SCALES and ANZ BANKING GROUP LIMITED
[2011] WASAT 19
•1 FEBRUARY 2011
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: CONSUMER CREDIT (WESTERN AUSTRALIA) ACT 1996
CITATION: SCALES and ANZ BANKING GROUP LIMITED [2011] WASAT 19
MEMBER: MR C RAYMOND (SENIOR MEMBER)
HEARD: 2 NOVEMBER 2010
DELIVERED : 1 FEBRUARY 2011
FILE NO/S: CC 155 of 2010
BETWEEN: MICHAEL DAVID SCALES
Applicant
AND
ANZ BANKING GROUP LIMITED
Respondent
Catchwords:
Consumer credit - Application to extend time for compliance with springing order - Dismissing proceeding - Principles to be applied - Whether applicant has demonstrated a reasonably arguable case
Legislation:
Consumer Credit (Western Australia) Act 1996 (WA), s 5
Consumer (Western Australia Act) Credit Code, s 11(1), s 70(1)
Credit (Commonwealth Powers) (Transitional and Consequential Provisions) Act 2010 (WA), s 5(2)
Result:
Application for extension of time dismissed
Proceedings stand dismissed
Category: B
Representation:
Counsel:
Applicant: Mr G Cridland
Respondent: Mr GD Cobby
Solicitors:
Applicant: Lyons & Lyons
Respondent: Gadens Lawyers
Case(s) referred to in decision(s):
McLean and Permanent Custodians Limited [2010] WASAT 127
Scales and Macquarie Group Limited [2010] WASAT 170
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
In this matter, the applicant applied for an extension of time to comply with a springing order under which the proceedings had been dismissed.
The circumstances giving rise to the springing order and the considerations to be taken into account were identical to those as set out in a related decision in Scales and Macquarie Group Limited [2010] WASAT 170, save in respect of the merits of the proceedings. The Tribunal found that on the merits, there was no evidence to support a case that the transaction was harsh so as to permit reopening.
The Tribunal concluded, after weighing all relevant considerations, that the interests of justice did not require an order granting the extension of time and consequently an order was issued refusing the application and reflecting the proceedings were dismissed.
The proceedings before the Tribunal
In this matter, the applicant has applied to the Tribunal pursuant to s 70(1) of the Consumer Credit (Western Australia) Code (Code). The Code at all material times had effect under s 5 of the Consumer Credit (Western Australia) Act 1996 (WA) (CC (WA) Act). The CC (WA) Act was repealed by the Credit (Commonwealth Powers) (Transitional and Consequential Provisions) Act 2010 which came in operation on 1 July 2010 (Western Australia, Government Gazette, No 130 (30 June 2010)). Pursuant to s 5(2) of the last mentioned Act, these pending proceedings are to be dealt with under the CC (WA) Act despite the repeal of that Act.
At a directions hearing and call-over on 14 June 2010, this matter and a related matter between the applicant and Macquarie Group Limited, being matter number CC 153 of 2010, were identified as being matters which raised issues common to a number of proceedings before the Tribunal. Those issues concerned bank lending practices and whether the transactions were unjust because it was alleged the banks were making loans to parties who the bank should have known were not capable of servicing the loans in circumstances which mounted to what was termed 'asset lending'. The intention was that this matter and matter CC 153 of 2010 (Scales matters) be set down for hearing before the President of the Tribunal, Justice Chaney. Other issues, which can be identified in the reported decision of McLean and Permanent Custodians Limited [2010] WASAT 127 (McLean) were also to be determined by the President of the Tribunal so that the principles established in the McLean and Scales matters could be applied to a number of other cases which were pending before the Tribunal.
The Scales matters did not progress satisfactorily resulting in the Tribunal issuing springing orders on 31 August 2010 dismissing the proceedings unless there was compliance with certain procedural directions. The applicant failed to comply with those directions but has applied for an extension of time to do so. These reasons for decision address that application.
The history, the application for extension of time and the circumstances in which the springing order came to be made
Reference is made to the discussion under [6] to [21] of the decision relating to matter number CC 153 of 2010 reported in Scales and Macquarie Group Limited [2010] WASAT 170 (Scales and Macquarie). Those paragraphs should be taken to be incorporated in these reasons for decision. As the facts and circumstances are identical in both cases and exactly the same affidavit evidence, statements of evidence and submissions were filed, there is nothing to add.
Considerations for the exercise of the discretion to extend time
All of the factors relevant to the consideration of the extension of time, save for the consideration of the merits, are exactly as stated in the Scales and Macquarie matter and should be taken to be incorporated as part of these reasons for decision. The merits require separate discussion.
The applicant's statement of issues, facts and contentions reflect that the applicant had a Macquarie Bank loan for approximately $570,000 when in or about December 2008 he sought to refinance the loan with the respondent.
The applicant asserts that his finance broker (the broker) altered the loan application form which had been filled in and signed by the applicant so as to falsely overstate his income. There is no evidence, including that of Ms Dominique Eva Grubisa in relation to the conduct of the broker to whom reference is made in the Scales and Macquarie decision, which suggests that the respondent was in any way aware of the falsification of the information provided. The loan documentation included declarations signed by the applicant as to the correctness of the information provided.
The following allegations are made relevant to the conclusion that the transaction was unjust.
a)At the time the loan was applied for, the applicant could not service the loan.
b)At no time did the applicant obtain legal advice prior to entry into the loan agreement.
c)The respondent was encouraging and allowing the applicant to service the debt with further debt while unjustly and unconscionably securing all advances over available equity.
d)The respondent was negligent and/or failed to conduct its due diligence in granting the loan to the applicant.
e)The respondent was conducting asset lending.
As appears from the applicant's affidavit, he initiated the process of refinancing through the respondent because he was aware that a more advantageous interest rate would apply compared to that which he was paying in respect of the monies owed to Macquarie Bank.
The respondent's documents show that the information provided to the respondent disclosed that the applicant had sufficient income to service the debt (and as already noted there is no evidence to suggest that the respondent was aware that information was false). Copies of the bank statements issued by Macquarie Bank showed that the applicant had indeed managed to pay a higher monthly instalment without default.
The documentation shows that the respondent did carry out due diligence on the loan and was satisfied concerning the applicant's income based on a pay roll advice received from the applicant's employer, BB Mortgage Solutions (which the applicant alleges was entirely false). In short, there was nothing in the information provided to the respondent to indicate that the applicant was unable to service the loan and therefore that the respondent was conducting asset lending.
There is no evidence that the respondent was aware of any circumstances which would render the transaction unjust by reason of the applicant not obtaining legal advice before concluding the loan agreement. The applicant was benefited by the refinancing of the Macquarie Bank loan. The loan application also included a declaration by the applicant to the effect that he understood and consented to all matters set out in the application form and agreed to be bound by the specific terms and conditions.
Under s 11(1) of the Code there is a presumption, unless the contrary is established, that the transaction is subject to the Code. The test to establish purpose is an objective one as set out in Scales and Macquarie and there is nothing contained within the documentation provided to the bank to suggest that the loan was for business purposes. Indeed, the business purposes declaration had been signed and the signature crossed out, which is an indication that the loan was for other than business purposes.
However, there is no evidence which supports the merits of the claim that the transaction was harsh or unjust. It may be that the alleged fraudulent conduct of the broker has caused loss to the applicant but that is not something for which the respondent is in any way responsible. There is no suggestion that the broker was anything other than an agent for the applicant. In the circumstances, I consider that the proceedings have no prospects of success.
Conclusion
Balancing all considerations, as identified in the Scales and Macquarie matter and the merits in relation to this case, I come to the conclusion that the interests of justice do not require the grant of the extension of time which is sought.
For the above reasons, an order will issue as follows:
1.The applicant's application for an extension of time to comply with Order 1 of the Tribunal made on 31 August 2010 is refused and the proceedings stand dismissed.
I certify that this and the preceding [19] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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