JESSUP v HSBC BANK
[2012] FMCA 309
•23 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JESSUP v HSBC BANK | [2012] FMCA 309 |
| CONSUMER LAW – Application for injunctive relief pursuant to s.177 of the National Consumer Credit Protection Act – respondent obtaining judgment in NSW – applicant resident in Tasmania – whether regulations and/or superseded Consumer Credit Code require proceeding to have been issued in Tasmania. |
| National Consumer Credit Protection Act 2009, ss.178, 179 Competition and Consumer Act 2010 Consumer Credit (Tasmania) Act 1996, ss.5, 8, 10 Tasmanian Statutes 1996 National Consumer Credit Protection Regulations 2010, reg.36(3) |
| Field v Perpetual Ltd [2010] FCA 1001 |
| Applicant: | STEPHEN JESSUP |
| Respondent: | HSBC BANK |
| File Number: | LNG 56 of 2011 |
| Judgment of: | Burchardt FM |
| Hearing date: | 17 February 2012 |
| Date of Last Submission: | 15 March 2012 |
| Delivered at: | Melbourne (via video link to Hobart) |
| Delivered on: | 23 April 2012 |
REPRESENTATION
| The Applicant: | In person (assisted at hearing by McKenzie Friend) |
| Counsel for the Respondent: | Mr P. Lunn |
| Solicitors for the Respondent: | Simmons Wolfhagen |
ORDERS
The application be dismissed.
The applicant pay the respondent’s costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
LNG 56 of 2011
| STEPHEN JESSUP |
Applicant
And
| HSBC BANK |
Respondent
REASONS FOR JUDGMENT
Introduction
On 11 November 2011, the applicant filed an application in the Court seeking relief under the National Consumer Credit Protection Act 2009 (“the Act”). The applicant sought an interim injunction to prevent the respondent from further relying upon a judgment it had obtained in the New South Wales Local Court, the setting aside of the judgment in that Court and the return of moneys obtained pursuant to it. Additionally, the applicant sought compensation under ss.178 and 179 of the Act and, if appropriate, damages for unconscionable conduct under the Competition and Consumer Act 2010.
For the reasons that follow, I do not propose to grant the applicant the relief he seeks and the application will be dismissed with costs.
The Facts
An affidavit by Tim Mozsny filed on 4 January 2012 on behalf of the respondent makes a number of factual assertions which have not been the subject of any challenge by the applicant and which I accept. From that affidavit it is apparent that on or about 3 March 2005, the applicant applied to the respondent for a Visa Card via the internet.
On or about the same date, the respondent approved that application and made credit of $22,000 available to the applicant.
The applicant started to use the credit card on or about 17 March 2005.
By 2009, the applicant was failing to pay the minimum amount due under the contract (governed by conditions sent to him in March 2005). On or about 4 September 2009, the respondent issued a notice pursuant to s.80 of the Consumer Credit Code demanding repayment of the overdue amount within 30 days.
The applicant failed to pay and by letter dated 19 July 2010, the respondent wrote to the applicant notifying him that the credit card had been cancelled and demanded full payment of the outstanding balance.
No payment was made and on or about 25 November 2009, the respondent commenced proceedings in the New South Wales Local Court which led, in the ultimate, to a default judgment on or about
1 February 2010 in the sum of $22,403.17.
Subsequently, the respondent obtained a garnishee order which was followed by two applications in the New South Wales Local Court by the applicant. Both of the applicant’s such applications to set aside the default judgment and garnishee orders were ultimately unsuccessful, the latter giving rise to an order that no further notices of motion for the applicant were to be accepted until he paid the costs associated with the two notices of motion. In the affidavit accompanying his first notice of motion the applicant stated inter alia that:
“My employer has already commenced garnishee of my wages and is due to do so again this week. This is creating severe financial strain and hardship in relation to my ability to be able to meet everyday expenses and mortgage payments.”
It is unchallenged that the applicant is now and has at all material times been resident in the State of Tasmania.
The respondent has filed an application seeking the summary dismissal of the application (4 January 2012) and the applicant has filed an application in a case on 12 January 2012. In light of the conclusions I have reached, it is not necessary to say more about these applications. The parties have made both oral and subsequently written submissions and in my view, the Court is in a position to determine the matter properly on the materials that have been filed.
The Law
Although the parties have not provided me with any of the relevant legislation, which is in many ways complex, it seems clear that Queensland first introduced a Consumer Credit Code which was then adopted by all the other States of Australia, albeit in some instances with some minor variations.
On and after 1 March 1997, the Consumer Credit (Tasmania) Act 1996 provided that the Consumer Credit (Tasmania) Code apply to all credit providers within the meaning of the Consumer Credit (Tasmania) Code (s.5 of the Act).
By s.8 of that Act, the jurisdiction exercisable under the Code and the Regulations was to be exercised in accordance with the Regulations and it would appear (see applicant’s written submissions) that regulations have been made pursuant to s.10 of the Act providing for the Tasmanian Supreme and Magistrates’ Court to have such jurisdiction.
The Code was adopted from the Queensland Code but was printed as an explanatory note to the Act (see Tasmanian Statutes 1996 Part 1, Act 25 at page 554 and following).
Relevantly, the Code applied to the provision of credit if, when the credit contract was entered into, the debtor was a natural person, ordinarily resident in Tasmania as the applicant was.
Although clause 177 of the Code provided for the regulations to give effect to a cross-vesting scheme, this does not appear to have ever occurred.
The Queensland regulations as in force at the time were also adopted as laws of the State of Tasmania and the transitional provisions of those regulations effectively applied the Code to pre-existing credit contracts (see regulations 40A, 41 and 43).
That statutory scheme continued until the introduction of the National Consumer Credit Protection Act 2009 which came into force relevantly on 1 July 2010 (see per Gordon J in Field v Perpetual Ltd [2010] FCA 1001 at [19]). The relevant transitional provisions, particularly in respect of “carried over instruments”, were considered by her Honour.
As explained by Gordon J in Field v Perpetual at [20]:
“The phrase “carried over instrument” is defined in s 4 of the Transitional Act to mean a contract or other instrument that was made before commencement, was in force immediately before commencement and one which the old Credit Code of a State or a Territory applied to immediately before commencement.”
The credit contract between the parties in this instance was one that was made before commencement. It is not entirely clear whether the contract had been cancelled by that stage. The cancellation letter located at Tab 3 of Exhibit TM-1 to Mr Mozsny’s affidavit suggests that it was dated 19 July 2010. The amount in that letter is higher than the total amount obtained on judgment. On one view, given the march of events, it might be thought to be a typographical error and treat that letter as in fact in July 2009.
In all the circumstances, I am prepared to assume in the applicant’s favour that the contract was still on foot as at commencement of the new legislation in July 2010 in which circumstances it is clear that the old Credit Code would have applied to the contract.
This is of some significance because the fact that this was a carried over instrument means that the new legislation applies to it including regulation 36(3) of the National Consumer Credit Protection Regulations 2010 which require that proceedings may only be brought in the State where the debtor lives.
The applicant says therefore that whatever else may be said, the contract became in effect governed by that regulation and therefore the application should never have been brought in the State of New South Wales. There is a further point to the argument that by virtue of the fact that the applicant lives in Tasmania the contract from the introduction of the Code required the Code to be applied (not the New South Wales law in the original 2005 contract) and, therefore, the proceedings could only have been brought in Tasmania.
It should be said that there appears to be authority from Tribunals in both Victoria and New South Wales that support this construction of the Code.
The parties’ submissions
As indicated, the applicant says that the respondent should never have brought the proceedings in New South Wales. It should have brought them pursuant to the Code or alternatively pursuant to regulation 36(3), in Tasmania.
The respondent in written submissions merely took the point that regulation 36(3) does not have retrospective effect and asserted that the proper construction of the Code was not such as to constrain actions only to the State in which the debtor lived.
Conclusions on the submissions
The authorities to which I have referred in paragraph 25 generally support the proposition that the applicable Code is the Code where someone lives. I accept that the Tasmanian Code by its terms cut across the pre-existing contract with its reference to New South Wales law and became applicable at some point in 1997. I also accept that jurisdiction under that legislation lay with Tasmanian Courts.
Nonetheless, I do not think that the fact that the Tasmanian Code prima facie gave jurisdiction only to the Tasmanian Courts is decisive. The reality is that the respondent brought its proceedings in New South Wales pursuant to its existing contract with the applicant. A judgment of the Court in New South Wales was regularly entered and that Court was not persuaded that it was inappropriate to do so as a result of the arguments that the applicant raised, which would appear to have included those raised in this Court.
It is conceivable that the New South Wales local Court order was made in circumstances where the Court did not have jurisdiction to do so, but for reasons to which I will come shortly, even if this is correct, it is not decisive.
Further and putting the matter shortly, I do not accept, however, that regulation 36(3) of the new regulations has any application. That provision is not retrospective on its face and to construe it as the applicant does would be to seek to prohibit ex post facto the judgment that the respondent had obtained in February 2010. Such a conclusion is so obviously lacking in common sense as to be obviously unsustainable.
Further consideration of the applicant’s claims
Accepting for the moment in the applicant’s favour that the respondent should have brought its proceeding in Tasmania because that was the appropriate place to bring it under the old Tasmanian Code, what is one to make of the applicant’s claims?
The first thing to be said is that there was nothing inherently unconscionable or wrong in the respondent proceeding as it did. I am quite satisfied that the respondent relied upon its longstanding contract (one that pre-dated the introduction of any of the Codes in any event) and simply took normal debt recovery proceedings.
I note further that the New South Wales Local Court was clearly very unimpressed by the applicant’s arguments and while this is in no sense determinative, it is a relevant consideration as to how this Court might view what was done in that jurisdiction.
The applicant’s primary claim is for injunctive relief (see s.177 of the National Consumer Credit Protection Act). The difficulty that, in my opinion, the applicant faces is that the conduct of the respondent did not constitute a contravention of that legislation. What the respondent contravened, if anything, were the provisions of the former Code.
It is, therefore, immediately apparent that the applicant is incapable of obtaining the injunctive relief that he seeks.
Furthermore, and in any event, even if I am wrong the applicant would not, in my opinion, be entitled as a matter of equity to the relief he seeks. Even if the applicant did establish a contravention of the Act, it would plainly be wholly unconscionable to set aside the debt he clearly owes to the respondent. Although the applicant has asserted that the garnishee order is causing him financial difficulty, he has not at any stage, including up till now, before this Court asserted that he did not owe the sums claimed by the respondent.
The suggestion that because of an unfortunate oversight the respondent, which is clearly entitled to the money ordered in its favour, should be sent back to the beginning and have to commence all over again is plainly one at which equity would not connive.
The reality is that the application is devoid of substantive merit and should be dismissed, even had I not reached the conclusions I have otherwise reached.
Costs
The respondent has foreshadowed an application for indemnity costs. The applicant is impecunious and has been self-represented throughout. The legislation with which we are concerned is all but impenetrable in some respects. His case has been in part successful (I have been persuaded that the action in New South Wales contravened the Tasmanian Code) and it is inappropriate in these circumstances, in my view, to make an order for indemnity costs.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Date: 23 April 2012
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