BMW Australia Finance Limited v Rodrigues (No 2)
[2021] FCCA 1831
•28 July 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
BMW Australia Finance Limited v Rodrigues (No 2) [2021] FCCA 1831
File number(s): MLG 828 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 28 July 2021 Catchwords: CONSUMER LAW – Practice and Procedure – application for default judgment for declarations that the applicant has security interest in a vehicle and was entitled to exercise that interest by taking possession of the vehicle – whether a claim for a declaration is capable of being satisfied by a respondent within the meaning of r 13.03A(2)(a) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) such that, if not satisfied, the Court may make an order for default judgment under r 13.03B(2) of the FCC Rules – a claim for declaration not capable of being satisfied by a respondent – whether in circumstances where the respondent did not appear on the application for default judgment and the applicant was in any event relying on evidence that was capable of supporting the facts on which it relied for the claim for declarations the applicant made it was open to the Court to proceed to hear the application under r 13.03C(1)(e) of the FCC Rules – it was open to the Court to so proceed – application heard and relief granted. Legislation: Federal Circuit Court of Australia Act 1999 (Cth) s 16
Federal Circuit Court Rules 2001 (Cth) rr 13.03A, 13.03B(2), 13.03C, 16.01
Personal Property Securities Act 2009 (Cth) ss 12, 123
Cases cited: BMW Australia Finance Limited v Rodrigues [2021] FCCA 1393 Number of paragraphs: 15 Date of hearing: 28 July 2021 Place: Sydney Solicitor for the Applicant: Mr N Angelakis of Mills Oakley Lawyers, by telephone 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:
28 JULY 2021
THE COURT DECLARES THAT:
1.The Applicant has a security interest in the 2003 Mercedes-Benz VIN No: WDB2304742F036715, Registration No: SL5500 (Vehicle), granted by the Respondent pursuant to the Loan Contract & Goods Mortgage between the Applicant and Respondent dated 18 September 2014 (Agreement), which has been perfected by registration on the Personal Property Securities Register, with registration number 201409250064657.
2.There has been an “Event of Default” under clause 12(a) of the Agreement by reason of the Respondent failing to make payments under the Agreement when due.
3.The Applicant was entitled to take possession of the Vehicle on 30 June 2021 pursuant to clause 13.3(a) of the Agreement and/or section 123 of the Personal Property Securities Act 2009 (Cth).
THE COURT ORDERS THAT:
4.There be judgment against the respondent in the sum of $28,469.25.
REASONS FOR JUDGMENT
(Revised from transcript)
On 23 June 2021 I published reasons for judgment in which I concluded that the applicant (BMW Finance) was entitled to gain entry to the premises referred to in those reasons for judgment for the purpose of repossessing a vehicle (Vehicle) which was claimed to be the subject of a mortgage.[1] On 24 June 2021, pursuant to those reasons, I made an order authorising BMW Finance, by its officers, employees, or agents, to enter the common property and car park situated at the premises referred to in that order for the purpose of taking possession of the Vehicle. I made other orders as well, including listing the matter for directions at 9:30 am on 14 July 2021.
[1] BMW Australia Finance Limited v Rodrigues [2021] FCCA 1393
The matter came before me on 14 July 2021. There was evidence before me on that day which I was satisfied established that the orders I had made, and the documents those orders required be served on the respondent, had been served on the respondent. I was also informed that, pursuant to the orders I had made, entry was gained to the property on which the Vehicle was located, and the Vehicle was repossessed. In light of that evidence I made an order discharging some of the undertakings that had been given as a condition to my having made the orders on 24 June 2021. The matter was then listed for the hearing of an application for default judgment; and that hearing was listed for today. The subject of these reasons for judgment, therefore, is BMW Finance’s application for default judgment. In addition I consider in these reasons an application that the respondent pay costs.
BMW Finance relies on written submissions which, in turn, identify the affidavits on which BMW Finance relies. I have read those affidavits. Particularly relevant to today’s hearing is the affidavit of Mr Angelakis affirmed 22 July 2021. In that affidavit Mr Angelakis deposes to two broad subjects. The first is service of the orders I made on 14 July 2021. I am satisfied on the basis of that affidavit that the orders made on 14 July 2021 were served in the manner required by those orders. That is significant because there has been no appearance today by the respondent. That is consistent with the previous three occasions on which this matter was before me. I am satisfied that, even though the respondent has not appeared, he has had notice of today’s hearing.
The second subject dealt with by Mr Angelakis in his affidavit is costs. Mr Angelakis’ affidavit annexes invoices issued by BMW Finance’s lawyers to prove the costs that BMW Finance has incurred in these proceedings.
I then turn to the application for default judgment. First, I refer to the orders that are sought. The orders go no further than the seeking of declarations, and the declarations are those set out in a draft form of order that has been provided to the Court. The application is said to be made pursuant to r 13.03B(2)(d) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules). That rule provides that if “a respondent is in default, the Court may . . . give judgment or make any other order against the respondent”. The reference in that rule to a respondent “in default” is a reference to r 13.03A of the FCC Rules and, in particular r 13.03A(2). That subrule specifies when a respondent is in default; and it requires two conditions. One is that the respondent “has not satisfied the applicant’s claim”. That is provided for in r 13.03A(2)(a) of the FCC Rules. The second thing that is required is that the respondent has failed to do any one or more of the things identified in r 13.03A(2)(b) of the FCC Rules.
There is no question here that the respondent is in default for failing, at the very least, to give an address for service and also failing to defend the proceeding with due diligence. A potential difficulty, however, arises in relation to the first requirement, namely, whether the respondent “has not satisfied the applicant’s claim”. It is not apparent that a claim for declaratory relief is a claim that is capable of being satisfied by a respondent, and I am not satisfied that it is. For that reason I am not satisfied that r 13.03A(2)(a) of the FCC Rules is met and that, in the circumstances of this case, it is appropriate for there to be default judgment.
That, however, is not the end of the matter. As I have noted, the respondent has been notified of today's hearing and he has not appeared. That circumstance engages r 13.03C of the FCC Rules, and, in particular r 13.03C(1)(e) which provides:
If a party to a proceeding is absent from a hearing … the Court … may do … the following:
. . . .
(e) proceed with the hearing generally or in relation to any claim for relief in the proceeding.
In support of the application for default judgment BMW Finance has read material that would have been read in any event if there were a hearing of the matter. In those circumstances I find that it is open to me to proceed, not by way of default judgment, but by way of hearing the matter generally. That task has been simplified to a great extent because of the reasons for judgment I published on 23 June 2021. In those reasons I identified in some detail the evidence, and the claims based on the evidence, BMW Finance makes. Of particular relevance is paragraph 38 of the earlier reasons. I there concluded I was satisfied that the evidence, if not contradicted or explained away by other evidence, renders more probable than not the following facts and matters:
(a)The respondent entered into the mortgage in question as a consequence of which he granted to BMW Finance a “security interest” in the Vehicle within the meaning of s 12 of the Personal Property Securities Act 2009 (Cth).
(b)By around June 2016 the respondent defaulted under that mortgage, as a consequence of which BMW Finance acquired the right to take possession or to seize the Vehicle.
(c)By letter dated 16 March 2017 BMW Finance notified the respondent that he had defaulted in the payment of instalments totalling $15,965, and demanded that the respondent remedy that default by paying to it $16,492.28, being the sum of the arrears, interest, and dishonour fees.
(d)The respondent has not remedied the default, with the consequence that BMW Finance was entitled to take action to recover possession of the Vehicle.
(e)BMW Finance had taken extensive steps to contact the respondent and to locate the Vehicle for the purpose of taking possession of it. The respondent had not responded, however, to BMW Finance’s attempts to contact him and he has, instead, changed his address without informing BMW Finance, permitted the registration of the Vehicle in question to lapse, and had taken steps to move the Vehicle to a particular location without informing BMW Finance.
(f)The matters in (e) manifested a recognition by the respondent that he does not have any ground for resisting BMW Finance’s claim to take possession of or seize the Vehicle, but he had, instead, taken steps to frustrate BMW Finance’s attempts to exercise its right to take possession of, or seize, the Vehicle.
There has been no evidence filed by the respondent to contradict or explain away any of the evidence. In those circumstances I find as fact the matters which in my earlier reasons I found were probable. That then leads me to what relief should be granted; and in particular, whether I should grant the declarations sought by BMW Finance. BMW Finance seeks three declarations, and these are as follows:
(a)the Applicant has a security interest in the 2003 Mercedes-Benz VIN No: WDB2304742F036715, Registration No: SL5500 (Vehicle), granted by the Respondent pursuant to the Loan Contract & Goods Mortgage between the Applicant and Respondent dated 18 September 2014 (Agreement), which has been perfected by registration on the Personal Property Securities Register, with registration number 201409250064657;
(b)there has been an “Event of Default” under clause 12(a) of the Agreement by reason of the Respondent failing to make payments under the Agreement when due; and
(c)the Applicant is entitled to possession of the Vehicle pursuant to clause 13.3(a) of the Agreement and/or section 123 of the Personal Property Securities Act 2009 (Cth).
In BMW Finance’s written submissions, there is reference to authority dealing with the granting of declarations in applications for default judgment. Those submissions are not relevant to the extent that I am not proceeding on the basis of their being an application for default judgment. Those submissions, however, are relevant to the extent that, at the very least, before a court can grant a declaration there must be some utility in its doing so.
There is no question this Court has power to make binding declarations of right, whether or not any consequential relief is or could be claimed. That power is conferred by s 16 of the Federal Circuit Court of Australia Act 1999 (Cth). In my opinion there would be utility in making the declarations sought, subject to some minor variations to which I will return in a moment. The utility would be this: the declarations would record in a succinct form and, for that reason, convey to the public, that, in taking possession of the Vehicle, BMW Finance acted lawfully and in exercise of rights it had to take possession of the Vehicle for the purpose of realising its security interest in that Vehicle. The minor variation I would make to the declarations is in relation to the third of the declarations, and the variation will be to alter it to speak in the past tense so that it reads that BMW Finance was entitled to take possession of the vehicle pursuant to cl 13.3(a) of the terms of conditions that form part of the mortgage the respondent granted over the Vehicle. That would more clearly reflect what has occurred in this proceeding.
I then turn to the question of costs. In the amended application BMW Finance claims that the respondent pay costs. What BMW Finance in fact seeks is an order that the respondent pay not only the legal costs BMW Finance has incurred in connection with this proceeding, but also costs it has incurred in seeking to locate and take possession of the Vehicle. BMW Finance relies on material that is in evidence and, in particular, cl 10.3 of the terms of conditions that form part of the mortgage the respondent granted over the Vehicle. The effect of that clause is accurately stated in paragraph 5(f) of the affidavit of Mr Later made on 23 April 2021, and that is that the respondent must pay all costs incurred by BMW Finance enforcing its rights under the mortgage.
Mr Angelakis identified a potential difficulty in that the application in claiming costs does not, in terms, claim costs pursuant to cl 10.3 of the mortgage. He submitted that that is not fatal to BMW Finance seeking costs pursuant to cl 10.3 of the mortgage because that claim for relief ought to be construed in light of all the evidence BMW Finance has filed, including paragraph 5(f) of the affidavit of Mr Later and, of course, the terms and conditions of the mortgage which are in evidence as well.
I agree that the amended application’s not claiming costs pursuant to cl 10.3 is not fatal. The basis, however, on which I would hold it is not fatal is not so much because the claim for costs ought to be construed in the manner Mr Angelakis says it should be construed. It is not fatal because of the general power this Court has under r 16.01 of the FCC Rules to give any judgment or make any order, even if such claim is not made in the originating process. In other words, that BMW Finance has not, in terms, claimed costs pursuant to cl 10.3 of the mortgage is not fatal because the Court has power under r 16.01 of the FCC Rules to give judgment as if it were claimed.
There would be no prejudice to the respondent because it is plain, at least from Mr Later’s affidavit of 23 April 2021 and the material annexed to that and in his later affidavit, that BMW Finance is seeking those costs pursuant to cl 10.3 of the mortgage. Those costs mostly consist of the legal costs BMW Finance has incurred. The additional non-legal costs are the costs BMW Finance has incurred in connection with engaging agents to locate and seek recovery of the Vehicle. I am therefore satisfied that BMW Finance is entitled to claim costs pursuant to cl 10.3 of the mortgage, and I am satisfied that those costs are the amount claimed by BMW Finance, namely, $28,469.25. The form of order, however, should not be that the respondent pay BMW Finance's costs. Rather, the order should be judgment in the amount of those costs, because the source of that liability is not a power in the Court to award costs, but in contract.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 10 August 2021
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