Bilaczenko v Financial Ombudsman Service Ltd

THE CLAIMS AT FIRST INSTANCE 2 The two claims by the applicant against the respondent were brought in the Federal Circuit Court of Australia (FCC) in June and July 2012. 3 One application claimed jurisdictional review of the respondent's "decision" to fail to "examine stockbroker fraud" and "stockbroker trading systems malfunctions", on the grounds that the respondent "acted in bad faith for want of jurisdiction" and made "an unauthorised" determination identified as No 17815. 4 The other complained of "contract impropriety" by the respondent having no authority to make a determination identified as No 17129. 5 The respondent is a public company limited by guarantee which operates as an internal dispute resolution scheme sponsored by the Australian Securities and Investments Commission (ASIC). The relevant conduct of the respondent took place during a period when its relationship with ASIC was governed by a Dispute Resolution Scheme Management Deed of 30 April 2008. 6 Under that Deed, the respondent provided dispute resolution services free of charge to consumers such as the applicant in relation to their complaints against financial service providers (FSP). 7 In the content of a complaint, the consumer is required to sign a contract before the respondent will provide dispute resolution services. The contract, relevantly, provided that material provided to the respondent by either the consumer complainant or the FSP was "without prejudice", that the respondent's determination was not reviewable (although it bound the FSP as a member of the respondent), and that the consumer complainant could pursue such legal rights as that person chose after the respondent's determination. The contract also recorded an agreement by the consumer complainant not to take action against the respondent or its adjudicators in relation to a complaint or its handling or its determination, unless that person acted in bad faith. 8 The applicant made complaint No 17129 about an FSP on 14 June 2006. The complaint was dismissed by the respondent after a hearing on 1 April 2008. The first application now before the Court above arises from that decision, and how the FCC subsequently addressed it. 9 The applicant made a further complaint No 17815 to the respondent in respect of a different FSP on 28 February 2007. That complaint was dismissed by the respondent on 19 March 2009. That decision was the subject of the other application to the FCC, and now to this Court.

FEDERAL CIRCUIT COURT DECISIONS 10 The primary judge in the FCC was confronted with a claim by the respondent that each application should be summarily dismissed relevantly because its determinations were not subject to judicial review. The hearing of the summary dismissal claims led to the making of orders on 30 May 2013 to that effect, and to the present applications to this Court. 11 The FCC's reasons for deciding that the two determinations were not subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) can be shortly stated. The two determinations were not decisions to which the ADJR Act applied, so as to give the FCC jurisdiction to entertain the applications under s 5 of the ADJR Act, because they were not decisions of an administrative character made under an enactment. The terms "decision to which this Act applies" and "enactment" are both defined in s 3 of the ADJR Act. In reaching that view, the FCC regarded the decision of the Court of Appeal in England in R v Panel on Take-overs & Mergers: Ex parte Datafin plc [1987] QB 815 (Datafin) as clearly distinguishable. It was common ground that the two determinations were "contractually based". 12 The FCC also had a second reason for summarily dismissing the application concerning determination No 17129. It accepted that, unlike determination No 17815, determination No 17129 was a "final" decision pursuant to the signed contract which precluded any judicial review of it. As noted, it did not preclude the applicant from separately pursuing proceedings in a court of appropriate jurisdiction directly against the FSP concerned. 13 The particular issue arises only in relation to determination No 17815 because the Financial Industry Complaints Service Ltd (FICS), as the predecessor of the respondent, had Rules which at the time of the later complaint included clause 36.2 which would prevent judicial review in any event. The respondent relied on Mickovski v Financial Ombudsman Service Ltd [2012] VSCA 185 (Mickovski) at [31] to support that proposition. The FCC accepted that contention. 14 For reasons which appear below, it is not necessary to address that issue. 15 As noted, on 31 May 2013 the FCC summarily dismissed the applicant's claims under r 13.10 of the Federal Circuit Court Rules 2001 (Cth). Such a decision is interlocutory: Rana v University of South Australia (2004) 136 FCR 344, so leave to appeal is necessary. Subsequently, in each matter, on 2 July 2013 the FCC ordered the applicant to pay costs of each of his applications fixed in the sums of $17,071.53 and $16,552.72 respectively. 16 As leave to appeal should have been sought under r 35.14 of the Federal Court Rules 2011 (Cth) within 14 days of the order challenged as prescribed by r 35.13, and the applications were not made within the prescribed time, the applications for extensions of time were also necessary. 17 The relevant principles upon which an extension of time should be granted are well settled: Parker v The Queen [2002] FCAFC 133 at [6]-[7]; Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349. The Court should be satisfied to grant the extension of time having regard to the reasons for the delay, any prejudice to the other parties by the delay, and the merits of the proposed appeal. 18 The relevant principles for granting leave to appeal are also well settled: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399. The decision challenged must be shown to be attended by sufficient doubt to warrant it being considered by an appellate court, and there must be substantial injustice to the putative appellant if leave to appeal were refused, supposing the decision challenged to be wrong.

CONSIDERATION 19 The material in support of the two applications is much the same. Each application was made on 21 August 2013, and refers to a FCC judgment given on 2 June 2013. The dismissal orders in each instance were made on 31 May 2013, and the costs orders on 2 July 2013. Nothing turns on that date difference. 20 In each case, the applicant asserts that he was unaware of the time within which he should have sought leave to appeal. 21 In each case, the application was accompanied by the same draft notice of appeal. It asserts "2 conflicting judes [sic] determinations", and that the determination was to the applicant's detriment. It seeks remittal of the two matters to the respondent for reconsideration, presumably after setting aside both the orders of the FCC and the two determinations of the respondent. 22 In each case, the application was accompanied by the same lengthy affidavit of the applicant. He says he lost $10,855 and $47,500 in share trading through the two FSPs the subject of his complaints to the respondent by "ongoing malfunctions and bad financial data processing of their electronic share trading platform". He says market buy and sell orders were executed at the wrong share prices and "numerous variations of these ongoing malfunctions of financial detriment". 23 There is then a general criticism of "internet computer technology" used in a variety of industries, including by Australian stockbrokers, and of the detriments that flawed technology may have caused. He refers to lack of capacity to address the asserted flaws, the ignoring of evidence of falsified electronic records, and bad faith by the respondents' case manager apparently in relation to his two complaints. It is only at that point that the focus appears to return to his two complaints to the respondents. He seems to assert that the respondent made the two determinations by "unconscionable conduct for the purpose of concealing a faulty Consumer Product and liability". 24 The affidavit then says, as the FCC noted, that he sought judicial review of the two determinations of the respondent "on the basis of breach of contract". 25 The affidavit then identifies and addresses several proposed grounds of appeal: (1) double costs: as the two matters were heard together by the FCC, it had "no jurisdiction" to order two sets of costs, and that it would be fair to order a single set of costs; (2) wrong respondent: the applicant should have named FICS as the respondent in the FCC proceedings, and in that context refers to the terms of the two applications to the FCC referred to above; (3) error in concluding that the respondents' determinations were not amenable to judicial review under the ADJR Act; (4) error in concluding that the respondents' determinations were not judicially reviewable, when the respondent itself enforced its determinations "in the courts", although (as the argument set out in the affidavit suggests) the error appears to be based upon the assertion that the decision in Mickovski was erroneous, and that the decisions in Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd [2004] NSWSC 826 (Masu) and D'Souza v Royal Australian and New Zealand College of Psychiatrists [2005] VSC 161 had correctly applied the English decision in Datafin to the opposite effect. (I take that ground to be a refinement of (3). I also observe that the applicant wrongly attributes to two judges then of the Supreme Court of Victoria the same identity, although nothing turns on that.) (5) contract law: the applicant was entitled to, but was not given, procedural fairness by the respondent [although in the subsequent text in the affidavit there are no particulars which would identify how he was deprived of procedural fairness, as the text suggests really a complaint about the outcome of the two determinations], and that they are reviewable "not merely as private contract but under an ADJR Act". 26 Before addressing those matters, it is convenient to have regard to the further affidavit of the applicant filed on 5 September 2013. It is the same in each matter. It very largely follows the earlier affidavit. It is obvious that the applicant feels very strongly about the inadequacy (as he sees it) of the computer technology used by Australian stockbrokers. I have considered the additional material in that affidavit. Relevantly, the further affidavit adds to grounds (2) above although in substance it refers to ground (4), and otherwise makes a few additions and deletions from the arguments advanced in the earlier affidavit. 27 As to ground (4), the affidavit adds a submission that the decision in Mickovski was wrongly applied by the FCC because the relevant Rules of FICS were different from those addressed by the FCC, and that the relevant authority was that of Masu. The additional argument really reflects what was said about ground (4) in the earlier affidavit. 28 The respondent's submission is also common to both applications. 29 In my view, both applications should be refused. 30 No satisfactory explanation has been given for the delay in making the applications. In the case of the 31 May 2013 orders, there is a delay of some six weeks after the 14 day period expired and in the case of the costs orders of 2 July 2013 the unexplained delay is two weeks. 31 There is no affidavit evidence to explain the delay. The only reference to this aspect is the assertion in each application that the applicant did not know the time to appeal. But he does not say whether he thought there was a time within which he should seek leave to appeal, or what it was that led to the applications being made on 2 August 2013 and not some later date. His affidavits do not suggest that he is unfamiliar with the existence of Rules of Court, or the Rules of the respondent, or that he did not have access to the Federal Court Rules 2011 (Cth), or that he would have had difficulty understanding them. 32 To the extent that that factor weighs in the scales against allowing the extension of time, it weighs against granting it. 33 What of the merits of the proposed appeals, if an extension of time is given and leave to appeal is given? 34 The proposed notice of appeal on each application is uninformative. It does not identify clearly what error is asserted on the part of the FCC. It suggests, by reference to two conflicting decisions, that the FCC wrongly applied Mickovski, rather than Masu. 35 That aspect emerges more clearly from the affidavits. 36 As to grounds (3) and (4); namely the availability of judicial review of the determinations under the ADJR Act, in my view, the applicant has not shown that there is any real prospect of showing that the respondent's determinations are reviewable under the ADJR Act. 37 In the first place, unlike the limited issues in the Mickovski and Masu cases, the starting point is the statutory jurisdictional foundation of the FCC under the ADJR Act. On that aspect, the FCC was clearly correct. The determinations of the respondent were not decisions under an enactment, so the right to review under s 5 of the ADJR Act was not available. They were decisions under a contractual structure established by ASIC. The applicant acknowledged that at the hearing before the FCC, and nothing in his submissions takes that aspect further. 38 Of course, once the FCC properly has jurisdiction by the genuine invocation of a statutory foundation (and the respondent does not contend that the applicant did not invoke the jurisdiction of the FCC by reliance on the ADJR Act), it may deal with the whole matter. 39 So the next question is whether the FCC erred in following the Mickovski decision so that the Datafin decision did not result in the determinations of the respondent being judicially reviewable on some other basis. There is no dispute that the effect of the Mickovski decision was properly understood by the FCC. 40 Mickovksi is a considered decision of the Court of Appeal of Victoria. It is therefore a decision which the FCC was, in essence, obliged to follow: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ. The primary judge did not overlook the Masu decision, but it cannot be said that his Honour erred in the circumstances in following the Mickovski decision. He was obliged to do so. 41 I have carefully considered the applicant's contention in his affidavits. I do not think they present an arguable case that Mickovski was erroneously decided. They do not really address in any critical way the analysis of the Court of Appeal in Victoria in that case that, even if the Datafin decision applies to common law administrative review in Australia, properly understood it could not operate in relation to the determinations. The contentions really only assert the importance of the Datafin decision, and of the earlier single judge decision in Masu. 42 Beyond those matters, the material seems to assert an independent contractual basis for jurisdiction. Again, I have carefully considered that material. I do not see a point of discrimination which might validly take the determinations out of the scope of the Mickovski decision. If there is some significant additional factual aspect which might have that effect, the material does not show that the applicant has any prospect of establishing it. 43 There are two other matters to address. 44 Firstly, ground (1) concerning costs: the FCC clearly had jurisdiction to award costs. The terms of any costs award are discretionary, provided no error of principle is shown. The fact that the two applications were heard together does not mean that separate costs orders in each could not, or should not, have been made. There is no material to support the assertion of error. The costs of each application may well have reflected the respondent's proper costs in each, and the FCC in the costs judgment on 2 July 2013 at [15] was careful to avoid duplication. Each application arose from a different determination of the respondent, concerning different (but perhaps overlapping) facts, so the costs of the respondent in each application were different. The FCC costs judgment of 2 July 2013 at [4] and [15] also shows that attention was given to the appropriate scales and to the schedules of costs provided by the respondent. 45 There is no prospect of an appeal against those costs orders succeeding. 46 Secondly, in regard to ground (2) to the extent it suggests that the applicant wrongly brought his applications against the respondent rather than FICS, there is also no prospect of an appeal succeeding on that basis. The applicant clearly brought the application correctly against the respondent, as it succeeded the role of FICS. The FCC recognised that the rules of FICS or the respondent applicable to the two separate determinations should be applied. There is nothing to suggest that the FCC erred in the identification of the applicable rules. As to their application, that has been addressed above. 47 Consequently, applying the principles to determine whether extensions of time should be granted to enable the applicant to seek leave to appeal from the order of the FCC in relation to either or both applications (the summary dismissal judgment and the costs judgment), the scales come down firmly against granting the extension of time. 48 In addition, in any event, I would not grant leave to appeal from those orders and judgments. In addition to the reasons already given, which indicate my view why the judgments and orders are not attended with sufficient doubt to warrant them being considered by a Full Court, I do not accept that the refusal of leave to appeal would cause injustice to the applicant even if those decisions were wrong. That is because, in any event, the determinations do not preclude the applicant (as distinct from the FSPs) from bringing such proceedings in an appropriate Court as he might otherwise bring, or have brought, as a result of the conduct of the FSPs of which he complains. 49 The applications are therefore refused. The applicant must pay to the respondent its costs of each of the applications. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.