The Relevant Facts
12 In support of its summary dismissal application, the CBA read the affidavit of Patrick James Forbes Lunn sworn on 18 October 2016. The applicant made a general relevance objection to that affidavit without articulating the basis of that objection. I admitted the whole of the affidavit of Mr Lunn including all of the annexures thereto.
13 In support of its summary dismissal application, FOS read the affidavit of Nicolas Crowhurst affirmed on 24 October 2016. The applicant objected to paragraphs 5 to 12 of that affidavit upon the basis that those paragraphs constituted nothing more than a summary of facts and matters otherwise to be found in the evidence before the Court and that, pursuant to s 136 of the Evidence Act 1995 (Cth), that summary should only be accepted as proof of the truth of its contents to the extent that it was otherwise supported by evidence before the Court. I received that evidence subject to a ruling in the terms sought by the applicant (see Transcript p 12 ll 9-34).
14 For her part, the applicant read and relied upon her affidavits sworn on 20 September 2016, 22 September 2016 and 12 December 2016, including all exhibits and annexures thereto. The applicant also relied upon the affidavit of Lorne Thomas Havenstein sworn on 22 September 2016 including all annexures and exhibits thereto. I shall refer to the applicant's affidavit of 20 September 2016 as "the applicant's principal affidavit".
15 The facts necessary to be found in order to determine the summary dismissal applications are, for the most part, not in dispute.
16 I now turn to set out those facts.
17 Where there is some dispute or controversy about any particular fact or matter and that dispute is relevant to the question of whether this proceeding should be summarily dismissed, I shall identify the fact or matter in dispute and, to the extent necessary, address the nature and extent of any dispute in respect of that fact or matter.
18 In 2008, the applicant obtained loan funds under a credit contract with the CBA dated 28 October 2008 (account number 10303682) in the amount of $300,000 (the first credit contract). That loan was secured by a mortgage over real property owned by the applicant and her former husband (Robert Foggo) at 16-18 Reuben Court, Kings Meadows, Tasmania (Reuben Court property). On 11 March 2011, the applicant sought and received permission from the CBA to redraw an additional sum of $13,000 in respect of this loan. Thus, the principal due under this loan thereafter became $313,000.
19 On 4 May 2010, the applicant and Mr Foggo made application to the CBA for a Wealth Package. Part of that package was an application for a further loan in the amount of $500,150. Most of that amount was used to pay out the existing lender to the applicant and Mr Foggo, Westpac Banking Corporation. The second loan was advanced by the CBA shortly after 4 May 2010 (Home Loan Account No 838932805) (the second credit contract) and was secured by a mortgage over the Elphin Road property and also a mortgage over other real property owned by the applicant known as 15 Abbott Street, East Launceston (the Abbott Street property).
20 The applicant encountered difficulties in complying with the obligations which she had undertaken under the two credit contracts which she had entered into with the CBA. This led to the applicant approaching FOS on 24 September 2012 with a request that FOS investigate and determine a dispute between the applicant and the CBA in relation to those two credit contracts.
21 In her referral to FOS, the applicant made three substantive complaints against the CBA. She said that the CBA had:
(a) Engaged in maladministration in making the loans because she could not afford to service those loans at the time when each of them was made;
(b) Not dealt with her appropriately when she found herself in financial difficulty; and
(c) Breached its duties owed to her as mortgagee in possession of the Reuben Court property.
22 In the first half of 2013, while the applicant's notified dispute was in the hands of FOS, the CBA took possession of the Reuben Court property. It subsequently sold that property by contract for sale dated 19 July 2013 for $400,000. One of the applicant's ongoing complaints is that the CBA sold that property at an undervalue. That complaint was included in the complaints made to FOS.
23 On 13 August 2014, FOS notified its determination in respect of the dispute which had been referred to it by the applicant (Final Determination).
24 FOS found that the CBA had been guilty of maladministration when it made the loans because:
(a) The living expenses accepted by the CBA at the time the loans were made were less than the acceptable standard for living expenses (based upon the Henderson Poverty Index or HPI);
(b) The projections used by the CBA in its serviceability assessment for the first credit contract were not sensitized in accordance with industry best practice;
(c) The CBA overestimated the business income of the applicant and Mr Foggo; and
(d) The CBA took Mr Foggo's full income into account in assessing serviceability despite the fact that he was on probation.
25 FOS found that the applicant's loss in respect of the first credit contract was $144,625.58. FOS found that that amount should be applied to reduce the amount due under the second credit contract, the first credit contract having already been fully repaid by the time that FOS issued its Final Determination.
26 FOS also found that the applicant's loss under the second credit contract was $28,340.06 being excess interest paid.
27 FOS therefore determined that the amount which the applicant should be obliged to pay under the second credit contract was $377,215.35 and that that amount should be split into two components: An interest bearing component ($307,422.46) and a non-interest bearing component ($69,792.89).
28 As mentioned at [25] above, the Final Determination proceeded upon the basis that the loan funds due to the CBA under the first credit contract had been repaid in full by the applicant and that she had no further liability to the CBA in respect of that contract.
29 As subsequently corrected, the Final Determination contained a finding that the CBA had not breached its duties as mortgagee in possession in respect of the Reuben Court property. All of the applicant's criticisms of the CBA's conduct as mortgagee in respect of that property were rejected by FOS.
30 It is clear from the detailed reasons provided by FOS in the Final Determination that the guiding principle which FOS adopted in making the Final Determination was that, to the extent possible, it would seek to restore the applicant to the position that she would have been in had the two loans not been made.
31 Initially, the applicant was not satisfied with the Final Determination. She sought further explanations from FOS. By letter dated 25 August 2014, the author of the Final Determination provided a detailed explanation of that Determination. The last paragraph on p 1 of that letter was in the following terms:
If you reject the Determination CBA will not be obliged to apply the reductions to the debt required by my Determination and can commence recovery action in regard to the full amount of the debt. However CBA will still have an ongoing obligation to you as a customer in financial hardship.
32 As I understand the way in which the FOS arrangements work, a participating financial institution (in this case, the CBA) voluntarily agrees to abide by the resolution of certain disputes referred to FOS, thereby ceding to FOS the power to determine on a final and binding basis certain types of disputes with the customers of the participating financial institution, if the customer chooses to engage with FOS for that purpose. By way of contrast, the customer has the right to elect between accepting the FOS determination once made or not accepting that determination. If the customer accepts the FOS determination, that is the end of the matter. The parties' rights in respect of the matters referred to FOS are thereafter governed by the FOS determination. If the customer does not accept the FOS determination, the parties' rights remain as they were before the referral to FOS.
33 The idea behind the FOS process seems to be that one way of addressing what may be an imbalance between the bargaining position of a financial institution and that of its customers is to provide this opportunity to the customer to secure an independent determination in respect of the customer's complaint without resort to litigation while at all relevant times retaining the right not to accept that determination. The basis of the FOS process is entirely contractual.
34 As I have already noted, the Final Determination in the present case contained a decision by FOS that the applicant be given the benefit of a substantial reduction in the amount which she was obliged to pay to the CBA pursuant to the remaining credit contract. The amount of that reduction was $173,275.64 (being the total of three amounts, namely, $144,625.58, $28,340.06 and $310.00). The Determination also provided for a reduction in the interest which the applicant would have to pay in the future.
35 On or about 12 September 2014, the applicant accepted the Final Determination by signing a formal form of acceptance but added next to her signature on the form of acceptance the words "under duress" in brackets.
36 By letter dated 16 September 2014, FOS responded to the applicant's transmission of her acceptance with the words "under duress" appended to her signature by stating the following:
(a) FOS would only accept a standard form release which has not been altered in any way but which has simply been signed and dated by the applicant. The "standard form release" is the FOS standard form styled "Acceptance of Determination", samples of which were annexed to Mr Crowhurst's affidavit and marked "NC-1" and "NC-3";
(b) By adding the words "under duress" next to her signature, the applicant had failed to accept the Final Determination;
(c) If the applicant wished to accept the Final Determination in full and final settlement of the dispute which she had notified to FOS, she was required to provide to FOS a signed and dated Acceptance of Determination form that has not been altered or amended in any way and to do so by 19 September 2014; and
(d) If such a signed Acceptance was not received by 19 September 2014, FOS would assume that the applicant was intending to reject the Final Determination.
37 At par 87 of her principal affidavit, the applicant claims that she was forced to sign the Final Determination under duress. She says that she signed it under economic duress. I have taken the applicant's references to "the Final Determination" and "determination" in par 87 to be references to her signed acceptance of the Final Determination. The only evidence which the applicant gives of such duress is the following:
I wrote the words "Under Duress" beside my signature. I was then asked by a CBA officer [whose name I do not recall] to remove the words "Under Duress" or "You will get nothing from the Bank or FOS"; however, I did not remove the words from the document but I placed a sticky note over the words. I then rescanned the document and sent it back to FOS, to show by reference to the original FOS document that I was being forced into the position of accepting the Final Determination against my will, and my interests.
38 Thus, on 19 September 2014, the applicant signed and returned to FOS by email what would have appeared to FOS to be a clean copy of the Acceptance form in which she accepted the Final Determination in full and final settlement of all matters between herself and the CBA arising out of the dispute. That signed Acceptance, as received by FOS, had not been altered, added to or qualified in any way.
39 In about early October 2014, the CBA gave effect to the Final Determination by recalculating the amounts due under the second credit contract and restructuring that contract in accordance with the decision of FOS specified in the Final Determination. The applicant accepted the benefit of these recalculations which provided to her a reduction in her debt to the CBA of a little over $173,000.00 and some interest relief in the future.
40 In this proceeding, notwithstanding that she signed, dated and dispatched to FOS an unqualified acceptance of the Final Determination on 19 September 2014, the applicant continues to argue that she never bound herself to accept that Determination.
41 On 30 September 2014, FOS published a corrected Determination in which it made clear that it had determined that the CBA had not failed to perform its duties as mortgagee in possession in respect of the sale of the Reuben Court property.
42 In November 2014, the applicant lodged with FOS further disputes between the CBA and her. However, FOS declined action in respect of these disputes upon the basis that all disputes as between the applicant and the CBA had already been determined by its Final Determination dated 13 August 2014, as later corrected. Subsequently, the applicant lodged with FOS further disputes with the CBA. These too were rejected, on this occasion because the applicant had already commenced proceeding No 532 of 2015 in the Supreme Court of Tasmania (proceeding SC 532 of 2015).
43 In late 2014 and early 2015, the applicant negotiated directly with the CBA in an attempt to secure further concessions from the CBA.
44 On 13 April 2015, the CBA commenced proceedings pursuant to s 146 of the Land Titles Act 1980 (Tas) in the Supreme Court of Tasmania, Hobart Registry for possession of the Abbott Street property and of the Elphin Road property (proceeding SC 256 of 2015).
45 On 2 June 2015, the applicant commenced an action for damages against the CBA in the Launceston Registry of the same Court (proceeding SC 532 of 2015).
46 On 17 June 2015, the applicant filed an Interlocutory Application in proceeding SC 532 of 2015 in which she sought an order that the CBA be restrained from taking possession of the Elphin Road property and of the Abbott Street property until further order or until an agreement between her and the CBA is reached. At the same time, she also sought an order staying proceeding SC 256 of 2015 until further order.
47 On 22 June 2015, that Interlocutory Application came before Holt AsJ. The applicant was represented on that day by an experienced lawyer, Mr Lester of Clarke & Gee, Lawyers. The CBA was represented by Senior Counsel. I have read the transcript of the exchanges in argument on that day. I do not think it is necessary to refer to that material in any detail. During the course of the morning, certain discussions took place between the legal representatives of the parties which led to the application then before the Court being resolved by consent.
48 The orders of the Court which were made by consent on 22 June 2015 in proceeding SC 256 of 2015 (the 22 June 2015 Orders) were in the following terms:
THE COURT ORDERS BY CONSENT THAT -
1. Unless in the meantime all money due under memorandum of mortgage number C970922 is paid, possession of the premises described in folio of the register volume 41683 folio 1 is to be given by the respondent Susan Burge to the applicant Commonwealth Bank of Australia (A.B.N. 48 123 123 124) on or before the 90th day following service of this order by postage or otherwise and where service is effected by post the order shall be deemed to have been served on the second business day following the date of posting.
2. Unless in the meantime all money due under memorandum of mortgage number C970922 is paid, possession of the premises described in folio of the register volume 91917 folio 16 is to be given by the respondent Susan Burge to the applicant Commonwealth Bank of Australia (A.B.N. 48 123 123 124) on or before the 150th day following service of this order by postage or otherwise and where service is effected by post the order shall be deemed to have been served on the second business day following the date of posting.
49 Order 1 made by his Honour on that day related to the Abbott Street property. Order 2 related to the Elphin Road property. A sealed copy of the 22 June 2015 Orders was served upon Mr Lester on 2 July 2015.
50 The effect of the 22 June 2015 Orders was that the applicant was given time to repay her debt to the CBA, failing which the bank was to be given possession of the Abbott Street property and Elphin Road property. The time allowed to the applicant under the 22 June 2015 Orders in respect of the Abbott Street property was 90 days after service of the orders and the time allowed to the applicant in respect of the Elphin Road property was 150 days after service of those orders. That is a period of approximately five months.
51 As I have already noted, the 22 June 2015 Orders were served on the applicant on 2 July 2015. Thus, under the 22 June 2015 Orders, the applicant had until the end of November 2015 to pay the CBA in full, failing which the CBA would be entitled to possession of both properties.
52 On 30 July 2015, in proceeding SC 532 of 2015, the applicant filed an Amended Statement of Claim in which she claimed that both credit contracts were void.
53 In her Amended Statement of Claim filed on 30 July 2015 in proceeding SC 532 of 2015, the applicant alleged that:
(a) In respect of the 2008 loan, the CBA had conducted an assessment of the applicant and Mr Foggo's capacity to afford and repay the loan and, in doing so, had placed too much emphasis on the assets and liabilities of the applicant and Mr Foggo and had failed to consider their income and expenses;
(b) In respect of the 2010 loan, the CBA had made similar errors of assessment; and
(c) As a result, the CBA was guilty of unconscionable conduct vis-a-vis the applicant and Mr Foggo in breach of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), in breach of the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act) and in breach of RG 209 being a Regulatory Guide published by the Australian Securities and Investments Commission (ASIC) under the ASIC Act.
54 The nub of the applicant's complaint as reflected in her Amended Statement of Claim in proceeding SC 532 of 2015 was that the CBA had failed properly to assess the capacity of the applicant and her former husband to meet her ongoing commitments under the two loans which she and Mr Foggo had entered into with the CBA in that the CBA focussed too much on her and her former husband's asset position and not sufficiently on their cash flow. She claimed that the CBA was engaged in asset lending and that both loans were always unrepayable except through the forced sale of the applicant's assets.
55 On 7 October 2015, the CBA obtained a Writ of Possession in respect of the Abbott Street property. On 6 November 2015, the CBA took possession of that property.
56 Mr Lester continued to represent the applicant until late October 2015.
57 On 28 January 2016, the applicant filed an Interlocutory Application in proceeding SC 532 of 2015 in which she sought the following relief:
1. Pursuant to rule 887 of the Supreme Court Rules 2000 (Tas) the defendant is restrained from selling the property of 15 Abbott Street, East Launceston in Tasmania and is further restrained from taking possession and selling the property at 127 Elphin Road, Launceston in Tasmania until further order of this Court or agreement between the plaintiff and the defendant;
2. Any further orders that seem appropriate to the Court.
58 The interlocutory relief sought by the applicant by means of her Interlocutory Application filed on 28 January 2016 was, in substance, an application to prevent the CBA from taking any further steps to sell either the Abbott Street property or the Elphin Road property.
59 The injunction application which the applicant had filed on 28 January 2016 came before the Court on 10 February 2016. On that day, there was a lengthy hearing at which the applicant gave evidence. Ultimately, the applicant's application was dismissed and the question of costs was reserved. That application was heard by Holt AsJ. His Honour gave reasons for the decision which he made on that occasion. The applicant included those reasons in her principal affidavit at pages 351 to 355.
60 On 12 February 2016, the Abbott Street property was sold at auction.
61 On 26 February 2016, the CBA took possession of the Elphin Road property by executing a Writ of Possession which it had previously obtained from the Supreme Court of Tasmania.
62 On 7 March 2016, a preliminary question came on for trial before Pearce J in the Supreme Court of Tasmania in proceeding SC 532 of 2015. On that occasion, the entirety of that proceeding was resolved by agreement between the parties. As a result, on the same day, his Honour directed that there be judgment for the CBA in the action with costs to be taxed if not agreed. The settlement agreement reached between the parties on 7 March 2016 was recorded in a Deed of Settlement and Release dated that day (7 March Deed). That Deed was in the following terms:
THIS DEED OF SETTLEMENT AND RELEASE is made the 7th day of March 2016 BETWEEN Commonwealth Bank of Australia (ABN 48 123 123 124) ("the Bank") AND SUSAN BURGE ("Burge")
WHEREAS the parties are in dispute in respect of Burge's alleged liabilities to the Bank and the Bank's alleged liabilities to Burge.
Without any admission of liability by either party the parties have agreed to fully and finally settle all disputes between them on the terms of settlement set out in this deed of settlement and release.
1. Burge is to consent to a direction or order that judgment be entered for the Bank in Supreme Court of Tasmania action No. 532 of 2015 ("the action") together with costs:
(a) That are agreed in the sum of $50,000.00 in the event that payment is made in accordance with clause 2 hereof; or
(b) Are to be taxed in the event that it is not.
2. On or before 18 April 2016 Burge will pay to the Bank the sum of $452,469.71 (which sum will include $50,000.00 for the agreed costs of the action) less the net proceeds of sale of the property known as 15 Abbott Street East Launceston.
3. If Burge does not pay the amount referred to in clause 2 on or before 18 April 2016 then the Bank will exercise its power of sale in respect of the property known as 127 Elphin Road Newstead and the amount that Burge is to pay to the Bank will become:
• $402,469.71 (together with the defendant's costs of the action as taxed or agreed, and the defendant's costs of Supreme Court proceedings No. 256 of 2015 in accordance with the loan agreement and the mortgage);
• Together with interest on the sum of $335,628.37 at the rate of 5.87% per annum from 8 March 2016 until payment; and
• Together with the costs of the sale in accordance with the loan agreement and mortgage in respect of that property;
• Less the proceeds of the sale of the properties known as 15 Abbott Street East Launceston and 127 Elphin Road Newstead.
4. The Bank undertakes that it will not take any steps to have judgment entered pursuant to the direction or order referred to in clause 1 before 18 April 2016.
5. Burge releases and forever discharges the Bank from all and any liability past, present or future and from all claims suits demands actions or proceedings arising out of or connected with:
(a) Any and all loan accounts conducted with the Bank by her either alone or in conjunction with any other person or entity at any time at or before the date of this deed;
(b) Any and all securities given to the Bank by her either alone or in conjunction with any other person or entity at any time at or before the date of this deed.
6. Burge will withdraw any complaint made to the Finance Ombudsman Service, the OAIC, ASIC, Tasmania Police, the Australian Federal Police and any State or Federal authority and will not make any further complaint to any State or Federal authority in respect of any of the matters referred to in clause 5.
7. The Bank and Burge will keep the provisions of this deed of settlement and release and all negotiations resulting in the deed confidential save as either may be required to disclose such matters to their legal or financial advisers or as otherwise required by law.
8. Neither Burge nor the Bank will disparage or denigrate the other.
9. The laws of Tasmania govern this deed and each party agrees to submit to the jurisdiction of the Courts of Tasmania.
63 Clause 3 of the 7 March Deed expressly provided that, if the applicant did not pay the amount due as specified in cl 2 thereof on or before 18 April 2016, then the CBA would exercise its power of sale in respect of the Elphin Road property and the debt due to the CBA would be quantified at the figure provided for in cl 3.
64 The applicant was represented at the hearing on 7 March 2016 by experienced Senior Counsel, Mr James Kewley SC, of the Melbourne Bar. Mr Kewley SC appeared before the Court when the matter was called on in the morning and secured an order that the matter stand down while the parties conducted negotiations. Mr Kewley SC then endeavoured to negotiate a settlement on behalf of the applicant with the legal representatives of the CBA. Those negotiations continued throughout the day and ultimately resulted in the settlement reflected in the 7 March Deed.
65 The applicant suggested in her principal affidavit that Senior Counsel for the CBA had "threatened" her by telling her more than once during the course of the day on 7 March 2016 that her case was a "precedent case" and that the CBA would not spare any expense in an endeavour to win it. She also made allegations against her own Counsel suggesting that, late in the day, he threatened to withdraw leaving her with no representation if she did not agree to the settlement embodied in the 7 March Deed.
66 Ultimately, in her principal affidavit, the applicant suggested that she had executed the 7 March Deed under duress.
67 The moneys required to be paid under the 7 March Deed were not paid in accordance with the terms of that Deed. Accordingly, on 20 April 2016, judgment was entered for the CBA against the applicant in proceeding SC 532 of 2015. The applicant was also ordered to pay the CBA's costs as taxed if not agreed. These steps were taken pursuant to the terms of the 7 March Deed (cl 1 to cl 4 thereof) and were a mere formality when it is remembered that Pearce J had already directed the entry of judgment on 7 March 2016.
68 It is apparent from the above account of the dealings between the parties that, from early 2016 at the latest, the CBA had made clear that, if the amount due to it from the applicant was not repaid in full within the timeframes agreed with the applicant, it would take possession of the Elphin Road property and sell that property at a time and in a manner to be determined by the CBA. It seems to me that it made that position very plain. However, whether it spelled out its intention to sell in express terms or not, it certainly made clear that it intended to take possession of that property. One of the natural incidents of a secured creditor taking possession of real property comprising or forming part of its security is the real potential for that creditor to exercise its power of sale under its security. After all, in most cases, why else would the secured creditor take possession of its security property? In addition, it seems to me to be quite clear that, at all times from early 2016, at the latest, the applicant understood that there was a real possibility that the CBA would take steps to take possession of and sell the Elphin Road property. This is demonstrated by the terms of the Interlocutory Application which she filed on 28 January 2016.
69 On 4 July 2016, solicitors then acting for the applicant sent an email to the solicitors acting for the CBA. That email was in the following terms:
Mr. Patrick Lunn
Simmons Wolfhagen Lawyers
168 Collins Street
Hobart TAS 7000
Dear Sir,
We refer to the action pending by Commonwealth Bank of Australia (whom we understand you act for) in respect of the threatened sale of real and personal property of Ms. Susan Burge as from tomorrow. We act for her in respect of that issue.
Given the circumstances, Ms. Burge requires your client's undertaking by midday tomorrow, 5 July 2016 to stay the sale of her property for a period of one calendar month to allow Ms. Burge to commence proceedings in the Federal Court of Australia to set aside the security and loan contract arrangements in respect of the property your client is pursuing on the grounds of arguable contraventions of the National Credit Code and the Australian Securities and Investment Commission Act 2001. We note that unless such undertaking is given by the time stipulated, Ms. Burge intends on filing an urgent injunction application in the Federal Court of Australia to prevent your client from taking action against her property.
We await your confirmation.
Yours faithfully
(Emphasis in original.)
70 That email demonstrates that, at least as far as the applicant was concerned, as at 4 July 2016, she understood that the CBA was threatening to sell both her Elphin Road property and her personal property kept there as early as the very next day, 5 July 2016.
71 By email sent in response, the CBA declined to accede to the applicant's request to provide an undertaking not to sell the Elphin Road property for one month. In that email, the CBA said:
Dear Sir,
This is an open e-mail.
We refer to your e-mail set out below.
We attach for your reference:
1. a copy of sealed consent orders that were made by the Supreme Court of Tasmania in Hobart Registry matter no. 256 of 2015 on 22 June 2015 when your client appeared in Court with her former legal practitioner Mr Fred Lester from the law firm Clarke and Gee;
2. a copy of an amended statement of claim filed on behalf of your client in Supreme Court of Tasmania Launceston District Registry Action No. 532 of 2015 on 30 July 2015 together with our client's defence to the amended statement of claim filed 31 August 2015;
3. a copy of deed of settlement and release executed by your client on 7 March 2016; and
4. a copy of a consent judgment that was entered in Supreme Court of Tasmania Launceston District Registry Action No. 532 of 2015 on 20 April 2016 upon the consent of the parties and by order of a judge that was made in the presence of your client and her former barrister Mr James Kewley on 7 March 2016.
You may or may not also be aware that a previous application made by your client to attempt to restrain our client from exercising its power of sale in respect of this property was heard and refused by the Supreme Court of Tasmania on 10 February 2016.
Our client declines your client's request to provide her with the undertaking that she seeks.
We have instructions to accept service of any proceedings your client chooses to commence against our client.
Kindly advise the basis upon which you say that your client has any extant cause of action against our client.
Yours faithfully
72 No steps were taken by the applicant on or after 5 July 2016 to restrain the CBA from selling the Elphin Road property until 6 September 2016 when she made an application to a single justice of the High Court of Australia in which she sought Constitutional Writ relief, the effect of which was to restrain the auction of the Elphin Road property which was then programmed to take place on 23 September 2016. That application was heard on 15 September 2016 by Gordon J and was dismissed with costs on that day.
73 On 16 September 2016, the applicant commenced two separate sets of proceedings in the Launceston District Registry of the Supreme Court of Tasmania (matters No 2717 of 2016 and No 2720 of 2016). In the first of those matters, the applicant sought an extension of the time within which to appeal the 22 June 2015 Orders and the entry of judgment made in proceeding SC 532 of 2015 on 20 April 2016. She claimed identical relief in proceeding No 2720 of 2016. By the time that these two matters came on for hearing, the applicant was also seeking an extension of the time within which to appeal the order made by Holt AsJ on 22 June 2015 striking out her Statement of Claim in proceeding SC 532 of 2015, notwithstanding that his Honour had given her leave to replead, a leave of which she had availed herself on 30 July 2015 when she filed her Amended Statement of Claim in that proceeding. She also sought, once again, interlocutory injunctive relief in relation to the sale or the completion of the sale of the Elphin Road property.
74 Chief Justice Blow, the Chief Justice of Tasmania, heard all of the applicant's applications in proceedings No 2717 of 2016 and No 2720 of 2016 on 4 November 2016 and delivered judgment in respect of those applications on 10 November 2016 (Burge v Commonwealth Bank of Australia [2016] TASSC 60) (Burge No 3). The Chief Justice refused all of the applications for extensions of time which the applicant then had extant in the Supreme Court of Tasmania. He also dismissed the applicant's claims for interlocutory relief. At [1]-[27], his Honour traversed the relevant facts.
75 After referring to various sections of the Supreme Court Civil Procedure Act 1932 (Tas) and, in particular, to s 191B(1) of that Act, the Chief Justice said (at [37]-[46]):
That subsection makes it clear that "any order … made … by the Associate Judge … is as valid and binding on … all parties concerned as an order … made … by a judge sitting in chambers or in court". It follows that a consent order made by the Associate Judge is just as binding on all parties concerned as a consent order made by a judge. By virtue of s 43(a), a consent order made by a judge is so binding that no party may appeal to the Full Court from it. It follows that the possession orders made by Holt AsJ on 22 June 2015 were so binding that neither party may appeal to the Full Court from them.
When there is a right of appeal from a consent order, the approach to be taken by the appellate court depends on whether the order evidences a contract between the parties to the proceedings. When that is the situation, the appeal cannot succeed unless there are grounds that warrant interference by the Court with the parties' contract: Huddersfield Banking Co Limited v Henry Lister & Son Limited [1895] 2 Ch 273 at 280; Harvey v Phillips (1956) 95 CLR 235 at 243-244; Harris v Caladine (1991) 172 CLR 84 at 104-105; Sky-Ridge Pty Ltd v Burlington Pty Ltd (1995) 4 Tas R 485 at 493-495.
In my view the orders for possession made by Holt AsJ on 22 June 2015 evidenced a contract made between the parties. When an order for the possession of premises is made in favour of a mortgagee under s 146 of the Land Titles Act, s 146(5) empowers this Court to order that possession be given by the mortgagor to the applicant "on or before such day, not being less than 4 weeks from the day of hearing, as the Supreme Court thinks fit to specify, unless within that period all the money due and costs are paid". It is clear that it was agreed between the parties that, in consideration of the applicant consenting to orders for the possession of the two properties, the CBA would consent to a 90-day order in respect of the Abbott Street property and a 150-day order in respect of the Elphin Road property. It follows that an appeal from either of the possession orders could succeed only on a basis upon which a contract might be impugned, such as fraud, duress, undue influence, or unconscionable conduct.
Similarly, it is clear from the terms of the Deed of Settlement and Release that the consent judgment of 20 April 2016 was the product of a contract made between the applicant and the CBA.
It follows that, if I am wrong about the applicability of s 43(a), appeals in relation to the possession orders and the consent judgment could only succeed on a basis that would warrant interference with a contract.
Economic duress
Economic duress is a recognised category of duress which, when established, will result in a contract being voidable. McHugh JA (as he then was) explained the law in relation to economic duress in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40. His Honour said at 46:
"The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate? Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress."
The applicant has sworn an affidavit in which she explains her reasons for consenting to the various orders from which she now wishes to appeal. There is nothing in that affidavit about the orders of 22 June 2015 to suggest that her will might have been overborne by economic duress on that day. She explained that her counsel advised her that day that the only way forward was to negotiate a longer sale period, and that she hoped to have her complaints about the CBA's conduct dealt with in her action, 532/2015. There is nothing in her affidavit to suggest that she might have given in to illegitimate pressure from the CBA or its representatives on that day.
Her description of the events that led up to the signing of the Deed of Settlement and Release on 7 March 2016 contains evidence of the application of pressure by representatives of the CBA. Her evidence as to their conduct can be summarised as follows:
• Initially Pearce J adjourned the trial so that the parties could conduct a round table conference. At that conference, the CBA legal team refused to mediate or discuss "any matter other than the Trial we were there for".
• Mr Lunn, junior counsel for the CBA, stated that the applicant owed an amount that was more than $30,000 greater than figures she had been provided with. However, after discussions in her absence, her counsel later advised her that he had caused that additional sum to "go away".
• The CBA's representatives refused to explain to her how the amount in the deed had been worked out. However the amount ($402,469.71) was lower than the figure that the CBA initially seemed to want (over $450,000).
• Mr Jackson SC, senior counsel for the CBA, said words to the effect that hers was a precedent case; that the CBA and "the Banking Association" had stated that they would throw any amount of money at her trial to win it; that even if she won the CBA would appeal; and that the CBA would continue to appeal until it won.
• Later, after her counsel had threatened to withdraw, Mr Jackson SC said words to the effect of, "I am sorry that you are the precedent case but we are just trying to save you money as the bank and the Banking Association have access to endless amounts of funds to throw at this matter. If you don't sign the deed you will basically have nothing left because we would continue to appeal until we won."
If those threats were made, I do not think that they were improper or illegitimate. Obviously the applicant was in a position of extreme financial disadvantage. However the representatives of the CBA went no further than to threaten to exercise, and keep on exercising, the CBA's rights as a litigant.
If I am wrong as to the effect of s 43(a) of the Supreme Court Civil Procedure Act, appeals from the possession orders and the consent judgment would be unlikely to succeed because it is unlikely that the applicant would be able to establish economic duress, as distinct from the exertion of legitimate pressure in pre-contractual negotiations.
76 The Chief Justice then addressed other arguments raised by Counsel for the applicant at [47]-[49]. His Honour described those arguments as "untenable".
77 Finally, at [50]-[54], his Honour dealt with the question of delay and prejudice to the CBA. In conclusion, at [55]-[61], the Chief Justice said:
The orders for possession of the Abbott Street and Elphin Road properties were consent orders. The judgment of 20 April 2016 was a consent judgment. Because of the provisions of ss 43(a) and 191B(1) of the Supreme Court Civil Procedure Act, there was no right of appeal to the Full Court from any of those orders. There is therefore no time limit in relation to them that can be extended.
If I am wrong as to that in relation to any or all of those orders, then I think extensions of time should be refused because each consent order was entered into pursuant to a contract, and there appears to be insufficient prospects of any such contract being avoided on the basis of economic duress or any other basis, and also because the applicant does not have a good explanation for her delay.
An extension of time in relation to the possession order relating to the Abbott Street property would be futile because the purchaser of that property must now have an indefeasible title to it.
An extension of time in relation to the order striking out the statement of claim in action 532/2015 would be futile because that action was dismissed on 20 April 2016, and cannot be revived.
For these reasons I have decided to dismiss the applications for every extension of time. As counsel for the applicant conceded, it would not be appropriate to grant either of her injunction applications in these circumstances.
In par 2 of her interlocutory application of 3 November 2016, the applicant sought "the right to a fair trial". That part of her application must fail because she has no pending proceedings in this Court.
The two originating applications (2717/2016 and 2720/2016), and the interlocutory applications filed on 16 September 2016 and 3 November 2016 are all dismissed.
78 As a result of the judgment of Blow CJ in Burge No 3, no further avenue of appeal in the Supreme Court of Tasmania in respect of the 22 June 2015 Orders or the 20 April 2016 judgment is available to the applicant. Those orders and that judgment therefore remain in place and have effect as between the applicant and the CBA according to law. In addition, in the course of dealing with the contractual basis for the 20 April 2016 judgment, ie the 7 March Deed, Blow CJ made a finding that, even if he were to accept the applicant's evidence as to the circumstances in which she came to sign the 7 March Deed and to agree to settle her claims against the CBA, that evidence did not establish that she signed that Deed and agreed to that settlement under duress. His Honour took the view that whatever pressure was applied to the applicant by the CBA and its legal representatives on that day was not improper or illegitimate.