Plaintiff v First Defendant

FINANCIAL SERVICES - External dispute resolution scheme - Australian Financial Complaints Authority - Scope of determination - Effect of acceptance of a determination by Australian Financial Complaints Authority on ability to bring further claims.

1 By summons filed on 1 September 2023 ('Application') the defendants seek summary judgment against the plaintiff pursuant to s 63 of the Civil Procedure Act 2010 (Vic) ('CPA') and Order 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules') on the writ and statement of claim filed on 15 June 2023. Alternatively, the defendants seek orders pursuant to Order 23 of the Rules that the Court stay the proceeding or give judgment in relation to the claim (or any part of it) or order that the whole or part of a pleading be struck out or amended.

2 The plaintiff, who is self-represented, opposes the Application.

3 From the materials filed before me, the following factual matters were not in contest.

4 On 12 March 2021, the plaintiff entered into a contract of home contents insurance with the second defendant, Insurance Manufacturers of Australia Pty Ltd ('IMA'). The first defendant, RACV Insurance Services Pty Ltd ('RACV') is not a party to the contract of insurance. It is the distributor of insurance policies, but is not the underwriter.[1]

5 The insurance policy was allocated policy number H0M 701 836 828 ('Policy') and comprised of a 2021-2022 Certificate of Insurance Prime Cover Home Contents Amendment, and RACV Home Insurance Product Disclosure Statement and Policy Booklet ('PDS').[2]

6 The Policy covered the plaintiff's contents located at 53 Kenny Street, Westmeadows in the State of Victoria ('Insured Premises') for the period between 9:28pm on 12 March 2021 and 11:59pm on 12 March 2022, subject to the full terms, conditions, limitations and exclusions contained within the Policy. Relevantly, the Policy contained a general exclusions and responsibilities section in the following terms:

Proof of loss and ownership

When you make a claim, we may ask you to provide certain documents to prove that you owned the items ... The types of documents we ask for depend on the situation and can include tax invoices for items purchased or services used, purchase receipts, valuation certificates, credit card or bank statements, photos. We may compare information you provide to us with a range of other sources, for example websites, such as auction and sales websites.

7 On 11 April 2021, the Policy was amended to increase the contents sum insured to $116,000.00 ('Contents Insurance'). The Contents Insurance comprised:

(a) general contents ($61,000.00 sum insured) ('General Contents Coverage'); and

(b) valuable items cover for jewellery and watches ($55,000.00 sum insured) ('Valuable Items Coverage').[3]

Under the Policy, the General Contents Coverage is capped at a total sum of $2,500.00 for jewellery and watches, including rings, watches, bracelets and necklaces. The plaintiff, by taking out Valuable Items Coverage, obtained further coverage of $55,000.00, subject to the terms and conditions of the Policy.

8 The Policy also contained a section headed 'Claims we pay' under which it is recorded that:

The most we pay is the Contents sum insured.

...

If we agree to cover your claim under Contents Insurance, then we can choose to pay your claim through any of these ways:

...

• Pay you the sum insured or provide you with store credits from one of our nominated suppliers to the value of the sum insured that applies to general contents, valuable items coverage and portable items coverage.

9 On 19 April 2021, the plaintiff made a claim ('Claim') under the Policy, which IMA allocated claim number RAV213276552, seeking cover for loss and damage to contents arising from an alleged burglary at the Insured Premises on 14 April 2021.[4]

10 In making the Claim, the plaintiff prepared a list of contents which she claimed were stolen from the Insured Premises or damaged during the alleged burglary.[5] That list included: a metal safe valued at $330.00; an Australian passport; a Turkish passport; a Turkish certificate of identity card; 22 gold bracelets (each 22 karat) of unspecified value; a diamond ring valued at $690.00; a diamond ring valued at $1,665.00; a custom designed diamond ring valued at $23,000.00; a 14 karat gold diamond bracelet valued at $4,200.00; a Saint Laurent bag valued at $690.00; a diamond wedding band valued at $499.00; two gold items (bracelet and necklace) purchased in Turkey of unstated value; an Apple iPhone 5S; an Apple iPhone 8; a 32 inch Samsung monitor; an Apple MacBook laptop; two Oculus gaming products; Apple TV; and a drone valued at $6,000.00. The list also contained a claim for damage to a 65 inch television. The Claim did not differentiate between General Contents Coverage and Valuable Items Coverage.

11 By letter dated 19 November 2021, IMA denied indemnity to the plaintiff for the loss and damage the subject of the Claim on the basis that the plaintiff had not established the occurrence of an insured event and could not establish ownership of the claimed items in accordance with the terms and conditions of the Policy.[6]

12 On 23 November 2021, the plaintiff raised a complaint with IMA as to the denial of indemnity on the Claim and the handling of the Claim. IMA conducted an internal review of the plaintiff's complaint, referred to as a level 1 review.

13 By letter dated 8 December 2021, IMA informed the plaintiff that the denial of indemnity would be maintained and provided her with reasons for that decision.[7]

14 Thereafter, the plaintiff made a further complaint as to IMA's decision to maintain the denial of indemnity.[8] IMA conducted an internal review of the plaintiff's further complaint, this time a level 2 review. By letter dated 21 December 2021, IMA informed the plaintiff that the denial of indemnity would be maintained and provided reasons for that decision.[9]

15 IMA is a member of the Australian Financial Complaints Authority ('AFCA') Scheme and agrees to be bound by the AFCA Complaint Resolution Scheme Rules ('AFCA Rules'). The AFCA Rules are addressed further below.

16 On 20 January 2022, the plaintiff lodged a complaint with AFCA in relation to IMA's denial of the Claim ('AFCA Complaint').[10] The outcome sought by the plaintiff was expressed in the following terms:

I would like my claim approved asap as it was a delayed claim from the start. I would like the evidence I have in regards to the reasons the insurer has used reasons to deny my claim to be taken into regard as the insurer has preferred to disregard them or has claimed not provided. I would also like to be compensated for discriminating insult and accusations that has not only effected me mentally but has damaged my pride and dignity.[11]

17 When making the AFCA Complaint, the plaintiff was required to accept an authority which authorised AFCA to consider her AFCA Complaint in accordance with the AFCA Rules.[12]

18 On 10 February 2022, IMA provided its external dispute resolution response to AFCA in relation to the plaintiff's AFCA Complaint.[13] IMA's response recorded the items that were the subject of the plaintiff's Claim in almost identical terms to those recorded by the plaintiff in her Claim, save that the 22 gold bracelets (each 22 karat) were ascribed a value of $40,000.00.

19 On 18 May 2022 (prior to any determination), AFCA wrote to the plaintiff confirming that 'a determination is a final decision and is binding on IMA if you accept it'. The letter also provided a link to the AFCA Rules.[14]

20 AFCA reviewed the plaintiff's Complaint and on 23 August 2023 made a written determination of the dispute between the plaintiff and IMA ('Determination').[15] On 23 August 2022, AFCA emailed a copy of the Determination to the plaintiff together with a letter from AFCA to the plaintiff dated 23 August 2022, the relevant parts of which were in the following terms:

I refer to your complaint with IMA. The Australian Financial Complaints Authority (AFCA) has considered your complaint and I have enclosed our determination for you.

Also attached are some frequently asked questions about determinations that may help.

Our determination is final

The determination outlines the details of your complaint, and the determination made by AFCA on the issues you raised.

All material supplied by both parties was considered in arriving at the determination.

Please note that our decision is final.

We need to know if you accept the determination

You must now decide whether or not to accept the determination and tell me within 30 days.

You may accept the determination by return email or letter confirming that you accept our decision in full and final settlement raised under case number 855486.

If you accept, IMA must comply with the terms of the determination.

If you do not accept, IMA is not required to comply with the terms of the determination. You retain whatever rights you might otherwise have to pursue your complaint in another place such as the courts.

...[16]

21 On 24 August 2023, the plaintiff emailed AFCA to inform AFCA that she accepted the Determination.[17]

22 On 25 August 2022, AFCA notified IMA that the plaintiff accepted the Determination and instructed IMA to undertake steps necessary to comply with the Determination.[18]

23 On 25 August 2022, a representative of IMA emailed the plaintiff outlining its settlement calculation in accordance with the AFCA Determination.[19]

24 On 6 September 2022, IMA paid the plaintiff a cash settlement of $3,267.00 and emailed the plaintiff a 'Cash Settlement Fact Sheet' confirming the cash settlement amount being paid in accordance with the Determination.[20]

25 On 11 September 2022, the plaintiff sent IMA an email confirming acceptance of the cash settlement amount.[21]

26 The balance of IMA's liability to the plaintiff pursuant to the Determination was paid to JB Hi-Fi on 11 October 2022 in the sum of $9,464.34. JB Hi-Fi, in turn, supplied replacement items to the plaintiff being an Apple iPhone, Samsung TV, Apple Macbook Pro and an Apple iPhone SE.[22]

27 On 12 October 2022, the day after delivery of the replacement items, the plaintiff emailed IMA stating that she did not consider the Claim finalised and that she did not consider she was bound by the AFCA Determination regarding the allegedly stolen jewellery.[23]

28 On 30 December 2022, the plaintiff telephoned IMA requesting IMA cash settle her replacement passport. A representative of IMA read the plaintiff the AFCA Determination which required the plaintiff to provide proof of applying for a replacement of the documents.[24]

29 On 15 June 2023, the plaintiff commenced this proceeding.

30 The requirements which must be satisfied in order to obtain summary judgment are well-known. They were summarised by Matthews JR (as her Honour then was) in Padella Pty Ltd v Elliott,[25] adopted by Sloss J in Israfoods (2006) Ltd v J & D Consortium Pty Ltd[26] and further detailed by Sloss J in Silver Chef Rentals Pty Ltd v Makong Australia Pty Ltd[27] and in Bendigo and Adelaide Bank Ltd v Grahame.[28]

31 Section 62 of the CPA provides that a 'defendant in a civil proceeding may apply for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success'.

32 A defendant making an application under s 62 of the CPA must follow the procedure in Part 2 of Order 22 of the Rules. Rule 22.16 of the Rules provides that a defendant shall make an application for summary judgment under s 62 of the CPA, and r 22.17 of the Rules provides that the application is to be made by summons. Pursuant to r 22.18 of the Rules, affidavit material is admissible on the application and may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted. Pursuant to r 22.19 of the Rules, a plaintiff may show cause against an application by affidavit or otherwise to the satisfaction of the Court.

33 Section 63 of the CPA provides that, subject to s 64 of the CPA, the Court may give summary judgment in a civil proceeding 'if satisfied' that a claim has 'no real prospect of success'.

Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because -

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

35 Section 65 of the CPA provides that the summary judgment provisions of the CPA are in addition to and do not derogate from any powers a Court has under the Rules in relation to the summary disposal of any civil proceeding. The ability to stay or dismiss a proceeding is also a feature of the Court's inherent jurisdiction to prevent the abuse of its processes.[29]

36 The test for summary judgment was explained by the Court of Appeal in the oft-cited case Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.[30] There, the Court of Appeal set out the relevant test to be applied in determining an application for summary judgment made under ss 61 and 63 of the CPA, as follows:

(a) the test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success;

(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the 'hopeless' or 'bound to fail test' essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125];

(c) it should be understood, however, that the test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success; and

(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[31]

37 The issue for the Court is whether the plaintiff has a 'real' as opposed to a 'fanciful' chance of success noting that the power to terminate proceedings summarily should be exercised with caution and should not be exercised unless it is clear that there is no real question to be tried.

38 Section 7(1) of the CPA sets out its overarching purpose, which is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. As to compliance with the CPA, the timely, cost effective and efficient conduct of civil litigation takes into account wider public interest than those of the parties to the dispute. Section 8 of the CPA requires that the Court must 'seek to give effect to the overarching purpose in the exercise of any of its powers' and s 9 of the CPA provides that when making any order or giving any direction in a civil proceeding, the Court is to further the overarching purpose by having regard to the objects specified in subsection (1), being:

(a) the just determination of the civil proceeding;

(b) the public interest in the early settlement of disputes by agreement between parties;

(c) the efficient conduct of the business of the court;

(d) the efficient use of judicial and administrative resources;

(e) minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for -

(i) the fair and just determination of the real issues in dispute; and

(ii) the preparation of the case for trial;

(f) the timely determination of the civil proceeding;

(g) dealing with a civil proceeding in a manner proportionate to -

(i) the complexity or importance of the issues in dispute; and

(ii) the amount in dispute.

39 In Hausman v Abigroup Contractors Pty Ltd[32] ('Hausman'), the Court of Appeal considered the interaction between rr 22.04 and 22.05 of the Rules, and in respect of an affidavit in support, stated that what 'must be verified are the facts necessary to establish a good cause of action'.[33] Once the plaintiff has established the elements of its cause of action, the defendant must satisfy the Court that there is some question to be tried or some other reason to go to trial. This involves addressing the plaintiff's claim and stating 'clearly and concisely what the defence is, and identify the facts relied upon in support of that defence.'[34]

40 The principles from Hausman remain good law since the advent of the CPA.[35]

41 In Hausman, the Court of Appeal also made clear that on a summary judgment application the judge 'should not be required to trawl through the defendant's material in an effort to see whether there can be constructed from that material an answer to the plaintiff's claim.'[36] Rather, the Court stated at [55]:

... It must be for the defendant to point to some material, whether legal or factual, that provides an arguable response to that claim. That is so even if it is the plaintiff who must ultimately discharge the burden of persuading the judge that there is no issue that warrants trial, and that summary judgment should therefore be granted.[37]

42 The Court of Appeal's observations in Hausman are equally applicable to an application brought by a defendant for summary judgment. The Court is not required to trawl through the plaintiff's material in an effort to see whether there can be constructed from that material an arguable claim or an issue that warrants trial.

Stay of Proceeding or Judgment - When will a pleading be struck out?

43 Pleadings are of great consequence. They are the primary means by which the parties advocate their case. They assist the parties to define the real issues in dispute. They set out the issues which must be determined in the case. A pleading that would not survive a summary judgment application will be struck out. To allow it to go forward would be futile.[38] The effect of striking out a statement of claim if no right to re-plead is granted brings the proceeding to a peremptory end.[39]

44 However, if it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the Court to dismiss the action as frivolous and vexatious and an abuse of process.[40] Moreover, where it is said that the issue is purely a question of law, the Court should not strike out a claim on this basis if it is conceivable that some factual matter could emerge at trial which might alter the analysis.[41]

45 In the alternate to summary dismissal, the defendants seek relief under Order 23 of the Rules. Rule 23.01(1) of the Rules provides:

Where a proceeding generally or any claim in a proceeding -

(a) is scandalous, frivolous or vexatious; or

(b) is an abuse of process of the Court -

the Court may stay the proceeding generally or in relation to any claim or give judgment in the proceeding generally or in relation to any claim.

46 Pursuant to r 23.04(1) of the Rules, evidence on an application under r 23.01 of the Rules shall be admissible for any party by affidavit or, if the Court thinks fit, orally.

Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading -

(a) does not disclose a cause of action or defence;

(b) is scandalous, frivolous or vexatious;

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) is otherwise an abuse of the process of the Court -

the Court may order that the whole or part of the indorsement or pleading be struck out or amended.

48 In Manderson M & F Consulting v Incitec Pivot Ltd,[42] the Court of Appeal considered the distinction between an application for summary judgment and an application under Order 23 of the Rules:

The authorities reviewed by Croft J in JBS Southern Aust v Westcity Group Holdings [2011] VSC 476, which disclosed the underlying rationale for s 63 of the [Civil Procedure Act 2010], make it clear that an inquiry as to whether a case has 'no real prospects of success' involves considerations extending beyond an analysis of the sufficiency of the statement of claim to plead a cause of action. The new power under s 63 is not one to be exercised by reference only to the sufficiency of the pleading.[43]

49 An application under r 23.02 of the Rules requires the Court to look only at the sufficiency of the pleading. No affidavit material can be used in support of the application.[44] However, in an application under s 62 of the CPA, the Court is required to consider the merits of the proceeding.

50 In Wheelahan v City of Casey (No 12)[45] ('Wheelahan'), Dixon J referred to the principles to be applied on an application under Order 23 of the Rules as follows (citations omitted):

(a) Order 13 of the Rules set out the relevant requirements of a sufficient pleading while r 23.02 provides the grounds on which the sufficiency of a pleading may be impugned;

(b) the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;

(c) the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence). The expression 'material facts' is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;

(d) as a corollary, the pleading must be presented in an intelligible form - it must not be vague or ambiguous or inconsistent. Thus a pleading is 'embarrassing' within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;

(e) the fact that a proceeding arises from a complex factual matrix does not detract from the pleading requirements. To the contrary, the requirements become more poignant;

(f) pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);

(g) a pleading which contains unnecessary or irrelevant allegations may be embarrassing - for example, if it contains a body of material by way of background factual matrix which does not lead to the making out of any defined cause of action (or defence), particularly if the offending paragraphs tend to obfuscate the issues to be determined;

(h) it is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing;

(i) every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));

(j) the effect of any document or purport of any conversation, if material, must be pleaded as briefly as possible, and the precise words of the document or the conversation must not be pleaded unless the words are themselves material (r 13.03);

(k) particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement - namely, to fill in the picture of the plaintiff's cause of action (or defendant's defence) with information sufficiently detailed to put the other party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;

(l) a pleading should not be so prolix that the opposite party is unable to ascertain with precision the cause of action and the material facts that are alleged against it;

(m) extensive cross-referencing of facts in a pleading may render parts of the pleading unintelligible;

(n) in an application under r 23.02, the court will only look at the pleading itself and the documents referred to in the pleading;

(o) the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown; and

(p) if the objectionable part of the pleading is so intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading. [46]

51 In Babcock & Brown DIF III Global Co-Investment Fund, LP v Babcock & Brown International Pty Ltd (No 2)[47] ('Babcock & Brown (No 2)'), Hargrave J referred to aspects of the principles set out in Wheelahan and added the following observation:

To this summary, I would add that the Court should consider the pleading under a challenge as a whole and adopt a partial case management approach to pleading objections, rather than accepting technical objections when the true nature of the case to be met is clear from reading the pleading as a whole and there is no embarrassment to filing a responsive pleading. Such an approach accords with the discretionary nature of the power to strike out and with the overarching purpose under the Civil Procedure Act. However, in cases alleging dishonesty or fraud, precise pleadings with full particulars are required.[48]

52 The principles set out in Wheelahan and Babcock & Brown (No 2) were endorsed by the Court of Appeal in Uber Australia Pty Ltd v Andrianakis,[49] where the Court held that in considering pleading objections on the ground that the pleading is embarrassing, the Court should stand back and consider the pleading as a whole and in that light ask: does the case alleged give clear notice of the case to be met at trial?

53 In Karlsson v Griffith University,[50] Wright J explained the overlapping nature of 'scandalous, frivolous or vexatious' and 'an abuse of process of the Court', as follows:

"Frivolous" in this context includes proceedings that a plaintiff has no reasonable prospects of successfully prosecuting or that are untenable, groundless or faulty: Spencer at [59]. Proceedings which are foredoomed to fail, and "frivolous" in that sense, include proceedings where no reasonable cause of action is disclosed.

"Vexatious", in this and similar contexts, refers to proceedings that are productive of serious and unjustified trouble or harassment: Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; [2002] HCA 10 at [25] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).

Further, frivolous or vexatious proceedings can also be instances of proceedings that are an abuse of process: Walton v Gardiner (1993) 177 CLR 378 at 393 (Mason CJ, Deane and Dawson JJ); [1993] HCA 77.[51]

54 In Ridgeway v The Queen,[52] Gaudron J explained at [32] (citations omitted):

The powers to prevent an abuse of process have traditionally been seen as including a power to stay proceedings instituted for an improper purpose, as well as proceedings that are "frivolous, vexatious or oppressive". This notwithstanding, there is no very precise notion of what is vexatious or oppressive or what otherwise constitutes an abuse of process. Indeed, the courts have resisted, and even warned against, laying down hard and fast definitions in that regard. That is necessarily so. Abuse of process cannot be restricted to "defined and closed categories" because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case. That is not to say that the concept of "abuse of process" is at large or, indeed, without meaning. As already indicated, it extends to proceedings that are instituted for an improper purpose and it is clear that it extends to proceedings that are "seriously and unfairly burdensome, prejudicial or damaging" or "productive of serious and unjustified trouble and harassment".[53]

55 In Kermani v Westpac Banking Corporation,[54] Robson AJA (Neave and Harper JJA agreeing) outlined the principles relating to stay applications on the grounds of abuse of process. Those principles relevantly included the following (citations omitted):

(1) The court possesses an inherent jurisdiction to stay its proceedings as an abuse of process if the proceedings are unjustifiably oppressive and vexatious or manifestly unfair or otherwise bring the administration of justice into disrepute among right-thinking people: Walton v Gardiner; Rogers v R and PNJ v R; Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd.

(2) The jurisdiction should only be exercised in exceptional cases or sparingly with the utmost caution: Jago v District Court (NSW).

(3) The jurisdiction to stay for abuse of process is not limited to cases where the proceedings have been brought for an improper purpose or where there is no possibility of the court affording the affected party a fair hearing: Walton v Gardiner; Rogers v R.

(4) The circumstances in which abuse of process may arise are extremely varied and the courts have refrained from limiting the circumstances to fixed categories: Hunter v Chief Constable of the West Midlands Police; Rogers v R; Batistatos v Roads and Traffic Authority (NSW).

(5) In considering whether to grant a stay as an abuse of process, the court should undertake a weighing process involving a subjective balancing of a variety factors and considerations: Walton v Gardiner.[55]

56 In determining whether a proceeding should be permanently stayed as an abuse of process, the Court undertakes a 'weighing process involving a subjective balancing of a variety of factors and considerations'.[56] The factors and considerations to be weighed include: the requirements of fairness to the parties; the public interest; and the need to maintain public confidence in the administration of justice.[57]

57 Abuse of process 'is not restricted to defined and closed categories'.[58] It will usually exhibit at least one of the following three characteristics: the Court's procedures are being invoked for an illegitimate collateral purpose; the use of the Court's procedures is unjustifiably oppressive to a party; and/or the use of the Court's procedures will bring the administration of justice into disrepute.[59]

58 The onus of proving an abuse of process is onerous and rests on the party alleging it.[60] The Court will only grant a permanent stay of proceeding on the basis of an abuse of process in exceptional circumstances.[61] It is not necessary for a party seeking relief against what it claims is an abuse of process to show 'misconduct' of some kind on the part of the plaintiff.[62] It is sufficient that the continuation of the proceedings would be fundamentally unfair to another party.[63]

59 Because the plaintiff is self-represented, it is appropriate to set out the applicable principles in respect of the Court's approach when one of the parties is not represented by a lawyer.

60 A judge has a duty to represented and unrepresented litigants alike to ensure that the hearing is conducted fairly and in accordance with law.[64] The duty, to assist a self-represented litigant in civil proceedings, requires the judge to provide such guidance to a self-represented litigant as will ensure procedural fairness.[65] What a judge must do to assist a self-represented litigant depends on the litigant, the nature of the case, and the litigant's intelligence and understanding of the case.[66] The assistance must be proportionate in the circumstances: it must ensure a fair trial and not afford an advantage to the self-represented litigant.[67]

61 The Court of Appeal, in Trkulja v Markovic ('Trkulja'),[68] identified the proper scope of assistance to be offered to self-represented litigants stating that a judge's duty to assist a self-represented litigant is flexible and will depend upon the circumstances of the litigant and the nature and complexity of the case. Those circumstances include the litigant's age, physical and mental health, level of education, proficiency in the English language, level of intelligence, personality, experience, understanding of the case and whether he or she is legally qualified. The Court of Appeal explained judge's duty in the following terms (citations omitted):

In determining the proper scope of assistance to be offered to a self-represented litigant, the touchstones are fairness and balance. The assistance may extend to issues concerning substantive legal rights as well as to issues concerning the procedure that will be followed. In some cases, it may be necessary for the judge to identify the issues and the state of the evidence in relation to them so as to enable the self-represented litigant to consider whether he or she wishes to adduce evidence. It is elementary that a judge ought to ensure that the self-represented litigant understands his or her rights so that he or she is not unfairly disadvantaged by being in ignorance of those rights. Notwithstanding this, the judge should refrain from advising a litigant as to how or when he or she should exercise those rights.

The High Court has stated that a frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy. Similarly, this Court has endorsed the proposition that '[c]oncealed in the lay rhetoric and inefficient presentation may be a just case'.

It is clear that a judge cannot become the advocate of the self-represented litigant. This is because the role of a judge is fundamentally different to that of an advocate. Further, a judge must maintain the reality and appearance of judicial neutrality at all times and to all parties. Accordingly, the restraints upon judicial intervention stemming from the adversary tradition are not relevantly qualified merely because one litigant is self-represented.[69]

62 The plaintiff is not legally trained. However, it is apparent from the documents the plaintiff has filed with the Court that the plaintiff is capable of clearly expressing her position. Her statement of claim is carefully drafted and contains an unusual degree of precision and clarity for a self-represented litigant without legal training. Having regard to the approach in Trkulja, I have discerned the following matters raised as potential claims by the plaintiff for consideration:

(a) a claim that the defendants have breached the contract of insurance as set out at paragraphs 37 to 43 of the statement of claim; and

(b) a claim for bad faith at paragraphs 44 to 55 of the statement of claim.

63 The damages which the plaintiff seeks are set out at paragraphs 41 to 43 and paragraphs 53 to 55 of her statement of claim. Broadly, the damages sought relate to alleged emotional distress and anxiety and includes claims for punitive and exemplary damages. The claims are repeated in the prayer for relief at paragraphs (a) to (c).

64 The relevant statutory provisions relating to the role played by AFCA are contained in Part 7.6 of the Corporations Act 2001 (Cth) ('Act').

65 AFCA is the operator of a financial services dispute resolution scheme authorised under s 1050 of the Act. IMA is a member of the AFCA Scheme.[70]

66 Section 912A(1)(g) of the Act records that if a financial services licensee provides services to retail clients, the licensee must have a dispute resolution system which complies with s 912A(2) of the Act. Section 912A(2) of the Act in turn provides that the licensee must have an internal dispute resolution procedure and have 'membership of the AFCA Scheme'.

67 The 'operational requirements' of the AFCA Scheme are contained in s 1051(4) of the Act as follows:

Operational requirements

(4) The operational requirements are that:

(a) the complaints mechanism under the scheme is appropriately accessible to persons dissatisfied with members of the scheme; and

(b) complaints against members of the scheme are resolved (including by making determinations relating to such complaints) in a way that is fair, efficient, timely and independent; and

(c) appropriate expertise is available to deal with complaints; and

(d) reasonable steps are taken to ensure compliance by members of the scheme with those determinations;

(e) under the scheme, determinations made by the operator of the scheme are:

(i) binding on members of the scheme; but

(ii) not binding on complainants under the scheme ...

68 Rule A.1.3 of the AFCA Rules provides that the AFCA Scheme is free of charge for complainants and that '[c]omplainants do not generally need legal or other paid representation to submit or pursue a complaint through AFCA'. It is a Scheme that is, consistent with the objects set out in s 1051A of the Act, meant to be accessible, independent, fair, efficient, cost effective and informal, and is said to favour the consumer who, unlike the 'financial firm', is not bound by the outcome unless they accept the determination.[71] Indeed, r A.2.1(c) of the AFCA Rules, requires AFCA to consider complaints submitted to it in a way that is: independent, impartial, fair; in a manner which provides procedural fairness to the parties; efficient, effective, timely, and; cooperative, with the minimum of formality.

69 Section 1051(4)(e) of the Act provides that determinations made by AFCA are binding on members of the Scheme, here IMA, but are not binding on complainants to AFCA. Rule A.15.4 of the AFCA Rules further provides that if a complainant does not accept a determination, the complainant is not bound by the determination and may bring action in the Courts or take any other action available to it. However, a person who submits a complaint to AFCA is deemed to have agreed to having the complaint considered under the AFCA Rules,[72] and is entitled to require that AFCA proceed in accordance with the AFCA Rules.[73] It is uncontroversial that the plaintiff submitted a complaint to AFCA and that she agreed to having her complaint considered under the AFCA Rules.

70 The AFCA Rules form part of a contract between AFCA, the financial firm (in this case IMA) and the complainant.[74] AFCA's jurisdiction, powers and obligations are governed solely by the contract set out in the AFCA Rules. Rule A.15.3 of the AFCA Rules provides that after AFCA has made a determination it is binding upon the parties to the dispute 'if accepted by the complainant within 30 days of the complainant's receipt of the determination'. That will be the case unless the determination is affected by fraud or dishonesty or lack of good faith or the outcome is one that no reasonable decision-maker could have reached.[75] There was no suggestion by the plaintiff that the Determination by AFCA was affected by fraud, dishonesty or a lack of good faith or that it was an outcome that no reasonable decision maker could have reached. Consistently with the AFCA Rules, it has been accepted that AFCA is entitled to make its determination by reference to what is fair and reasonable in all of the circumstances rather that the existing legal rights and obligations of the parties.[76]

71 Under r A.10.2 of the AFCA Rules, AFCA must provide the parties to the complaint with access to relevant information and an opportunity to make submissions.

72 Rule A.12.1 of the AFCA Rules requires that AFCA may, after collecting relevant information and obtaining submissions from the parties, choose to provide the parties with a preliminary assessment of the complaint. If the financial services firm which is the object of the complaint fails to accept AFCA's preliminary assessment within the timeframe specified by AFCA, the complaint must proceed to a determination.

73 When determining a complaint at the request of a party, the AFCA decision maker must consider the parties' reasons, if any, for disagreeing with the preliminary assessment, but it is not limited to those reasons.[77]

74 Rule A.14.2 of the AFCA Rules provides that when determining any other complaint, the AFCA decision maker must do what the AFCA decision maker considers is fair in all the circumstances having regard to: legal principles, applicable industry codes or guidance; good industry practice; and previous relevant determinations of AFCA or Predecessor Schemes. AFCA is not bound by the rules of evidence.

75 Rule A.14.4 of the AFCA Rules stipulates that any remedy must be within AFCA's jurisdiction as set out in Section D. Rule D.3.1 of the AFCA Rules provides, in turn, that an AFCA decision maker may decide that the financial firm is to compensate the complainant for direct financial loss. When calculating the value of such a remedy, monetary compensation and any remedy where the value can readily be calculated, such as the waiving of a debt, are included. Rule D.4 of the AFCA Rules includes a table which sets out the maximum amounts that AFCA may award for complaints, not including costs and interest.

76 The essence of the plaintiff's AFCA Complaint was that she sought to have her Claim under the Policy approved and sought to challenge the accusations that she alleged had been made by IMA against her of fraud. The AFCA Complaint submitted by the plaintiff was in respect of claim number RAV213276552, being the Claim she submitted to IMA.[78] The AFCA Complaint contained a note that one of the files submitted with the complaint was a document entitled 'RACV Complaint Letter'. That letter was not put into evidence by the plaintiff.

77 AFCA made its Determination on 23 August 2022. The Determination, which the plaintiff accepted on 25 August 2022, [79] set out AFCA's 'key findings' as follows:

(a) IMA was entitled to partially deny the Claim;

(b) AFCA was persuaded that the plaintiff's home was burgled and that she was not involved in this event. However, the evidence established that the plaintiff failed to act in accordance with her duty of utmost good faith and there were legitimate concerns about her credibility;

(c) IMA was required to meet the Claim under the terms of the policy and in accordance with the provisions of the Determination;

(d) IMA was not required to pay compensation. IMA was entitled to investigate the Claim. There was no reasonable basis to award compensation against IMA;

(e) it was fair to limit cover to items where the plaintiff had established a valid claim for theft or property damage through verifiable evidence;

(f) the Determination was substantially in favour of IMA; and

(g) upon acceptance by the plaintiff, IMA was required to meet its obligations under the terms of the Policy and in accordance with the provisions of the Determination.[80]

78 In so far as any claim against RACV is concerned, the defendants contend that it is misconceived. RACV distributed the Policy but was not a party to the Policy. The plaintiff and IMA were the parties to the Policy. This factual matter was not disputed by the plaintiff and I accept that the documents before the Court demonstrate that RACV was not a party to the contract of insurance.

79 Having considered the statement of claim, I am not able to discern any allegation or claim that is specifically directed at RACV. The claim alleging a breach of contract set out at paragraphs 37 to 43 of the statement of claim concerns an alleged breach of the Policy, to which RACV was not a party. The claim alleging bad faith set out at paragraphs 44 to 55 again relates to the circumstances in which the Claim was made under the Policy and dealt with by IMA. The final claim, being a breach of what is termed the general insurance code of practice, seems to be catch all of the other two primary claims, and again relates to the circumstances surrounding the denial by IMA of the plaintiff's Claim under the Policy.[81]

80 There being no separate cause of action alleged against RACV, in its capacity as distributor of the Policy, and none having been advanced in argument before me, I must conclude that the proceeding as against RACV is, in the circumstances, misconceived and has no proper basis or reasonable prospect of success. It will be summarily dismissed.

81 The defendants contend that the Determination was made in respect of the entirety of the Claim and the entirety of the dispute arising between the plaintiff and IMA.

82 The defendants further contend that by accepting the Determination, the plaintiff created a binding settlement between the plaintiff and IMA, which replaced any rights the plaintiff and IMA had under the Policy. The settlement cast upon IMA an obligation to indemnify the plaintiff in regard to the items set out in the Determination. In furtherance of the settlement, IMA says that it discharged its obligations by providing the plaintiff with a cash payment and replacement items in accordance with the Determination. The defendants submit that the plaintiff accepted the payment and replacement items and accordingly IMA contends that it has discharged its obligations under the settlement and in accordance with the Determination.

83 The defendants otherwise contend that the plaintiff's claim, which appears to seek payment for the items which the AFCA Determination denied (as well as exemplary, aggravated and punitive damages) has no basis at law and should be dismissed. Alternatively, they say it does not have reasonable prospects of success and ought to be summarily dismissed.

84 Having regard to the matters alleged by the plaintiff in her statement of claim, and those advanced at the hearing before me, there are two key matters which the Court must consider:

(a) did the plaintiff accept AFCA's Determination?; and

(b) if the answer to (a) is yes:

(i) what is the effect of the Determination on any rights the plaintiff may have in respect of any claims against the defendants?; and

(ii) what should become of the proceeding?

(a) writ and statement of claim filed on 15 June 2023;

(b) response to summons for application by defendants filed on 5 September 2023 ('Plaintiff's Response');

(c) affidavit affirmed on 21 September 2023 ('First Ofli Affidavit');

(d) affidavit affirmed on 26 October 2023 ('Second Ofli Affidavit'); and

(e) outline of submissions filed on 25 October 2023 ('Plaintiff's Outline').

86 In her affidavits and various written submissions, the plaintiff's arguments were broadly as follows:

(a) first, the plaintiff says she and the defendants (which I will treat as a reference to IMA) executed an insurance agreement encompassing two distinct components under a single policy, namely General Contents Coverage amounting to $61,000.00 and Valuable Items Coverage amounting to $55,000.00. The cumulative coverage under the Contents Insurance amounts to $116,000.00.[82] The plaintiff complains that the defendants (again IMA) do not make any distinction in their affidavit material that she made claims under both components of the Contents Insurance;[83]

(b) by extension to the first contention, the plaintiff says that the Determination was only in relation to the General Contents Coverage component of the Contents Insurance and did not consider the Valuable Items Coverage under her Claim.[84] The plaintiff says that she only accepted the Determination for the General Contents Coverage component of her Claim. She says a letter she received from IMA dated 6 September 2022 makes is clear that the defendants knew that she didn't believe that her Claim was settled.[85] The plaintiff further contends that AFCA was not informed of the Valuable Items Coverage under her Claim and says that if she was consulted, she would have clarified that matter. She deposes that she accepted the Determination on the basis that AFCA had not been informed about the two separate categories of Contents Insurance, with the Valuable Items Coverage still to be determined between the plaintiff and defendants (IMA).[86] In further support of this position, she says that when she logs into the RACV member website, the status of all items under General Contents Coverage are marked as 'finalised' whereas the items under Valuable Items Coverage are marked as 'awaiting assessment'.[87] The plaintiff contends if it were the case that the acceptance of the Determination was binding and in respect of the entire Claim, then the RACV member website should say so. The plaintiff maintains that no resolution has been made.[88] The plaintiff deposes that she did not request and was not aware the Determination included matters beyond what was requested by her in her AFCA Complaint.[89] She says that she was also not made aware of the accusations made against her for breach of contract with no compensation awarded.[90] She further says that she accepted the Determination as it was 'determined she had not engaged in fraud' and the Determination only 'covered items under one cover and still reserved the right to cover items under the other cover' as well as compensation rights in relation to the serious allegations made against her;[91]

(c) second, the plaintiff contends that the effect of the Determination was that 'her [C]laim was not found to be fraudulent', and that 'the theft wasn't fabricated and did in fact take place'. The plaintiff says that this meant that 'the reason the complaint was made to AFCA and the nature of the complaint was resolved' and that she 'believed that the defendant was to cover all items claimed a loss of in the theft';[92]

(d) third, the plaintiff contends that, despite her alleged expectation, she was not consulted in the process of the AFCA Determination and was not consulted or contacted regarding any clarifications, consent or opinion involved in the final AFCA Determination;[93]

(e) fourth, the plaintiff states that she does not believe that she is bound by the AFCA Determination. She contends that she was never notified about the formation of a tripartite contract and being bound by the AFCA Rules.[94] The plaintiff asserts that she was presented with a choice to either accept or reject the Determination, however, was not informed that accepting the Determination would bind her and come with terms, conditions, and potential consequences.[95] To the contrary, the plaintiff says that she was led to believe that only the defendants were bound by reason of a letter from AFCA dated 18 May 2022 which read 'a determination is a final decision and is binding on IMA if you accept it'.[96] The plaintiff alleges that the defendants and AFCA failed to inform her that acceptance of the Determination had a binding effect on her and failed to provide her with a list of the items she would not receive compensation for should she accept the Determination. If AFCA or the defendants had communicated this to her, the plaintiff says that she would not have accepted the Determination;[97]

(f) fifth, the plaintiff says, which I will treat as an alternate submission, that she accepted the Determination based on its outcome which confirmed that no fraud was involved. The plaintiff says that consequently she believed the Claim was then to be reinstated, the defendants were to be held liable for covering the loss of all claimed items, and that the inclusion of items covered by the General Contents Coverage in the Determination did not alter the outcome. The plaintiff asserts that there was no specific request or complaint from either her or IMA regarding the items not covered. She says she did not request that AFCA address this matter and neither did IMA. The plaintiff contends that it is reasonable to assume that any disputes regarding the items not covered would be addressed in accordance with common sense and appropriate procedures, once the Claim was restored to its original position;[98]

(g) sixth, between 25 August 2022 and 11 October 2022, the plaintiff engaged in verbal and written discussions with the defendants. The plaintiff contends that AFCA's 'A guide to determinations'[99] obliged IMA to provide a deed of settlement which did not occur;

(h) seventh, the plaintiff contends that the allegations made by the defendants were unsubstantiated, and she intended to demonstrate the legitimacy and validity of her claims during the Court hearing;[100] and

(i) eighth, the plaintiff alleges that the defendants have taken advantage of her vulnerabilities and have acted in bad faith, and says that they have not been made accountable for the way that the plaintiff was treated.[101]

87 At the hearing the plaintiff's arguments mirrored to large part those set out in her affidavits, outline and reply. As best as I can distil them, the plaintiff's oral submissions were as follows:

(a) she provided to RACV a list of all items that had been stolen from her home on 14 April 2021, including items she believed were not covered by the Contents Insurance;[102]

(b) she provided sufficient proof of ownership of the stolen items in the form of personal photographs and images obtained from the internet;[103]

(c) she was underinsured. If it had been her intention to submit a fraudulent claim to RACV she would have ensured she had adequate cover and 'paid the whole lot of it';[104]

(d) allegations of fraud were made against her by RACV due to her financial status and she was not given an opportunity to prove that the allegations were not true;[105]

(e) she expected AFCA to reach out to her to provide further evidence and her version of events in the process of making its Determination;[106]

(f) AFCA acted on misleading information in making its Determination;[107]

(g) AFCA's Determination provided cover for items which fell under the General Contents Coverage only. It was not determined that any items were to be covered by the Valuable Items Coverage. AFCA's determination 'picked out... the lesser amounts';[108]

(h) AFCA's Determination was based on what suited the defendants and was not in her favour;[109]

(i) the consequence of AFCA's Determination was that she had to either accept a Determination which did not cover her for the amount of the entire loss, or reject a determination that cleared her of fraud;[110]

(j) she accepted the AFCA Determination because it cleared her of fraud;[111]

(k) she accepted the AFCA Determination because AFCA asked her to. If she had known accepting the Determination would waive the rights she might otherwise have to pursue her complaint in other places such as the Courts, she would have 'stuck a big stink about that'. She believed that as AFCA found that her Claim was not fraudulent, she retained her rights to continue to pursue her complaint against the defendants;[112]

(l) she was of the belief that as AFCA had determined that her Claim was not fraudulent, her Claim would be reinstated and she would have the opportunity to provide further material;[113]

(m) her profile on the RACV member website indicates that her Claim has been settled in respect of the General Contents Coverage but that the Valuable Items Coverage is still pending,[114] supporting her belief that her Claim would be reinstated following AFCA's Determination and she would have the opportunity to provide further material;

(n) she was of the belief that AFCA's Determination was binding on the defendants but was not binding on her,[115] but admitted she overlooked the last paragraph of the letter from AFCA dated 23 August 2022;[116] and

(o) she was never asked to repay the settlement money she received because it was not 'an award'.[117]

What comprised the plaintiff's Claim? What comprised the plaintiff's AFCA Complaint? What matters did the AFCA Determination address?

88 Dealing with the first two grounds raised by the plaintiff, it was uncontroversial that nowhere in her statement of claim does the plaintiff plead that the Determination only dealt with a component of her Claim. Similarly, it is uncontroversial that in her Claim, the plaintiff sought indemnification for 25 items purportedly stolen or damaged. I refer to the list of items set out at paragraph 10 of these reasons. The 25 items fell under both the General Contents Coverage and the Valuable Items Coverage. It was IMA's refusal to accept her Claim that the plaintiff referred to AFCA. AFCA, in turn, in considering the plaintiff's AFCA Complaint specifically addressed a number of items that must have been subject to the Valuable Items Coverage. The AFCA Determination recorded the following:

The insurer asked the complainant to provide evidence to establish that she owned the items she claimed were stolen.

The complainant provided a photograph of a white gold diamond bracelet, which she says was among the items stolen. She says it was stolen along with the valuation certificate. The complainant says she sent a photograph to a friend, to show her the bracelet after she received it as a gift.

The insurer conducted a reverse search of the image, which revealed it was an (online) Walmart photograph.

This allegation was clearly flagged in the insurer's notice of response. While the complainant's submissions respond to most of the insurer's allegations, it is silent on this issue.

Section 13 of the Insurance Contracts Act 1984 says a contract of insurance is based on utmost good faith, and it is implied that each party to such a contract must act towards the other with the utmost good faith on any matter concerning the contract.

The complainant's silence on this issue is indicative that she likely has not acted towards the insurer with the utmost good faith.

During a formal recorded interview with a representative of the insurer on 31 August 2021, the complainant said that a friend actually sent the plaintiff the photograph. This response is clearly inconsistent with the other information provided by the complainant.

While this is one inconsistency, it is a serious one and must be viewed considering all the other evidence.

The burden of proof is on the complainant to establish a valid claim.

The complainant must show that she suffered the claimed loss or damage as the result of an insured event covered under the terms of the policy. Where the complainant establishes a valid claim, the burden shifts to the insurer to establish a reason to deny cover, either by way of the policy exclusions or on some other basis.

The onus upon the complainant extends to establishing that the loss occurred in circumstances which are consistent with the other known and confirmed evidence and the complainant's version of the loss is credible.

The complainant's onus extends to establishing ownership and possession of the lost items.

The policy documentation (PDS) provides:

General exclusions and your responsibilities

...

This section also outlines your responsibilities. You may put your insurance claim at risk or cover at risk if you do not meet your responsibilities to us.

Your responsibilities

...

Co-operate

You must:

• be truthful and frank in any statement you make to us

...

• co-operate fully with is, even if we have already paid your claim which includes:
  • providing us with all the information, documents and help we need to deal with your claim. If we request information or documents that are relevant to your claim, we will provide an explanation as to why this is needed.
  • as soon as reasonably possible sending us any letters, notices or court documents that you receive about any incident which has resulted, or may result in a claim against you

• being interviewed by us or our representatives

• ...

Proof of loss and ownership

...

When you make a claim, we may ask you to provide certain documents:

• to prove that you owned the items;

• to help us identify the items

The type of documents we ask for depend on the situation and can include:

• tax invoices for items bought or services used;

• purchase receipts;

• valuation certificates;

• credit card or bank statements;

• photos.

For some of the allegedly stolen items, there is no independent or verifiable proof of ownership. The only evidence as to ownership and loss of those items are statements from the plaintiff herself.

...[AFCA was] satisfied the complainant cannot provide any independent or verifiable ownership evidence of the following items:

• 22 x 22 crt gold Turkish bracelets, valued unspecified;

• diamond ring valued at $690;

• a diamond cluster ring set valued at $1,655;

• 18 crt white gold diamond ring valued at $23,000;

• 22 x 24 crt gold medallion necklaces (x2), value unspecified;

• a drone belonging to her brother and left at her home;

• an apple tv.

The complainant says all her jewellery were gifts from her family or then-husband, and she was never provided receipts.

While she has provided historic photographs of her wearing bracelets and bangles, [AFCA is] not satisfied this is adequate evidence to establish she owned the allegedly stolen items at the time of the claim event.

There were no photographs that clearly identified her wearing the rings, and the valuation for the 18crt white gold diamond ring was in her brother's name. While [AFCA] understand the complainant's position that her then-husband attended the valuation with her brother, and it must have been put under his name, [AFCA was] not satisfied this was adequate to demonstrate her ownership of this in these circumstances.

It is noted that her brother refused to speak to the insurer's investigator and there is no evidence to corroborate the complainant's version of events. Further, the complainant has provided no verifiable evidence that the drone allegedly belonging to her brother was left at the premises.

The complaint also submitted another valuation for the diamond cluster ring set she said she received with the rings, however this valuation is not addressed to anyone and does not establish her ownership of this item. When asked about this item in her second interview, the complainant stated she had actually lost a part of this item, which is inconsistent with the evidence she had submitted earlier to the insurer.

...

In view of the above, [AFCA is] satisfied the complainant cannot establish on the balance of probabilities, a valid claim for the above listed items. Accordingly, the insurer is entitled to deny cover for these items.

90 Despite the matters considered by AFCA in the Determination, the plaintiff, in her statement of claim seeks to, in effect, reagitate the conduct of IMA in denying her Claim: see paragraphs 25 to 28 of the statement of claim. In those paragraphs, she does not plead that her Claim was made in two parts. Moreover, at paragraphs 29 to 32 of the statement of claim, there is no suggestion by the plaintiff that her AFCA Complaint was limited to any particular aspect of her insurance claim. A plain reading of the AFCA Determination leads to the inescapable conclusion that AFCA considered the totality of the plaintiff's Claim and that the Determination covered both components of the Contents Insurance. In those circumstances, I am unable to accept the plaintiff's affidavit material or submissions that the Determination only dealt with part of her Claim. I consider that the distinction that the plaintiff now seeks to establish is without substance and doomed to fail.

91 The plaintiff otherwise deposes that she accepted the Determination on the basis of AFCA not having been told about the two separate covers with the Valuable Items Coverage still to be determined between the plaintiff and defendants.[118] Given the matters clearly recorded by AFCA in its Determination, and extracted at paragraphs 88 to 89 of these reasons, I am unable to accept the plaintiff's evidence. If the plaintiff genuinely held the belief that she had submitted distinct claims to IMA and that any claim by her in relation to the Valuable Items Coverage was still to be determined (either by IMA and/or AFCA), it was open to the plaintiff to decline to accept the Determination. She did not do so.

(a) she was not consulted in the process of the AFCA Determination;

(b) AFCA was not informed of the Valuable Items Coverage under the Claim; and

(c) if she was consulted she would have clarified that matter,

I am unable to accept that submission.

93 On 10 February 2022, IMA provided it's response to the plaintiff's AFCA Complaint. That response recorded that the items which were the subject of the Claim were those recorded at paragraph 10 of these reasons. The plaintiff did not challenge IMA's response to AFCA.

94 Before me, the defendants relied upon documents produced by AFCA in response to a subpoena for production issued to it on 27 September 2023 ('Subpoena'). One of the documents produced by AFCA in answer to the Subpoena was a letter from the plaintiff to AFCA headed 'reply date 11 May 2022 to further allegations made by RACV on 22 March 2023' ('plaintiff's AFCA Response').[119] The plaintiff's AFCA Response was not contained in any of the plaintiff's material before me. The plaintiff's AFCA Response makes it clear that she was in fact consulted by AFCA and that AFCA complied with its obligations under r A.10.2 of the AFCA Rules to provide the plaintiff with an opportunity to make submissions. Accordingly, I am unable to accept the plaintiff's evidence on this issue.

95 In addition, on 18 May 2022, AFCA wrote to the plaintiff and advised that it considered it appropriate to proceed directly to a determination under r A.8.2 of the AFCA Rules. If the plaintiff wished to raise any further matters with AFCA, she was aware from at least 18 May 2022 that absent her doing so, the matter would proceed directly to a determination. No further material was submitted by the plaintiff to AFCA.

Was the plaintiff bound by AFCA's Determination?

96 In this case, the Determination was accepted by the plaintiff on 24 August 2022.[120] Upon that acceptance, and in accordance with r A.15.3 of the AFCA Rules, the Determination was binding upon the plaintiff and IMA.[121] It is convenient to extract the paragraphs of the statement of claim which deal with this issue:

1. Plaintiff advised that she did not accept the determination and further advised that she was left with loss and damages caused by the Defendant that still needed to be addressed and offered the defendant to re-consider and review its decision in regards to her remaining losses that she was caused during the claim process and as a direct result of the refusal of the claim.
2. Defendant refused acceptance of Plaintiff's offer and advised they were obligated to the decision in the determination by AFCA which was considered settled.
3. The Plaintiff contends that the defendant is liable to cover her losses for valuable items therefore, is not satisfied with the outcome and refuses the reasons insurer relied on and seeks an order for the Defendant to pay her the total sum insured to cover her total losses under the policy on the terms that the policy promised to cover and compensation for damages.

97 That pleading is to be contrasted with the evidence before me, including an email from the plaintiff to AFCA in which she stated:

Dear Sir/Madam,

I wish to advise that I accept the Determination and would appreciate advise (sic) on who will be the contact people to have items replaced in the determination.[122]

98 On the material before me, there is no real prospect that the plaintiff could establish the facts pleaded at paragraphs 34 to 36 of her statement of claim. She accepted AFCA's Determination in writing and then insisted on IMA complying with the Determination.[123] The plaintiff's assertion now that she did not accept the AFCA Determination is simply not maintainable.

99 In Burge v Commonwealth Bank of Australia (No 3)[124] ('Burge') Foster J dealt with a similar summary dismissal application as the present. In Burge, the complainant accepted a determination by the Financial Ombudsman Service ('FOS') (a predecessor to AFCA) but later commenced a proceeding against the Commonwealth Bank of Australia seeking to challenge the bank's entitlement to take possession of her property by joining FOS to the proceeding and challenging the validity of the FOS decision.

100 In summarily dismissing the proceeding, Foster J outlined that the facts of the case justified a conclusion that the applicant had accepted the FOS determination,[125] and having so accepted, the applicant was bound by it and was estopped from arguing that she had rights against the bank which were different from the rights set out in the final determination. Foster J correctly summarised the options open to a complainant once a determination was received at [121]:

The choice which confronts every applicant to FOS when FOS delivers its Determination is between accepting the Determination and replacing all of his or her rights previously available in relation to the subject matter of the Determination with the new rights and entitlements laid down in the Determination, on the one hand, and rejecting the Determination, on the other hand, thereby preserving all of those prior rights.[126]

101 In Mickovski v Financial Ombudsman Service Ltd ('Mickovski') at [468], the Court of Appeal noted that the use of the word 'final' in relation to a determination made by a contractually authorised dispute resolution panel very often meant that the decision made by such a body was not subject to appeal or review (citations omitted):

As was stated by Isaacs and Rich JJ in Commonwealth v Limerick Steamship Co Ltd, the word 'final' in relation to a determination derives its meaning of being 'the last' from the context in which it appears. Hence, where the context is one of further examination or review by a superior court, the word imports the meaning that there is to be no appeal. Accordingly, where a statute provides that a decision is 'final', it is ordinarily taken to preclude a right of appeal except in cases where the tribunal has acted without jurisdiction or otherwise such that its decision is a nullity. Similarly, where parties agree that a determination is to be 'final', they are taken to have agreed that the determination will not be subject to review unless affected by fraud or dishonesty or lack of good faith or (by analogy with jurisdictional error) unless it is otherwise apparent that the determination has not been carried out in accordance with the agreement.[127]

102 Once a complaint is made to AFCA, the AFCA Rules form a contract between the complainant, AFCA and the financial services firm. AFCA's determination of the complaint is final and binding on both parties if accepted by the complainant. For the reasons explained by the Court of Appeal in Mickovski at [466] to [467], such a determination is not susceptible to judicial review. Moreover, by their agreement that AFCA's determination is to be final, the parties accept that the determination will not be subject to review unless affected by fraud, dishonesty or a lack of good faith.

103 In King v Insurance Australia Ltd[128] ('King'), Gibson DCJ dismissed a proceeding in circumstances where the plaintiff had earlier accepted a FOS determination. Her Honour emphasised, at [152], that a party cannot simply walk away from a determination that is not to his or her liking once the final determination is made and accepted and try to start again. As is the case in this present matter, in King, the plaintiff had accepted sums of money paid to him by the insurer. This was said in King to be clear evidence of post contractual conduct evidencing that a contract has been formed.[129]

104 In this matter, the plaintiff chose to accept the Determination and thereby became bound by it as a matter of contract. Alternatively, after accepting the Determination, in the circumstances of this case, the plaintiff is prevented by an estoppel by convention from arguing that she has rights against either of the defendants that were different to the rights set out in the Determination insofar as the subject matter of the Determination is concerned.

105 To the extent that it may have been the case, in line with the plaintiff's submissions, that she did not read or understand the AFCA Rules, or that she overlooked the last paragraph of the letter from AFCA dated 23 August 2022,[130] or that it is her subjective belief that the AFCA Determination did not deal with the entirety of her Claim, the decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[131] makes is clear that a person who enters a contract (here the Determination) is bound by the terms of that contract and it is immaterial whether or not the person read the terms.

106 Moreover, the meaning of the terms of any contractual document are to be construed objectively, by what a reasonable person would have understood them to mean. That normally requires consideration not only of the text but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.[132] Notwithstanding that I consider it highly improbable that the plaintiff could have considered that the Determination only dealt with part of her Claim, the plaintiff's belief is irrelevant to the objective construction of the Determination.

107 Finally, having regard to the decision in Mickovski, it is not open to this Court to engage in a de novo assessment of whether the Determination dealt with all or part of the plaintiff's Claim. AFCA's Determination in this matter is not susceptible to judicial review. AFCA's jurisdiction, powers and obligations are governed solely by the contract set out in the AFCA Rules; and any challenge to a determination by AFCA depends largely on whether the determination was made in accordance with the terms of that contract. In my opinion the Determination is clear and a fair reading leads to the compelling conclusion that it deals with the entirety of the plaintiff's Claim.

Was the plaintiff's AFCA Complaint limited to a determination of an allegation of fraud?

108 The AFCA Determination was not limited to the issue of fraud. A simple reading of the Determination makes that fact abundantly clear. I am unable to accept the plaintiff's submission that the AFCA Determination only dealt with the issue of whether she had engaged in fraud and that thereafter, the Claim was to be reinstated and the defendants were to be held liable for covering the loss of all the claimed items. This submission by the plaintiff not only misstates the evidence but ignores the terms of the AFCA Rules (see rr A.15.3 and A.15.4 of the AFCA Rules) and well established contractual principles. The learned authors of Sutton on Insurance Law describe the binding effect of settlement agreements. A settlement agreement is a binding agreement in its own right which replaces the policy under which the dispute arose. An insured's rights are governed by the settlement agreement, not the policy of insurance.[133]

The relevance of the plaintiff's communications with IMA between 25 August 2022 and 11 October 2022

109 The relevance of the plaintiff's communications with IMA between 25 August 2022 and 11 October 2022 to the matters alleged in the statement of claim are somewhat unclear. The plaintiff accepted the AFCA Determination. Consequently, it became binding on IMA. IMA was then requested by AFCA to bring into effect the terms of the Determination. Thereafter, IMA engaged with the plaintiff to provide compensation and replacement items. The plaintiff contends that IMA was obliged under the AFCA 'Guide to determinations' to provide her with a deed. There is no such obligation. Rule A.15.3 of the AFCA Rules provides that the financial firm, here IMA, may ask the complainant, here the plaintiff, to provide it with a binding release. No such release was sought by IMA and the AFCA Rules do not require one in the circumstances of this Determination. Further, the plaintiff contends that IMA's letter dated 6 September 6 2022, titled 'Cash Settlement Fact Sheet', explicitly stated that the settlement was replacing the items covered under General Contents Coverage of $61,000.00 and that by reason of this the defendants knew that she did not believe her Claim was settled.[134] Such an analysis by the plaintiff ignores the AFCA Rules and the Determination itself. It also ignores the matters pleaded at paragraph 35 of the plaintiff's statement of claim. In the premises, I am unable to accept the plaintiff's contention that no resolution has been reached in respect of some components of her Claim.

110 If it was the case that the plaintiff wished to demonstrate the legitimacy and validity of her Claim via a Court hearing, she was open to decline to accept the Determination. She elected not to do so. Rule A.15.4 of the AFCA Rules expressly provides:

If a complainant does not accept a Determination, the complainant is not bound be the Determination and may bring an action in the courts or take any other available action against the Financial Firm.

111 To the extent that the plaintiff alleges that the defendants have taken advantage of her vulnerabilities and have acted in bad faith and have not been made accountable for the way that the plaintiff was treated, these are matters that were considered by AFCA and dealt with expressly in the Determination. The Determination records that:

Is the insurer required to pay compensation?

No. The insurer was entitled to investigate the claim. There is no reasonable basis to award compensation against the insurer.

...

The complainant is seeking compensation for non-financial loss on the basis the insurer's allegations of fraud caused her mental harm and offended her dignity. She says the insurer acted unfairly and breached its obligation of utmost good faith through its conduct towards her, including:

• it tricked her during the interview by confusing her and making it appear that she was delivering inconsistent answers (she says the interviewer was aware she had a bad memory and should not have put her on the spot or under pressure)

• asking her to provide information irrelevant to the claim, including her criminal history

• being dishonest with her about the negative customer feedback the insurer has received over time (she says she would never have insured her property with them had sheen been aware of this).

AFCA takes a conservative approach to assessing compensation for non-financial loss. We only award compensation where there has been an unusual amount of inconvenience, delay or interference with the complainant's reasonable expectation or peace of mind.

Considering all of the circumstances, [AFCA] is satisfied that the insurer has not mishandled the claim.

If this determination is accepted, the outcome is more favourable to the complainant than the insurer's final decision or its final settlement offer. However, [AFCA] is satisfied that the insurer has not acted in bad faith or made a decision that was obviously incorrect.

[AFCA] is satisfied that it had legitimate concerns regarding the complainant's evidence and it was reasonable for it to investigate and ask for the type of information requested from the complainant.

...

112 Turing then to the critical issue before me, having concluded that the Determination was accepted by the plaintiff, what becomes of the plaintiff's claim in this proceeding?

113 Whether the plaintiff's claim has any real prospect of success necessarily rests upon the likelihood of the plaintiff establishing the matters pleaded at paragraph 34 of the statement of claim. Paragraph 34 of the statement of claim is in the following terms:

Plaintiff advised that she did not accept the determination and further advised that she was left with loss and damages caused by the Defendant that still needed to be addressed and offered the defendant to re-consider and review its decision in regards to her remaining losses that she was caused during claim process and as a direct result of refusal of claim.

114 Given my conclusions in relation to the plaintiff having accepted the AFCA Determination, and the subject matter that was within the scope of the AFCA Determination, the plaintiff's allegation at paragraph 34 can have no real prosect of being accepted. The uncontroverted evidence is that upon receiving the AFCA Determination the plaintiff wrote to AFCA the next day accepting the Determination. As the authorities in Burge, King and Mickovski referred to above confirm, the plaintiff's acceptance created a binding and enforceable agreement between the parties. Thereafter, the plaintiff insisted on performance by IMA of the terms of the Determination. She sought and was paid cash compensation and otherwise received certain replacement items.

115 Adopting the analysis of his Honour in Burge at [121] and the language of her Honour in King, the plaintiff cannot now simply walk away from a Determination that is not to her liking once the final Determination was made and accepted by her, and try to start again. This is particularly so in circumstances, such as the present, where the plaintiff has accepted the performance of IMA which only became a requirement upon the plaintiff accepting the AFCA Determination.

116 In the circumstances, the plaintiff's claim against IMA also has no real prospects of success.

118 Given this conclusion, it is unnecessary for me to consider the alternate ground relied upon by the defendants, being relief under r 23 of the Rules.

[1] Affidavit of Michael Martin sworn on 31 August 2023, [6], exhibit MM-1 page 3 ('Martin Affidavit'). Page 9 of PDS describes the parties to the contract. 'Us' is defined as the product issuer named on the inside cover of the PDS. The product issuer named is IMA. RACV is not a party to the contract of insurance.

[7] Ibid, [10], Exhibit MM-4. For the avoidance of doubt, the plaintiff disputed the reasons given by IMA for its decision.

[9] Ibid, [12], Exhibit MM-5. For the avoidance of doubt, the plaintiff disputed the reasons given by IMA for its decision.

[10] Affidavit of Hulya Ofli affirmed on 26 October 2023, Exhibit HO-001 ('Second Ofli Affidavit'); Martin Affidavit, [15], Exhibit MM-7.

[12] Affidavit of Melissa Plavsic sworn on 25 October 2023, [8], Exhibit MXP-2 ('Plavsic Affidavit').

[13] Second Ofli Affidavit, Exhibit HO-001.

[15] Martin Affidavit, [16], Exhibit MM-8.

[17] Martin Affidavit, [19], Exhibit MM-10.

[21] Ibid, [21]-[26]; Exhibit MM-15.

[25] [2018] VSC 301.

[26] [2019] VSC 323, [41].

[27] [2019] VSC 703, [49]-[60].

[28] [2020] VSC 86, [22]-[38] ('BABL').

[29] Burton v Shire of Bairnsdale [1908] HCA 57; (1908) 7 CLR 76, 92 (Isaacs J).

[30] [2013] VSCA 158; (2013) 42 VR 27, 40 [35] (Warren CJ and Nettle JA).

[31] Ibid_,_ 42 [40]-[42] (Warren CJ and Nettle JA, Neave JA agreeing in part).

[32] [2009] VSCA 288; (2009) 29 VR 213 ('Hausman').

[38] Caason Investments Pty Ltd v Cao (2015) 236 FCR 322, [21] (Gilmour and Foster JJ).

[39] Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 90-91 (Dixon J).

[40] Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186; (2020) 61 VR 580, 594 [35] ('Uber'). See also CA & CA Ballan Pty Ltd v Oliver Hume (Australia) Pty Ltd [2017] VSCA 11; (2017) 55 VR 62, 72.

[41] Mutton v Baker [2014] VSCA 43, [55] (Whelan JA).

[42] [2011] VSCA 444; (2011) 35 VR 98, [32] (Redlich JA and Judd AJA).

[44] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 23.04(2).

[45] [2013] VSC 316.

[47] [2017] VSC 556.

[49] Uber (n 40), [35]-[37], [50]-[52] (Niall, Hargrave and Emerton JJA).

[50] [2020] NSWSC 365.

[51] Ibid, [87]-[89].

[52] (1995) 184 CLR 19 ('Ridgeway').

[54] [2012] VSCA 42; (2012) 36 VR 130.

[56] Walton v Gardiner (1993) 177 CLR 378, 396 ('Walton'). See also Johnson v Gore Wood & Co [2002] 2 AC 1, 31; quoted with approval in UBS AG v Tyne [2018] HCA 45; (2018) 360 ALR 184, 188-9 [7].

[57] Treasury Wine Estates Ltd v Melbourne City Investments Pty Ltd [2014] VSCA 351; (2014) 45 VR 585, 590 [22] (Maxwell P and Nettle JA) ('Treasury Wine'); Project 28 Pty Ltd v Barr [2005] NSWCA 240, [62] ('Project 28').

[58] Project 28 (n 57), [58] (Ipp JA, with whom Hodgson JA and Campbell AJA agreed).

[59] Walton (n 56), 393 (Mason CJ, Deane and Dawson JJ); Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251, 286-7 (McHugh J); PNJ v The Queen (2009) 252 ALR 612, 613 [3] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ).

[60] Treasury Wine (n 57), 599 [62] (Kyrou JA).

[61] Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509, 519 (Mason CJ, Dawson, Toohey and McHugh JJ).

[62] Ridgeway (n 52), [137] (Gaudron J).

[64] MacPherson v The Queen [1981] HCA 46; (1981) 147 CLR 512, 523; Dietrich v The Queen [1992] HCA 57; (1992) 177 CLR 292; Werden v Legal Services Board [2012] VSCA 278; (2012) 36 VR 637, [53].

[65] Minogue v Human Rights and Equal Opportunity Commission [1999] FCA 85; (1999) 166 ALR 129, [27]-[29] ('Minogue'); Rajski v Citec Corp Pty Ltd (Unreported, NSW Court of Appeal, Samuels JA, 16 June 1986).

[66] Abram v Bank of New Zealand (1996) ATPR 42340, 42347; Minogue (n 65), [27]-[29] and [33]; Platcher v Joseph [2004] FCAFC 68, [104]; Tomasevic v Travaglini [2007] VSC 337; (2007) 17 VR 100, 130 ('Tomasevic').

[68] [2015] VSCA 298.

[69] Ibid, [39]-[41] (Kyrou and Kaye JJA and Ginnane AJA).

[70] Australia Capital Financial Management Pty Ltd v Australian Financial Complaints Authority Ltd [2022] NSWCA 204 ('ACFM v AFCA 2022'); Section A.1 of the AFCA Rules were exhibited to the Martin Affidavit, Exhibit MM-6.

[72] See r A.3.1, AFCA Rules; ACFM v AFCA 2022 (n 70), [8].

[73] Mickovski v Financial Ombudsman Service Ltd [2012] VSCA 185; (2012) 36 VR 456, [35] ('Mickovski'); Cromwell Property Securities Ltd v Financial Ombudsman Service Ltd [2014] VSCA 179; (2014) 288 FLR 374, [78], [87] ('Cromwell').

[74] Rule A.1.2, AFCA Rules. See also ACFM v AFCA 2022 (n 70), [7]-[8] _(_Bell CJ and Meagher JA described the contractual relationship).

[75] Mickovski (n 73), [38]. See also Cromwell (n 73), [86]-[89], [93], [256].

[76] Patersons Securities Ltd v Financial Ombudsman Service Ltd [2015] WASC 321; (2015) 108 ACSR 483, [95].

[79] Plavsic Affidavit, Exhibit MXP-1, 33.

[80] Martin Affidavit, Exhibit MM-8, clauses 1.2 and 1.3.

[81] Statement of Claim filed on 15 June 2023, [56]-[58].

[82] Affidavit of Hulya Ofli affirmed on 21 September 2023, [7] ('First Ofli Affidavit').

[83] Ibid, [10]; Second Ofli Affidavit, [5].

[88] Plaintiff's Outline, [8] and [13].

[92] Ibid, [17]; Second Ofli Affidavit, [5].

[98] Plaintiff's Outline, [8] and [13].

[102] Transcript of Proceedings (27 October 2023) 42.22-42.29.

[119] Transcript of Proceedings (27 October 2023) 71.18-71.26.

[121] Ibid; ACFM v AFCA 2022 (n 70).

[122] Plavsic Affidavit, Exhibit MXP-1, 33.

[123] Martin Affidavit, Exhibits MM-12 and MM-13.

[124] [2017] FCA 383 (Foster J).

[128] [2023] NSWDC 26.

[129] Ibid, [185]. See also Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61, [25].

[130] Transcript of Proceedings (27 October 2023) 49.3-49.10.

[133] WIB Enright and RM Merkin, Sutton on Insurance Law (Thomas Reuters, 4th ed, 2014) vol 2, 225-26.

[134] Martin Affidavit, [16], Exhibit MM-8.