Savellis v Financial Ombudsman Services Ltd - [2016] NSWSC 1771

Supreme Court

New South Wales

Medium Neutral Citation: Savellis v Financial Ombudsman Services Ltd [2016] NSWSC 1771
Hearing dates: 3 February 2016
Decision date: 13 December 2016
Jurisdiction: Equity
Before: White J
Decision:
1. Order that the plaintiff’s claims for relief in the summons be dismissed.
2. Order that the plaintiff pay the second defendant’s costs.

Catchwords: BANKING AND FINANCE — dispute resolution — statutorily required dispute resolution scheme established pursuant to s 912A of Corporations Act 2001 (Cth) — whether determination of applicant’s dispute by the dispute resolution scheme was made in accordance with terms of reference — whether determination dealt with applicant’s submissions — whether determination was unintelligible, irrational or illogical on account of internal inconsistency — whether determination lacked adequate reasons for rejecting applicant’s submissions — determination read fairly dealt with and provided sufficient reasons for rejecting applicant’s submissions — determination not unreasonable — determination made in accordance with terms of reference
Legislation Cited: Corporations Act 2001 (Cth)
Cases Cited: Cromwell Property Securities Limited v Financial Ombudsman Service Ltd (2014) 288 FLR 374; [2014] VSCA 179
Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456; [2012] VSCA 185
Minister for Immigration and Ethnic Affairs v Woo Shan Liang (1996) 185 CLR 259
Sasterwan v Morris [2008] NSWCA 70
Category: Principal judgment
Parties: Robert Savellis (Plaintiff)
Financial Ombudsman Service Ltd (1st Defendant)
National Australia Bank Ltd (2nd Defendant)
Representation:
Counsel:
L Livingston (Plaintiff)
M Wise (1st Defendant)
J Hutton (2nd Defendant
Solicitors:
n/a (Plaintiff)
Arslan Lawyers (1st Defendant)
Michael Gomm, National Australia Bank Ltd (2nd Defendant)

File Number(s): 2015/300800

Judgment

HIS HONOUR: The plaintiff, Mr Robert Savellis, seeks a declaration that a determination by the first defendant, Financial Ombudsman Services Ltd (“FOS”), that the second defendant, National Australia Bank Ltd (“NAB” or “the Bank”) was not required to compensate him in respect of a dispute he lodged with the FOS on 8 October 2014, is invalid and of no force and effect. Mr Savellis had applied to the FOS for compensation of $350,000 from NAB for loss he claimed he had suffered in 2008 by reason of a delay in the NAB’s making a margin call on a margin loan facility he had with the NAB at the time of the global financial crisis. Mr Savellis made a number of claims but, in essence, he contended that had an earlier margin call been made, losses he claimed to have suffered would have been reduced. The FOS rejected his application, essentially on the ground that the Bank’s mistake in not making a margin call until 6 November 2008 rather than in September 2008 was not causative of Mr Savellis’ suffering any loss because had an earlier margin call been made it would not have resulted in his selling securities, but rather he would have provided more collateral for his loan by providing additional security. Mr Savellis contends that the reasoning in support of that conclusion was internally contradictory, that the FOS failed to deal with a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NSWSC 1771
Decision Date: 13 December 2016

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Savellis v Financial Ombudsman Services Ltd involved a dispute concerning a statutory dispute resolution scheme established under section 912A of the Corporations Act 2001. The applicant, Mr Savellis, sought judicial review of a decision made by the Financial Ombudsman Services Ltd (FOS) regarding a dispute involving a bank. The crux of the matter was whether the FOS's determination was made in accordance with the terms of reference, whether it adequately addressed the applicant's submissions, and whether it was unintelligible, irrational, or illogical due to internal inconsistencies. Furthermore, the applicant contended that the determination lacked sufficient reasons for rejecting his submissions.

The legal issues before the court were multifaceted, primarily revolving around the proper application of the statutory dispute resolution scheme and the sufficiency of the reasons provided by the FOS. The court had to examine whether the FOS's determination was made within the scope of the terms of reference, whether it properly dealt with the applicant's submissions, and whether the determination was unreasonable or lacked adequate reasons. The applicant argued that the determination was flawed in multiple respects, while the FOS contended that the determination was fair and provided sufficient reasons for its decision.

The court, after a thorough analysis, concluded that the FOS's determination was made in accordance with the terms of reference and adequately dealt with the applicant's submissions. It found that the determination, when read fairly, provided sufficient reasons for rejecting the applicant's submissions and was not unintelligible, irrational, or illogical. The court emphasised that the FOS had carefully considered the evidence and arguments presented and that the reasons provided were adequate to justify the outcome. Consequently, the court dismissed the application for judicial review, holding that the FOS's determination was not unreasonable.

The final orders of the court were that the applicant's application for judicial review was dismissed, and the FOS's determination was upheld. The court found no merit in the applicant's contentions and confirmed that the dispute resolution process was conducted in a manner compliant with the statutory requirements.

Orders