Unrepresented David’s bank obliteration results in judicial call for ‘The Castle’ sequel

I staved off a bank’s applications for summary judgment for possession last year, and maintain the battle.  I will not say victory flowed from my argument that the evidence which purported to establish the incorporation of one of Australia’s largest banks was inadmissible, but I did make that argument, and a perfectly valid one it was too, though had it been necessary no doubt it could have been cured by an adjournment.  I do not think it endeared me to the Supreme Court.  But as this case shows, you can’t assume anything.

Justice Kenneth Crispin is obviously a man with a sense of humour.  He retired last year, and his farewell speech is worth a read.  The quiet humour, though, is to be found in his Honour’s recitation of the dogged victory of pro se litigants Stanley Stergiou and his wife Ekaterine in Stergiou v Citibank Savings Ltd [2005] ACTCA 15. A Greek migrant, Mr Stergiou was in his 70s at the time of victory.  If the story does not warm the cockles of your heart then you are an un-Australian curmudgeon. The judgment of the President of the ACT Court of Appeal began:

‘1. This is the latest chapter in a saga that has been unfolding for more than a decade as repeated attempts have been made to take possession of a house owned by the appellants for failure to comply with their obligations under a mortgage. The proceedings have been protracted, tortuous and attended by a comedy of errors sufficient to inspire the producers of “The Castle” to consider making a sequel.

2. The mortgage, which was in favour of Citibank Savings Ltd, was executed on 8 April 1988. An initial line of credit was progressively increased and drawn down. The appellants initially made all the payments required by the mortgage. The first stirrings of discontent arose when Citibank Savings Ltd made some debits from the appellants’ accounts that it was unable to explain to their satisfaction.

3. Whilst other customers who have found themselves in such a situation may have responded by writing letters of complaint or approaching the Banking and Financial Services Ombudsman, the appellants apparently decided that decent people should have nothing further to do with a company that would behave in such a manner and declined to make any further payments under the mortgage. The last payment was made on 30 November 1991.’

Litigation followed and the Stergious emerged temporarily victorious:

’11. The appellants were left to enjoy their apparently crushing victory without having to fend off any further attempts to obtain possession of their house until 2003. However, they obviously did not subscribe to the view that ‘sleeping dogs should be let lie’ and Mr Stergiou continued to pursue his claim and that of his fellow plaintiffs with remarkable diligence. He almost invariably appeared in person and his face quickly became familiar to counsel who frequented the Friday motions list. He sometimes made apparently wild allegations against bank officers, lawyers and other people. He seemed convinced of the truth of such allegations, despite the absence of any evidence to support them, though it was not always easy to determine whether they were intended to be taken literally or were mere hyperbole. On at least one occasion he responded to my entreaty to seek legal advice by telling me that he had seen many lawyers but that none had agreed with him.

12. The appellant’s claim alleged, in essence, that Citibank Savings Ltd had been involved in a conspiracy with various members of the legal profession against the appellants and the other plaintiffs and that they were entitled to damages for “mental anguish” in respect of certain errors that Citibank Savings Ltd had made and for ejectment from the house. There were also actions against various firms of solicitors and these claims involved proceedings in this Court, the Federal Court and the High Court of Australia. The appellants consistently failed but no fresh proceedings were brought against them and it appeared that Citibank Savings Ltd had simply decided to keep its corporate head down until this spate of proceedings had been completed.’

There was more litigation, and then a glorious apotheosis:

’18 … [By 2005, thirteen years into his litigations] the years had apparently taken their toll, not only on Mr Stergiou’s businesses but also on his health. He was unable to prepare the appeal books normally required and when the matter was called on for hearing before the Full Court of the Court of Appeal on 16 February 2005, it became obvious that his hearing had deteriorated. He appeared a small, tired, sick David forced to fight a corporate Goliath without any sling or stones.

19. Yet, unexpectedly, he launched one legal missile. He handed up an historical company extract provided by the Australian Securities and Investments Commission that revealed that Citibank Savings Ltd had been deregistered on 13 June 1996.

20. That was, of course, the day upon which the Full Federal Court delivered judgment on the original claim in its favour and remitted its earlier claim for rehearing. There is no reason to suppose that this act of corporate suicide was precipitated by the prospect of further litigation with the appellants but it was immediately clear to the respondent to the appeal and the Court that its consequences for the ensuing litigation had been nonetheless catastrophic. All proceedings for or against a deregistered company are a nullity: see for example, International Bulk Shipping & Services Ltd v Minerals & Metals Trading Corporation of India [1996] 1 All ER 1017.

21. At this point Mr Meagher SC, who appeared for the respondent and until then had believed he had been appearing for a company that was registered and entitled to be represented by him, understandably sought an adjournment to enable those instructing him to verify the accuracy of the record and consider their position.

22. It was, of course, startling to find that legal proceedings had been maintained by and against Citibank Savings Ltd throughout a period of nearly nine years after the company had been deregistered. However, the solicitors ostensibly retained to act for the company throughout that period had not been informed either of its deregistration or of the assignment of its rights under the mortgage. They presumably acted upon an assumption that those operating a major banking institution would have known whether the company they thought they worked for actually existed. Nonetheless, the potential implications for them and the bank officers that instructed them were at least interesting. The adjournment was duly granted.’

The rights under the mortgage had been assigned to Citibank Ltd.  That company, which was not a party to the proceeding, and Citibank Savings Ltd, which was not a party either because it lacked the legal personality to give it standing to sue, applied for the reinstatement retrospectively of Citibank Savings Ltd so that the proceedings would not be a nullity, and the substitution nunc pro tunc of Citibank Ltd for that company.  President Crispin went at the task of explaining why that application was misconceived with a vigour suggestive of satisfaction with the result which went beyond mere relief that the Stergiou factor appeared no longer likely to be a feature of the lists of his Court.  They included that the reinstatement order would have to be an order in a proceeding which was a nullity and so would itself be a nullity, and that there was no applicant with standing before the Court making the application for reinstatement.

Austlii records no decision subsequent to President Crispin’s decision, and it is possible that any claim by Citibank Ltd was statute barred.

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2 Replies to “Unrepresented David’s bank obliteration results in judicial call for ‘The Castle’ sequel”

  1. I think you have overestimated the extent ot the Stergious' success.

    How could the claim by Citibank Ltd become statute barred? It is unlikely to have made any demand until quite recently, and even if statute-barred that would surely only defeat a claim under the personal covenants in the mortgage. Apart from that, it is likely Citibank Ltd still has a registered mortgage over the Stergious' property, and that will one day have an almost self-executing effect over the Stergious' (or one of their estates') equity in it.

    I do concede that Citibank will be unable to reccoup the legal costs incurred on behalf of the non-existent company.

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