MacLaren v Australia and New Zealand Banking Group Ltd [2022] VSC 662

2 Pursuant to rule 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ("the Rules"), ANZ has applied for 2 preliminary questions to be tried separately and before the remaining issues in the proceeding, namely:

(1) Is [MacLaren] prevented from seeking the relief claimed against [ANZ] in these proceedings, whether on the basis of the causes of action alleged in these proceedings or otherwise, by reason of an accord and satisfaction?

(2) Is [MacLaren] estopped from seeking the relief claimed against [ANZ] in these proceedings, whether on the basis of the causes of action alleged in these proceedings or otherwise?

3 During the course of argument, these questions were amended to remove the references to "or otherwise". Counsel for ANZ explained that the words had been included to allow for the possibility of MacLaren seeking to further amend his pleadings. However, it was accepted that the inclusion of "or otherwise" made the proposed questions both unclear and too wide. Accordingly, the application will be considered based on the revised separate questions ("the Separate Questions").[1]

4 For the reasons that follow, the application for the Separate Questions to be ordered will be refused.

5 The proceeding is in its early stages. Apart from pleadings being filed and served, no other substantive interlocutory steps have been taken.

6 In his second further amended statement of claim ("the Statement of Claim"), MacLaren makes a series of claims arising out of 20 payments made to Maxi EFX Global AU Pty Ltd ("Maxi") between 25 November 2019 and 6 January 2020 totalling $1.62 million ("the Payments"). It is alleged that there was a "relationship" between ANZ (as banker) and Maxi (as merchant), pursuant to which Maxi was required to accept a nominated credit card provided by ANZ for payment of goods and services.

7 Very broadly, MacLaren alleges that ANZ provided him with a Visa credit card and that the terms of the associated credit card agreement were breached because ANZ allowed the Payments to be made to Maxi using the credit card. Specifically, MacLaren alleges ANZ should not have processed the Payments because each of them exceeded the "transactional and/or daily or overall credit limit of $30,000". It is further alleged that MacLaren has suffered loss because he was deceived into making the Payments by Maxi, and that the deceit was facilitated by ANZ enabling the Payments. Furthermore, it is alleged that equitable intervention is warranted because ANZ acted in a manner contrary to public policy, including by allegedly failing to notify MacLaren of asset preservation orders made against Maxi by the Federal Court on 12 December 2019 and continuing to allow some of the Payments to be made after that date.

8 In addition, it is alleged that on or about 12 March 2020 MacLaren notified ANZ that he had a dispute with Maxi. MacLaren alleges that for various reasons ANZ should have processed, but failed to process, a chargeback with respect to the transactions giving rise to the Payments.

9 MacLaren alleges ANZ made certain representations in connection with the acquisition or possible acquisition of financial services and thereby engaged in misleading or deceptive conduct in contravention of section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth); and further or alternatively acted in an unconscionable manner in contravention of sections 12CC to 12CCA of that Act.[2] As part of these allegations, MacLaren alleges ANZ assessed him as being "vulnerable and requir[ing] the benefit of a $30,000 credit limit to protect him from scams, and frauds"; and, despite knowing both this and the existence of the asset preservation orders, took no steps to notify or warn MacLaren against making the Payments.

10 As part of its defence to these allegations, ANZ alleges that MacLaren made a complaint against ANZ ("the Complaint") to the Australian Financial Complaints Authority ("the Complaints Authority") arising from or in connection with the Payments. It is alleged that as a result of the Complaint, a conciliation conference was conducted by telephone on 17 March 2021, which was attended by MacLaren and a representative of ANZ, together with a case manager and a conciliator from the Complaints Authority. ANZ alleges that during this conference a verbal offer was put to MacLaren to resolve the Complaint for $5,000 ("the Offer"). Further, it is alleged that on 26 March 2021 the Offer was reiterated in writing in an email from ANZ to MacLaren. Furthermore, ANZ alleges that on 29 March 2021 MacLaren accepted the Offer "with the result that an agreement for the settlement of the matters raised in [the Complaint] was reached between [MacLaren] and [ANZ]". Finally in this regard, ANZ alleges that on 30 March 2021 it paid MacLaren $5,000 in accordance with this agreement, and that as a result ANZ has no liability to MacLaren in respect of the matters pleaded in the Statement of Claim by reason of an accord and satisfaction.

11 Further or alternatively, ANZ alleges that by agreeing to accept the Offer, MacLaren represented that he would accept the payment of $5,000 in full and final satisfaction of any liability arising from the matters the subject of the Complaint. ANZ alleges it relied upon this representation in making the $5,000 payment to its detriment and by reason of each of the matters alleged in relation to the Complaint, MacLaren is estopped from seeking the relief claimed against ANZ in the Statement of Claim.

12 In pleading to these allegations in his reply, MacLaren takes objection to ANZ relying upon without prejudice negotiations that MacLaren alleges did not result in a binding agreement. MacLaren alleges he had no intention to provide a release of all his claims, denies any intention to create legal relations and alleges the Offer was expressed as a "goodwill offer" such that it did not preclude him from commencing this proceeding. In relation to the estoppel allegations, MacLaren alleges ANZ has failed to plead material facts concerning "any representation, reliance or detriment or estoppel", and that the allegations are so vague and uncertain that they may prejudice a fair trial and are an abuse of process and should be struck out.[3]

13 In an affidavit in support, Angus Ross, a solicitor acting for ANZ, swore that it was ANZ's position that the dispute the subject of this proceeding was resolved by an accord and satisfaction or estoppel arising by reason of the matters set out above. After setting out his considerable experience in commercial litigation, the solicitor expressed his belief (based on this experience and the facts of the case) that trying the Separate Questions as a next step in the proceeding had sufficient potential to resolve the proceeding in less time and with fewer costs, and would result in less of a burden on court resources than would otherwise be incurred in a trial of all the issues. Based on this belief, the solicitor swore that the circumstances justified the making of orders for the Separate Questions.

14 In opposition, Mark Stanarevic, a solicitor acting for MacLaren, referred to his experience and disputed the opinion expressed by ANZ's solicitor. Based on his analysis of the case, MacLaren's solicitor suggested that if the Separate Questions were ordered, in addition to evidence from MacLaren concerning the "surrounding circumstances" of the communications in March 2021 relied upon by ANZ, evidence would need to be adduced from various persons engaged by the Complaint Authority who were involved in dealing with the Complaint, including in relation to the conciliation conference and the Offer. It was further suggested that ANZ would need to lead evidence about its alleged detriment. MacLaren's solicitor summated that any trial of the Separate Questions would take approximately 1 to 1½ days, whereas all issues in the proceeding would otherwise be resolved in a trial of 4 to 5 days. In short, it was contended there would be no significant saving of time or costs if it were ordered that there be a trial of the Separate Questions.

(a) any question in a proceeding be tried before, at or after the trial of the proceeding, and may state the question or give directions as to the manner in which it shall be stated;

(b) different questions be tried at different times or places or by different modes of trial.

16 There was no real controversy about the approach to be taken on an application such as this.

17 The principles applicable to the making of an order under rule 47.04 were stated in Murphy v Victoria, as follows:[4]

1. A separate trial should be ordered under r 47.04 only with great caution and only in a clear case.
2. The attraction of trials of issues rather than of cases in their totality, 'are often more chimerical than real', so that separate trials should 'only be embarked upon when their utility, economy and fairness to the parties are beyond question'.
3. The advantages of trying separate questions for one party may unfairly disadvantage another party, including because the questions will be determined without the benefit of all the evidence relevant to the proceeding.
4. There should be no trial of a separate question on the basis of assumed facts unless the facts are agreed or can readily be determined judicially. Otherwise, the parties remain free to dispute the relevant facts at any later trial.
5. As a general rule, it is inappropriate to order that a preliminary issue be isolated for determination unless the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.
6. Factors which tell against making order under r 47.04 include that the separate determination of the question:

a) may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial; > > b) may result in significant overlap between the evidence adduced on the hearing of the separate question and at trial; possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding; and > > c) may prolong rather than shorten the litigation.

18 ANZ submitted that the Separate Questions relate to a settlement that occurred after the events the subject of the Statement of Claim. Thus, it was contended, there would be no overlap between the evidence adduced at the hearing of the Separate Questions and, if the matter were to proceed beyond this, the trial of the remainder of the issues. It was submitted the evidence relating to the Separate Questions was limited and in writing; with a written offer and a written acceptance, and a subsequent payment. In the same vein, it was submitted there was a clear demarcation between issues the subject of the Separate Questions and the remaining issues.[5]

19 The court was told that ANZ intended to prove its case without relying on oral evidence. However, understandably, ANZ reserved its position on whether it would adduce responsive oral evidence if MacLaren's evidence referred to any oral representations that he contended were relevant to the alleged settlement agreement.

20 Further, it was noted that if either of the Separate Questions was determined in ANZ's favour then that would dispose of the proceeding in its entirety. Furthermore, even if ANZ were unsuccessful with respect to the Separate Questions, it was submitted that the court's time would not have been wasted. This was put on the basis that those issues would still need to be determined if all issues were heard at the same time, but would substantively fall away if they had already been determined separately.

21 ANZ submitted the fact that discovery had not taken place was no bar to a trial of the Separate Questions being ordered. While acknowledging that in many cases an order for the hearing of a separate question prior to discovery may be inappropriate, it submitted there was no rule against the making of such an order. It contended that, on the issues raised in the Statement of Claim, discovery (whether by categories or general discovery) was likely to be significant. In these circumstances, it was submitted it would be appropriate for "very limited" discovery to be ordered in relation to the Separate Questions, as this would also have the potential to save significant costs in the event ANZ were to be successful regarding the Separate Questions.

22 In response to the suggestion that there was the potential for issues of credit to arise both on the Separate Questions and, if such a hearing were necessary, at the further hearing of the remaining issues, ANZ submitted that those issues would need to be determined and "exactly the same thing could happen" in any event if all matters were heard together. Further, it was submitted if MacLaren was found to be more credible in respect of 1 aspect of his evidence, that would infect the remainder of his evidence whether or not the Separate Questions were heard before other issues.

23 In opposing the application, MacLaren emphasised the caution repeatedly expressed about potential pitfalls in determining questions separately from the remainder of the issues in a proceeding. It was submitted the court should only exercise its discretion to order a trial of separate questions in a clear case. Further, it was submitted that the application was premature because the parties were yet to make discovery,[6] or provide witness statements or outlines of evidence. It was submitted until this occurred, the court would not be in a position to assess the true interrelationship between the issues.

24 MacLaren contended that the Separate Questions involved issues of mixed fact and law that had not been properly formulated. In support of this, it was argued that the causes of action and the basis for their relevance to the separate hearing had not been identified.[7] Similarly, it was submitted the affidavit in support sworn by the solicitor for ANZ failed to identify the relevant facts to be proved as well as the manner in which ANZ intended to establish them.[8] MacLaren submitted the relevant facts included oral representations made to him, not just the documentary trail. In this regard, it was submitted that evidence going to the issue of whether ANZ was acting unconscionably in taking the defences the subject of the Separate Questions would also need to be led.

25 MacLaren also contended that it was likely that issues of credit would arise with respect to both the Separate Questions and the other issues in the proceeding. It was submitted it would be unsatisfactory for the court to make determinations in relation to credit on the Separate Questions and then revisit matters of credit if the remainder of the issues were heard and determined. On this matter, MacLaren submitted there were likely to be conflicting accounts of what was said in March 2021 such that there would be credibility issues concerning the witnesses to be called by both ANZ and MacLaren. It was contended that it would be unsatisfactory for witnesses to have their credit in issue on the Separate Questions when there was a real prospect that their credibility would be revisited.

26 Finally, MacLaren submitted that ANZ was a large organisation and it would not be oppressive to require it to make general discovery.

27 There are 2 matters, either of which would itself make the ordering of the Separate Questions inappropriate.

28 First, and leaving aside the fact that MacLaren's submissions raised the issue of unconscionability in relation to the alleged settlement agreement (presently, this has not been pleaded in the reply), ANZ's defence based on estoppel itself raises questions concerning unconscionability. If the Separate Questions were ordered, then the court would need to consider whether ANZ was acting unconscionably in seeking to maintain the estoppel pleaded. As was properly conceded by ANZ's counsel, in determining this issue the court would be required to consider all the relevant circumstances of the case. These circumstances are highly likely to include matters that go beyond the events in March 2021. Indeed, there would be a real possibility that the entire course of conduct adopted by ANZ might need to be considered in determining whether or not a defence of estoppel ought to be successful.[9] Thus, while it may be accepted that if either of the Separate Questions were determined in favour of ANZ it would put an end to the proceeding at first instance, there is not a clear demarcation between the issues in the proceeding more generally and those raised by the Separate Questions.

29 Secondly, there was no dispute on this application that issues of credibility may arise both in relation to the Separate Questions and also with respect to the trial of the remaining issues in this proceeding. It would be entirely unsatisfactory for the court to endeavour to determine credibility issues for the purposes of the Separate Questions only to have to revisit the credibility of the same witnesses in any subsequent hearing. Such a scenario would enliven the prospect that a trial judge might make a particular finding on the more limited evidence before the court regarding the Separate Questions, only to form a different view once all of the evidence relevant to an assessment of the credibility of 1 or more witnesses was available. It is trite that, in making any assessment about the credibility of a witness, a trial judge is required to consider all the admissible evidence before drawing any final conclusions.[10]

30 In addition to these matters, there are other factors that also weigh against the Separate Questions being ordered.

31 In circumstances where no discovery has taken place, the court is in no position to make a proper assessment of the likely scope and duration of the evidence relevant to the Separate Questions. In particular, where there are live issues relating to unconscionability and credibility, it may be that the documents considered to be relevant or to go to credit are of such volume that this fact in itself would make the trial of the Separate Questions inappropriate. Further, if discovery is ordered on a limited basis for the purpose of the Separate Questions, the court would necessarily be required to determine the Separate Questions without the benefit of all the evidence relevant to the proceeding.

32 Further, based on the issues raised by MacLaren, the Separate Questions could not be determined on assumed facts that might be agreed or could be readily determined judicially.

33 The matters raised on this application, including those identified above, lead to the conclusion that each of the factors identified as telling against a separate question being ordered are present in this case.[11] In summary, this is not a clear case where the hearing of the Separate Questions would be appropriate.

34 It has not been established that utility, economy and fairness to the parties would be served by the Separate Questions being ordered. For the reasons stated above, the application will be dismissed.

[1] Consequently, the word "whether" also logically ought be removed from the formulation of both questions.

[2] While the Statement of Claim alleges a contravention of "s 12CC - CCA" of the Australian Securities and Investments Commission Act, presumably an allegation of unconscionable conduct in contravention of s 12CA or s 12CB, or both, is intended.

[3] No application has been made to strike out the estoppel allegations.

1. [4] [2014] VSCA 238; (2014) 45 VR 119, 126 [28] (Nettle AP, Santamaria and Beach JJA), referred to with approval in Hoh v Ying Mui Pty Ltd [2019] VSCA 203, [393] (Beach and Hargrave JJA and Sifris AJA). See also Vale v Daumeke [2015] VSC 342, [71] (Derham AsJ); Wells Fargo Bank Northwest National Association v Victoria Aircraft Leasing Ltd (No 2) [2004] VSC 341, [201] (Dodds-Streeton J); Hyder Consulting (Vic) Pty Ltd v CGU Insurance Ltd [2001] VSC 449, [25] (Byrne J).

[5] Referring in particular to Vale v Daumeke [2015] VSC 342, [31] (Derham AsJ).

[6] Relying on Murphy v Victoria [2014] VSCA 238; (2014) 45 VR 119, 127-128 [30]-[31] (Nettle AP, Santamaria and Beach JJA).

[7] This submission was partially directed to the use of the phrase "or otherwise" in the original formulation of the Separate Questions, which was withdrawn during oral submissions: see par 3 above.

[8] See Jacobson v Ross [1995] VicRp 24; [1995] 1 VR 337, 340.7-341.4 (Brooking J, with whom JD Phillips J substantially agreed). See also Vale v Daumeke [2015] VSC 342, [71] (Derham AsJ).

[9] Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1, 15 [8] (Kiefel CJ and Bell J), 37 [83] (Gageler J), 60-61 [154]-[155] (Nettle and Gordon JJ); Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525, 587 [188] (Gageler J), 620 [294] (Keane J); Violet Home Loans Pty Ltd v Schmidt [2013] VSCA 56; (2013) 44 VR 202, 219 [59] (Warren CJ, Cavanough and Ferguson AJJA); The Commonwealth v Verwayen (1990) 170 CLR 394, 444.6-445.2 (Deane J). See also Competition and Consumer Act 2010 (Cth), sch 2, ss 21-22; Australian Securities and Investments Commission Act 2001 (Cth), ss 12CB-12CC.

[10] R Slater & Sons Pty Ltd v Perkins [2022] VSCA 165, [22], [25]-[27] (T Forrest and Macaulay JJA); Westpac Banking Corporation v Forum Finance Pty Ltd [2022] FCA 981, [22] (Lee J); Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 125-126 [23] (Gleeson CJ, Gummow and Kirby JJ); Fletcher Construction Australia Ltd v Lines Macfarlane & Marshall Pty Ltd (No 2) [2002] VSCA 189; (2002) 6 VR 1, 32-33 [103] (Charles, Buchanan and Chernov JJA), citing Mifsud v Campbell (1991) 21 NSWLR 725, 728 (Samuels JA). See also Hoh v Ying Mui Pty Ltd [2019] VSCA 203, [400] (Beach and Hargrave JJA and Sifris AJA) in the context of a misconceived adoption of a sequential trial model by a trial judge when issues of credit were involved.

[11] Murphy v Victoria [2014] VSCA 238; (2014) 45 VR 119, 126 [28(6)] (Nettle AP, Santamaria and Beach JJA): see par 17 above.