BMW Australia Finance Ltd v Singh
[2024] VCC 302
•15 March 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BANKING AND FINANCE LIST
Case No. CI-23-03926
| BMW AUSTRALIA FINANCE LTD (ABN 78007101715) trading as BMW FINANCIAL SERVICES | Plaintiff |
| v | |
| ANIL KUMAR SINGH | Defendant |
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JUDGE: | HIS HONOUR JUDGE WISE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 March 2024 | |
DATE OF RULING: | 15 March 2024 | |
CASE MAY BE CITED AS: | BMW Australia Finance Ltd v Singh | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 302 | |
RULING
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Subject:CIVIL PROCEDURE
Catchwords: Defendant’s application to set aside judgment entered in default of appearance – where parties entered into finance contract and chattel mortgage with respect to motor vehicle – plaintiff entered default judgment against defendant for repossession of vehicle and debt amount – defendant alleges vehicle was repossessed by plaintiff and judgment amount is excessive – plaintiff opposed the application – principles of Kostokanellis v Allen and Lubura v Nezirevic in considering an application to set aside default judgment – where defendant’s evidence of allegation of repossession of vehicle is second-hand hearsay and no other evidence supporting defence – plaintiff denies allegation of repossession of vehicle – whether there is a defence on the merits – whether defence has real not fanciful prospects of success – Court not satisfied that defendant discharged onus of establishing a defence on the merits – application dismissed
Legislation Cited: Civil Procedure Act 2010 (Vic); County Court Civil Procedure Rules 2018 (Vic)
Cases Cited:Evans v Bartlam [1937] AC 473; Kostokanellis v Allen [1974] VR 596; Lubura v Nezirevic (2013) 42 VR 43
Ruling:For the plaintiff
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms H Warren (solicitor) | Law Squared |
| For the Defendant | Mr I G Hone (solicitor) | Hone Legal & Conveyancing |
HIS HONOUR:
1This is an application by the defendant to set aside a judgment entered in default of appearance on 24 August 2023. The application was first provided to the Court and served on the plaintiff on or about 18 or 19 December 2023. For reasons that are not entirely apparent to me, the summons was not formally filed until 8 March 2024, but the parties have proceeded as though that application has been on foot since 18 or 19 December 2023.
2The proceeding concerns a claim by the plaintiff (BMW) against the defendant (Mr Singh) in respect of a motor vehicle that was subject to a finance contract and a chattel mortgage. Mr Singh fell into arrears quite some time ago, and ultimately BMW commenced this proceeding seeking repossession of the vehicle itself or otherwise an amount representing the amount owed on the finance contract.
3Mr Singh has put on one affidavit, sworn 19 December 2023, in support of his application. In the affidavit he concedes that the judgment was regularly entered.[1] Mr Hone, his solicitor appearing today, has sought to slightly resile from that position. His position today is that if the primary defence that Mr Singh seeks to agitate is found by me to have sufficient prospects of success so as to set aside the judgment, then under those circumstances, the amount for which the judgment was entered is excessive. The argument is that in such event, the judgment will not have taken into account the value of the vehicle which the defendant says was repossessed by BMW. It seems to me that that position is correct if, and only if, he is able to persuade me that there is a sufficient prospect of success in his primary argument that there is a triable issue that the vehicle was repossessed by BMW.
[1] Affidavit of Anil Kumar Singh sworn 19 December 2023, at [4].
4The principles to be applied on an application to set aside a judgment entered in default are well known and not in dispute. The application is made pursuant to Order 21.07 of the County Court Civil Procedure Rules 2018 (Vic). Where the judgment is regularly entered – and for present purposes, I am going to proceed upon the basis that it was regularly entered – the applicant must show grounds why the Court’s discretion should be exercised in the defendant’s favour: Kostokanellis v Allen.[2]
[2][1974] VR 596 at 603-605.
5In Lubura v Nezirevic,[3] Warren CJ described the test for setting aside a default judgment as follows:
“The test for setting aside a default judgment is set out in Kostakanellis v Allen where the Full Court held that a court should assess:
•Whether there is a defence on the merits;
•The reasons for the default;
•Whether the application to set aside the judgement was made promptly after the judgment came to the knowledge of the first defendant; and
•Whether, if the judgment is set aside, a suitable award of costs and the giving of security would be adequate to cover the prejudice to the plaintiff in having the judgment set aside.”
[3](2013) 42 VR 43 at [3].
6I note that this test is not all that different from the test for summary judgment under s63 of the Civil Procedure Act 2010 (Vic): whether there is a real prospect of success.
7Of these considerations, the primary consideration is whether the defendant has merits to which the court should pay heed. If merits are shown the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication: Lord Wright in Evans v Bartlam [1937] AC 473 at 489, applied in Kostokanellis v Allen [1974] VR 596 and Lubura v Nezirevic [2013] VSCA 215 at [4].
8I also note that this is the defendant’s application. The material filed with the Court must disclose particulars of the relevant sections of the defence and the material facts that the defendant relies on in his defence. The defendant must meet the onus of proof that the applicant bears in such applications.
9The principal defence that Mr Singh seeks to agitate in defence of the claim is that the vehicle itself was repossessed by BMW, and he says that the value of the vehicle repossessed has not been brought into account in calculating the money judgment entered. At paragraph 7 of his affidavit, Mr Singh deposes as follows:
“In or about August 2021 I arranged with Ash [his son] to place the said vehicle with a motor dealer Young Timers Garage Pty Ltd on consignment sale. I am informed both by Ash and by staff at Young Timers Garage Pty Ltd that on or about 7 March 2022 staff at Young Timers Garage Pty Ltd telephoned Ash and advised him that a person purporting to be repossession agents acting on behalf of the Plaintiff was in attendance at the premises of Young Timers Garage Pty Ltd seeking to repossess the said vehicle and that Ash said to check they were duly authorised to repossess the vehicle on behalf of the Plaintiff and if they were to let them do so. I am informed by both Ash and staff at Young Timers Garage Pty Ltd that such staff later telephoned Ash to confirm they had checked the paperwork for the repossession, that it appeared in order and that they had accordingly let the person take the car. I am further informed by staff at Young Timers Garage Pty Ltd that they did not retain copies of the repossession paperwork produced to them or other details of the person who collected the said vehicle.”
10That is the substantial evidence put forward about the purported repossession. I will return to whether this evidence is sufficient in and of itself to make good, on information and belief, the proposition that there is an arguable case that the car was repossessed by BMW.
11As against this, BMW has filed two affidavits upon which it relies: an affidavit of Shama Akbar of 12 March 2024 and an affidavit of its solicitor Hayley Warren of 12 March 2024. In short, BMW denies that it or any agent on its behalf repossessed the vehicle. Through these affidavits BMW has introduced evidence from its books and records to the effect that no such repossession occurred.
12So the question before me is whether Mr Singh has put on sufficient evidence to enable me to conclude that he has some real, and not fanciful, prospects of success in establishing that BMW or its agents did in fact repossess the vehicle.
13It is my view that no admissible evidence of the purported repossession has been put on by Mr Singh. At best, the evidence is second-hand hearsay which is unsupported by any contemporaneous documents. By that I mean Mr Singh deposes that his son Ash had a conversation with some unnamed person at Young Timers Garage Pty Ltd (Young Timers Garage) who told Ash certain things. This is not first-hand hearsay. This is second-hand hearsay. It is not admissible evidence to establish the fact for which it is put forward: that is, that a repossession of the vehicle by BMW or its agents occurred at the premises of Young Timers Garage. It is also not admissible evidence of the documents that were allegedly produced to, but not retained by, some unnamed person at Young Timers Garage relating to the repossession of the vehicle.
14I note that no affidavit has been put on by Mr Singh’s son, Ash. I note that no affidavit has been put on from anyone at Young Timers Garage. I note that no identification of the relevant person from Young Timers Garage has been made in relation to the information purportedly given to Ash. I note that no documents in support of the alleged repossession have been produced by Mr Singh and that he has not even produced any documents to support the proposition that the BMW was ever given to Young Timers Garage for sale. I note that these events occurred way back in August 2021, when Mr Singh says that the vehicle was placed with Young Timers Garage on consignment sale.
15It is unrealistic to expect this Court to accept the unsupported assertion of Mr Singh, without any documents, under circumstances when this affidavit was prepared with the assistance of a solicitor in December 2023 and was filed by his solicitor. Indeed, Mr Singh has had the opportunity to put on further affidavits upon which he wished to rely prior to the hearing of this application commencing.[4] He did not take that opportunity and, apparently, was content to rest his evidence on this basis. In the end, it seems to me that rather than providing evidence to satisfy the relatively low burden on Mr Singh in respect of this alleged defence, all he has done is make an unsupported allegation through his affidavit that the alleged events occurred.
[4] Pursuant to section I.2 from the Commercial Division Omnibus Practice Note PNCO 2-2022.
16Having regard to the unsupported nature of the allegation made, and putting that against the documentary evidence and affidavits provided by the BMW, in my view, Mr Singh has failed to discharged the fairly slight onus he had to establish that the purported defence he wishes to agitate has anything other than fanciful prospects of success.[5]
[5]I also note that in his affidavit and written submissions, Mr Singh alleged that even if this defence was not sufficient to enjoy prospects of success, the fact that he might have a third party claim against Young Timers Garage is a reason why the default judgment should be set aside. In oral submissions, Mr Hone did not press this position, correctly in my view. If Mr Singh does have a claim against Young Timers Garage, he can pursue that claim in a separate proceeding. It does not provide a basis to set aside the judgment against BMW, which is independent of that matter.
17Having regard to that finding, it is unnecessary for me to consider the other matters that fall to be considered on applications of this nature. Nevertheless, I must say that had he discharged his onus in respect of the defence on the merits, I consider that the other considerations would not have prevented the default judgment being set aside, albeit on appropriate terms as to costs and security.
18I wish to deal with two other matters raised by Mr Hone.
19First, Mr Hone submitted that on an application such as this, where evidence is given as to a defence upon information and belief, the Court should accept the facts deposed to at their highest, and that should be sufficient to satisfy the requirement that Mr Singh has a real, rather than fanciful, prospect of success. I reject that submission. On an application such as this, the applicant has the onus from first to last. The Court’s task is to consider all of the evidence filed by both Mr Singh and BMW when assessing the question of whether Mr Singh has satisfied his onus of demonstrating that he has a real prospect of succeeding on that defence. Taking into account all of those matters, as I have indicated, I do not accept that Mr Singh has established to the requisite standard that he has a real prospect of success on the merits.
20Secondly, Mr Hone submitted that if it be the case that he were able to persuade me that Mr Singh did have real prospects of success on the merits, that would lead to this judgment having been entered for an excessive amount and therefore that the judgment was entered irregularly. As it happens, he has not persuaded me as to the first matter, and therefore I do not need to decide the question of whether under those circumstances the judgment was entered irregularly.
21For all those reasons, I intend to dismiss the defendant’s application and order that he pay the plaintiff’s costs of the application.
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