to Veda’s system, understands the information to be, and it is in fact, an accurate reproduction of information that had been fed into that database by other subscribing credit providers. Contravention of s 18R(1) is an offence only if that subsection is contravened intentionally.
Clause 1.4 of the Code provides:
Where a credit reporting agency:
(a)becomes aware that information supplied by a credit provider relating to an overdue payment or a serious credit infringement may be inaccurate; and
(b)reasonably believes that other credit information files may contain similar inaccurate listings, the credit reporting agency must, as soon as practicable:
(i)notify the credit provider concerned, in writing, that it may have listed an inaccurate overdue payment or serious credit infringement against the individual concerned;
(ii)request the credit provider to ascertain whether other individuals’ credit information files may be similarly affected, and to investigate the accuracy of any overdue payment or serious credit infringement listing in those other individuals’ files; and
(iii)advise the Privacy Commissioner in writing of the above actions.
Clause 1.4 may be compared with cl 1.3 of the Code discussed at [41]–[42] above.
In the present cases, Veda became aware that listed particulars of defaults may have been inaccurate as a result of challenges made to their accuracy by the individuals concerned or by DR Capital on their behalf. The gravamen of the applicants’ complaint is not that Veda did not respond appropriately or with sufficient speed to the challenges. Their complaint is in respect of the listing of the defaults at all. In any event, any tardiness on the part of Veda would assume relevance only in relation to an inaccurate listing.
It remains to refer to the “Information Privacy Principles” and the “National Privacy Principles”.
The Information Privacy Principles are the privacy principles numbered 1 to 11 set out in s 14 of the Privacy Act. I will not set them out here. Section 13 provides, relevantly, that for the purposes of the Privacy Act, an act or practice is an interference with the privacy of an individual if the act or practice, in the case of an act or practice engaged in by, relevantly a credit reporting agency or credit provider, breaches an Information Privacy Principle in relation to personal information that relates to the individual.
The National Privacy Principles are set out in Schedule 3 to the Privacy Act. They impose obligations on “organisations”. Section 6C of the Privacy Act defines an “organisation” to mean relevantly, a body corporate that is not a small business operator, a registered political party, an agency, a State or Territory authority or a prescribed instrumentality of a State or Territory. The expression “agency” is defined in s 6 and does not include either a credit reporting agency or a credit provider. The National Privacy Principles therefore apply to Veda: it is an organisation and is not within the exclusion. I will not set out the National Privacy Principles here.
Part V (ss 36–70B) of the Privacy Act is headed “Investigations”. Section 36, the first section in Div 1 (ss 36–51) in Pt V, provides, relevantly, that, subject to exceptions, an individual may complain to the Commissioner about an act or practice that may be an interference with the privacy of the individual. Clause 3.2 of the Code provides that where a credit reporting agency is unable to resolve a dispute, it must immediately inform the individual concerned of this fact and of the fact that the individual may complain to the Commissioner.
Section 40(1) provides that subject to subs (1A), the Commissioner must investigate an act or practice if:
(a)the act or practice may be an interference with the privacy of an individual; and
(b) a complaint about the act or practice has been made under section 36.
Subsection (1A), however, provides that the Commissioner must not so investigate a complaint if the complainant did not first complain to the respondent, unless the Commissioner decides that it was not appropriate for the complainant to complain to the respondent first.
Section 41(1) provides, relevantly, that the Commissioner may decide not to investigate, or not to investigate further, an act or practice about which complaint has been made under s 36 if the Commissioner is satisfied that:
(a) ... ;
[there is no (b)]
(c) ... ;
(d) ... ;(e)the act or practice is the subject of an application under another Commonwealth law, or a State or Territory law, and the subject-matter of the complaint has been, or is being, dealt with adequately under that law; or
(f)another Commonwealth law, or a State or Territory law, provides a more appropriate remedy for the act or practice that is the subject of the complaint.
The first section in Div 2 (ss 52–53B) of Pt V, s 52 provides, relevantly, as follows:
(1)After investigating a complaint, the Commissioner may:
(a) make a determination dismissing the complaint; or
(b)find the complaint substantiated and make a determination that includes one or more of the following:
(i)a declaration:
(A)…
(B)… — that the respondent has engaged in conduct constituting an interference with the privacy of an individual and should not repeat or continue such conduct;
(ii)a declaration that the respondent should perform any reasonable act or course of conduct to redress any loss or damage suffered by the complainant;
(iii)a declaration that the complainant is entitled to a specified amount by way of compensation for any loss or damage suffered by reason of the act or practice the subject of the complaint;
(iv)a declaration that it would be inappropriate for any further action to be taken in the matter.
(1A)The loss or damage referred to in paragraph (1)(b) includes injury to the complainant’s feelings or humiliation suffered by the complainant.
(1B)A determination of the Commissioner under subsection (1) is not binding or conclusive between any of the parties to the determination.
(2)…
(3)…
(3A)…
(3B)A determination may include an order that:
(a)an agency or respondent make an appropriate correction, deletion or addition to a record, or to a credit information file or credit report, as the case may be; or
(b)…
Division 3 (ss 54-55B) of Pt V provides for enforcement of determinations made under s 52. Section 55 provides:
Determination under section 52
(1)An organisation that is the respondent to a determination made under section 52:
(a)must not repeat or continue conduct that is covered by a declaration that is included in the determination under sub-subparagraph 52(1)(b)(i)(B); and
(b)must perform the act or course of conduct that is covered by a declaration that is included in the determination under subparagraph 52(1)(b)(ii).
Determination under approved privacy code
(2)An organisation that is the respondent to a determination made under an approved privacy code:
(a)must not repeat or continue conduct that is covered by a declaration that is included in the determination and that corresponds to a declaration mentioned in paragraph (1)(a); and
(b)must perform the act or course of conduct that is covered by a declaration that is included in the determination and that corresponds to a declaration mentioned in paragraph (1)(b).
Section 55A provides for proceedings in this Court or the Federal Magistrates Court of Australia to enforce a determination. The section provides in subs (1) for the persons who may commence proceedings for an order to enforce a determination. They include the complainant and, if the determination was made under s 52, the Commissioner. Section 55A provides in subss (2)-(5) as follows:
(2)If the court is satisfied that the respondent has engaged in conduct that constitutes an interference with the privacy of the complainant, the court may make such orders (including a declaration of right) as it thinks fit.
(3)The court may, if it thinks fit, grant an interim injunction pending the determination of the proceedings.
(4)The court is not to require a person, as a condition of granting an interim injunction, to give an undertaking as to damages.
(5)The court is to deal by way of a hearing de novo with the question whether the respondent has engaged in conduct that constitutes an interference with the privacy of the complainant.
As appears at [90] ff below, I do not find it necessary to address the question whether the provisions in Pt V of the Privacy Act noted above are inconsistent with the continued subsistence of causes of action in defamation and negligence. The provisions are relevant, however, to Veda’s contention that the common law did not impose on Veda a duty of care in respect of the accuracy of default listings (see [374] ff below).
“Consumer Defaults” and “Commercial DefaultS”
The expressions “consumer default” and “commercial default” were much used in submissions. They are not used in the Privacy Act. They refer to a default in relation to the provision of (consumer) credit on the one hand and commercial credit on the other (see [23] above). For convenience, I will also use the expressions “consumer default” and “commercial default”.
Veda frequently submitted in relation to a listed commercial default that the Privacy Act had no application. Veda was pleased to draw attention to the fact that the listed defaults in relation to Dale, McGary and Shields were not consumer defaults but were commercial defaults, with the consequence, so Veda submitted, that the Privacy Act, and, in particular, s 18E(1)(b)(vi) and (x) and (ba) had no application.
With respect, this way of describing the position was apt to mislead.
I gave a detailed account of s 18E at [28]ff. It was not disputed that Veda was a credit reporting agency to which that section applied. I set out the definition of “personal information” at [12] above. The expression is not defined by reference to “credit”, the definition of which (as consumer credit) I set out at [21] above. I set out the definition of “credit information file” at [30] above and the definition of “credit reporting business” at [18] above.
The notion of a “credit information file” is central to the operation of s 18E. I will return to that concept below.
Section 18E(1) prohibits a credit reporting agency, such as Veda, from including personal information in an individual’s credit information file unless the information satisfies para (a), (b), (ba), (c) or (d) of s 18E(1). Subparagraphs (vi) and (x) of para (b) of s 18E(1) and para (ba) of that subsection are all dependent, in various ways, on the notion of “credit”. As noted at [20] above, the word “credit” standing alone in the Privacy Act means consumer credit. This is why, by way of reminder, I have sometimes written “(consumer) credit” in these Reasons.
Section 18E(1) prohibits a credit reporting agency from including particulars of commercial defaults in an individual’s “credit information file”, not because of any failure to give a notice or to take recovery steps, but because commercial defaults do not fall within any of the classes of (consumer) credit information referred to in s 18E(1) at all.
In a sense it is true that a default in relation to commercial credit does not have to “satisfy” the constraints referred to in subparas (vi) and (x) of para (b) or in para (ba) of s 18E(1) because those provisions refer only to (consumer) credit. However, those provisions identify information which a credit reporting agency is permitted to include in an individual’s credit information file, and commercial defaults lie entirely outside the scope of such information. Thus, while it is beside the point for the applicants to complain that the “requirements” of those provisions are not met in relation to a commercial default, it is also wrong to assume that this means that commercial defaults may be recorded in a credit information file regardless of those requirements.
It would be possible for me to spend some time discussing what is the “credit information file” of each of the applicants in the context of Veda’s electronic database, and the question whether, in contravention of s 18E, Veda included commercial defaults in that credit information file (as distinct from in any “commercial credit information file” that may have existed relating to the same applicant). But on the assumption that Veda contravened s 18E, the question arises where that leads. The applicants do not sue for breach of statutory duty. The gravamen of their defamation claims is that the listed default conveyed the defamatory imputations concerning them that are identified in their respective TFASCs. The gravamen of their claims in negligence is that the listed default was inaccurate.
Moreover, even if Veda contravened s 18E by including commercial defaults in the applicant’s (consumer) credit information files, I do not know that the applicants would be any worse off than they would have been if Veda had included the identical commercial defaults in “commercial credit information files” that were accessed by enquiring credit providers at the same time as they accessed the (consumer) credit information files.
For the above reasons, I do not find it necessary to explore the question whether Veda contravened s 18E by including commercial defaults in (consumer) credit information files that it maintained in respect of the applicants. That is not the pleaded case and it is doubtful that a different pleading of the case would have improved the position of the applicants in the present respect.
Before moving from the present issue, I should note, in fairness to Veda, that business records of Veda that are in evidence demonstrate that Veda is well aware of the present distinction. For example, the “Veda Advantage Default Information Guide” states:
The foundation of our services is our database: The largest single source of credit information in Australia. Our database contains more than 14 million consumer and 2.8 million commercial credit files. It includes records on the credit activity of Australian individuals, companies and businesses. [my emphasis]
The document continues by informing readers of constraints imposed by the Privacy Act on dealings with “an individuals’ consumer credit file” (emphasis in original).
Sample pleading in the case of Shane Dale
In all but one of the nine proceedings the final pleading is a third further amended statement of claim (TFASC). The exception is Mr Taylor’s proceeding in which it is a second further amended statement of claim. The purist would object, but I will use TFASC to include a reference to Mr Taylor’s final pleading also.
The TFASCs exhibit a common structure of which that in Mr Dale’s proceeding will serve as an example. The following account of Mr Dale’s TFASC is of its allegations, not of facts found by me. Numerals in square brackets in bold below are the numbers of paragraphs in Mr Dale’s TFASC.
Veda is a trading corporation incorporated under the Corporations Act 2001 (Cth) and carries on a credit reporting business within the meaning of the Privacy Act [2].Veda published of and concerning Mr Dale information in certain credit reports, which included the words and figures or, in the alternative, the information set out in Schedule A to the TFASC, [3]. Schedule A was as follows:
SCHEDULE A
Consumer [sic – should be Commercial] Defaults
Account No: 0724019 Account Type: Credit Card Association Code: Principal’s Account Latest Subscriber: BARTERCARD LTD QLD Latest Date: 20/03/2000 Latest Amount: $1174 Latest Reason: Clearout (Watched) Original Subscriber: BARTERCARD LTD QLD Original Date: 20/03/2000 Original Amount: $1174 Original Reason: Clearout (Watched)
Schedule A set out verbatim certain information that was recorded in the credit information file maintained by Veda in respect of Mr Dale. It showed that Bartercard Ltd Qld (Bartercard) listed a “Clearout (Watched)” default on 20 March 2000, showing an “amount” of $1174. Since the “Latest Date” is also 20 March 2000, we know that Bartercard did not update the listed default.
In the case of Dale, Fisher, Marker, Shields and Strange, there was also a Schedule B to the TFASC. In the cases of Adams, McGary, Taylor and Tyndall, there was only a Schedule A. As will be seen below, the Schedules B were also extracts of information recorded in the relevant credit information files. Each Schedule B was identical to the Schedule A annexed to the same TFASC but for one difference: the Schedule B had an additional final line which recorded that the debt in question had a “Status” of “Paid” or “Settled” as at a specified “Status Date”. As appears at [96] below, in Mr Dale’s case the additional line gave a Status of Paid as at a Status Date of 20 June 2003.
Where a TFASC had both Schedules A and B annexed, the TFASC alleged that the material complained of in Schedule A had been published to one or more enquiring credit providers prior to the recording of the payment and that the material complained of in Schedule B had been published to one or more credit providers after the recording of the payment or settlement.
The meanings of expressions that were used in the credit information files were to be found in an “Internet User Guide” that Veda provided to its subscribers (Guide). The Guide instructed subscribing credit providers as to the “codes” by which various types of defaults were to be listed and, it follows, by which the listed defaults were to be understood. The expression “Clearout (Watched)” was listed in the Guide under the heading “Commercial Credit Default Report Types”. In relation to this expression, the Guide stated:
The account must be a confirmed missing debtor e.g. skip or clearout. There must be reasonable efforts made to contact the debtor in person or in writing. You can list a clearout immediately, you do not have to wait the 60 days as long as efforts have been made to prove the debtor is a confirmed missing debtor.
The reference to “the 60 days” is explained by the definition of “Payment Default”, which was another Commercial Credit Default Report Type that was defined on the same page of the Guide as follows:
The account must be 60 days or more overdue and the debtor or debtors must have been sent a written notice advising of the overdue payment, and requesting payment of the amount outstanding.
The expression “Repossession Loss (after sale)” was defined on the same page of the Guide as “The amount outstanding after sales of goods”.
It is convenient to note that the expression “Payment Default” was also listed under the heading “Individual Consumer Credit Default Report Types” in the Guide and was defined there in the same way. The Individual Consumer Credit Default Type that was comparable to “Clearout (Watched)” was “Serious Credit Infringement (Confirmed Clearouts only)”. This was defined as follows:
Must be a confirmed missing debtor e.g. a skip or clearout. There must be reasonable efforts made to contact the debtor in person or in writing. You can list a SCI [Serious Credit Infringement] immediately, you do not have to wait 60 days as long as efforts have been to prove the debtor is a confirmed missing debtor.
No doubt the reason why there is no reference to “serious credit infringement” in the case of the Commercial Credit Default Report Type “Clearout (Watched)” is that the Privacy Act’s definition of “serious credit infringement” in s 6(1)(set out at [31] above) relates only to consumer credit. Apparently the author of the Guide considered that in all circumstances, the inability, after efforts, of a credit provider to contact a consumer after he or she had left his or her last address known to the credit provider, would satisfy that definition of “serious credit infringement”. There was no Indivdual Consumer Credit Default Type comparable to “Repossession Loss (after sale)”.
The terms “Paid” and “Settled” are defined in the Guide under the heading “Default Status Types” as follows:
Paid A defaulted account, which has been paid in full and is now closed.
Settled A defaulted account, which was in default, and a lesser amount has been agreed upon by both parties to be paid as full and final payment.
According to Mr Dale’s TFASC, the words and figures or information in Schedule A concerning Mr Dale were published to the following entities on the following dates:
(a) 19 October 2000 Direct Mortgage Solutions;
(b) 24 November 2000 American Exp New Accts NSW;
(c) 25 November 2000 Citibank Limited;
(d) 27 November 2000 American Exp New Accounts NSW;
(e) 2 January 2001 Citibank Limited;
(f) 19 June 2003 S E Rentals Pty Ltd. [3]These particulars are records in Mr Dale’s credit information file of occasions on which credit providers, to whom Mr Dale had applied for consumer or commercial credit, accessed his file. I will use the term “enquiring credit providers” to refer to subscribing credit providers who recorded an applicant’s application for consumer or commercial credit in that applicant’s credit information file. Of course, all six alleged publications of the matter complained of in Schedule A post-dated the date of the listing of “Clearout (Watched)” by Bartercard on 20 March 2000. I will use the expression “listing credit provider” to refer to a subscribing credit provider, such as Bartercard in Mr Dale’s case, that listed a default.
The matter referred to in Schedule A conveyed the following imputations each of which was defamatory of Mr Dale:
1.That the applicant refused to pay to a creditor a debt of $1,174.00 which he was legally obliged to pay before 20 March 2000.
2.That the applicant had since before 20 March 2000 been unable to pay his debts.
3.The applicant is a credit risk by reason of his continuing failure since 2004 to pay a creditor a debt of $1,174.00 which he is legally obliged to pay despite being sent a written notice by the creditor requesting payment.
4.The applicant had engaged in fraudulently evading his obligations to pay his debts.
5.The applicant is reasonable [sic – reasonably] suspected by a creditor of fraudulently evading his obligation to pay his debts.
6.The applicant is a serious credit risk.
7.That the applicant has taken advantage of his change of address in order to evade his obligations to pay his debts.
8.That the applicant is reasonably suspected by a creditor of taking advantage of his change of address to evade his obligations to pay his debts. [4]
Imputations (a)-(c) were conveyed by the natural and ordinary meaning of the matter complained of or with the aid of extrinsic facts known to the persons to whom that matter was published, while imputations (d)-(h) were conveyed with the aid of extrinsic facts known to those persons.
The following particulars of extrinsic facts are given:
(a)The persons to whom the matter was published were employees or agents of the companies to whom the matters complained of were published.
(b)The companies were subscribers of the respondent enabling the companies to have access to its “Business Information Services” products and services including its internet data base.
(c)The respondent published to its subscribers an “internet user guide” to enable users to access credit information files including credit information files concerning the applicant. The respondent also conducted training seminars using its internet user guides to train subscribers and users, inter alia, how to access and use credit information files and how to interpret the information on these files and how to provide information to be recorded on those files.
(d)Persons accessing the information were required to use operator identification codes, which would be provided to them by the respondent.
(e)In the respondent’s “internet user guide” the following appears in relation to individual consumer credit default type reports:
“Serious credit infringement (confirmed clear outs only)”
[The definition from the Guide is set out – see [89] above]
“Payment Default”
[The definition from the Guide is set out – see [88], [89] above]
A default is an account that is usually 60 days or more overdue, where $100 or more is owed for which you have commenced collection action. Once listed with Baycorp Advantage - Business Information Services, the default will remain in file for five years. (p 53)
(f)In the respondent’s “internet user guide” the following appears in relation to commercial credit default reports:
“Clearout (Watched)”
[The definition from the Guide is set out – see [87] above]
“Payment Default”
[The definition from the Guide is set out – see [88] above]
A default is an account that is usually 60 days or more overdue, where $100 or more is owed and for which you have commenced collection action. Once listed with Baycorp Advantage- Business Information Services, the default will remain in file for five years. (p 37)
(g)The persons to whom the matter was published knew each of the facts referred to in (c) and (f) and were aware [of] and understood the “internet user guide” as a whole.
(h)Section 18E(1) of the Privacy Act 1988 provides that a credit reporting agency must not include personal information in an individual creditors [sic – individual’s credit] information file unless it comes within the circumstances set out in s.18E(1). The only subsection to which the personal information “clearout (watched)” could be authorised is under s.18E(1)(b)(x) which is that the information is a record of “the opinion of a credit provider that the individual has in the circumstances specified, committed a serious credit infringement”. Under s 6(1) of the Privacy Act “serious credit infringement” is defined to mean:
“an act done by a person:
(a)that involves fraudulently obtaining credit, or attempting fraudulently to obtain credit; or
(b)that involves fraudulently evading the person’s obligations in relation to credit, or attempting fraudulently to evade those obligations; or
(c)that a reasonable person would consider indicates an intention, on the part of the first-mentioned person, no longer to comply with the first-mentioned person’s obligations in relation to credit.”
(i)Even if the persons to whom the matter complained of was published was [sic – were] not aware of the precise terms of sections 18E or 6 they knew that “clearout (watched)” meant that the debtor was either engaged in fraudulently evading or attempting to evade his/her obligations to pay her [sic – his/her] debts to the credit provider or that the credit provider had formed that opinion.
(j)The persons to whom the matter complained of [was published] knew that a clearout is a default which remains listed on a credit report for seven years, whereas a payment default is removed five years after listing.
(k)The persons to whom the matter complained of [was published] knew the New South Wales Consumer Credit Act 1995 which adopts the Consumer Credit Queensland Act states inter alia a credit provider must not begin enforcement proceedings against a debtor in relation to a credit contract unless the debtor is [in] default under the credit contract and the credit provider has given the debtor or any guarantor, a default notice, complying with the section, in turn allowing the debtor a period of thirty days from the date of the notice to remedy the default.
Veda further published of and concerning Mr Dale the information in certain credit reports which included the words and figures or, alternatively, the information set out in Schedule B to the TFASC[5]. The following particulars of publication are given:
(a) 24 June 2003 Optus Commun Aust NSW;
(b) 10 November 2003 CBFC Rentals Pty Limited ... .Schedule B was as follows:
SCHEDULE B
Account No: 0724019 Account Type: Credit Card Association Code: Principal’s Account Latest Subscriber: BARTERCARD LTD QLD Latest Date: 20/03/2000 Latest Amount: $1174 Latest Reason: Clearout (Watched) Original Subscriber: BARTERCARD LTD QLD Original Date: 20/03/2000 Latest Amount: $1174 Original Reason: Clearout (Watched) Status: Paid Status Date: 20/06/2003
Ms Shields said that she did not dispute that she was liable as guarantor and she accepted that Richgrove’s default in paying the leasing charges began in October 2000 (there is an obvious slip or error in the transcript’s reference to 2002 at T179.34). She also accepted that the vehicle was repossessed in January 2001 and that there was a loss on the sale by Ford Credit which gave rise to a liability on her part as guarantor. She also agreed that ultimately she did pay the money or a portion of it on 19 July 2004.
Ultimately, there is no dispute that Ms Shields owed the money or that it was outstanding for a period well in excess of sixty days. Her complaint is that she did not receive the relevant notices from Ford Credit; but this complaint cannot properly be directed at Ford Credit (and even less so, Veda) given her explanation that her husband/co-director/co-guarantor was taking her mail. She does not dispute that Ford Credit sent the notices to her at her residential address.
Ms Shields also suggested that Ford Credit had refused to speak with her when she attempted to contact it, but I agree with Veda that this evidence is at odds with Ford Credit’s attempts to contact Ms Shields. She said that she always knew that there were monies outstanding and owed to Ford Credit and she accepted in the witness box that Ford Credit had been attempting to contact her. She said that she had attempted six to eight times to contact Ford Credit in relation to “money” and “the vehicle that had broken down”.
I also agree that there were significant issues of credibility surrounding Ms Shields’s evidence. She gave evidence in chief that an application for credit to CMS Asset Solutions and an application for credit to QPF Finance had each been refused but she conceded in cross-examination that that evidence had been untrue.
There may have been some problem with the mail as between Ms Shields and her husband but I am not satisfied that she did not receive the letters from Ford Credit. Even if I am mistaken about this, it is of limited consequence. The notice requirement in s 18E(1)(ba) is not relevant to this commercial default. The Guarantee, by cl 3, stated that Ms Shields’s liability was not impaired, released or discharged by the absence of any notice to her. Ms Shields has not led evidence inconsistent with the correctness of the listing.
It is not established that the listing by Ford Credit on 9 March 2001 of a Payment Default with an amount shown of $16,598 was inaccurate as alleged in Ms Shields’s TFASC.
(7) Strange
I referred to Schedules A and B to Mr Strange’s TFASC at [249]–[250] above. Schedule A shows that “CITY FIN LCS BRWNPLNS/SNYBNK” (City Finance) recorded on 2 June 2003 a “Clearout (Watched)” default showing an amount of $573.00. According to Schedule A, as at 11 February 2004 the amount had changed to $445. Schedule B showed that as at 6 April 2005 the “Status” was “Settled”.
Apparently “City Finance” was a business name of Start Over Finance Pty Ltd, and I will refer to the listing credit provider as “Start Over”.
In his affidavit of 19 December 2007, Mr Strange said that in or around July 2002 he took out a short term loan with Start Over. The loan contract between Mr Strange and Start Over is in evidence. It provided for 36 weekly repayments, amounting to a total loan repayment period of 252 days. The first payment was due on 24 July 2002, and in oral evidence Mr Strange acknowledged that the loan was due to be repaid fully by around March 2003. In his affidavit, Mr Strange said that he did not default on payment until he encountered marital problems and lost his job, and said that even then, he continued to maintain some form of payment toward the loan. In oral evidence, he said that those events occurred “probably about February 2003”, and that he had arranged with Start Over to make the minimum payments as best he could and try to make up the arrears. In about November or December of 2002 Mr Strange moved house within Crestmead, Queensland. In oral evidence he said that he telephoned Start Over, informing them of the move and giving them his new telephone number. He said that he “would assume that [the conversation] would have been November/December of [2002]”.
Mr Strange said in his affidavit and oral evidence that in or around February 2004 he moved interstate, living temporarily with his parents in Armidale NSW, but that his residential mailing address remained the same address in Queensland. He said that he saw no reason to notify Start Over of the change in his place of residence because the mail (addressed to him at Crestmead) was being forwarded to him at his parents’ house and he always received it. He said that his mobile telephone number had not changed at any time. Mr Strange said in his examination in chief that he continued to make payments during this time. He accepted in cross-examination that he defaulted on payments of his loan, and that as at February 2004 he had been in default since March 2003, insofar as he had not paid back the full amount by that date.
Mr Strange said that between his relocation within Crestmead in November/December 2002 and February 2004 he had telephone conversations with Start Over concerning some missed payments. He placed those telephone conversations in around early 2004. Mr Strange said that in about February 2004 he received a telephone call from Start Over on his mobile telephone in relation to making a payment on the loan, in which he said the Start Over representative was accusing him of breaching a verbal agreement arising from his previous telephone conversations with Start Over. He refused to give Start Over his parents’ address. He said that the telephone conversation became rather heated. He said that his view was that he should not give Start Over his parents’ address because he was not residing there permanently. He said in his affidavit that that was the only contact he had with Start Over before it listed “Clearout (Watched)”. That listing, however, occurred on 2 June 2003, some eight months before the alleged telephone conversation. Taken to this part of his affidavit in cross-examination, Mr Strange said that it was not correct, then that it was correct, then that he received the telephone call some time after the listing.
In Mr Strange’s case as in others senior counsel for Veda took the applicant to assertions that were made in replies to letters written by Mr Symes of DR Capital on the applicant’s behalf, with a view to showing that the applicant had not, through Mr Symes, denied certain assertions made against his or her interests. In the present case, Start Over’s solicitor asserted in correspondence with Mr Symes that his client’s instructions were that it had sent Mr Strange several notices to his Crestmead address of its intention to list his default with Veda, none of which notices were returned.
I found Mr Strange’s evidence in cross-examination unsatisfactory. He repeatedly argued with the cross-examiner and demonstrated an unwillingness to confront and answer the questions that were put to him. He conceded that he received “several telephone calls” from Start Over yet wished to say he was “not necessarily” in default when he instructed Mr Symes to make an offer on his behalf in settlement of “any outstanding debt”. He also said that once he learned that Start Over had listed him as a defaulter, he “was less than obliging to repay them”.
In or about early 2007 Mr Strange obtained from “Baycorp Collections” a copy of a computer printout from its file relating to him. It revealed an entry on 2 June 2003 stating:
This client has since left his place of work last week. His home number is disconnected, he was very rude to our employee last week. We have a postal address for him, I have yet to check if he is still at his home. He has had all relevant notices. Final Notice sent to him on 23/09/2002. His postal address is [a GPO Box].
There is no evidence one way or the other as to whether a check was carried out on 2 June 2003 as to whether to Mr Strange was still “at his home”.
Mr Strange said that his home telephone number at that time was not connected, but that his mobile telephone was working. He said he did not receive a letter dated 23 September 2002 from Start Over – a reference to the letter referred to in the above extract. In his affidavit dated 19 February 2008, he asserted that he was never given any written notice of the intention of Start Over Finance to list him as a default. In his oral evidence, Mr Strange said he could not recall receiving notice from Start Over threatening to list him with Veda (then the Credit Reference Association of Australia) if he failed to pay.
Veda’s internal records in relation to Mr Strange were very detailed. Unless otherwise indicated, the information referred to in the following eleven paragraphs is based on those records.
DR Capital, on behalf of Mr Strange, wrote to Veda on 1 September 2005, alleging that the default had been listed without cause and without the requisite notice being provided. This letter was in evidence. Veda consequently contacted Start Over which replied that the consumer had not been able to be located and that the entry was correct and should remain.
On 27 November 2006 Veda received directly from Mr Strange a letter disputing the listing on the basis that Start Over had his current address. Veda again contacted Start Over which confirmed that at the time of the listing mail was being returned, and that the clearout listing was correct and should remain. Veda advised Mr Strange that the listing would remain.
On 15 March 2007 Mr Strange took up the matter with “ISS Customer Relations” within Veda. Mr Strange advised that Start Over’s Clearout (Watched) listing was incorrect and that he had never received any notice from Start Over. He said that he was providing a letter sent by Start Over to Veda, in which (according to the PAS file note) Start Over advised that the listing should be deleted to resolve the matter. This letter itself is not in evidence. Veda made further investigations with Start Over, which then informed Veda that it “could not substantiate the Clearout… unable to provide copy of the returned mail envelopes”. As a result, Mr Strange’s credit information file was amended to a “Payment Default” rather than “Clearout (Watched)”. Veda advised Mr Strange of this on 16 March 2007, telling him it was unable to delete the listing. Veda said that as the account was 60 days in arrears, “the listing will remain on the file as a payment default”.
On 13 April 2007 Mr Strange contacted Veda and advised that the amount set out in the listing was incorrect. Veda received a statement from Start Over’s solicitor that the amount that was sixty days overdue at the time of the listing was only $390.65. A PAS file note seems to accept that this was correct. The amount was amended to $390 accordingly, and Veda advised Mr Strange of the amendment.
Veda submits that the amount listed need not be the amount recoverable at law, and refers to para 55C (pp 355-356) of the Code. That paragraph states, relevantly: “The amount to be reported will not necessarily be the amount recoverable at law, which may be affected by other contingencies not foreseen at the time of reporting”. There is no suggestion in Mr Strange’s case, however, that it was because of contingencies not foreseen at the time of reporting that the erroneous amounts were recorded.
On 14 May 2007 DR Capital made a request pursuant to s 18J(2) of the Privacy Act that there be included a statement on Mr Strange’s file reading as follows:
Despite, City Finance and their Solicitors instructions to remove the incorrect default from my credit report, Veda Advantage has refused to do so. I am currently seeking legal advice in regards to joining a class action taken by GMP Legal in the Federal Court of Australia against Veda Advantage.
DR Capital’s letter of request is in evidence. Veda’s record states that the note was placed on Mr Strange’s credit information file. In cross-examination Mr Symes agreed that the first sentence of his letter was untrue in that neither Start Over nor its solicitors had instructed or requested Veda to remove the listed default.
Notwithstanding Mr Symes’s concession, I note that there is an entry on Mr Strange’s PAS file that Start Over had written requesting that the default be removed. There is also a note in Mr Strange’s PAS file, dated 14 May 2007:
Recd email from John Brady(solicitor for City Finance). He advised to delete the df as they had conversation with Mr Strange and made it clear that if the matter can be dealt with by the lifting of the default, consumer will sign whatever document either we or you reasonably request him to sign to say that there will be no further action of any sort against his client, City Finance Franchising Pty.
On 15 April 2005, Mr Symes wrote to Start Over stating: “We request on behalf of our client that you accept the offer by our client to pay any outstanding debt on the proviso that all default listings are removed from his credit report”.
On 15 May 2007 Mr Strange contacted Veda indicating that he was not happy with the responses Veda had given him and he asked that his matter be sent to Veda’s legal team. On 29 May 2007 Veda sent to Mr Strange the legal team’s reply to his further complaints.
On 30 May 2007 Mr Strange sent three emails to Veda responding to Veda’s correspondence of 29 May. Mr Strange asserted that the listing of “Payment Default” was in error and contrary to a letter sent by Start Over to Veda.
On 8 June 2007 Veda’s notes state that it wrote to Mr Strange indicating that there was insufficient evidence to establish that error; and, indeed, that Start Over had provided information substantiating the “Payment Default” listing. Veda acknowledged that Start Over had indeed requested the removal of the default, stating “when City Finance requested the removal of the default listing from your file we advised them this could only occur if the default itself had been listed in error, that is, if they had reported an account that was not in arrears at the time of listing. We asked them to give us details about any error that was made.” Veda’s PAS notes go on to state that no such details had been provided by Start Over. Veda invited Mr Strange to provide it with any further information that might establish that the listing was an error, and it referred him to the office of the Privacy Commissioner.
The evidence establishes that Mr Strange borrowed from Start Over in or around July 2002; that from March 2003 he was in default; that as at 2 June 2003 he had left his place of work; that he changed addresses within Crestmead, Queensland; that in or about February 2004 he moved, at least temporarily, to Armidale in New South Wales; and that he refused when requested by Start Over to provide it with his address there.
The critical time is 2 June 2003, the date of the listing by Start Over. Mr Strange was changing addresses in 2002 and 2004. I do not have confidence in him as a person who would be diligent in ensuring that Start Over always had his up to date address. It is not enough for a creditor to have a telephone number, facsimile number or email address. Knowing the physical whereabouts of the debtor is important for recovery purposes.
It is not established that by 2 June 2003 Start Over had not confirmed that Mr Strange was a missing debtor, notwithstanding reasonable efforts to contact him in person or in writing. It is not shown to have been inaccurate for the Clearout (Watched) listing to have been made on 2 June 2003. However, I accept that it was inaccurate for the amount of $573 (and later $445) to be shown. The Original Amount (and the Latest Amount) should have been only $390.
(8) Taylor
I referred to Schedule A to Mr Taylor’s TFASC at [262] above. It shows that on 27 May 2002 BA Collections Factoring entered a Consumer Default of “Clearout Watched”, showing an amount of $795.00. The question arises whether this listing was different from the Individual Consumer Credit Default Type “Clearout (Watched)”. The entry shows against “Latest Reason” simply the two words “Clear Out”. There is no such Individual Consumer Credit Default Type in the Guide. The entry also shows that as at 8 January 2003 the amount had been “Paid”.
There are two Commercial Credit Default Report Types in the Guide: “Clearout (Watched)” and “Clearout (Not Watched)”. There is also an “Individual Consumer Credit Default Report Type” “Serious Credit Infringement (Confirmed Clearouts only)”. In my opinion the listings “Clearout watched” and “Clear Out” told enquiring credit providers that as at 27 May 2002 Mr Taylor had cleared out from his address and had been unable to be contacted by BA Collections Factoring, notwithstanding reasonable efforts on its part. Therefore I do not think that “Clear Out” or “Clearout (watched)” bore a meaning significantly different from “Clearout (Watched)”. I note that the ICCR in respect of Mr Taylor that is in evidence, from which no doubt Schedule A was derived, listed “Clearout (Watched)” as a Consumer Default by Mr Taylor.
The present issue, therefore, is simply whether Mr Taylor has proved that it was inaccurate to record as at 27 May 2002 that BA Collections Factoring had properly satisfied itself that he was a missing debtor.
In his affidavit Mr Taylor said that on or around 7 June 2000 he drew three cheques on the ANZ Bank (ANZ) which he understood were presented on 9 June 2000 but not met for insufficient funds in the account. He said that ANZ charged him dishonour fees for an ANZ Savings Account that was overdrawn. Mr Taylor said he did not recall being notified by ANZ that he owed it money. At the time he was living in Queensland.
According to Mr Taylor’s affidavit in or around August 2000 he relocated to Sydney. On or around 28 November 2002 he applied to St George Bank for a credit card and his application was declined. On or around 9 December 2002 he requested a copy of his credit information file from Veda and received a copy which revealed that he owed ANZ $795.00.
On around 2 February 2003 he contacted Alliance Factoring which had acquired the debt from ANZ. On or around 21 July 2003 he paid the debt in full in a sum of $871.28.
After making the payment he obtained from Veda on 28 July 2003 a copy of his credit information file which showed a double listing of his debt of $795.00 to Alliance Factoring. He states:
The reported amount overdue was in the sum of $795.00 and this was due to a clearout. On 8 January 2003 Alliance Factoring 3 listed a payment default in the sum of $836.00. The listing was amended by Alliance Factoring 3 on 9 January 2003 and reported the amount overdue as $836.00 due to a clearout.
Over a period from late July 2003 to 19 March 2004 Mr Taylor requested, obtained and paid for five copies of his credit report which all showed the amount as unpaid. Finally on 30 September 2004 he received a copy of his credit report which showed the amount as paid. Mr Taylor states that if he had known that there was a debt owing to ANZ which was sold to Alliance Factoring, he would have notified Alliance Factoring of his change of address.
In oral evidence Mr Taylor said that the overdrawn account was a savings account. He said that he left Queensland and returned to New South Wales to live and went into a branch of ANZ and told it of his new address in Sydney. Mr Taylor produced two sheets being statements of account issued by ANZ to him in relation to an ANZ “Access Cheque” Account in his name, one for the period 21 August 2000 to 21 September 2000 and the other for the period 21 September 2000 to 11 October 2000. There is no reason to infer that the ANZ Access Cheque account was different from the “savings” account to which Mr Taylor referred. Whereas the former shows his Queensland address, the latter shows his Sydney address in the suburb of Cremorne. Both show debit balances. Mr Taylor said that he had obtained these documents from ANZ some time in about 2005.
Mr Taylor said that when he drew the cheques, he did not have a facility enabling him to overdraw. He said that his belief was that a customer was not entitled to overdraw on a savings account.
On 28 April 2005 Mr Taylor obtained from ANZ a copy of the terms and conditions that had governed his ANZ Access Cheque Account from the time he opened it in 1999. The terms and conditions provide that ANZ does not agree to provide any credit in respect of the account without prior written agreement, and that the customer must not overdraw unless such a credit facility is in place. However, if the customer requests ANZ to allow a withdrawal or payment that would overdraw the account, the request is an offer made by the customer to ANZ for credit equal to the overdrawn amount, and ANZ is not obliged to accept the offer, but may in its discretion do so, by allowing the individual withdrawal or payment to be made. There is provision for the charging of interest in that situation. If ANZ accepts the customer’s offer, an independent “credit contract” comes into being.
In cross-examination Mr Taylor agreed that he knew in 2000 that his ANZ Access Cheque account was one on which he could draw cheques but he emphasised that he did not have an overdraft facility in place. He said that he did not know of any practice among banks allowing customers to overdraw accounts in the absence of an overdraft facility. He also said that he had not signed any documents pursuant to the Privacy Act about the disclosure of information or giving an authority to another party to make inquiries. However, Mr Taylor conceded that when he was speaking to Mr Symes of DR Capital in November 2004, he was aware that the debt to the ANZ had been incurred in 2000.
Importantly, DR Capital’s initial letter written on behalf of Mr Taylor to Alliance Factoring on 10 November 2004 said that due to the extremely short time frame in which he had had to move back to Sydney, Mr Taylor had not had time to leave a forwarding address and that he had not been in a state of mind to do so due to illness. The letter also asserted that Mr Taylor had believed at the time that there was no need to notify ANZ of the change of address since “he had no loans or credit cards at the time”. Mr Taylor agreed that this letter was written by Mr Symes based on instructions that he (Mr Taylor) had given to him.
In cross-examination, however, Mr Taylor said that at the time of instructing DR Capital he had forgotten that he had in fact told ANZ of his forwarding address. He said that it was only when Alliance Factoring told him it had taken an assignment of the debt from ANZ and he saw the ANZ bank statements that he saw to his surprise that he must have notified ANZ of his forwarding address after all. Mr Taylor said that he could not remember actually receiving the bank statements at his Cremorne address and could not recall whether the bank statements came to him at that address. He suggested that his lack of recall might be attributable to his state of ill health at the time. He could not now say whether or not he had read the statements. However, he insisted that he was not aware that he owed ANZ $706.35 until he first received a copy of his credit information file. He said that that was when he learned that Alliance Factoring had acquired the debt from ANZ. As mentioned above, this was in December 2002. Mr Taylor agreed that according to the letter that Mr Symes wrote on his behalf to Alliance Factoring, he had known of the debt to ANZ from December 2002 until it was paid on 14 January 2004.
DR Capital wrote to Veda on 1 September 2005 requesting that the “Clear Out” listing be removed because Mr Taylor had not been supplied with the required notice, and because the default had been listed without cause. Veda’s PAS notes reveal that Veda contacted Alliance Factoring on 29 September 2005 to investigate DR Capital’s claim. Alliance Factoring requested Veda to remove the listing after if had spoken to Mr Taylor, and Veda did so. (Mr Allison testified that if a subscriber tells Veda that a listing is in error, Veda automatically removes it at a charge of $25 to the subscriber.) Veda submits that the fact that Alliance Factoring requested the removal does not itself establish the listing was incorrect. Mr Taylor drew three cheques on his ANZ account on 9 June 2000 which placed the account into overdraft. He moved to Sydney two months later and then did not receive any notices requesting payment. He accepted that he had an obligation to pay ANZ and that the debt was outstanding for over a year.
The question which arises for decision is whether it was inaccurate to record on 27 May 2002 that Mr Taylor had cleared out. Do the bank statements establish that ANZ had his correct address as at 27 May 2002? Veda submits that “common experience is that documents presently issued by banks are usually updated with the current details”. There is, however, no evidence of this practice before the Court; and if the two statements were indeed issued contemporaneously in 2005, it seems curious that the bank would update one and not the other.
I think that Mr Taylor has proved that it would have been inaccurate for the listings “Clearout watched” and “Clear Out” to be made on 27 May 2002. According to the ICCR in evidence relating to Mr Taylor, the listing was in fact “Clearout (Watched)”. It was also inaccurate for that class of default to have been listed on 27 May 2002.
(9) Tyndall
Schedule A to Mr Tyndall’s TFASC was described at [269]. It refers to ALLIANCE FACTORING 8 having, on 13 September 2002, listed a “Payment Default”. The amount shown was $316. According to Schedule A, the debt was paid on or by 27 September 2002. Accordingly, it was listed as unpaid for only some 14 days.
Mr Tyndall gave oral evidence that in 1999 he was living at an address in Queanbeyan, where there was a Telstra telephone account in his name. He subsequently moved to an address at Griffith in the Australian Capital Territory, where he lived with some friends. At the time of moving he telephoned Telstra giving his account number and providing Telstra with his new Griffith address to which he requested that all correspondence be forwarded. He stated that he gave money to his flat mate in Queanbeyan who was to pay any outstanding amounts.
When he moved into the house at Griffith, ACT there was already a telephone there connected to Telstra, and he phoned Telstra requesting that his name be added to the account as a user, “basically, a resident of the house”. At Griffith, Mr Tyndall and his friends received telephone bills from Telstra regularly but Mr Tyndall said he did not receive any bills there in relation to his former Queanbeyan address.
Subsequently he moved to an address at Bruce, also in the ACT. He moved in there with a friend and with his girlfriend. As before, he notified Telstra of his new address The telephone there was in his name, while the others were listed as residents.
When living at the Bruce address, Mr Tyndall received a reminder or telephone bill in relation to the Griffith address. He said that the reminder said “this is your old bill, please pay that and here’s your new one”. He said that he and his friends divided it up and that he paid it by the due date which he thought was “September”. This testimony is not clear in view of the fact that Mr Tyndall referred to two bills – an old one and a new one. In his oral evidence he said that he rang Telstra and said “Thanks very much, I’ll pay it”. This suggests that this was a somewhat unusual payment arrangement and therefore that he was referring in his earlier evidence to paying the old bill.
Mr Tyndall received shortly afterwards a letter on a black and white letterhead from “Alliance Factoring and Baycorp” asserting that he owed $300 odd for a telephone. He said he thought it must have been for “our previous address”; that is, in Griffith, for which he had already made arrangements to pay Telstra. He said that he and his housemates looked at the bill for that address and thought they would pay it at its due date, and they did so.
Later when he was going through receipts relating to the house, he noticed that there was still a Telstra bill. He said that he telephoned Telstra to confirm that he had paid that bill, and said “that now clears [the Griffith address]”, and Telstra agreed. He said that he then noticed that the numbers and amounts on it were “different” so he telephoned the number up the top there”, which, I assume, was the number of Alliance Factoring. He said he told the person to whom he spoke that he did not know what the bill was for, and that the person told him that the outstanding amount was for a Queanbeyan telephone. The person told him that Alliance Factoring had taken it over from Telstra.
Mr Tyndall said that he paid the bill to Alliance Factoring two to three weeks after his initial conversation with the person there. In fact, in a letter to DR Capital dated 8 December 2004, Alliance Factoring notes that he paid it on 26 September 2002. Mr Tyndall said that prior to moving to the Bruce address he had never been called upon to pay any sum in relation to the Queanbeyan address.
There is evidence that Alliance Factoring was a wholly owned subsidiary of Veda and that it provided a court enforceable undertaking to the Australian Competition and Consumer Commission on 17 August 2005, later varied on 27 February 2007, concerning its debt collection practices and procedures in attempting to collect debts it purchased from Telstra in 2002 and 2003. The evidence is irrelevant to the issue of accuracy or inaccuracy of a particular default listing.
DR Capital wrote to Veda on 2 December 2004 and 1 September 2005 requesting that the default be removed on the basis that Mr Tyndall had not been given due notice and that the default had been listed without cause. The letter of 2 December 2004 stated that the notice regarding the debt was received on 25 August 2002 but the default was listed on 13 September; and that therefore the 30 day notice period specified in the Code had not lapsed.
Veda’s PAS notes state that on or shortly before 28 September 2005 Veda contacted Alliance Factoring which requested that Veda remove the listing as it had been listed just after correspondence had issued. The “Payment Default” listing was then removed by Veda.
The evidence suggests, however, that the listing on 13 September 2002 was correct. Mr Tyndall said that he received a notice from Alliance Factoring about the debt in August 2002. No doubt that was the letter on the black and white letterhead which Mr Tyndall said claimed “$300 odd” for a phone. Although the letter was not produced, Mr Tyndall accepted that it was dated 13 August 2002 and threatened that if the amount of $316 was not paid within fourteen days of that date, the default might be listed with Veda. Mr Tyndall stated that he received the letter on 25 August 2002, a date he recalled because of its proximity to an Australian Rules Football Grand Final.
Unfortunately, Mr Tyndall made an incorrect assumption that the letter related to another debt. He said, with commendable frankness:
As I said, sir, I honestly thought it was a different Telstra bill and so that’s why I put it to the side.
He said that he accepted now that he was mistaken about that. He accepted that the amount claimed was owing and that when he paid it on 26 September 2002, it had been outstanding for two years. Accordingly, he accepted that at the time of the listing only some 14 days earlier, he was at least 60 days overdue in paying it: see s 18E(1)(b)(vi)(A) of the Privacy Act.
I am not persuaded, in the absence of compelling evidence either way, that Telstra and Alliance Factoring had not by then taken steps to recover the sum of $316 by sending to Mr Tyndall statements of account and letters of demand. Indeed, I accept Veda’s submission that the condition laid down in s 18E(1)(b)(vi)(B) of the Privacy Act was also satisfied: see [578] and [584] above.
It is not shown to have been inaccurate for Alliance Factoring to have listed the “Payment Default” on 13 September 2002 in respect of the amount of $316.
Summary
In the result, it is established that the listing of the defaults in the cases of Mr Marker, Mr Taylor and Mr Strange (as to the amount only), was inaccurate. Inaccuracy is not established, however, in the cases of Ms Adams, Mr Dale, Mr Fisher, Mr McGary, Ms Shields, Mr Strange (except as to the amount) and Mr Tyndall. This is an additional reason why the claims in negligence by those seven applicants fail.
Section 109 of the Constitution and the Defamation Act 1974 (NSW)
I referred to subpara (v)(i) of Veda’s defence at [114] above. That subparagraph is directed to the alleged constitutional invalidity of, relevantly, s 9 of the Defamation Act 1974. The cause of action in defamation arises under that section, although the section invokes terms and concepts that had developed as part of the common law.
As noted at [3] above, Veda gave to the Attorneys-General of the Commonwealth, the States and the Territories notice under s 78B of the Judiciary Act of a matter arising under the Constitution or involving its interpretation, as a result of which the Attorney-General for the State of New South Wales sought leave to intervene and was added as second respondent.
The notice identified the matter as being:
Whether the laws of each state and territory of Australia in so far as they purport to provide or create a cause of action in defamation or negligence against the Defendant, being a credit reporting business within the meaning of the Privacy Act 1988 (Cth) of the Commonwealth of Australia, are inconsistent with the said Privacy Act and specifically with Part IIIA thereof and whether, therefore, each such law is invalid to the extent of the inconsistency by reason of section 109 of the Constitution.
Veda filed a Notice of Motion seeking an order that the proceedings be permanently stayed or dismissed. Although the Notice of Motion did not state the ground relied on, apparently it was the alleged s 109 inconsistency. One day of the hearing was set aside to deal with the issue of constitutional invalidity the subject of the s 78B notice and of the motion. On that day counsel appeared for the Attorney-General for New South Wales to contest Veda’s submissions.
The parties are agreed that I ought not to decide the constitutional question unless I first find that a cause of action under the Defamation Act has been made out. The theoretical availability of such a cause of action does not in itself result in inconsistency for the purposes of s 109: see State of Victoria v Commonwealth (1937) 58 CLR 618.
Since I have decided to dismiss all nine proceedings including the claims of defamation, on other grounds stated above, I will say nothing further on the present issue.
conclusion
For the reasons given above, all nine proceedings will be dismissed with costs except the costs of the unresolved constitutional issue, as to which there will be no order for costs.
I certify that the preceding five hundred and ninety-six (596) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate:
Dated: 1 April 2009In each proceeding:
Counsel for the Applicant: Mr T S Hale SC and Mr P W Bates
Mr D F C Thomas (on 1 April 2008 alone, when the constitutional issue was argued)Solicitor for the Applicant: Gerard Malouf & Partners Counsel for the Respondent: Mr B R McClintock SC and Mr M S White Solicitor for the Respondent: Ebsworth & Ebsworth Lawyers Counsel for the intervener,
the Attorney-General for the
State of New South Wales:Mr M G Sexton SC SG and Ms K M Richardson
(Ms Richardson appeared on 1 April 2008 when the constitutional issue was argued)
Dates of Hearing: 10, 17, 18, 19, 20, 25, 26, 27, 28 March; and
1, 21, 24 April 2008Date last submission received: 6 May 2008 Date of Judgment: 1 April 2009 ANNEXURE
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