Esanda Finance Corporation Limited and Potter
[2007] WASAT 278
•22 OCTOBER 2007
| JURISDICTION | : | STATE ADMINISTRATIVE TRIBUNAL |
| STREAM | : | COMMERCIAL & CIVIL |
| ACT | : | STATE ADMINISTRATIVE TRIBUNAL ACT 2004 (WA) |
| CITATION | : | ESANDA FINANCE CORPORATION LIMITED and POTTER [2007] WASAT 278 |
| MEMBER | : | DR B DE VILLIERS (MEMBER) |
| HEARD | : | 27 SEPTEMBER 2007 |
| DELIVERED | : | 22 OCTOBER 2007 |
| FILE NO/S | : | CC 1287 of 2007 |
| BETWEEN | : | ESANDA FINANCE CORPORATION LIMITED Applicant |
| AND | ||
| TREVOR POTTER Respondent | ||
| Catchwords: |
Service - Interaction between the enabling statute and the SAT Act - How is service effected if a person has moved without leaving a forwarding address - What reasonable steps are required to effect personal service - Reasonable efforts to effect service - Dispensing of service
Legislation:
Consumer Credit (Western Australia) Code, s 95, s 171, s 172
State Administrative Tribunal Act 2004 (WA), s 5, s 33(1)(c), s 45, s 48
State Administrative Tribunal Rules 2004 (WA), r 26(3), r 31, r 36
[2007] WASAT 278
Result:
Order made
Category: B
Representation:
Counsel:
| Applicant | : | Ms KJ Shaw (Acting as Agent) |
| Respondent | : | No appearance |
Solicitors:
| Applicant | : | Insight Mercantile Pty Ltd |
| Respondent | : | No appearance |
Case(s) referred to in decision(s):
Nil
[2007] WASAT 278
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
1 Esanda Finance Corporation Limited brought an interlocutory
application for the Tribunal to order that personal service is deemed to have occurred when a copy of the application before the Tribunal was placed in the letterbox of the last known residential address of Mr Potter. Esanda explained the efforts that have been made to locate Mr Potter and his failure to make any payments since February 2007.
The Tribunal considered the options available for substituted service. satisfied that Esanda has taken all reasonable steps to bring the application to Mr Potter's attention.
3 The Tribunal found that, based on the facts of this matter, it is
4 An order was therefore made that personal service is deemed to have
been effected on the day when the application was left at the last known
residential address of Mr Potter.
Background
5 The State Administrative Tribunal (Tribunal) was requested by
Esanda Finance Corporation Limited (Esanda), in an interlocutory application, to make orders for substituted service or to dispense with personal service on grounds that Mr Potter had vacated his last known residential address without leaving a forwarding address where service could be effected on him in person. Esanda contended that it had made all reasonable efforts to locate Mr Potter and to serve the application on him.
6 Esanda contended that the Tribunal could make an order that service
is dispensed with or that substituted service had been effected when Esanda left a copy of the notice of the hearing at the last known address of the place of residence of Mr Potter. In the alternative, Esanda contended that service could be effected in a manner foreshadowed in the Consumer Credit (Western Australia) Code (Credit Code) by leaving the notice at the last known residential address of Mr Potter.
7 The requirement for personal service to be effected has already
resulted in a substantial delay of the matter being progressed to a hearing. Esanda has made extensive efforts to locate Mr Potter, but to no avail. It is therefore, according to Esanda, appropriate for the Tribunal to order that service has been effected and then to proceed with the application pursuant to s 48 of the State Administrative Tribunal 2004 (WA)
[2007] WASAT 278
(SAT Act) in the absence of Mr Potter since his actions are causing an
unnecessary disadvantage to Esanda.8 The application was lodged with the Tribunal on 9 August 2007 and,
despite several notices to the last known residential address of Mr Potter and the purported new address that had been given by his wife to Esanda's agent, he failed to make any submissions or to attend any of the directions hearings. All notices were returned to the Tribunal with envelopes marked as "Unknown address" and "Not at this address".
Summary of facts
The facts of relevance to the interlocutory proceeding are briefly as
follows:
10 Mr Potter entered into a financing agreement with Esanda on
3 January 2003 for purposes of financing the acquisition of a motor vehicle. Mr Potter fell into arrears in his repayments in February 2007. Since then he has not made any payments.
11 A default notice dated 9 March 2007 was mailed to Mr Potter at his
residential address, 382 Lesmurdie Road, Lesmurdie. Mr Potter has since then failed to make any payments, to deliver the vehicle, or to enter into refinancing negotiations with Esanda.
Mr Potter has since moved from 382 Lesmurdie Road, Lesmurdie without informing Esanda of his forwarding address or whereabouts.
13 The last known address of Mr Potter was believed to be
26 Stirling Crescent, Lesmurdie. This was in accordance to the address his wife gave to an agent of Esanda when he visited their house at 382 Lesmurdie Road, Lesmurdie in August 2007 in order to effect personal service of the default notice.
On enquiry conducted by Esanda, it appeared, however, that the address, 26 Stirling Crescent, Lesmurdie did not exist.
15 Esanda made an attempt to locate Mr Potter at 26 Stirling Road,
High Wycombe, since it is a neighbourhood close to Lesmurdie. An agent of Esanda visited 26 Stirling Road, High Wycombe on 23 August 2007 but was told by a female present that Mr Potter was not known to her.
16 A copy of the application before the Tribunal was therefore,
in accordance with the Credit Code, left in a sealed envelope by an agent
[2007] WASAT 278
of Esanda on 24 August 2007 at the last known address of Mr Potter,
being 382 Lesmurdie Road, Lesmurdie.17 The Tribunal sent notices of directions hearings in regard to this
matter to 26 Stirling Crescent, Lesmurdie and 26 Stirling Crescent, High Wycombe. The notices were returned marked "Insufficient address" and "Not at this address".
Statutory framework
18 The SAT Act contains several provisions dealing with the
requirements for service. The main sections of relevance to this
application are quoted below for the sake of convenience:
Section 45 of the SAT Act provides the following in regard to service and dispensing of service:
"Who has to be given a copy of an application
(1) When an application is accepted by the executive officer
the applicant is to give a copy of the application to -
(a) each other party; (b)
any other person entitled under this Act or the enabling Act to a copy of, or notice of, the application; and
(c)
any person to whom the applicant is directed by the Tribunal to give a copy of the application.
(2)
Subsection (1) does not require the applicant to give a copy of the application to a person mentioned in subsection (1) (a "notifiable person") if -
(a)
the executive officer has given or undertaken to give a copy of the application to the notifiable person;
(b)
under subsection (3) the Tribunal dispenses with the requirement to give a copy of the application to the notifiable person; or
(c)
the rules exempt the person from the requirement to give a copy of the application to the notifiable person.
[2007] WASAT 278
(3) The Tribunal may make an order dispensing with the requirement to give a copy of an application to a notifiable person specified in the order if satisfied -
(a) that the applicant has made all reasonable attempts to give a copy of the application to the notifiable person but has been unsuccessful; or (b) that the making and hearing of the application without notice to the notifiable person would not cause injustice. (4) The Tribunal's power under subsection (3) is exercisable
only by a legally qualified member.(5) The Tribunal may make an order under subsection (3) on
the application of the applicant or on its own initiative.…"
Rule 26(3) of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) provides as follows in regard to service on a person:
"If an application is made under the Tribunal's original jurisdiction, subject to these rules or a decision of the Tribunal, a copy of the application must be given to a person other than a public sector body by personal service."
Rule 31 provides how personal service is effected on a person:
"(1) If a document is required to or may be given by personal
service, it is given to -
(a)
a natural person, by leaving a copy of the document with him or her;
.... or as the Tribunal or a judicial member or non-judicial
member may order."
Rule 36(2) provides the basis for substituted service:
"(2) If the Tribunal makes an order under subrule (1),
the Tribunal may order that the document is taken to have[2007] WASAT 278
been given on the happening of any specified event, or at
the expiry of any specified time."
Submissions
23 Ms Shaw, for Esanda, sought orders that the placing of the
application in the mailbox at the last known residential address of Mr Potter should be regarded as sufficient to comply with the provisions for service of the SAT Act and the Credit Code.
24 In short, she contended that personal service of the Tribunal
application has not been able to be effected since Mr Potter has left his last known address without informing Esanda where he can be located or what his new address would be.
25 Esanda has made extensive efforts to locate Mr Potter at his original
address, the purported new address, as well as an address in a
neighbouring suburb.26 Esanda has, despite its best efforts, been unable to trace him.
Mr Potter has, in the meantime, not made any repayments under the credit agreement or attempted to renegotiate the contract.
27 In light of the fact that personal service of the application was not
possible regardless of the reasonable efforts of Esanda, the Tribunal should consider an alternative way to deal with the statutory requirement for personal service.
28 Ms Shaw proposed the following course of action: There appears to
be an inconsistency in the way service has to be conducted under the SAT Act and the Credit Code. In essence, the SAT Act requires personal service of the application on Mr Potter, while under the Credit Code, personal service could be taken to have been effected if the notice is placed at the address of the last known place of residence of Mr Potter. Section 5 of the SAT Act provides that if there is an inconsistency between the enabling Act (Credit Code) and the SAT Act, the provisions of the enabling Act prevails.
29 Ms Shaw contended, therefore, that Esanda should be relieved of the
obligation to effect personal service pursuant to s 171 of the Credit Code on the grounds that it has made reasonable, but unsuccessful, attempts to give personal service to Mr Potter, and there is reasonable proof that Mr Potter can no longer be contacted at the address of his last known residence. As a result, the Tribunal may therefore make an order pursuant
[2007] WASAT 278
to s 172 of the Credit Code that service requirements were complied with when the notice was placed on 24 August 2007 at the address of the last place of residence of Mr Potter known to Esanda.
Consideration
30 The Tribunal will, in dealing with the information before it, first
consider the requirements for personal service, and secondly, the options
available if personal service cannot be effected.
Personal service
31 Section 45(1) of the SAT Act places an obligation on the applicant of
a proceeding before the Tribunal to give a copy of the application to the other party. Rule 26(3) of the SAT Rules requires that for an application made under the Tribunal's original jurisdiction (such as this matter), personal service must be effected.
32 The reason for this obligation is obvious - the rules of natural justice
require that a person who has an interest in a proceeding before the Tribunal, or who may be affected by a proceeding, must be made aware of the proceeding and must be given reasonable opportunity to present their case and to reply to any information that may be to its prejudice.
As a point of departure, Esanda is therefore under a statutory obligation to serve the application on Mr Potter in person.
34 The credit agreement entered into between Esanda and Mr Potter sets
out in [12(1)] the actions that may constitute a default on the part of Mr Potter. Non-payment of moneys under the agreement constitutes a default. If a default occurs, Esanda may seize and take possession of the car pursuant to [12(3)] of the credit agreement. Paragraph 13(1) of the credit agreement provides as follows in regard with service of a default notice:
"Esanda may give a notice or demand to me in respect of this
Agreement by:
• leaving it at my business or residential address last known to Esanda; or • sending it by post, telex, facsimile or similar facility to my business or residential address last known to Esanda." [2007] WASAT 278
35 The Tribunal accepts the evidence that a default notice dated
9 March 2007 was sent via ordinary post to Mr Potter at 382 Lesmurdie Road, Lesmurdie. On the available information, Mr Potter was still resident at the address at that time.
The Tribunal accepts that between 4 May 2007 and 24 August 2007, Esanda, through its agent, made several attempts to contact Mr Potter. None of these attempts caused Mr Potter to comply with his contractual obligations, to make any payments, or to make efforts to renegotiate the agreement.
37 The Tribunal accepts that Esanda's agent paid a personal visit to
382 Lesmurdie Road, Lesmurdie on 2 July 2007. During the visit, he had sight of the vehicle in question, and also spoke to who he believed was Mr Potter's wife. She told the agent that they were moving and gave as an address 26 Stirling Crescent, Lesmurdie. It turned out that this was not an accurate address.
38 Esanda, in a further effort to track down Mr Potter, visited the same
street address in another suburb, High Wycombe, to establish if that was
Mr Potter's residence. It was not the case.39 The Tribunal accepts that Esanda has made reasonable attempts, over
a period of several months, to engage Mr Potter, to bring these proceedings to his attention, and to give him opportunity to comply with the terms of the agreement or to renegotiate aspects of it. The Tribunal further accepts the evidence that, since the default notice of 9 March 2007, Mr Potter has not made contact with Esanda nor has he made any payments in accordance with the loan agreement.
40 The Tribunal further notes that correspondence sent by the Tribunal
in regard to these proceedings to the Lesmurdie address and High
Wycombe address have been returned undelivered.
Mr Potter has, for all practical purposes, absconded.
The Tribunal therefore finds that:
(a)
Mr Potter has been made aware of the default in his failure to make payments pursuant to the credit agreement; but
(b)
personal service of the Tribunal proceedings has not been possible since he is not resident any more at his last
[2007] WASAT 278
known address and has not provided Esanda with his new
residential particulars; and
(c)
Esanda has not been able to locate him despite the reasonable efforts it has made.
Substituted service or dispensing with personal service
43 The next question to deal with is if Esanda can rely on s 45(2) and
s 45(3) of the SAT Act, r 36(1) of the SAT Rules or s 172 of the Credit Code for an order to dispense with service or for an order that service is deemed to have occurred.
44 Parliament envisaged that, if an applicant has made all reasonable
attempts to locate a respondent and failed, remedies should be available to the credit provider. It is for the Tribunal to be satisfied, on the available evidence, that the applicant has indeed done what could be regarded as "reasonable" to effect personal service.
45 The Tribunal has already found above that it is satisfied that Esanda
has made all reasonable attempts to effect personal service on Mr Potter, but to no avail. The Tribunal is also satisfied that Mr Potter was aware that he was in breach of the credit agreement by not paying the monthly sum and that the vehicle could, as a consequence of his breach, be seized. Mr Potter has, since the notice of default, made no attempt to honour the agreement, to make any form of payment, or to renegotiate the terms thereof.
Mr Potter is not acting with clean hands in these proceedings and he is clearly not being roughly handled by an unscrupulous credit provider.
47 Ms Shaw proposed that, in light of what she describes as an
inconsistency between the Credit Code and the SAT Act, the provisions for substituted service of the Credit Code should apply. The Credit Code requires that, in an instance such as this, the requirements for service of a default notice are complied with by leaving a notice at the address of the place of residence of Mr Potter last known to Esanda.
48 The Tribunal does not accept the contention of Ms Shaw that there is
an inconsistency between the SAT Act and the Credit Code. The Credit Code deals with notices to be given "for the purposes of this Code" (s 171(1)(a)), while the SAT Act deals with a "copy of the application" for purposes of the SAT proceedings (s 45(1)). The Credit Code deals with a default notice, while the SAT Act deals with an application for
[2007] WASAT 278
proceedings under the SAT Act. The two Acts therefore regulate separate proceedings, and the service provisions cannot be construed to be inconsistent.
The Tribunal must therefore deal with substituted service or dispense with service of the application only under the SAT Act.
50 As mentioned already, the SAT Act provides for dispensing with
service (s 45(3)), effecting personal service in a manner ordered by the Tribunal (r 31 of the SAT Rules) or substituted service (r 36 of the SAT Rules).
The Tribunal accepts the evidence that when Mr McDonald, agent for Esanda, visited 382 Lesmurdie Road, Lesmurdie on 24 August 2007, a copy of the application and the accompanying affidavit was placed in the letterbox.
52 Section 45(3)(a) of the SAT Act enables the Tribunal to make an
order dispensing with the requirement to give a copy of the application to Mr Potter, if it is satisfied that Esanda has made all reasonable attempts to give a copy to him, but has been unsuccessful, and that service can therefore be dispensed with. This order can only be made by a legally qualified member of the Tribunal (s 45(4) of the SAT Act). I am such a member.
53 The Tribunal is satisfied that on the basis of the available
information, Esanda has discharged its duties and has made all reasonable
efforts to effect service on Mr Potter.54 In addition to the Tribunal's power to dispense with service, r 31(1)
of the SAT Rules contemplates that personal service might be effected in ways other than as specified in that subrule, and r 36 of the SAT Rules consequently gives the Tribunal power to make an order for substituted service.
55 Rule 31(1) of the SAT Rules determines that personal service is
effected by leaving a copy of a document with the respondent. The subrule further empowers the Tribunal to also make other orders as to how personal service is effected. In making such other orders as the Tribunal deems appropriate, consideration must be given to the ways in which service can be disposed of. For example, the SAT Act provides that in the case where ordinary service for documents is required, service can be effected by leaving a copy of the document at the last known place of residence of a person (s 33(1)(c)). There is a similar provision to the
[2007] WASAT 278
Credit Code which requires that personal service can be effected, if the new address of a person is not known, by leaving a copy of the notice or document at the address of the place of residence of the person last known to the person giving the notice. The credit agreement also provides for service at the last known residential address of Mr Potter.
56 It is clear to the Tribunal that Parliament aimed to achieve a balance
of interests with the alternative provisions as to how service can be effected. Parliament recognised that circumstances may arise whereby a person moves away from his last known address without leaving a forwarding address or without making contact with the credit provider. A credit provider could be severely prejudiced by not knowing where to find such a person, and as a result, personal service could not be effected. It would be grossly unfair and unreasonable to place a burden on the credit provider to find such a person at all costs. There is also a duty on Mr Potter to inform Esanda of his whereabouts. The SAT Act therefore refers to "all reasonable" attempts that must be made to locate a person (s 45(3) of the SAT Act). It is for the Tribunal to be satisfied that all reasonable attempts have been made.
57 It is not in every instance where a person has moved from his last
known address that the Tribunal necessarily be satisfied that substituted service could be effected. It depends on the facts and circumstances of each case.
Once the Tribunal is satisfied, it may make orders as to how personal service is deemed to have been effected.
59 In this matter, the Tribunal is satisfied that Esanda has done all that it
reasonably could to effect service on Mr Potter. The following steps
were, in summary, taken by Esanda:
• a notice of default was sent to Mr Potter in accordance with the credit agreement to notify him of the default; • an agent of Esanda paid a personal visit to the address where Mr Potter was resident at the time to discuss the default with him; • Mr Potter was aware that he had fallen in arrears, but made no effort to negotiate a variation of the agreement or to make any payments; [2007] WASAT 278
• an agent of Esanda visited the last known residence of Mr Potter, where he spoke to his wife and again explained to her that Mr Potter was in arrears. The wife gave an incorrect forwarding address; • Esanda attempted to effect personal service on Mr Potter at the new address but it appeared to be nonexistent; and • when it was unsuccessful, Esanda sent an agent to a neighbouring suburb with the same street name in an attempt to locate Mr Potter. It was again unsuccessful.
60 The Tribunal is of the view that the standard of service as determined
by the Credit Code in matters of this nature could be followed in the case
of Mr Potter.61 An order should therefore be made pursuant to r 36(2) of the SAT
Rules that it is deemed that personal service was effected on Mr Potter on 24 August 2007 when an agent of Esanda left a copy of the application in the letterbox of his last known residential address, being 382 Lesmurdie Road, Lesmurdie.
62 It must be noted that, even if Esanda succeeds in the orders it seeks
to take possession of the vehicle, Mr Potter is, pursuant to s 95(2) of the Credit Code, entitled to 21 days' notice prior to the vehicle being disposed of.
Finding
63 The Tribunal finds that personal service was deemed to have been
effected on 24 August 2007 on Mr Potter pursuant to r 36(2) of the SAT Rules, when the agent for Esanda left a copy of the application in the letterbox of his last known residential address, being 382 Lesmurdie Road, Lesmurdie.
| Order |
1. Personal service is deemed to have been effected on Mr Potter pursuant to r 36(2) of the SAT Rules, when the agent for Esanda Finance Corporation left a copy of the application in the letterbox of his last known residential address, being 382 Lesmurdie Road, Lesmurdie, on 27 August 2007.
[2007] WASAT 278
I certify that this and the preceding [63] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
DR B DE VILLIERS, MEMBER
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