Islam v Commonwealth Bank of Australia
[2024] NSWSC 149
•01 March 2024
Supreme Court
New South Wales
Medium Neutral Citation: Islam v Commonwealth Bank of Australia [2024] NSWSC 149 Hearing dates: 20 February 2024 Date of orders: 01 March 2024 Decision date: 01 March 2024 Jurisdiction: Common Law Before: Harrison CJ at CL Decision: (1) Dismiss the proceedings with costs.
(2) Order that the plaintiffs be restrained by themselves, their servants or agents or howsoever otherwise from commencing or continuing in any Court or Tribunal any proceedings against the defendant (other than in the nature of a defence, cross-claim or cross-summons) which arise from the same or similar facts as these proceedings without leave of a judge of the Supreme Court of NSW, unless and until the plaintiffs have paid the costs ordered in (1) above.
(3) Grant liberty to apply.
Catchwords: CIVIL PROCEDURE – application for summary disposal – allegations that a bank unlawfully complied with the terms of a freezing order – dismissal of proceedings – frivolous or vexatious proceedings
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), rr 12.10, 13.4(1), 14.28(1)
Category: Procedural rulings Parties: M D Rajibul Islam (Plaintiff)
Trustees of Gulf Bridge Investment Trust (Second Plaintiff)
Mortgage Plus Australia Pty Ltd (Third Plaintiff)
Mortgage Plus Australia LLC – New Mexico (Fourth Plaintiff)
Harmanos Ltd – London (Fifth Plaintiff)
Credit mee Limited UK (Sixth Plaintiff)
Secure it Plus LLC Delaware USA (Seventh Plaintiff)
Commonwealth Bank of Australia (Defendant)Representation: Counsel:
Solicitors:
F Tao (Defendant)
Gadens (Defendant)
File Number(s): 2023/91975 Publication restriction: Nil
JUDGMENT
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HIS HONOUR: By notice of motion dated 1 September 2023, the Commonwealth Bank seeks orders pursuant to UCPR 13.4(1) and 14.28(1) respectively that the proceedings be dismissed or that the summons filed on 21 March 2023 and the statement of claim filed on 25 July 2023 be struck out. The bank also seeks the following order:
5. Pursuant to s 67 of the Civil Procedure Act, UCPR 12.10 and or the Court’s inherent jurisdiction, the plaintiffs are restrained, jointly and severally from commencing or continuing in any Court or Tribunal any proceedings against the defendant (other than by a claim in the nature of a defence, cross-claim or cross-summons) which arise from the same or similar facts as these proceedings without leave of a Judge of the Supreme Court of NSW, unless and until the plaintiffs have paid in full theCcosts ordered in orders 3 and 4 above.
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The bank’s application is supported by the affidavits of Katherine Alison Merrick and Emmanuel Lucas Bell affirmed on 1 September 2023. Neither deponent was required for cross-examination.
Background
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On 9 December 2022, the bank was served with a copy of orders made by this Court in unrelated proceedings between Abu Walid Ratul as plaintiff and Mr Islam and Australian Real Estate Relation Pty Ltd as defendants. In short, the orders restrained Mr Islam from, among other things, dealing with his assets in the nature of a freezing order. On 9 December 2022, Mr Islam had either in his name or jointly with Sarah Anwar Khan a total of 14 accounts with the bank. In accordance with the order of the Court, the bank placed a “stop” on each of the Islam accounts on the afternoon of that day.
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In circumstances to which it is unnecessary in detail to refer, the bank received notice that the orders of the Court served earlier had in effect been varied to permit Mr Islam to have access to certain of his accounts. At approximately 10.00am on 16 December 2022, in anticipation of receiving a sealed copy of the second order, the bank arranged for the hold placed on two of Mr Islam’s accounts with the bank to be lifted. From that point on, Mr Islam had unrestricted access to and operation upon all of his accounts, save for two card accounts, and subject only to the terms and conditions applying to each account. The terms of the second order did not authorise the bank to release or lift the stop order that had been placed on the Australian Real Estate Relation accounts in accordance with the first order.
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Having regard to these matters, and in the events that occurred, Mr Islam was able during the period between the early evening of 9 December 2022 and the morning of 12 December 2022 to continue to use his credit cards to make purchases or pay for services and he did so. In summary, the bank acted in accordance with orders of this Court made in proceedings in which Mr Islam was a defendant which restrained him in particular respects from dissipating his assets in what might be described as the usual way. The bank was not a party to those proceedings but was obliged to comply with the terms of the orders that had been made.
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Notwithstanding that unexceptionable state of affairs, Mr Islam commenced the present proceedings claiming, in his summons, liquidated [sic!] damages of $450 million along with all manner of other extraordinary prayers for relief. Only for the reason that it is difficult by way of summary to do justice to the extraordinary nature of some of the relief claimed in the summons, the following prayers for relief should be noted in full:
“2. Activation of all the accounts and bank cards held by the first plaintiff in the Commonwealth Bank of Australia.
3. Future prevention of such behaviour in the interests of all other citizens.
4. Any other orders that the Court deems necessary.
5. Costs.
6. At all time Commonwealth bank to obliged with the regularity guide line RG204 and all other guidelines set out by ASIC for their Australian Credit Licence to act with due diligence at all time and not to breach any further Banking conduct of conducts rectified in our pleadings , until and unless ordered by the court
7. Commonwealth bank to investigate the employees / employee for working on behalf of Mitry lawyers to execute wrong and negligent court orders toward our Bank Accounts.
….
9. Commonwealth Bank to explain if they have understood the Supreme court order made by Supreme court and along with above mentioned vigorous actions they have taken to comply with Supreme court orders or it was their employees obnoxious act to discriminate my racial back ground to remind me of my heritage and where we came from.”
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The Statement of Claim specifies the following claims for relief:
“1. The Plaintiffs seek the following reliefs from this esteemed Court, to redress the severe harm and egregious transgressions committed by the Defendant.
2. Compensatory Damages: The Plaintiffs implore this Court to decree compensatory damages in the colossal amount of $150 million AUD, with a view to adequately and justly remedying the staggering financial losses, acute emotional distress. and irrevocable reputational damage suffered as a direct and proximate consequence of the Defendant’s wrongful conduct. Damages for the financial losses incurred because of the Defendant’s actions, including compensation for the detrimental impact on the Plaintiffs ability to operate his businesses.
3. Infrastructural Funding: The Plaintiffs humbly beseech this Honourable Court to command the Defendant to allocate and disburse the sum of $150 million AUD towards the expeditious construction of state-of-the-art infrastructures, meticulously designed to fortify and ensure unassailable cyber safety for all Australians and their treasured personal identification.
4. Implementation of Advanced Oracle System: The Plaintiffs earnestly implore this Distinguished Court to order the Defendant to apportion and dedicate the substantial sum of $150 million AUD for the development, enhancement, and expeditious deployment of an advanced and further developed Oracle System. meticulously engineered to be made available to all courts in New South Wales and other states, thereby fostering the seamless administration of justice.
5. Legislative Funding: The Plaintiffs humbly entreat this eminent Court to decree the payment of $100 million AUD by the Defendant to the esteemed State Legislative Council and Legislative Assembly ACT Canberra, with the express purpose of introducing novel and robust doctrines, legislations, and mechanisms meticulously crafted to electively address, deter, and chasten the abhorrent breaches and wanton violations perpetrated by financial institutions.
6. Employee Training and Education: The Plaintiffs fervently implore this Sagacious Court to mandate the Defendant to assign and allocate the sum of $100 million AUD for the comprehensive training, education, and professional development of its employees within the court system. This would ensure unswerving compliance with their sacrosanct legal obligations, while fostering the provision of exemplary service and the safeguarding of justice.
7. Employee Training and Education: The Plaintiffs fervently implore this Sagacious Court to mandate the Defendant to assign and allocate the sum of $100 million AUD for the comprehensive training, education. and professional development of its employees within Commonwealth Bank of Australia. This would ensure unswerving compliance with their sacrosanct legal obligations, while fostering the provision of exemplary banking service and the safeguarding of banking legislations. This is to ensure that Commonwealth Bank of Australia employees have adequate training to manage situations similar to the plaintiffs.
8. Accountability and Compliance Measures: The Plaintiffs requests the Court to impose stringent accountability measures on the Defendant, including regular auditing, reporting, and compliance with all applicable legislative acts, regulations and guidelines.
9. Any other relief that this Honourable Court, in its wisdom and magnanimity, deems just, equitable, and appropriate under the circumstances [sic].”
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The essential burden of Mr Islam’s complaint is that the bank wrongfully restrained him from enjoying access to his various accounts and otherwise than in accordance with the strict terms of the freezing order. For example, Mr Islam contends that the orders do not restrain him from exercising control over his own personal bank accounts, as opposed to accounts in the name of Australian Real Estate Relation, to which business accounts he was otherwise an authorised signatory. Indeed, Mr Islam’s 15 April 2023 affidavit elaborates upon his concerns as follows:
“32. On the Orders made by the Supreme Court on 9th of December 2022 (Exhibit page 10-13), it clearly states in number 4 that the defendant (Md Rajibul Islam) be restrained to exercise control over the business transaction accounts in relation to Australian Real Estate Relations Pty Ltd. The orders do not restrain Md Rajibul Islam to exercise control over his own personal bank accounts. Therefore, the defendant is in contempt of court orders when they decided to freeze all of the bank accounts in relation to my personal banking.
33. Furthermore, the Freezing order granted by the court on 9th December 2022, did not require freezing of my bank accounts and access to bank accounts. The Freezing order (Exhibit RI-1 page 14-20) clearly states in no.8 and no 12 that:
‘8. This order does not prohibit you from:
(a) paying up to AUD$500 a week for your ordinary living expenses;
(b) paying AUD$10,000 on your reasonable legal expenses of these proceedings and any appeal therefrom;
(c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and’
…
‘12. Bank withdrawals by the respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order’.”
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In his statement of claim, Mr Islam “particularises” in general terms the losses he claims to have suffered by reason of the banks’ actions in placing stops on his accounts:
“Impact of the Defendant’s actions
45 The freezing of the Accounts has caused the first plaintiff significant financial hardship, as they were unable to access the funds in the Account to pay for their essential living expenses, such as food and medical expenses.
46 The first plaintiff was unable to pay for their elderly parents for expenses including but not limited to accommodation expenses, electricity bill, food expenses and medical expenses. The freeze on the first plaintiff’s bank accounts in December 2022, prevented them from accessing funds to perform transactions.
47 As a result of the stop on the first plaintiff’s bank accounts, their businesses were unable to pay bills and suppliers.
48 The first plaintiffs Netbank Savings account has a shared account holder, his wife Sarah Khan. However, during the time between 9th December 2022 until on or around 19th December 2022, she was also unable to access the Netbank Savings account due to stops being placed.
49 The first plaintiff’s credit cards held with defendant had direct debits set up for various amenities including:
a. Internet for the home of their elderly parents showing direct debits to Flip TV
b. Mobile phone connections for their elderly parents showing direct debits to Belong telecommunication service
Particulars
Bank Statements of Md Rajibul Islam showing direct debit.
50 CBA’s freezing of the first plaintiff’s accounts, failure to lift the freeze and negligence in addressing the issue resulted in breaches of the Banking Code of Conduct 1959 and 2013, the Corporations Act 2001, and Tort Law. The breaches include failure to exercise due care and skill, failure to provide adequate services, and failure to act in good faith.”
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In her affidavit, Ms Merrick deposes, in compliance with the rules, that it is her view that the proceeding has no prospect of success and is hopeless and manifestly groundless. She advances by way of illustrating her opinion that Mr Islam in fact claims $750 million, that the statement of claim is replete with pejorative characterisations of the bank’s conduct and is lacking in identification, in any specific terms, of the facts which are relied upon to support the allegations.
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In response to Mr Islam’s allegations, Mr Bell deposed to the fact that, if a customer needed to conduct transactions on a stopped account and they are lawfully able to do so, for example in accordance with the terms of a freezing order where the customer may be permitted to withdraw funds for business purposes and living expenses, then the customer can attend their local branch to do so. The freezing order in accordance with which the bank placed stops on Mr Islam’s accounts was such an order. Mr Islam does not plead as part of his claim that he approached the bank in this way or that when he did the bank failed to permit him to make authorised withdrawals from any of his accounts for business or living expenses. Even if he did, it is clear to the point of demonstration that the losses he claims are in the realm of fiction. Moreover, the statement of claim does not in any way describe, other than in terms of mere inconvenience, how, if at all, the matters complained of allegedly led to actual loss or damage in monetary terms as properly understood.
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In my opinion, the proceedings are in truth both frivolous and vexatious and an abuse of the process of the court. I consider that the proceedings should be dismissed with costs and that Mr Islam be restrained from commencing any proceedings based upon or arising out of the same facts.
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So far as costs are concerned, I have not been provided with any submissions or evidence in support of either an indemnity costs order or a gross sum costs order. To the extent only that the bank may choose to press these claims, I would grant liberty to apply to restore the matter for the limited purpose of addressing them.
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Decision last updated: 01 March 2024
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