Gow and Registrar of Personal Property Securities
[2021] AATA 917
•19 April 2021
Gow and Registrar of Personal Property Securities [2021] AATA 917 (19 April 2021)
Division:TAXATION AND COMMERCIAL DIVISION
File Number:2019/3289
Re:Samantha Gow
APPLICANT
Registrar of Personal Property SecuritiesAnd
RESPONDENT
DECISION
Tribunal:Member D Mitchell
Date:19 April 2021
Place:Brisbane
The Tribunal affirms the decision under review.
..............[SGD].................................................
Member D Mitchell
CATCHWORDS
PERSONAL PROPERTY SECURITIES REGISTER – amendment notice seeking removal of registration from Personal Property Securities Register – whether the Registrar suspects on reasonable grounds that the amendment is not authorised – amendment sought granted by Delegate of Registrar – decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act1975 (Cth)
Personal Properties Securities Act 2009 (Cth)
Personal Properties Securities Regulations 2010 (Cth)
CASES
Denbride Pty Ltd and Registrar of Personal Property Securities [2015] AATA 938
Sandhurst Golf Estates Pty Ltd & Ors v Coppersmith Pty Ltd & Ors [2014] VSR 217
REASONS FOR DECISION
Member D Mitchell
19 April 2021
INTRODUCTION
Ms Samantha Gow (the Applicant) is seeking review of a decision of the Registrar of Personal Property Securities (the Respondent) dated 7 December 2018.[1]
[1] Exhibit 1, T-Documents, T1, pages 1-8, Application for Review.
The reviewable decision was made pursuant section 181 of the Personal Property Securities Act 2009 (Cth) (the PPS Act) to remove registration number 201804100003322 from the Personal Property Securities Register (PPS Register) and to further make that registration unavailable when searched.[2]
[2] Exhibit 1, T Documents, T15, page 99, Record of Decision.
BACKGROUND
On 14 January 2017, the Applicant signed a Chattel Mortgage Loan Agreement (the loan agreement) with Volkswagen Financial Services Australia Pty Ltd (Volkswagen) in her capacity as Directory/Secretary of Sam Gow Pty Ltd and in her personal capacity as guarantor.[3] This agreement effected the purchase of a motor vehicle (that became the collateral) by Sam Gow Pty Ltd as the trustee of the Gow Family Trust (the purchaser).[4]
[3] Exhibit 1, T Documents, T10, page 73, Chattel Mortgage Loan Schedule.
[4] Exhibit 1, T Documents, T10, pages 71-78, Chattel Mortgage Loan Schedule.
Under the loan agreement the purchaser granted a security interest in the collateral to the lender. This secured the borrower’s obligations in relation to the loan agreement, including those regarding repayment of the loan.[5] Volkswagen made registration number 201701160011064 over the collateral on the PPS Register in relation to the security interest created by the loan agreement.[6]
[5] Exhibit 1, T Documents, T10, pages 71-78, Chattel Mortgage Loan Schedule.
[6] Exhibit 1, T Documents, T4, pages 42-43, Serial Number Search Certificate.
Volkswagen claimed that the borrower defaulted on the loan repayment obligations[7] and on or around 24 March 2018 the motor vehicle was repossessed pursuant to an order of the Magistrates Court of Queensland[8] and was placed with Pickles Auctions Pty Limited (Pickles) for sale.[9]
[7] Exhibit 1, T Documents, T4, pages 36-41, Default Notices.
[8] Exhibit 1, T Documents, T10, pages 86-87, Magistrates Court of Queensland – Order for Delivery of Goods to Mortgagee.
[9] Exhibit 1, T Documents, T4, page 35, Letter from Pickles.
On 10 April 2018, the Applicant made registration number 201804100003322 over the motor vehicle on the PPS Register.[10] In making the registration on the PPS Register the Applicant identified herself as the secured party in relation to a security interest in the motor vehicle. The grantor of the security interest was not provided in the registration, however it is clear that the Applicant considered Volkswagen to be the grantor of the security interest.[11]
[10] Exhibit 1, T Documents, T4, pages 46-48, PPSR Registration Number Search Certificate.
[11] Exhibit 2, Applicant’s Statement of Facts, dated 5 June 2020.
As a result, Pickles was unable to dispose of the motor vehicle as instructed by Volkswagen.[12]
[12] Exhibit 1, T Documents, T4, page 35, Letter from Pickles.
On 1 August 2018, Volkswagen via its legal representatives issued an amendment demand to the Applicant seeking removal of the registration from the PPS Register.[13] The amendment demand outlined that it was authorised pursuant to Item 1 in section 178(1) of the PPS Act on the basis that it is:[14]
An amendment to end effective registration (including an amendment to remove the registration), because no collateral described in the registration secures any obligation (including a payment) owed by a debtor to the secured party.
[13] Exhibit 1, T Documents, T4, pages 16-17, Letter to the Applicant outlining Volkswagen’s Amendment Demand.
[14] Exhibit 1, T Documents, T4, page 16, Letter to the Applicant outlining Volkswagen’s Amendment Demand.
Subsequently on 17 August 2018, Volkswagen commenced the administrative process for enforcement of the amendment demand pursuant to section 179 of the PPS Act by providing an Amendment Statement (on the approved form required by section 180(3) of the PPS Act) and supporting documents to the Respondent.
Volkswagen provided the following statement as required under the regulation 5.9 of the Personal Property Securities Regulations 2010 (Cth):[15]
[15] Exhibit 1, T Documents, T3, page 14, Amendment Statement.
1The person identified in part 2 of this form, gave an amendment demand to the Secured Party identified in part 1, in accordance with section178 of the Personal Property Securities Act 2009 (Cth), at least 5 business days before this Amendment Statement was given to the Registrar.
2Either (tick which applies):
☒ No collateral described in the registration identified in part 1 above secures any obligation (including) a payment owed by a debtor to a Secured Party.
……
3The secured party (has) (tick which applies):
……
☒ No written response was received from the Secured Party.
…….
The supporting documents provided by Volkswagen included:
·A letter confirming that Pickles, acting under their instructions continued to have possession of the motor vehicle to which PPSR Registration Number 201701160011064 relates.[16]
·A copy of the Amendment Demand sent to the Applicant on 1 August 2018.[17]
·A copy of the PPS Register Serial Number Search Certification for PPSR Registration Number 201701160011064 showing that Volkswagen was the secured party in relation to the motor vehicle.[18]
·Copies of a default notice dated 5 May 2017 sent to the Applicant, Sam Gow Pty Ltd and the Trustee for the Gow Family Trust in relation to the loan agreement.[19]
[16] Exhibit 1, T Documents, T3, page 15, Letter from Pickles.
[17] Exhibit 1, T Documents, T3, pages 16-17, Letter to the Applicant outlining Volkswagen’s Amendment Demand.
[18] Exhibit 1, T Documents, T3, pages 18-21, Serial Number Search Certificate.
[19] Exhibit 1, T Documents, T3, pages 22-27, Default Notices.
On 27 August 2018, the Respondent wrote to the Applicant in accordance with section 180 of the PPS Act notifying her that it had received an Amendment Statement in respect of registration 201804100003322. The Applicant was advised that it was open to her to amend the registration or if she asserted that the amendment is not authorised to provide a response in writing by 3 September 2018. The letter further advised that pursuant to section 181 of the PPS Act at the end of 3 September 2018 the Registrar must register a financing change statement amending the registration in accordance with the amended demand, unless the Registrar suspects on reasonable grounds that the amendment is not authorised under section 178 of the PPS Act.[20]
[20] Exhibit 1, T Documents, T4, pages 28-29, Amendment Notice in respect of Registration 201804100003322.
On 31 August 2018, the Respondent wrote to the Applicant following up on their correspondence dated 27 August 2018, as no response from the Applicant had been received at that point.[21]
[21] Exhibit 1, T Documents, T6 pages 51-52, Email from Respondent to Applicant.
On 5 September 2018, the Respondent again wrote to the Applicant following up on their correspondence dated 27 August 2018, as no response had been received from the Applicant in relation to the correspondence or attempted telephone contact. The Respondent extended the Applicant’s response date to 11 September 2018.[22]
[22] Exhibit 1, T Documents, T7 pages 53-55, Email from Respondent to Applicant.
Later that day, the Applicant provided a response outlining that consent was not given for the removal of the registered interest and that removal of that interest was opposed. The reasons provided by the Applicant was:[23]
On or about 24 March 2018, the incumbent vehicle was stolen from us. The theft was carried out by various people known & unknown purportedly upon the direction of Volkswagen Financial Services Australia Pty Ltd.
Numerous QLD Police Officers were also involved and are now the subject of a formal complaint to the QLD Crime & Misconduct Commission (see attached receipt). There is still further litigation to be pursued also.
[23] Exhibit 1, T Documents, T8 pages 56-59, Email from Applicant to Respondent.
That same day the Respondent again wrote to the Applicant seeking further information as follows:[24]
If the amendment is not authorised can you please provide evidence to support this such as:
A copy of a relevant security agreement
Email or written correspondence which supports the existence of an obligation or agreement
Statements or invoices indicating the existence of a debt or other obligation
Any other evidence that shows an interest granted in the collateral
Or can alternatively please advise if the PPSR Registration was created due to the formal complaint to the QLD Crime & Misconduct Commission.
Please provide a response by close of business 11 September 2018.
[24] Exhibit 1, T Documents, T9 pages 60-63, Email from Respondent to Applicant.
On 21 September 2018, the Applicant provided further information to the Respondent that included:[25]
[25] Exhibit 1, T Documents, T10 pages 64-87 and T11, pages 88-91, Emails from Applicant to Respondent, including attachments.
·An email trail showing the Applicant seeking information from Volkswagen and the following attachments:[26]
oLoan Account Statement dated 25 August 2018;
oDeclaration of Purposes for which Credit is provided, signed by the Applicant on 14 January 2017;
oVolkswagen Financial Services Australia Pty Ltd – Chattel Mortgage Loan Schedule executed on 14 January 2017;
oInterested Party Certificate of Currency dated 14 January 2017;
oDefault Notices dated 5 May 2017 sent to the Applicant, Sam Gow Pty Ltd and The Trustee for the Gow Family Trust; and
oMagistrates Court of Queensland – Order for Delivery of Goods to Mortgagee made on 15 March 2018.
·An email trail showing the Applicant seeking further information from Volkswagen.[27]
[26] Exhibit 1, T Documents, T10 pages 64-87, Email from Applicant to Respondent, including attachments.
[27] Exhibit 1, T Documents, T11, pages 88-91, Email from Applicant to Respondent.
On 24 September 2018, the Respondent wrote to the Applicant following up on their correspondence dated 5 September 2018, noting that a response had not been received and extending the time to provide a response to 2 October 2018.[28]
[28] Exhibit 1, T Documents, T12, pages 92-96, Email from Respondent to Applicant.
On 7 December 2018, a delegate of the Respondent having taken into consideration the information provided by Volkswagen and the Applicant (received on 21 September 2018 as outlined above)[29] decided to remove registration 201804100003322 from the PPS Register and make that registration unavailable for search on the PPS Register.[30]
[29] Exhibit 1, T Documents, T14, page 98, File Note.
[30] Exhibit 1, T Documents, T15, page 99, Record of Decision.
On 25 March 2019, the Applicant wrote to the Respondent bringing to the attention of the Delegate a further email she had sent to the Respondent dated 21 September 2018. In that email the Applicant provided:[31]
Please see the attached request I’ve been sending to Volkswagen in relation to a dispute.
As of yesterday I'm still awaiting further confirmation and documentation from them.
there's no contact with Volkswagen in relation to the vehicle finance further they have not got a signed contract with me or a valid security interest.
As the interest they may of had, if any was extinguished when they stole his vehicle.
I will also forward you the email sent to them yesterday, which again requesting the documents originally sought 23 August 2018.
We have also requested the removal of the interest they have registered with your office by the end of today.
After which we intend to request assistance from the PPSR to have this removed should they not remove it.
[31] Exhibit 1, T Documents, T18, pages 108-111, Email from Applicant to Respondent.
After a discussion with the delegate, the Applicant by way of email dated 25 March 2019 provided:[32]
It has always been my contention that Volkswagen financial did not have a valid and/or enforceable security interest lodged for the following reasons;
1. The degree of enforceability of a security interest is determined as follows, a security agreement is "an agreement or an act by which a security interest is created, arises or is provided for" or some form of "writing evidencing such an agreement or act" (which must be either signed or accepted by the Grantor)". There is no contract or agreement with Volkswagen, there has never been such agreement in existence. As per the attached documents in email sent 21 September 2018, there is a finance contract with Audi Financial.
2. "For the security interest to be enforceable by the Secured Party, not just against the Grantor but also against third parties, the security interest must have attached to the Collateral and either must have possession or control of that Collateral and there must be a security agreement that covers the Collateral". I took possession of the vehicle 14 January 2017 as per contract of same date with Audi Financial. According to the search certificate 12 July 2018, provided by Volkswagen, PPSR registration 201701160011064 was not lodged by Volkswagen until 16 January 2017, after I have taken the vehicle.
Could I please be provided with a statement of reasons for the decision 7 December 2018 as discussed. Also, should it be possible to have an extension of time granted, I would like to apply for a review of the decision 7 December 2018 and/or considered.
[32] Exhibit 1, T Documents, T19, pages 112-116, Email from Applicant to Respondent.
In a file note dated 18 April 2019, the Delegate acknowledged that they had not previously seen the September 2018 email from the Applicant until it was forwarded by the Applicant on 25 March 2019. The Delegate concluded that the email was about a different registration, and that there was nothing new or material contained in the email to the amendment demand to remove registration 201804100003322 from the PPS Register.[33]
[33] Exhibit 1, T Documents, T20, page 117, File Note.
On 18 April 2019, the Delegate provided a statement of reasons to the Applicant for the decision made on 7 December 2018.[34]
[34] Exhibit 1, T Documents, T21, pages 118-127, Cover Email attaching Letter and Statement of Reasons for Decision.
On 27 April 2019, the Applicant wrote to the Respondent stating the following:[35]
I need to clarify a couple of things;
1. The finance contract was not with Volkswagen, it was with Audi Finance see attached email. This is why I say they didn't have a valid interest.
2. Hunt and Hunt lawyers did not serve me with any request for the removal of my registration. The only letter I received from them in relation to this matter was 27 August 2018, being the same date as the Amendment Statement was sent out as per your reasons.
3. The purported court order is signed by a registry officer and not a Judge which has not authority and is invalid. This was not provided when vehicle was taken, no paperwork was provided when vehicle taken and I had no knowledge of such proceedings.
4. The default letter they have given you is false the actual date of that document was more than a year prior being 2017 not 2018.
5. I was owed $6, 000-$7,000 for monies I was overcharged and monies for insurance that they did not pay to the insurance company that was included in the financed amount, these things were in dispute. I did have a valid registered interest.
……..
[35] Exhibit 1, T Documents, T22, pages 128-134, Email from Applicant to Respondent with Attachments.
On 11 June 2019, the Applicant sought review of the Respondent’s decision by way of an application to this Tribunal.[36]
[36] Exhibit 1, T Documents, T1, pages 1-8, Application for Review.
By consent it was agreed that this matter could be adequately determined in the absence of the parties. The Tribunal agreed to review the objection decision in accordance with section 34J of the Administrative Appeals Tribunal Act1975 (Cth). As such, a hearing was not conducted in this matter, the Tribunal’s decision has been reached “on the papers” having considered the documents filed by the parties.
The Tribunal admitted into evidence and considered the following:
·Exhibit 1, T Documents – Section 37 T-Documents (pages 1 to 153).
·Exhibit 2, Applicant’s Statement of Facts, dated 5 June 2020 (pages 1 to 4).
·Exhibit 3, Respondent’s Statement of Facts, Issues and Contentions and Submissions, dated 3 July 2020 (pages 1 to 5).
LEGISLATIVE FRAMEWORK
The PPS Act applies to security interests in personal property. A security interest is an interest in personal property provided for by a transaction that secures payment or the performance of an obligation. A security interest is enforceable against the grantor and third parties in circumstances set out in the PPS Act.[37]
[37] Section 3 of the PPS Act.
Section 12 of the PPS Act outlines what constitutes a security interest:
12 Meaning of security interest
(1)A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property).
Note: For the application of this Act to interests, see section 8.
(2) For example, a security interest includes an interest in personal property provided by any of the following transactions, if the transaction, in substance, secures payment or performance of an obligation:
(a) a fixed charge;
(b) a floating charge;
(c) a chattel mortgage;
(d) a conditional sale agreement (including an agreement to sell subject to retention of title);
(e) a hire purchase agreement;
(f) a pledge;
(g) a trust receipt;
(h) a consignment (whether or not a commercial consignment);
(i) a lease of goods (whether or not a PPS lease);
(j) an assignment;
(k) a transfer of title;
(l) a flawed asset arrangement.
(3) A security interest also includes the following interests, whether or not the transaction concerned, in substance, secures payment or performance of an obligation:
(a) the interest of a transferee under a transfer of an account or chattel paper;
(b) the interest of a consignor who delivers goods to a consignee under a commercial consignment;
(c) the interest of a lessor or bailor of goods under a PPS lease.
(3A) A person who owes payment or performance of an obligation to another person may take a security interest in the other person’s right to require the payment or the performance of the obligation.
(4) Without limiting subsection (3A):
(a) an account debtor, in relation to an account or chattel paper, may take a security interest in the account or chattel paper; and
(b) an ADI may take a security interest in an ADI account that is kept with the ADI.
(5) A security interest does not include:
(a) a licence; or
(b) an interest of a kind prescribed by the regulations for the purposes of this section.
(6) A security interest is not created only by an agreement or undertaking to do either of the following:
(a) to postpone or subordinate a person’s right to payment or performance of all or any part of a debtor’s obligation to another person’s right to payment or performance of all or any part of another of the debtor’s obligations;
(b) to postpone or subordinate all or any part of a secured party’s rights under a security agreement to all or any part of another secured party’s rights under another security agreement with the same grantor.
Section 10 of the PPS Act defines security agreement to mean an agreement or act by which a security interest is created, arises or is provided for or writing evidencing such an agreement or act.
General rules about security agreements and security interests are set out in section 18 of the PPS Act as:
(1) A security agreement is effective according to its terms.
(2) A security agreement may provide for security interests in after‑acquired property.
(3) A security interest in after‑acquired property attaches without specific appropriation by the grantor.
(4) A security agreement may provide for future advances.
(5) A security interest is taken to secure reasonable expenses in relation to the enforcement of the security interest, unless the parties agree otherwise.
Part 5.6 of the PPS Act sets out an administrative process by which a person with an interest in collateral may required changes to the registration, by way of an amendment demand given to the secured party. The amendment demand may seek an amendment to end a registration on and/or remove the entry from the PPS Register.
Section 178 of the PPS Act outlines when amendment demands may be made:
178 How amendment demands are given
(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.
Where a secured party is given an amendment demand and an application has not been made to register a financing change statement in compliance with the demand before the end of 5 business days after the demand is given to the secured party, and there are not proceedings currently before a court, then the administrative process set out in sections 180 and 181 of the PPS Act are enlivened.
Sections 180 and 181 of the PPS Act provide:
180 Administrative process—amendment notices
Amendment notice given by Registrar
(1) The Registrar may give the secured party a notice (an amendment notice), in accordance with subsection (5), of the amendment demanded.
At the initiative of the Registrar
(2) An amendment notice may be given at the initiative of the Registrar, if the Registrar suspects on reasonable grounds that the amendment demanded is authorised under section 178.
In response to a statement by the person who gave the amendment demand
(3) The person who gave the amendment demand to the secured party may give a statement in the approved form to the Registrar:
(a) stating the amendment demanded; and
(b) including anything else prescribed by the regulations.
Note: The provision of false or misleading information in the statement may be an offence against Part 7.4 of the Criminal Code.
(4) An amendment notice must be given in response to a statement under subsection (3) as soon as practicable after the statement is given (unless an amendment notice has already been given at the initiative of the Registrar).
Amendment notices
(5) An amendment notice is given in accordance with this subsection if:
(a) the notice is in the approved form; or
(b) the notice:
(i) states the amendment demanded; and
(ii) invites the secured party to submit a response to the amendment demand in writing to the Registrar before the end of 5 business days after the day the notice is given (or an extended period approved by the Registrar); and
(iii) sets out the effect of section 181 (amendment of registration); and
(iv) if a statement is given under subsection (3)—includes a copy of the statement.
Note: The provision of false or misleading information in any response to the invitation may be an offence against Part 7.4 of the Criminal Code.
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.
(4) In making a decision about whether to register a financing change statement amending the registration in accordance with the amendment demand, the Registrar must consider:
(a) the response (if any) of the secured party to the invitation in the amendment notice; and
(b) any other relevant information.
(5) Data removed from the register because of an amendment under this section 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: The provision of false or misleading information in any response to the invitation may be an offence against Part 7.4 of the Criminal Code.
Note 2: The Registrar must give a verification statement to each secured party after the registration of a financing change statement (see section 156).
Note 3: Application may be made to the Administrative Appeals Tribunal for review of certain decisions of the Registrar about registration (see section 191).
Note 4: This section stops applying if proceedings come before a court under section 182 in relation to the amendment demanded (see subsection 179(2).
Note 5: Incorrectly removed data may be restored under section 186.
Section 10 of the PPS Act defines collateral to mean personal property to which a security interest is attached and in relation to a registration with respect to a security interest to include personal property described by the registration (whether or not a security interest is attached to the property).
ISSUES
The issue before the Tribunal is whether pursuant to section 181 of the PPS Act there are reasonable grounds to suspect that the amendment sought by Volkswagen and subsequently made by the Respondent was not authorised under section 178 of the PPS Act.
To determine this issue the Tribunal will need to consider whether the Applicant has a security interest in the collateral described in registration 201804100003322 and if so whether the secured obligation is still outstanding.
CONTENTIONS
Applicant
The Applicant set out her contentions in a Statement of Facts dated 5 June 2020. [38] In the Statement of Facts the Applicant raises issues she considers arose in relation to the finance contract of which she says led to the borrower being owed $8,134.00 by Audi Finance for breach of contract.[39]
[38] Exhibit 2, Applicant’s Statement of Facts, dated 5 June 2020, pages 1-4.
[39] Exhibit 2, Applicant’s Statement of Facts, dated 5 June 2020, page 1, paragraphs 5-9.
The Applicant further contends that the repossession of the motor vehicle on or about 24 March 2018 was theft on the basis that she asserts that the Court Order was invalid.[40]
[40] Exhibit 2, Applicant’s Statement of Facts, dated 5 June 2020, page 2, paragraphs 13-18.
In relation to the Amendment Statement the Applicant provided:[41]
[41] Exhibit 2, Applicant’s Statement of Facts, dated 5 June 2020, pages 3-4, paragraphs 19-31.
19On or about 10 April 2018 security interest 201804100003322 was registered with the PPSR, the secured party was the guarantor.
20At no time was the grantor or guarantor served with a request for the removal of that registered interest by Hunt and Hunt lawyers. did not serve me with any request for the removal of my registration. The only letter received from them in relation to this matter was 27 August 2018, being the same date as the Amendment Statement was sent out, as per the ‘statement of reasons for decision’ T21/121 – T21/127.
21On or about 5 Sept 2018 – In a phone call to the PPSR, the guarantor gave verbal advice of their decision not to remove their registered interest.
22From that date until the final decision being made in December nearest emails went between the borrowers and the register in relation to this matter for the purposes of being included in their assessment.
23On or about 21 September 2018, there was an email sent to the registrar for their consideration in relation to the potential removal of their security interest. Unfortunately, this email was overlooked and not taken into consideration. The information and attachments contained in that email were pertinent to the registrar’s ability to make the correct decision with respect to the removal, this decision was adversely affected because of this.
24It has always been my contention that Volkswagen financial did not have a valid and/or enforceable security interest lodged for the following reasons
25The degree of enforceability of a security interest is determined as follows, a security agreement is "an agreement or an act by which a security interest is created, arises or is provided for" or some form of "writing evidencing such an agreement or act" (which must be either signed or accepted by the Grantor)". There is no contract or agreement with Volkswagen, there has never been such agreement in existence. As per the attached documents in email sent 21 September 2018, there is a finance contract with Audi Financial.
26"For the security interest to be enforceable by the Secured Party, not just against the Grantor but also against third parties, the security interest must have attached to the Collateral and either must have possession or control of that Collateral and there must be a security agreement that covers the Collateral". I took possession of the vehicle 14 January 2017 as per contract of same date with Audi Financial. According to the search certificate 12 July 2018, provided by Volkswagen, PPSR registration 201701160011064 was not lodged by Volkswagen until 16 January 2017, after I have taken the vehicle. Perfection of their interest could not be realized without possession. Therefore, they held no enforceable interest.
27The finance contract was between Audi Financial and the borrower, not Volkswagen.
28The purported court order is signed by a registry officer and not a Judge which has not authority and is invalid. This was not provided when vehicle was taken, no paperwork was provided when vehicle taken, and I had no knowledge of such proceedings.
29The default letter they have given is false the actual date of that document was more than a year prior being 2017 not 2018. The loan account was not in arrears,
30The borrower was owed a total amount of $8,134.00 (not inclusive of any potential damages) for monies that had been overcharged and monies for insurance that was never paid to Allianz, for the comprehensive insurance. These are numerous breaches of the agreement and we submit misleading and deceptive conduct.
31The guarantor’s interest was a valid interest for the reasons also.
Respondent
The Respondent provided their contentions in a Statement of Facts, Issues and Contentions dated 3 July 2020.[42] The Respondent outlined:[43]
[42] Exhibit 3, Respondent’s Statement of Facts, Issues and Contentions, dated 3 July 2020, pages 1-5.
[43] Exhibit 3, Respondent’s Statement of Facts, Issues and Contentions, dated 3 July 2020, pages 3-5.
18. The Applicant’s SOFIC raises many issues regarding the loan agreement and the repossession of the collateral. These include allegations of breaches of contract, errors in the amount charged, questions of the enforceability of Volkswagen’s security interest, misleading and deceptive conduct, falsification of documents, irregularities in the repossession of the collateral (including that the Court order was invalid or erroneous, leading to a conclusion that the collateral was stolen by Volkswagen), and other related matters.
19. None of these matters demonstrate that the Applicant had a registrable security interest in the collateral. The Applicant does not address the sole issue that is central to the Respondent’s Decision - how a PPSA security interest in the collateral arose that entitled her to make and maintain a registration on the PPSR.
20. The Applicant’s submissions appear to invite the Tribunal to conclude that her allegations about her original dealings with Volkswagen (and/or Audi Financial Services) means Volkswagen agreed to grant her a security interest in the collateral. There is no evidence that it did so.
21. As stated in Sandhurst Golf Estates “the transaction that gives rise to the security interest must be consensual. The transaction itself must give rise to the security interest”. That is, there must be a security agreement.
22. For that reason, even if the Applicant’s claims to be owed monies by Volkswagen are accepted, the payment obligation is not secured under a security agreement where Volkswagen grants an interest in the collateral. In other words, such a debt, if it is owed, is unsecured.
23. In relation to the Applicant’s complaints about the loan agreement and treatment at the hands of Volkswagen the Respondent draws the Tribunal’s attention to Denbride Pty Ltd and Registrar of Personal Property Securities [2015] AATA 938 (4 December 2015). Senior Member McCabe’s decision says:
My role, and the role of the Registrar, is narrower [than a court of competent jurisdiction having regard to all the facts]. We are not in a position to resolve the larger commercial dispute between the parties. It is enough that I am satisfied the obligations appear to be real; unless and until those obligations are set aside or varied in subsequent proceedings in another place, I am not in a position to order an amendment to the register.
In this matter, where the issues involved appear to extend well beyond questions about what was recorded on the PPSR by the Applicant, the application of this reasoning (though it related to a Registration left on the PPSR) may assist. The Denbride decisions shows how tightly focussed the administrative decision process under s181 is on the question of the apparent presence (or absence) of a security interest.
24. The Respondent also notes the concern of the Applicant about the immediacy of the effect of the decision to remove the Registration. The need for the Respondent to amend the PPSR upon making a decision is clear in the language of s181. The section does not require the Registrar to make a decision that stands in a queue for later implementation. Section 181 demands action upon the PPSR relating to the registration in question as a consequence of the decision maker achieving the relevant state of mind.
25. For completeness, the Applicant also contends that an email that was provided to the Respondent during the administrative process, but which was not considered by the decision-maker due to an administrative error, contained relevant material. Following submissions by the Applicant the decision-maker located the document, considered this issue (see the file note at T20/117) and concluded that the email did not include any new relevant information, and would not have affected its decision. This was addressed in the Statement of Reasons (T21/127).
Decision under PPSA section 181
26. The ultimate issue for determination in the review is whether the Applicant has a security interest in the collateral described in its registration and, if so, whether the secured obligation is still outstanding. If the Tribunal suspects on reasonable grounds that it does then it should reverse the Respondent’s decision. This involves the application of ss181 and the table in s178(1) of the PPSA.
CONSIDERATION
At the outset it is important to keep in mind that the matter before the Tribunal relates solely to whether the Tribunal is satisfied that there are reasonable grounds to suspect that the amendment to the PPS Register sought by Volkswagen was not authorised under section 178 of the PPS Act. The Tribunal notes that the concerns raised by the Applicant in relation to the loan agreement, repossession of the motor vehicle as the collateral and any other perceived contractual issues between the Applicant, her associated entities and Audi Finance or Volkswagen are of limited relevant to the matter before the Tribunal.[44]
[44] Denbride Pty Ltd and Registrar of Personal Property Securities [2015] AATA 938.
The Tribunal agrees with the Respondent, in that these matters do not address how a PPS Act security interest in the motor vehicle arose that entitled the Applicant to make and maintain a registration on the PPS Register.
It is relevant to note that the loan agreement makes it clear that Volkswagen for the purposes of the provision of the finance over the motor vehicle that gave rise to the 2017 registration on the PPS Register is one and the same as Audi Financial Services. The Tribunal notes that the title of the loan agreement makes reference to “Volkswagen Financial Services Australia Pty Ltd ABN 20 097 071 460”[45] and further a note in the agreement provides:[46]
Volkswagen Financial Services Australia Pty Ltd, Australian Credit Licence Number 389344, provides credit under following names: Volkswagen Financial Services, Audi Financial Services & Skoda Financial Services.
[45] Exhibit 1, T Documents, T10, page 71, Chattel Mortgage Loan Schedule.
[46] Exhibit 1, T Documents, T10, page 74, Chattel Mortgage Loan Schedule.
Consequently, the Tribunal does not accept the Applicant’s contentions that there was no contact or agreement with Volkswagen.
The evidence before the Tribunal, specifically the loan agreement satisfies the Tribunal that Volkswagen has an interest in the motor vehicle that forms collateral for the purpose of registration number 201804100003322 on the PPS Register .
A security interest is created, arises or is provided for by an agreement or act or writing evidencing such an agreement or act. In this matter the Applicant’s contentions mainly go to the validity of the initial registration on the PPS Register in relation to the motor vehicle that resulted from the loan agreement. Review of registration number 201701160011064 is not before this Tribunal.
The Applicant appears to be contending that the security interest in relation to registration number 201804100003322 is an interest in the motor vehicle (as collateral) to secure the payment of monies of which she says is a debt to the borrower for monies that had been overcharged and insurance that was never paid pursuant to the loan agreement and that further as guarantor her interest is valid.
The Applicant has not provided any evidence or made contentions that establish that Volkswagen agreed to grant her or her associated entities a security interest in the motor vehicle. In considering the creating of a security interest Robson J in Sandhurst Golf Estates Pty Ltd & Ors v Coppersmith Pty Ltd & Ors [2014] VSR 217 at [99] said that:
The transaction that gives rise to the security interest must be consensual. The transaction itself must give rise to the security interest.
Further, there is no corroborating evidence that establishes that any monies were outstanding from Volkswagen to the Applicant or one of her associated entities. The amount claimed as outstanding by the Applicant was not itemised or corroborated and as such there is no evidence that a debt arose. Even had there been such evidence of monies being owed by Volkswagen, in the absence of evidence establishing that a security agreement had been made between the Applicant and Volkswagen in relation to such a debt and that payment being secured by an interest in the motor vehicle, the Tribunal must conclude that any such debt is unsecured.
In considering the evidence before it, the Tribunal is satisfied that the administrative process associated with an amendment demand undertaken by the Respondent pursuant to section 180 of the PPS Act was appropriately undertaken. The Applicant was provided with numerous opportunities to provide further information in relation to the amendment notice. The Applicant did not however provide evidence that went to the issue in question.
Based on the evidence before it, the Tribunal finds that there is no security agreement between the Applicant and Volkswagen in relation to the motor vehicle (being the collateral). As such the Applicant does not have a security interest over the motor vehicle. Consequently, the Tribunal finds that the collateral (motor vehicle) described in registration number 201804100003322 does not secure any obligation owed by a debtor to the Applicant (as the secured party).
Pursuant to section 181 of the PPS Act the Tribunal considers there are no reasonable grounds that the amendment to the PPS Register being sought is not authorised under section 178 of the PPS Act and as such the registering of a financing change statement amending the registration in accordance with the amendment demand is appropriate.
CONCLUSION
The decision under review is affirmed.
I certify that the preceding 55 (fifty-five) paragraphs are a true copy of the reasons for the decision herein of Member D Mitchell
...........[SGD]......................................................
Associate
Dated: 19 April 2021
Hearing: Heard on the papers Applicant:
Ms Samantha Gow
Respondent: Mr Michael Piotrowicz Australian Financial Security Authority
Key Legal Topics
Areas of Law
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Commercial Law
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Administrative Law
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Property Law
Legal Concepts
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Statutory Construction
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Judicial Review
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Consent
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Standing
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Procedural Fairness
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Remedies
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