BMW Australia Finance Limited v Rodrigues
[2021] FCCA 1393
•23 June 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
BMW Australia Finance Limited v Rodrigues [2021] FCCA 1393
File number(s): MLG 828 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 23 June 2021 Catchwords: CONSUMER LAW – application under s 100 of the National Credit Code for access to residential premises for the purpose of taking possession of a vehicle claimed to be the subject of a security interest – whether the court has power to make an order under s 100 of the National Credit Code without prior notice to the occupant – circumstances in which such order may be made – order authorising access made ex parte subject to undertakings and other conditions Legislation: Federal Circuit Court Rules 2001 (Cth) r 6.14
National Consumer Credit Protection Act 2009 (Cth) s 187, Sch 1, ss 4, 5, 88, 99, 100
Personal Property Securities Act 2009 (Cth) ss 10, 12, 18(a), 19(1), 123(1), 150, 206(1), 207
Drugs Misuse Act 1986 (Qld) s 57(c)
Planning and Environment Act 1987 (Vic) s 173
Subdivision Act 1988 (Vic) s 30
Cases cited: Baxter vCommissioners of Taxation (NSW) [1907] HCA 76
CGU Insurance Ltd v Blakeley [2016] HCA 2
Commissioner of Police v Tanos [1958] HCA 6
Dovuro Pty Ltd v Wilkins [2003] HCA 51
Ndjamba v Toyota Finance Australia [2010] NTSC 23
Thow v Campbell [1997] 2 Qd R 324
Number of paragraphs: 51 Date of hearing: 16 June 2021 Place: Sydney Solicitor for the Applicant: Mr N Angelakis of Mills Oakley Lawyers, by video The Respondent: No appearance by, or on behalf of, the respondent ORDERS
MLG 828 of 2021 BETWEEN: BMW AUSTRALIA FINANCE LIMITED (ACN 007 101 715)
Applicant
AND: XANDER RODRIGUES
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
23 JUNE 2021
THE COURT ORDERS THAT:
1.By 30 June 2021 the applicant inform the associate to Judge Manousaridis by email either that:
(a)the applicant gives to the Court undertakings in terms of the undertakings set out in the Proposed Orders referred to in paragraph 51 of the reasons for judgment of Judge Manousaridis that will be published on the pronouncement of these orders, in which case Judge Manousaridis will make orders to the effect of the Proposed Orders; or
(b)the applicant will not give to the Court undertakings in terms of the undertakings set out in the Proposed Orders, in which case the matter will be relisted for further hearing.
2.The applicant has liberty to apply.
REASONS FOR JUDGMENT
INTRODUCTION
In the morning of 16 June 2021 I heard ex parte an application by the applicant (BMW Finance) for a declaration and orders in relation to the gaining of possession of a motor vehicle in which BMW Finance claims it has a “security interest” within the meaning of s 12 of the Personal Property Securities Act 2009 (Cth) (PPS Act).
Before I set out the declaration and orders BMW Finance seeks, it will be necessary to set out the background as revealed by the evidence on which BMW relied at the hearing. Nothing I state in the background, however, should be taken to be a final finding of fact.
BACKGROUND
BMW Finance is the holder of an Australian credit licence issued under the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act). It trades under the name of “Alphera Financial Services”.
On about 18 September 2014 the respondent, Mr Rodrigues, apparently signed a document headed “Loan Contract & Goods Mortgage Schedule” (Mortgage Schedule). The Mortgage Schedule is a standard form that provides for the inclusion of information. The information that has been inserted into the document includes the name of the borrower (Mr Rodrigues), the loan amount ($77,041.50), the annual percentage rate (7.5%), the term of the loan (60 months), the number of payments (60 monthly payments), the amount of each monthly payment ($1,543.75), and a “description of goods” (Mercedes-Benz “Vin/ Chassis No: WDB2304742F036715” and “Reg. No: SL5500”) (Vehicle). The Mortgage Schedule also contains the following provision:
GENERAL CONDITIONS
The terms and conditions in the General Conditions (reference AlpheraLCGM-01/12) apply in this Contract. Words that are defined in the General Conditions have the same meaning in the Contract Schedule. Definitions of capitalised terms can be found in clause 22. Rules to assist understanding this Contract are set out in clause 22.
The General Conditions to which this provision refers contain terms that include the following:
(a)Mr Rodrigues must make the repayments as set out in the “Contract Schedule” (which is defined in cl 22 to mean the “loan contract and goods mortgage schedule containing specific details of this Contract”) (cl 4.1);
(b)Mr Rodrigues assigns to BMW Finance “all” his “interest in the Goods” (cl 6), being the “mortgaged goods specified in the Contract Schedule including all additions or accessories to the goods and all replacement goods” (cl 22). BMW Finance will hold that interest “as security for the payment of the Amount Owing” and for Mr Rodrigues’ performance of his obligations under “this Contract” (cl 6);
(c)If an “Event of Default” occurs BMW Finance “may exercise the rights, powers and remedies” under clause 13. These include the right to require that Mr Rodrigues repay immediately the “Amount Owing” (cl 13.2), and to take or enter into possession of “the Goods” (cl 13.3(a)); “enter any land, house or other building or premises during business hours on giving reasonable notice, for the purpose of taking possession of the Goods” (cl 13.3(a)), and sell “the Goods” (cl 13.4(a)). An “Event in Default” includes the non-payment of any amount “payable under this Contract when due” (cl 12(a)).
(d)BMW Finance will not exercise the rights that accrue to it on the happening of an “Event of Default” without first giving all relevant notices required by law, the period required by the notice and any postponement period have elapsed, and Mr Rodrigues has not remedied the default specified in the notice (cl 13.1). Relevant to this proceeding is the notice s 88 of the National Credit Code (Code), being Schedule 1 to the NCCP Act, requires to be given in relation to credit contracts to which the Code applies. BMW Finance accepts the Mortgage Schedule and the general conditions it incorporates (which I will collectively refer to as “the Mortgage”) constitute a “credit contract” within the meaning of s 4 of the Code. That is, BMW Finance accepts that under the Mortgage it provided credit to Mr Rodrigues in circumstances that fall within s 5 of the Code and, for that reason, the provisions of the Code apply to the provision of that credit.
According to an affidavit made by Mr Later, BMW Finance’s Collections Team Leader, BMW Finance advanced “the funds” to Mr Rodriguez on 25 September 2014. Pursuant to s 150 of the PPS Act, BMW Finance applied to the Registrar of Personal Property Securities to register a “financing statement” within the meaning of s 10 of the PPS Act in relation to the Mortgage. The registration became effective at 15:01:23 on 25 September 2014.[1]
[1] Affidavit of M A Later 23.04.2021, annexure MAL-2, page 15
Mr Rodrigues made the required monthly payments until around May 2016, but he does not appear to have made any payments after that month.[2]
[2] Affidavit of M A Later 03.06.2021, annexure MAL-9, page 27
By letter dated 16 March 2017 BMW Finance notified Mr Rodriguez that he had defaulted on the payment of instalments totalling $15,965, and demanded that Mr Rodriguez remedy that default by paying to it $16,492.28, being the sum of the arrears, interest, and dishonour fees. It may be taken that BMW Finance gave this notice under s 88(2) of the Code, which provides.
A credit provider must not begin enforcement proceedings against a mortgagor to recover payment of money due or take possession of, sell, appoint a receiver for or foreclose in relation to property subject to a mortgage, unless:
(a) the mortgagor is in default under the mortgage; and
(b) the credit provider has given the mortgagor a default notice, complying with this section, allowing the mortgagor a period of at least 30 days from the date of the notice to remedy the default; and
(c) the default has not been remedied within that period.
(d) if the mortgage secures an obligation under a credit contract for a reverse mortgage, the credit provider has spoken to one of the following persons by telephone or in person in that period and has thus both confirmed that the mortgagor received the default notice and informed the person of the consequences of failure to remedy the default, or has made reasonable efforts to do so:
(i) the mortgagor;
(ii) a practising lawyer representing the mortgagor;
(iii) a person with a power of attorney relating to the mortgagor’s financial affairs.
Criminal penalty: 50 penalty units.
Mr Rodriguez has not remedied the default.
On 28 April 2017 BMW Finance engaged a mercantile agent to take possession of the Vehicle. In a letter dated 22 December 2017 the mercantile agent reported on the efforts he had made to locate the Vehicle. On 1 May 2017 the agent attended a house in Bellfield in Victoria at the address Mr Rodrigues had specified in the Mortgage Schedule as his address (Bellfield property), where the occupant informed the agent that Mr Rodrigues was family, and he did not live at the house. On 5 May 2017 the agent attended what was believed to be Mr Rodrigues’ place of employment, but the agent was told Mr Rodrigues had closed the store. On 8 May 2017 the agent called Mr Rodrigues’ telephone but it was not answered. The agent again attended the Bellfield property, on 12 May, 22 May, and 8 June 2017. The agent attended the Electoral Office and noted there was no new listing for Mr Rodrigues. The agent also conducted an ASIC search which revealed Mr Rodrigues was a director of two companies.
In around January 2019 BMW Finance carried out a VEDA search, which disclosed that Mr Rodrigues’ address was “L2/50 40 Burgundy Street”, Heidelberg. BMW Finance engaged an agent to attend the Heidelberg address. The agent reported the Heidelberg address appeared to be a unit (Heidelberg unit) in a building that comprised office suites and apartments (Heidelberg building). The agent sounded the intercom for the Heidelberg unit, but there was no response. The agent entered the secured car parking area (Heidelberg car park), but the agent did not see the Vehicle. The agent again attended the Heidelberg building on 20 and 30 January 2019, and on 11, 16, 22, and 28 February 2019, but the agent received no response when he used the intercom for the Heidelberg unit, and he did not see the Vehicle on the occasions the agent entered the Heidelberg car park.
In the meantime, on about 2 September 2019 BMW Finance sent to Mr Rodrigues a letter headed “Notice to Mortgagor Requesting Disclosure of Location of Mortgage Goods” in which Mr Rodriguez was required to inform BMW Finance of, among other things, the location of the Vehicle. Mr Rodrigues did not respond to the letter. Searches were later carried out which revealed that the Vehicle’s registration was cancelled on 16 January 2020.
According to Mr Later, on about 5 February 2021 the mercantile agent located the Vehicle in the Heidelberg car park. The agent reported the Vehicle was parked in car park space number 205. A title search reveals there is no lot 250 or any lot “2/50”, but it does reveal a Lot 205. An agreement under s 173 of the Planning and Environment Act 1987 (Vic) records that the car park numbered 205, on which the Vehicle was parked, forms part of Lot 205 of a particular plan of subdivision, being the instrument noted in the title for Lot 205.
The registered proprietor of Lot 205 is a company called Detour (Vic) Pty Ltd (DVPL). Mr Rodrigues is not recorded as a director of DVPL, and Mr Later is not aware of any connection between Mr Rodrigues and the person who is recorded as the director of DVPL. Bencorp OCM Pty Ltd (Bencorp) is the owners corporation of the strata scheme of which the Heidelberg unit forms part; and OCC Management Pty Ltd (OCC Management) manages the affairs of the owners corporation.
COURSE OF PROCEEDING
BMW Finance commenced a proceeding in this Court on 28 April 2021 by filing an application in which it claimed the following orders:
1.Pursuant to Federal Circuit Court Rules 2001 – Rule 1.06(1) dispensing with the requirement to serve this Application and its supporting documents and that the Application be listed for hearing in the absence of the Respondent.
2.The Applicant and/or its duly authorised agent be permitted to take reasonable step(s) in order to take possession of the Collateral, from the following premises:
a. [the Heidelberg property]; or
b.any other residential premises in Australia at which the Collateral is reasonably believed to be located.
3.The Respondent to pay the Applicant its costs fixed in the sum of $5,054.00.
4.The Applicant has liberty to apply for further orders.
BMW Finance filed with its application an affidavit made by Mr Later on 23 April 2021. Mr Later deposes to matters which, if accepted, BMW Finance contends entitles it to possession of the Vehicle. It may be inferred that the predicates of that conclusion include the following:
(a)The Mortgage is an agreement between BMW Finance and Mr Rodrigues by which a “security interest” within the meaning of s 12 of the PPS Act was created in the Vehicle securing to BMW Finance Mr Rodrigues’ obligations under the Mortgage.
(b)The Mortgage secures the obligations referred to in (a) by, among other things, containing a term by which Mr Rodrigues assigns his interest in the Vehicle to BMW Finance, and terms that bind Mr Rodrigues to permit BMW Finance, in the circumstances provided by those terms, to take possession of, and sell, the Vehicle.
(c)Given (a) and (b), the Mortgage is a “security agreement” within the meaning of s 10 of the PPS Act.
(d)Being a “security agreement”, then, by operation of s 18(a) of the PPS Act, the Mortgage is effective according to its own terms, including those terms that entitle BMW Finance to take possession of and sell the Vehicle if an “Event of Default” occurs.
(e)BMW Finance gave consideration for the security interest in the Vehicle created by the Mortgage, namely it advanced a loan. For that reason, the security interest created by the Mortgage has “attached” to the Vehicle.
(f)Given (e), s 19(1) of the PPS Act applies to render the security interest created by the Mortgage, namely, the set of rights that include the taking of possession and the sale of the Vehicle, enforceable by BMW Finance against Mr Rodrigues.
(g)Mr Rodriguez has defaulted under the Mortgage, BMW Finance gave to Mr Rodrigues the notice it was required to give under s 88 of the Code, and Mr Rodriguez failed to remedy that default.
(h)Given (g), and as provided for by s 123(1) of the PPS Act, BMW Finance “may seize” the Vehicle “by any method permitted by law”.
BMW Finance has not attempted to give Mr Rodrigues notice of this proceeding.
On the application being filed, it was listed for hearing on 16 June 2021. On 24 May 2021, however, BMW Finance filed an application in a case in which it seeks the following orders:
1.An order that this Application be listed for hearing without notice to and in the absence of the Respondent.
2.The Applicant and/or its duly authorised agent be permitted to take reasonable step(s) in order to take possession of [the Vehicle] (Collateral) from the property situate at [the address of the Heidelberg building] (Property).
3.Pursuant to rule 1.06(1) of the Federal Circuit Court Rules 2001 (Cth) (Rules), the Court dispense with the requirement to serve:
(a)the initiating Application filed on 27 April 2021 on the Respondent pursuant to rule 6.06 of the Rules; and
(b)this Application in a Case and the Affidavit of Michael Anthony Later dated 23 April 2021 . . . on the Respondent pursuant to rule 4.08(3)of the Rules.
4.The Applicant serve a copy of the Initiating Application, Application in a Case, Affidavit of Michael Anthony Later, and these Orders (Documents) on the Respondent no less than 5 business days after taking possession of the Collateral.
5.The Applicant serve the Documents on the Respondent by . . .
6.The Respondent to pay the Applicant its costs fixed in the sum of $5,054.00.
4.The Applicant has liberty to apply to:
(a)set aside or vary these orders; and/or
(b)seek further orders.
At the hearing on 16 June 2021 Mr Angelakis, who appeared for BMW Finance, provided draft orders (Applicant’s Proposed Orders) that differed from the orders claimed in the application, and in the application in a case. Mr Angelakis said BMW Finance did not intend to apply ex parte for all of the Applicant’s Proposed Orders. BMW Finance instead applied for orders 1, 2, 4, 6, and 7 of the Applicant’s Proposed Orders.
(a)Applicant’s Proposed Order 1 is that BMW Finance be granted leave to file an amended application (Amended Application) in the form of the draft exhibited to the second affidavit of Mr Later.[3] The draft Amended Application claims orders that include the following:
[3] Affidavit of M A Later 03.06.2021, annexure MAL-15, pages 103-110
3.An order pursuant to section 88(5)(c) of the National Credit Code . . . (Code) that the Applicant is authorised and has leave, nunc pro tunc, to commence this enforcement proceeding.
4.A declaration that the Applicant has a security interest in [the Vehicle] (Collateral) granted by the Respondent pursuant to [the Mortgage] (Agreement) which has been perfected by registration on the Personal Property Securities Register, with registration number 201409250064657.
5.A declaration that there has been an “Event of Default” under the Agreement.
6.An order pursuant to section 123(1) of [the PPS Act] the applicant may take reasonable steps to seize the Collateral.
7.Alternative [sic] to order 6 above, a declaration that pursuant to 13.3(d) of the Agreement, the Applicant is entitled to take reasonable steps to secure possession of the Collateral.
8.An order pursuant to section 100 of the Code that the applicant is authorised to enter the property situated at [address of Heidelberg building] for the purpose of taking possession of the Collateral.
9.Pursuant to rule 1.06(1) of the Federal Circuit Court Rules 2001 (Cth) (Rules), the Court dispense with the requirement to serve:
(a)the initiating Application filed on 27 April 2021 on the Respondent pursuant to rule 6.06 of the Rules; and
(b)this Application in a Case and the Affidavit of Michael Anthony Later dated 23 April 2021 . . . on the Respondent pursuant to rule 4.08(3) of the Rules.
The Amended Application then provides for a number of orders that deal with the service of documents after one or more of these orders have been made, and BMW Finance takes possession of the Vehicle.
(b)Applicant’s Proposed Order 2 is that DVPL, Bencorp, and OCC Management be joined as parties. BMW Finance submits these companies are necessary parties because the orders BMW Finance seeks will, or at least may, interfere with interests these companies have or may have in the Heidelberg building.
(c)Applicant’s Proposed Order 4 is a declaration to the effect of abovementioned paragraph 4 of the claim for relief made in the Amended Application.
(d)Applicant’s Proposed Order 6 is a declaration to the effect that, pursuant to s 123(1) of the PPS Act, BMW Finance may take reasonable steps to seize the Vehicle.
(e)Applicant’s Proposed Order 8 is that BMW Finance is authorised to enter the Heidelberg building for the purpose of taking possession of the Vehicle. Mr Angelakis submitted that this is the principal order BMW Finance seeks to obtain ex parte.
JURISDICTION
“Jurisdiction” means “authority to adjudicate”.[4] Further:[5]
Jurisdiction with respect to a particular subject matter is authority to adjudicate upon a class of questions concerning that subject matter. The existence before a court of a question of the relevant subject matter class is necessary to the court’s authority to adjudicate.
[4] Baxter v Commissioners of Taxation (NSW) [1907] HCA 76; (1907) 4 CLR 1087, at page 1142
[5] CGU Insurance Ltd v Blakeley [2016] HCA 2, at [24]
The subject of the proceeding BMW Finance has brought in this Court is a claim for a declaration that BMW Finance has a “security interest” in the Vehicle within the meaning of s 12 of the PPS Act, and a number of orders to give effect to that asserted security interest, including an order authorising BMW Finance to enter residential premises to take possession of the Vehicle. I have set out at [16] of these reasons the predicates of BMW Finance’s claims. The question is whether this Court has jurisdiction to adjudicate questions in relation to these claims. There are two sources of jurisdiction.
The first is s 207 of the PPS Act, which provides that jurisdiction “is conferred on a court mentioned in an item in the following table with respect to a PPS matter, subject to the limits on the court’s jurisdiction (if any) specified in the item”. The table in s 207 identifies this Court as one of the courts on which jurisdiction is conferred, and places a limit on that jurisdiction by providing that this Court “does not have jurisdiction to award an amount for loss or damages that exceeds: (a) $750,000; or (b) if another amount is prescribed by the regulations – that other amount”. The jurisdiction that falls within the expression “PPS matter” is identified in s 206(1) of the PPS Act:
This Part deals with the jurisdiction of a court with respect to a matter (a PPS matter):
(a)arising under a provision of this Act authorising an application to be made to a court; or
(b) otherwise arising in relation to this Act, other than a matter in respect of which the Federal Court or the Federal Circuit Court has jurisdiction under the Administrative Decisions (Judicial Review) Act 1977; or
(c) otherwise arising in relation to a security agreement or a security interest.
BMW Finance’s claim for a declaration is one that arises in relation to the PPS Act, and its claim for the other orders arise in relation to the Mortgage BMW Finance claims is a “security agreement” within the meaning of s 10 of the PPS Act. This Court, therefore, has jurisdiction under s 207 of the PPS Act to entertain these claims.
The second source of jurisdiction is s 187 of the NCCP Act, which provides that jurisdiction “is conferred on a court referred to in an item in the following table in relation to civil matters arising under this Act, subject to the limits on the court's jurisdiction (if any) specified in the item”. The table in s 187 identifies this Court as one of the courts on which jurisdiction is conferred, and places a limit on that jurisdiction by providing that this Court “does not have jurisdiction to award an amount for loss or damages that exceeds: (a) $750,000; or (b) if another amount is prescribed by the regulations – that other amount”.
The jurisdiction conferred by s 187 of the NCCP Act is engaged by BMW Finance’s application to this Court. As I have already noted, BMW Finance accepts the Code applies to BMW Finance’s provision of credit to Mr Rodriguez under the Mortgage. Division 4 of Part 5 of the Code regulates enforcement procedures for “goods mortgaged”. Two provisions are particularly relevant. The first is s 99 of the Code, which provides:
(1)A credit provider, or an agent of a credit provider, must not enter any part of premises used for residential purposes for the purpose of taking possession of mortgaged goods under a goods mortgage unless:
(a)the court has authorised the entry; or
(b)the occupier of the premises has, after being informed in writing of the provisions of this section, consented in writing to the entry.
(2)The regulations may provide for procedures for the obtaining and giving of consent for the purposes of this section and may set out the circumstances in which consent is or is not taken to have been given.
(3) If premises are entered in contravention of this section by a credit provider or an agent of a credit provider, the credit provider commits an offence.
Criminal penalty: 50 penalty units.
(4)Subsection (3) is an offence of strict liability.
The second relevant provision is s 100 of the Code, which provides:
The court may, on the application of a credit provider that is entitled to take possession of mortgaged goods, authorise the credit provider to enter residential premises for the purpose of taking possession of mortgaged goods.
One of the orders BMW Finance seeks is an order under s 100 of the Code that BMW Finance be authorised to enter the Heidelberg building for the purpose of taking possession of the Vehicle. I am therefore also satisfied the Court has jurisdiction under s 187 of the NCCP Act to entertain that claim.
EX PARTE ORDER AUTHORISING ENTRY
There are two questions. The first is whether this Court has power to make an order under s 100 of the Code without notice to Mr Rodrigues, or to DVPL, Bencorp, and OCC Management. The second is, assuming the Court does have such power, whether I should make such order.
Power to make s 100 order ex parte?
BMW Finance submits this Court has power to make an order under s 100 of the Code without first giving notice to Mr Rodrigues or to DVPL, Bencorp, and OCC Management. It principally relies on the judgment of Blockland J in Ndjamba v Toyota Finance Australia.[6]
[6] Ndjamba v Toyota Finance Australia [2010] NTSC 23
In Ndjamba a credit provider applied ex parte to the Local Court for an order under an equivalent provision to s 100 of the Code authorising the credit provider to enter the debtor’s residential premises for the purpose of taking possession of a vehicle the debtor had mortgaged to the credit provider. The Local Court made an order ex parte authorising entry, pursuant to which the credit provider entered the debtor’s property and recovered the mortgaged vehicle. On appeal from the Local Court’s order Blockland J held that, in the circumstances of the case, the “Local Court was authorised to make the ex parte order”.[7] Her Honour said:[8]
In my view the circumstances as they were at the time of the hearing clearly give rise to a strong inference that on the facts known at the time, the Appellant would take action to prevent the repossession of the vehicle which on all of the material before the learned Magistrate was a legitimate recovery exercise pursuant to the loan agreement. I am mindful that courts proceed cautiously concerning ex parte applications. The primary considerations on whether or not to proceed ex parte concern whether there is urgency; whether irreparable damage would flow from making an ex parte order; whether hardship would flow to a party against whom an order is made and whether such an order can be set aside.
Given the failure to give consent when otherwise the evidence indicated a right of repossession, there was some urgency to preserve the subject vehicle or at least its whereabouts to enable its repossession. Given the failure to give consent to enter the premises, it was open in my view for an inference to be drawn that the Appellant may not cooperate if aware of the proceedings. This in turn gives rise to reasonable grounds to suspect the vehicle may be hidden or its position changed if notice of repossession proceedings were given. The Respondent consequentially may have suffered harm or unnecessary expense in locating the vehicle and the debt may have remained unsatisfied.
[7] Ndjamba v Toyota Finance Australia [2010] NTSC 23, at [8]
[8] Ndjamba v Toyota Finance Australia [2010] NTSC 23, at [8], [9]
Her Honour noted the respondent could challenge the lawfulness of the order by applying to the Local Court for a rehearing of the application for an order authorising entry to the premises.
On first impression the judgment in Ndjamba appears to offend the “deep-rooted principle of the law that before any one can be punished or prejudiced in his person or property by any judicial or quasi-judicial proceeding he must be afforded an adequate opportunity of being heard”.[9] That principle, however, must be considered in the light of s 99 and s 100 of the Code, properly construed, and, more broadly, in the light of the respective interests ss 99 and 100 of the Code, and s 123(1) of the PPS Act, may reasonably be taken to support and protect.
[9] Commissioner of Police v Tanos [1958] HCA 6; (1958) 98 CLR 383, at page 395
First, there are the interests of the person - the “secured party” or “credit provider” - who holds or who claims to hold a security interest in particular “collateral”. Subsection 123(1) of the PPS Act provides that a “secured party may seize collateral, by any method permitted by law, if the debtor is in default under the security agreement”. This recognises a right in the secured party to peaceably take control of collateral without having to apply to a court for an order and without, therefore, having to assume the legal burden it would carry, in those circumstances, to prove it holds a security interest in the collateral in question. This, it may safely be said, is the principal advantage of a creditor obtaining security in collateral.
Second, there is the interest of persons who occupy residential premises on which collateral is or may be located. That interest is the occupant’s being secure in his or her own dwelling. It is protected by s 99 of the Code prohibiting a credit provider from entering residential premises for the purpose of taking possession of the collateral. That prohibition, however, is not absolute. It is subject to two exceptions. One is that the credit provider has informed the occupier of the provision of s 99 of the Code, and the occupier has consented in writing to the credit provider entering the premises for the purpose of taking possession of the collateral. The second exception is where a court authorises entry for that purpose.
It may be supposed that s 99 of the Code assumes that the credit provider would attempt to secure the occupant’s co-operation to gain entry on to the premises to exercise its right to seize the collateral located on the premises. The occupant may elect to co-operate, either by consenting in writing to the credit provider entering the residential premises, or by delivering the collateral to the credit provider without any need for entry. But the co-operation of an occupant cannot be assumed; and it may be inferred that at least one of the purposes for which s 100 of the Code was enacted is to deal with an occupant of residential premises who is unwilling to co-operate with the credit provider’s exercise of its right of seizure, or to deal with an occupant who actively seeks to frustrate the credit provider’s exercise of its right of seizure. In those circumstances, it is reasonable to construe s 100 of the Code as conferring on a court a broad discretion, not only in relation to whether it should exercise the power s 100 confers to authorise entry, but also in relation to the manner in which it should exercise that power, including whether the court should make an order authorising entry without first giving notice to the occupier. That is consistent with the language of s 100 of the Code. It is a bare conferral of a power to authorise entry; and it is a power a court “may” exercise.
I conclude, therefore, that, on its proper construction, s 100 of the Code authorises a court, in an appropriate case, to make an order ex parte authorising a credit provider to enter residential premises for the purpose of taking possession of collateral. It would be appropriate to make such order where there is evidence that strongly suggests there is a significant risk that the giving of notice of an application for an order under s 100 of the Code would lead the occupier to engage in conduct that would frustrate the very purpose for which the credit provider seeks the order, namely, to enter the premises to take possession of collateral.
The making of an ex parte order, however, should only be made having regard to the principles that apply to the making of ex parte injunctions and other ex parte orders for the preservation of property. The credit provider must establish a prima facie case that it holds a security interest in the collateral in question; the collateral is situated on the premises to which entry is sought; and there is a real risk that the giving of notice to the occupant will frustrate the very purpose for which the credit provider is seeking access to the premises, namely, to take possession of the collateral. Further, the court should make orders that are calculated to reserve to the occupant the right to apply to set aside any ex parte order, and orders to protect the occupant from any loss the occupant might suffer if the occupier successfully contests the ex parte order after he or she receives notice of it. These would include requiring the credit provider to give an undertaking as to damages, and to serve the occupant with the order and materials on which the order was made as soon as practicable having regard to the purposes for which, in the particular circumstances of the case, the ex parte order for entry was made. It should also include an order that the proceeding come back before the court, again at such time as is reasonable having regard to the purposes for which, in the particular circumstances of the case, the ex parte order for entry was made.
Should an order be made ex parte against Mr Rodrigues?
I am satisfied that the evidence, if not contradicted or explained away by other evidence, renders more probable than not the following facts and matters:
(a)Mr Rodrigues entered into the Mortgage as a consequence of which he granted to BMW Finance a “security interest” in the Vehicle within the meaning of s 12 of the PPS Act.
(b)By around June 2016 Mr Rodrigues defaulted under the Mortgage, as a consequence of which BMW Finance acquired the right to take possession (to use the language of s 100 of the Code) or to seize (to use the language of s 123(1) of the PPS Act) the Vehicle.
(c)By letter dated 16 March 2017 BMW Finance notified Mr Rodriguez that he had defaulted in the payment of instalments totalling $15,965, and demanded that Mr Rodriguez remedy that default by paying to it $16,492.28, being the sum of the arrears, interest, and dishonour fees. This letter constituted the giving of the notice s 88(2) of the Code requires a credit provider, such as BMW Finance, to give before the credit provider can enforce its rights in relation to “goods mortgaged”.
(d)Mr Rodrigues has not remedied the default, with the consequence that BMW Finance is entitled to take action to recover possession of the Vehicle.
(e)BMW Finance has taken extensive steps to contact Mr Rodrigues and to locate the Vehicle for the purpose of taking possession of the Vehicle. Mr Rodrigues, however, has not responded to BMW Finance’s attempts to contact him. Mr Rodrigues has instead changed his address without informing BMW Finance, permitted the registration of the Vehicle to lapse, and has taken steps to move the Vehicle to the Heidelberg car park, where it is currently located, without informing BMW Finance.
(f)The matters in (e) manifest a recognition by Mr Rodrigues that he does not have any ground for resisting BMW Finance’s claim to take possession of or seize the Vehicle, but he has instead taken steps to frustrate BMW Finance’s attempts to exercise its right to take possession of, or seize, the Vehicle.
The next question concerns the identity of the occupier or occupiers of the Heidelberg car park and that part of the Heidelberg building that are required to be traversed to access the Heidelberg car park. The determination of that question is necessary because it is the interest of the occupier that s 99 of the Code protects. It is therefore the likely consequence of the occupier’s being notified of an application for an order under s 100 that must be assessed when determining whether it is appropriate to make such an order under s 100 of the Code ex parte. But what does the word “occupier” in s 100 of the Code denote?
Neither the Code nor the NCCP Act defines “occupier”. That word, therefore, must be given its ordinary meaning having regard to the statutory context in which it appears. A helpful discussion of the meaning of “occupier” was given in Thow v Campbell.[10] The question in that case was whether the prosecution had proved that a person was the “occupier” of a house within the meaning of s 57(c) of the Drugs Misuse Act 1986 (Qld). Pincus and Davies JJ said:[11]
Occupation is a question which can arise in various contexts. Commonly it is treated as being dependent upon control, in the sense of being able to exclude strangers: Council of the City of Newcastle v. Royal Newcastle Hospital (1959) 100 C.L.R. 1 at 4, a decision of the Privy Council, is an example. Ordinarily, one would expect that a person capable of being described as “the occupier” of premises would have, alone or with others, at least some de facto control of the premises. . . .
Although the provision says “the occupier", not “an occupier”, there may be more than one occupier; for example, each of a group of people in possession of premises as joint tenants is “the occupier” for the purposes of s. 57(c), but the use of the word “the” is in our view some guide to the intended meaning. It might suggest that if a number of people are living in a house one may be “the occupier” and the others not. For example, it seems unlikely that if a family consisting of a couple and their dependent children are living in a house, each of the children is necessarily “the occupier” of the whole house for the purposes of the section.
[10] Thow v Campbell [1997] 2 Qd R 324
[11] Thow v Campbell [1997] 2 Qd R 324 at 326
Ambrose J said:[12]
The meaning to be given to the term “occupy” must depend upon the context in which the term is used… In the context of s.57(c) of the Act, I take the view that essential to the occupancy of a place for the application of that section the person concerned must at least be making a use of that place with at the very least sufficient defacto control or management of it to facilitate that use. Very often such control or management will involve at least defacto possession of the place although not necessarily an exclusive one.
[12] Thow v Campbell [1997] 2 Qd R 324 at 327-328
The evidence shows that the Vehicle is parked in car park number 205 of the Heidelberg car park; and the car park forms part of the title to Lot 205. When considered with the results of the VEDA search that shows Mr Rodrigues’ address to be the address of the Heidelberg building, and evidence that the registration of the Vehicle has lapsed, it may reasonably be inferred that Mr Rodrigues is the occupier of Lot 205, and the car space associated with it, under a lease or some other arrangement with the registered proprietor, DVPL. Further, it is reasonably arguable that Mr Rodrigues is also an occupier of the Heidelberg common property. Given the Vehicle is located at car park number 205, and the car park is a secured car park, it is reasonable to infer that Mr Rodrigues, in common with other lot owners or lessees of other lot owners, has the means of gaining access to the common property by key, card, or access code, to the exclusion of persons who are not lot owners or lessees of lot owners. It follows, therefore, that the making of an order under s 100 of the Code would affect Mr Rodrigues’ interest as occupier of the Heidelberg building and the Heidelberg car park.
The last question is how Mr Rodrigues is likely to react if BMW Finance gives him notice of its application to apply for an order authorising entry into the Heidelberg car park. Given my finding that the evidence establishes a prima facie case that Mr Rodrigues has sought to frustrate BMW Finance’s attempt to exercise its right to take possession of the Vehicle, I am satisfied there is a substantial risk that if notice is given to Mr Rodrigues that BW Finance applies for an order under s 100 of the Code, he would take steps to remove the Vehicle from the Heidelberg car park. I am therefore satisfied it is appropriate that I make an order under s 100 of the Code ex parte authorising BMW Finance to enter the Heidelberg car park and the common property of the Heidelberg building for the purpose of taking possession of the Vehicle.
I am prepared to make such order, however, only on BMW Finance giving to the Court two undertakings. The first is the “usual undertaking as to damages” as specified in the “Usual Undertaking as to Damages Practice Note (GPN-UNDR)” issued by the Federal Court of Australia. Paragraph 2.2 of that practice note provides that:
The “usual undertaking as to damages” if given to the Court in relation to any interlocutory order made by it or any interlocutory undertaking given to it, is an undertaking:
(a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, (to be assessed by the Court or as it may direct), to any person, (whether or not that person is a party), affected by the operation of the order or undertaking or any continuation (with or without variation) of the order or undertaking; and
(b) to pay the compensation referred to in (a) to the person affected by the operation of the order or undertaking.
The second undertaking is that if, as a consequence of its entry into the Heidelberg car park, BMW Finance takes possession of the Vehicle, BMW Finance will hold the Vehicle until further order of the Court.
I also propose to make the following orders:
(a)I will authorise entry only up to 14 July 2021 when I propose the matter be listed before me for directions.
(b)I will make an order under r 6.14(1) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) dispensing with personal service, and order that the orders I make, and the application, Amended Application, and the affidavits of Mr Later be served on Mr Rodrigues by leaving documents in an envelope at the Heidelberg building and by text message to three telephone numbers. I propose to make these orders because, given the unsuccessful efforts BMW Finance has already made to contact Mr Rodrigues, I am satisfied it would be impracticable for BMW Finance to personally serve any document on Mr Rodrigues.
(c)I will make an order that BMW Finance serve the documents in (b) within 24 hours of BMW Finance taking possession of the Vehicle, if BMW Finance takes possession of the Vehicle as a consequence of its gaining entry to the Heidelberg building.
The position of DVPL, Bencorp, and OCC Management
I am not satisfied there is a reasonably arguable case that DVPL or OCC Management are occupiers of the Heidelberg common property or of the Heidelberg car park. I have concluded that, if not contradicted or explained away by other evidence, the evidence renders probable that Mr Rodrigues is a party to a lease or other arrangement with DVPL under which Mr Rodrigues is permitted to occupy the Heidelberg unit and the Heidelberg car park. As for OCC Management, there is nothing in the evidence to suggest it could reasonably be considered to be an occupier of the Heidelberg common property or of the Heidelberg car park.
That leaves Bencorp, the owners corporation. It is true that as an owners corporation Bencorp is likely to have powers and duties, which for certain purposes would lead to its being properly charactered as an occupier of at least the Heidelberg common property. The type of occupation s 99 of the Code appears to have in view, however, is occupation for use as a residence. It is difficult to characterise the occupation an owners corporation may have of common property as residential. That is not to say that common property of a strata scheme cannot be residential premises; that is likely to be the case when common property is viewed from the perspective of lot owners or their lessees or licensees. Under s 30 of the Subdivision Act 1988 (Vic) common property vests in lot owners as tenants in common for the time being in shares proportional to their lot entitlements.
In any event, assuming DVPL, Bencorp, or OCC Management are occupiers, I am satisfied there is a real risk that if notice is given to these entities, of BMW Finance’s application for an order under s 100 of the Code, such notice will be passed on to Mr Rodrigues. I am therefore satisfied that it is appropriate to make an order under s 100 of the Code without notice being given to any of DVPL, Bencorp, or OCC Management.
OTHER PROPOSED ORDERS
I will now consider whether I should make any of the other Applicant’s Proposed Orders.
(a)I propose to make orders in terms of Applicant’s Proposed Orders 1 and 2, together with an order that the Amended Application be filed on the making of these orders, and that it be made returnable on 14 July 2021.
(b)I will not at this stage make any declaration. An “interlocutory declaration is a form of order not known to the law”.[13]
(c)I propose to order that BMW Finance serve the orders I will make together with the application that was filed on 21 April 2021, Amended Application, and Mr Later’s affidavits, and that these documents be served on Mr Rodrigues in the manner provided for in the Applicant’s Proposed Orders. I will order, however, that the documents be served on Mr Rodrigues within 24 hours after BMW Finance takes possession of the Vehicle.
(d)I do not propose to make any order concerning service of the Amended Application on DVPL, Bencorp, or OCC Management. These companies are to be served in the manner provided for by the FCC Rules.
(e)I will list the matter for directions at 9.30 am on 14 July 2021 unless anyone applies to have the proceeding listed before me at an earlier day.
[13] Dovuro Pty Ltd v Wilkins [2003] HCA 51, at [143] (Hayne and Callinan JJ)
DISPOSITION
I have set out in a schedule to these reasons for judgment the form of orders I propose to make (Proposed Orders), assuming BMW Finance gives the undertakings specified in the Proposed Orders. At this stage, however, I only propose to make the following orders:
(a)By 30 June 2021 BMW Finance inform my associate by email either that:
(i)it gives to the Court undertakings in terms of the undertakings specified in the Proposed Orders, in which case I will make orders in terms of the Proposed Orders; or
(ii)it is not prepared to give to the Court undertakings in terms of the undertakings specified in the Proposed Orders, in which case the matter will be relisted for further hearing before me.
(b)The applicant has liberty to apply.
I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 23 June 2021
SCHEDULE – PROPOSED ORDERS
THE COURT NOTES THAT:
1.The applicant, by its lawyers, undertakes to the Court that it will:
(a)submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not that person is a party) affected by the operation of order 3 of these orders or any continuation (with or without variation) of order 3 of these orders; and
(b)pay the compensation referred to in (a) to the person affected by the operation of order 3.
THE COURT ORDERS THAT:
2.The applicant has leave to file an amended application in the form of the draft amended application that is marked annexure “MAL-15” to the affidavit of Michael Antony Later affirmed on 3 June 2021 (Amended Application), the Amended Application to be made returnable before Judge Manousaridis at 9.30 am on 14 July 2021.
3.Subject to order 8, pursuant to s 100 of Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) the applicant, by its officers, employees, or agents, is authorised until 14 July 2021 to enter the common property and car park situated at 40 Burgundy Street Heidelberg Victoria (Building) for the purpose of taking possession of Mercedes-Benz Vin No: WDB2304742F036715, Registration No. SL5500 (Vehicle).
THE COURT NOTES THAT:
4.The applicant, by its lawyers, undertakes to the Court that if, pursuant to order 3, the applicant enters the common property and car park situated in the Building and takes possession of the Vehicle the applicant will safely secure and retain possession of the Vehicle until further order of the Court.
THE COURT ORDERS THAT:
5.Pursuant to r 6.14 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) personal service on the respondent, Mr Xander Rodrigues, of the application filed on 21 April 2021 (Application) and of the Amended Application is dispensed with, and the Application and Amended Application be served on the respondent, Mr Xander Rodrigues, in the manner provided for in order 6.
6.The applicant serve on the respondent, Mr Xander Rodrigues, these orders, the Application, the Amended Application, and the affidavits of Michael Antony Later affirmed on 23 April 2021 and 3 June 2021 (Documents) by:
(a)placing the Documents in an enveloped marked “CONFIDENTIAL: ATTENTION XANDER RODRIGUES”, and placing the envelope in a mail box associated with Lot 205 situated in the Building, or in such other place in or about the Building where documents may be left for the attention of occupants of lots or units situated in the Building; and
(b)sending an SMS text message to the respondent, Mr Xander Rodrigues, at each of the phone numbers 0422 299 940, 0401 787 871, and 0422 299 945 which states the following:
The Federal Circuit Court of Australia has made orders in the absence of Mr Xander Rodrigues authorising BMW Australia Finance Limited to enter the common property and car park situated at 40 Burgundy Street Heidelberg Victoria for the purpose of taking possession of Mercedes-Benz Vin No: WDB2304742F036715, Registration No. SL5500. Documents on file MLG828/2021 can be obtained by emailing the solicitor for BMW Australia Finance Limited at [email protected] or by inspection at the Court: level 7, 305 William Street Melbourne Victoria 3000
7.Service of the Documents in the manner permitted by order 6 must be effected within 24 hours after the applicant takes possession of the Vehicle as a consequence of its having gained entry, pursuant to order 3 of these orders, to the common property or car park situated at the Building.
8.On being served with the Documents in the manner permitted by order 6, or on becoming aware of these orders other than by service of the Documents in the manner permitted by order 6, the respondent, Mr Xander Rodrigues, has liberty to apply to the Court to discharge any one or more of these orders.
9.The proceeding is otherwise listed for directions before Judge Manousaridis at 9.30 am on 14 July 2021.
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