Renouf v RAC Finance Ltd (No.2)
[2018] FCCA 182
•27 February 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RENOUF v RAC FINANCE LTD (No.2) | [2018] FCCA 182 |
| Catchwords: CONTRACT – Credit contract – whether credit contract discharged – whether credit contract has otherwise come to an end. CONTRACT – Assignment – whether credit contract assigned. PRACTICE AND PROCEDURE – Whether application out of time – whether application “may not be brought”. PRACTICE AND PROCEDURE – Whether to issue injunction to prevent operation of order of Magistrates Court of Western Australia – whether statutory bases for issue of injunction met – whether serious question to be tried – balance of convenience – comity between Federal and State courts – effect of delay in making application for injunction. WORDS AND PHRASES – “may not be brought” – “not” – “may not” – “discharged” – “or otherwise comes to an end” – “otherwise”. |
| Legislation: Acts Interpretation Act 1901 (Cth), ss.13, 15AA, 15AB |
| Cases cited: Associated Newspapers Ltd v Bancks (1951) 83 CLR 322; (1951) 25 ALJ 77 Renouf v RAC Finance Limited [2017] FCCA 142 Silberman v Citigroup Pty Ltd [2011] VSC 426 NC Seddon and RA Bigwood, Cheshire and Fifoot’s Law of Contract (Eleventh Australian Edition) (Chatswood: Lexis Nexis Butterworths, 2017) |
| Applicant: | BRENT PHILIP RENOUF |
| Respondent: | RAC FINANCE LTD |
| File Number: | PEG 392 of 2016 |
| Judgment of: | Judge Lucev |
| Hearing date: | 30 March 2017 |
| Date of Last Submission: | 30 March 2017 |
| Delivered at: | Perth |
| Delivered on: | 27 February 2018 |
REPRESENTATION
| For the Applicant: | In person |
| Counsel for the Respondent: | Mr T Stott |
| Solicitors for the Respondent: | P.A. Martino Barrister & Solicitor |
ORDERS
That the Originating Application filed 23 August 2016 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 392 of 2016
| BRENT PHILIP RENOUF |
Applicant
And
| RAC FINANCE LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
On 23 August 2016 Brent Philip Renouf (“Mr Renouf”) filed a claim under the National Consumer Credit Protection Act 2009 (Cth) (“NCCP Act”) in this Court against the respondent RAC Finance Limited (“RAC Finance”). In the Originating Application Mr Renouf seeks orders pursuant to s.76(2) of the National Credit Code (“NC Code”, the NC Code being Schedule 1 to the NCCP Act), to reopen a credit contract, and an injunctive order pursuant to s.177 of the NCCP Act upon an order obtained by RAC Finance from the Magistrates Court of Western Australia (“Magistrates Court”). RAC Finance opposes the Originating Application and the orders sought, and has raised two interlocutory issues in relation to the orders sought by Mr Renouf.
The two interlocutory issues raised by RAC Finance and which are now before the Court for resolution are as follows:
a)whether the Originating Application was filed outside the two year statutory time limit under s.80(1) of the NC Code insofar as it seeks orders under s.76(2) of the NC Code, and is therefore time barred; and
b)whether, in all the circumstances, the Court can issue an injunction under s.177(1) of the NCCP Act.
The Court will refer to these issues as the “Time Issue” and the “Injunction Issue” respectively, or the “Issues” collectively.
Brief factual background
Some of the factual material relevant to these proceedings was set out in the Court’s judgment on an interlocutory matter delivered on 31 January 2017: Renouf v RAC Finance Limited [2017] FCCA 142 at [20]-[36] per Judge Lucev (“Renouf (No 1)”), and need not presently be re-stated at any length. It will be necessary to refer to relevant facts at more length later in these Reasons for Judgment because affidavits have been filed in relation to the Issues, but by way of brief factual background it is presently sufficient to note that:
a)Mr Renouf entered into a credit contract (“Credit Contract”) with RAC Finance on 2 May 2012 whereby RAC Finance provided a personal loan of $10 000;
b)as a consequence of an alleged default on the Credit Contract, proceedings were commenced in the Magistrates Court on 11 September 2012, and on 3 November 2014 RAC Finance obtained summary judgment against Mr Renouf (“Summary Judgment Order”); and
c)an application to set aside the Summary Judgment Order (“Set Aside Application”), was dismissed in the Magistrates Court (“Set Aside Dismissal”), as was an appeal to the District Court of Western Australia against the Set Aside Dismissal (“District Court” and “District Court Appeal” respectively).
Orders sought and response
In order to put the Issues in context it is necessary to set out the orders sought by Mr Renouf and the response filed by RAC Finance.
Orders sought
The orders sought 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.
(Transcribed from original without amendment).
Response
On 27 September 2016 RAC Finance filed a response to the Originating Application which included grounds of opposition as follows:
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.
(Transcribed from original without amendment).
Evidence and submissions
Mr Renouf
Mr Renouf relied upon two affidavits for the purposes of the Issues, namely an affidavit sworn on 14 February 2017 (“First Renouf Affidavit”) and an affidavit sworn on 23 February 2017 (“Second Renouf Affidavit”).
Without being critical of Mr Renouf, who was self-represented, it is fair to observe that the First and Second Renouf Affidavits largely consist of submissions and sometimes mere assertions, and that the factual material in them is limited. To the extent necessary the Court has had regard to:
a)those aspects of the First and Second Renouf Affidavits which constitute submissions as submissions made by Mr Renouf; and
b)the limited relevant factual material in the First and Second Renouf Affidavits.
At the hearing on 16 March 2017 Mr Renouf relied upon his written submissions filed on 20 February 2017, and made brief oral submissions at hearing. Mr Renouf’s written submissions contained a number of assertions and allegations against RAC Finance and its lawyers which the Court does not consider to be of any relevance in determining the Issues. In particular, allegations of legal professional misconduct are, generally speaking, matters for the appropriate professional disciplinary tribunal, and allegations of procedural mis-steps before the Magistrates Court were matters which ought to have been raised before that court (if they were not), or upon the Set Aside Application or the District Court Appeal, and which, in any event, are not relevant for present purposes.
RAC Finance
RAC Finance relied upon an affidavit of Carl Brucciani sworn 13 March 2017 (“Brucciani Affidavit”) and an affidavit of Timothy Paul Stott affirmed 13 March 2017 (“Stott Affidavit”), and written submissions filed on 15 March 2017, which were supplemented by oral submissions at hearing.
Principles of statutory interpretation
Before considering the Issues it is necessary to make some reference to some basic principles of statutory interpretation, as follows:
a)the correct starting point for analysis is the text of the legislation, and not judicial statements of what the common law is, or judicial elaborations or glosses on the statutory provisions: Visy Paper Pty Ltd & Ors v Australian Competition & Consumer Commission [2003] HCA 59; (2003) 216 CLR 1; (2003) 77 ALJR 1893; (2003) 201 ALR 414; [2003] ATPR 41-952 at [25] per Gleeson CJ, McHugh, Gummow and Hayne JJ;
b)statutory words should not be considered in isolation, and to derive meaning from the text, and to fulfil the purpose of Parliament, what is required is that the meaning of the words be derived from the legislative context in which the words appear, and thus an examination of the relevant phrase, sentence, often the paragraph, and other immediately surrounding provisions, in the context of the statute as a whole: Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; (1996) 71 ALJR 123; (1996) 35 ATR 249; (1996) 24 AAR 282; (1996) 141 ALR 59; (1996) 43 ALD 193; (1996) 96 ATC 5240; CLR at 396-397 per Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ; and
c)giving effect to the purpose of Parliament as expressed in the text of statutory provisions is the overall objective of statutory construction: Project Blue Sky Inc & Ors v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 72 ALJR 841; (1998) 153 ALR 490; CLR at [69] per McHugh, Gummow, Kirby and Hayne JJ; Acts Interpretation Act 1901 (Cth) (“AI Act”), ss.15AA and 15AB.
Time Issue
RAC Finance submissions
RAC Finance made the following submissions regarding the Time Issue:
a)no reported judgments appear to have considered the phrase “rescinded or discharged or otherwise comes to an end” as it appears in s.80 of the NC Code;
b)section 80 of the NC Code and the Explanatory Memorandum to the National Consumer Credit Protection Bill 2009 (Cth) (“NCCP Explanatory Memorandum”) do not provide any particular guidance as to the intended meaning of s.80 of the NC Code, and thus the plain meaning of the words should apply;
c)the Credit Contract was discharged by exercise of the right of termination, specifically:
i)on 2 August 2012 by automatic exercise of the express contractual right under cl.22(b) of the Credit Contract which effectively discharged Mr Renouf from future payment obligations and provided RAC Finance with an immediate right to payment;
ii)by exercise of the common law right to terminate the Credit Contract for breach, and the conduct of closing the Loan account and serving the Magistrates Court claim upon Mr Renouf is consistent with the termination of the Credit Contract, and that occurred on 7 August 2013; and
iii)by exercise of the common law right of repudiation on account of the absence of readiness or willingness Mr Renouf displayed in performing his obligations under the Credit Contract which was an offer of repudiation on his behalf, and RAC Finance closing the loan and commencing the Magistrates Court claim was acceptance of his offer and an election to terminate effective from 7 August 2013;
d)the Credit Contract was discharged at the latest on 7 August 2013, thus s.80(1) of the NC Code prohibits Mr Renouf from bringing a claim as over two years elapsed before the filing of the Originating Application on 23 August 2016; and
e)in response to the claim of an assignment raised by Mr Renouf, RAC Finance continues to own the rights to the Credit Contract, and Mr Renouf’s submissions based on a search of a bank account and a letter he has received on where to direct payments, do not reasonably suggest the rights to the Credit Contract have been assigned.
Mr Renouf’s submissions
With respect to the Time Issue Mr Renouf relevantly submitted that:
a)the Credit Contract has not been discharged or transferred by an assignment; and
b)he is currently making fortnightly payments into the bank account of National Credit Management Limited (“NCML”), whom he submits has been assigned the debt by RAC Finance and that such assignment has failed to comply with legal obligations including:
i)his not receiving any written notice of an assignment as required by the Property Law Act 1969 (WA) (“PL Act”), the Privacy Act 1988 (Cth), and the Australian Securities and Investment Commission (“ASIC”) Regulatory Guide 303 annexed to the First Renouf Affidavit as Annexure BPR-05;
ii)NCML not holding a debt collectors licence as required by the Debt Collectors Licensing Act 1964 (WA) (“DCL Act”), and Mr Renouf’s fortnightly payments not appearing to be being held in a trust account as the account name refers only to NCML and makes no mention of being a ‘trust account’;
iii)NCML not providing Mr Renouf with a “credit guide” as required under s.160 of the NCCP Act; and
iv)correspondence from NCML not displaying an Australia Credit Licence number,
therefore no assignment has validly occurred, nor has the Credit Contract been discharged given Mr Renouf is still making fortnightly repayments, and thus the time limitation pursuant to s.80(1) of the NC Code is not applicable.
Consideration of Time Issue
The Time Issue arises from that part of the Originating Application whereby Mr Renouf seeks to make application under s.76(1) of the NC Code for the Court to exercise its discretion to reopen the transaction that gave rise to the Credit Contract if satisfied that the circumstances in which it was entered into were unjust.
The statutory time limit for bringing an action under s.76 of the NC Code is found in s.80(1) of the NC Code which reads as follows:
(1) An application (other than an application under section 78) may not be brought under this Division more than 2 years after the relevant credit contract is rescinded or discharged or otherwise comes to an end.
The use of the words “[a]n application … may not be brought” outside the two year prescribed time limit indicates that the Parliament intended that there be a prohibition on the making of an application outside of the prescribed time limit. That appears to be the plain meaning of the words “may not be brought”. That is particularly so when one considers that “not” is an adverb of negation: The Shorter Oxford English Dictionary on Historical Principles, Volume II (Oxford: Clarendon Press, 1973) page 1415 (“Shorter Oxford Dictionary”), and thus imports a prohibition on the activity concerned, that is, in this case, the making of an application outside of the prescribed time limit. In this case “not” negates “may”.
In the Court’s view the plain meaning of the words “may not be brought” prohibits the making of an application under s.76 of the NC Code outside of the prescribed two year time limit in s.80(1) of the NC Code.
The Court’s view of the plain meaning of the words “may not be brought” is also confirmed by a consideration of other materials and judgments set out below.
Had the Parliament intended that a court be able to exercise a discretionary power to extend the time for the making of an application to re-open a transaction or a contract it could have made express provision for an application to extend time. The fact that the Parliament has not done so is significant, and suggests that Parliament did not intend that the time for the making of an application be able to be extended beyond the prescribed time limit in s.80(1) of the NC Code.
Section 197 of the NC Code does provide for a court to extend a period of time, but does so in restricted terms, as follows:
The court may extend a period if authorised by this Code to do so even though the period has elapsed.
There is no provision in the NC Code which authorises the extension of the period of time in s.80(1) of the NC Code once that period has elapsed. That fact would appear to again confirm that Parliament intended there be a prohibition on the making of an application outside of the prescribed time limit in s.80(1) of the NC Code.
The Court notes that s.210 of the NC Code provides that:
(1) In this Code, the word may , or a similar word or expression, used in relation to a power indicates that the power may be exercised or not exercised, at discretion.
(2) In this Code, the word must , or a similar word or expression, used in relation to a power indicates that the power is required to be exercised.
(3) This section has effect despite any rule of construction to the contrary.
The Court has disregarded s.210 of the NC Code in determining the meaning of “may not be brought”. The Court has done so because:
a)as indicated above: see [16] above, this is a case in which the use of “not” negates “may” on the plain meaning of the phrase “may not”; and
b)“may” as it is defined in s.210(1) NC Code relates to the exercise of “a power” (such as that in s.76 of the NC Code whereby “The Court may” re-open a credit contract), rather than the making of an application by an applicant which is a purely procedural step prior to the exercise of any power. Again, it is significant in this context that the NC Code does not provide a court with a power to grant an extension of time for the making of an application under s.76 of the NC Code, and that the lack of such a specific power is consistent with s.80 of the NC Code limiting time for the making of any application under s.76 of the NC Code.
In interpreting the words of the NC Code it is also relevant, because it is a schedule to the NCCP Act, and therefore part of the NCCP Act: AI Act, s.13(1)(b), to have regard to the other terms of the NCCP Act. In that regard, the Court notes that the NCCP Act only contains one provision with respect to extension of time, and that is in s.306(4) of the NCCP Act which provides that the “period prescribed” by s.306(3) of the NCCP Act, which is 14 days, “may be extended by the court”. The time period in that case relates to the giving of a notice of objection to admission of statements made at an examination. The fact that the Parliament has seen fit to expressly provide power to a court to extend time in relation to that issue is again an indicator that no extension of time was intended to apply in respect of s.80(1) of the NC Code once the prescribed period of two years had elapsed.
The NCCP Explanatory Memorandum does not refer to s.80 of the NC Code, and it is of no assistance in the resolution of the Time Issue.
Section 73(1) of the Uniform Consumer Credit Code (“UC Code”), first enacted in the Consumer Credit (Queensland) Act 1994 (Qld) was in the same terms as s.80(1) of the NC Code. The Explanatory Note to the Consumer Credit (Queensland) Act 1994 (Qld) states that s.73(1) [of the UC Code] “limits the time within which applications may be made under the Division.” Given the lack of any reference to s.80 of the NC Code in the NCCP Explanatory Memorandum, the fact that the Explanatory Note to Queensland legislation based upon the UC Code, enacted in 1994 refers to the limitation of time, is arguably of limited assistance in determining the meaning of s.80(1) of the NC Code.
Case law on s.80(1) of the NC Code and its predecessors is scarce.
In Perpetual Trustees Australia v Richards [2008] NSWSC 658 (“Richards”) the New South Wales Supreme Court, in dealing with s.73 of the Consumer Credit (New South Wales) Act 1995 (NSW) (“NSW CC Code”), which provided that an application “may not be brought under this Division more than 2 years after the relevant credit contract is rescinded or discharged or otherwise comes to an end”, observed as follows:
It may be arguable that the defence is not statute barred. Like the Contracts Review Act, the relief granted under the … [NSW CC Code] is discretionary. Further, s 11(1) of the … [NSW CC Code] provides that in any proceedings in which a party claims that a credit contract, mortgage or guarantee is one to which this … [NSW CC Code] applies, it is presumed to be such unless the contrary is established. The facts and circumstances of this matter need to be ascertained at trial before the discretion, if any, are exercised. This issue is also not suitable for separate determination.
Richards at [66] per Harrison AsJ.
Richards is plainly distinguishable. Firstly, because in Richards the New South Wales Supreme Court gave no consideration to the meaning of the phrase “may not be brought”. Secondly, because what was truly in issue in Richards was whether there was a credit contract at all: Richards at [64]-[65] per Harrison AsJ, and not whether time should be limited (a question not able to be dealt with until such time as the preliminary question of whether there was a credit contract at all had been determined). Thirdly, “the relief” referred to in Richards at [66] per Harrison AsJ is not relief pursuant to s.73 of the NSW CC Code, but the relief under ss.70 and 71 of the NSW CC Code (which are the equivalents of ss.76 and 77 of the NC Code) both of which provide that a court “may” make the order (for example, for the re-opening of a credit contract) sought, and are therefore provisions for “relief” which is discretionary, which was what was being said in Richards at [66] per Harrison AsJ. Richards is therefore of no assistance in determining the proper meaning of the phrase “may not be brought” in s.80 of the NC Code.
In Silberman v Citigroup Pty Ltd [2011] VSC 426 (“Silberman”) at [27]-[30] per Mukhtar AJ, the Victorian Supreme Court referred to s.73 of the Consumer Credit Code (Vic), identical in terms to s.80 of the NC Code. In Silberman it was accepted by both parties that an account was “cancelled” when it was closed by the respondent on the default of the applicant. This prohibited the applicant from raising two of his three applications against the bank as the two year time limit had lapsed: Silberman at [28]-[30] per Mukhtar AJ.
In Konings v Commonwealth Bank of Australia [2016] FCA 667 (“Konings”) the Federal Court observed that s.80 of the NC Code assumed that the right to apply, under s.76 of the NC Code, exists and has not been extinguished, and then observed that there “… is no suggestion that s 80 [of the NC Code] would revive a right that has ceased to exist”: Konings at [14] per McKerracher J.
The phrase “may not be brought” has been considered by superior courts in both New South Wales and New Zealand in relation to environmental planning and building laws.
In The Owners Strata Plan 56963 v Australand [2011] NSWSC 710 (“Australand”) the New South Wales Supreme Court was dealing with a provision of s.109ZK(1)(a) of the Environmental Planning and Assessment Act 1979 (NSW) which provided that “a building action may not be brought in relation to any building work … more than 10 years after the date on which the relevant final occupation certificate is issued”. In Australand at [18] per McDougall J the New South Wales Supreme Court said:
The purpose of s 109ZK was to provide a “drop dead” date after which actions might not be brought if they fell within the definition of “building action”. … To the extent that any rights had accrued as at 1 July 1998, those rights continue to be enforceable. All that s 109ZK(1) did was impose a time limit for the enforcement of those rights.
In Body Corporate 169791 v Auckland City Council [2010] NZHC 1448 (“Body Corporate 169791”) the New Zealand High Court dealt with a claim which was sought to be struck out on the basis of s.393(2) of the Building Act 2004 (NZ) which provided that civil proceedings relating to building work “may not be brought against a person after 10 years or more from the date of the act or omission on which the proceedings are based”. In Body Corporate 169791 at [21] per Lang J the New Zealand High Court observed that the relevant provision, and its predecessor under a 1991 Act, were “commonly referred to as ‘long’ provisions, because they impose a finite time limit within which claims relating to defects in the construction of buildings must be issued. They operate to prevent any claims being brought after 10 years from the date of occurrence of the act or omission upon which the claim is based”. The New Zealand High Court went on to further observe in Body Corporate 169791 at [23] per Lang J that:
There is now no doubt that, as between the owner of a building and those whom he or she chooses to sue for defects in the building, claims are absolutely barred after 10 years from the date upon which the building work was carried out. There are no exceptions to that rule, even in cases involving fraudulent concealment of wrongdoing.
Of the predecessor provision in New Zealand under the 1991 Act the New Zealand Court of Appeal in Gedye v South [2010] NZCA 207; (2010) 3 NZLR 271; (2010) 11 NZCPR 321 at [35] per Arnold, Panckhurst and Harrison JJ said that:
… Equally clearly, we think the purpose of s 91(2) was to restrict the litigation of faulty building claims to a maximum ten year period. …
The Federal Court has also dealt with the meaning of the phrase “may not be brought” in the context of Australia’s migration laws.
In SZQLD vMinister for Immigration & Citizenship [2011] FCA 1339 (“SZQLD”) the Federal Court was dealing with the provisions of s.476A(3) of the Migration Act1958 (Cth) (“Migration Act”) which provided that “an appeal may not be brought to the Federal Court from” certain judgments of this Court and the Federal Court. In SZQLD at [5] and [7] per Rares J the Federal Court held that the words “may not be brought” were clearly designed to foreclose any right of appeal and that those plain words must be given that effect. SZQLD has been regularly applied by the Federal Court to foreclose any right of appeal consistent with the intention of s.476A(3) of the Migration Act as determined by SZQLD: see AZACM v Minister for Immigration & Citizenship [2013] FCA 710 at [11] per Mansfield J; BZABK v Minister for Immigration & Citizenship & Anor [2012] FCA 774; (2012) 205 FCR 83 at [30], [36] and [38] per Foster J; Bandi v Minister for Immigration & Border Protection [2014] FCA 1290 at [8] per Besanko J; MZYIZ v Minister for Immigration & Citizenship [2010] FCA 1449 at [4] per Bromberg J; Singh v Minister for Immigration & Border Protection [2017] FCA 1316 at [3] per Pagone J.
Although the Federal Court has dealt with the words “may not be brought” in the context of the bringing of an appeal under the Migration Act, there is an equivalence in circumstances where the words in s.80(1) of the NC Code deal with the bringing of an application, and both deal with that in the context of a prescribed time limit outside of which the appeal or application “may not be brought”. In the circumstances, the Court is of the view that the Federal Court’s consideration of the meaning of the words “may not be brought” is binding on this Court because it is not plainly wrong, and therefore has to be applied by this Court in its consideration of the meaning of the phrase “may not be brought” in s.80(1) of the NC Code. As to the binding nature of authoritative obiter in Federal Court judgments on this Court see CEPU (Western Australia Division) v Fortescue Metals Group Ltd [2016] FCCA 1227; (2016) 310 FLR 1 at [54] per Judge Lucev; O Jones, “When is the Federal Magistrates Court bound by the Federal Court?” [2012] 86 ALJ 478 at 483.
Having regard to the plain meaning of the words “may not be brought”, alternatively, the binding nature of the authoritative obiter of the Federal Court in the cases cited above, and further the meaning attributed to the phrase “may not be brought” in other cases, it is clear in the Court’s view that the words “may not be brought” prohibit the bringing of an application under s.76 of the NC Code outside of the time limit prescribed in s.80(1) of the NC Code where the relevant contract has been rescinded, discharged or otherwise come to an end. The effect of s.80(1) of the NC Code is to provide a “drop dead date” beyond which no application under s.76 of the NC Code can be made if the relevant contract has been rescinded, discharged or otherwise come to an end.
Was the Credit Contract discharged or did it otherwise come to an end?
The time limitation does not have effect unless the Credit Contract has been rescinded, discharged or otherwise comes to an end. The Parliament has chosen to use the words “rescinded” and “discharged” and the phrase “or otherwise comes to an end” as disjunctive alternatives (because of the use of “or” in the compound phrase “rescinded, discharged or otherwise comes to an end” in s.80(1) of the NC Code), and that would ordinarily mean that the words “rescinded” and “discharged” and the phrase “or otherwise comes to an end” are each intended to relate to different matters or circumstances.
It has been suggested that rescission ought to be used for the annulment of a contract from the outset (that is ab initio), and not for termination for breach, but that the High Court has continued to use “rescission” in connection with termination for breach on many occasions: NC Seddon and RA Bigwood, Cheshire and Fifoot’s Law of Contract (Eleventh Australian Edition) (Chatswood: Lexis Nexis Butterworths, 2017) at page 1013 at [21.9]. Any overlap involving the use of discharge instead of rescission does not arise in these proceedings because RAC Finance does not allege that the Credit Contract has been rescinded, so the question for consideration is whether the Credit Contract was discharged or otherwise came to an end more than two years before the Originating Application was filed on 23 August 2016.
It is convenient to begin consideration of this issue by considering the meaning of “discharged” and the meaning of the phrase “or otherwise comes to an end” before determining whether the factual context means that the Credit Contract has been discharged or otherwise come to an end.
Discharged
The word “discharged” is the past tense of “discharge”. The plain meaning of “discharge” is the act of freeing someone from an obligation or liability: Shorter Oxford Dictionary, Volume I at 560.
The use of “discharged” is more common as a descriptor of the effects of termination, be it for breach or repudiation, and being “discharged” from the contract means the parties are released from the further obligation to perform and to remain ready and willing to perform, and involves the innocent party exercising a right under the express terms of the contract, or the common law or a statutory provision, and gives rise to a liability in damages for breach on the part of the party in default: McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457; [1933] ALR 381, CLR at 476-477 per Dixon J (“Dennys Lascelles”).
In Koompahtoo Local Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor [2007] HCA 61; (2007) 233 CLR 115; (2007) 82 ALJR 345; (2007) 241 ALR 88; [2008] Aust Contract Reports 90-279; (2008) 24 BCL 272 (“Koompahtoo Council”) the High Court dealt with the basis upon which a contract may be terminated for breach, and in particular dealt with the circumstances in which termination of a contract may occur where there has been either a breach of an essential term or a sufficiently serious breach of a non-essential term by the other party. The decision of the High Court ultimately rested upon breaches, not of an essential obligation, but of a sufficiently serious non-essential term or terms of a contract: Koompahtoo Council at [53] and [71] per Gleeson CJ, Gummow, Heydon and Crennan JJ.
The High Court in Koompahtoo Council said that there were two relevant circumstances in which a breach of contract by one party may entitle the other to terminate: the first was where the obligation with which there had been a failure to comply had been agreed by the contracting parties to be essential, sometimes described as a condition: Koompahtoo Council at [47] per Gleeson CJ, Gummow, Heydon and Crennan JJ. The High Court referred to the judgment of the New South Wales Supreme Court in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 (“Tramways Advertising”) comparing conditions and warranties in contracts, and set out a lengthy passage from Tramways Advertising including the following:
The nature of the promise broken is one of the most important of the matters. If it is a condition that is broken, ie, an essential promise, the innocent party, when he becomes aware of the breach, has ordinarily the right at his option either to treat himself as discharged from the contract and to recover damages for loss of the contract, or else to keep the contract on foot and recover damages for the particular breach. If it is a warranty that is broken, ie, a non-essential promise, only the latter alternative is available to the innocent party: in that case he cannot of course obtain damages for loss of the contract. The question whether a term in a contract is a condition or a warranty, ie, an essential or a non-essential promise, depends upon the intention of the parties as appearing in or from the contract. The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor. If the innocent party would not have entered into the contract unless assured of a strict and literal performance of the promise, he may in general treat himself as discharged upon any breach of the promise, however slight. If he contracted in reliance upon a substantial performance of the promise, any substantial breach will ordinarily justify a discharge. In some cases it is expressly provided that a particular promise is essential to the contract, eg, by a stipulation that it is the basis or of the essence of the contract; but in the absence of express provision the question is one of construction for the Court, when once the terms of contract have been ascertained. … the principle [is] that effect must be given to the apparent intention of the parties as disclosed in the contract.
Tramways Advertising at 641-642 per Jordan CJ.
The High Court in Koompahtoo Council at [48] having referred to Tramways Advertising then said:
… It is the common intention of the parties, expressed in the language of their contract, understood in the context of the relationship established by that contract and (in a case such as the present) the commercial purpose it served, that determines whether a term is “essential”, so that any breach will justify termination.
Koompahtoo Council at [48] per Gleeson CJ, Gummow, Heydon and Crennan JJ.
The High Court in Koompahtoo Council then went on to deal with the second relevant circumstance justifying termination for breach of a contract, that is “where there has been a sufficiently serious breach of a non-essential term”: Koompahtoo Council at [49] per Gleeson CJ, Gummow, Heydon and Crennan JJ.
In relation to a breach of a non-essential term the High Court in Koompahtoo Council observed that:
We add that recognition that, at the time a contract is entered into, it may not be possible to say that any breach of a particular term will entitle the other party to terminate, but that some breaches of the term may be serious enough to have that consequence, was taken up in Ankar. Breaches of this kind are sometimes described as “going to the root of the contract”, a conclusory description that takes account of the nature of the contract and the relationship it creates, the nature of the term, the kind and degree of the breach, and the consequences of the breach for the other party. Since the corollary of a conclusion that there is no right of termination is likely to be that the party not in default is left to rely upon a right to damages, the adequacy of damages as a remedy may be a material factor in deciding whether the breach goes to the root of the contract.
Koompahtoo Council at [54] per Gleeson CJ, Gummow, Heydon and Crennan JJ (footnotes omitted).
The High Court further observed that a judgment as to whether a breach of a non-essential term goes to the root of a contract rests primarily upon the construction of the contract: Koompahtoo Council at [55] per Gleeson CJ, Gummow, Heydon and Crennan JJ, and said that the “focus of attention should be the contract, and the nature and seriousness of the breaches” and that:
… the intention that is relevant is the common intention of the parties, at the time of the contract, as to the importance of the relevant terms and as to the consequences of failure to comply with those terms. This is a question of construction of the contract to be decided in the light of its commercial purpose and business relationship it established. …
Koompahtoo Council at [68] per Gleeson CJ, Gummow, Heydon and Crennan JJ.
As can be seen from the passages in Koompahtoo Council, and also the passage from Tramways Advertising, set out above, a contract may, subject to its specific terms, be discharged for:
a)breach of an essential term; and
b)a sufficiently serious breach, or breaches, of a non-essential term,
and that the characterisation of a term as essential or non-essential depends upon the construction of the relevant contract.
A contract may be discharged by repudiation, where there is an actual failure to perform according to the terms of the contract, including in circumstances where a party evinces an intention to no longer be bound by those terms: Dennys Lascelles CLR at 476-477 per Dixon J. In Koompahtoo Council at [44] per Gleeson CJ, Gummow, Heydon and Crennan JJ the High Court said of repudiation as follows:
… The term repudiation is used in different senses (Heyman v Darwins Ltd [1942] AC 356 at 378; Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626). First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations (Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 634 per Mason CJ). It may be termed renunciation (Heyman v Darwins Ltd [1942] AC 356 at 397. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it (Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 659). (In this case, we are not concerned with the issues that arise where the alleged repudiation takes the form of asserting an erroneous interpretation of the contract. Nor are we concerned with questions of inability as distinct from unwillingness.) Secondly, it may refer to any breach of contract which justifies termination by the other party (See Carter, Breach of Contract, 2nd ed (1991) at 217). It will be necessary to return to the matter of classifying such breaches. Campbell J said this was the sense in which he would use the word " repudiation" in his reasons. There may be cases where a failure to perform, even if not a breach of an essential term (as to which more will be said), manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements (eg Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 at 304-305; Associated Newspapers Ltd v Bancks (1951) 83 CLR 322). This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.
Thus, a contract may also be discharged by repudiation.
Communication of an election to terminate the contract, often referred to as acceptance of the repudiation, is necessary: Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; (1985) 59 ALJR 373; (1985) 57 ALR 609, and the commencing of an action claiming relief on the basis of repudiation ordinarily constitutes an election to terminate the contract: Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; (1982) 56 ALJR 445; (1982) 41 ALR 441; CLR at 547 per Gibbs CJ and CLR at 570 per Brennan J (with whom Stephen J CLR at 547 agreed).
Or otherwise comes to an end
As observed above, the context in which the phrase “or otherwise comes to an end” appears, that is in juxtaposition to “rescinded” and “discharged” suggests, both directly and contextually, that “or otherwise comes to an end” means something other than, for relevant purposes, “discharged”.
This is also made obvious by the use of the word “otherwise” in the phrase “or otherwise comes to an end”, which means “in another way, or in other ways; differently”: Shorter Oxford Dictionary, Volume II at 1470. See too Crowe v Graham (1968) 121 CLR 375; (1968) 41 ALJR 402; [1968] ALR 524; CLR at 388 per Windeyer J where it was observed that:
To read “or otherwise” as meaning “likewise”, “in some like manner or way”, seems to me a departure from the ordinary meaning of the phrase.
In TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 (“TCN Channel 9”) the New South Wales Court of Appeal dealt with an agreement for the production and distribution of two television programmes which provided that the agreement in relation to one programme should, at the option of the television station, terminate if a related contract for provision of personal services by a television personality “comes to an end”. The contract further provided that if the television station desired to terminate the production and transmission of the second television show it might do so by giving three months’ notice after a specified date. The television station repudiated the contract for the provision of the personal services of the television personality and continued to produce the second show. There was an action for damages for breach of contract.
In TCN Channel 9 at 146 per Hope JA (with whom Meagher JA agreed at 163) the New South Wales Court of Appeal observed that:
On one view the words “come to an end” are unambiguous and encompass any situation where the contract ceases, no matter what the reason may be for that cessation. However the context shows at least that it was not intended to mean “comes to an end by effluxion of time”, … This in itself suggests that the words are ambiguous and that their meaning is to be found by reference to the matrix of facts and the contractual context in which they appear.
The New South Wales Court of Appeal also found that the words “comes to an end” should be attributed a meaning which excluded any termination of the contract of which the substantial cause was repudiation: TCN Channel 9 at 148 per Hope JA (with whom Meagher JA agreed at 163). It was observed that repudiation must be accepted before there is a termination of the contract: TCN Channel 9 at 148 per Hope JA (with whom Meagher JA agreed at 163).
The Credit Contract refers to an “Event of Default” defined at cl.22 of the Credit Contract, and which indicates some other possible means by which the Credit Contract may otherwise come to an end, including, for example, an insolvency event with respect to the debtor, or a declaration of mental illness in respect of the debtor, or the death of the debtor: Credit Contract, cll.1 and 22(a)(vii) and (viii). Another means by which the Credit Contract may otherwise come to an end might be if the contract was frustrated for some reason.
It follows that “or otherwise comes to an end” provides for a broader means of termination of a contract, but means distinct from the particular means whereby a contract is “discharged”.
Was the Credit Contract discharged?
Under the Credit Contract entered into on 2 May 2012 Mr Renouf was given an amount of credit in the sum of $10,240, which, with interest, meant that he had a total repayment amount of $14,471.40. That amount was to be repaid by 60 payments of $241.19, made monthly, with the first repayment to be one month from the date of acceptance of the Credit Contract. Mr Renouf did not make any payment due under the Credit Contract. That constituted an “Event of Default” as defined in the Credit Contract as follows:
22. Default
Event of Default
(a) An Event of Default occurs under This Contract if:
(i) the Debtor fails to pay any amount payable by the Debtor under This Contract when due;
(ii) the Debtor fails to perform or observe another obligation imposed on it by This Contract;
…
What can happen after an Event of Default
(b) If an Event of Default occurs subject to the Law (including the obligation to give notice to the Debtor), the Total Amount Owing automatically becomes due and payable and RACF may pursue the Debtor for the Total Amount Owing.
The “Law” is defined in cl.1 of the Credit Contract to mean:
… common Law, principles of equity and laws made by a Federal or State parliament and includes regulations and other instruments under laws made by a Federal or State parliament and consolidations, amendments, re-enactments or replacements of any of them.
The “Total Amount Owing” is defined in cl.1 of the Credit Contract to mean:
… at any time, the Account Balance at that time, plus:
(a) all accrued interest charges, default interest charges and other amounts which the Borrower must pay under This Contract but which have not been debited to the Debtor’s Account at that time; and
(b) all money which the Borrower will or may owe RACF in the future under This Contract, including a Future Advance.
“Account Balance” is defined in cl.1 of the Credit Contract to mean:
… the difference between all amounts credited and the aggregate of all amounts debited or which RACF is entitled to debit to the Debtor’s Account under This Contract.
The Credit Contract sets out what the debtor, Mr Renouf, owes RAC Finance and how he must repay RAC Finance, at cll.6 and 7 which provide as follows:
6.What the Debtor Owes
(a) The Debtor owes RACF all of the following once they are debited to the Debtor's Account:
(i)the Loan;
(ii) interest charges; and
(iii)all other amounts debited to the Debtor's Account under This Contract.
(b) Amounts that are debited to the Debtor's Account become part of the Account Balance owing under This Contract on which interest charges are calculated.
7. Repayments
(a) The Debtor must pay to RACF the following:
(i) the Loan and interest charges by the repayments set out in the Schedule; ·
(ii) the Account Balance on the date the final repayment is due;
(iii) all other amounts payable under This Contract at the time(s) set out in This Contract;
(b)Payments received by RACF will not be treated as made until actually credited in clear funds to the Debtor's Account.
(c)Any cheque, promissory note, negotiable instrument, bank order or other method of payment that is not cash received by RACF for moneys payable shall be regarded as conditional only and will not be regarded as payment until it is cleared.
(d)All payments must be paid to RACF at its Principal Place of Business or such other address as RACF may from time to time nominate in writing to the Debtor without any deduction, set-off or counterclaim. Unless paid by bank authority or direct debit authority, each payment must be accompanied by details identifying the Loan.
As indicated above, it is common ground that Mr Renouf did not make any payment due under the terms of the Credit Contract.
For present purposes, the relevant factual matrix following the failure to make the first monthly payment (which was due on 2 June 2012) is as follows:
a)RAC Finance’s employees attempted to contact Mr Renouf concerning the failure to pay instalments under the Credit Contract;
b)Mr Renouf did not respond to any contact from RAC Finance’s employees, and did not pay any of the arrears or amounts owing under the Credit Contract;
c)a Default Notice was posted to Mr Renouf by express post by RAC Finance on 3 July 2012;
d)RAC Finance shortly thereafter engaged Australiawide Mercantile Agency (“AWMA”) to recover the arrears under the Credit Contract;
e)AWMA reported to RAC Finance that they could not contact Mr Renouf;
f)Mr Renouf had not complied with the Default Notice, and was in further default under the Credit Contract by failing to make further instalment payments;
g)RAC Finance engaged National Credit Management Ltd (“NCML”) to recover the Total Amount Owing under the Credit Contract;
h)NCML reported to RAC Finance that it had received written correspondence from Mr Renouf in which he had not acknowledged the Credit Contract;
i)Mr Renouf had not made any payment on being provided with a copy of the Credit Contract, and RAC Finance considered that he was not going to make any payment, and therefore closed Mr Renouf’s account on its books and instructed NCML to arrange commencement of a court claim to recover the Total Amount Owing under the Credit Contract;
j)NCML engaged RAC Finance’s lawyers in this application to commence proceedings against Mr Renouf to recover the Total Amount Owing; and
k)the Magistrates Court claim was commenced on 11 September 2012, served on Mr Renouf on or about 1 March 2013, and the Summary Judgment Order was made on 3 November 2014.
See Brucciani Affidavit at [3].
It is apparent from the terms of cl.22, read with cll.6 and 7, of the Credit Contract as set out at [59] and [63] above that Mr Renouf’s failure to pay instalments due under the Credit Contract constituted an Event of Default (Credit Contract, cl.22(a)(i)) which entitled RAC Finance to pursue Mr Renouf for the Total Amount Owing: Credit Contract, cl.22(b).
There is no more essential term in a loan contract (here the Credit Contract) than that the debtor (here Mr Renouf) repay the creditor (here RAC Finance). Under the Credit Contract repayment was to be by way of the regular monthly payments. There can therefore be no doubt that the repayment by way of monthly payments of the sum loaned to Mr Renouf was an essential term of the Credit Contract, without which RAC Finance would not have entered into the Credit Contract. The first breach of the Credit Contract by the failure to repay the monthly payment due on 2 June 2012 constituted a breach of an essential term by Mr Renouf. RAC Finance was entitled to treat the breach of the Credit Contract by Mr Renouf as a breach of an essential term, and therefore one which discharged the Credit Contract: Tramways Advertising at 641-642 per Jordan CJ; Koompahtoo Council at [47] per Gleeson CJ, Gummow, Heydon and Crennan JJ. The relevant breach for these purposes occurred on 2 June 2012 when Mr Renouf failed to make the first payment. There were ongoing breaches of that essential term, and following the second breach on 2 July 2012, RAC Finance issued a Default Notice, that issuance being a pre-condition to the taking of enforcement proceedings to recover the Total Amount Owing, by reason of the provisions of s.88(1) of the NC Code which provide that a credit provider must not begin enforcement proceedings against a debtor in relation to a credit contract unless a default notice has been given and the default not remedied within 30 days. The Court notes that “enforcement proceedings” in relation to a credit contract means “proceedings in a court to recover a payment due under the contract”: NC Code, s.204. Section 88(1) of the NC Code does not alter the date of discharge, but merely operates as a pre-condition to enforcement proceedings.
Even if the failure to make a single monthly payment was not considered to be a breach of an essential term, the conduct of Mr Renouf in failing to make any monthly payments would constitute a breach of non-essential terms going to the root of the contract, and which would justify treating the breaches as sufficiently serious to discharge the Credit Contract.
On the above analysis, as the Court has found that there was a breach of an essential term of the Credit Contract, on 2 June 2012 the Credit Contract was discharged from that date. Even if that be wrong, the Court is of the view for the reasons set out above, that the Credit Contract would otherwise have been discharged by reason of a sufficiently serious breach or breaches of the Credit Contract, and that those breaches were sufficient to discharge the Credit Contract by either:
a)the date of issuance of the Default Notice on 3 July 2012; or
b)the date of commencement of proceedings in the Magistrates Court on 11 September 2012.
The Credit Contract was also discharged by repudiation by the commencement of proceedings in the Magistrates Court on 11 September 2012, that being evidence of an election to accept Mr Renouf’s earlier repudiatory conduct, which by way of a failure to make monthly payments in accordance with the Credit Contract, constituted conduct evincing an intention no longer to be bound by the Credit Contract, and also a breach of the Credit Contract justifying termination by RAC Finance: Koompahtoo Council at [44] per Gleeson CJ, Gummow, Heydon and Crennan JJ.
Whether by way of breach of an essential term, or breaches of non-essential terms, the Credit Contract was discharged on 2 June 2012, or alternatively on 3 July 2012 or 11 September 2012, or on the basis of discharge by repudiation on 11 September 2012. In those circumstances, the Credit Contract was discharged more than two years before the making of the Originating Application in these proceedings.
Was there an assignment?
Mr Renouf submitted that RAC Finance had assigned the benefit of the Credit Contract, but also submitted that the assignment was not a valid assignment. The question of assignment is relevant because of the provisions of s.188 of the NC Code which provides that:
(1) If the rights of a credit provider under a credit contract, mortgage or guarantee are assigned or pass by law to another person, this Code from then on applies to that other person and does not impose any further obligation on the credit provider.
(2) The debtor, mortgagor or guarantor has and may exercise the same rights in respect of the credit contract, mortgage or guarantee against the assignee as the debtor, mortgagor or guarantor has against the credit provider.
(3) Subsection (1) does not apply while the credit provider continues to receive payments from the debtor, or would continue to do so if the debtor complied with the credit contract.
The NC Code contains no definition of “assignment”: NC Code, s.204.
In any event, at the time at which the Court has found that the Credit Contract was discharged, that is 2 June 2012, there is nothing in Mr Renouf’s submissions which suggests that any right under the Credit Contract had been assigned at that time. Likewise, as at 3 July 2012 when RAC Finance issued the Default Notices. Insofar as mercantile agents, AWMA and NCML, were engaged by RAC Finance the engagement of those mercantile agents to pursue the Total Amount Owing under the Credit Contract is not evidence of an assignment. The fact that the Magistrates Court claim was made in the name of RAC Finance is evidence enough of the fact that there was no such assignment at any time prior to the making of the Magistrates Court claim. Further, there is no evidence of an assignment otherwise, including no evidence of an assignment in writing, as there may have been if there was an assignment: PL Act, ss.20 and 34(1)(c).
The submissions by Mr Renouf as to the corporate structures of NCML and various other entities, and their inter-relationships, are all beside the point, and provide no evidence of an assignment by RAC Finance prior to, or after, the discharge of the Credit Contract.
The assertion by Mr Renouf that the Credit Contract has not been discharged because he is making fortnightly payments in relation to the Summary Judgment Order also is erroneous. Those payments are payments in relation to a judgment debt pursuant to a court order, and are not payments under the Credit Contract.
The various matters upon which Mr Renouf asserts that there was an assignment, or upon which he asserts that if there was an assignment it was not a valid assignment, do not establish that there was an assignment of any right that RAC Finance had under the Credit Contract. The question of the invalidity of any such purported assignment is therefore irrelevant.
In the circumstances, the Court finds that:
a)there was no assignment of any right under the Credit Contract prior to its discharge on 2 June 2012;
b)in any event, there was no assignment of any right under the Credit Contract prior to the making of the Magistrates Court claim by RAC Finance on 11 September 2012 (which is only relevant if the Credit Contract was discharged on a date after 2 June 2012); and
c)in any event, there was no assignment, and there is no evidence of any assignment, of any right under the Credit Contract by RAC Finance at any time.
Conclusion on Time Issue
The Court finds the Originating Application was made more than two years after the Credit Contract was discharged, and pursuant to s.80(1) of the NC Code the Originating Application, insofar as it seeks relief under s.76 of the NC Code, is time barred and cannot be pursued.
Injunction Issue
RAC Finance submissions
In respect of the Injunction Issue, RAC Finance submitted:
a)it is neither within the general nature of an injunction nor within s.177 of the NCCP Act to give relief in the form of a stay of execution of a judgment of a court;
b)an injunction encompasses any form of curial order which ordinarily requires a person to refrain from doing some act which affects another person's right, interest or property: Australian Securities & Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; (2001) 204 CLR 559; (2001) 75 ALJR 363; (2001) 177 ALR 329; (2001) 37 ACSR 1 at [120] per McHugh J;
c)a successful litigant is entitled to enforce a valid and subsisting judgment and the exercise of that legal right cannot constitute a wrongful act nor the infringement of another person's right; and
d)section 177(1) of the NCCP Act empowers the Court to grant injunctive relief in certain circumstances, but its wording does not enlarge the power of the Court to grant injunctive relief in cases not involving the protection or restoring of another person's rights, interest or property.
Mr Renouf’s submissions
With regard to the Injunction Issue Mr Renouf’s lengthy submissions did not address the relevant issue in relation to the injunction sought. Mr Renouf failed to make any submission of any substance as to whether this Court has jurisdiction to issue an injunction under s.177(1) of the NCCP Act.
Consideration of Injunction Issue
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.
Mr Renouf has sought interim and final injunctive relief pursuant to s.177(1) of the NCCP Act, to prevent RAC Finance from enforcing the Summary Judgment Order obtained in the Magistrates Court.
The Court expressed concerns about its power to issue an injunction as sought by Mr Renouf in Renouf (No 1) at [63] per Judge Lucev, those doubts being expressed and the discussion arising in the context of whether or not the proceedings (which were commenced as small claims proceedings, but found not to be so: Renouf (No 1) at [64]-[65] per Judge Lucev) were sufficiently complex to warrant the grant of leave to RAC Finance to appear by a lawyer in these proceedings.
In this case, s.177(1) of the NCCP Act does not provide a basis upon which this Court can issue an injunction in relation to a Summary Judgment Order made by the Magistrates Court. The Summary Judgment Order does not fulfil any of the bases for the issuance of an injunction set out in paragraphs (a) to (f) of s.177(1) of the NCCP Act. The Summary Judgment Order is a judgment on an application in relation to an alleged breach of the Credit Contract which, by reason of Mr Renouf’s default, was an order that the Magistrates Court was, exercising its discretionary powers, entitled to and prepared to make. In so doing, the Magistrates Court was not engaging in any conduct of the kind set out in s.177(1) of the NCCP Act, but rather exercising powers under the Magistrates Court (Civil Proceedings) Act 2004 (WA) (“Magistrates Court CP Act”), s.18(2) of which provides that:
The Court may give judgment in favour of a claim without a trial if the party defending the claim does not satisfy the Court that the defence has a reasonable prospect of succeeding.
It was open to the Magistrates Court to set aside the Summary Judgment Order: Magistrates Court CP Act, s.18(6), or for an appropriate court, in this case the District Court, to set aside the Summary Judgment Order on appeal. Mr Renouf traversed both of those courses, but failed on both the Set Aside Application and the District Court Appeal.
Comity between Federal and State courts is an important consideration. Generally, the courts:
a)ought not be seen to be competing for litigation business; and
b)should not be hearing the same matters, or matters which are substantially similar.
Comity is therefore a matter to which appropriate weight must be given in determining how litigation is to be conducted, having regard to the overall practicalities of the interests of the administration of justice: Pegasus Leasing Limited v Cadoroll Pty Limited & Ors (1996) 59 FCR 152; [1996] ATPR 41-495; FCR at 157 per Lee and Tamberlin JJ (“Pegasus Leasing”).
Because:
a)the Set Aside Dismissal and the District Court Appeal have both been determined adversely to Mr Renouf;
b)there is a considerable degree of overlap in relation to the factual matrix relevant to the issues underlying the Summary Judgment Order, Set Aside Application and District Court Appeal and the issues which would arise in these proceedings if the Originating Application had been made within time; and
c)these proceedings were commenced well after the dismissal of the District Court Appeal against the Set Aside Application in relation to the Summary Judgment Order,
considerations of comity weigh heavily against the issuing of an injunction when considered as part of the assessment of the balance of convenience.
If what is sought is a mandatory injunction then the Court must feel a high degree of assurance that Mr Renouf will win at hearing: Queensland v Australian Telecommunications Commission (1985) 59 ALJR 562; (1985) 59 ALR 243, ALJR at 563 per Gibbs CJ. A mandatory injunction can only be granted if Mr Renouf shows a very strong probability upon the facts that grave damage will accrue to him in the future if the mandatory injunction is not granted: Redland Bricks Ltd v Morris [1970] AC 652 (“Redland Bricks”); Lord v McMahon (No.3) [2016] NSWSC 1686 at [16] per Slattery J. The jurisdiction to grant a mandatory injunction is to be exercised sparingly and with caution, albeit unhesitatingly in a proper case: Redland Bricks at 665 per Lord Upjohn.
Ordinarily an interlocutory injunction may be granted if there is a serious question to be tried, and the balance of convenience between the parties favours an injunction: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board (1982) 57 ALJR 425; (1982) 46 ALR 398; Castlemaine Tooheys Ltd & Ors v The State of South Australia (1986) 161 CLR 148; (1986) 60 ALJR 679; (1986) 67 ALR 553; Findley v MSS Security Pty Ltd [2017] FCCA 466 at [29] per Judge McNab (“Findley”), and an interlocutory injunction is granted in aid of some legal or equitable right to final relief: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199; (2001) ALJR 1; (2001) 185 ALR 1; (2001) 54 IPR 161; [2001] Aust Torts Reports 81-627 at [11]-[12] and [16] per Gleeson CJ; [60] per Gaudron J; and [88]-[91] and [105] per Gummow and Hayne JJ; Findley at [30] per Judge McNab.
In this case the difficulty for Mr Renouf is that there is neither damage nor a serious question arising because there is no application to be considered by this Court because the Originating Application is out of time for the purposes of s.80(1) of the NC Code, and there is no relief available in that respect to Mr Renouf. There is simply no legal, equitable or other basis for injunctive relief on the usual principles applicable to mandatory or interlocutory injunctions.
Delay is a sufficient reason for rejecting interlocutory relief: Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing Co New South Wales Ltd (1987) 76 ALR 633 at 638-639 per Bowen CJ, Beaumont and Foster JJ; Williment & Ors v Commissioner of Taxation [2010] FCA 808; (2010) 190 FCR 234; (2010) 79 ATR 650 at [16]-[18] per Perram J (“Williment”) where a delay of over two weeks in the time taken to approach the Federal Court for the purpose of obtaining interlocutory relief was described as “a very substantial delay”: Williment at [7] per Perram J, and one which warranted the refusal of injunctive relief: Williment at [18] per Perram J.
The Summary Judgment Order was made more than 19 months before the Originating Application was filed in this Court. Judgment on the Set Aside Application was given on 9 March 2015, more than 17 months before the Originating Application was filed. The District Court Appeal was heard and determined ex tempore on 16 June 2016, and was in fact determined by the District Court refusing an application by Mr Renouf to extend time within which to appeal, the application to appeal being 210 days, or about seven months, out of time. The Originating Application was filed more than two months after the dismissal of the District Court Appeal.
In addition to the injunction application not satisfying the requirements of s.177(1) of the NCCP Act the Court notes:
a)that Mr Renouf failed to have the Summary Judgment Order set aside by the Magistrates Court in the Set Aside Application and by the District Court on the District Court Appeal; and
b)the delay in making the application for the injunction (whether mandatory or interlocutory) is lengthy,
and each of those facts weigh against the balance of convenience favouring the issuance of any form of injunction.
Finally, the Court notes that in a matter relating to the NCCP Act it would not be appropriate to grant an injunction on the basis of the empowering provisions in s.15 of the Federal Circuit Court of Australia Act 1999 (Cth) in circumstances where the criteria for the grant of an injunction are specifically set out in s.177(1) of the NCCP Act, and are not satisfied.
For all of the above reasons, the application for an injunction must be refused.
Conclusions and orders
The Court has concluded that:
a)the Originating Application is out of time for the purposes of s.80(1) of the NC Code, and therefore the application to re-open the Credit Contract under s.76 of the NC Code cannot be brought; and
b)there is no basis on which to issue an injunction against the Magistrates Court in relation to the Summary Judgment Order, and the Court will not do so,
from which it follows that the Originating Application must be dismissed as the relief sought in it is either not available to Mr Renouf, or, in the case of injunctive relief, is relief that the Court is not prepared to grant. There will be an order accordingly.
The Court will hear the parties as to costs.
I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of Judge Lucev
Associate:
Date: 27 February 2018
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