Draper and Registrar of Personal Property Securities

[2017] AATA 817

Draper and Registrar of Personal Property Securities [2017] AATA 817 (31 May 2017)

Division:TAXATION & COMMERCIAL DIVISION

File Number:           2016/0673

Re:Keith Draper

APPLICANT

AndRegistrar of Personal Property Securities

RESPONDENT

AndAustralia and New Zealand Banking Group Limited

OTHER PARTY

DECISION

Tribunal:Deputy President K Bean

Date:31 May 2017

Place:Adelaide

The decision under review is affirmed.

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Deputy President K Bean

CATCHWORDS

PERSONAL PROPERTY SECURITIES – Amendment demand given seeking removal of registration from Personal Property Securities Register – Delegate of Registrar refused to register a financing change statement amending registration – Whether reasonable grounds to suspect amendment sought not authorised – Collateral continues to secure debt owed by the applicant – Amendment sought not authorised – Decision under review affirmed.

LEGISLATION

Personal Properties Securities Act 2009, ss 178, 180, 181, Part 5.6

REASONS FOR DECISION

Deputy President K Bean

31 May 2017

1. In January 2012, the applicant, Mr Draper (and his wife) took out a loan in order to enable them to purchase a car, a Holden Barina.  The loan was advanced by the other party to this application (ANZ), trading as “Esanda”.

2. Unfortunately, a dispute has subsequently arisen as to whether Mr and Mrs Draper continue to owe any amount under that loan, and whether the loan, which was secured against the car, should continue to appear on the Personal Property Securities Register (the Register).

3. In November 2015, Mr Draper made a request to the respondent to remove the registration from the Register.  However, the respondent’s delegate ultimately decided not to make that amendment to the Register.

4. Accordingly, on 10 February 2016, Mr Draper applied to this Tribunal for review of that decision. On 29 July 2016, the ANZ applied to be a party to the application, and on 2 September 2016 ANZ was made a party.

5. A hearing of the application took place on 17 February 2017 with the respondent being represented by Mr Michael Piotrowicz, and ANZ by Mr Thomas George.  Mr Draper elected not to participate in the hearing, and so it proceeded in his absence.

6. Before addressing the issues which arise from the application more directly, I will first explain the applicable statutory framework.

   THE STATUTORY FRAMEWORK

7. Part 5.6 of the Personal Property Securities Act 2009 (the Act) sets out an administrative process by which a person with any interest in collateral which is the subject of a registration can make an amendment demand of a secured party seeking an amendment to end a registration on the Register, including an amendment to remove the registration.  If the secured party does not comply with the amendment demand within five business days, the person may give an amendment statement to the Registrar stating the amendment demanded.  The Registrar is required to then issue an amendment notice to the secured party stating the amendment demanded and inviting a response within a certain timeframe.[1]

   [1]     Personal Property Securities Act 2009 s 180.

8. Section 178 specifies amendments which are authorised as follows:

   (1)A person with an interest (including a security interest) in collateral described in a registration with respect to a security interest may give a demand (an amendment demand), in writing, to the secured party for a financing change statement to be registered to amend the registration as authorised by the following table:

   Note:If the secured party does not comply with the amendment demand, the demand may be enforced under Subdivision A (administrative process) or Subdivision B (judicial process) of Division 2.

Authorised amendments
Item	When amendment is authorised	What amendment is authorised
1	No collateral described in the registration secures any obligation (including a payment) owed by a debtor to the secured party.	Amendment to end effective registration (including an amendment to remove the registration).
2	The particular collateral in which the person has an interest does not secure any obligation (including a payment) owed by a debtor to the secured party.	Amendment to omit the collateral.

(2)Data removed from the register because of an amendment in compliance with the amendment demand must not be made available for search in the register by reference to any time before (or after) the time of removal, if the Registrar so decides for the purposes of this subsection.

Note 1:Application may be made to the Administrative Appeals Tribunal for review of the Registrar’s decision that the removed data is not to be made available for search in the register (see section 191).

Note 2:Incorrectly removed data may be restored under section 186.

(3)A secured party must not require payment for compliance with an amendment demand in relation to collateral that:

(a)   at the time the security interest attached to the collateral, the grantor intended to use predominantly for personal, domestic or household purposes; or

(b)   the grantor is using predominantly for personal, domestic or household purposes.

1. Section 181 of the Act relevantly provides as follows:

   181  Administrative process—registration amendments

   (1)If an amendment notice is given to a secured party under section 180, after the end of the period covered by subsection (3), the Registrar must (at his or her initiative) register a financing change statement amending the registration (including an amendment to remove the registration) in accordance with the amendment demand, unless the Registrar suspects on reasonable grounds that the amendment is not authorised under section 178.

   (2)However, the Registrar may register such a financing change statement before the end of the period covered by subsection (3) if:

   (a)   the secured party has responded to the invitation in the amendment notice; and

   (b)   the Registrar has no reason to believe that the secured party intends to give a further response.

   (3)    The period covered by this subsection is:

   (a)   5 business days after the day the amendment notice is given to the secured party; or

   (b)   a longer period approved by the Registrar (in relation to the particular amendment demand, or to a class of amendment demands) after the amendment notice is given to the secured party.

2. It follows that the main issue for my determination is whether there are reasonable grounds to suspect that the amendment sought by Mr Draper is not authorised under s 178, pursuant to s 181(1). Such reasonable grounds would clearly include satisfaction on my part that the collateral described in the registration continues to secure an obligation owed by Mr and Mrs Draper to the secured party, ANZ.

   THE FACTUAL CONTEXT

3. The following findings of fact made by the delegate who made the decision under review are also supported by the evidence before me:

   In January 2012 the Secured Party (trading as Esanda) entered into a loan arrangement with the Applicant and Barbara Olive Draper (Mrs Draper) to facilitate their purchase of a new motor vehicle from a motor vehicle dealer.

   In this regard, a written agreement (Loan Agreement), which appears to have been signed by the Applicant and Mrs Draper as borrowers, has been provided to the Registrar. The contract is dated 18 January 2012, is numbered 553882349 and names the Secured Party trading as Esanda as Credit Provider and City Holden Rose Park as intermediary (Intermediary). It describes the vehicle being purchased (the “goods”) as a Silver Holden Barina TM Hatch, registration number S637ANK, VIN KL3TA48E9CB046110 (Collateral). The Loan Agreement also states:

   A mortgage is to be given over the goods to the Credit Provider. If a mortgage is NOT to be given over the goods, the Borrower(s) MUST indicate “no” and initial here… .”

   No indication that a mortgage is not to be taken or initials appear in the designated section of the Loan Agreement.

   On 23 January 2012 the Secured Party registered a mortgage on the SA vehicle Securities Register (SA REVS) regarding the Collateral.

   The registration on SA REVS against the Collateral was migrated to the PPSR as registration 201201250060267 (Earlier Registration) …

   …

   On 22 November 2015 the Applicant under cover of letter dated 17 November 2015 submitted an amendment statement to the Registrar seeking the removal of the Registration on the basis that no collateral described in the Registration secured any obligation (including a payment) owed by the debtor to the Secured Party. The Applicant asserted:

   -The signatures on the Loan Agreement were stuck on with tape

   -The Disputed Fees and Charges were fraudulent and accordingly had been refunded by the Secured Party

   -The Loan Agreement is an Esanda contract which means that the Secured Party cannot legally act upon the contract

   -The Secured Party was trying to get control of the Collateral without compensating him and Mrs Draper for their loss.

   …

   On 25 November 2015 the Registrar sent the Secured Party an amendment notice inviting it to amend the Registration or to respond in writing if it believed the amendment demand was not authorised.

   On 11 December 2015 the Secured Party responded to the amendment notice advising that it would not be removing its security interest in relation to the Collateral.[2]

   [2]     Exhibit 1, T1/011‑012, T1/013 and T1/015 (emphasis in original).

   DOCUMENTARY MATERIAL

4. The most relevant documents before me are the following:

   ·A copy of contract 553882349, being a loan contract relating to a total loan amount of $9,639, including an “origination fee” payable to the dealer of $700, and an establishment fee of $350.[3]  The contract gives a disclosure date of 18 January 2012, was faxed from City Holden on that date and also purports to have been signed by Mr and Mrs Draper on that date;

   [3]     Exhibit 1, T12/096‑098.

   ·A copy of the contract for the sale of the vehicle, reflecting a total amount of $19,580 based on a price for the vehicle of $17,158. The contract is dated 12 January 2012 and purports to have been signed by Mrs Draper on that day, with the purchaser nominated to be Mrs Draper;[4]

   [4]     Exhibit 3.

   ·A copy of a tax invoice issued to Mrs Draper on 18 January 2012, recording details of a trade‑in and a “changeover” amount of $16,580;[5] and

   ·A “Summary of Events” provided by Mr George based on the ANZ records in relation to “Esanda Contract No 553882349”.[6]  This records:

   -     On 12 March 2013, Mrs Draper called to request the payout figure;

   -     On 18 March 2013, the last customer payment was received (via direct debit);

   -On 22 March 2013, Mrs Draper requested that direct debits be suspended as she was intending to pay out the contract before the next payment due date.  She also requested that a copy of the original contract be sent to her;

   -On 4 April 2013, a fax was received from Mr and Mrs Draper asserting that the contract was a fraud as it showed excessive fees of $1,050;

   -On 16 April 2013, $1,050 was credited to the loan contract pursuant to an agreement entered into with Mr and Mrs Draper to resolve their complaint in relation to the fees;

   -On 11 February 2014, correspondence was received from Mr and Mrs Draper advising of a payment sent on 19 December 2013 for $6,960.81 to pay out the contract.  The relevant cheque was presented on 24 December 2013, but was dishonoured on 6 January 2014; and

   -On 28 March 2014, a recoveries demand was issued for $8,481.20.

   [5]     Exhibit 3.

   [6]     Exhibit 7.

   ORAL EVIDENCE

5. Mr George also gave oral evidence at the hearing, during which he indicated that Esanda is a division of ANZ, incorporated into the ANZ business.  Accordingly, the loan contract in this matter was with ANZ, trading as Esanda.[7]  With respect to the cheque Mr Draper referred to having sent to Esanda, he also confirmed that the cheque was dishonoured when ANZ sought to cash it.[8]

   [7]     Transcript, 17 February 2017, p 16.

   [8]     Transcript, 17 February 2017, p 20.

6. From the records he had access to, Mr George further indicated that 14 payments had been made on the loan from the start of the loan until the last payment on 18 March 2013.[9]  He further explained that Esanda/ANZ loans are rarely signed by Esanda/ANZ, as the terms and conditions of the loans generally specify that the agreement may be accepted by ANZ/Esanda by disbursing “all or any part of the loan”.[10]  He also explained that loans of this kind were generally secured by the vehicle, and that is what had occurred here.

   THE PARTIES’ CONTENTIONS

   [9]     Transcript, 17 February 2017, p 21.

   [10]    Transcript, 17 February 2017, p 22.

   The respondent’s position

7. In its Statement of Facts, Issues and Contentions, the respondent contended as follows:

   The Loan Contract stated the Applicant would repay a loan to the Other Party by making 84 monthly payments over a period that would end in January 2019.

   The second page of the Loan Contract … contained words that gave the Other Party a secured interest over the collateral until the loan was repaid.

   Aside from the Applicant’s assertions, there is no evidence of a forgery or fraud in the Loan Contract, and the Loan Contract appeared to be signed by the Applicant.[11]

   [11]    Respondent’s Statement of Issues, Facts and Contentions dated 3 November 2016, at [20.2]‑[20.4].

8. The respondent has also made the following submissions:

   The respondent contends the representations made in the Applicant’s letters, and his offers of payment, confirm the existence of an agreement under which the Other Party loaned funds to the Applicant in return for a security interest in the collateral. Furthermore, the Applicant, by his conduct, appears to have accepted the terms of the loan agreement. This conduct includes the making of 74 loan payments … in relation to the Collateral, a vehicle paid for with borrowed money provided by the other party, that the Applicant enjoyed the benefits of at all relevant times.

   …

   The Respondent contends the Applicant has not disputed that he made an agreement with the Other Party, or that he made payments to the Other Party under an agreement.

   …

   The respondent contends that if there were problems in arranging formal execution of the agreement between the Applicant and the Other Party, as a written contract … there does not appear to be any argument that both parties were aware of forming an agreement about the collateral. The Applicant appears to have provided an amount to the Other Party at the outset of their agreement through the trade in of a vehicle … The Applicant also made subsequent efforts to finalise the agreement with the Other Party by sending a cheque …

   The Respondent considers it was open to find an agreement formed between the Applicant and Other Party and that the agreement continued for a period before the Applicant raised a dispute about the amount remaining to be paid. The Respondent observes the Loan Contract document … suggests an agreement commenced in January 2012, but also observes that the Applicant’s earliest communication raising a dispute appears to be a letter dated 31 March 2013 … The Respondent contends between January 2012 and March 2013, the Applicant made instalment payments to the Other Party under the agreement. The Respondent refers the Tribunal to a letter … where the Applicant states he made seventy four (74) such instalment payments.[12]

   [12]    Respondent’s Statement of Issues, Facts and Contentions, pp 8-9, 12.

9. I should also record the fact that Mr George did not seek to make any submissions on behalf of ANZ, and essentially adopted the submissions made by Mr Piotrowicz for the respondent.

   Mr Draper’s position

10. Mr Draper contends that the amendment he has sought is authorised for a number of reasons. These include his assertion that the contract for the provision of finance dated 18 January 2012 was fraudulent. He has asserted that the “forging consists of signatures stuck to a contract and other documents”,[13] and as “the signatures are forged and the contract has not been signed by either Esanda or ANZ Bank”, the contract is “not a legally binding contract and is therefore not valid”.[14] 

    [13]    Exhibit 1, T1/005.

    [14]    Exhibit 1, T1/006.

11. Mr Draper has further contended “[t]he fraud was committed by the dealer (City Holden SA) just to obtain $700 of commission”.[15]  He has also stated (in correspondence to an entity described as “Credit Wash”) “we signed all the contracts on the 12^th January 2012 prior to picking up the Holden Barina on the 18^th January 2012”,[16] and (in correspondence addressed to City Holden):

    we signed all the papers for the purchase of the car on 12^th January 2012 as our Deposit of $500 was given to you by cheque on that day.  We were not provided with a copy of the contract for the purchase of the car on the day of the signing of the car.

    …

    No authorization in writing was given to you to contract for a loan for the balance but only to enquire that we would be eligible for a loan and then we would make a loan application to Esanda as were (sic) good clients of the ANZ Bank. There was no written authorization for you to write a contract.[17]

    [15]    Exhibit 1, T5/038.

    [16]    Exhibit 2, Attachment 2, p 3.

    [17]    Exhibit 1, T8/062.

12. Mr Draper further states:

    We told City Motors Holden Rose Park Adelaide South Australia we would go to our bank to see if we could get a loan for the purchase of the car which was the ANZ Bank ...

    …

    The sales person … rang me on the Monday 9^th January 2012 to inform me that ESANDA would give me the loan and … that when I picked up the car on the 16th January 2012 … we would sign the loan agreement. This is why we were fraudulently induced to believe a contract that we signed on the 12^th January 2012 was valid and handed to ESANDA for operation and then we did not query it.[18]

    [18]    Exhibit 6, at [1]‑[2].

13. Mr Draper also states “there was a contract for the loan from ESANDA prior to the 18^th January 2012 it was signed on the 12^th January 2012 and that is where the signatures were cut from and stuck to the forged contract on the 18^th January 2012”.[19]

    [19] Exhibit 6, at [5].

14. With respect to the alleged fraud, Mr Draper has also stated:

    The dealer had a legal contract signed and all the monies received on the 12^th January 2012.

    They forged the dates on the receipts to try and imply a contract signed on the 18^th January 2012 (This contract is a forgery) at the same time because all monies and contracts were signed and they registered the car in my wife’s name on the 16^th January 2012.

    They tried to imply by their fraudulent receipts that a contract was signed on the 18^th January 2012 and that they could release the car as sold on the 16^th January 2012 for an amount of $500.00 and no signed contract.

    They then destroyed the original Legal Contract so they could claim an extra $1,010.00 which was subsequently adjusted on the forged contract but they didn’t adjust the contract with the interest wrongly charged and therefore continued on with a fraudulent contract.[20]

    [20]    Exhibit 9, p 4 at [1]‑[4].

15. I note that some of these contentions are difficult to follow and appear inconsistent with one another.  In at least one of his communications, Mr Draper has acknowledged attending the dealer on 18 January 2012 to collect the car.  This would be consistent with all of the documentation and with the dealer registering the car in Mrs Draper’s name on 16 January 2012 prior to handing it over to her on 18 January 2012 (once finance was in place, all monies had been received and all relevant documents signed).  In other communications, he asserts that all of the documents, including the loan contract, were signed on 12 January 2012, and the car was collected on 16 January 2012, the same date it was registered.  I note there is no contemporaneous documentary evidence to support that version of events, and it appears inconsistent with another of Mr Draper’s assertions, that on 12 January 2012 no authorisation for a loan was given, as Mr and Mrs Draper were intending to make their own enquiries about a loan.  

1. Crucially, however, Mr Draper does not dispute the existence of a legal contract with Esanda, pursuant to which he and his wife were obliged to repay the loan advanced.  In October 2015, Mr Draper acknowledged paying to Esanda “74 payments of $173.82 which amounts to $2,433.62” (I note this reference to 74 clearly should be 14).[21] 

   [21]    Exhibit 1, T5/039.

2. Mr Draper has also acknowledged the offer of $1,050.00 from ANZ “to resolve our complaint about the fees associated with the contract in full and final settlement”, which he and his wife accepted.[22]  In a document lodged with the Tribunal on 27 June 2016, Mr Draper stated:

   The contract that is invalid and fraudulent was rescinded by us on the 1‑4‑2013 which is approx 3 years ago and is before it was accepted by ESANDA.[23]

   [22]    Exhibit 1, T8/055.

   [23] Exhibit 2, at [5].

3. However, it is not clear to me that there is any basis upon which the loan agreement entered in to with Esanda could be regarded as invalid, or could lawfully be rescinded by Mr and Mrs Draper.

4. Mr Draper also stated in a letter to solicitors retained by Esanda:

   I sent a cheque to pay out the balance of the fraudulent contract on the 19^th December 2013. To date they have not cleared the cheque nor have they written to me to inform me as to why they haven’t done so, also they haven’t informed us of any amount that they have given to you to collect.[24]

   However I note from the evidence before me that when ANZ attempted to cash this cheque, it was dishonoured.

   [24]    Exhibit 1, T8/065.

5. Mr Draper has also said: “I’m not prepared to pay them anymore than the 6,960.81 which is a proper and accurate calculation of what was stated in their contract”,[25] and:

   When we wanted to pay out the contract we required a payout figure from ESANDA which they never gave in writing which they had to do under the Consumer Protection Act but gave us an amount $8,500 which then made us suspicious so we then asked for a copy of the contract and this is when we discovered the fraudulent changes and the stuck on forged signatures.[26]

   [25]    Exhibit 1, T8/065.

   [26] Exhibit 5, p 2 at [7].

6. In conjunction with ANZ’s records, this suggests that Mr and Mrs Draper first became concerned about the relevant contract being “forged” in approximately March 2013, more than 12 months after the relevant documents were signed.  Until that time, Mr and Mrs Draper accepted that there was a valid loan agreement, and made the required repayments.

7. Mr Draper has also contended that the contract was “an ESANDA Contract which means ANZ cannot legally act upon the contract”.[27]  However, I note Mr George’s evidence that Esanda is in fact a division of ANZ, and not a separate legal entity.

   [27]    Exhibit 1, T8/050.

   ANALYSIS

8. As I have already alluded to, what is striking about the evidence before me, and Mr Draper’s submissions, is that there appears to be no dispute that Esanda did loan funds to Mr and Mrs Draper to purchase the vehicle, and that that loan was secured against the vehicle.

9. Mr Draper has made various submissions about the loan documentation apparently signed on 18 January 2012.  He asserts that the contract which bears that date was forged, as he and his wife did not attend the Holden dealer on that day, and he would not have signed a contract containing the fees which are reflected in that contract.  He asserts that he and his wife did sign a loan contract earlier, on 12 January 2012, and the signatures from that document were fraudulently affixed to the 18 January 2012 contract, which contained additional fees and charges.

10. On that version of events, both the purchase and loan contracts were signed on the same day, 12 January 2012, and Mr and Mrs Draper returned to the dealer on the 16^th to collect the car, which was registered in Mrs Draper’s name on that day.  It is unclear how this is to be reconciled with Mr Draper’s reference in correspondence to having attended the dealer on 18 January 2012[28] and, as I have already noted, there is no corroborative evidence whatsoever with respect to this version of events.  It appears to have its origins in Mr and Mrs Draper’s examination of a copy of the original loan contract sent to them in March 2013, which contained additional fees and charges Mr Draper did not recall.  Because he did not recall those fees and charges, and did not believe he would have agreed to them, he has asserted that the contract was forged, and made the associated allegations.  However, all of the contemporaneous documentation is consistent with the purchase contract being signed on 12 January 2012, the car being registered in Mrs Draper’s name (by the dealer) on 16 January 2012, and the loan contract being signed on the 18^th, when the car was collected.  In these circumstances, the clear possibility arises that rather than the contract being forged, what has actually occurred is that Mr Draper either did not note the presence of the additional fees when he signed the loan contract, or had forgotten them by March 2013 when he again looked at the loan contract.

    [28]    Exhibit 3, p 3.

11. Doing the best I can on the evidence I have, and in the absence of any oral evidence from Mr Draper, I have reached the conclusion that it is more likely than not that the loan contract was signed on 18 January 2012, and the contract which bears that date has not been forged.

12. Critically however, even if that contract had been forged, or does not correctly reflect the agreement reached, Mr Draper does not dispute the existence of a loan agreement, pursuant to which Esanda advanced the balance of the purchase price of the vehicle.  Nor does he clearly dispute that this loan was secured against the vehicle, which I am satisfied it was.

13. As counsel for the respondent, Mr Piotrowicz, has pointed out, in order to support the registration, it is not necessary that the contract entered into by Mr and Mrs Draper was that purportedly signed on 18 January 2012, or even that the agreement was reduced to writing (although in this case I consider that there was a written agreement).  It is sufficient that an agreement was entered into, secured by the vehicle, and that the loan has not been fully discharged, or that there are reasonable grounds to suspect that the loan has not been fully discharged.

14. It is clear on the evidence, and not disputed by Mr Draper, that an agreement was entered into.  I am also satisfied on the evidence, including the oral evidence of Mr George, that the loan was secured by the vehicle.

15. As to whether the loan has been fully discharged, Mr Draper has made assertions to the effect that it has been, or that he is not required to pay the remaining balance.  However, on the evidence before me, no repayments have been made against the loan since March 2013, and as at March 2014, the amount owed was $8,481.20.

16. In addition to his assertion that the contract was forged, Mr Draper has at times put forward other reasons as to why he and his wife are not required to repay the loan, including that the loan contract was not signed, that it was with Esanda and not ANZ, or that the contract was otherwise not valid or that he and his wife had rescinded it.

17. As I have previously indicated, I am not persuaded that any of these purported justifications for not repaying the loan are valid.  Mr George has explained that Esanda is a part of ANZ, and that loan contract documents are not required to be signed by ANZ/Esanda.  Further, nothing put forward by Mr Draper supports his assertions that the loan agreement was invalid or that he or his wife were entitled to rescind it.  I am satisfied that there was a valid loan agreement entered into in January 2012, secured by the vehicle, that Mr and Mrs Draper have an ongoing legal obligation to repay the relevant loan, that they have failed to meet that obligation by making the agreed repayments, and they have not discharged the loan.

18. I therefore suspect on reasonable grounds that the amendment sought by Mr Draper is not authorised, and have accordingly concluded that I should affirm the decision under review.

    DECISION

19. The decision under review is affirmed.

I certify that the preceding 42 (forty-two) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean

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Associate

Dated: 31 May 2017

Date of hearing:	17 February 2017
Applicant:	No appearance
Solicitor for the Respondent:	Mr M Piotrowicz Registrar of Personal Property Securities
Representative for Other Party:	Mr T George ANZ