CHAPTER 4 IN THE COURTS
The reason for a court case was straightforward, i.e.: to get the court to declare that variable interest rates were illegal under common law and thereby create a
precedent so that past victims could make their claims for restitution and compensation. But there had to be a reason, at law, to bring the case to a court.
As I said previously, I am not legally trained and, therefore,
had to ferret around in the hope of finding something.
In our local shopping mall is a Dymocks bookshop which has a section catering to school children and other novices. One of the small volumes I bought in this quest
was the "Oxford Reference A Dictionary of Law" with "Over 3,000 clear and concise entries".
One of those entries said "severance" which described how, if a contract had any bad bits under statute or common law, one could have that element removed from the contract. That became the path to follow.
Here follows a sequence of papers and extracts from affidavits I filed in the Supreme and High Court. I have all the transcripts and judgments in full but the courts have copyright on their publications which is suspicious, in itself, because the courts belong to the people and there should be complete freedom to broadcast anything that is said or done, especially when the matter is of national importance (which this most definitely is).
I hope this construction sufficiently tells the story. But if the reader has any questions, please write to my postal address of:
P.O. Box 4520, North Rocks, NSW 2151, Australia.
To begin the process I filed a Statement of Claim in the Common Law Division of the Supreme Court of New South Wales, Sydney Registry, Queens Square on 4th July, 1996. The following extract is paragraphs 8 to 12 of the Particulars:
18. In "FIXED INTEREST RATE LOAN FIXED FOR 1, 2, 3, 4 OR 5 YEARS" it says that "On the 5th anniversary of the first advance of your loan the above fixed interest rate will cease. At that time, the following interest rate options will be available:
(a) A further interest rate period at the rate for St.George's fixed rate residential loans at that time, OR (b) St.George's variable residential loan interest rate applicable at that time."
19. There is no certainty as to what "the rate applicable for St.George's fixed rate residential loans" will be "On the 5th anniversary of the first advance" and, therefore, what the monthly repayment figure will be."."
10. There is no certainty as to what "St.George's variable residential loan interest rate" will be "On the anniversary of the first advance" and, similarly, what those monthly repayment figures will be.
11. Variable interest rate loan contracts are contrary to Common Law which demands that "certainty of terms" are an essential element for the creation of a contract.
12. Variable interest rates contravene basic principles of economics applicable to the determination of "The rate of interest charged for any particular transaction"
(Ref: Collins Dictionary of Economics. Second Edition) which "will depend on such considerations as the purpose and duration of the loan, the amount borrowed, the collateral security (if any), and the credit worthiness
of the borrower, all factors influencing the degree of perceived 'risk' involved in making the loan by the lender."
I filed a Differential Case Management Document on 18th July, 1996. The following are the
first two pages of that document:
IN THE SUPREME COURT OF
File No: 20680 of 1996.
NEW SOUTH WALES
SYDNEY REGISTRY.
THE PLAINTIFF'S D.C.M. DOCUMENT:
1.I am the Plaintiff and I am aware of the need to serve the DCM and the notice of status Conference on the St.George Bank Limited, the Defendant.
2. Contained in this DCM are:
((1) photocopies of pages 2, 3, 4, 5 and 6 of a fax to me and imprinted "07 MAR. '96 (THU) 16:35 COLIN BIGGER TEL: 61 2 221 7224" containing the "LOAN APPROVAL",
(2)a photocopy of a letter to me from St.George Bank Limited, dated 2 April, 1996, and
(3)a photocopy of my letter to Mr. John Kolyvas dated 6th March, 1996.
3.A NARRATIVE OF THE FACTS:
3.1. In the Statement of Claim, I have outlined the terms of Loan Account No. S.211.9702210 which illustrate the confused, misleading and render the contract void under Common Law.
3.2. The letter from St.George Bank (2nd April, 1996) refers to a letter I sent to Mr. John Kolyvas on the 6th of March, 1996 in which, the latter, I enclosed a leaflet I wrote entitled, "Variable interest rate loans are bad because."
3.3 My leaflet says that "certainty of terms" is an "essential element" under Common Law for the creation of a contract. On that basis, variable interest rate loans are repugnant to Common Law and, therefore, thoseĠcontracts are void.
3.4. The St.George letter says that, "At the moment it is proposed to introduce a new uniform Consumer Credit code ... implemented Australia-wide on 1st August, 1996. This legislation will cover home loans."
3.5. That is one of the reasons for the urgency for orders from the Supreme Court, i.e.: the proposed legislation is intended to legalise the unjust and illegal practice of variable interest rate loans. This action would deny the people of Australia their constitutional right to be protected under Common Law. A judgment from the Supreme Court in this case would go a long way to preventing such a monstrous miscarriage of our legislative process.
3.6. The other reason for expedition is that there is a possibility that St.George Bank will increase the interest rate on my loan by either 2% or 3% (the latter if reduction from 10.9% to 9.9% is also removed) ""on the anniversary of the approval" which will be on the 3/8/1996.
3.7. This increase in the interest rate after one year (even though St.George clearly say the interest rate is "fixed" for five years) could see my monthly repayments go from $2,483.00 to either $2,645.20 or possibly $2,717.43. It is uncertain.
3.8. When I took the loan from St.George Bank it was after making extensive enquiries to raise money to help pay out a previous "interest only" loan I had on my house. The previous loan fell due in September 1995. St.George would not offer any more than five years at the fixed interest rate. An independent financial consultant, Mr. David Carroll, confirmed that no one was offering better. Therefore, the choice was accept this ""best" loan, which I knew to be invalid, or sell my house.
3.9.I took the loan and have been trying constantly to persuade the bank to put right what is wrong in the agreement. This they refuse to do and that is why I am appealing to the Supreme Court to order the relief asked for in my Statement of Claim.
3.10. This action is appropriate to be brought in the Supreme Court because it is "a matter of public interest".
3.11. The practice of variable interest rate loans has become widespread across Australia. It is unconscionable. It is rapacious. It has caused misery, hardship and devastation. It is wrong.
3.12. In regard to the quote in my Statement of Claim for the method of determing the interest rate on a loan: by talking on the telephone with the editor of that reference book, Monica Thorp, in London and explaining I was using it in the Supreme Court in a dispute with my bank, permission has been granted for its use. The title of the book is the Collins Dictionary of Economics, Second Edition, with Christopher Pass, Bryan Lowes and Leslie Davids the authors and Harpers Collins, Publishers.
JOHN WILSON
The following is the Judgment of Master Greenwood. (There is no copyright restriction on this document as appears on the transcripts.)
THE SUPREME COURT OF NEW SOUTH WALES
COMMON LAW DIVISION
MASTER GREENWOOD
TUESDAY, 17th SEPTEMBER, 1996
20680/96 JOHN WILSON v ST.GEORGE BANK LIMITED JUDGMENT MASTER:
On 22nd August, 1996 the defendant filed a motion seeking that the statement of claim be struck out pursuant to Part 15 r 26, or that the proceedings be summarily dismissed under Part 13 r.5 of the Supreme Court Rules.
I remind myself that in dealing with an application for summary disposal the onus is on the party seeking relief on a summary basis to satisfy the Court that the opponent has no plausible claim or defence.
Briefly, the facts of the relationship between the parties concern the borrowing by the plaintiff of $150,000 from the defendant. The contract was referred to as a "Home Loan Plus".
The Loan Approval, which is annexure A to the affidavit of David Singer, sworn on 21st August, 1996, indicates that the loan was for a period of seven years with a five-year period of fixed interest at 10.9 per cent, reducing to 9.9 per cent for prompt payment.
The annexure to the loan approval document dealt with the remaining terms of the loan. It is headed "Fixed Interest Rate Loan fixed for 1, 2, 3 or 5 Years". The relevant part of that document reads that the interest rate on the loan approval is fixed for a period of five years. It continues:
"On the fifth anniversary of the first advance of your loan the above fixed interest rate will cease. At that time, the following interest rate options will be available:
(a) A further interest rate period at the rate applicable for St.George's fixed rate residential loans at that time; or
(b) St. George's variable residential loan interest rate applicable at that time."
The defendant published from time to time the interest rates for it's various lendings, including the home loan interest rates. Annexed to Mr. Singer's affidavit are two publications, one is a copy of a publication of the rates which is available in branches of the defendant's bank, the second (annexure E) is an example of a publication in The Sydney Morning Herald of Monday, 29th July, 1996. Mr. Singer deposes that the rates are published in The Sydney Morning Herald on each Monday.
The plaintiff's statement of claim was filed on 4th July, 1996. It recites in the first eight paragraphs details of the Home Loan Approval. It sets out information which the plaintiff says is relevant to his argument. The statement of claim then reads:
"9. There is no certainty as to what 'the rate applicable for St.George's fixed rates residential loans' will be "On the fifth anniversary of the first advance' and, therefore, what the monthly repayment figure will be.
10. There is no certainty as to what 'St. George's variable residential loan interest rate' will be 'On the anniversary of the first advance' and, similarly, what those monthly repayment figures will be.
11. Variable interest rate loan contracts are contrary to Common Law which demands that 'certainty of terms' are an essential element for the creation of a contract.
12. Variable interest rates contravene basic principles of economics applicable to the determination of 'The rate of interest charged for any particular transaction' (Ref. Collins Dictionary of Economics. Second Edition) which will depend on such considerations as the purpose and duration of the loan, the amount borrowed, the collateral security (if any), and the credit worthiness of the borrower, all factors influencing the degree of perceived 'risk' involved in making the loan by the lender."
Part 13 r 5 of the Supreme Court Rules provides that where in any proceedings it appears to the Court that there is no reasonable cause of action disclosed, or the proceedings are frivolous or vexatious, ot vexatious, or the proceedings are an abuse of the process of the Court, the Court may order that the proceedings be stayed or dismissed generally, or in relation to any claim for relief in the proceedings.
Part 15 r 26 provides that:
"Where a pleading discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or has a tendency to cause prejudice,
embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the Court, the Court may ... order that the whole, or any part of the pleading be struck out."
The plaintiff's argument is
quite simple and clear. He submits that under his contract with the defendant he does not know what rate of interes the will have to pay in five years time when the fixed interest component of his loan expires and he,
therefore, does not know what the loan willcost. Thus, the contract is uncertain and must be void for uncertainty.
In aid of this submission the plaintiff calls on the words of Viscount Maugham in Scammell and Nephew Limited
v Ouston (1941) AC 251 where the learned judge said:
"There was no evidence to suggest that there are any of the well-known usual terms of such a contract, for instance, as to the interest payable."
The "terms" to which the judge was referring concern interest rates which were said to be "hire-purchase terms payable over two years" and in the circumstances this term was held to be void for uncertainty and therefore the contract was held to be void for uncertainty.
The question of the effect on a contract where the future interest rate is uncertain, although specified at the time when the contract was entered into, was considered by Smith J. in the Supreme Court of Victoria in Tonelliv Komirra Pty Limited. It is reported at (1972) VR 737. At page 741 the learned judge wrote:
"The defendant's contention that the sale note was void by reason of uncertainty as to the rate of interest payable on outstanding purchase money was based on the fact that conditions 2 (A) and 2 (B) provided that the rate of interest should be one-quarter per cent above 'the current bank overdraft rate'. It was submitted that what these words referred to was a current rate which would have been charged by whatever bank the plaintiff might have approached for a loan of the amount of the outstanding purchase money. And it was pointed out that, according to the evidence, the rate which each bank would have charged any customer upon any loan, whatever the amount or purpose, would have been fixed by negotiation with the particular borrower; so that it was not possible to identify any rate as being that currently charged by banks for any particular size or class of loan.
"In my view, however, the conclusion that follows from this state of the evidence is not that the provision as to the rate of interest was void for uncertainty. It is that the provision does not refer to a rate of interest currently charged by banks for loans of a certain size or class, but refers to the only uniform rate that did exist, namely, the uniform maximum bank overdraft interest rate prescribed and published from time to time by the Reserve Bank with the approval of the Commonwealth Treasurer. Accordingly, this third allegation of uncertainty, like those earlier discussed must be rejected."
Turning now to the terms of the loan approval which I have dealt within greater detail earlier, the loan approval is for the period of seven years, the first five years of interest being fixed at 9.9 per cent, the remaining two years of interest on the loan would be set at one of the two options which were available: either the St. George fixed residential rate applicable at that time; or the St. George variable residential loan interest rate applicable at that time.
I am of the view that the contract which the parties entered into is not void for uncertainty. The agreement between the parties is that at the end of five years the interest rate will be that prescribed and published by the bank for residential fixed interest rate loans, or variable interest rate loans. Uncertainty does not lie in the terms of the contract which were agreed between the parties, but in what the rate will be applicable at the expiration of five years. Thus, whilst the amount of that future rate is uncertain, the rate itself is indeed certain. It has been defined as the rate that is applied in the circumstances which I have earlier setout.
It follows, therefore, that the plaintiff's pleading falls because the gravamen of his complaint, namely, that the contract is void for uncertainty, is not correct. The contract is certain, certain in its terms. It is the percentage of interest to be determined in an agreed way and payable in the sixth and seventh years of the contract which is unknown at this point in time. Now whilst the quantum of the future interest rate is uncertain, its method of determination is not.
As the basis of the plaintiff's claim is built upon the submission that the contract is void for uncertainty, it follows that the plaintiff's claim cannot stand.
I, therefore, dismiss the statement of claim. The plaintiffis to pay the defendant's costs.
It follows from what I have said that the plaintiff's motion for summary judgment also cannot stand. I, therefore, dismiss
that motion, the plaintiff to pay the defendant's costs.
I certify that this and the five preceding pages are a true copy of the reasons for judgment herein of Master Greenwood.
S. Arundsen
Associate
Dated 17th September, 1996
I filed a Notice of Appeal from Master to Judge on 24th September, 1996.I filed more Affidavits to support the Notice of Motion.
On 30 SEP 1996 the hearing was before Mr. Acting Justice Hamilton. Again, copyright restrictions on the transcript prevent me reproducing it here but the following is his judgment:
THE SUPREME COURT OF NEW SOUTH WALES
COMMON LAW DIVISION
HAMILTON AJ
MONDAY, 30th SEPTEMBER, 1996
020680/96 JOHN WILSON v ST. GEORGE BANK LIMITED
JUDGMENT PLAINTIFF:
Shouldn't the terms of the contract be established when the contract is made?
HIS HONOUR: No, that is the problem. You see, that is not the law and that is the point of the maxim that I have given you, that the law regards as certain something which can be rendered certain provided there is some objective criterion or objective formula by which at sometime you can obtain certainty. You cannot do it simply by saying in general terms, well, whatever one party to the contract does binds the other, but you may have a reference to either the decision of a third person or to the Consumer Price Index for instance, rents in leases are often fixed for the future by reference to the Consumer Price Index, which is published from time to time; so that if a formula is specified whereby in some objective way certainty can be obtained at the relevant time, then in one sense, of course, it is uncertain, but for legal purposes it is not uncertain.
If have heard the submissions that have been made about this matter, I think there is not a great deal for me to say about the matter, save that Master Greenwood's judgment appears to me to be correct and indeed for the reasons given by the learned Master with which I agree. The appeal will therefore be dismissed.
I certify that this and the one preceding page are a true copy of the reasons for judgment herein of
The Honourable Mr. Acting Justice Hamilton.
Associate
Dated 30th September, 1996
I filed a Notice of Appeal in the Court of Appeal on 9th October, 1996.I filed another Affidavit and on 18th October, 1996, filed a Notice of Motion asking for injunctions to be placed on the St. George Bank Ltd. to stop them trading in variable interest rate loans "until this case can be fully heard".
On 21st October, 1996, the opposition solicitors filed a Notice of Motion asking "That leave to the appellant to appeal be refused."
I filed another Affidavit with Annexures that were Press Releases from the Reserve Bank of Australia which were clear testimony to the uncertainty of future interest rates.
On 28th October, 1996 a hearing was held in the Court of Appeal before Judge of Appeal Clarke and Acting Judge of Appeal Abadee.
Again, the transcript from the Court of Appeal has copyright restrictions but the following four pages are their judgment:
THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL
CA 40593/96
CLARKE JA, ABADEE AJA
MONDAY, 28th OCTOBER, 1996
JOHN WILSON v ST. GEORGE BANK LIMITED JUDGMENT
CLARKE JA: Mr. John Wilson has filed a notice of appeal from a decision by Hamilton AJ on 30 September, 1996 in which the learned judge dismissed an appeal brought by Mr. Wilson from a judgment of Master Greenwood given on 17th September, 1996.
In the course of preparation for the hearing both parties seem to have directed their mind to the need to secure the leave of this court to bring the appeal. Quite unusually, St. George Bank Limited, the opponent, has not sought, as I understand it, to strike out the appeal but in a gesture helpful to Mr. Wilson has invited the Court to consider an assumed application by Mr. Wilson for leave to appeal and to dismiss it.
The factual background is that Mr. Wilson filed a statement of claim in the Supreme Court seeking a declaration that a loan account that he has with the bank is void; or, alternatively, the severance of part of what is described as a contract.
Without going into the detail of the statement of claim, my understanding is that Mr Wilson complains that a mortgage which he entered into with the St. George Bank is void, or partly void because in one respect it is uncertain in its terms.
The mortgage provides for the payment of a fixed rate of interest for the first five years of its term and for the following two years make the following provision (I am not quoting from the mortgage but the effect of the mortgage).
"On the fifth anniversary of the first advance of your loan the above fixed interest rate will cease. At that time the following interest rate options will be available:
(a) A further interest rate period at the rate applicable for St. George's fixed rate residential loans at that time; or
(b) St. George's variable residential loan interest rate applicable at that time."
The point is that at the end of five years the fixed interest rate ceases and there then is an option available to Mr. Wilson to determine whether, in the ensuing period of the mortgage, he will pay interest at the St. George fixed interest rate for residential loans, or the St. George variable interest rate for residential loans. His complaint is that the provision for interest during the final two years is not fixed, i.e., the interest rate payable in respect of those two years is not known at the time of the mortgage and accordingly there is an uncertainty in the agreement between the parties which renders the agreement void or partly void.
The St. George Bank, upon receipt of the statement of claim, moved to strike it out or, alternatively, secure an order that the proceedings be summarily dismissed on the ground that there was no arguable cause of action disclosed in the statement of claim. The argument of the St. George Bank was that it was clear that there was no uncertainty in the terms of the mortgage and that the parties had expressly agreed upon the manner or mechanism by which the interest rate for the mortgage would be fixed in the last two years of its term. Accordingly, there was no substance at all in the complaints in the statement of claim and it should be struck out and the proceedings dismissed.
Master Greenwood heard the application and he on 17th September, 1996, he ordered that Mr. Wilson's claim be summarily dismissed. Mr. Wilson there upon appealed from that judgment and the appeal was, as I have earlier indicated, heard by Hamilton AJ and dismissed.
The Supreme Court Act in section 101(2)(i) provides that an appeal shall not lie to this court, except by leave of the Court of Appeal, from a judgment or order of the court in a division on an application for summary judgment under the Rules. As I understand the motion considered by Master Greenwood, and upheld by him, it was an application for summary judgment. Accordingly, Mr. Wilson can bring an appeal to this Court from Hamilton AJ's order only by leave of this Court and, despite the absence of a formal application by him, the Court is disposed in the circumstances to treat the present hearing as an application for leave to appeal. Clearly, if Mr. Wilson does not get leave to appeal he cannot seek any other orders from this court, which acts only the basis of the existence of pending appeals.
The question then is whether Mr. Wilson should be granted leave to appeal. In my opinion the material before the court demonstrates that there was no uncertainty in the terms agreed between the parties, and therefore noinvalidity of the agreement. The uncertainty that exists in only as to what interest will be payable by Mr. Wilson for the last two years of the term. The parties have, however, in their contract provided an agreed mechanism for determining with certainty what that interest rate will be. Such a method of determination of interest rates and analogous payments is well known to the law and, provided that the parties have agreed in terms that could be described as certain as to the mechanism which is to be applied in determining what the interest rate or other payment should be, the agreement does not fail for lack of certainty.
I regard that proposition as such trite law as to need no authority for its support. It is well established and is applied as settled in the commercial law of this State on a regular basis.
Although the decision in Tonelli v Komirra Pty Limited (1972) VR 737was somewhat different, it provides an example of the method by which the law upholds contracts as sufficiently certain where a mechanism is provided for determining interest rates payable in the future which have not been expressly agreed at the time of the contract.
In my opinion there is no substance at all in law in Mr. Wilson's complaints and I would be disposed to dismiss the application with costs.
ABADEE AJA: I agree with the orders proposed by Clarke JA and his reasons for them.
CLARKE JA: The orders of the court will be that leave to appeal from
the judgment of Hamilton AJ is refused with costs.
I hereby certify that this and the preceding three pages are a true copy of the reasons for judgment herein of his
Honour Mr. Justice Clarke and of the Court.
Associate
Dated 28th October, 1986.
On 7th November, 1996 I lodged an Application for Special Leave to Appeal in the High Court. I submitted all the necessary Statements, Appeal Books and Summaries of Argument.
Again, because of copyright restrictions, no transcript but here is my Summary of Argument and the Address I made to
High Court on 11th April, 1997:
IN THE HIGH COURT OF AUSTRALIA
SYDNEY OFFICE OF THE REGISTRY
No. S190 of 1996
BETWEEN: JOHN WILSON Applicant and St. George BANK LIMITED Respondent
APPLICANT'S SUMMARY OF ARGUMENT
Part I:
1. Whether a loan contract, which provides for variable interest rates or a future fixed interest rate not established at the time the loan contract was created, is void for uncertainty? "It is a discrete question of law" (letter from the High Court, 10/1/97).
Part II:
1.I filed a Statement of Claim with the Common Law Division of the Supreme Court of New South Wales on 4th July, 1996 saying that I have a seven-year loan contract with the St. George Bank Limited where the bank would only allow five years maximum at the specified fixed interest rate and then for the final two years I could choose either the bank's fixed interest rate applicable at that time or the bank's variable interest rate applicable at that time.
2.On 17th September, 1996, Master Greenwood dismissed my Statement of Claim saying, "Thus whilst the amount of that future rate is uncertain, the rate itself is indeed certain."
3.I appealed from a Master to a Judge and, on 30th September, 1996, Mr. Acting Justice Hamilton upheld Master Greenwood's judgment and, when I asked Mr. Acting Justice Hamilton, "Shouldn't the terms of the contract be established when the contract is made?", he said, "No, that is the problem."
4.I appealed to the Court of Appeal and at the hearing on 28th October, 1996 Judge of Appeal Clark and Acting Judge of Appeal Abadee refused me leave to appeal on the grounds there was "No arguable cause for action in Statement of Claim."
5.I am now applying to the High Court of Australia for Special Leave to Appeal.
Part III:
11. Master Greenwood said "Thus whilst the amount of that future rate is uncertain, the rate itself is indeed certain". Master Greenwood's untrue statements and his corruption of the meaning and the Spirit of the Law are an attempt to pervert the course of Justice. To defeat this, keywords should be defined.
12.A "loan" is a "thing, especially money, lent to be returned with or without interest".
13.A "contract" is "an agreement duly executed and legally binding". It is a "business agreement for supply of goods or performance of work at fixed price".
14. Under Common Law, there must be "certainty of terms" for a contract to be valid.
15." Certainty" means "that which is certain" and ""certain" means "absolutely assured, regular, fixed".
16. "Terms" means "conditions, stipulations, price, charge, rate of payment".
17. "Variable" means "apt to change, changeable, uncertain".
18. For a loan contract to be valid, the interest rate must be certain.
19. To make out a contract with uncertainty of terms (e.g.: variable interest rates) to be a valid contract is false representation, i.e.: fraud.
10. The practice of variable interest rate loans has become wide spread across Australia. It is unconscionable. It is rapacious. It has caused misery, hardship and devastation. It is wrong.
11. Variable interest rates even contravene the basic principles of economics applicable to the determination of "The rate of interest charged for any particular transaction" (Ref: Collins Dictionary of Economics) which "will depend on such considerations as the purpose and duration of the loan, the amount borrowed, the collateral security (if any), and the creditworthiness of the borrower, all factors influencing the degree of perceived 'risk' involved in making the loan by the lender.".
12. When variable interest rates go up they are penal, i.e.: the borrower is punished by having to pay more when he or she has done nothing wrong.
13. When the market rates go down, a borrower should be at liberty to negotiate refinancing with the same lender or obtain funds elsewhere to pay out the balance of the loan. Then the new rate becomes the new fixed rate and the contract is valid.
14. My appeal is to have Master Greenwood's judgment overruled because the evidence as to the uncertainty of the terms of my loan contract was wrongfully rejected (SCR Part 51 r.16.4).
15. Master Greenwood said: "Uncertainty does not lie in the terms of the contract which were agreed between the parties, but in what the rate will be applicable at the expiration of five years." Is not the interest rate one of the terms of a loan contract?
16. My contract is a loan contract and the terms of a loan contract areas above, i.e.: the "conditions, stipulations, price, charge, rate of payment".".
17. Master Greenwood is saying in one breath that the terms are certain and in the next that the rate is uncertain and yet in another that ""the rate itself is indeed certain".
18. Master Greenwood's judgment is "gobbledegook". It is confused and contradictory. It is a travesty. It is fundamentally erroneous. Master Greenwood makes a mockery of the court. He is in contempt of the court.
19. Mr. Acting Justice Hamilton (30th October, 1996) wrongly applied the legal maxim "certum est quod certum reddi potest" and said that certainty of terms was not necessary when creating a contract. He wrongfully rejected Common Law.
20. The Oxford Reference Dictionary of Law says this of the maxim: ""If something is capable of being made certain, it should be treated as certain." If the interest rate at the expiration of five years was capable of being made certain at the time the contract was made then there would be no case. However, "the amount of that future rate is uncertain" ((Greenwood 17th September, 1996). Therefore, the rate itself is indeed uncertain. Therefore, the contract is void.
21. Annexures "A", "B", "C" and "D" to my Affidavit filed on 23rd October, 1996 is material sent to me by the Reserve Bank of Australia and received on 21st October, 1996. They support the argument that there was no certainty at the time of creating my loan contract as to what any future interest rate might be. This uncertainty still exists.
22. Master Greenwood said: "Now whilst the quantum of the future interest rate is uncertain, its method of determination is not."
23. Not even the "method of determination" of future interest rates is certain....not when one reads Annexures "A", "B", "C" and "D".
24. Those documents are similarly Annexures "A", "B", "C" and "D" to this Summary of Argument and are numbered pages 8, 9, 10, 11, 12, 13, 14,15 and 16, 17 and 18.
25. Annexure "A" uses the words: "Following on from the improvement in the financial outlook, the Board has decided to reduce interest rates"; "to around 7 per cent."; "This follows deliberations at the Boardmeeting yesterday, and consultations with the Treasurer."; and "The2-3 per cent objective, and its view that the economy has the capacity to grow a little faster than at present without threatening this objective".
26. Annexure "A" also refers to: (i) "Last week's CPI figure"; (ii) "inflation was running at an annual rate around 21per cent";(iii) "other price indicators"; (iv) "The Statistician's series of manufacturing prices"; (v) "The Bank's forecast suggest"...etc. ... and lists "factors influencing future inflation".
27. Annexure "A" states: "it (the Board) will be ready to increase interest rates if wages and salary developments get out of line with that objective."." and "The reduction in rates will help buoy the economy, and make more progress over the year ahead in reducing unemployment."
28. Annexure "A" illustrates the fact that the Reserve Bank of Australia makes decisions on what interest rates will be depending on factors which exist at that time and what the Board decide will be its objective or policy at that time.
29. Annexure "B" is headed "MONETARY POLICY TIGHTENS" and talks of "taking action this morning to raise cash rates" and "this further tightening has occurred rather sooner than some might have expected.".
30. Annexure "B" talks of "Notwithstanding the effects of the severe drought" and "rising imports" and "employment, which grew by 3.3per cent.".
31. Annexure "B" talks of "consumer prices are increasing by about 2 per cent" and "Rises in labour costs also have been quite modest" and "the strengthening international economy".
32. Annexure "B" shows a graph comparing the "Housing rate of major banks" to the "Cash rate" in the period from 1984 to 1994 which proves that the practice of passing on fluctuations in market rates to the borrower is at the discretion of the lender in that the fluctuations may be passed on either in full or in part or not at all and either immediately or at a later date.
33. Annexure "C" is headed "MONETARY POLICY TO TIGHTEN" and tells that "The Reserve Bank will be operating in money markets this morning to increase cash rates by 0.75 per cent, to around 51per cent. This action follows deliberations by the Board over several months, and consultations with the Government."
34. Annexure "C" says "Given these development, the current interest rate regime, which was adopted more than a year ago when the recovery was much less robust, is no longer appropriate." and "At least part of the increase in short term interest rates can be expected to flow through to variable home loan rates. The Bank is announcing another change of a prudential kind, which, at the margin, is expected to have some influence on home lending." and "The bank is writing to the banks on the details of this change in arrangements, which will apply to all housing loans approved after 5th September, 1994.".
35. Annexure "D" is headed "FURTHER TIGHTENING OF MONETARY POLICY" and talks of "this increase will help to avoid overheating of the ecomony further down the track" and "Policy setting, however, must be forward looking".
36. These Annexures support the argument of the uncertainty of future interest rate by explaining the changes in and the multiplicity of the factors which are considered and how even policies influence the final rate arrived at on a particular date.
37. When Judge of Appeal Clarke and Acting Judge of Appeal Abadee refused leave to appeal because there was "No arguable cause of action disclosed in Statement of Claim, that is emphatically untrue. "
38. The Statement of Claim, in paragraphs 9 and 10, says "There is no certainty as to what "the rate applicable for St. George's fixed rate residential loans" will be "On the 5th anniversary of the first advance" and, therefore, what the monthly repayment figure will be." and the same for "St. George's variable loan interest rate".
39. In the Statement of Claim I ask for "the severance of the part of the contract contrary to Common Law".
40. There is not simply an "arguable cause for action".
41. Subsequent material I have filed in the Supreme Court leave no doubt of the need for an Australian court to protect the Australian people against this heinous and fraudulent practice of variable interest rate loans.
42. Under Common Law, "certainty of terms" is an essential element of a contract.
43. Considering what has transpired in the courts to this point in time, the question that demands an answer is: "Does Common Law exist in Australia?".
44. "Honi soit qui mal y pense."
45. "Let right be done."
Part IV:
1. Special leave to appeal should be granted because ""substantial injustice will be done by leaving that erroneous decision unreversed" (SCR Part 51.3.2).
2. Master Greenwood is wrong and, subsequently, Mr. Acting Justice Hamilton, Judge of Appeal Clark and Acting Judge of Appeal Judge Abadee are wrong.
Part V:
1. If this application is refused, the quest for Truth and Justice does not end there. I shall apply for special leave to appeal to Her Majesty in Council.
2. No order for costs in favour of the respondent should be made and those made should be stuck out because the respondent has included in the loan contract a clause to "oust the jurisdiction of the courts" (Ref: Cheshire and Foot. Law of Contract. Chapter 14 (1402), i.e.: even if I should win the St.George Bank will add their costs to my loan. This is confirmed in a letter the respondent's solicitors sent to my wife and dated 9th August, 1996 (Annexure "E", page 19, of this Summary of Argument).
Part VI:
1.I rely on Common Law.
Part VII:
1.I would like to supplement this summary with oral argument to ask each judge on the bench of the High Court of Australia
(a) "Does "variable" mean "uncertain"?" and (b) ""Does" uncertainty" mean "certainty"?" and to have the opportunity to participate in debate on any issue which may arise.
Dated the 28th day of January, 1997.
John Wilson
(Signed, Applicant)
IN THE HIGH COURT OF AUSTRALIA
SYDNEY OFFICE OF THE REGISTRY
No. S190 of 1996
APPLICANT'S ADDRESS TO THE HIGH COURT (Item 1)
11.I would firstly like to draw your attention to the Notice of Motion I filed on 1st April, 1997. I am reporting the crime of fraud being committed by the banks in the form of variable interest rate loans. The proof that this is a crime is contained in my Summary of Argument and the Affidavit accompanying the Notice of Motion.
12.I am also drawing your attention to an illegal Act of Parliament called the Australia Act 1986 which attempts to deny me my right to Appeal to the Privy Council. I have documented the proof that this Act is illegal in my submissions.
13. To summarise what I ask: that the Constitution Act 1900 be enforced, that the Bill of Rights 1688 be enforced, and that Common Law be enforced.
14.I want the High Court of Australia to grant Special Leave to Appeal and I move that the orders and the certificate in my Notice of Motion begranted.
15. In Part III of the Respondent's Summary of Argument they say: ""There is no lack of certainty." The interest rate for the final two years of the loan contract is uncertain as explained in my Statement of Claim.
16. They also say: "There is a clear mechanism for determining the variable interest rate when the time arrives." The loan contract was created in 1995
and the mechanism for determining the interest rate after five years was not certain then and it is not certain now. The contract was void for uncertainty then and it is void for uncertainty now. This I have explained in my
Summary of Argument.
17. They also refer to the maxim certum est quod certum reddi potest. This is not applicable here because the maxim means "if something is capable of being made certain then it must be considered to be certain". When the loan contract was taken out the interest rate for the final two years was not capable of being made certain and even now it is not capable of being made certain.
18. The case of Tonelli v. Komirra Pty Ltd (please refer to item 2) should be disregarded because there Smith J, said "(at page 741) ... and it was pointed out that, according to the evidence, the rate which each bank would have charged any customer upon any loan, whatever the amount or purpose, would have been fixed by negotiation with the particular borrower; so that it was not possible to identify any rate as being that currently charged by the banks for any particular size or class of loan." and "(atpage 741) ... In my view, ... is that that provision ... refers to the only uniform rate that did exist ...".
19. In other words, "the uniform maximum bank overdraft interest rate prescribed and published from time to time by the Reserve Bank with the approval of the Commonwealth Treasurer" "would have been fixed" into the loan contract and if the interest rate is not variable.
10. When I said to Judge of Appeal Clarke (item 3) that "I repeat that the rate would have been fixed by negotiation with the particular borrower and that means it is stated quite categorically what that will be."." Judge of Appeal Clarke said "You are making submissions. IfI repeat your submissions and I disagree with every word of them, they are not part of my judgment, except I am reflecting my view that your submissions will not be accepted."
11. When I said to Judge of Appeal Clarke (item 3) "referring back to that legal maxim ("certum est certum quod reddi potest"), it (the interest rate) is uncertain if it can be referring to something that is not certain", Judge of Appeal Clarke said "Maxims are useful, but they are tools."
12. The rates for the last two years of my loan contract do not exist.
They are not yet known.
They are uncertain.
They did not exist when the loan was taken out and the contract made.
13. The Tonelli v Komirra judgment supports my case not the Respondent's.
14.I could not find any case dealing with variable interest rate loans contracts.
15. The Respondent's paragraph 3.3 is wrong, i.e.: my complaint is asto the uncertainty of both choices after the first five years and that is clearly explained in my Statement of Claim, i.e.: there is no certainty either way.
16. The Respondent has no defence and, if it were possible, the HighCourt of Australia should give a Summary Judgment in my favour on the 11th April, 1997.
17. To have a Summary Judgment was, in fact, the direction of the Supreme Court on 2/8/96 (please refer to item 4) but the Respondent disobeyed that direction and filed for a Summary Dismissal and, from that point on, I have received a series of "wrongful" judgments.
18. Those "wrongful" judgments being:
((1) Master Greenwood 17/9/96,
((2) Mr. Acting Justice Hamilton 30/9/96, and
((3) Judge of Appeal Clarke + Acting Judge of Appeal Abadee 28/10/96.
19. It's time for the Judiciary to put its house in order.
20.I my Differential Case Management Document, filed on 18th July, 1996, was a letter to the St. George Bank dated 6th March, 1996, which included a copy of a leaflet I was distributing at the time entitled "Variable interest rates are bad because:" It explains "they are ILLEGAL" and how "they CONTRAVENE the principles of economics". (Please refer to item 5).
21. Again I ask that: (a) Special Leave to Appeal be granted,
(b) the Injunctions be imposed, and
(c) the Certificate be made out.
22. Finally, in my Summary of Argument I have said that I would like to ask each Judge, here today, two questions and I draw your Honours' attention to item 6 where those questions are laid out. And, with your Honours' permissions I would like to ask them now.
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