Coutsournas v Commonwealth Bank of Australia

Judgment (11 paragraphs)

[1]

REASONS FOR JUDGMENT 1 The following two related applications were before the Court: (a) the application of Peter Coutsournas filed on 11 June 2010, in which Mr Coutsournas seeks relief pursuant to a number of provisions of the Corporations Act 2001 (Cth) ("Corporations Act"), the Trade Practices Act 1974 (Cth) ("Trade Practices Act"), the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act") and the Fair Trading Act 1999 (Vic), relief and damages for "breach of guarantee" breach of contract, "under the Common law of fraud" and "under breach of the unwritten law of Australia, to and for a Fair Go". (b) a notice of motion filed on 1 July 2010 by the respondent, the Commonwealth Bank of Australia ("CBA"), seeking that Mr Coutsournas' proceeding be dismissed with costs pursuant to O 20 r 5 of the Federal Court Rules. 2 The notice of motion is supported by the affidavits of Gregory Peloso, a Manager in the in Risk Management Division of the CBA, sworn on 1 July 2010 and 11 August 2010. 3 Mr Coutsournas' application is accompanied by a statement of claim filed on 11 June 2010, an affidavit sworn by Mr Coutsournas on 11 June 2010, an amended statement of claim filed on 6 August 2010 and a further affidavit of Mr Coutsournas sworn on 6 August 2010. The documents were prepared by Mr Coutsournas, who is not legally qualified. He was assisted at the first hearing of the matter on 6 July 2010 by counsel who appeared as an amicus curiae pursuant to the Duty Barristers Scheme and whose assistance the Court acknowledges. 4 The relief sought by Mr Coutsournas includes damages for breach of the specified statutory provisions, breach of contract and "breach of guarantee", damages for negligence, and orders that the CBA pay him various amounts, including $10 million together with interest, exemplary damages for previously bankrupting him (totalling over $100 million together with interest compounding daily), damages for loss of sales of the business, lost average wages and superannuation, and an immediate payment of $143,417,559.81 together with interest. Mr Coutsournas also seeks an order that he be permitted to open business and personal bank accounts with the CBA. 5 The application identifies as questions of law for resolution "what is a bounced cheque" and "what is a bounced cheque while in a credit balance called"? 6 None of the documents drawn by Mr Coutsournas conforms to the established conventions of pleading or principles governing the form and content of affidavits. The statement of claim filed on 11 June 2010 is grossly repetitive, lacks chronological or logical sequence and more significantly, fails, on a benevolent reading, to provide a coherent statement or intelligible narrative of Mr Coutsournas' substantive complaints. Sections of the affidavit sworn on 11 June 2010 are unintelligible. 7 From the documents, in so far as they can be understood, it appears that Mr Coutsournas' principal complaint relates to the CBA's dishonour of cheques written for his business, which was conducted through a company called Southern Food Management Pty Ltd ("Southern") during the period 2000 to 2004. The business subsequently failed, and Southern and Mr Coutsournas were party to numerous proceedings against the CBA in the Victorian Civil and Administrative Tribunal ("VCAT"). 8 In his first affidavit, Mr Coutsournas alleged that a VCAT hearing in proceeding C49981/2002 was flawed, as evidence was wrongly excluded and he was denied natural justice. 9 Mr Coutsournas alleged that in the VCAT proceedings, the CBA argued that "it was above the law and could bounce anyone's cheques both business and personal whenever they choose to do so" by reference to clearance time. He alleged that the CBA failed to notify him before dishonouring cheques which caused him financial hardship. 10 In his first affidavit, Mr Coutsournas submitted that there is no clearance time in the Cheques Act 1986 (Cth), that penalty fees are illegal and that the CBA relied on its immunity from civil banking claims under the Trade Practices Act. He alleged that the CBA illegally and fraudulently deducted fees while an account was in credit. He complained that he could not change banks from 2000 to 2004, because his bank statements showed penalty fees; could not obtain assistance from the banking ombudsman, as the business was a corporation; that ASIC and the ACCC "could not get involved"; further, that the Prime Minister's Office, Treasury and Attorney General's Department referred him on. 11 In his first affidavit, Mr Coutsournas further alleged that: (a) the CBA "harassed and coerced over 70 cheques bounced while in credit balance" (sic); (b) his business, "Southern Food Management" had over 700 bank account transactions that had all been "litigated in VCAT"; (c) his business could not be sold due to the damage done by the CBA in dishonouring cheques, which caused financial hardship, compounding debts, creditors ceasing to supply and "a slow gradual decline of profits to losses" which "deterred potential buyers over the years"; (d) the business was growing and profitable, turning over $2.2 million per annum before the CBA "started bouncing cheques again" on 27 January 2000; (e) the business was liquidated in 2009. It was his second business liquidated by the CBA's "action to profit from illegal item fees with their fraudulent practice of bouncing payments to suppliers while in credit balance"; (f) Mr Coutsournas had "a separate and add on contractual agreement with the [CBA] with my personal guarantee" and "a separate and add on contract with the [CBA] to 'bankroll me'". 12 The statement of claim reiterated allegations of breach of many different statutory provisions, largely unrelated to material facts. It offered no definition or sufficient identification of key terms, including the business. In summary, it alleged that: (a) Mr Coutsournas was a customer of the CBA in the 1980s whose personal cheque accounts the CBA "forcefully closed". (b) In mid to late 2000, Mr Coutsournas gave a personal guarantee of the liabilities of the business. (c) The CBA failed to advise him to seek independent legal and financial advice on the effect of the guarantee, the financial risks or that he could refuse to give the guarantee. (d) Mr Coutsournas was a secretary, shareholder and employee of the business (sic). (e) The CBA took Mr Coutsournas' personal guarantee under false pretences. It lowered the limits on his two small unsecured overdraft accounts, refused the working capital finance which was "in principle pre‑approved" and aggressively charged excessive fees until its deductions exceeded the overdraft limits. Further, the CBA bounced cheques "while in credit balance more often" after it obtained the personal guarantee. (f) On 10 August 2001, the CBA entered into "a binding vertical contract" in lieu of Mr Coutsournas not seeking damages "prior to entering the orders for the business of VCAT". The CBA bankrupted Mr Coutsournas in 1991. (g) In 2003 and September 2004, the CBA "forcefully closed" Mr Coutsournas' personal and business accounts, due to his "inappropriate conduct" in operating them. That action further damaged his business. (h) Mr Coutsournas was forced to change banks and opened an account with the ANZ, which provided less advantageous terms. In consequence, he suffered a nervous breakdown in late 2004 to 2005. (i) The ANZ failed to provide the expected facilities, so Mr Coutsournas had to borrow from non‑bank lenders. (j) Mr Coutsournas' business was again liquidated, his credit rating was affected, and he currently does not receive adequate wages or the minimum wage. (k) In 2008, Mr Coutsournas met the CBA's Chairman in the foyer after the Annual General Meeting who promised that the issues would be resolved, which did not occur. 13 The materials exhibited to Mr Coutsournas' affidavit include excerpts from a dictionary; copies of bank statements for Southern; correspondence from CBA to Southern regarding cheque dishonour; a market analysis document; calculations of lost wages and of Mr Coutsournas' claim in the sum of over $100 million as at 1 June 2010. It also exhibits a copy of a bank statement for an account in the name of Mr Coutsournas dated 18 March 2003 with a closing balance of $248 credit (not identifying the bank) and a copy of a blank CBA cheque bearing Mr Coutsournas' name.

Notice of motion 21 The notice of motion filed 1 July 2010 by the CBA seeks that the proceeding be dismissed pursuant to O 20 r 5 of the Federal Court Rules. O 20 r 5 of the Federal Court Rules provides: Stay or dismissal (proceedings commenced on or after 1 December 2005) (1) This rule applies to a proceeding commenced on or after 1 December 2005 if the Court is satisfied that, for the proceeding generally or for a claim for relief in the proceeding: (a) the proceeding or claim is frivolous or vexatious; or (b) the proceeding or claim is an abuse of the process of the Court. (2) The Court may order that the proceeding be stayed or dismissed generally or in relation to the claim for relief. (3) The Court may receive evidence on the hearing of an application for an order under subrule (2). 22 By his first affidavit sworn 1 July 2010 in support of the notice of motion, Mr Peloso deposed to and exhibited a number of orders and reasons for decisions of VCAT in relation to proceedings between the CBA, Southern and Mr Coutsournas. 23 A perusal of the exhibited materials indicated the following. 24 On 10 August 2001, VCAT ordered by consent that a proceeding brought by Southern be struck out and that the CBA reimburse Southern for all overdrawing and cheque dishonour fees together with interest from 3 to 10 August 2001 inclusive, refer its file in the matter to its credit management department, and charge no further overdrawing and cheque dishonour fees to Southern's account. 25 On 1 July 2004, Member Liden of VCAT made orders in VCAT File No. C4998/2002 (in which Southern was the applicant and the CBA the respondent) and VCAT File No. 744/2004 (in which the CBA was the counterclaimant and Southern the respondent to counterclaim). 26 Member Liden ordered the CBA to pay the applicant $2,651.95 in the applicant's proceeding and the applicant to pay the CBA $15,431.43 on the counterclaim, which was, by consent, to be set off, leaving the applicant to pay $12,779.48 on the counterclaim. 27 Member Liden gave reasons, from which it appeared that on 31 December 2001, Southern lodged a claim for damages of $17,000 plus the repayment of fees and interest. On 26 February 2004, the CBA counterclaimed for payment of $15,498.54 together with interest, because Southern had not closed its accounts in accordance with terms of settlement between the parties dated 15 August 2003 and amounts remained unpaid on Southern's overdraft accounts. 28 Member Liden considered Southern's allegations that CBA breached a term described as the temporary overdrawn protection term and the terms of consent orders made in VCAT. 29 Those allegations were supported by the sworn evidence of Peter Coutsournas as secretary of Southern, who asserted that (contrary to its representations) the CBA calculated debit balances by reference to cleared funds, rather than banked funds, and dishonoured cheques on that basis. The CBA contended that the agreement between the CBA and Southern required it to honour any cheque which would result in a debit balance of cleared funds of $500 or less, although in its discretion it could allow the limit to be exceeded. 30 The Tribunal found that the term alleged by the CBA applied to the transactions and was not breached when the CBA failed to exercise its discretion in Southern's favour. The Tribunal noted that, in any event, Southern had provided no evidence of any loss caused by the dishonouring of the cheques. The Tribunal rejected Southern's claim for exemplary damages. 31 The Tribunal found that, contrary to Terms of Settlement dated 15 August 2003 (which required Southern to close its accounts with the CBA), Southern had only closed its accounts in credit but not those that were overdrawn. As at 10 March 2004, the amounts owed on those debit accounts totalled $15,431.43. 32 On 3 February 2005, Senior Member Steele of VCAT dismissed Southern's application in C3982/2004, as the claim had already been decided by the Tribunal in another application. 33 Senior Member Steele, in his Reasons for Decision, compared the claims made in C3982/2004 with those determined by Member Liden, discussed above. He concluded that the points in claim in each matter were substantially the same, albeit the latter alleged further losses flowing from the same alleged breach of the same alleged agreement, on which Southern had already failed. Senior Member Steele concluded that the application before him was an abuse of process. 34 On 8 September 2008, Member Liden in VCAT C5677/2007 (in which Peter Coutsournas sought relief against six banks or lending corporations including the CBA) summarily dismissed the claim against the CBA. 35 In her Reasons for Judgment, Member Liden stated, inter alia, that Mr Coutsournas was a director and secretary of Southern, which had opened a number of accounts with the CBA on terms including the temporary overdrawn protection term. Member Liden noted the dispute over the basis for calculation of the debit balance relevant to the term and the seven applications which Southern had commenced in VCAT against the CBA, all of which were dismissed or struck out save for C4998/2002 (in which CBA consented to an order). Three applications had been dismissed on the ground that the subject matter had already been determined and dismissed in a previous application. 36 Member Liden set out the history of the proceeding, in which Mr Coutsournas had filed "voluminous and repetitive correspondence". She observed that the CBA had submitted that the claim against it had previously been considered by the Tribunal in C3027/2001; C4998/2002; C4200/2004; C3980/2004; C3318/2004; C3982/2004 and C541/2007, but had dismissed or struck out; and that the only difference between the current and previous matters was that it was brought in Mr Coutsournas' name, rather than that of Southern. Mr Coutsournas, however, never held a personal account with the CBA in his own name and had no standing. Further, the CBA did not seek to rely on any personal guarantee given by Mr Coutsournas. 37 At a jurisdictional hearing on 28 February 2008, Mr Coutsournas conceded that the accounts were in the name of Southern, but asserted that he and Southern should not be viewed as separate legal entities. Mr Coutsournas submitted that he personally pursued a new case claiming multi‑million dollar damages, as his business would have secured tens of millions of dollars had the CBA not bounced Southern's cheques. 38 Member Liden concluded that Mr Coutsournas lacked standing to bring the application against the CBA as he had no accounts in his personal capacity; the subject matter of the application in respect of the fees, losses and damages allegedly suffered by Southern by reason of the dishonouring of cheques had been considered and determined by the Tribunal in C3982/2004 and attempts to relitigate them were dismissed on the basis of the doctrine of res judicata and issue estoppel; the proceeding in Mr Coutsournas' name was entirely misconceived (as he did not hold the relevant accounts) and lacking in substance. Mr Coutsournas' voluminous and repetitive correspondence contained extravagant claims which were repeated in his oral submissions. While he had a tendency to make "naïve and simplistic…somewhat grandiose, and self serving" assertions which were "inherently incoherent from either a common sense or legal point of view", the Tribunal was "not prepared to find, at this point, that he is acting vexatiously." 39 On 25 August 2009, Southern was wound up in insolvency by the order of Associate Justice Efthim of the Supreme Court of Victoria. Paul Pattison and Malcolm Howell were appointed liquidators. 40 On 11 May 2010, Member Lulham of VCAT ordered that a proceeding commenced by Nicholas Coutsournas against the CBA and others be wholly dismissed pursuant to s 75(1)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). 41 Member Lulham, in his Reasons for Decision, stated that Nicholas Coutsournas filed a "most inadequate statement of his claim" which he failed to amend and relied on affidavits sworn by his brother Peter Coutsournas, who participated in oral submissions. The points of claim, related to Southern's accounts with CBA, which allegedly represented that it would not bounce cheques due to uncleared funds. The applicant also alleged that the CBA required him to guarantee the business obligations to the CBA, but the CBA's solicitor deposed that the CBA did not have a written or oral guarantee and did not seek to rely on or enforce one. 42 The application also alleged that the CBA closed Southern's bank accounts, causing it to enter new banking facilities with another bank on harsher terms ‑ the new bank (against which no claim was made) caused Southern to borrow from non‑bank lenders at higher interest. 43 Member Lulham noted that it was very difficult, even on a non‑technical, non‑pedantic reading, to discern a cause of action in the points of claim. 44 He observed that if, as the CBA alleged, the applicant did not give a guarantee of Southern's obligations, there was no sustainable claim. The chronology was a mere recounting of Southern's unsuccessful trading and eventual insolvency. The alleged representations that cheques would not bounce due to uncleared funds were made to the company, not the applicant. No documents evidencing Southern's contract with the CBA were exhibited, and it was inherently implausible that the alleged representations would either be made or relied upon. 45 Further, even if the applicant established that he gave a guarantee in reliance on the alleged representations, he did not allege that Southern was indebted to the CBA or that there was detriment in reliance on the representations. There was thus no cause of action in misleading and deceptive conduct. 46 The allegation that Southern ceased banking with CBA and henceforth banked with other institutions did not give rise to a cause of action. It was not alleged that the CBA was not entitled to close the account. Nor did the allegation that the applicant did not receive adequate wages give rise to a cause of action against the CBA. 47 Member Lulham concluded that the claim was frivolous, vexatious, misconceived, lacking in substance and incurable by amendment. He therefore dismissed the proceeding. 48 In his affidavit sworn 11 August 2010, Mr Peloso deposed that the CBA maintains an electronic record of all open and closed bank accounts dating back to late 1993. 49 Mr Peloso located electronic records of the following three CBA personal accounts held by Mr Coutsournas. (a) a "Personal Loan" account opened on 27 July 1990 and closed on 10 November 1993; (b) a "Personal Loan" account (bearing a different account number) held between 18 October 2000 and 31 October 2000; and (c) an "AwardSaver Account" opened on 11 October 2000 and closed on 19 August 2003. 50 Mr Peloso could locate no records of a cheque account held by Mr Coutsournas and inferred that any such account was closed prior to 1994 (when the CBA began to maintain electronic records of all accounts). 51 The "AwardSaver Account" is the only account which was open on the dates of the alleged dishonouring of cheques on 27 January 2000, 17 December 2002, 15 January 2003 and 6 February 2003.

Discussion 52 The jurisdiction to dismiss a proceeding as an abuse of process "ought to be very sparingly exercised, and only in very exceptional cases": Dow Hager Lawrance v Lord Norreys (1890) 15 App Cas 210 at 219, perLord Herschell. Per Lord Watson at 222: [I]t is legitimate to examine not only the pleadings in this suit, but the whole probabilities of the case, and the judicial history of the claim, from first to last… 53 The jurisdiction should not work to deprive litigants of "the right to submit real and genuine controversies to the determination of the courts by the due procedure appropriate for the purpose…": Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 92 Dixon J. 54 The authorities also establish that, consistently with the requisite cautious approach to summary dismissal, it should not be ordered "merely on the ground that it appears at the early stage of the hearing of the motion brought for that purpose, to advance a highly implausible claim which will very probably fail": Australian Building Industries Pty Limited v Stramit Corporation Limited [1997] FCA 1318 at page 27. 55 In Chu Sing Wun v Minister for Immigration and Ethnic Affairs (1997) 47 ALD 538 at 543, Nicholson J approved O'Loughlin J's recognition in Roser v Immigration Review Tribunal (No 2) (1992) 29 ALD 182 that "repetitive processes can amount to an abuse of the process of the court". Nicholson J added (at 543) that: [A]buse of process may be constituted where claims advanced are untenable and have no chance of success or because the same issues have been litigated previously, even though the proceedings, remedies and parties are not precisely identical but are in all essential respects the same: Lessur-Millar v R (1990) 47 A Crim R 111 at 117. 56 In Shumack v Commissioner, Australian Federal Police [2005] FCA 1476, Gyles J dismissed a proceeding pursuant to O 20 r 2 of the Rules with costs. His Honour found that it disclosed no reasonable cause of action, but rather, a statement of grievances very similar to those pursued in the Supreme Court of the Australian Capital Territory, where successive statements of claim had been struck out. 57 In the present case, even if the gross non‑compliance with the conventions of pleading and the applicable Rules as to form and content be discounted, in my opinion the materials filed by Mr Coutsournas do not disclose a coherent, intelligible complaint giving rise to a recognised and sustainable cause of action vesting in him personally. 58 In an oral submission before me, Mr Coutsournas clarified the nature of his complaint. He made clear that he sought relief because he expected to receive profits and wages as "the fruits" of his company Southern, but the CBA destroyed his enterprise thereby damaging his company and his livelihood. Mr Coutsournas explained that as a shareholder and employee of the company, he was personally damaged by reason of the CBA's misleading and deceptive conduct in closing corporate and personal bank accounts and dishonouring the company's cheques drawn to pay his wages Mr Coutsournas acknowledged that Southern had issued proceedings in relation to those matters. 59 An analysis of the VCAT decisions exhibited to the first affidavit of Mr Peloso indicates that Mr Coutsournas, Southern (which conducted the business prior to its liquidation) and another director of Southern, Mr Nicholas Coutsournas, have unsuccessfully pursued a considerable number of applications in VCAT based on identical or virtually identical allegations to those Mr Coutsournas makes in this proceeding. 60 In some of those previous applications, Mr Coutsournas apparently conceded that the relevant bank accounts were those of Southern, rather than his personal accounts and the CBA denied the existence of personal accounts. In the present application, Mr Coutsournas asserted (and the CBA's searches confirmed) that he held a personal account with the CBA at the relevant time. Mr Coutsournas alleged a personal cause of action against the CBA based on misleading and deceptive conduct and negligence. 61 The present application (in contrast to the VCAT applications) also alleges breach of a significant number of provisions of the Corporations Act, ASIC Act and Trade Practices Act. The new allegations of statutory contraventions were not coherently developed in the materials and did not appear to found any sustainable cause of action, whether vesting in the company or the applicant personally. The claim based on s 1041(I) of the Corporations Act is, for example, predicated on a civil action for loss or damage due to contraventions of other provisions relating to financial products as defined in Part 7.1, Division 3 (see s 763A-763C). There is nothing to suggest that a financial product as defined was involved. Section 12GF of the ASIC Act is predicated on a person suffering loss or damage, but no cogent and sustainable allegation of personal loss and damage can be derived from the material filed by Mr Coutsournas. 62 The separate legal entity doctrine poses an insuperable impediment to Mr Coutsournas' standing in relation to allegations of misleading and deceptive conduct and negligence based on the CBA's closure of the company's bank accounts and dishonouring of its cheques. Any related cause of action would vest in the company, now in liquidation. The separate legal entity principle is also an impediment to a shareholder's claim of personal loss based on the diminuation of the value of his or her shares or the company's assets. 63 The allegation that Mr Coutsournas personally guaranteed repayment of Southern's liabilities to CBA in the absence of independent advice has been made in previous proceedings, but the CBA has consistently denied that it holds or relies on any personal guarantee. Moreover, the CBA has neither alleged that Southern had any outstanding liabilities to the CBA nor called upon any guarantee. There is no indication that the applicant suffered any loss, damage or detriment by reason of a guarantee. Mr Coutsournas' second affidavit suggested that a guarantee was proposed in connection with an advance that was never made. 64 The amended statement of claim asserted that Mr Coutsournas as a customer of the CBA held personal bank accounts, but alleged no agreement between the CBA and Mr Coutsournas. Although Mr Coutsournas sought an adjournment to permit him to clarify and distinguish his personal claims from corporate claims, the central allegations remain ambiguous. It is alleged that the CBA undertook not to limit credit either to Mr Coutsournas and/or Southern, and dishonoured cheques written by Mr Coutsournas and/or Southern (emphasis added). There is no unequivocal assertion that the conduct involved or affected Mr Coutsournas personally. 65 In his second affidavit, Mr Coutsournas alleged a representation that working capital would be provided, but whether the representation were made to the company or Mr Coutsournas personally there is no allegation that they acted to their detriment in reliance thereon. The alleged term of the facility agreement requiring the CBA to afford unlimited credit to both Southern and Mr Coutsournas until further notice does not satisfy any test for implication. The inclusion of such a term, the making of a representation to that effect or reliance thereon, is implausible and no evidence to support the allegations was exhibited or provided. 66 Nor is there any no cogent allegation that Mr Coutsournas personally suffered loss or damage by reason of the alleged conduct. Further, the unclear, unintelligible and repetitious nature of the materials remains unaddressed. 67 In my opinion, the application has no reasonable prospects of success due to its abiding opacity, confusion and ambiguous allegations which do not constitute a cause of action in negligence, misleading and deceptive conduct or on any other recognised basis. Any such cause of action would, in any event, appear to be statute‑barred. 68 The inclusion of ambiguous allegations suggestive of a claim vesting in Mr Coutsournas personally and bare allegations of breach of numerous statutory provisions does not materially distinguish this application from the many substantially similar applications previously brought by Mr Coutsournas, the company or other persons. The present application depends on the same facts and circumstances and reiterates substantially the same complaints as those repeatedly and unsuccessfully ventilated in a number of varied guises before VCAT. 69 The proceeding is, in my opinion, vexatious and an abuse of process. It should be dismissed. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds‑Streeton.

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