Charlton v CNH Capital Australia Pty Ltd

[2013] NSWSC 1632

Supreme Court

New South Wales

Medium Neutral Citation:

Charlton v CNH Capital Australia Pty Ltd [2013] NSWSC 1632

Hearing dates:

29/10/2013

Decision date:

29 October 2013

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1) Order that the plaintiff is to file and serve any amended Summons, and all affidavits in support, on or before 4pm 18 November 2013.

(2) Order that the defendant is to file and serve all affidavits in reply by 4pm 29 November 2013.

(3) Stand proceedings over for directions before Garling J to 9.30am on 2 December 2013 for determination of a future hearing date.

(4) Direct that pursuant to r 7.36 of the Uniform Civil Procedure Rules, the plaintiff is to be referred to a Registrar for referral to a barrister on the pro bono panel for legal assistance by way of advice about, and representation in, the conduct of these proceedings.

(5) Direct that the solicitor for the defendant is to give notice in writing to the Chief Executive Officer of the NSW Rural Assistance Authority of these proceedings and the fact that they are listed for further directions at 9.30am on 2 December 2013 and to indicate in that letter that the Court would be assisted by any submission the Authority may make on the legal issues in the proceedings which arise on the arguments of each party.

(6) Reserve all questions of costs.

(7) Liberty to apply for further directions on 24 hours' notice.

Catchwords:

REAL PROPERTY - mortgages - loan secured by farm property - Farm Debt Mediation Act - whether enforcement action taken by mortgagee void by reason of failure to comply with legislation - whether construction of legislation provides for alternate satisfaction of statutory requirements. APPEAL - Local Court - default of loan - application to set aside judgment - question of fact and law. PROCEDURE - whether current Summons should be resubmitted - whether plaintiff should have opportunity to apply for pro bono legal assistance.

Legislation Cited:

Farm Debt Mediation Act 1994
Local Court Act 2007
Supreme Court Act 1970

Cases Cited:

Waller v Hargraves Investments Limited (2012) 245 CLR 311

Category:

Consequential orders

Parties:

Josephine Charlton (P)
CNH Capital Australia Pty Ltd (D)

Representation:

Counsel:
In person (P)
A Spencer (D)
Solicitors:
Bayside Solicitors (D)

File Number(s):

2013/211888

EX TEMPORE Judgment

1. On 8 November 2012 the Local Court at Parramatta, for the reasons which were then delivered, ordered that there be judgment entered against Josephine Charlton for the sum of $38,326.89 plus court costs and interest. As well Ms Charlton was ordered to pay the professional costs of the plaintiff in those proceedings, CNH Capital Australia Pty Ltd.

1. Bankruptcy proceedings in the Federal Circuit Court were commenced by the creditor against Ms Charlton by the service of a Bankruptcy Notice some time in January 2013.

1. On 11 July 2013, Ms Charlton filed a Summons in this Court as plaintiff against the creditor CNH Capital Australia Pty Ltd. The Summons consists of a range of documentation commonly provided in accordance with the Rules of Court for an application for Leave to Appeal under s 101 of the Supreme Court Act 1970 to the Court of Appeal, has come on for hearing before me today.

1. Ms Charlton appears for herself as she has done throughout the whole of the proceedings. In the course of the hearing today it has become apparent that, whilst Ms Charlton submits that there was an error of law in the judgment of the Local Court, which error is constituted by a finding which made her personally liable for debts which she says were properly incurred by a trust of which she was then the trustee, she really seeks to agitate a number of more complex and difficult questions.

Issues of Substance

1. Those questions include whether the Farm Debt Mediation Act 1994 ("the Act") applied to the claim being made by CNH Capital Australia Pty Ltd against Ms Charlton in the Local Court; whether there had been, as a matter of fact, any compliance with the Act by the company; and whether the construction of the Act has the effect that there are parallel routes by which a creditor may satisfy its obligation under the Act, namely, by proceeding to deliver a notice under s 8 of the Act or, alternatively, by obtaining a certificate issued under s 11 of the Act the NSW Rural Assistance Authority.

1. It is clear that Ms Charlton seeks to agitate that, as a matter of fact, no Notice under s 8 was served upon her and, secondly, that no s 11 Certificate was obtained and that, accordingly, particularly having regard to the High Court of Australia's statements of principle in Waller v Hargraves Investments Limited (2012) 245 CLR 311, the proceedings in the Local Court were, under the Act, enforcement proceedings which were barred by s 6 of the Act.

1. On the other hand, the creditor seeks to argue that as a matter of fact it has complied with s 8(1) of the Act by the service of a relevant notice and, secondly, that provided it has complied with s 8 of the Act, it is entitled to commence enforcement proceedings without regard to the procedure described in s 11 of the Act.

1. Counsel for the creditor and the Court's own researches have not to date identified any specific decision of this Court or of the Court of Appeal, which deals with this issue of the proper interpretation of the Act. It seems to me that this issue is one of substance and of general importance. It is not easy of resolution.

1. Indeed, the factual question as to whether there has been compliance with s 8 of the Act is not itself easy of resolution. On the one hand, Ms Charlton asserts by production of the originals and copies of the documents which she received, that the bundle of documents she received included no notice under s 8 of the Act. On the other hand, so it appears from material filed in the Federal Circuit Court of Australia, the Retail Collections Officer of the creditor will say that such a notice was generated by her with respect to each contract and that she placed all of the documents generated, including the s 8 notice, into separate envelopes and hand-addressed them to Ms Charlton. She says that in the ordinary course of business those envelopes would be despatched through the creditor's mailing system to the applicant.

1. A very brief perusal of the documents annexed to the Retail Collections Officer's affidavit, and those provided by Ms Charlton, raises a question as to whether they are in fact the same documents or not. This is a question which will need to be determined. It is not without substance.

Late Application

1. A fundamental issue before this Court is that, although judgment in the Local Court was entered in November 2012, no proceedings were filed in this Court until 11 July 2013. Ms Charlton advances the following explanation for that delay from the Bar table, not in any affidavit and, accordingly, it is not able to be tested by counsel for the creditor, should the creditor wish to do so. Ms Charlton says that the reason for the lengthy delay is that throughout the entire process she has not been legally represented. She says, and the Court can readily accept, that a person in her position with work and family obligations, including raising three young children, understandably reacts emotionally and without any detachment to the issues which are raised. She says that as a consequence of that she did not see things throughout the process in the Local Court as clearly as they now appear to her to be.

1. Secondly, Ms Charlton says that in the course of that Local Court process at a call-over in front of a Registrar, a lawyer representing the creditor told the Court that the creditor had complied with such obligations as fell upon it under the Act. She says she accepted and relied upon that statement and, accordingly, because of her general lack of familiarity with the Act and the process which underpins it, she did not raise as an issue in the proceedings before the Local Court any failure to comply with that Act. However, she says that once enforcement action began in the bankruptcy jurisdiction she became aware in March 2013, to a far greater extent than she was at the time of the Local Court proceedings, of the Act and the process necessary to be engaged in by a creditor before enforcement action can be commenced and continued with.

1. Further, she says that until receipt of an affidavit of Ms Leesa Kearney, filed in the Federal Circuit Court of Australia on 19 June 2013, and served on her at or about that time or shortly afterwards, she had never seen a notice under s 8 of the Act and had never had cause to consider whether any such notice ought to have been served and whether it was in fact served and, accordingly, she says that it was shortly after receiving those documents she then commenced these proceedings.

1. I have outlined all of this, not to indicate that I accept or reject any of these matters because they clearly have not been tested, having been only advanced from the bar table by way of explanation. I do so to indicate that this is a matter which requires further directions and further attention to the appropriate practice and procedure in this Court, and requires careful attention by all parties to the underlying issue of substance about the factual and legal application of the Act. Also, I do so because I have determined that it is in the interests of justice and in the interests of ensuring the just, quick and cheap determination of the real issues in the dispute that this matter should be adjourned, directions should be given for the further conduct of the matter and the matter brought back before the Court, in as reasonable a time as is possible, to enable a hearing to be conducted as quickly as is possible. Whether or not it is possible to do that before the end of term, I do not yet know, but it seems to me that I should at least make directions, the aim of which is to ensure that there can be a hearing in as short a time as is possible consistent with the interests of justice.

1. As well, given the nature of the issues which arise under the Act, it seems to me that it would be appropriate if notice of the proceedings is given to the Chief Executive Officer of the NSW Rural Assistance Authority ("the Authority") because the Authority may wish to seek leave to intervene to put arguments as to the construction of the Act, which would assist the Court in the determination of a question which, at least as I see it today, involves some difficult questions of statutory construction. Whether the Authority does seek to intervene and whether the parties oppose or consent to that intervention will be matters that can be left to be decided in due course.

1. Finally, the nature of the issues both of fact and of law compel me to conclude that it is in the interests of justice that the plaintiff ought be referred to a Registrar for pro bono panel legal assistance and I propose to make such referral.

1. It should also be said that because the Summons sought relief under s 101 of the Supreme Court Act 1970, which is clearly an inappropriate section, the Summons needs to be put into correct form and the appropriate orders sought so that the defendant creditor has a proper opportunity of putting all arguments that it wishes to before the Court. In that respect, any amended Summons will need to indicate whether the appeal is brought pursuant to s 39 or s 40 of the Local Court Act 2007, and whether there is any reliance, and I don't suggest there need be, on s 69 of the Supreme Court Act, 1970. The amended Summons needs to specify with particularity such order as is sought with respect to an extension of time and such order as is sought with respect to the adducing of further evidence at the hearing of any appeal if that is the course which the plaintiff ultimately chooses to follow.

1. For the moment I think it is adequate if I give the following directions in the context of there being a limited period of time within which this case can be resolved before the end of term:

(1)   I order that the plaintiff is to file and serve any amended Summons, and all affidavits in support, on or before 4pm 18 November 2013.

(2)   I order that the defendant is to file and serve all affidavits in reply by 4pm 29 November 2013.

(3)   I stand proceedings over for directions before Garling J to 9.30am on 2 December 2013 for determination of a future hearing date.

(4) I direct that pursuant to r 7.36 of the Uniform Civil Procedure Rules, the plaintiff is to be referred to a Registrar for referral to a barrister on the pro bono panel for legal assistance by way of advice about, and representation in, the conduct of these proceedings.

(5)   I direct that the solicitor for the defendant is to give notice in writing to the Chief Executive Officer of the NSW Rural Assistance Authority of these proceedings and the fact that they are listed for further directions at 9.30am on 2 December 2013 and to indicate in that letter that the Court would be assisted by any submission the Authority may make on the legal issues in the proceedings which arise on the arguments of each party.

(6)   I reserve all questions of costs.

(7)   Liberty to apply for further directions on 24 hours' notice.

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Decision last updated: 10 March 2014