Renouf v RAC Finance Limited
[2017] FCCA 142
•31 January 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RENOUF v RAC FINANCE LIMITED | [2017] FCCA 142 |
| Catchwords: JURISDICTION – Whether matter a small claims proceeding – where injunction sought in relation to earlier order of the Magistrates Court – whether injunction available in a small claims proceeding. PRACTICE AND PROCEDURE – Injunction sought in relation to order of Magistrates Court – whether power to issue injunction under relevant legislation. PRACTICE AND PROCEDURE – Interlocutory application seeking leave to be represented by a lawyer – factors for consideration as to whether lawyer to be granted leave to represent a party in small claims proceedings – whether issues factually or legally complex – whether lawyers having previously dealt with matter in the Magistrates Court and District Court might assist the Court – complexity arising from prior proceedings in the Magistrates Court and District Court – whether any form of estoppel arises – whether Court has power to issue an injunction in relation to Magistrates Court order dismissing an application to set aside summary judgment in favour of the respondent – whether complexity arises from numerous matters required to be considered as to whether the credit contract was unjust – whether respondent employs persons able to appear in small claims proceedings – whether respondent’s external lawyers fit and proper to be granted leave to appear. CORPORATIONS – Delegation of power by board of directors – whether power to delegate extends to authorisation to make affidavits. WORDS AND PHRASES – “public interest”. |
| Legislation: Australian Consumer Law, Pts.2-1 & 2-3 |
| Cases cited: Cangemi v Specialist Diagnostic Pathology Services Pty Ltd T/as Western Diagnostic Pathology [2014] FCCA 187 D Ipp “Lawyers Duties to the Court” (1998) 114 LQR 63 |
| Applicant: | BRENT PHILIP RENOUF |
| Respondent: | RAC FINANCE LIMITED |
| File Number: | PEG 392 of 2016 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 10 November 2016 |
| Date of Last Submission: | 10 November 2016 |
| Delivered at: | Perth |
| Delivered on: | 31 January 2017 |
REPRESENTATION
| For the Applicant: | In person |
| Counsel for the Respondent: | Mr T P Stott |
| Solicitors for the Respondent: | P A Martino |
DECLARATION AND ORDERS
The Court declares that these proceedings are not small claims proceedings under s.199 of the National Consumer Credit Protection Act 2009 (Cth).
If, contrary to the declaration in (1) above these proceedings are small claims proceedings under s.199 of the National Consumer Credit Protection Act 2009 (Cth), then pursuant to s.199(7) of the National Consumer Credit Protection Act 2009 (Cth) and r.46.4 of the Federal Circuit Court Rules 2001 (Cth) the Court grants leave for the respondent in these proceedings to be represented by a lawyer.
Costs reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 392 of 2016
| BRENT PHILIP RENOUF |
Applicant
And
| RAC FINANCE LIMITED |
Respondent
REASONS FOR JUDGMENT
Application in a Case
Before the Court is an Application in a Case filed 27 September 2016 by which the respondent, RAC Finance Limited (“RAC Finance”) seeks leave to be represented in these proceedings by a lawyer. The Application in a Case is opposed by the applicant, Brent Philip Renouf (“Mr Renouf”).
Originating Application
The Originating Application is made in the Court’s jurisdiction under the National Consumer Credit Protection Act 2009 (Cth) (“NCCP Act”) under which Mr Renouf seeks orders pursuant to s.76(2) of the National Credit Code (“NC Code”), that being Schedule 1 to the NCCP Act, to reopen a credit contract, and an order under s.177 of the NCCP Act for an injunction upon an order obtained by RAC Finance from the Magistrates Court of Western Australia (“Magistrates Court”) on 9 March 2015.
RAC Finance opposes the Originating Application.
Leave for a lawyer to represent a party
The need for leave for a lawyer to represent RAC Finance arises because the Originating Application is said to be made as a small claims proceeding in this Court’s jurisdiction under the NCCP Act. In particular, s.199(7)-(9) of the NCCP Act provides as follows:
(7) A party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.
(8) If the court grants leave for a party to theproceedings to be represented by a lawyer, the court may, if it considers appropriate, do so subject to conditions designed to ensure that no other party is unfairly disadvantaged.
(9) For the purposes of this section, a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.
Rule 46.4 of the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”) is headed “Lawyers – National Consumer Credit Protection Act small claims proceeding” and provides as follows:
(1) A party to a small claims application may not be represented by a lawyer without the leave of the Court.
(2) If the Court grants a party leave to be represented by a lawyer, the leave may be given subject to conditions the Court considers appropriate.
(3) For subrule (1), a party is not taken to be represented by a lawyer if the lawyer is an employee or officer of that party.
From the Court’s research it does not appear that s.199(7)-(9) of the NCCP Act or r.46.4 of the FCC Rules have been the subject of any reported or published judgments.
The Court notes however that s.199(7)-(9) of the NCCP Act is in identical terms to s.548(5)-(7) of the Fair Work Act 2009 (Cth) (“FW Act”). Further, r.46.4 of the FCC Rules is in identical terms to r.45.13 of the FCC Rules. Therefore, any judgments in relation to s.548(5)-(7) of the FW Act and r.45.13 of the FCC Rules will be both relevant and persuasive in relation to the proper interpretation of s.199(7)-(9) of the NCCP Act and r.46.4 of the FCC Rules respectively.
The Court also notes that:
a)section 44 of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”) provides as follows:
A party to a proceeding before the Federal Circuit Court of Australia is not entitled to be represented by another person unless:
(a) under theJudiciary Act 1903 , the other person is entitled to practise as a barrister or solicitor, or both, in a federal court; or
(b) under the regulations, the other person is taken to be an authorised representative; or
(c) another law of the Commonwealth authorises the other person to represent the party.
b)rule 9.04 of the FCC Rules provides as follows:
Except as provided by or under an Act or regulations made under an Act, or with the leave of the Court, a corporation may not start or carry on a proceeding otherwise than by a lawyer.
Law – relevant cases
As indicated above it appears that there are no reported or published judgments in relation to s.199(7)-(9) of the NCCP Act or r.46.4 of the FCC Rules. There are, however, reported judgments in relation to s.548(5)-(7) of the FW Act and r.45.13 of the FCC Rules (formerly, and at the time of the reported judgments, the Federal Magistrates Court Rules 2001 (Cth) (“FMC Rules”)).
In McShane v Image Bollards Pty Ltd [2011] FMCA 215; (2011) 206 IR 239 (“Image Bollards”) the Federal Magistrates Court having set out the relevant provisions of s.548(5)-(7) of the FW Act, s.44 of the FCCA Act, and rr.9.04 and 45.13 of the FMC Rules, observed at [39] per Lucev FM that:
Section 548(5) of the FW Act prevails over s.44 of the FM Act and r.9.04 of the FMC Rules in relation to the appearance of lawyers in this Court.
In Hughes v Mainrange Corporation Pty Ltd [2009] FMCA 1025; (2009) 190 IR 191 (“Mainrange Corporation”) the Federal Magistrates Court took into account, in granting leave for a lawyer to appear in small claims proceedings under the FW Act, that:
a)the nature of the issue to be determined was a pure legal issue, that is jurisdiction; and
b)that a lawyer, by reason of training and expertise, ought to have the ability to provide the Court with the appropriate and logical arguments based on research to be of assistance to the Court in a case where a legal issue of that type (namely jurisdiction) arose.
Mainrange Corporation at [2]-[3] per Lucev FM.
Mainrange Corporation was referred to in Li v Zheng Min-Seng & Ors [2010] FMCA 344 (“Li”) where leave was granted for a lawyer to appear, in a matter where the jurisdictional ceiling on the Federal Magistrates Court’s ability to make orders under s.548 of the FW Act was raised: Li at [15]-[16] per O’Sullivan FM.
In Corcoran v Bansley Pty Ltd [2011] FMCA 440; (2011) 250 FLR 323; (2011) 210 IR 284 (“Corcoran”) the then Federal Magistrates Court dealt with a matter where the Court allowed leave for a non-lawyer to appear for a corporation where the matter concerned:
… contractual and statutory interpretation matters of some complexity, but … at the lower to mid end of complexity … [and] sufficiently complex that, were it sought, the Court would presently be minded to grant leave to lawyers to appear for the parties. That said the matter is not sufficiently complex to deny an experienced industrial advocate … leave to represent … [the corporate respondent].
Corcoran at [28] per Lucev FM.
In Transport Workers’ Union of Australia v Transit Systems WA Pty Ltd [2012] FMCA 637; (2012) 224 IR 436 (“Transit Systems”) the Federal Magistrates Court had regard to the fact that there were complex, or relatively complex, legal issues arising which would ordinarily support the grant of leave for a lawyer in small claims proceedings under the FW Act, namely the interpretation of the provisions of criminal record checking provisions of working with children legislation, the interpretation of a clause of a collective agreement involving compliance with legislation and regulations governing the driving of public passenger vehicles, and an issue as to whether there had been observance of and compliance with lawful directions given by an employer, those being matters which might also be raised by the employee’s contractual provisions, and the interpretation of the stand down provisions of the FW Act: Transit Systems at [2]-[3] per Lucev FM. In Transit Systems it was also relevant that an employee of the union (which was the other party), who was appearing by reason of the fact that he was an employee of the union, was also a lawyer with considerable experience: Transit Systems at [4]-[5] per Lucev FM.
In Cangemi v Specialist Diagnostic Pathology Services Pty Ltd T/as Western Diagnostic Pathology [2014] FCCA 187 (“Cangemi”) this Court granted leave for a lawyer to appear because there was sufficient complexity involving the interpretation of a collective agreement, and the interpretation of, and interaction between, that collective agreement and the contract of employment, and serious issues as to whether the employee had repudiated the contract or whether the employee was terminated by the employer, and whether the employee resigned and whether the employee was made redundant: Cangemi at [6] per Judge Lucev.
In Whitfield v One Key Resources Pty Ltd [2014] FCCA 553; (2014) 285 FLR 416; (2014) 241 IR 472 (“One Key Resources”) this Court ultimately determined the matter was not a small claim, and therefore the respondent was entitled to appear by its lawyers, but in the course of hearing, and assuming that leave was required under s.548(5) of the FW Act, the Court granted leave to the respondent’s lawyers to appear at hearing because:
a)there was a technical legal issue as to whether the matter was a small claims matter or a general protections court claim;
b)if the matter was a general protections court claim, there was a necessity to address specific factors in relation to any exercise of discretion by the Court to extend time;
c)the self-represented litigant, had not addressed those factors because he had not filed an outline of submissions, and had therefore not provided any assistance to the Court in advance of the hearing with respect to addressing those factors, that being the purpose for which an outline of submissions was ordered to be filed;
d)the lawyers for the respondent had filed submissions, addressing the relevant factors concerning an extension of time, and thereby provided assistance to the Court in respect to addressing those factors, and the Court was likely to be assisted by the appearance of lawyers for the respondent in the proceedings, both in relation to the specific technical legal issue which arose, and more generally in relation to the consideration of the extension of time factors; and
e)were leave to have been refused, the Court may have been left with no assistance from the parties in relation to the specific technical issue, or the relevant factors concerning an extension of time.
One Key Resources at [6]-[7] per Judge Lucev.
It can be discerned from the above judgments of the Federal Magistrates Court and this Court that factors relevant to a consideration of whether a lawyer should appear in small claims proceedings under the NCCP Act include:
a)matters involving complexity in the interpretation of statutes (and regulations), quasi legislative instruments (such as industrial awards) and contracts;
b)matters involving complexity in relation to the interaction between any one or more of statutes, quasi legislative instruments and contracts;
c)a pure legal issue, such as whether the jurisdiction of the Court is invoked;
d)whether lawyers, by reason of their training and expertise, might, in a matter of sufficient complexity, be of assistance to the Court; and
e)where a person appearing for another party as a director or employee is also a lawyer.
The Court also accepts that there may be circumstances in which lawyers for a party who have been involved in ongoing or prior litigation of a similar kind, or which involves the same or similar facts, might be granted leave to appear on the basis of:
a)the complexity of both legal and factual matters arising from the ongoing or prior litigation;
b)because their involvement in the ongoing or prior litigation puts them in a position to be of assistance to the Court; and
c)the party does not have an in-house lawyer, or an in-house lawyer or employee, capable of conducting the matter before the Court.
It also follows from the provisions of s.199(7) of the NCCP Act that it prevails over s.44 of the FCCA Act and r.9.04 of the FCC Rules in relation to the appearance of lawyers in this Court: Image Bollards at [39] per Lucev FM.
Relevant factual material
The relevant factual material is set out below.
Credit contract entered into
On 3 April 2012 Mr Renouf contacted RAC Finance via an online service to enquire about a personal loan. Ultimately, he was advised that RAC Finance were willing to provide him with a $10,000 personal loan.
On 2 May 2012 Mr Renouf attended the Mandurah branch office of RAC Finance to sign documents which included a credit contract. Mr Renouf alleges that he signed the credit contract, and that it was only after he had done so, that he was given an Information Statement. It is this alleged action of giving Mr Renouf the Information Statement after he had signed the credit contract which Mr Renouf alleges is in breach of s.16(1)(b) of the NC Code, and which he says justifies the Court reopening his credit contract as an unjust transaction under s.76(2) of the NC Code.
Magistrates Court claim by RAC Finance
On 11 September 2012 RAC Finance lodged a claim in the Magistrates Court claiming an amount of $11,657.64 ($10,846.00 exclusive of various fees) as a consequence of Mr Renouf allegedly defaulting on the terms of the credit contract, and the total sum of the credit contract thereby being repayable in full.
On 29 October 2014 the Magistrates Court made a general order in the following terms:
1.The Claimant shall lodge and serve a Form 19 Statement of General Procedure Claim within 14 days.
2.The Defendant shall lodge and serve a Form 21 Statement of Defence to General Procedure Claim within 14 days of service of Statement of General Procedure Claim.
3.The parties to exchange lists under oath of all documents that are or have been in the respective power, possession or custody relating to the matter at issue in this action by 5 December 2014.
4.Each Party to lodge with the Court a Listing Conference Memorandum on or by 30 January 2015 and to provide to the Court unavailable dates for attendance at such Conference by the same date.
Summary judgment in the Magistrates Court
On 3 November 2014 RAC Finance obtained summary judgment against Mr Renouf in the Magistrates Court. Mr Renouf did not appear at the hearing of the summary judgment application, and asserts that it was unclear to him whether he was required to attend the summary judgment hearing, which seemingly had been listed sometime previously as a consequence of an application by RAC Finance for summary judgment. Mr Renouf says he was unclear in relation to whether he needed to appear at the summary judgment hearing because of the orders made by the Magistrates Court on 29 October 2014, and by a refusal of a Registrar of the Magistrates Court to confirm or otherwise at a 29 October 2014 pre-trial conference whether Mr Renouf was required to attend on the hearing of the summary judgment application.
Magistrates Court set aside application
Sometime later in November 2014 Mr Renouf made an application to have the summary judgment set aside.
Submissions were filed by each of RAC Finance and Mr Renouf in relation to the set aside application. RAC Finance filed two sets of written submissions. RAC Finance’s first set of submissions on the set aside application run to 10 pages. RAC Finance’s second set of legal written submissions run to some seven pages. In addition to dealing with the circumstances in which the Magistrates Court came to make the summary judgment order, and as part of its opposition to the summary judgment order being set aside, RAC Finance made submissions in relation to the merit of Mr Renouf’s defence to RAC Finance’s claim. RAC Finance’s submissions deal with matters such as:
a)Mr Renouf’s claim of undue influence alleged to have been exercised by RAC Finance over Mr Renouf in entering into the credit contract, and sets out the law in relation thereto, as well as dealing with the question of whether actual undue influence arose when the credit contract was signed. The Court notes that the claim of undue influence was raised by Mr Renouf as part of his application to set aside the summary judgment;
b)Mr Renouf’s claim that RAC Finance committed misleading or deceptive conduct under the Australian Consumer Law (“ACL”) by failing to provide any pre-disclosure in relation to the credit contract, that also being a claim raised by Mr Renouf as part of his application to set aside the summary judgment. RAC Finance submitted that the Magistrates Court was not a court of competent jurisdiction in relation to misleading or deceptive conduct under the ACL, as only the federal courts, and the Supreme Court of Western Australia invested with federal jurisdiction, were courts of competent jurisdiction in relation to remedies for the alleged contravention of the ACL: citing Competition and Consumer Act 2010 (Cth), s.86 (“C&C Act”) and the ACL, Part 2-1;
c)an allegation by Mr Renouf which alleged breach of the unfair contract terms of the ACL, which RAC Finance submitted was misconceived and without merit by reason of it not being brought in a court of competent jurisdiction, and because the unfair contract terms of the ACL relate to unfair terms in consumer contracts and not statements in pre-disclosure documents: citing ACL, Part 2-3; and
d)in relation to penalties sought by Mr Renouf, RAC Finance again said that this was misconceived and without merit because only the federal courts, and not the Magistrates Court had jurisdiction to impose penalties for breach of the NC Code.
RAC Finance’s submissions also deal with an issue raised by Mr Renouf as to the enforceability of the credit contract by reason of the non-provision of the Information Statement prior to the credit contract being signed. Those submissions deal with significant questions as to borrower’s rights pursuant to s.16 of the NC Code and reg.70 of the National Consumer Credit Protection Regulations 2010 (Cth) and the nature of the remedy available in the event of a contravention of the disclosure requirements under the NC Code. Furthermore, there are clearly factual issues which arise from the submission in relation to the alleged signing by Mr Renouf of an express acknowledgement of receipt of the Information Statement, that acknowledgement being part of the credit contract, as well as other acknowledgements in relation to the nature of the arrangements being entered into. The submissions also raise the issue of the claim being a common law contractual claim rather than a claim arising under the NCCP Act. Significant issues as to the appropriate remedies are also raised, given that the loan of $10,000 was advanced, and had not been paid back.
Mr Renouf also provided the Magistrates Court with written submissions on the application to set aside the summary judgment. Those submissions run to seven typed pages. The nature of them can be deduced from the Court’s summary of RAC Finance’s submissions on the set aside application which are summarised above: see [27]-[28] above.
On 9 March 2015 the application by Mr Renouf to set aside the summary judgment was heard by the Magistrates Court. The Transcript of the Magistrates Court hearing on 9 March 2015 is at annexure BPR-07 to Mr Renouf’s affidavit sworn 22 August 2016. Early in those proceedings the presiding Magistrate observed that the matter “has got quite a history” and that “the proceedings were lodged on 11 September 2012 so that’s more than – it’s about 2 ½ years ago they started. And it’s unusual for this court’s files to go into multiple volumes. This has.”: Transcript, Magistrates Court, 9 March 2015, page 3. It is plain from an examination of the Transcript of the set aside application that:
a)the set aside proceedings were stayed for some time whilst the Financial Ombudsman dealt with a claim made by Mr Renouf in relation to these matters; and
b)there were a significant number of interlocutory processes which engaged the attention of the Magistrates Court during the almost two and a half years between the set aside application being made and it being heard.
Ultimately, the Magistrates Court dismissed the application to set aside the summary judgment, and in doing so concluded that:
a)there was no dispute that Mr Renouf had signed the relevant credit contract, and that the loan money was transferred to him, and that no repayments had been made: Transcript, 9 March 2015, page 57;
b)Mr Renouf had failed to put forward a reasonable defence on the merits to the claim made by RAC Finance: Transcript, 9 March 2015, page 58;
c)to the extent that there had been breaches of any relevant federal credit legislation that did not make the credit contract unenforceable: Transcript, 9 March 2015, page 58;
d)whether or not Mr Renouf wanted to pursue the matter in another court (namely a federal court) did not justify a setting aside of the summary judgment: Transcript, 9 March 2015, page 58;
e)the credit contract was not unusual, and was in fact fairly standard, and that Mr Renouf could not point to anything in particular which might show that he was actually misled or that the position might have been different from that which was told to him, and was therefore not satisfied that there was any misleading or deceptive conduct on the part of RAC Finance which misled Mr Renouf into signing the credit contract: Transcript, 9 March 2015, page 59; and
f)there was no arguable defence on the merits, and the application to set aside the summary judgment was dismissed: Transcript, 9 March 2015, page 59.
Magistrates Court stay application
Subsequently, Mr Renouf applied for a stay of the judgment of the Magistrates Court to dismiss the application to set aside the summary judgment. The stay application was heard by a Registrar of the Magistrates Court. The Registrar observed that Mr Renouf had “lodged about three or four sets of submissions” and that RAC Finance had lodged submissions in response: Transcript, 22 December 2015, page 5. What orders, if any, issued with respect to the stay application is not apparent from the papers filed with this Court.
The District Court appeal
Mr Renouf filed an appeal with the District Court of Western Australia (“District Court”) against the judgment of the Magistrates Court dismissing his application to set aside the summary judgment. The District Court judgment was delivered extempore on 16 June 2016. It is evident that there had been a relatively lengthy hearing, as the extempore judgment commences at page 137 of the relevant transcript. The District Court observed, almost immediately, that the “proceedings have a protracted history”: Transcript, 16 June 2016, page 137.
The District Court refused an application by Mr Renouf to extend time within which to appeal, and held that:
a)Mr Renouf had not provided a reasonable explanation for a significant delay (of 210 days) in filing the appeal;
b)the appeal had no prospects of success;
c)RAC Finance would suffer not insignificant prejudice and ought to be able to get on with its business;
d)Mr Renouf had deliberately misused the Court’s process because the primary purpose of the appeal was to improve the prospects of his stay application in the Magistrates Court; and
e)Mr Renouf would suffer no real prejudice as he can still pursue his alleged claims against RAC Finance for alleged breaches of federal credit protection legislation.
Transcript, 16 June 2016, page 143.
An application to amend the appeal notice out of time was also dismissed, with the District Court finding that the proposed amended appeal grounds had no prospect of success: Transcript, 16 June 2016, page 145.
The District Court found that if what the Magistrates Court had held was that it did not have jurisdiction to deal with the federal credit legislation contraventions alleged by Mr Renouf, then that finding would be incorrect: Transcript, 16 June 2016, page 146. The District Court went on to find however that Mr Renouf had sought the imposition of civil or criminal pecuniary penalties in his application to the Magistrates Court, and to have any penalties set-off against a proposed set-off or counterclaim in the Magistrates Court proceedings, which the District Court found was not a matter in relation to which the Magistrates Court had jurisdiction. This finding is set out in a lengthy summary of the relevant law at Transcript, 16 June 2016, pages 147-149. The District Court went on to find that the proposed amended grounds of appeal had no merit in any event, and dismissed the appeal: Transcript, 16 June 2016, pages 149-154.
The Originating Application
On 23 August 2016, more than two months after the District Court appeal was dismissed, the Originating Application was filed.
The final orders sought by Mr Renouf in the Originating Application are as follows:
1. An order pursuant to s76 (2) of the National Credit Code (“the Code”) being Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth) to reopen the credit contract as being unjust due to:
a. The Information Statement being withheld from the Applicant before signing the contract.
b. The Information Statement was only supplied to the Applicant after the supplied paperwork from the Respondent was signed.
2. An order pursuant to s177 of the National Consumer Credit Protection Act 2009 (Cth) for an injunction to the Magistrate Court order obtained by the Respondent on the 9th March 2015, as the respondent's legal counsel denied the Applicant's National consumer protection rights from being heard in the Magistrate court as;
a. It was successfully submitted to the Magistrate court by the Respondent's legal counsel that the contract before the court was a common law contract, and,
b. The contract was not a regulated contract, and,
c. The Magistrate court did not have the jurisdiction to deal with the NCCPA and the NCC, and,
d. The Applicant would have to have his defences heard in a court with the competent jurisdiction namely the Supreme Court of the state or the Federal Court.
3. Such further or other orders as the court considers appropriate.
Mr Renouf also seeks interlocutory relief by way of an injunction, under s.177 of the NCCP Act to suspend the order made by the Magistrates Court on 9 March 2015.
The grounds of the application assert that the credit contract was entered into in circumstances where RAC Finance is the holder of an ASIC approved credit licence, the credit contract is regulated by the NCCP Act, and Mr Renouf was not given the required Information Statement before he entered into the credit contract.
Mr Renouf alleges a breach of s.16(1)(b) of the NC Code by reason of the Information Statement, and further binding terms, not being provided to him until after he had signed the credit contract, and asserts that he is able to use s.76(2) of the NC Code to have the Court reopen the credit contract as an unjust transaction.
The Originating Application is opposed by RAC Finance on the following bases:
1. The respondent opposes order 1 as sought by the applicant in the application dated 26 August 2016 (“Application”) on the bases that:
(1) the contract between the respondent and the applicant entered into in May 2012 is not an unjust contract; and
(2) the applicant is precluded from bringing the Application pursuant to s 80(1) of the NCCPA.
2. The respondent opposes order 2 as sought by the applicant in the Application on the bases that:
(1) the applicant's application is misconceived as the applicant seeks an injunction in respect of an order made by the Magistrates Court; and
(2) the respondent has not engaged and not proposing to engage in conduct that would constitute one of the matters specified in s 177 of the NCCPA on which an injunction can be ordered.
Affidavits in relation to the Application in a Case
RAC Finance has filed two affidavits in support of the Application in a Case.
The first of RAC Finance’s affidavits is that of Timothy Paul Stott sworn 23 September 2016 (“Mr Stott’s Affidavit”). Mr Stott is employed as a lawyer in the office of RAC Finance’s external lawyers.
Mr Stott’s Affidavit indicates that RAC Finance’s present lawyers have acted for RAC Finance in the proceedings in both the Magistrates Court and the District Court in the proceedings referred to above, and that Mr Stott has had the general carriage of those matters under the supervision of his principal: Mr Stott’s Affidavit at [4]-[5].
At [6] of Mr Stott’s Affidavit he sets out why it is that RAC Finance seeks leave to be represented by a lawyer in these proceedings, as follows:
6. The respondent seeks that the parties, or at least the respondent, have leave to be represented by a lawyer in these proceedings for the following reasons:
(1) the applicant's application in these proceedings (“Application”) relates directly to the Fixed Interest Loan Agreement that was the subject of the Magistrates Court Proceedings and District Court Appeal Proceedings;
(2) the facts on which the applicant relied in the Magistrates Court Proceedings and the District Court Appeal Proceedings are the same facts on which the applicant relies on in his Application;
(3) the applicant has attached various materials from the Magistrates Court Proceedings and District Court Appeal Proceedings in support of his Application;
(4) the Magistrates Court Proceedings were protracted proceedings in which numerous documents were filed, with the respondent legally represented in those proceedings for their duration by the office of P.A. Martino;
(5) as part of the Application, the applicant applies for an injunction under s 177 of the National Consumer Credit Protection Act 2009 (Cth) (“NCCP”) being an order not covered by the small claims procedure;
(6) the applicant has also applied for the Fixed Interest Loan Agreement to be reopened under s 76(2) of the National Credit Code (“the Code”), while if the Fixed Interest Loan Agreement were so reopened then the same would have significant implications to the judgment, enforcement costs and other costs orders of the Magistrates Court Proceedings and District Court Proceedings; and
(7) there is also a legal issue as to whether the applicant is out of time to bring an application for an order under s 76(2) of the Code due to the operation of s 80(1) of the Code which prevents such an application being brought more than two (2) years after the relevant credit contract has come to an end.
Mr Stott’s Affidavit at [7(7)] also indicates that Mr Renouf has applied (seemingly for a second time) to suspend the enforcement of the Magistrates Court judgment, and that the suspension application has been adjourned sine die until a means inquiry applied for by Mr Renouf in connection with his suspension application has occurred. That means inquiry was listed for 27 September 2016. There was no evidence that as at the time of the hearing of the Application in a Case the means inquiry had been determined.
Mr Stott’s Affidavit at [8] indicates that in the proceedings in the Magistrates Court:
a)judgment was entered in the amount of $14,066.31;
b)RAC Finance had its costs of the action and Mr Renouf’s unsuccessful application to set aside the summary judgment taxed in the amount of $12,990.21;
c)RAC Finance’s fixed costs of the applicant’s unsuccessful application to suspend enforcement of the judgment dated 24 September 2015 were $3,564.00; and
d)RAC Finance’s recoverable enforcement costs to 23 September 2016 were approximately $2,635.60.
In relation to the District Court proceedings Mr Stott indicated that the costs were yet to be taxed and enforced, but that he estimated they would likely be in the vicinity of $8,500 to $10,500: Mr Stott’s Affidavit at [11]-[12].
The second of RAC Finance’s affidavits is an affidavit of Carl Brucciani sworn 11 October 2016 (“Mr Brucciani’s Affidavit”). Mr Brucciani is a compliance manager employed by RAC Finance with access to their records: Mr Brucciani’s Affidavit at [2].
Mr Brucciani says that the Royal Automobile Club of WA (“RACWA”) operates a number of companies, including RAC Finance, through a holding company, RACWA Holdings Pty Ltd (“RACWA Holdings”), and that through RACWA Holdings, RACWA employs four people who work as in-house legal counsel in respect of RACWA’s governance and contracts generally, with those persons having little or no experience in consumer credit matters, debt recovery or litigation generally, and, further, that RAC Finance itself does not employ any person as in-house legal counsel, and does not employ anyone who is a lawyer: Mr Brucciani’s Affidavit at [5].
Mr Brucciani attests to the fact that he has management of RAC Finance’s file in respect of its dealings with Mr Renouf, but that he has only had conduct of the matter since about mid-2015, and that prior to that date two former employees had had the conduct of the matter, one from 2012 to the end of 2013, and the other from the end of 2013 until about mid-2015: Mr Brucciani’s Affidavit at [6]-[8].
Mr Brucciani says that RAC Finance’s external lawyers have had the conduct of the Magistrates Court and District Court proceedings during that period, and that they assisted RAC Finance in responding to Mr Renouf’s complaint to the Financial Ombudsman: Mr Brucciani’s Affidavit at [9].
Mr Brucciani says that there is no one employed by RAC Finance with full knowledge of the conduct of these matters (by which the Court understands him to mean the Magistrates Court proceedings and the District Court proceedings respectively), and that it relies upon its lawyers in that regard: Mr Brucciani’s Affidavit at [10]-[11].
The Court has also, in preparing these Reasons for Judgment, had regard to the affidavits sworn by Mr Renouf on 22 and 26 August 2016, particularly the former, and particularly for the purposes of setting out much of the relevant factual material appearing at [21]-[36] above.
Submissions
Both Mr Renouf and RAC Finance filed submissions in support of the Application in a Case.
Mr Renouf’s submissions
Mr Renouf’s submissions assert that:
a)the intention of Parliament under the NCCP Act and the NC Code was to allow a streamlined process which created a presumption that the parties do not need legal representation and against the issuing of adverse costs orders, and for the bringing of those complaints in a variety of courts, including the Magistrates Court and this Court;
b)each party to an action should be able to present their case under conditions that do not place them at a substantial disadvantage, and that the intention of the Parliament in relation to the small claims provisions of the NCCP Act was to allow an unsophisticated consumer to be heard without legal obstruction;
c)the external lawyers for RAC Finance had initially misled the Magistrates Court as to whether or not it had jurisdiction to hear his claim, and although a submission that the Magistrates Court did not have jurisdiction to hear the claim was corrected at the hearing of the stay application on 22 December 2015, the result has been that Mr Renouf has been denied the right (which he asserts is a constitutional right by reference to s.117 of the Constitution which deals with the rights of residents as and between the states) to be heard in the Magistrates Court by the external lawyers retained by RAC Finance;
d)there is a possibility that the lawyer who has had the conduct of the matter in the Magistrates Court and the District Court (that is, Mr Stott) may need to be cross-examined in these proceedings;
e)there is no evidence that either Mr Stott or Mr Brucciani have been duly authorised by RAC Finance to affirm or swear the affidavits used in the Application in a Case, and that neither contains any annexure of the “alleged delegated authority” which Mr Renouf says is required by reason of s.198D of the Corporations Act 2001 (Cth) (“Corporations Act”), and which he says must be recorded in RAC Finance’s Minute Book: Corporations Act, s.251A;
f)whoever is supplying instructions to RAC Finance’s external lawyers can represent RAC Finance in a small claims proceeding;
g)any one of the lawyers retained as in-house legal counsel by RACWA Holdings could represent RAC Finance;
h)the applicant has made a freedom of information request to ASIC for a list of RAC Finance’s responsible managers, which relates to who are responsible managers for the purposes of a regulatory guide issued by ASIC which provides guidance on how credit licensees can meet their organisational competence and representative training obligations under the NCCP Act; and
i)the external lawyers retained by RAC Finance are not fit and proper to have conduct of the proceedings, by reason of their conduct of the Magistrates Court proceedings.
RAC Finance’s submissions
RAC Finance submits that the following matters are relevant to the Court’s consideration of whether it ought to be granted leave to appear by a lawyer:
a)the credit contract has been the subject of protracted proceedings in other courts in which RAC Finance was at all times represented by their present external lawyers;
b)RAC Finance have no personnel who are familiar with the totality of the litigation in those other proceedings, and RAC Finance relies on their present external lawyers in that regard;
c)the facts and materials that Mr Renouf relies on in these proceedings are the same facts and are either the same material or materials taken from the other proceedings, being relevant to the issue of RAC Finance’s external lawyers’ familiarity with the matter;
d)there are judgments and costs orders in favour of RAC Finance in the proceedings in the Magistrates Court and the District Court which will be relevant to the issue of relief should the credit contract be reopened;
e)a lawyer by reason of training and expertise ought to have the ability to provide the Court with appropriate and logical arguments based on research to be of assistance to the Court in a case such as this; and
f)the effect of s.200 of the NCCP Act is that if leave is given to RAC Finance to be represented by a lawyer in these proceedings, RAC Finance will not be entitled to an order for payment of its legal costs of the proceedings unless it is found that these proceedings were commenced vexatiously or without reasonable cause.
Consideration
Had this matter been brought to this Court in the first instance it may have been seen as a simple case. The facts at that time were not complex, and would seemingly have involved an allegation that the Information Statement had not been provided to Mr Renouf until after he had signed the credit contract, that that constituted a breach of s.16(1)(b) of the NC Code, and that by reason of that conduct the Court could reopen the credit contract as an unjust transaction under s.76(2)(i) of the NC Code, which provides that the Court may have regard to the extent to which the provisions of a credit contract and their legal and practical effect were actually explained to a debtor. That, however, is not the position with which the Court is now faced.
The factual position is now vastly complicated by reason of:
a)the Magistrates Court summary judgment which was, in part at least, erroneous, insofar as the Magistrates Court held that it had no jurisdiction to deal with a claim of the type brought by Mr Renouf (see NCCP Act, s.187(1), Item 3), but which was in part also not erroneous, insofar as it correctly held that it did not have jurisdiction to at least offset civil or criminal pecuniary penalties in relation to a proposed set-off or counterclaim by Mr Renouf: see the District Court judgment, Transcript, 16 June 2016, pages 147-149;
b)the unsuccessful stay application before the Magistrates Court in which the lawyer for RAC Finance indicated that the submissions originally made by RAC Finance to the Magistrates Court that it had no jurisdiction to deal with Mr Renouf’s claim were wrong, save in relation to the penalty issue;
c)the dismissal by the District Court of Mr Renouf’s appeal to the District Court against the Magistrates Court’s judgment on the application to set aside the summary judgment, which deals with some of the factual matters, and which arrives at factual conclusions, in respect of some matters relevant to the Court’s considerations as to whether or not to reopen the credit contract under s.76(2) of the NC Code; and
d)the effect, if any, of a further application apparently made to the Magistrates Court, and an ongoing means inquiry, the result of which is not presently before the Court, in relation to a second suspension application before the Magistrates Court.
As these Reasons for Judgment demonstrate, the factual position has altered dramatically by reason of the conduct of the various proceedings before the Magistrates Court and the District Court. The conduct of the parties to the credit contract since it was entered into is a factor to which the Court must have regard when determining whether to grant relief in respect of the credit contract: NC Code, s.76(5). In determining whether to grant relief, the Court must now have regard to:
a)whether any estoppel arises in relation to the judgments of the Magistrates Court and the District Court (even though RAC Finance’s lawyer did not press a submission concerning estoppel on the hearing of the Application in a Case, the Court is of the view that estoppel issues are likely to arise in respect of both the judgments of the Magistrates Court and the District Court if this matter were to proceed to hearing in this Court), or whether these proceedings might be better stayed until proceedings in the state jurisdictions are complete: compare Tradesman Technologies Pty Ltd v Ameduri [2010] FMCA 1011; and
b)the various orders made, with respect to both damages and costs, by the Magistrates Court, and the pending costs of the appeal to the District Court, and what, if anything, this Court can order by way of relief in that regard, if it were to find the credit contract to be unjust.
Having regard to what appears above, it is evident to this Court that the factual position is now complex, and that that factually complex position also gives rise to a legally complex position with respect to any relief which might be granted by the Court.
The injunctive relief sought is of itself a legal issue which gives rise to some complexity. Firstly, an issue arises as to whether or not the Court can make an injunction in relation to an order of the Magistrates Court. Section 177(1) of the NCCP Act provides that:
(1) If, on the application of ASIC or any other person, the court is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute:
(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to contravene this Act; or
(d) inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f) conspiring with others to contravene this Act;
the court may grant an injunction on such terms as the court considers appropriate.
On its face, s.177(1) of the NCCP Act does not provide power for this Court to issue an injunction in relation to an order made by the Magistrates Court by way of summary judgment. Neither the Magistrates Court, nor the order issued by the Magistrates Court dismissing the application to set aside that court’s earlier summary judgment, appear, on their face, to be matters which can be the subject of an injunction under s.177(1) of the NCCP Act. Nor is the application for injunctive relief an “ancillary or consequential” order for the purposes of s.199(4) of the NCCP Act, which provides that the monetary limits in column 3 of s.199(2) of the NCCP Act do not apply to any ancillary or consequential orders. The type of ancillary or consequential order to which s.199(4) of the NCCP Act is directed is plainly an order, for example, for damages for breach of contract or negligence which might be part of a claim before a court in addition to any order covered by the NCCP Act or NC Code. Whether or not an injunction might be able to be issued pursuant to the Court’s powers under s.15 of the FCCA Act was not a matter addressed by the parties in these proceedings. Complexity also arises with respect to whether or not this Court can, as a matter of law, or ought to, as a matter of discretion injunct a Magistrates Court judgment which was the subject of a dismissed appeal to the District Court. The position is complicated because of the various stay applications and appeals brought by Mr Renouf in the Magistrates Court and the District Court. Those are matters which the Court will have to engage with in order to determine whether there has been a delay in applying for injunctive relief, and if there has, whether the delay is too lengthy to warrant discretionary relief.
The issue of injunctive relief being sought by Mr Renouf raises yet a further complexity: that is, whether or not the seeking of injunctive relief takes the matter outside of the small claims jurisdiction under s.199 of the NCCP Act.
Section 199 of the NCCP Act prescribes those orders which are within the small claims procedure. In proceedings in relation to the Fair Work Act 2009 (Cth) (“FW Act”) it has been held that a claim which does not seek relief within the matters listed as small claims matters in s.548(1A) of the FW Act, or which seeks relief in addition to the those matters, is not a small claim: Ritchie v Chubb Security Services Ltd [2010] FMCA 361; (2010) 196 IR 174 at [4] per Smith FM; Groves v Chadwick [2013] FCCA 1269 at [17(a)] per Judge Lucev; Yousef v Taxsmart Group Pty Ltd & Anor [2013] FCCA 2089 at [1] per Judge O’Dwyer; One Key Resources at [19] per Judge Lucev. Whilst the provisions of s.199 of the NCCP Act include an order under s.76 of the NC Code as sought by Mr Renouf, they do not include orders for injunctive relief under s.177 of the NCCP Act. The effect of that is that if the relief sought by an applicant includes an order for injunctive relief which is not, as here, within those orders which the Court may make in a small claims proceeding, then the proceeding is not a small claim proceeding. It follows from that that lawyers do not need leave to represent RAC Finance in these proceedings because RAC Finance must be represented by a lawyer: FCC Rules, r.9.04. There will be an order accordingly.
Section 76 of the NC Code enjoins the Court to have regard to a number of matters in determining whether a term of a particular credit contract is unjust for the purposes of determining whether that particular credit contract ought to be reopened. In making that determination the Court must have regard to the public interest, and to all of the circumstances of the case, “at the time” the credit contract “was entered into”. Having regard to the public interest, which appears to be a mandatory consideration by reason of the use of the words “is to have regard to the public interest” is often, of itself, a matter which involves complex considerations, including the following:
a)consideration of the term as one which embraces standards of human conduct;
b)as directing attention to a conclusion or determination which best serves the advancement of the interests or welfare of the public;
c)as being dependent upon particular circumstances in each case for its content, and which in any particular case might be determined by the subject matter, scope and purpose of any statutory enactment being considered;
d)that may involve a balancing of the public interest against private interests or individual interests;
e)as being a concept of wide meaning, not readily limited by precise boundaries, and typically importing a discretionary value judgment to be made by reference to undefined factual matters, albeit that it may be confined by the subject matter, scope and purpose of any statutory enactment; and
f)as not being a homogenous undivided concept, but rather one which can be multi-faceted, and which requires a decision-maker to consider and evaluate the relative weight of the various facets before reaching a final conclusion as to where the public interest resides, thus involving an evaluation of what the relevant facets of the public interest are, and of their competing and comparative importance.
See McKinnon v Secretary, Department of Treasury [2005] FCAFC 142; (2005) 145 FCR 70; (2005) 220 ALR 587; (2005) 88 ALD 12; (2005) 41 AAR 23 at [9]-[15] per Tamberlin J, and the cases there cited; followed in Ellis v Silver Vision Pty Ltd trading as Arirang Korean BBQ Restaurant & Café [2016] FCCA 907 (“Arirang Restaurant”).
In determining whether, and if so to what extent, the public interest is engaged, it may be necessary for a Court to have regard to any regulatory codes (especially where mandatory considerations are imposed by those codes) and the objects of the relevant legislation: Arirang Restaurant at [23]-[24] per Judge Lucev.
Section 76(2) of the NC Code then sets out a number of matters (16 in all, but only 15 of which are presently relevant) to which the Court “may have regard” in determining whether a term of a credit contract was unjust at the time it was entered into. Those matters are as follows:
(a) the consequences of compliance, or noncompliance, with all or any of the provisions of the contract, mortgage or guarantee;
(b) the relative bargaining power of the parties;
(c) whether or not, at the time the contract, mortgage or guarantee was entered into or changed, its provisions were the subject of negotiation;
(d) whether or not it was reasonably practicable for the applicant to negotiate for the alteration of, or to reject, any of the provisions of the contract, mortgage or guarantee or the change;
(e) whether or not any of the provisions of the contract, mortgage or guarantee impose conditions that are unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interests of a party to the contract, mortgage or guarantee;
(f) whether or not the debtor, mortgagor or guarantor, or a person who represented the debtor, mortgagor or guarantor, was reasonably able to protect the interests of the debtor, mortgagor or guarantor because of his or her age or physical or mental condition;
(g) the form of the contract, mortgage or guarantee and the intelligibility of the language in which it is expressed;
(h) whether or not, and if so when, independent legal or other expert advice was obtained by the debtor, mortgagor or guarantor;
(i) the extent to which the provisions of the contract, mortgage or guarantee or change and their legal and practical effect were accurately explained to the debtor, mortgagor or guarantor and whether or not the debtor, mortgagor or guarantor understood those provisions and their effect;
(j) whether the credit provider or any other person exerted or used unfair pressure, undue influence or unfair tactics on the debtor, mortgagor or guarantor and, if so, the nature and extent of that unfair pressure, undue influence or unfair tactics;
(k) whether the credit provider took measures to ensure that the debtor, mortgagor or guarantor understood the nature and implications of the transaction and, if so, the adequacy of those measures;
(l) whether at the time the contract, mortgage or guarantee was entered into or changed, the creditprovider knew, or could have ascertained by reasonable inquiry at the time, that the debtor could not pay in accordance with its terms or not without substantial hardship;
(m) whether the terms of the transaction or the conduct of the credit provider is justified in the light of the risks undertaken by the credit provider;
(n) … [not relevant as it relates only to mortgages];
(o) the terms of other comparable transactions involving other credit providers and, if the injustice is alleged to result from excessive interest charges, the annual percentage rate or rates payable in comparable cases;
(p) any other relevant factor.
On the evidence presently before the Court s.76(2) of the NC Code raises a number of issues which might need to be considered at the hearing in these proceedings. Given the history of the proceedings to date it seems to the Court that it is likely that Mr Renouf will seek to engage as many of the matters referred to in s.76(2) of the NC Code as possible in his favour, and whilst he cannot be criticised for doing so, it does mean that the proceedings are likely to be more complex than would otherwise be the case. The Court notes that the hearing and determination of Mr Renouf’s claim would be likely to be further complicated because some of the matters which might be relied upon by Mr Renouf, particularly those under s.76(2)(j) of the NC Code as to whether unfair pressure, undue influence or unfair tactics were exerted or used, are matters in respect of which issues of estoppel might arise by reason of the District Court judgment.
The Court observes that, upon its reading of the Transcript of the proceedings of the Magistrates Court, it appears that the following matters referred to in s.76(2) of the NC Code were referred to in those proceedings, or in the District Court judgment, and are therefore likely to arise in the proceedings in this Court, namely:
a)paragraph (a), relating to the consequences of compliance, or non-compliance, with provisions of the credit contract;
b)paragraph (b), relating to the relative bargaining power of the parties;
c)paragraph (c), as to whether or not, at the time of the credit contract being entered into its provisions were the subject of negotiations;
d)paragraph (d), as to whether or not it was reasonably practicable for Mr Renouf to negotiate for the alteration of, or to reject, any of the provisions of the credit contract;
e)paragraph (e), whether or not any of the provisions of the credit contract imposed conditions that are unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interests of a party to the credit contract;
f)paragraph (g), as to the form of the credit contract and the intelligibility of the language in which it is expressed;
g)paragraph (h), as to whether or not independent legal or other expert advice was obtained by Mr Renouf;
h)paragraph (i), as to the extent to which the provisions of the credit contract and their legal and practical effect were accurately explained to Mr Renouf and whether Mr Renouf understood those provisions and their effect;
i)paragraph (j), as to whether RAC Finance exerted or used unfair pressure, undue influence or unfair tactics on Mr Renouf, and if so, the nature and extent thereof; and
j)paragraph (k), as to whether RAC Finance took measures to ensure that Mr Renouf understood the nature and implications of the transactions, and if so, the adequacy of those measures.
A consideration of at least the above factors, in the context of the existing factual and legal circumstances of this case, would give rise to matters of not inconsiderable factual, and arguably legal, complexity. And, whilst Mr Renouf may be correct in asserting that it was the intention of the Parliament to provide a simple mechanism for unsophisticated consumers to bring claims in small claims proceedings untroubled by the appearance of a lawyer for the other side, it is equally the case that the Parliament has recognised, by the inclusion of the provisions of s.199(7)-(9) of the NCCP Act that there will be cases of sufficient complexity to warrant a lawyer being granted leave to appear for a particular party, or for lawyers to be granted leave to appear for various parties. This case is a case in which the complexity is such as to warrant the appearance of a lawyer for RAC Finance.
The Court notes that RAC Finance’s lawyers have been involved in the prior proceedings in the Magistrates Court and the District Court and that this favours their ongoing involvement due to their familiarity with the matter. It also enhances their capacity to assist the Court where the Court seeks relevant assistance in relation to those matters, which now form an essential part of this matter. Insofar as Mr Renouf asserts that he may need to cross-examine Mr Stott, and therefore Mr Stott cannot appear for RAC Finance, the Court observes that the identity of the lawyer who appears for a party is immaterial to the test as to whether or not a lawyer ought to appear for a party in these types of small claims proceedings. If Mr Stott needs to be cross-examined by Mr Renouf that may mean that he is unable to appear as counsel for RAC Finance at any hearing as the practice of solicitor also appearing as counsel in circumstances where the solicitor/counsel has sworn an affidavit, or is likely to have to give evidence, is not one to be encouraged. The difficulties that may arise are many, and ought to be manifest: Sheahan & Le Poidevin Industries Pty Ltd v Northern Australian Land and Agency Co Ltd & Ors (unreported, Supreme Court of South Australia, Perry J, 4 February 1993) at [3]-[18]; Pittorino v Meynert & Ors [2001] WASC 245 a [7]-[10] per Master Bredmeyer; D Ipp “Lawyers Duties to the Court” (1998) 114 LQR 63 at 92; Singh v Official Trustee in Bankruptcy & Anor [2013] FMCA 57 at [13] per Lucev FM. Even if Mr Stott is not able to appear for RAC Finance, it remains the case that this is a case of sufficient complexity, both on the facts and on the law, to warrant the appearance of a lawyer for RAC Finance.
Mr Renouf has raised the question of whether Mr Stott and Mr Brucciani are in fact authorised to swear the affidavits that they have sworn in these proceedings. In so doing Mr Renouf relies upon ss.198D and 251A of the Corporations Act for a submission that the “delegated authority” thereby being exercised, that is by the swearing of the affidavits, ought to be properly authorised and recorded in RAC Finance books.
Section 198D of the Corporations Act provides that the directors of a company can delegate any of their powers to an employee of the company or any other person (amongst others) unless the company’s constitution provides otherwise, and s.251A of the Corporations Act provides that the delegation must be recorded in the company’s minute book. To apply these provisions to the authorisation given by RAC Finance to Mr Stott and Mr Brucciani to swear or affirm affidavits is to misconceive what is intended by s.198D in particular. What s.198D does is to provide that a power that the board of directors: see Cheerine Group (International) Pty Ltd v Yeung [2006] NSWSC 1047 at [21] per Young CJ in Eq, may exercise pursuant to the constitution of RAC Finance may be delegated to another person to exercise. Such a power might, typically, be to authorise persons to organise the undertaking of legal proceedings on behalf of RAC Finance. The delegation of that power to a senior officer is what must be recorded in RAC Finance’s minute book for the purposes of s.251A of the Corporations Act, and not every subsequent exercise of the delegated power by the person to whom it has been delegated. Thus, this aspect of Mr Renouf’s submissions is misconceived. It is, however, an example of the type of submission, made before the Magistrates Court, the District Court and now this Court which has made this matter more protracted than it ought to have been.
Mr Renouf’s submission that one of the lawyers engaged by RACWA Holdings could appear for RAC Finance is also misconceived. That is because on the evidence before the Court those lawyers are not employees of RAC Finance, but rather employees of RACWA Holdings, and therefore do not fall within the exception to the exclusion of a lawyer appearing in s.199(9) of the NCCP Act.
Mr Renouf also submitted that by reason of RAC Finance’s external lawyers having misled the Magistrates Court as to the nature of that court’s jurisdiction in relation to Mr Renouf’s claim that RAC Finance’s external lawyers were not fit and proper to be granted leave to appear on behalf of RAC Finance. For reasons set out above: see [72] above, the test is whether leave ought to be granted to lawyers to appear for RAC Finance, not whether leave is granted to a particular lawyer to appear. If there is objection to a particular lawyer appearing then that case must be made separately after leave to a lawyer to represent is granted. In any event, to ascribe to a particular lawyer, or the firm of lawyers for whom that lawyer works, the epithet of not being fit and proper to appear would require conduct far more serious than what appears to have been a simple mistake by a junior practitioner, compounded by the fact that the presiding judicial officer in the Magistrates Court does not appear to have read the relevant section of the NCCP Act, being s.187(1). The Court also notes that that error was corrected on the next occasion that the practitioner concerned (Mr Stott) appeared before the Magistrates Court.
Finally, the Court also notes that it is arguable that Mr Renouf needs an extension of time in which to make the claim in relation to s.76(2) of the NC Code in the Originating Application, a point made by RAC Finance in their Response to the Originating Application. That is because of the provisions of s.80(1) of the NC Code which arguably provides that an application may not be brought more than two years after the relevant credit contract is rescinded or discharged or otherwise comes to an end. In this case, by reason of the alleged default of Mr Renouf in making payments, the credit contract has arguably either been rescinded or otherwise brought to an end by RAC Finance terminating the credit contract and taking action to recover the amount of credit provided, plus interest and other charges, from Mr Renouf. That is, again, a matter about which there might be some argument and some legal complexity, particularly in relation to the relevant date of any rescission or ending otherwise of the credit contract.
In the Court’s view there are myriad legal and factual issues of sufficient complexity in these proceedings to warrant the Court finding that it is appropriate for RAC Finance to be granted leave to appear by a legal practitioner, even if the matter were a small claims proceeding (which the Court has found that it is not: see [65] above). Moreover, the Court is satisfied that it would be significantly assisted in relation to the various legal and factual issues if a lawyer were to appear for RAC Finance to deal with those legal and factual issues, and that is the case even if that lawyer were to be one who has not previously appeared in Magistrates Court or District Court proceedings.
It is therefore the case that the Court considers that if these proceedings are small claims proceedings, then leave ought to be granted to RAC Finance for it to be represented by a lawyer in these proceedings, pursuant to s.199(7) of the NCCP Act and r.46.4 of the FCC Rules.
Conclusion and order
For the reasons set out above the Court has concluded that:
a)the proceedings are not small claims proceedings, and, therefore, RAC Finance must be represented by a lawyer: FCC Rules, r.9.04; and
b)if, contrary to (a) above, the proceedings are small claims proceedings under s.199 of the NCCP Act, then pursuant to s.199(7) of the NCCP Act and r.46.4 of the FCC Rules, RAC Finance is to be granted leave to be represented by a lawyer in these proceedings.
There will be a declaration and, in the alternative, an order accordingly, to reflect the above conclusions.
The Court will reserve costs. In that regard the Court notes that an interesting question arises as to whether these proceedings have, to date, been “dealt with as small claims proceedings”: NCCP Act, s.200(1)(a), which is an issue which the parties have not yet been called upon to address.
I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Date: 31 January 2017
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