Flowers v Grimshaw

EX TEMPORE JudgmenT (REVISED) 1Mr Mark Flowers is suing the Bank of Queensland for an amount of financial compensation which he has assessed in the sum of $125,052.50 plus court costs. The origin of this claim, and the facts in this regard are not in dispute, is that on 9 September 2013 the bank deducted the sum of $647.11 from the account he maintained with it and paid that amount to the Child Support Agency. 2Mr Flowers' argument is that that deduction was not authorised by the express or implied terms of his contract with the Bank in respect of the account in his capacity as customer and in the Bank's capacity as banker. He goes further and argues that the deduction could only be lawful if it had been paid pursuant to an agreement of a tripartite nature between him on the one hand and the bank and the Child Support Agency on the other hand. 3For the purpose of defining the issues, I record that today I am hearing the bank's application for summary dismissal of the proceedings pursuant to rule 13.4 of the Uniform Civil Procedure Rules 2005 (NSW). An order striking out the statement of claim is sought in the alternative. Its principal application is for summary dismissal and although the various provisions of rule 13.4 are relied upon, as I understand the argument in writing and as advanced orally by Mr Price of learned counsel, the real gravamen is that the proceedings disclose no reasonable cause of action. 4Essentially the Bank's case, as expressed in the affidavit of Bianca McDonald sworn on 2 July 2014, is that the Bank made the deduction and paid the money to the Child Support Agency under legal compulsion. 5The Bank's position might be referred to under the Common Law as one of confession and avoidance. That is to say the bank concedes that it had no contractual authority from Mr Flowers to make the deduction of which he complains, but it pleads a legal justification under Section 72A Child Support (Registration and Collection Act) (1988) (Cth) as avoiding what otherwise might have been the legal consequence of liability for breach of its contract with Mr Flowers. Relevantly, Section 72A is in the following terms: Registrar may collect child support related debts from a third person 1. The registrar may give written notice to a person: (a)... (b) who holds or may subsequently hold money for or on account of a child support debtor; (c)... requiring that person to pay to the Registrar: (e) if the amount of money is more than the maximum notified deduction total - an amount equal to the maximum notified deduction total; ... By subsection 2 it is an offence for the Bank to refuse to comply with a notice under subsection 1 and by subsection 2B the offence created by subsection 2 is one of strict liability. Section 72A (9) provides: A person who makes a payment in compliance with a notice under subsection (1) is taken to have made the payment under the debtor's authority or the authority of any other person concerned and is indemnified in respect of that payment. 6According to Ms McDonald's affidavit, the bank received a notice under Section 72A from the Child Support Agency dated 6 September 2013. On 9 September 2013 it withdrew the sum of $647.11 and remitted that sum by bank cheque to the Child Support Agency under cover of the Bank's letter of the same date. That same day Mr Flowers was notified in writing of the action taken by the bank. Mr Flowers does not dispute that he received that notice and, indeed, he has tendered a copy of it as part of exhibit A. I have also received as part of exhibit A the current account authority he signed with the bank on 17 September 2010 and, as is conceded by Mr Price, there was nothing in that document or in any other evidence before me that expressly authorised as a matter of contract between Mr Flowers and the bank, the deduction the bank made on 9 September 2013. 7The bank's argument is that under legal compulsion it paid the money and under section 72A(9) it is taken to have made that payment with Mr Flowers' authority. Accordingly, it is not liable to Mr Flowers for what might otherwise have been a breach of its contract with him. Mr Flowers argues that the enactment of the Federal Parliament does not overcome his common law rights. However, he also refers in passing to other provisions of Commonwealth Law, including the ASIC legislation and the Australian Consumer law which he says demonstrates that the Bank's conduct in making the deduction, in the circumstances of the case, is unconscionable. 8As can be readily seen, this case involves the exercise by me of federal jurisdiction because the defence relied upon by the bank is derived from federal law. The law I am to apply to resolve the dispute derives from the provisions of ss 79 and 80 Judiciary Act 1903 (Cth). To some extent Mr Flowers, with respect to him, is correct that in resolving this dispute in federal jurisdiction I am required to apply the common law in Australia, but only to the extent to which it is not displaced by laws of the Commonwealth Parliament or applicable State law. Now, it may be that but for Section 72A of the Federal legislation, the question about whether the bank was entitled to make this deduction would have been, as argued by Mr Flowers, determined by the application of common law principle, but I am bound by the federal enactment and, in the circumstances, I am of the view that there is no triable issue about the lawfulness of the bank's deduction of the sum of $637.11 from Mr Flowers' account. 9I am very aware a court should be extremely slow to summarily dismiss proceedings. All citizens are entitled to their day in court. It is only when the very high bar, well established by decisions of the High Court of Australia has been crossed that a court is justified in deciding, and disposing of, a case without allowing the parties the benefit of a trial. With respect, Mr Price has correctly referred to those decisions in paragraph 5 in his outline of submissions. They are well known, and include Dey v Victorian Railways Commissioners (1949) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways NSW (1964) 112 CLR 125; Spencer v Commonwealth of Australia (2010) 241 CLR 118. That last case concerned the somewhat different position prevailing now under the rules of the Federal Court, but their Honours reaffirmed the general rule which applies in this Court. 10Even though I am exercising Federal jurisdiction I am not bound by the rules of the Federal Court. Again, as Mr Price, with respect, correctly argues, to accede to the bank's application in the present case I need to be satisfied, and he carries the onus of proof in this regard, that Mr Flowers' claim is so obviously untenable that it cannot possibly proceed. For the reasons I have pronounced I am so satisfied. This is one of those rare cases where the exceptional power to summarily dismiss proceedings has been properly engaged. 11Before pronouncing my order I will refer to one other matter. In bringing these proceedings, Mr Flowers sued a private individual who was at one time the Chief Executive Officer of the Bank of Queensland. I am satisfied that in substance it is more than clear that Mr Flowers intended to sue the bank, indeed during the course of his careful and moderate submissions he constantly referred to the defendant as "the bank". Had that been the only defect in the pleading I would have given him leave to file an amended statement of claim naming the Bank of Queensland as defendant. However given the decision I have made on the Bank's principal application for relief there would be no practical purpose served by pronouncing such an order. 12My orders are: (1)Under Rule 13. 4 Uniform Civil Procedure Rules 2005 the proceedings are summarily dismissed. 13The bank applies for costs. The general rule is that the successful party is entitled to his, her or its costs to be paid by the unsuccessful party on the ordinary basis. That general principle can be displaced by the exercise by the Court of a special discretion in relation to costs if there is some factor that the losing party can point to engaging that special discretion. I have had the benefit of hearing Mr Flowers on whether or not any other order should be made and he has, I think it may be said, implied that my decision is erroneous and that he is entitled to win. With respect to him, that's not a matter which I can entertain as engaging a special discretion as to costs. 14In the circumstances, I will pronounce the following order. (2)The plaintiff is to pay the defendant's costs of and incidental to the proceedings forthwith after they have been agreed or assessed.