Matsoukatidou v Commonwealth Bank of Australia
[2014] VSCA 307
•3 December 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0067
| BETTY MATSOUKATIDOU | First Appellant |
| and | |
| MARIA ASIMINA MATSOUKATIDOU | Second Appellant |
| v | |
| COMMONWEALTH BANK OF AUSTRALIA | Respondent |
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| JUDGES: | BONGIORNO, BEACH and KYROU JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 11 November 2014 |
| DATE OF JUDGMENT: | 3 December 2014 |
| MEDIUM NEUTRAL CITATION: | [2014] VSCA 307 |
| JUDGMENT APPEALED FROM: | Commonwealth Bank of Australia v Matsoukatidou [2014] VCC 863 (Judge Cosgrave) |
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PRACTICE AND PROCEDURE — Appeal against order granting summary judgment — Appellants did not plead or depose to any substantive defence — Hearing of application for summary judgment delayed for two years due to appellants lodging disputes with Financial Ombudsman Service Ltd (‘FOS’) — Judge refused application for adjournment based on alleged English language difficulties — No error of law or miscarriage of discretion — Overarching purpose in s 7(1) of Civil Procedure Act 2010.
ADMINISTRATIVE LAW — Natural justice — Judge did not reconvene hearing to allow appellants to respond to material filed by respondent — Material comprised two emails from FOS to the effect that FOS was not currently dealing with any disputes lodged by appellants — Judge relied on emails in granting summary judgment — In light of procedural history, absence of substantive defence, the specific and objective factual contents of emails from FOS, hearing rule of natural justice not breached — Even if there had been a breach, setting aside impugned order would be futile because the ultimate decision would inevitably have been the same — Effect of FOS’s Terms of Reference — Appeal dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the First Appellant | The First Appellant appeared in person | |
| For the Second Appellant | No appearance | |
| For the Respondent | Mr G W Moffatt | Gadens Lawyers |
BONGIORNO JA
BEACH JA
KYROU JA:
Introduction and summary
This is an appeal from an order of a judge of the County Court (‘Order’) granting summary judgment in favour of the respondent, Commonwealth Bank of Australia (‘Bank’), against the appellants, Betty Matsoukatidou (‘Betty’) and her daughter, Maria Matsoukatidou (‘Maria’).[1] The Order provided that the Bank recover possession of a property situated in Tecoma that was registered in the names of Betty and Maria (‘the Matsoukatidous’) as tenants in common (‘Property’) and that the Matsoukatidous pay certain amounts to the Bank.[2]
[1]Commonwealth Bank of Australia v Matsoukatidou [2014] VCC 863 (‘Reasons’).
[2]The Order is set out at [31] below.
The genesis of this litigation is an investment home loan for $600,980.00 that was made by the Bank to Betty on 23 April 2007 to enable her to refinance the Property, under the terms of a loan agreement dated 23 April 2007 (‘loan agreement’). The loan was secured by a mortgage executed by the Matsoukatidous over the Property and a guarantee executed by Maria. On 5 April 2011, after Betty defaulted on the loan agreement and Maria defaulted on the guarantee, the Bank instituted a proceeding against them in the County Court to enforce the loan agreement, mortgage and guarantee. On 6 March 2012, the Bank applied for summary judgment pursuant to r 22.02 of the County Court Civil ProcedureRules 2008 (‘Rules’).
In the period from 20 April 2012 until 29 May 2014, the Matsoukatidous lodged seven disputes with Financial Ombudsman Service Ltd (‘FOS’). Pursuant to cl 13.1(a) of FOS’s Terms of Reference,[3] the Bank was precluded from further pursuing the County Court proceeding while FOS was dealing with those disputes.[4] Consequently, the Bank’s application for summary judgment was adjourned repeatedly from 27 April 2012 until it was finally heard by Judge Cosgrave at 9.34am on 30 May 2014.
[3]Financial Ombudsman Service, Terms of Reference 1 January 2010 (as amended 1 January 2014) (‘FOS’s Terms of Reference’).
[4]Relevant provisions of FOS’s Terms of Reference are set out at [8] below.
At the hearing on 30 May 2014, Betty represented herself and Maria, who was also present. Betty contended that there were outstanding disputes with FOS and that the hearing of the Bank’s application for summary judgment must be adjourned. The Bank denied that there were any outstanding disputes and stated that it would be in a position later on the same day to produce a letter from FOS to verify this. The judge adjourned the hearing to enable the Bank to file an affidavit exhibiting such a letter from FOS. On the afternoon of the same day, the Bank filed two affidavits (‘Bank’s final affidavits’) exhibiting two emails from FOS which when read together stated, in substance, that no disputes were outstanding.[5] The judge made the Order on the same day without any further oral hearing.
[5]Rule 22.03(3) of the Rules confers a discretion on a judge to admit hearsay evidence in support of an application for summary judgment. See also Stoney v A & S Boesley Pty Ltd [2014] VSCA 237, [65]–[70].
On 13 June 2014, the Matsoukatidous filed a notice of appeal that was drafted by them. It contains six grounds of appeal, one of which alleges that the procedure adopted by the judge constituted a denial of natural justice. On 21 August 2014, the Matsoukatidous applied to this Court for a stay of the Order (‘Stay Application’). That application was dismissed on 5 September 2014.[6]
[6]Matsoukatidou v Commonwealth Bank of Australia [2014] VSCA 229 (‘Stay Decision’).
For the reasons that follow we would dismiss the appeal.
FOS’s Terms of Reference
The Bank is a member of FOS, which is an approved external dispute resolution scheme.
FOS’s Terms of Reference relevantly provide:
1.3 Scope of the Terms of Reference
a) These Terms of Reference set out who is eligible to lodge a Dispute, the types of Disputes that FOS can consider, how FOS resolves Disputes, the types of remedies that FOS can provide and other related matters. These Terms of Reference are binding upon Financial Services Providers.[7] …
[7]The Bank is a Financial Services Provider within the meaning of cl 1.3(a) of FOS’s Terms of Reference.
…
5.1 Exclusions from FOS’s jurisdiction
[FOS] may not consider a Dispute:
…
k) where the Dispute raises the same events and facts and is brought by the same Applicant as a Dispute previously dealt with by FOS … and there is insufficient additional events and facts raised in the new Dispute to warrant FOS’s consideration of the new Dispute; …
…
5.2 Discretion to exclude Disputes
FOS may refuse to consider, or continue to consider, a Dispute, if FOS considers this course of action appropriate, for example, because:
…
d) the Dispute being made is frivolous or vexatious or lacking in substance; …
…
5.3 Process for exclusion of Disputes
a) Where a Dispute is lodged with FOS and:
(i) FOS considers that these Terms of Reference exclude the Dispute; or
(ii) FOS decides to exercise a discretion under these Terms of Reference to exclude the Dispute,
FOS will advise the Applicant (and any other parties that are involved in and have been informed about the Dispute) and provide reasons for this assessment.
b) If, within 30 days of receipt of this advice, the Applicant objects to an assessment made by FOS in accordance with paragraph a), FOS will review the matter if FOS is satisfied that the Applicant’s objection may have substance.[8] If so:
[8]Emphasis added.
(i) FOS will inform the other parties involved in the Dispute;
(ii) all parties will be given an opportunity to provide submissions;
(iii) all parties will be provided with copies of each other’s submissions; and
(iv) FOS will review the matter and provide the parties with FOS’s final decision referred to as a Jurisdictional Decision — this will set out the reasons for the decision.
…
7.6 ‘Without prejudice’ nature of Service
FOS operates on a ‘without prejudice’ basis. This means that information obtained through FOS may not be used in any subsequent court proceedings unless required by an appropriate court process.
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13.1 Debt recovery or other proceedings
a) [W]here an Applicant lodges a Dispute with FOS, the Financial Services Provider:
…
(ii) must not pursue legal proceedings relating to debt recovery instituted prior to the lodging of the Dispute with FOS save to the minimum extent necessary to preserve the Financial Services Provider’s legal rights and, in particular, must not seek judgment in those legal proceedings provided the Dispute is lodged before the Applicant or Other Affected Party takes a step in those legal proceedings beyond lodging a defence or a defence and counterclaim (however described); …
while FOS is dealing with the Dispute.
…
13.4 FOS’s confidentiality obligations
FOS must keep confidential all information pertaining to a Dispute that is provided to FOS except:
a) to the extent reasonably necessary to carry out FOS’s responsibilities including under these Terms of Reference or for any incidental purpose; or
b) as required or permitted by law.
Facts and procedural history
As stated at [2] above, on 23 April 2007, the Bank entered into a loan agreement with Betty for $600,980.00. Security for the loan was provided in the form of a guarantee executed by Maria to the value of $594,217.00 and a mortgage over the Property executed by the Matsoukatidous on 4 June 2007[9] and registered on 6 June 2007. The guarantee is not dated. It states that the guaranteed agreement to which the guarantee applies is the loan agreement dated 23 April 2007 and that the supporting security is a mortgage over the Property.
[9]See [76] below.
Clause 9.3(d)–(f) of the Bank’s Usual Terms and Conditions for Consumer Mortgage Lending, which were incorporated into the loan agreement, stipulated the following consequences for failure to remedy a default: the Bank may decide, without further notice, that all amounts owing under the loan agreement would become due and payable immediately; the Bank would be entitled to sue Betty for those amounts; and the Bank would be entitled to exercise its rights under the mortgage to sell the Property.
Clause A22.5(b) of the Bank’s Memorandum of Common Provisions, which was incorporated into the mortgage, provided that the Bank was entitled to take possession of the Property if it gave the Matsoukatidous notice of default and the Matsoukatidous did not remedy the default within the time specified in the notice.
As at 7 February 2011, the loan agreement was in arrears in the amount of $16,663.00. On that day, the Bank served a Notice of Default and Notice of Demand (‘Default Notice’) on the Matsoukatidous, requiring payment of the amount of $16,663.00 together with a further amount of $560.78 for enforcement costs by 14 March 2011.
On 5 April 2011, following the Matsoukatidous’ failure to comply with the Default Notice, the Bank filed a writ in the County Court seeking possession of the Property as well as payment of all moneys owed under the loan agreement and the guarantee. The total amount owing under the loan agreement was said to be $609,165.85. The Bank’s statement of claim alleged that the mortgage is dated 4 June 2007 and that the guarantee was ‘entered into on or about 23 April 2007’.
On 28 July 2011, Betty and Maria filed identical defences. The defences were obviously prepared without any assistance from a lawyer and are very confusing. It appears that the Matsoukatidous denied being served with any notice of default or demand for payment at the Property and asserted that, insofar as the Bank purported to serve Maria at a second address, Maria no longer lived at that address. The defences did not deny any other allegations in the Bank’s statement of claim.
By summons filed on 6 March 2012, the Bank applied for summary judgment. The summons was supported by a substantive affidavit and an affidavit of service and was returnable on 13 April 2012. The substantive affidavit stated that the guarantee was ‘dated on or about 23 April 2007’ and that it ‘is one of the [Bank’s] Books of Account’.
On 13 April 2012, Judge Anderson adjourned the hearing of the summons to 27 April 2012. His Honour made an order requiring the Matsoukatidous to file and serve any affidavits upon which they intended to rely in opposition to the Bank’s summons by 24 April 2012. The order noted that the Matsoukatidous were instructing a solicitor, David Phillips, to represent them and that they would be seeing him in conference on Monday 16 April 2012.[10]
[10]The summary of the order dated 13 April 2012 is taken from the Bank’s written submissions on the appeal.
The Matsoukatidous did not file and serve any affidavit pursuant to Judge Anderson’s order.
On 26 August 2012, the Matsoukatidous’ family home on the Property was burnt down. In a report to police, Betty alleged that arsonists were responsible for the fire.
Between 20 April 2012 and 29 May 2014, the Matsoukatidous lodged seven disputes with FOS, which are summarised below.[11]
[11]This summary relies in part on documents that were not in evidence at the hearing of the Bank’s application for summary judgment. Those documents include affidavits filed by the parties in this Court in the Stay Application and the Bank’s written submissions on the appeal. Betty’s affidavit dated 28 August 2014 that was filed in support of the Stay Application refers to a dispute numbered 352925 which was said to have been lodged by Betty with FOS on 26 February 2014. However, Betty did not exhibit any documents concerning this alleged dispute and, more significantly, there was no evidence before Judge Cosgrave about the existence of the alleged dispute.
(a) Dispute numbered 281332 dated 20 April 2012. This dispute was lodged by Betty. It related to the Default Notice and relied on hardship as the basis for altering Betty’s repayment obligations under the loan agreement. This dispute was settled under a resolution agreement dated 26 October 2012 (‘Resolution Agreement’) that was negotiated at a conciliation conference.
(b) Dispute numbered 311375 dated 23 January 2013. This dispute was lodged by Betty. It related to the requirement that the Matsoukatidous pay the legal costs of the Bank. FOS assessed this dispute to be outside its Terms of Reference and excluded it on the basis that it had been dealt with in dispute numbered 281332 and the Matsoukatidous had not complied with the terms of the Resolution Agreement. Betty was advised of FOS’s assessment by letter dated 25 February 2013. She objected to this assessment on 12 April 2013. On 20 May 2013, FOS advised that its reasons for excluding the dispute were valid and Betty’s objections had no substance. In a letter from Tim Goss, Manager Operations — Financial Difficulty, FOS, to Betty dated 30 October 2013, Mr Goss stated:
I have thoroughly reviewed disputes 281332 and 311375 in light of the complaint which you have raised. I am satisfied that FOS has dealt with both disputes appropriately and dispute 311375 remains excluded from our jurisdiction for the reasons provided in our letter dated 20 May 2013.
(c) Dispute numbered 336085 dated 28 August 2013. This dispute was lodged by Betty and comprised a complaint by the Matsoukatidous about the Bank’s handling of a claim for hardship based on a house fire at the Property, the failure of the home insurer to indemnify them and the loss of a planning permit for the Property. This dispute was deleted by FOS on 9 September 2013 because it related to an entity that was separate to the Bank, namely, Commonwealth Insurance Ltd. In an email from Anna Mandoki, Manager — Financial Difficulty, FOS, to Betty dated 20 November 2013, Ms Mandoki stated:
We have previously reviewed your complaints in relation to FOS dispute numbers 336085, 311375 and 281332 and our position was explained in detail in Mr Tim Goss’s letter to you dated 30 October 2013. We have closed your disputes against [the Bank] about your home loan, and we will not be reopening them. This means that [the Bank] is entitled to continue with the legal proceedings it has started against you.
You have exhausted all avenues of appeal available under our Terms of Reference in relation to your disputes about your home loan and the current legal proceedings. We are not able to consider these matters further.[12]
(d) Dispute numbered 336515 dated 10 September 2013. This dispute was lodged by Betty and related to the cancelation of the Matsoukatidous’ home insurance policy. This dispute was determined against the Matsoukatidous on 4 December 2013 because it related to Commonwealth Insurance Ltd.[13]
(e) Dispute numbered 354177 dated 6 March 2014. This dispute was lodged by Maria and related to the County Court proceeding and was assessed by FOS on 11 March 2014. A letter from Ms Mandoki to Maria dated 11 March 2014 stated:
[12]Emphasis added.
[13]The summary relating to dispute numbered 336515 is based on Betty’s affidavit dated 28 August 2014 that was filed in support of the Stay Application and on the Bank’s written submissions on the appeal. Although this dispute was mentioned in the email dated 20 November 2013 that is referred to at [19(c)] above, the extract of that email which was exhibited to Betty’s affidavit dated 5 February 2014 does not include the paragraph that mentions the dispute. Accordingly, there was no evidence about the dispute before Judge Cosgrave.
As your request raises issues that were dealt with under dispute number 281332, we have deleted your new dispute number 354177 and treated it as a request to re-open dispute number 281332.
…
Review of available information
We have previously dealt with the issue of your financial difficulty in dispute 281332. Dispute 281332 was resolved by way of [the Resolution Agreement]. We will not consider your financial difficulty again.
While you have said that the [Property] was burned by an arsonist, this event happened before you signed the [Resolution Agreement] with [the Bank], and was taken into account as part of dispute 281332.
As your dispute was closed more than a year ago, and the information you have provided does not raise any new issues, we will not reopen the dispute number 281332.
Moving forwards
There is no further role for FOS in your dispute. As we are not able to consider your dispute further, we will delete any future disputes that you and/or Mrs Matsoukatidou lodge about the same issue, without written notice to you.[14]
[14]Emphasis added.
(f) Dispute numbered 363161 and 363281 dated 29 May 2014. Dispute numbered 363161 was lodged by Maria and dispute numbered 363281 was lodged by Betty. These disputes related to the Bank’s refusal of an application by the Matsoukatidous for hardship assistance which was apparently based on both the fire and the refusal of payments under the home insurance policy, as described at [19(c)] above. The Bank communicated its refusal of the Matsoukatidous’ application by letter to Betty dated 2 May 2014. Betty applied to have the Bank’s decision reviewed by a different employee on 28 May 2014. Apparently, the disputes were lodged with FOS in response to the following email from Stuart Hickman, Manager Customer Experience, of the Bank, to Betty dated 29 May 2014:
I refer to your conversation yesterday regarding hardship assistance.
Please be advised that this request for hardship assistance has been declined.
…
Please note we will not receive any further complaints about this issue and if you continue to [unclear] this issue we will lodge this as a vexatious complaint intending to delay court proceedings.
FOS’s handling of disputes numbered 363161 and 363281 is discussed at [26] and [28] below.
The Matsoukatidous’ lodgement of disputes numbered 281332, 311375, 336085, 336515 and 354177 with FOS resulted in the Bank’s application for summary judgment being repeatedly adjourned due to cl 13.1(a) of FOS’s Terms of Reference.[15]
[15]The Bank’s written submissions on the appeal state that the hearing of the Bank’s application for summary judgment was adjourned on the following dates: 13 April 2012, 27 April 2012, 14 June 2012, 2 August 2012, 7 September 2012, 2 November 2012, 25 January 2013, 4 April 2013, 11 June 2013, 6 September 2013, 19 September 2013, 1 November 2013, 14 November 2013, 20 November 2013, 24 January 2014, 6 February 2014, 12 March 2014, 11 April 2014 and 1 May 2014. The adjournment on 13 April 2012 is discussed at [16] above and the adjournment on 20 November 2013 was said to be the result of a listing error. It is not clear whether all the other adjournments were related to the disputes summarised at [19] above.
On 5 February 2014, Betty filed an affidavit in response to an order made by Judge Cosgrave on 24 January 2014 requiring that she file and serve any affidavit material upon which she sought to rely by that date. The affidavit:
(g) exhibited two emails Betty sent to the County Court and the Bank’s solicitors on 6 September 2013 applying for an adjournment of the hearing of the Bank’s application for summary judgment due to the lodgement with FOS of dispute numbered 336085;
(h) stated that Tim Goss’s letter dated 30 October 2013[16] dealt with disputes numbered 311375 and 281332 but not dispute numbered 336085;
[16]See [19(b)] above. The affidavit states that Mr Goss’s letter is dated 4 September 2013.
(i) stated that Anna Mandoki of FOS disclosed her email dated 20 November 2013[17] to the Bank’s solicitors for use in the County Court proceeding;
[17]See [19(c)] above.
(j) stated that the Australian Securities and Investments Commission (‘ASIC’) was investigating misconduct by FOS in refusing to investigate dispute numbered 336085;
(k) stated that FOS breached its obligation to keep confidential discussions at a conciliation conference; and
(l) stated that the Matsoukatidous had requested a variation to the loan agreement due to hardship and that the request was under consideration by the Bank.[18]
[18]The exhibits to the affidavit indicate that the claimed hardship arose from: the alleged arson of the Property; a refusal by the Yarra Ranges Shire Council to extend a planning permit that Betty had obtained in 2008; and Betty losing her job.
It can be seen from the above summary that Betty’s affidavit did not respond to the contents of the two affidavits filed by the Bank in support of its application for summary judgment. It can also be seen that the affidavit did not refer to dispute numbered 336515 and therefore there was no evidence about the existence of that dispute when Judge Cosgrave made the Order on 30 May 2014.[19]
[19]See n 13 above.
Decision subject to appeal
As stated at [4] above, at the hearing before Judge Cosgrave at 9.34am on 30 May 2014, Betty represented herself and Maria. Betty submitted that five disputes were still being investigated by FOS and that the hearing could not continue. Betty did not list the five disputes but she stressed that the correspondence from FOS did not confirm that dispute numbered 336085 had been resolved. Betty did not refer to dispute numbered 336515.
The Bank relied on the letter dated 11 March 2014 that is discussed at [19(e)] above for the proposition that FOS’s position was that all of the disputes that had been lodged by the Matsoukatidous with FOS had been investigated and were concluded.
Judge Cosgrave stated that he could not determine the status of disputes numbered 281332 and 363161 from the evidence before him. In response, the Bank stated that it would be able to provide to the Court, later on the same day, a letter from FOS indicating that there were no outstanding disputes. The judge stated that he was satisfied that it was appropriate to make the order sought by the Bank provided that the anticipated letter from FOS indicated that there were no outstanding disputes. His Honour adjourned the hearing to enable the Bank to communicate with FOS, and stated that the hearing would remain adjourned if the anticipated letter from FOS indicated that there were outstanding disputes.
Prior to the adjournment, Betty made a statement that we will assume, for the purposes of the appeal, was an application for an adjournment to enable her to obtain assistance from a legal representative to defend the application for summary judgment due to language difficulties. The judge did not respond to this statement other than to say ‘Thank you’.
The parts of the transcript dealing with some of the matters set out at [26] and [27] above are as follows:
HIS HONOUR: Do you have any comments though with respect to the substantive application? I assume Ms Matsoukatidou has a copy of this?
MR MOFFATT: Yes, she has, Your Honour.
MS MATSOUKATIDOU: Yes, just now.
HIS HONOUR: Yes. Do you have any specific comments with respect to that?
MS MATSOUKATIDOU: No, Your Honour, because if that will go ahead, my English — only yesterday I realise what the summary advancement of that means. It means that the defence will be tested so that means, in any case, my English is very limited. I just realise that. In case it won't be investigated by FOS, we'll go ahead in this court and five complaints will be disregarded, I have to get a legal representative because my English is not so good.
HIS HONOUR: Thank you.
MS MATSOUKATIDOU: Thank you.
…
HIS HONOUR: All right. Just so you understand, Ms Matsoukatidou, what I'm proposing is that — you have said to me that there are outstanding complaints. The bank has indicated that its understanding is different and I will not make any orders until I get a letter from FOS telling me whether there are outstanding complaints or not.
MS MATSOUKATIDOU: I understand.
HIS HONOUR: If FOS says there are outstanding complaints, then the proceeding will stop again. If FOS says there are no outstanding complaints, then I will make the orders set out in the plaintiff's submission and we expect to know what FOS says later today. If you can make sure please, Ms Matsoukatidou, that we have contact details for you in terms of an email address, if that's possible.
MS MATSOUKATIDOU: Yes.
…
HIS HONOUR: All right. Well, if you … provide those email details, we will communicate further with you once we know the position of FOS.
MS MATSOUKATIDOU: Yes, Your Honour.[20]
[20]Transcript of Proceedings, Commonwealth Bank of Australia v Matsoukatidou (County Court, No 1475 of 2011, Judge Cosgrave, 30 May 2014) 15–17.
On the same day, following the adjournment, the Bank’s final affidavits were filed. The first of the Bank’s final affidavits exhibited an email from Wes Pan, Legal Counsel, General Resolution Group, FOS, to Ivka Baban of the Bank dated 30 May 2014 at 10.01am. That email stated:
I confirm our telephone conversation of this morning 30 May 2014 that I have reviewed disputes 281332, 354177, 336085, and 363161 in the names of Betty and Maria Matsoukatidou.
Disputes 281332, 354177, and 336085 have been closed or deleted and will not be reopened.
We have previously informed Ms Maria Matsoukatidou that we would delete any future disputes lodged by her or Betty Matsoukatidou about matters previously raised and addressed without any further written notice. On this basis, I will attend to deleting dispute 363161 immediately.
You may present this email and our letter of 11 March 2014 to the court as evidence of FOS’s position.
The second of the Bank’s final affidavits exhibited a second email from Mr Pan to Ms Baban dated 30 May 2014 at 2.58pm, which stated:
We have previously informed Ms Maria Matsoukatidou that we would delete any future disputes lodged by her or Betty Matsoukatidou about matters previously raised and addressed without any further written notice. On this basis, I will attend to deleting dispute 363281 immediately.
You may present this email and our letter of 11 March 2014 to the court as evidence of FOS’s position.
On the basis of these emails, and being otherwise satisfied that the principles for granting summary judgment were satisfied, the judge made the Order. The Order relevantly provided:
Date of Order: 30 May 2014
Other Matters: The [Matsoukatidous] contended orally that the [Bank’s] application should not proceed because the [Matsoukatidous] had between 1 and 5 outstanding complaints lodged with [FOS]. Later on 30 May 2014 the [Bank] filed 2 affidavits exhibiting correspondence from the Legal Counsel, General Resolution Group, [FOS], who confirmed that there were no outstanding disputes lodged by the [Matsoukatidous] in respect of this matter.
…
ORDERS
1. The [Bank] recover possession of the [Property].
2. [Betty] pay the [Bank] the sum of $763,128.17.
3. [Maria] pay the [Bank] the sum of $594,217.
4.The [Matsoukatidous] pay the [Bank’s] costs …
In his reasons for making the Order, the judge stated:
During the afternoon of 30 May 2014, the court received emails from both the [Matsoukatidous] and the [Bank]. The [Matsoukatidous] referred to an allegedly outstanding complaint. The [Bank] filed by email two affidavits exhibiting letters from the Legal Counsel, General Resolution Group, [FOS], stating that there were no outstanding complaints lodged by the defendants in respect of this proceeding. The second email addressed the particular complaint raised by the [Matsoukatidous’] email of 30 May 2014
Accordingly, I made the orders which I had said that I would make in the event that [FOS] confirmed there were no outstanding complaints …[21]
[21]Reasons [6]–[7].
His Honour’s reasons did not refer to Betty’s application for an adjournment to enable her to obtain assistance from a legal representative.[22]
[22]See [27]–[28] above.
Grounds of appeal
As stated at [5] above, the Matsoukatidous filed a notice of appeal which contains six grounds of appeal. The grounds are difficult to comprehend because the notice was drafted by the Matsoukatidous without legal assistance. We have reformulated the grounds based on our understanding of their meaning. The reformulated grounds are set out at [42], [58], [62], [84], [87] and [89] below.
The conduct of the appeal
Prior to the hearing of the appeal on 11 November 2014, the parties filed written submissions and separate bundles of authorities. The Matsoukatidous’ written submissions were prepared by them without any obvious input from any lawyer. However, it can be inferred that the Matsoukatidous had legal assistance in selecting the authorities upon which they relied. Most of the authorities concerned the principles of natural justice.
At the hearing of the appeal, Betty appeared in person but Maria did not attend. Betty tendered a medical certificate dated 11 November 2014 which stated that Maria was ‘receiving medical treatment’ and that she ‘will be unfit to continue her usual occupation’ on 11 and 12 November 2014. Betty informed the Court that she did not feel that she could properly represent Maria at the hearing of the appeal because their interests were not identical.
The Court informed Betty that, although the Court should not be taken as being satisfied that the medical certificate provided a valid excuse for Maria’s absence, Maria would be given 14 days within which to file written submissions in relation to the issues in the appeal. The Court made an order giving Maria leave to file such submissions and providing for the Bank to respond to such submissions.
Betty then commenced her oral submissions by reading from a prepared document which had not been filed previously. In response to an inquiry by her, the Bench informed her that it would be assisted by having a copy of that document. Arrangements were made for a member of the Court’s staff to make copies of the document for the Bench and for counsel for the Bank, and the matter was then adjourned briefly to enable the document to be read.
The document was headed ‘Defendants’ Arguments’ (‘Arguments Document’) and the first sentence stated that it was provided on behalf of Betty ‘and [her] daughter Maria, who is also a Defendant’. Both Betty’s and Maria’s names appeared at the end of the Arguments Document. The Arguments Document contained submissions in addition to the Matsoukatidous’ written submissions.
When the hearing of the appeal resumed, Betty informed the Court that the Arguments Document had been prepared by her with the assistance of ‘friends’. It may be inferred that those ‘friends’ had some legal training. Betty confirmed that the submissions in the Arguments Documents were being made on behalf of Maria and herself. The Bench informed Betty that Maria would still be able to file further written submissions in accordance with the order to which reference is made at [37] above. The Court arranged for the transcript of the hearing of the appeal to be emailed to the parties on 17 November 2014.
On 25 November 2014, the Court received a written submission signed by Maria. This submission is discussed at [93] below. On 28 November 2014, the Court received a written submission in reply from the Bank. On 2 December 2014, the Court received an email from the Matsoukatidous, together with two attachments, which responded to the Bank’s submission.
First ground of appeal: Refusal of adjournment
The first ground of appeal is that, in refusing the Matsoukatidous’ application for an adjournment in order to obtain legal representation and an interpreter ‘due to [lack] of English’,[23] the judge denied them natural justice.
[23]See [27]–[28] above.
Betty submitted that the judge’s refusal to grant an adjournment constituted a denial of natural justice because the Matsoukatidous were not provided with an opportunity to present their defence, despite each of them having filed a defence.
The Bank submitted that it is not clear that Betty was seeking an adjournment to obtain legal representation because of English language difficulties. In any case, the Bank contended, a decision to refuse an adjournment is an exercise of a discretion.[24] The Bank relied on House v The King[25] in support of the proposition that, in order to successfully appeal against an exercise of discretion, the Matsoukatidous must demonstrate that the judge made an error in the exercise of the discretion such as acting on a wrong principle, considering irrelevant matters, making a mistake in relation to the facts or not taking into account a material consideration.[26]
[24]In support of this proposition, the Bank relied upon Bloch v Bloch (1981) 180 CLR 390, 395 and Brimbank Automotive Pty Ltd v Murphy [2009] VSC 26, [11].
[25](1936) 55 CLR 499 (‘House’).
[26]House (1936) 55 CLR 499, 505
The Bank relied on Sali v SPC Ltd[27] in support of the proposition that this Court should be slow to interfere with the discretion exercised by a trial judge to refuse an adjournment unless the refusal will result in a denial of justice to the applicant and the adjournment will not result in any injustice to any other party.[28]
[27](1993) 116 ALR 625 (‘Sali’).
[28]Sali (1993) 116 ALR 625, 628.
The Bank submitted that the judge’s refusal to grant an adjournment must be considered in light of the following factors:
(m) the Matsoukatidous did not file and serve any affidavit in response to the Bank’s summons in accordance with the order made by Judge Anderson on 13 April 2012;[29]
[29]See [16] and [17] above.
(n) the Matsoukatidous’ defences did not allege any wrongdoing by the Bank in the conduct of the loan agreement;
(o) the defences filed by the Matsoukatidous did not plead that their English language difficulties were a basis on which the loan agreement, the guarantee or the mortgage were to be set aside;
(p) the Matsoukatidous did not swear an affidavit in support of their alleged application for an adjournment;
(q) the hearing of the Bank’s application for summary judgment had been delayed for two years because of the disputes lodged by the Matsoukatidous with FOS;
(r) as at 28 May 2014, the Matsoukatidous did not have any unresolved disputes with FOS and it was therefore fair to conclude that the County Court would hear the application for summary judgment on 30 May 2014 and that disputes numbered 363161 and 363281 were lodged so as to further delay the hearing of that application;
(s) as the Matsoukatidous had not demonstrated that they had a defence to the Bank’s application for summary judgment, the refusal of an adjournment did not result in a denial of justice to them. On the other hand, if the County Court had granted yet another adjournment, an injustice would have been caused to the Bank; and
(t) the Matsoukatidous have not demonstrated that the judge made an error in the exercise of his discretion.
The part of the transcript of the hearing on 30 May 2014 that deals with Betty’s application for an adjournment is set out at [28] above. It can be seen from the transcript that although Betty did not expressly apply for an adjournment, she informed the judge that she only realised on the previous day that if the Matsoukatidous’ contentions based on disputes lodged with FOS were unsuccessful, the substantive issues in the summary judgment application would be dealt with by the Court. She also stated that she needed to obtain legal representation in relation to those issues because her ‘English is not so good.’ She did not mention that she intended to engage an interpreter.
The transcript indicates that the judge did not seek clarification from Betty as to whether she was applying for an adjournment and did not make any express ruling on any such application. His Honour simply said ‘Thank you.’
In our opinion, the judge should have sought clarification from Betty as to whether she was applying for an adjournment and, upon being informed that such an application was being made, his Honour should have invited submissions from the parties in relation to the application and he should then have ruled on the application.
As stated at [27] above, for the purposes of the appeal, we have assumed that Betty applied for an adjournment. We will also assume that the judge implicitly rejected the application. Based on those assumptions, it would have been preferable for his Honour to deal with the application for an adjournment expressly rather than implicitly rejecting it, particularly since the Matsoukatidous were self-represented litigants and Betty’s first language was not English. In the circumstances of the case, however, we are not satisfied that such a rejection, or a failure to follow the procedure outlined at [49] above, constitutes an error of law or a miscarriage of discretion in the sense discussed in House.
Although Betty stated that her ‘English is not so good’, the transcript of the hearing on 30 May 2014 indicates that her English language skills were sufficient for her to understand what was being said at the hearing and to actively participate in it. We are fortified in this conclusion by our own observations of Betty during the hearing of the appeal. Betty did not inform the judge that she intended to engage an interpreter and we are far from satisfied that she needed one.
In the light of the pleadings, the affidavit material before the judge and the history of the proceeding, Betty’s assertion that she needed to obtain legal representation in relation to the substantive issues in the application for summary judgment is hollow. In their defences, the Matsoukatidous did not plead any substantive defence to the Bank’s claim.[30] Similarly, the Matsoukatidous did not file any affidavit material which disputed the substantive grounds relied upon by the Bank for its application for summary judgment. The only affidavit that the Matsoukatidous filed in the County Court proceeding was Betty’s affidavit of 5 February 2014 which dealt primarily with the disputes lodged with FOS.[31]
[30]See [14] above.
[31]See [17] and [22] above. To the extent that the affidavit referred to other matters, namely the Matsoukatidous’ lodgement of a complaint with ASIC and their request to the Bank for the variation of the loan agreement, those matters did not provide a legal basis for resisting the Bank’s application for summary judgment. See [88] and [92(b)] below.
The material before the judge indicates that between the filing of the writ on 5 April 2011 and the hearing on 30 May 2014, the only basis upon which the Matsoukatidous sought to prevent the Bank from obtaining summary judgment was the existence of the disputes that they had lodged with FOS. It would have been obvious to the Matsoukatidous that the existence of such disputes merely stalled the Bank’s pursuit of its application for summary judgment and did not constitute a substantive defence to that application.[32] The Matsoukatidous had a period of over three years prior to the hearing on 30 May 2014 to obtain legal advice on any substantive defences that may have been available to them and to file affidavit material in support of any such defences. The fact that they did not file any such affidavit material suggests that they did not have any substantive defences.
[32]At the hearing on 30 May 2014, Betty said that obtaining adjournments on the basis of extant disputes lodged with FOS ‘won’t go anywhere’. See Transcript of Proceedings, Commonwealth Bank of Australia v Matsoukatidou (County Court, No 1475 of 2011, Judge Cosgrave, 30 May 2014) 4.
In any event, it was open to the judge, in the proper exercise of his discretion, to conclude that, as the Matsoukatidous had not availed themselves of the ample opportunities that they had to obtain legal advice and to file affidavit material in support of any substantive defences upon which they wished to rely, it was far too late for them to be seeking yet another adjournment.
In deciding whether to grant an adjournment, the judge was required by s 8(1) of the Civil Procedure Act 2010 to give effect to the overarching purpose set out in s 7(1) of that Act, namely, to ‘facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.’ Having regard to the matters set out at [51] to [54] above, we are satisfied that the only course available to his Honour, consistent with the overarching purpose, was to refuse the application for an adjournment.
The natural justice aspects of the first ground of appeal are discussed below in in the context of the third ground of appeal. As will be seen, we are not satisfied that, if the Matsoukatidous had been granted an adjournment, they would have been in any better position to resist the Bank’s application for summary judgment.
It follows that the first ground of appeal must be rejected.
Second ground of appeal: Granting leave to the Bank to file further evidence
The second ground of appeal is that the judge should not have granted the Bank an adjournment to enable it to file further evidence.[33]
[33]See [26] and [28] above.
The Matsoukatidous submitted that the judge erred in giving the Bank leave to file further affidavit material to clarify whether FOS was currently dealing with any disputes lodged by them, and to grant an adjournment for that purpose. This was said to be because the Matsoukatidous had filed ‘specific evidence’ which ‘proved’ that FOS had in its possession five disputes lodged by the Matsoukatidous which were still ‘active’.
In our opinion, this ground is without merit. The only affidavit that the Matsoukatidous filed in opposition to the Bank’s application for summary judgment was Betty’s affidavit of 5 February 2014.[34] That affidavit could not possibly establish that any disputes that the Matsoukatidous had lodged with FOS were still being dealt with by FOS as at 30 May 2014. It appears that, at the hearing on 30 May 2014, Betty gave to the judge a document that referred to dispute numbered 363161. For the reasons discussed at [72] below, the judge was justified in concluding that FOS was no longer dealing with that dispute.
[34]See [22] above.
The judge had a discretion to grant an adjournment for the purpose of enabling the Bank to file supplementary affidavits on a narrow factual issue, namely whether, as at 30 May 2014, FOS was dealing with any disputes that had been lodged by the Matsoukatidous. No error of law or miscarriage of discretion has been demonstrated.
Third ground of appeal: Natural justice; confidential information
The third ground of appeal contains two limbs. The first limb is that, by failing to reconvene the hearing after receiving the Bank’s final affidavits in order to give the Matsoukatidous an opportunity to respond to the emails from FOS,[35] the judge breached the hearing rule of natural justice. The second limb is that, by permitting the Bank to rely on the two emails, his Honour enabled confidential information in the emails relating to a conciliation conference to be disclosed to the Court in breach of s 36 of the Information Privacy Act 2000[36] and s 63 of the Privacy and Personal Information Protection Act 1998 (NSW). The Matsoukatidous contended that the emails should have been impounded by his Honour pursuant to s 188 of the Evidence Act 2008.
[35]See [29]–[30] above.
[36]The Information Privacy Act 2000 was repealed on 17 September 2014. All references to the Act are to the Act as in force as at 1 July 2014.
First limb of third ground of appeal: Natural justice
In her oral submissions, Betty contended that, by making the Order upon receipt of the Bank’s final affidavits on the afternoon of 30 May 2014 rather than reconvening the hearing and giving the Matsoukatidous the opportunity to respond to those affidavits, the judge denied them natural justice. She stated that, on 30 May 2014, it was her understanding that the hearing would be reconvened after the Bank filed further evidence and that she had provided her email address so that she could be informed of the timing of the reconvened hearing. She said that she did not expect that his Honour would make the Order because she was aware that FOS had received disputes numbered 363161 and 363281 and had not yet finalised them in accordance with the procedures set out in FOS’s Terms of Reference. According to Betty, it was inappropriate for the judge to make the Order prior to the Matsoukatidous receiving, and being able to comment on, FOS’s emails upon which his Honour relied in making the Order.
Betty submitted that, if the judge had given the Matsoukatidous an opportunity to comment on the emails from FOS and to present their defences, they would have relied on the following matters in resisting the making of the Order:
(u) The purported deletions by FOS of disputes 363161 and 363281 on 30 May 2014 were ineffective because FOS’s Terms of Reference do not authorise the deletion of disputes without following the process set out in cl 5.3. Accordingly, those disputes remained current as at 30 May 2014.
(v) On the morning of 30 May 2014, the judge had said that he would give the Bank an opportunity to file further material verifying that no disputes lodged with FOS by the Matsoukatidous remained current. The emails from FOS that were exhibited to the Bank’s final affidavits did not verify this; rather they confirmed that FOS had current disputes which it then inappropriately deleted.
(w) The judge was not aware that FOS’s Terms of Reference provide for a right of appeal in respect of disputes that are rejected by FOS. Had his Honour been aware of this, he may not have accepted that the purported deletions of disputes 363161 and 363281 were effective, as the deletions deprived the Matsoukatidous of the opportunity of exercising the right of appeal. The Matsoukatidous intended to exercise that right.
(x) There is a discrepancy in the mortgage in that, although it was registered on 6 June 2007, it bears the date 9 June 2007.
(y) The guarantee that Maria was said to have signed is not dated.
(z) Maria never received the Default Notice.
(aa) Betty disputes the accuracy of the amount for arrears set out in the Default Notice.
The Bank relied on the evidence summarised at [19], [29] and [30] to submit that at the time that the judge made the Order, there were no outstanding disputes lodged with FOS.
In our opinion, it would have been preferable for the judge to have resumed the hearing of the Bank’s application for summary judgment after the Bank’s final affidavits were filed rather than proceeding to make the Order. Prior to those affidavits being filed, there was no certainty that any correspondence that FOS provided would be so clear and unequivocal that it would be impossible for the Matsoukatidous to refute it or to make any meaningful submissions on it. As the contents of the emails did not entirely accord with the anticipated contents — in the sense that the emails suggested that there were extant disputes which would be deleted so that they were no longer current — it would have been prudent for his Honour to reconvene the hearing to enable the Matsoukatidous to receive the emails and respond to them. This is particularly so having regard to the fact that the Matsoukatidous were self-represented litigants and Betty’s first language was not English.
However, in all the circumstances of this case — including its history, the state of the evidence as at 30 May 2014, and the specific and limited nature of the sole outstanding factual issue — and the overarching purpose set out in s 7(1) of the Civil Procedure Act 2010, the course adopted by the judge did not constitute a breach of the hearing rule of natural justice.
Betty’s submission that, on 30 May 2014, it was her understanding that the hearing would be reconvened after the Bank filed further evidence, is inconsistent with her conduct on that day. As set out at [28] above, when the judge explained to the parties the course he intended to adopt, Betty’s responses were ‘I understand’ and ‘Yes’. His Honour would have been justified in concluding that Betty had no objection to the proposed course.
It is clear from [22] and [24] above that, as at 30 May 2014, the state of the evidence before the County Court was such that the only potentially viable legal impediment to the granting of summary judgment was the prohibition in cl 13.1(a) of FOS’s Terms of Reference in respect of the pursuit of judgment during the time that FOS ‘is dealing with’ a dispute. The wording of that clause gave rise to a narrow factual issue, namely, whether, as at 30 May 2014, FOS was still dealing with any dispute lodged by the Matsoukatidous. That information was exclusively in the possession of an independent third party, FOS. The Matsoukatidous could give evidence about the disputes that they had lodged with FOS, and what communications they had received from FOS in relation to them, but they could not refute any statement by FOS as to whether FOS was still dealing with any of the disputes as at 30 May 2014.
In the particular circumstances of this case, it is understandable that the judge formed the view that, in the absence of any substantive defence to the Bank’s application for summary judgment, it was appropriate to grant that application provided that FOS confirmed in writing that it was no longer dealing with any dispute lodged by the Matsoukatidous. Having regard to the extraordinary number of adjournments that had previously been granted due to the disputes that the Matsoukatidous had lodged with FOS,[37] his Honour would have been justified in being keen to avoid further delays and costs by granting yet another adjournment. The course adopted by his Honour furthered the overarching purpose in s 7(1) of the Civil Procedure Act 2010, as required by s 8(1) of that Act.
[37]See n 15 above.
Even if we are wrong in our conclusion at [67] above that the judge did not breach the hearing rule of natural justice, we are of the view that any such breach would not have vitiated the Order. This is because, if the Matsoukatidous had been given the opportunity to agitate the matters set out at [64] above, those matters could not have affected the outcome of the Bank’s application for summary judgment.[38] We will consider those matters in turn.
[38]It is well established that a decision made in breach of the hearing rule of natural justice is not necessarily vitiated. In particular, such a decision will not be set aside and a new trial will not be ordered if to do so would be futile because the decision inevitably would have been the same had there been compliance with the rules of natural justice. See Stead v State Government Insurance Commission (1986) 161 CLR 141, 145.
In relation to the matter referred to at [64(a)] above, the allegation that FOS’s Terms of Reference do not authorise the deletion of disputes without following the process set out in cl 5.3 cannot be considered in isolation but must be viewed in the context of the history of communications and dealings between FOS and the Matsoukatidous. Of particular importance are the statements in FOS’s email dated 20 November 2013[39] and letter dated 11 March 2014[40] that FOS had exhausted its consideration of the matters in the Matsoukatidous’ disputes and that FOS would delete future disputes based on the same matters without written notice to the Matsoukatidous. This is because it is clear from those statements that any deletion of a future dispute which merely repeated matters resolved by decisions made by FOS in relation to previous disputes was not intended by FOS to constitute a fresh adverse decision which engaged the process in cl 5.3 of FOS’s Terms of Reference.[41] Rather, the deletion was intended to be a simple administrative step to give effect to the earlier substantive decisions and to avoid those decisions being undermined by a repetition of the resolved matters in a future dispute. A dispute that was deleted by FOS in such circumstances could not be considered to be an extant dispute for the purposes of cl 13.1(a) of FOS’s Terms of Reference.
[39]See [19(c)] above.
[40]See [19(e)]above.
[41]See also [74]–[75] below.
In relation to the matter referred to at [64(b)], it can be accepted that the emails from FOS that were exhibited to the Bank’s final affidavits did not in terms say that, as at 30 May 2014, no disputes that had been lodged by the Matsoukatidous remained current. It can also be accepted that, at the time that the emails were sent, there were extant disputes which FOS stated that it would immediately delete. However, the contents of the emails must be considered in the context of the history of communications between FOS and the Matsoukatidous. In particular, the deletion of disputes did not take place in isolation, but in the context of FOS’s email dated 20 November 2013 and letter dated 11 March 2014 that are discussed at [72] above. Read in the context of those letters, the emails from FOS dated 30 May 2014 in substance stated that FOS was no longer dealing with any disputes lodged by the Matsoukatidous. This meant that cl 13.1(a) of FOS’s Terms of Reference did not prevent the Bank from proceeding with its application for summary judgment.
In relation to the matter referred to at [64(c)] above, the provisions of cl 5.3(b) of FOS’s Terms of Reference which deal with rights of review of adverse decisions of FOS are confined to objections which FOS is satisfied ‘may have substance’.[42] It is clear from the history of communications between FOS and the Matsoukatidous —particularly FOS’s email dated 20 November 2013 and letter dated 11 March 2014 — that FOS regarded any disputes lodged by the Matsoukatidous which raised matters that had already been resolved by FOS as lacking substance. Accordingly, in respect of the disputes that FOS deleted on 30 May 2014, it can be confidently inferred that FOS was satisfied that those disputes and any possible objections relating to them lacked substance and therefore did not engage the rights of review in cl 5.3(b) of FOS’s Terms of Reference.
[42]See [8] above.
Having regard to FOS’s email dated 20 November 2013 and letter dated 11 March 2014 and the terms of cls 5.1(k) and 5.2(d) of FOS’s Terms of Reference, it was inevitable that FOS would treat as not falling within FOS’s Terms of Reference any new disputes by the Matsoukatidous which relied on matters already dealt with by FOS. Such disputes could not engage cls 5.3 or 13.1(a) of FOS’s Terms of Reference. To construe FOS’s Terms of Reference in a manner that entitled an individual to continue to lodge repeat disputes with FOS each of which engaged the processes and review rights in cl 5.3 would have the effect of enabling that individual to control the temporal scope of the prohibition in cl 13.1(a). Such a construction must be rejected because it would have the absurd result that the individual could indefinitely postpone the resolution of the relevant court proceeding.[43]
[43]Neave and Tate JJA came to a similar conclusion in their Stay Decision. See Stay Decision [24]. See also Financial Ombudsman Services Ltd v Pioneer Credit Acquisition Services Pty Ltd [2014] VSC 172, [19]–[20].
In relation to the matter referred to at [64(d)] above, the handwritten date on the mortgage is unclear and can be read as either ‘04/06/07’ or ‘09/06/07’. As the mortgage was registered on 6 June 2007, the only logical inference is that the mortgage is dated 4 June 2007. In any event, the Matsoukatidous did not take issue with the validity of the mortgage in the County Court proceeding.
In relation to the matter referred to at [64(e)] above, in her defence, Maria did not deny signing the guarantee and did not rely on the fact that the guarantee was not dated. Moreover, Maria did not file any affidavit in opposition to the Bank’s application for summary judgment and Betty’s affidavit dated 5 February 2014[44] did not refer to the fact that the guarantee was not dated.
[44]See [22] above.
In relation to the matter referred to at [64(f)] above, the Bank filed an affidavit of service in relation to the service of the Default Notice upon Maria. As Maria did not file any affidavit to refute the affidavit of service, the judge was entitled to be satisfied that the Default Notice had been served on Maria.
In relation to the matter referred to at [64(g)] above, the Matsoukatidous did not, at any stage between the filing of the writ on 5 April 2011 and the hearing of the Bank’s application for summary judgment on 30 May 2014, file any affidavit material disputing the amount of arrears claimed by the Bank. Accordingly, the judge was entitled to accept the Bank’s evidence about the amount of arrears owing by the Matsoukatidous.
It follows that if, contrary to our conclusion at [67] above, the judge breached the hearing rule of natural justice, such a breach is not of such a nature as to warrant this Court setting aside the Order and ordering a new trial.
The Matsoukatidous also submitted that they were denied the opportunity to cross-examine the deponent to the Bank’s final affidavits. Rule 22.07(1) of the Rules confers a discretion on the County Court to permit cross-examination of a deponent. The manner in which Judge Cosgrave dealt with those affidavits indicates that his Honour considered that the anticipated letter from FOS would be
self-explanatory and that further evidence or submissions would not be of any assistance if the letter verified that no disputes were outstanding. It is apparent that his Honour would not have permitted any cross-examination. In the circumstances of this case, he would have been justified in adopting that course.
Second limb of third ground of appeal: Disclosure of confidential information
In relation to the second limb of the third ground of appeal, there is no merit in the Matsoukatidous’ contention that the sending of the two emails from FOS to the Bank on 30 May 2014 resulted in the disclosure of confidential information in breach of s 36 of the Information Privacy Act 2000 and s 63 of the Privacy and Personal Information Protection Act 1998 (NSW). First, it is to be doubted that those Acts apply to FOS.[45] Secondly, the emails do not disclose any personal information received from the Matsoukatidous. Rather, they merely reported on a factual issue, based on FOS’s records, upon which the parties had adduced affidavit evidence and had made submissions. The judge was entitled to admit the emails into evidence as they were relevant to that factual issue. It follows that there was no legal basis upon which the judge could have impounded the emails pursuant to s 188 of the Evidence Act 2008.[46]
[45]The Information Privacy Act 2000 relevantly applied to a ‘public sector agency’ as defined in s 3 of the Act. It is unlikely that FOS satisfied that definition. Section 36 applied to statements made in the context of a conciliation of a complaint made to the Privacy Commissioner and not to a conciliation under FOS’s Terms of Reference. See also cl 2.1(a) and (f) of sch 1 to the Act in relation to the circumstances in which use or disclosure of personal information was permitted. The Privacy and Personal Information Protection Act 1998 (NSW) relevantly applies to a ‘public sector agency’ and a ‘public sector official’, as those terms are defined in s 3(1) of the Act. It is unlikely that FOS or its employees fall within those definitions. Sections 62 and 63 of the Act deal with corrupt disclosure and use of personal information by public sector officials and offering to supply personal information that has been disclosed unlawfully, respectively. See also ss 17, 18 and 25 of the Act in relation to the circumstances in which use or disclosure of personal information is permitted.
[46]Section 188 of the Evidence Act 2008 provides that a court may direct that a document which has been tendered or produced before a court is to be impounded and kept in the custody of an officer of the court for such period, and subject to such conditions, as the court thinks fit.
It follows that the third ground of appeal is not made out.
Fourth ground of appeal: Disclosure of information by FOS
The fourth ground of appeal is that the disclosure of the contents of the two emails dated 30 May 2014 from FOS constituted corrupt disclosure and use of personal information by public sector officials — namely, Mr Pan of FOS and the Bank’s solicitor — in breach of s 62 of the Privacy and Personal Information Protection Act 1998 (NSW).
This ground is misconceived for the reasons set out at [82] above.
The Matsoukatidous also submitted that disclosure of the contents of the two emails by FOS was in breach of cl 7.6 of FOS’s Terms of Reference, which states that FOS ‘operates on a ”without prejudice” basis’.[47] The Matsoukatidous submitted that the effect of this clause is that information obtained through FOS may not be used in subsequent court proceedings. In our opinion, cl 7.6 did not prevent FOS from providing to the Bank the information in the two emails. In circumstances where the Matsoukatidous relied on the existence of extant disputes to obtain the benefit of the prohibition in cl 13.1(a) of FOS’s Terms of Reference, FOS was entitled to provide to the Bank information relevant to that issue in order to ensure that the County Court was not misled and did not misapply that clause. Further, as Judge Cosgrave adjourned the hearing on 30 May 2014 in order to enable the Bank to obtain information from FOS about the status of the Matsoukatidous’ disputes, the provision of that information by FOS to the Bank might possibly be said to have been ‘required by an appropriate court process’ within the meaning of cl 7.6. For similar reasons, cl 13.4 did not preclude FOS from providing the information to the Bank.
[47]Clause 7.6 of FOS’s Terms of Reference is set out at [8] above. The Matsoukatidous erroneously referred to cl 16.6 of FOS’s Terms of Reference which cannot apply to them.
Fifth ground of appeal: Investigations by regulatory authorities
The fifth ground of appeal is that the judge ignored investigations by ASIC and the ‘privacy commissioner’ of complaints by the Matsoukatidous about official misconduct by FOS and FOS’s deletion of disputes.
This ground is also misconceived because, in the circumstances of this case, the existence of an investigation by a regulatory authority into the conduct of FOS could not affect the Bank’s entitlement to summary judgment. We note that the evidence before the judge did not establish that any regulatory authority had informed the Matsoukatidous that their complaints warranted investigation.
Sixth ground of appeal: Judge’s failure to require production of the mortgage
The sixth ground of appeal is that the judge should not have made the Order because the Bank failed to produce the mortgage or the epitome of mortgage.
This ground must be rejected. The evidence in the affidavits in support of the Bank’s application for summary judgment — which the Matsoukatidous did not refute — was sufficient to justify the making of the Order.[48]
[48]See r 22.03(3) of the Rules in relation to the admissibility of hearsay evidence. Section 51 of the Evidence Act 2008 abolished the common law best evidence rule in relation to the contents of documents.
Other matters upon which the Matsoukatidous relied
The Matsoukatidous’ written submissions address a number of issues that do not relate to the grounds of appeal. These additional submissions are summarised below.
(bb)
The judge deprived the Matsoukatidous of the opportunity to file a
counter-claim for damages which they intended to file in relation to the cancellation of their home insurance policy.
(cc) The judge wrongly refused the Matsoukatidous’ rights under s 72 of the National Credit Code,[49] which they submitted provides for the variation of the repayment terms of a loan agreement on the basis of hardship.
(dd) Maria, who was only sued as a guarantor, was never served with either the writ or the summons and has been denied the opportunity to lodge her own disputes with FOS.
(ee) Pursuant to r 22.10 of the Rules, the judge was required, and failed, to make a declaration as to liability for the debt the Matsoukatidous allegedly owed to the Bank because the Bank failed to establish the amount of the debt.
[49]National Consumer Credit Protection Act 2009 (Cth) sch 1, s 72 (‘National Credit Code’).
The above issues cannot affect the outcome of the appeal for the following reasons:
(ff) As at 30 May 2014, the Matsoukatidous had not filed any counterclaim or any affidavit setting out the basis for a counterclaim. Accordingly, the judge was entitled to determine the Bank’s application for summary judgment on the basis of the then current pleadings and evidence before the County Court.
(gg) Even if s 72 of the National Credit Code applied to the loan agreement, it did not oblige the Bank to vary the loan agreement due to the Matsoukatidous’ alleged hardship. Accordingly, that section was not relevant to the Bank’s application for summary judgment.[50]
(hh) Maria did not file any affidavit disputing service upon her of the writ or the summons. She had, in fact, lodged disputes with FOS. In any event, the issue under cl 13(1)(a) of FOS’s Terms of Reference is whether Betty or Maria had lodged any disputes with FOS with which FOS was still dealing; that clause is not concerned with the reasons why either Betty or Maria did not lodge any disputes.
(ii) Rule 22.10 of the Rules did not apply to the present case, as the declaration to which the rule refers is to be made in cases where the amount of the debt is not established to the satisfaction of the County Court. In the present case, the amounts of the debts owed by the Matsoukatidous to the Bank were obviously established to the satisfaction of Judge Cosgrave.
[50]The Matsoukatidous did not at any stage make an application pursuant to s 74 of the National Credit Code to change the terms of the loan agreement.
Maria’s written submission, which the Court received on 25 November 2014, reproduced some of the contents of Betty’s affidavit dated 28 August 2014 in support of the Stay Application[51] and re-canvassed some of the submissions that had previously been made. We have already dealt with those matters. Maria’s submission also raised a limited number of new matters. These were either not relevant to the issues before the judge on 30 May 2014[52] or did not otherwise provide any basis for refusing the Bank’s application for summary judgment. Accordingly, they cannot affect the outcome of the appeal.
[51]See n 11 above.
[52]For example, Maria refers to ss 38, 44, 60, 76, 78, 88, 89A, 90 and 96 of the National Credit Code in circumstances where there was no evidence before the judge indicating how these provisions were engaged or how they were relevant to the Bank’s application for summary judgment.
Conclusion
For the above reasons, the appeal will be dismissed.
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