Musgrave v. Australia and New Zealand Banking Group Ltd

[2009] QDC 263

[2009] QDC 263

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 1814 of 2009

A MUSGRAVE	Applicant
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	Respondent

BRISBANE

..DATE 30/06/2009

ORDER

CATCHWORDS: District Court of Queensland Act s 68, s 69, s 85 - Court held it lacked jurisdiction to entertain a claim for a declaration regarding and injunction restraining "collection activity" - although immediate concerns related to threatened debiting of a sum within jurisdiction, the consequence of debiting might be that the whole debt became due.

HIS HONOUR:  This application by Mr Musgrave, a barrister who

is self represented, is one in the form of an originating

application seeking the following relief:

1. "A declaration that, on its proper construction, the  contract for the provision of financial services between the applicant and respondent includes as terms the Financial Ombudsman Service's Terms of Reference, Guidelines and associated Policy Statements and the Banking Industry Code of Practice ("the Dispute Resolution Terms").

1. A declaration that, on its proper construction, the Dispute Resolution Terms require that the respondent suspend collection and recovery action including making demand on the applicant for payment of any amount or debiting the account of the applicant for amounts the subject of the dispute between the applicant and respondent before the Financial Ombudsman Service until such time as the Financial Ombudsman Service completes its consideration of the matter in dispute between the applicant and the respondent.

1. An injunction, including interim or interlocutory injunctions, restraining the respondent from making demand on the applicant for payment of any amount (including debiting, or attempting to debit, any account of the applicant) for the amount being a part of the subject matter of the dispute between the applicant and respondent before the Financial Ombudsman Service until such time as the Financial Ombudsman Service considers the matter.

1. That this matter be referred to mediation.

1. The respondent pay the applicant's costs of the application."

Exhibit 1, which I accept for present purposes, was supplied

to Mr Musgrave by the respondent Bank in June 2008 when he

established an investment arrangement described as an APELS

(ANZ Protected Equity Leveraged Solutions) investment.

The guidelines invite investors, if differences that may arise

with the Bank can't be resolved by negotiation, to approach the Financial Ombudsman Service.  Mr Musgrave has done that in a reference about which he is understandably coy, not only for

purposes of preserving confidentiality but because of his

concern that the Financial Ombudsman Service will not proceed

any further with a complaint of which a Court becomes

seized.

The expectation of the Ombudsman's office as communicated to

Mr Musgrave, and no doubt to the Bank, is that the financial

services provider, namely the Bank, will "suspend any

collection activity or recovery action upon notification."

There's no guidance available anywhere, it seems, as to what

is collection activity.  Mr Musgrave asserts that it extends

to debiting his investment account with an amount of some

$137,000 for interest, which the Bank threatens to do today,

having allowed only a few days' grace.

From the course of discussions that have been going on for some weeks, Mr Musgrave's concern is that the making of that debit, or the entry of that debit, will place him in default which may embarrass him, and not just in his affairs with the Bank but more generally in a commercial sense.

He is anxious not to have that large debit which he may well

be unable to pay.  It's not appropriate for me to make any

pronouncements about whether what he wants to restrain the Bank from doing amounts to "collection activity" or whether he should or should not be expected to give the usual undertaking as to damages, given that I've reached the view that the Court has no jurisdiction.

Relief of the kind that is sought on an interim basis comes

within section 69 of the District Court of Queensland Act

1967, but that is available only in a proceeding in which the

Court has jurisdiction under section 68. The potentially

relevant jurisdiction is that under subsection (1)(b) in

actions and matters:

1. For the determination of any question of construction arising under a deed, will or other written instrument, and for a declaration of the rights of the persons interested where the sum or the property in respect of which the declaration is sought does not exceed in amount or value the monetary limit."

It is a curiosity that Mr Musgrave hasn't put before the Court

the "written instrument" whose construction he desires. 

The guidelines referred to qualify as a written instrument,

but have no particular reference to Mr Musgrave.

Mr Kimmins' affidavit, prepared in haste for the Bank, does

exhibit what are presented as the relevant forms to enter into

an APELS transaction.  Mr Musgrave's signature appears on

pages 12 and 14.  At least on the latter, one finds the loan

amount requested as $1,000,000 with interest "fixed".  It would appear that the arrangements were for annual payments of interest in advance, the first (the Court hears) being made in June 2008 at the time of the establishment of the APELS arrangement.  The next was due a few days ago.

Mr Musgrave has sought leave to make, and formulated on the

run, amendments to his originating application calculated to

show that he is only seeking relief in respect of a single

$137,000 amount.  I've concluded that this isn't a sound

approach.  The Court has learned that, unsurprisingly, if

there's default in paying interest when it's due the Bank is

entitled to terminate the whole arrangement, to call up the

principal which straight away gets us into financial realms

far in excess of the monetary limit on this Court's

jurisdiction.  It may be accepted that the Court would have jurisdiction to entertain a claim for a deposit or instalment within the monetary limit under a contract of sale for a price multiples of that limit (which could not be enforced fully in the Court).  The present is not that straightforward a case.

The Bank, represented by Mr Clothier, is contesting the

Court's jurisdiction.  Any relief that this Court gave would

be subject to being set aside on appeal as occurred in matters

such as Startune Pty Ltd v Ultra-tune Systems (Aust) Pty

Ltd [1991] 1 QdR 192 and Matelot Holdings Pty Ltd of the Gold Coast City Council [1993] 2 QdR 168. By seeking declarations, as he has, Mr Musgrave has avoided the pitfall exposed him in Matelot Holdings.

However, in my opinion it's not possible to avoid an analysis

in which "the property in respect of which the declaration is

sought" does exceed the "monetary limit".  In the end

Mr Musgrave was constrained to ask the Court to transfer the

proceeding to the Supreme Court which is what I'd effectively

indicated to him I thought the Court ought to do.  That

possibility doesn't apply if the proceeding has to be struck

out under subsections(4) and (5).

The circumstances are such that it wouldn't be right to

determine against Mr Musgrave that he is blame-worthy for

having proceeded in this Court.  So, to keep alive

Mr Musgrave's hope of obtaining the relief which he needs

urgently in the Supreme Court this afternoon I'll order under

section 85(2) of the District Court of Queensland Act 1967

that the proceeding be transferred to the Supreme Court.

There's still nothing filed in the Court.  Leave to bring the

application in terms of the document handed up having been

granted by me this morning, that's all I need do.  I'll

reserve costs if you like.

...

HIS HONOUR:  I'm going to reserve costs.

-----