Dennis v Commonwealth Bank of Australia

RANGIAH J: 1 This is an application for leave to appeal against a judgment of the Federal Circuit Court of Australia delivered on 27 April 2018 summarily dismissing the applicant's proceeding against the respondent: Dennis v Commonwealth Bank of Australia [2018] FCCA 1159. 2 The applicant's application before the Federal Circuit Court claimed that the respondent had breached its responsible lending obligations under Chapter 3 of the National Consumer Credit Protection Act 2009 (Cth) (the Act) by declining the applicant a temporary loan. The applicant sought compensation for loss and damage allegedly sustained as a result of those breaches. 3 Some of the relevant factual background has been described in a previous judgment involving the applicant, Dennis v Minister for Finance [2017] FCCA 45, as follows: 11. Ms Dennis lives alone with a number of companion animals in a rural setting to the south of Brisbane. Her companion animals (two dogs and three horses) are her family. As she points out, she had and continues to have a legal obligation, as well as a moral obligation, to provide for their care. 12. On 9 October, 2015 Ms Dennis' companion dog, an English Setter named Hobson, was diagnosed with hemangiosarcoma. Although Hobson had been unwell for other reasons for some time, he was responding well to his treatment and the care that Ms Dennis was providing for him. However, the diagnosis of hemangiosarcoma was both unexpected and serious. According to Ms Dennis and the veterinary advice that she obtained, Hobson could not be left alone and required her constant care and attention. She was the only person available to provide that care. … 14. Ms Dennis needed to be on hand to properly care for Hobson. Ms Dennis was able to immediately secure extended leave, without pay, from each of her employers so that she might stay at home to nurse him. Her employers understood her predicament and the email correspondence to her from them in evidence before me was very supportive of her. She was under no pressure to return to work before she was able to safely leave Hobson on his own. 15. The duration of Hobson's illness was entirely unknown. His condition was very serious and according to the material before me, usually resulted in an afflicted dog passing very quickly. However, with the assistance of some trial treatments, Hobson battled the odds. His illness was unexpectedly lengthy. 16. Without an income Ms Dennis soon, to use her words, "ran out of cash and credit". She had the debt of some $350,000 that she needed to service as well as to provide for herself and her animals. But her funds were limited and quickly exhausted. She made a number of attempts to acquire funds from various sources, none of which were successful. 4 The applicant's attempts to acquire funds described at [16] of the reasons included making an application for a loan (or an extension of a credit facility - it is unclear which) from the respondent. On 4 November 2015, the respondent refused the application. 5 The applicant claims that the respondent's refusal of her application caused her severe financial hardship. She claims she was forced to resign from her employment so that she could attempt to access her superannuation. It is the refusal of the application that formed the basis of her proceeding in the Federal Circuit Court. 6 The applicant was self-represented before the primary judge (as she is in her application for leave to appeal). The respondent applied for summary judgment under r 13.10 of the Federal Circuit Rules 2001 (Cth) on the basis that the proceeding had no reasonable prospect of success. 7 In reasons delivered ex tempore, the primary judge noted that, through questioning of the applicant, he had ascertained that the application had been brought pursuant to s 178 and was based on claims that the respondent had contravened ss 47, 130, 131 and 160D of the Act. The applicant's principal claim was that the respondent was required to comply with the requirements of ss 130 and 131 of the Act but had failed to do so. 8 The primary judge went on to consider the application of ss 130, 131 and 160D of the Act, concluding: 21. It then goes to show, then, section 130 is really only a matter that applies when it is that the bank was looking at increasing the credit limit, and it is only when the credit limit is going to be increased that s.128, s.129, and s.130 need to be complied with. … 23. When one looks at all of those provisions as well as section 160D, which is a prohibition on giving misleading information, that contention, that these sections apply to an increase in credit, is absolutely correct. 24. The problem for the Applicant here is that when one looks at those provisions, they are to ensure that there is no irresponsible lending of money that would cause a person to get in over their head; and that a licensee or a lender must make absolutely sure that what occurs in the process of either lending money or extending further credit is a rigorous process that ensures that the consumer is protected from getting into a financial position from which they would be unable to extract themselves. 25. In this matter, what has occurred is that the Commonwealth Bank has looked at the situation and come to a decision that it should not increase the credit liability of the Applicant. The Applicant in this case says that such a decision was in breach of the obligations that the Commonwealth Bank of Australia had to its consumers, and was a contravention of the protections in the Act. 26. However, the Applicant has not been able to show me any evidence that the Commonwealth Bank had actually failed in the obligations that it has pursuant to s.130 and s.131. Those sections, as I say, have to be read with s.128 and s.129. 27. That being the case, it is quite obvious that what has occurred here is that the Commonwealth Bank has looked at all of the information that the Applicant has given it. The Commonwealth Bank has come to a decision in accordance with all of those sections. … 31. In this case, there is no reasonable prospect of success. The Applicant cannot point to any evidence other than subjective feelings that would show that there has been any breach of s.130 and s.131. In those circumstances, the duty of the Court is to put an end to the litigation before it gets too far and clogs up the system. 9 Section 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) gives the Court jurisdiction to hear and determine an appeal from a judgment of the Federal Circuit Court exercising original jurisdiction under a law of the Commonwealth. However, s 24(1A) provides that an appeal shall not be brought from an interlocutory judgment unless the Court or a judge gives leave to appeal. In the present case, the primary judge gave summary judgment under r 13.10 of the Federal Circuit Court Rules. That was an interlocutory judgment: see Scott v Human Rights and Equal Opportunity Commission [2007] FCA 2055 at [16]; Dobson v Australian Postal Corporation [2013] FCA 320 at [7]; Rowe v Emmanual College [2013] FCA 939 at [13]. Accordingly, the applicant requires leave to appeal. 10 The Court has a discretion as to whether to grant leave to appeal from an interlocutory judgment, but generally leave will not be granted unless the decision in question is attended with sufficient doubt to warrant the grant of leave and substantial injustice would result from a refusal of leave to appeal: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399; Minogue v Williams [2000] FCA 125 at [19]. Leave will more readily be granted where, as here, the interlocutory decision effectively determines a substantive right: Decor Corporation at 400; Minogue v Williams at [19]. 11 An appeal from the Federal Circuit Court to this Court is by way of rehearing: see SZSYM v Minister for Immigration and Border Protection [2014] FCA 174 at [28]; Hu v Stansure Strata Pty Ltd [2014] FCA 779 at [11]. In such an appeal, it is ordinarily necessary to demonstrate error on the part of the primary judge: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [14]. In the proposed appeal, the appellant would be required to demonstrate some legal, factual or discretionary error on the part of the primary judge. 12 The applicant's draft notice of appeal contains the following grounds: 1. The relevant consumer protection provisions in Chapter 3 - Responsible lending conduct of the National Consumer Credit Protection Act 2009 (NCCP Act) were not applied correctly. Sections 130, 131 and 160D are relied on by the Applicant. 2. Judicial reasoning in prior consumer law judgments was not considered. 3. The Applicant has provided evidence that the lending decision of the Respondent is unsuitable and placed her in a position she was forced to sell her home and suffer significant financial hardship for the remainder of her life. A statutory remedy is sought under Section 178 of the NCCP Act. 4. The Respondent has not provided any evidence in its defence. 5. The emphasis has been placed on the vulnerability of the Applicant as a selfrepresented litigant. The orders are unjust. 13 The errors alleged by the proposed first ground of appeal are that ss 130, 131 and 160D of the Act were not applied correctly. Although the applicant's second proposed ground alleges that judicial reasoning in prior consumer law judgments was not considered, she has not identified any such judgments. The third ground appears to allege that the applicant provided sufficient evidence to warrant the dismissal of the summary judgment application. The fourth ground refers to the applicant's vulnerability as a self-represented litigant and appears to be associated with an allegation of apprehended bias developed in the applicant's written submissions. 14 The applicant's written submissions appear to raise the following grounds in addition to, or supplementing, those set out in the proposed notice of appeal: (1) The primary judge mischaracterised or misunderstood the factual background of the case. (1) The respondent should not have been permitted to rely upon an affidavit filed on 19 March 2018 when it had no relationship to the application and did not mention the grounds of the application. (2) The respondent should not have been permitted to rely upon a decision of the Banking and Financial Ombudsman Service Australia which dismissed the applicant's complaint. (3) The applicant was not treated fairly or impartially by the primary judge (I take this to be an allegation of apprehended bias). (4) The applicant was disadvantaged because she had not received the respondent's "Response" prior to the hearing. (5) There was professional misconduct by the respondent's counsel and solicitors. 15 There are two principal themes of the applicant's submissions. The first is that the primary judge erred in deciding that the applicant did not have any reasonable prospects of success in prosecuting her proceeding for relief under s 178(1) of the Act. The second is an allegation of apprehended bias against the primary judge. 16 Unfortunately, the respondent's written submissions say little that is useful to the disposition of the application for leave to appeal. They consist substantially of a cut and paste of the written submissions placed before the primary judge, some parts of which are presently irrelevant. They add a paragraph about the test for leave to appeal. They blandly assert that the draft grounds of appeal are without merit. The written submissions make no mention of the Act. They do not mention the applicant's submissions about the primary judge's reasons. They say nothing about the applicant's allegation of apprehended bias. After being specifically asked about that issue in the course of oral submissions, the respondent mentioned the two leading High Court authorities and made some cursory oral submissions to the effect that the evidence does not establish apprehended bias. 17 In Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577, Gummow ACJ at [2] and Callinan J at [172] held that the Full Court of the Federal Court had erred by dealing first with the substantive issues and then with the allegation of apprehended bias on the part of the trial judge. Similarly, Kirby and Crennan JJ said at [117]: An intermediate appellate court dealing with allegations of apprehended bias, coupled with other discrete grounds of appeal must deal with the issue of bias first. It must do this because, logically, it comes first. Actual or apprehended bias strike at the validity and acceptability of the trial and its outcome. It is for that reason that such questions should be dealt with before other, substantive, issues are decided. It should put the party making such an allegation to an election on the basis that if the allegation of apprehended bias is made out, a retrial will be ordered irrespective of possible findings on other issues. Even if a judge is found to be correct, this does not assuage the impression that there was an apprehension of bias. Furthermore, if, as here, an intermediate appellate court finds the allegation made out, but grants no relief because it otherwise finds in favour of the party making the allegation, a defect in the administration of justice has been found to have occurred which, in the absence of any successful appeal on the point, will remain unremedied. Inevitably, this adversely affects public confidence in the administration of justice. 18 Accordingly, an intermediate appellate court must deal with an allegation of apprehended bias first and, if it finds that the allegation is made out, is required to order a retrial without considering the merits of any other grounds. In my opinion, the same approach must be taken in an application for leave to appeal. If the applicant's ground of apprehended bias has sufficient prospects of success, the applicant may suffer serious injustice if leave is not granted, and leave to appeal should be granted without consideration of the merits of the applicant's other grounds. 19 However, it is relevant to describe the basis of the applicant's allegation that the primary judge erred by finding that the applicant did not have reasonable prospects of success in her application for relief for contraventions of the Act in order to give context to the hearing in which apprehended bias is said to have arisen. 20 Section 178(1) of the Act provides, relevantly, that the Court may order a defendant to compensate a plaintiff if the defendant has contravened a civil penalty provision, and loss or damage has resulted from the contravention or commission. 21 Sections 128, 130 and 131 of the Act are civil penalty provisions. Section 128 provides, relevantly, that a licensee must not enter a credit contract, or increase the credit limit of a credit contract, with a consumer who is the debtor under the contract unless certain requirements are met, including that the licensee has: (c) made an assessment that: (i) is in accordance with s 129; and … (d) made the inquiries and verification in accordance with s 130. 22 Section 129 provides, relevantly, that for the purposes of s 128(c), the licensee must assess whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period. Section 129 is accompanied by a note that states, "The licensee is not required to make the assessment under this section if the contract is not entered or the credit limit is not increased". 23 Section 130(1) of the Act provides that, for the purposes of s 128(d), the licensee must, before making the assessment: (a) make reasonable inquiries about the consumer's requirements and objectives in relation to the credit contract; and (b) make reasonable inquiries about the consumer's financial situation; and (c) take reasonable steps to verify the consumer's financial situation; and (d) make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and (e) take any steps prescribed by the regulations to verify any matter prescribed by the regulations. 24 Section 131(1) and (2) of the Act provide that the licensee must assess that the credit contract will be unsuitable if it is likely that: (a) the consumer will be unable to comply with the financial obligations under the contract, or could only comply with substantial hardship; or (b) the contract will not meet the consumer's requirements or objectives; or (c) circumstances prescribed in the regulations will apply to the contract. 25 There is a note to s 131(1) of the Act which states, "Even if the contract will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the contract will be unsuitable for other reasons." 26 The applicant submits that the primary judge was wrong to hold that s 130 and s 131 of the Act do not apply where a licensee refuses to increase a credit limit. As I have said, it is not appropriate to consider the merits of that argument. 27 The primary judge also held that s 160D of the Act only applies where a licensee enters a credit contract or increases the credit limit of a credit contract, but did not explain why that was so. Section 160D of the Act prohibits a person, in the course of engaging in a credit activity, from giving information or documents to another person if the giver knows, or is reckless as to whether, the information is or the documents are false in a material particular or materially misleading. The expression "credit activity" is given a broad definition in s 6(1) of the Act. The applicant's submission appears to be that the provision is not excluded in circumstances where a licensee refuses to enter a credit contract or refuses to increase the credit limit. Again, it is not appropriate to comment upon the applicant's prospects of success in respect of an argument of contravention of s 160D of the Act. 28 The primary judge did not appear to deal with the applicant's allegation that the respondent had contravened s 47(1)(a) of the Act, which requires a licensee to "do all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly." That provision is not a civil penalty provision. 29 Against this background, I will proceed to consider the applicant's allegation that she "was not treated fairly or impartially by the primary judge". She submits that: 16. The presiding Judge did not ask [the respondent's counsel] one (1) question. Instead, he brutally cross-examined me, constantly interrupted me, insulted me, ridiculed everything I tried to say, and virtually accused me of lying about many issues. He also expressed many of his own opinions, which are not based on the material facts and the evidence in this proceeding, and he made numerous sarcastic comments about me, as a woman and a self-represented litigant. This is evidenced in the Transcript of Proceedings for the hearing on 27 April 2018. What is not included in this transcript is that the presiding Judge screamed at me numerous times throughout the hearing and he allowed [the respondent's counsel] to use his i-Phone during the hearing which shows a complete lack of respect for me. 30 The applicant makes other allegations about the conduct of the primary judge, including that his Honour gave her "a look of complete contempt" and that he "screamed at me and falsely accused me of interrupting him". The applicant sets out examples of exchanges where she says the primary judge screamed at her, interrupted her and cross-examined her. She asserts that his Honour ridiculed her submissions, constantly interrupted her, was sarcastic and insulted her. 31 There is a distinction between an allegation that a trial was conducted unfairly and an allegation of apprehended bias: see RPS v R (2000) 199 CLR 620 at [11]. The former turns largely on whether the litigant has had a proper opportunity to advance his or her case. While the applicant's allegation contains elements of both, I understand the applicant's allegation to be substantially one of apprehended bias. 32 The test for apprehended bias was described in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6] as whether "a fair-minded lay-observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide". 33 It is necessary to take into account that modern judges often take an active role in questioning the submissions made by the parties - to an extent that may surprise self-represented litigants unfamiliar with the usual processes of the court. In Johnson v Johnson (2000) 201 CLR 488, the plurality observed at [13]: Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of "the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case". Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them. (Citations omitted.) 34 I have read the transcript of the final hearing conducted by the primary judge. I have also listened to the audio recording in view of the applicant's contention that the transcript does not capture the tone and volume of his Honour's voice. The parties have had the opportunity to make submissions concerning the audio recording. 35 The hearing took about 1½ hours. The recording demonstrates that in the early stages, the primary judge was concerned to ascertain the legal basis for the applicant's claim. That was because the affidavits filed by the applicant were lengthy, discursive and somewhat difficult to follow. 36 Early in the hearing, the applicant interrupted the primary judge at times. His Honour said forcefully, "No, hold it. Hold it. Hold it. Hold it…You've got to - don't talk over me. Do not ever do that." 37 As the hearing went on, it emerged more clearly that the applicant's principal complaint was that the respondent had breached ss 130 and 131 of the Act in circumstances where the respondent had declined to grant the applicant a loan or to extend her credit limit. His Honour asked the applicant a number of questions directed to testing the validity of her argument. The primary judge also expressed his views in a number of lengthy passages. The applicant and his Honour each started to talk over the other. Eventually, his Honour shouted, "Do not talk over me again. You understand - understand?". The applicant replied, "I understand, your Honour". The primary judge then responded, "Then don't do it. You go on about all sorts of other things. Stick to the point." 38 During the hearing, the primary judge made comments, which the applicant has construed as ridiculing her case. These include, "That's rubbish" and "You're kidding me". She complains that his Honour was sarcastic at times. She complains that at one point, she was asked a series of questions that resembled a cross-examination, suggesting that a complaint she had made about her inability to obtain legal assistance was not the truth. 39 At the end of the hearing, the applicant was given the chance to make final submissions, and she made uninterrupted submissions for about five minutes. 40 The applicant has shown an arguable case of apprehended bias. Where, as here, the interlocutory decision effectively determines a substantive right, leave to appeal will usually be granted if there is any doubt about the decision at first instance: Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 at [43]. Both tests in Décor Corporation are satisfied. The applicant should be granted leave to appeal. 41 As I have said, the applicant is self-represented. I suggested during the hearing that she should, in her own interests, use her best endeavours to obtain legal representation. I propose to grant the applicant a referral certificate for pro bono legal assistance under r 4.12 of the Federal Court Rules 2011 (Cth). It is to be hoped that a lawyer who agrees to act pro bono will encourage the applicant to exercise discernment as to the grounds of appeal that are run. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.

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