Popal v Accounts Control Management Services Pty Ltd

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

No. 1285 of 2010

KABIR POPAL AND NADERA POPAL	Appellants
v
ACCOUNTS CONTROL MANAGEMENT SERVICES PTY LTD ACN 050 268 141	First Respondent
and
NATIONAL AUSTRALIA BANK LTD	Second Respondent

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 August 1010
DATE OF JUDGMENT:	14 September 2010
CASE MAY BE CITED AS:	Popal v Accounts Control Management Services Pty Ltd
MEDIUM NEUTRAL CITATION:	[2010] VSC 412

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MAGISTRATES’ COURTS – Application for leave to appeal out of time – Whether exceptional circumstances – Exercise of discretion – Leave to appeal granted. 

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Dr C Parkinson	Hambros & Cahill Lawyers
For the First Respondent	Mr N Frenkel	Cornwall Stodart Lawyers
For the Second Respondent	Mr A Segal	Thompson Playford Cutlers

TABLE OF CONTENTS

Parties and Introduction.................................................................................................................. 2

Applicable legal principles.............................................................................................................. 4

Have exceptional circumstances been demonstrated?.............................................................. 7

Will the grant of leave cause material prejudice?....................................................................... 9

Should the Court exercise its discretion to grant leave?........................................................... 9

HIS HONOUR:

Parties and Introduction

1. In 2003 the applicants, Kabir Popal and his wife, Nadera Popal, conducted a business at the Victoria Market selling marble tiles, water fountains and Persian handcrafts.  To enable them to conduct their business, they maintained a business cheque account with an overdraft facility, and a merchant facility, with Westpac Banking Corporation. 

1. The merchant facility enabled them to process credit card transactions in the course of their business.  Under that facility, Westpac could debit their cheque account with the amount of disputed transactions in certain circumstances, such debits being described in the facility documentation as ‘chargebacks’. 

1. Mr and Mrs Popal also maintained a personal account with the second respondent, National Australia Bank.  This personal account had no overdraft facility, and had never been overdrawn.  In circumstances which are not presently relevant, Mr Popal signed a direct debit request in favour of Westpac, authorising National Bank to debit the personal account with adjustments, fees and chargebacks due to Westpac under the merchant facility. 

1. On 3 November 2003, Westpac called on the direct debit authority for an amount of $19,634, in respect of chargebacks allegedly due under the terms of the merchant facility.  National Bank honoured the call and the resulting debit placed Mr and Mrs Popal’s personal account into overdraft in the sum of $17,932. 

1. Mr and Mrs Popal did not pay the overdraft amount.  With overdraft interest and bank fees, the debt grew to $28,761.  The overdraft debt was assigned to the first respondent, Accounts Control Management Services Pty Ltd.  Accounts Control then commenced proceedings in the Magistrates’ Court against Mr and Mrs Popal, seeking to recover the whole of the overdraft debt. 

1. Mr and Mrs Popal contended in the Magistrates’ Court that their direct debit request did not authorise National Bank to debit their personal account with any amount which would place the account in overdraft.  Further they denied that Westpac had been entitled…