Norman v National Australia Bank Limited

[2012] HCATrans 171

[2012] HCATrans 171

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne       No M67 of 2012

B e t w e e n -

MATTHEW TRAVIS NORMAN

Applicant

and

NATIONAL AUSTRALIA BANK LIMITED

Respondent

Application for special leave to appeal

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 20 JULY 2012, AT 9.32 AM

Copyright in the High Court of Australia

MR M.T. NORMAN appeared in person.

MR A.A. SEGAL:   If it please your Honour, I appear for the respondent.  (instructed by Gadens Lawyers)

HIS HONOUR:   Yes.  Now, Mr Norman, let us just work out what we are doing.  You are moving on a summons of 16 July in which you seek various relief.  There is that summons.  In support of your summons you have an affidavit which is sworn on 16 July to which there are various exhibits, is that right?

MR NORMAN:   That is correct, your Honour.

HIS HONOUR:   Yes.  Now, I take it there is no objection to my receiving the affidavit, is there, Mr Segal?

MR SEGAL:   No, your Honour.

HIS HONOUR:   Yes.  Thank you.  Now, going to your summons, Mr Norman, paragraph 1 seeks orders, in effect, holding things as they now are ‑ ‑ ‑

MR NORMAN:   Yes, your Honour.

HIS HONOUR:   ‑ ‑ ‑ until the hearing and determination of the application for special leave, is that right?

MR NORMAN:   That is correct, your Honour.

HIS HONOUR:   Then orders 2 and 3 would be matters that would be dealt with ordinarily by the Full Court on the return of the application for special leave?

MR NORMAN:   That is correct.

HIS HONOUR:   So in the first instance we need to focus on whether you should have an order of the kind you seek in paragraph 1 of your summons.  Let us not for the moment fuss about the way in which that is expressed.  Essentially what you are looking for is to stop execution of the judgment that has been given in the courts below?

MR NORMAN:   That is correct, yes.

HIS HONOUR:   Now, I have read your affidavit and looked at the exhibits in support.  I notice in your affidavit that you refer to Justice Brennan’s decision in Jennings Construction v Burgundy Royale, one of the often referred to decisions in this area.  If you go to page 25 of your affidavit.

MR NORMAN:   Yes.

HIS HONOUR:   At paragraph 69 you pull out a quote from Justice Brennan’s judgment and you refer there to four matters that are taken to account.

MR NORMAN:   Yes.

HIS HONOUR:   For the moment it will be most helpful, I think, if you focus only on the first of those matters, namely, whether there is a substantial prospect that leave will be granted.  Let us for the moment at least, subject to what is said later, assume that matters (b), (c) and (d) all go in your favour.

MR NORMAN:   Yes.

HIS HONOUR:   Let us make that assumption for the moment in your favour.  Let us focus therefore on the first one, which is whether there is a substantial prospect that leave would be granted.

MR NORMAN:   Okay.

HIS HONOUR:   Now, bear in mind, would you, that come the leave application, as you know or may know, the parties to leave applications have only a limited time in which to present their argument.  I am not seeking to impose that particular limit on you at the moment, but it will be best if, as far as possible, you distil and focus the argument.

MR NORMAN:   I will be brief.  Yes, I will.

HIS HONOUR:   Do you follow me?

MR NORMAN:   Yes.

HIS HONOUR:   What is it you would want to tell me about those matters?

MR NORMAN:   Your Honour, if we are just concentrating mainly on (a), the material that is now in my possession should have been in the first instance brought up as part of the initial proceedings against me way back when the case actually started.  I have asked on many occasions for the information to be disclosed on how the application for the loan was made and yet I have never had a single document sent to me on my initial application which shows my initial signature.  I have only been shown the information that says this is the contract, not the application for the contract.

I submit that it was deliberately not disclosed by the bank during the proceedings because on that information I have identified over two dozen material facts that are not actually what I would have written only because there is information in there that suggests that I had, as an example, $400,000 worth of assets when in fact I had $4,300 worth of assets.  It is stated that I owned a Jeep Wrangler where in fact I had a loan for Jeep Wrangler and a Jeep Commander worth $110,000.  The fact of the matter is – and I am also quoting obviously the recent High Court decision on Tonto Home Loans Australia Pty Limited v Tavares, FirstMac Ltd. 

The reason why that came about and why I immediately looked through that case was because a whistleblower from within Australia who was currently working with reporters at The Australian, and also an advocate for people like myself to look at our cases and things like, this person actually let me know that if you have been to court – number one, if you are on a low doc loan, which I am, did they actually present you with your application, which is something that I have wanted all the way through, and the answer to that was no.  She then said, well, you might need to ask for that application and demand it from a court, which I tried.  Again I had no real opportunity to look at that.

In fact, the whole time I was in court, not one material fact was being considered because all I was doing was fighting a summary judgment.  In other words, I had to try and find where a judge had gone wrong, not necessarily on the facts of the case.  So that was really hard for me to do having no experience.  However, now with quite a small bit of experience, and I have seen that the errors made in the judgments along the way have been that if I had been given what every litigant is given at the very beginning, and that is an opportunity to see the case in full, well, then I would have certainly been going down a different path.  It is just that it is very hard to show fraud when the application made against you does not disclose the information that should have been disclosed, because it is my information.  It is not private.  It is information that under banking code states that I am allowed to see, but they refused to show it.

HIS HONOUR:   You say you would have gone down a different path?

MR NORMAN:   I would have stayed on the same path, yes, but I would have actually gone down to the – the whole reason why I wanted to discover documents, your Honour, was that there was nothing to reference whether or not what they had in their possession was correct.  They refused to actually allow me to see my application which they knew was incorrect and I only got that application finally from the bank because I not only asked for it in the court, but I was asking for it at the bank and the bank themselves were actually saying it is in court so you are going to have to go through the solicitor.  I said, well, I just want my own account documents and they would not allow me to see those.  When I did finally see those after judgment was made in the Court of Appeal, then I went through that and immediately saw all the different wrongdoings of – you know, another example is they said that my wife was a teacher.  Well, she was unemployed at that time.

HIS HONOUR:   Let me just understand this better than I presently do.  Assume that you can demonstrate that the application documents in various respects contain wrong information.

MR NORMAN:   Yes.

HIS HONOUR:   What is the consequence you say that follows from showing that to be so?

MR NORMAN:   Your Honour, if I was to apply for a home loan, which I did, and I did give my manager the information that was requested, it would have actually shown that I had no opportunity of paying for it because it was done with future income that was not actually around.  The difference was that my wife and I already had a home and because we had more children, we were looking to update the home.  Unfortunately, we kind of got put into a position where the home that we were in, which was under a loan – and, to be quite honest, with the deposit that we put on this new house we certainly could have almost paid it off, which was an unfortunate thing for us. 

If the application was done correctly without adding information that just was not true, we should have actually been rejected is the main point.  We should have been rejected for that loan and unfortunately we were not and then within 12 months we were already defaulting based on the application and that was – you know, I was not certainly a money man.  I did not know my way around certain things and I was relying on money that just stopped because of the financial crisis at that time in 2008.  Because I was dealing with American money, unfortunately those future income possibilities literally stopped.  We then approached the bank for financial assistance and, strangely enough, the excuse for not having financial assistance came back that due to the fact that we cannot class future income as income, well, then financial assistance was dismissed or not approved, but the whole point of the matter was that we should not have got the loan in the first place if future income was not consistent with the banking rules. 

What the bank have actually done is even stated that we were making $10,000 a month from income that we do not know about and that we were also making weekly income from renting out something from someone, which again – I mean, the whole application looked like it was not even us and that is what our main issue is now, is that did the bank, in fact, unconscionably give us a loan when they really should not have and then knowingly within the first 12 months of that loan being accepted, we were then already in default.  Not only were we in default, but they refused a financial assistance and instead convinced us to take out a further $45,000 loan, re‑mortgage, in other words, taking from one account, putting it into the mortgage account, which again we obviously defaulted because we could not afford now two loans plus the issues that we were in.

So my main fact here, your Honour, in just (a), is that the material that I have now in my possession clearly shows that the documents that we signed at the very beginning were not the documents that were presented to the bank and had no information that we presented to the bank for the loan in the first place.  I would suggest that for that reason we have still got a fair way to go when it comes to applying certain rules and regulations that have been broken by the bank.

HIS HONOUR:   As I would understand it, an answer the bank may make is application was made for the loan.

MR NORMAN:   Yes.

HIS HONOUR:   If misstatements were made by bank officers in connection with that loan application, the fact remains a loan was sought, a loan was given, the bank asked for a mortgage, the mortgage was given, the money has not been repaid and that is the essence of the bank’s case against you, I think.

MR NORMAN:   That is correct.

HIS HONOUR:   Now, what is the error in that?

MR NORMAN:   Your Honour, one of the recent decisions in the High Court, being Tonto Home Loans Australia Pty Limited ‑ ‑ ‑

HIS HONOUR:   Yes.  That is the Court of Appeal of New South Wales, I think, is it not?

MR NORMAN:   Well, it went actually to an appeal to the High Court.

HIS HONOUR:   It has gone on leave.  Has leave been granted, I think?

MR NORMAN:   I believe that that case is now over.

HIS HONOUR:   I do not think we have had – in fact, I know we have not had an appeal judgment given in it.

MR NORMAN:   Right.  So they have come back ‑ ‑ ‑

HIS HONOUR:   Unless you can point me to it, I am certainly not conscious of it.  I am generally familiar with the Court of Appeal decision and the Court of Appeal decision was about the application of the Contracts Review Act which is a New South Wales Act and does not, I think – I am subject to correction in all of this, but at least as far as I am aware, is not engaged or equivalent provisions are not engaged in this jurisdiction in Victoria, but perhaps I am wrong.

MR NORMAN:   There was three cases in that one.  There was the obviously ‑ ‑ ‑

HIS HONOUR:   There was Tonto and two FirstMac cases.

MR NORMAN:   That is correct, 21 December 2011.

HIS HONOUR:   That is the New South Wales Court of Appeal?

MR NORMAN:   Yes.

HIS HONOUR:   It is not this Court.  But be that as it may, whatever jurisdiction it was, that was a case about, I think, the Contracts Review Act and about review of contracts in particular where there is an intermediary negotiating the loan, on one view of things, wearing two hats, one for the lender, one for the borrower and such arrangement are always perilous where you have an intermediary who has got interests one way, duties another way and surprise, surprise, the interest and duty do not rub along all that well.

MR NORMAN:   Yes.

HIS HONOUR:   Now, in this case, correct me if I am wrong, you dealt with a bank officer, is that right?

MR NORMAN:   That is correct.

HIS HONOUR:   You say that the material you lately have received shows that between your dealing with the bank officer and the papers getting to the decision-makers within the bank there are additions to the papers which you say are factually wrong ‑ ‑ ‑

MR NORMAN:   Correct.

HIS HONOUR:   ‑ ‑ ‑ and which, had the truth been known, might have, you would go so far as to say should have, said to the bank do not make the loan.

MR NORMAN:   That is correct.

HIS HONOUR:   Is that the nub of what you have to say?

MR NORMAN:   That is correct, yes.

HIS HONOUR:   Now, the answer to it that the bank seeks to make is you asked for the loan, you got the loan, you gave the mortgage, you have not paid the money back, therefore.  Now, do I capture sufficiently what seems to be the essence of the dispute between the two parties?

MR NORMAN:   In a way, yes, your Honour, and can I go back to ‑ ‑ ‑

HIS HONOUR:   Well, correct me and extend me to the point to which I am not getting it right.  That is what I am asking you to do.

MR NORMAN:   You are right.  Going back to the Brennan decision as well which has shown in similar circumstances in his judgment that if the respondent was given the opportunity to give us the information that we required in the first place, we would have been in a position to be going through the normal interlocutory information, discovering documents, but the fact that we have been in the Supreme Court for the last 12 months without any consideration and without any facts of the case, we have literally spent 12 months with my learned friends discussing summary judgments and not the facts of the case.  Now, the facts of the case are not very different ‑ ‑ ‑

HIS HONOUR:   I understand that.  Assume for the purposes of argument – and I know it is contrary to what you say the facts are – but assume you have had all of this information from day one. 

MR NORMAN:   Yes.

HIS HONOUR:   I think the bank’s answer is, well, had you had all that information, it would still not give you a defence to the claim they make.  Now, that is the area for debate.

MR NORMAN:   I would certainly argue that in actual fact that does give us a claim due to the fact that if we – the bank manager’s responsibility and obligation to its customers is to make a decision based on whether or not we can repay the loan.  By putting us into a position where we are now not able to – and, in fact, from that day we were living a normal life until after – within six months after the loan we realised that we are struggling because we have – we have upgraded the house, we had more children and the fact is that we were literally within the six month period contacting the bank to ask for further time to pay certain things.  Now, our life had changed after that moment.  Both my wife and I ‑ ‑ ‑

HIS HONOUR:   Mr Norman, I do not need any persuasion about the reality or the breadth of the personal issues that this presents.  I well understand that.  I have got to decide the case, though, according to law.

MR NORMAN:   Yes.

HIS HONOUR:   As I say, you do not need to persuade me that there are real live personal issues profoundly affecting you, your wife, your children.

MR NORMAN:   Yes.

HIS HONOUR:   I understand that.  I have got to bring you back, though, to the law.

MR NORMAN:   Yes.  For this instance, your Honour, all I ask is that for the leave of appeal – sorry, the granting of a stay of execution, which I believe is the main factor of why we are here today, and that is that if that is granted, we are in a position to further show our evidence that what the bank has done has been fraudulent and unconscionable and if they are found to be fraudulent and unconscionable by not following their own code of practice as well as going against the law, that which we believe we have shown in our many documents that have been presented, that the issues that we now have will not be able to be finalised properly due to the fact that we will not have a home to continue to look through and prepare for an appeal. 

We believe that – I mean, look, this has happened quickly for us, so obviously one of the main points that I am hoping that you will understand is that we have only just been given the evidence and so, you know, the nerves as well as anything coming to the High Court is a hard one, but at the end of the day we need that time to prepare properly for an appeal which we believe we would be successful under the fact that the bank manager had an obligation to us not to loan us money if we could not afford it.  Although my wife and I certainly believed at that stage that everything that we submitted was true and correct, we were hoping that the bank manager had enough experience, and supposedly he was the leading manager of making sure – acquisitions manager, I believe – and yet he failed at his responsibility. 

The bank’s code of conduct states that no person that is coming in for a loan should be given a loan if they cannot repay it, and that has put us into the position that we are now.  We believe with further time – there are obvious reasons why we need to stay in the house while preparing for an appeal, which I can certainly go through in detail if your Honour pleases, but at the moment what we are asking for is a stay of execution so that the appeal can be heard in its entirety.  I have still got a fair bit of work to do on that only because, you know, this has been quite a rushed process for us and a daunting process at that, and so what I ask your Honour for is the opportunity to stay further proceedings so that we can put our case to an appeal. 

Also, you know, obviously there is one thing that I am interested in doing straightaway is looking through the Tonto Home Loan Case, because from what I have been led to believe, and certainly I have been – I have had other support from people going through that with me, is that the case in the Tonto Home Loan Case was also to do with unconscionable conduct when it comes to bank managers handing over money that they should not have or bank managers actually – well, in this case it was brokers, but brokers adding information to a home loan application that were not true.  Supposedly two Supreme Court judges in Sydney found for the applicant in that as well.  I actually thought it had gone to the High Court and so I apologise for that.  I read it completely wrong if that is ‑ ‑ ‑

HIS HONOUR:   That is all right.

MR NORMAN:   But I actually thought it had been appealed and won in the High Court.  But my main objective is to keep my family safe.  Everything revolves around where we live.  I study from home, I work from home.  I have got four kids, obviously, and pets.  To properly present or prepare for an appeal, I would need that stay so that – you know, we do not have family and friends.  It would literally wipe us out in one fell swoop.  So, your Honour, that, I would suggest, is my submission to you and respectfully ask that that be granted.

HIS HONOUR:   Yes.  Thank you, Mr Norman.  Yes, Mr Segal. 

MR SEGAL:   Yes, your Honour.

HIS HONOUR:   Again, if you would be good enough to confine your submissions, at least in the first instance, to the issue of sufficient prospects of success.

MR SEGAL:   Thank you, your Honour, of that indication.  The judgment of the Court of Appeal – I do not know whether your Honour has had an opportunity to review that ‑ ‑ ‑

HIS HONOUR:   Yes.

MR SEGAL:   ‑ ‑ ‑ noted that Mr Norman’s prospects of success of appeal in that case were dismal and there has been nothing that has been said this morning by Mr Norman which addresses any particular matter or legal question that was dealt with by the Court of Appeal.  So my primary submission is that the decision of the Court of Appeal is not attended by any doubt.  What instead has been suggested this morning is that there is a whole bundle of new material which changes the nature of the case and that, in my submission, is not entirely accurate. 

Mr Norman, in his affidavit, puts forward a large bundle of material.  A substantial proportion of that was the material which was dealt with at the summary judgment application stage.  This case commenced and an application for summary judgment was made.  It was heard before Associate Justice Landsdowne last year.  In support of the application, the bank put forward the documents, the loan documents, which are referred to by Mr Norman as having just been received.

HIS HONOUR:   But his complaint is that the loan application documents he did not see until recently.

MR SEGAL:   That is what he said this morning, but if one goes to – this is at page 13 of his affidavit, paragraph 37, he refers to the overdraft facility individual consumer purposes document and says he does not recognise the document and has not seen it before.  That was an exhibit to the primary affidavit in support of the summary judgment application.

HIS HONOUR:   Well, that may be, but have I got any evidence of that?

MR SEGAL:   There is not any evidence in terms of an affidavit before you today, but it was the material upon which the lower courts ‑ ‑ ‑

HIS HONOUR:   Well, it may be, but I can act in this application on what I have in front of me.  Now, at the point of an application for special leave we do not get the file transmitted.  The file is transmitted if leave to appeal is granted.  So this Court does not have the file in the court below.  I for the moment, I think, have to be confined to what is revealed by the material filed in this Court.  In the end, however, whether or not this is new material may or may not present some Mickelberg point, may or may not present some point about the capacity of this Court to receive new evidence on appeal. 

Let us leave that aside for the moment, assume there is no such problem standing in the way of Mr Norman, that is to say, make the assumption that favours Mr Norman.  It may be dubious but make it.  He says that lately received is material which shows that the bank acted on assertions about assets and income and liabilities which were not right.  Now, assume that can be demonstrated, what is the legal consequence that follows if that were to be demonstrated?

MR SEGAL:   In assuming that that can be demonstrated, the first matter here is that – confining myself to Mr Norman’s affidavit, he has signed all of the loan application documentation and so that there is no allegation that this document was a blank document which he signed, which was, for example, an allegation made in Tonto Homes.  He has put his name to that document and so must stand behind it.  But putting even that to one side, it still does not alter the premise which your Honour raised to Mr Norman earlier that he has been given a loan, a loan which he used to purchase his property which was secured by a mortgage and which he now does not want to pay back, and it is trite to say that one cannot keep the loan and the property and so, in those circumstances, the ability to enforce the mortgage is not questioned and so the effect is – leaves us with the entitlement of the respondent to enforce its judgment.

HIS HONOUR:   Well, it seems to me that that proposition comes to this.  Application was made, the loan was made, the mortgage was given.  If there were misstatements in the bank’s documents, those misstatements were made by the bank to the bank.  They were not misstatements made by the bank to Mr Norman or Mrs Norman and as I understand it, the proposition that you say follows from that is, well, if the bank misled itself, it misled itself.  It leads to no relevant conclusion.

MR SEGAL:   That is our submission, your Honour.

HIS HONOUR:   Now, Mr Norman also says in slightly different ways, but essentially one point, that the bank manager was obliged not to lend if the borrowers could not afford it.  Now, that has been put in a number of different ways but it is that, look, if the truth had been known, this loan would never have been made.  What, if any, answer does the bank seek to make to that proposition?

MR SEGAL:   Well, accepting that that was correct, which, based on the earlier judgments, is not correct, then it still does not prevent the bank from being repaid because otherwise it would result in the same premise that Mr Norman would have the loan and the property.

HIS HONOUR:   But it would also depend, would it not, upon a premise that one party to a commercial transaction, namely, the bank, owes some duty to look after the interests of the other party to the commercial transaction, namely, the borrower, and it is a very large proposition, I would have thought.

MR SEGAL:   That is a large proposition that would need to be dealt with in – there are circumstances where that proposition may arise.

HIS HONOUR:   I am not sure of that.  I would have thought that, leaving aside the imposition of norms of conduct by the consumer law, the general thesis in Australian commercial transactions is each party looks after itself.

MR SEGAL:   Absolutely, save for the other limited circumstance where, for example, the bank take on the role of fiduciary or some other financial adviser capacity where there is ‑ ‑ ‑

HIS HONOUR:   That was an argument that was current about 20 years ago at the time of the last credit squeeze and it was an argument that, at least in my recollection, did not advance very far.

MR SEGAL:   No, it did not, your Honour.  But that would be ‑ ‑ ‑

HIS HONOUR:   It is a sad commentary when one remembers 20 years ago starting as a judge dealing with such arguments, but there we are, that is beside the point.  Yes, go on.

MR SEGAL:   But these allegations which have flavoured some of the affidavit of predatory lending and the like have been considered by the lower courts in this proceeding.  The allegation has been previously made and considered and the judgments of the court refer to those allegations having been considered and there is no error of law which has been identified by Mr Norman in that regard.  I do not need to take your Honour to the principles of law as outlined in the Burgundy Royale decision.

HIS HONOUR:   No.  I am generally familiar with those.

MR SEGAL:   The similar scenario was presented to the Court of Appeal of Victoria in Palmer v Permanent Custodians.  In that case there had been a default judgment for possession and some similar arguments were made and the court did not consider, leaving aside the question of the merits of any – or prospects of any special leave application, also considered the other questions as well that were referred to, but your Honour has asked me not to address you on those matters.  So in the circumstances we have applications that have been signed by the borrowers, funds have been

advanced and a property purchased secured by a mortgage.  Unless your Honour has anything further, those are my submissions.

HIS HONOUR:   Yes.  Thank you. Yes, Mr Norman, is there anything you want to say in answer to what has been put?

MR NORMAN:   Yes, thank you.  Firstly, your Honour, judgment in the Court of Appeal, there was no statement of the case being dismal.  Due to the fact that there is new evidence that has never been seen by either myself or my wife, I am not quite sure what evidence my learned has suggested has been part of this case all along because all along we have been asking for the evidence and they have yet to provide it.  The other problem that we now have is that the new evidence does have, in fact, blank documents all the way through that application, blank evidence that actually states on that that the bank must ensure that the person going for the loan fills out, which it was not filled out.

HIS HONOUR:   Well, assume all that were to be decided ultimately in your favour.

MR NORMAN:   Yes.

HIS HONOUR:   The bottom line question you have to address can be put colloquially is, so what?  The colloquialism does not help.  What matters is, what is the legal consequence if the bank has, in effect, misled itself?

MR NORMAN: Your Honour, I have got here in regard to the false information, especially when it comes to Part 6-6, Division 2, section 290 of the National Consumer Credit Protection Act 2009, false information:

(1)      A person must not:

(a)in purported compliance with a requirement made under this Chapter; or

(b)in the course of an examination of the person;

give information, or make a statement, that is false or misleading in a material particular.

. . . 

(2)A person must not, at a hearing, give evidence that is false or misleading in a material particular.

For starters, my learned friend has certainly pushed you in a direction that is just not true.  When it comes to unconscionable conduct in connection with a financial service, it can be said that:

(1)A person must not, in trade or commerce, in connection with:

(a)the supply or possible supply of financial services to a person (other than a listed public company); or

(b) the acquisition or possible acquisition of financial services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

. . . 

(3)For the purpose of determining whether a person has contravened subsection (1):

(a)the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

The other issues that we have here is that preliminary assessment of unsuitable of a credit contract for the purposes of the Act, it states:

(1)For the purposes of paragraph 115(1)(c), the licensee must make a preliminary assessment that:

(a)specifies the period the assessment covers; and

(b)assesses whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period.

(2)For the purposes of paragraph 115(2)(a), the licensee must make a preliminary assessment that:

(a)specifies the period the assessment covers; and

(b)assesses whether the credit contract will be unsuitable for the consumer if the consumer remains in the contract in that period.

Furthermore, the reasonable inquiries, et cetera, about the consumer:

(1)For the purposes of paragraph 115(1)(d) or 115(2)(b), the licensee must, before making the preliminary assessment:

(a)make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and

(b)make reasonable inquiries about the consumer’s financial situation; and

(c)take reasonable steps to verify the consumer’s financial situation; and

(d)make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and

(e)take any steps prescribed by the regulations to verify any matter prescribed by the regulations.

Now, under the National Consumer Credit Protection Act 2009, section 125, this part has rules that apply to licensees, rules of law that, as credit providers – and these rules are aimed at better informing consumers and preventing them from being in unsuitable credit contracts. So:

Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.

Division 3 requires a licensee –

being the bank –

before entering or increasing a credit limit of a credit contract, to make an assessment as to whether the contract will be unsuitable.  To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation.  The licensee must give the consumer a copy of the assessment if requested.

Which it has been and denied:

Division 4 prohibits a licensee from entering or increasing the credit limit of a credit contract that is unsuitable for a consumer. 

So I would suggest, your Honour, that in light of my learned friend’s allegations that this has been heard in the courts below, I can honestly say that not one piece of this evidence has had the opportunity of being heard in the court below due to the fact that instead of hearing the material facts of the case, we have, in fact, been fighting the term “summary judgment” and that, your Honour, is not the material facts that are being relied on.  I can also say, your Honour, that the lower courts have, in fact, shown no discipline in having this case given natural justice because from day one we started with a default judgment which was overturned.  We then went to a summary judgment based on whether or not the information in my application was written properly and, furthermore, at no stage were we given the opportunity to have answers for our allegations of fraud from the bank.

So in hindsight, I would suggest that looking back to the case that we have gone through for the last 12 months, no judge has made a decision based on the facts of the case, but, in fact, all judges have made decisions based on whether or not I knew what a summary judgment was and whether or not they applied the rules of the court correct.  Unfortunately for me there has been no part of this case presented to the court in its entirety.  I have certainly never been given an opportunity.  Mr Segal here had three hours to run over the contract with Associate Justice Landsdowne and I had 13 minutes to reply with a 100-page affidavit and counterclaim, and yet 13 minutes later the court was coming to a close and it was all over.  I was not given the same opportunity.  I was literally railroaded into a judgment that I had to appeal immediately and from then it skyrocketed into where it is today.

The fact of the matter is there has been no natural justice so far.  I have now had to rely on the High Court to look at the matter properly and deal with the fact that only two weeks ago this information was presented to us, information that we have never seen, and I can assure you that if this goes to appeal, the information that Mr Segal is asking your Honour to predict based on what he has just now suggested that is in that information from the lower courts, I can now tell you that none of that information is in that as proof or evidence in their application for all these summary judgments.  We have never seen it before. 

The pages on it that they gave to us has new evidence.  We did not just find this new evidence.  It was actually handed to us by then after judgment was made.  That new evidence is actually new evidence.  It has never been seen and it is – what we see as unconscionable is that, as I have

just described in the National Consumer Credit Protection Act, the decisions made by the bank were fraudulent and unconscionable in the reasonings that I have actually put to the court before but been ignored until today where you have given me an opportunity to state the material facts that we are relying on.  My learned friend here seems to be flying by the seat of his pants when it comes to ‑ ‑ ‑

HIS HONOUR:   I do not think we are going to get far by having that kind of ‑ ‑ ‑

MR NORMAN:   No, I am sorry.  I was not being disrespectful ‑ ‑ ‑

HIS HONOUR:   Well, let us just stick to the issues, shall we.

MR NORMAN:   The issue is that my learned friend has just told you that this information has been judged in the lower courts.  I can assure you that none of this information that I am bringing to you has been even considered, let alone judged in the lower courts.  So I do believe that an appeal is necessary due to the fact that this new evidence has a lot to do with the Trade Practices Act that needs to be arbitrated or litigated properly without the necessity of worrying about whether a judge made a mistake or not.  I would rather just look at the material facts of the case.  If that is true, under the National Consumer Credit Protection Act 2009, the bank is therefore in breach of that Act and should be dealt with by hearing the facts that they now want to present. I think I have said it all, your Honour. If your Honour pleases.

HIS HONOUR:   Thank you, Mr Norman. 

MR NORMAN:   Your Honour, just one quick ‑ ‑ ‑

HIS HONOUR:   Yes, Mr Norman.

MR NORMAN:   I will be very quick.  Everything that I have just said to you regarding each Act that I brought up is actually in my affidavit in support of the summons.

HIS HONOUR:   Yes.  I was familiar with that.  Yes.  Thank you.  I am just getting a couple of reports brought in.  It will take a moment.  It will not delay us unduly, I would have thought.

MR NORMAN:   Take your time, your Honour.

HIS HONOUR:   That is one of the privileges of sitting here, that I do.

On 30 November 2011, Associate Justice Landsdowne of the Supreme Court of Victoria gave judgment to National Australia Bank Limited against Matthew Travis Norman and Rebecca Jane Norman for possession of the land described in a particular certificate of title and known as 4 Yorkshire Court, Nerrina, Victoria.  The property is the Normans’ family home.  At the same time, her Honour also gave judgment against Mr Norman in the sum of $516,774.63, ordered costs against the Normans and ordered that all but certain paragraphs of a counterclaim made by Mr Norman should be dismissed.  On 14 December 2011, the Associate Justice ordered that the balance of the counterclaim made by Mr Norman should stand dismissed.

Mr Norman appealed against the judgment and orders given and made by the Associate Justice.  Mrs Norman by then was and remains bankrupt and Mrs Norman has played no active part in the litigation at any relevant stage.  In accordance with the applicable rules of the Supreme Court of Victoria, the appeal brought by Mr Norman against the judgment entered by the Associate Justice was an appeal by way of rehearing afresh.  On 6 February 2012, Justice Judd of the Supreme Court ordered that Mr Norman’s appeal be dismissed with costs.

Mr Norman then sought leave to appeal to the Court of Appeal of the Supreme Court of Victoria against the orders made by Justice Judd.  On 18 May 2012, the Court of Appeal, Chief Justice Warren and Justice Harper, ordered that the application be dismissed with costs.  Chief Justice Warren, who gave the principal reasons in the Court of Appeal, concluded that, in her view, Mr Norman did not make out an arguable case of error in the judgment of Justice Judd.

On 16 July 2012, Mr Norman filed an application for special leave to appeal to this Court against the whole of the judgment and orders of the Court of Appeal.  His application for special leave to appeal being filed out of time, he seeks an extension of time within which to make that application for special leave.  For present purposes, it is convenient to leave aside from consideration any difficulty that may be presented by the application being made beyond the time prescribed by the rules.

By summons dated 16 July 2012, Mr Norman applies for orders which, in effect, would stay the operation of the judgment for possession of the land pending the hearing and determination of his application for special leave to appeal.  His summons also seeks orders granting him special leave and orders setting aside the judgment of the Court of Appeal, but, as explained in the course of oral argument, those are matters which are appropriately considered by the Full Court that hears and determines the application for special leave and attention has been confined in argument to the question whether Mr Norman should have a stay of execution of the judgment which was given in the Supreme Court of Victoria that the bank should have possession of the land.

It is to be observed that the judgment obtained by the bank at first instance was affirmed on appeal by way of rehearing by a single judge of the Supreme Court and that that judgment was not disturbed on application for leave to appeal to the Court of Appeal.  The immediate question for my determination is whether the bank should now be denied enforcement of that judgment pending the hearing and determination of Mr Norman’s application for special leave.

In his affidavit in support of his application for a stay, Mr Norman referred to the well-known decision of Justice Brennan in Jennings Construction Limited v Burgundy Royale Investments Pty Limited (No 1) (1986) 161 CLR 681. There it will be recalled that Justice Brennan said, at 683, that:

The jurisdiction to grant a stay [in that case] depends on whether a stay is necessary to preserve the subject-matter of the litigation.  If an application for special leave to appeal would be futile unless a stay is granted, the jurisdiction arises.

This is a case in which it may fairly be said that the application for special leave to appeal would be rendered futile if a stay is not granted.  Justice Brennan also pointed out in Jennings Construction, at page 684, that:

A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted.  If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal.

It is against this background that Justice Brennan observed, at 685, that:

In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court’s discretion.  In each case when the Court is satisfied a stay is required to preserve the subject-matter of the litigation, it is relevant to consider:  first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.

As I understand it, Mr Norman has not applied to the Court of Appeal for an order staying the effect of the judgment entered by the Associate Justice and affirmed by Justice Judd.  Mr Norman says in his affidavit that, as he understood the position, the Court of Appeal had made it clear that “the applicant could not apply in the Court of Appeal for a stay pending further action.”  It may be doubted whether that accurately records the position that obtained in the Court of Appeal, but for present purposes it is convenient to put aside from further consideration the absence of application for stay to the Court of Appeal.  Instead, it is better to focus on the first of the four questions identified by Justice Brennan in Burgundy Royale, namely, whether there is a substantial prospect in this case that special leave to appeal would be granted.  It was to that question that I directed the parties to address their oral submissions.

That being the issue for consideration on this application for stay, it is necessary to identify more closely the grounds on which the application for special leave to appeal is founded.  Though expressed more discursively in the application for special leave, I would understand from Mr Norman that he seeks to make complaints centring upon two different but related and cumulative points.  First he submits that he has at all times during the pendency of this litigation in the Supreme Court sought and been denied access to the documents held by the bank in connection with the loan that was the subject of the security given by the Normans over their home.  Mr Norman seeks to characterise the refusal of the bank to grant access to these documents, until as recently as two weeks ago, as being both unconscionable and either fraudulent or evidence of fraudulent conduct by the bank.

The second foundation of his application for special leave is that the documents recently produced show, he would submit, a number of deficiencies which demonstrate fraud or unconscionable conduct by the bank.  Those deficiencies centre upon what are said to be misstatements in application and supporting documents concerning the assets and liabilities and income and expenditures of Mr and Mrs Norman.  He submits that the bank made these misstatements, in effect to itself, without his knowledge or approval and that the loan, which is the subject of the security now in question, was made by the bank only because it thus misled itself about the capacity of the Normans to repay the loan.

He put the point in the course of oral argument in a number of different ways but to substantially no different effect.  He said that the documents were such that, had the true position been known, the Normans’ loan application should have been rejected.  He said that the documents demonstrated that the bank had “unconscionably” given a loan to the Normans that the bank should not have given.  He said that the bank, and personalising the point, the relevant bank manager, was obliged not to lend to them if they could not afford the loan and he emphasised in the course of his argument that these were matters of which the Normans did not know and of which they could not have known but for the late production of the documents.

Accordingly, so he submits, the proceedings that have been undertaken thus far have denied him, and I assume he would add his wife, natural justice because the proceedings have been undertaken to the point of entry of judgment against him not being based on what he would identify as being the relevant and important facts of the case.  He says that at no point in the litigation below has he been able to present the case he would now seek to raise because he submits the documents upon which that case depends have been only recently made available to him.

Several points must be made about these submissions.  First, the bank would, as I understand it, seek to dispute the accuracy of some, at least, of the assertions of Mr Norman about what documents were available to him during the litigation.  That is a controversy upon which I have not embarked.  I am prepared to dispose of the present matter on the footing that Mr Norman’s allegations are to be accepted.  I do note, however, that they are matters of some controversy. 

Second, and not unimportantly, there may be a very real and lively question whether on an appeal to this Court (were special leave to appeal to be granted) it would be open to an appellant to adduce evidence in this Court that was not evidence in the court below.  This Court has more than once considered this issue, more often than not in the context of criminal proceedings, and it is established that because this Court’s jurisdiction on appeal is to make such order as the intermediate court should have made on the material before it, it is not open to this Court to receive evidence which was not before the court from which the appeal is brought.  Reference may be made in this regard to Eastman v The Queen (2000) 203 CLR 1 and Mickelberg v The Queen (1989) 167 CLR 259.

Again, however, it is convenient to put this obstacle to one side in considering what order should now be made.  In doing so, I am not to be taken as indicating either that there is no obstacle or that it may not be a very large obstacle in the way of Mr Norman advancing his case in the fashion in which he would seek to do so.  Rather, it is better to deal with the submissions made by Mr Norman by making two observations. 

First, that Mr Norman did not have discovery of documents before the application for summary judgment was considered is anything but unusual.  It is commonplace for applications for summary judgment to be determined at a point in the proceedings before any of the otherwise ordinary interlocutory processes of the court have been pursued.  Indeed, the whole purpose of the summary judgment jurisdiction is to deal with cases of a kind where the undertaking of further interlocutory processes would not be an efficient use of either the Court’s or the parties’ time and money.  Thus, the procedural circumstances that attend this case are in no way unusual.

The second point to be made in respect of Mr Norman’s submissions is more fundamental.  The submissions which he makes do not answer, as it seems to me, the bank’s fundamental contentions that:  application was made for a loan; the borrowers are not shown to have been misled in making that application; the loan was made; the mortgage was given in support of the loan; the loan has not been repaid; the holder of the security is therefore entitled to realise on its security. 

Mr Norman seeks to characterise the bank’s conduct as fraudulent or deceptive or unconscionable, but his case is founded on the proposition that what he now identifies to be misstatements, inaccuracies, untruths found in the bank’s documents are matters of which neither he nor his wife were aware before the loan was made, when it was made or when the security was given.  That is, it is the essence of his case that these misstatements, deceptions, untruths, if that is what they are, were not communicated to him until after judgment had been given. 

In my opinion, his prospects of obtaining special leave to appeal to this Court against the judgment of the Court of Appeal of Victoria are not sufficient to warrant interception or interruption of the execution of the judgment that has been given.  The application for stay is dismissed.  Costs of the application for stay I think should properly be made costs in the application for special leave.  There will be orders in those terms.  Adjourn the Court.

AT 10.55 AM THE MATTER WAS ADJOURNED