Mercedes-Benz Financial Services Australia Pty Ltd v Peovski
[2022] VCC 199
•2 March 2022
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Banking and Finance List
Case No. CI-20-02726
| MERCEDES-BENZ FINANCIAL SERVICES AUSTRALIA PTY LTD (ACN 074 134 517) | Plaintiff |
| v | |
| ALEKSANDAR PEOVSKI | Defendant |
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JUDGE: | His Honour Judge Woodward | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 March 2022 | |
DATE OF JUDGMENT: | 2 March 2022 | |
CASE MAY BE CITED AS: | Mercedes-Benz Financial Services Australia Pty Ltd v Peovski | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 199 | |
REASONS FOR JUDGMENT
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Subject:CONTRACT
Catchwords: Motor vehicle Asset Loan Agreement – breach of terms – whether defendant executed Asset Loan Agreement – whether defendant served with default notice
Legislation Cited: Personal Property Securities Act 2009 (Cth)
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | M Biviano | Law Squared |
| For the Defendant | No appearance | None |
HIS HONOUR:
Summary and outcome
1By proceedings commenced on 22 June 2020, the plaintiff sues to recover money it alleges is owing to it by the defendant under an “Asset Loan Agreement” dated 18 January 2019 (“agreement”), pursuant to which plaintiff agreed to advance funds to assist in the defendant’s purchase of a Mercedes-Benz motor vehicle with VIN WDD1903782A019950 (“vehicle”). The amount that plaintiff says is owing to it under the agreement as at 2 March 2022 is $258,778.23. The plaintiff also seeks an order for possession of the vehicle.
2I am satisfied that plaintiff has proved its claim and there will therefore be judgment for the plaintiff against the defendant in the sum of $258,778.23 (which sum includes interest pursuant to statute up to 2 March 2022) plus costs, to be taxed on and indemnity basis in default of agreement. I will also order that plaintiff have possession of the vehicle.
Issues in the proceeding
3An appearance and defence were filed in the proceeding on behalf of the defendant by Nicholas James Lawyers. The defence is dated 27 August 2020. The only substantive defence pleaded on behalf of the defendant is to the effect that the signature on the agreement is not his signature, and thus he did not enter into the agreement.
4He also pleads that, while he did live at the address stated in the agreement from December 2017 to 27 June 2019, from 8 September 2019 he was, and continues to be, located in Bitola, North Macedonia. This pleading appears to support the denial by the defendant of service of a demand under the agreement on or about 11 March 2020.
5On 14 May 2021, Nicholas James Lawyers filed a Notice of Solicitor Ceasing to Act in the proceeding. On 20 May 2021, Judicial Registrar Burchell (as her Honour then was) made orders in the proceeding accepting the filing of the Notice of Solicitor Ceasing to Act and providing that ordinary service may be effected on the defendant at the email address [email protected]. There has been no further document filed with or otherwise provided by on behalf of the defendant to the court, except for a Notice of Dispute dated 8 June 2021 sent by email to plaintiff’s solicitors and the court on that date, from the email address [email protected].
6In particular, the defendant has played no part in the preparation of any pre-trial documents, including the statement of issues. For that reason, the statement of issues provided by the plaintiff has apparently been prepared by reference to the defendant’s defence and identifies two issues in the proceeding to the effect as follows:
(a) Did the defendant sign the agreement and enter into the agreement with plaintiff?
(b) Was the defendant served with demands for payment pursuant to the agreement?
7Further, despite numerous emails being sent to the email address [email protected] both by the solicitors for plaintiff and the court concerning the forthcoming trial (and none of those emails received a non-delivery report in response), the defendant failed to appear at the trial or otherwise seek to substantiate his defence. Indeed, it would appear that there has been no attempt by the defendant to contact either the plaintiff’s solicitors or the court since June 2021. This was confirmed both by counsel for the plaintiff and my associates at the commencement of the trial. In the circumstances, I agree with the plaintiff’s statement of the issues in the proceeding.
Background
8At the pre-trial directions hearing in the proceeding on 14 February 2022, Judicial Registrar Bennett made orders for witness statements, including an order that evidence at trial will be given by witness statements which, when adopted, will stand as the evidence-in-chief of the witness. The plaintiff’s solicitors have since filed and served four witness statements including detailed referencing to the relevant documents in the court book, each of which was adopted by the witness concerned at trial, and was not subject to cross-examination. The witnesses were:
(a) Terrence Dilisio, a senior business manager employed by 3 Point Motors Pty Ltd, a Mercedes-Benz dealership in Fairfield, Victoria (“3 Point Motors”);
(b) Vishal Patel, an in-house solicitor employed by the plaintiff;
(c) George Milios, an optometrist and Justice of the Peace based in Kogarah, NSW; and
(d) Marcus Brash, the solicitor responsible for the conduct of this proceeding on behalf of the plaintiff.
9The summary below is based on the matters stated, and documents referred to, in those witness statements and the oral evidence of the witnesses.
10In early January 2019, the defendant contacted 3 Point Motors by telephone and commenced discussions concerning the purchase of the vehicle. On 4 January 2019 the defendant emailed 3 Point Motors attaching a signed Mercedes-Benz Finance Privacy Disclosure Statement and Consent dated 3 January 2019 and various identification documents. On 6 January 2019, the defendant sent a further email attaching copies of personal tax returns and financial statements of his business, as additional support for his application for finance for the vehicle. The defendant also provided further identification documents over the ensuing days.
11Terrence Dilisio is a Senior Business Manager with 3 Point Motors who had dealings with the defendant in early 2019. On about 4 January 2019, Mr Dilisio undertook online searches relating to the defendant’s business “Ap Pro Sound”. He made similar searches earlier this year and noted that the mobile number associated with the business matched that which he had used to contact the defendant in January 2019, and showed the address for the business as “Rockdale NSW, 2216”. This matched the suburb and postcode of the address provided by the defendant in various documents that he emailed to Mr Dilisio during January 2019. More particularly, rates notices and the agreement each recorded the defendants residential address as “U 62, 6-10 Garnet Street Rockdale NSW 2216”.
12Mr Dilisio also gave evidence concerning information provided by the defendant about an address in Victoria. The effect of this evidence was that the defendant also provided a rates notice for a property at 125 Market Road Werribee Victoria 3030 and informed Mr Dilisio that the defendant resided 50% of the time at the Werribee address and the other 50% at the address in Rockdale NSW.
13On 18 January 2019, Mr Dilisio emailed to the defendant five documents for execution by the defendant to put in place finance for the purchase of the vehicle. Mr Dilisio confirmed in oral evidence in effect that this included a complete set of the terms and conditions applying to the agreement, referred to further below. In addition to the terms and conditions, the documents sent to the defendant by email comprised a direct debit request form relating to the defendant’s account with the Bank of Sydney (“BOS Account”), a finance application, a repurchase agreement and a declaration of purpose.
14The defendant signed and returned these later that day. The defendant also emailed to Mr Dilisio on 18 January 2019 a certificate of currency of insurance and copies of four certified identification documents, comprising the defendant’s passport, NSW driver’s licence, ING Visa debit card and a NAB Visa card.
15Importantly, each of these documents was certified as a true copy by George Milios, an optometrist based in Kogarah, NSW. Mr Milios gave evidence at trial confirming he is a Justice of the Peace in NSW with registration number 170279, appointed 4 October 1983. He gave evidence:
(a) of his practice in relation to the certification of documents;
(b) that he did not know the defendant and has no recollection of the defendant attending at his business premises;
(c) that it was his signature and stamp appearing on the certified documents; and
(d) of his belief based on his practice that the defendant probably attended his business premises in person, showed him the original identification documents which he would have checked and verified (along with checking that the defendant’s appearance matched his photo in the identification documents) before certifying each of the documents.
16It appears that sometime late on 18 January 2019, someone at 3 Point Motors in Fairfield noted that the documents that had been signed and returned by the defendant were wrongly dated 2018, not 2019. Accordingly, a fresh set of finance documents incorporating the correct date was sent by email to the defendant and he signed and returned these (including, relevantly, the agreement) on 18 January 2019. Mr Dilisio could not recall if it was he who arranged this, but his review of the dealership file confirmed that this had occurred. Confirmation of these matters was also provided following a review of the plaintiff’s business records by Mr Patel.
17The evidence was that the defendant collected the vehicle from 3 Point Motors on 19 January 2019, after signing a “Customer Consent Form” and a “VicRoads Dealership Transfer” that day. The dealership file discloses that the defendant provided original identification documents to 3 Point Motors that day which were scanned and added to the dealership file.
18Finally, Mr Dilisio gave evidence that on or about 23 January 2019 the plaintiff transferred $252,000 to 3 Point Motors on behalf of the defendant, and produced a tax invoice and remittance advice for this payment. Mr Patel also gave evidence of this payment, and confirmed that on or about 23 January 2019, the plaintiff registered its Security Interest in the vehicle on the Personal Property Securities Register.
19The chronology of events is next taken up by Mr Patel, who gave evidence that the defendant made four payments of $3,772.74 pursuant to the direct debit from the BOS Account between 18 February and 17 May 2019. These payments are recorded in the plaintiff’s business records and also in a bank statement for the BOS Account discovered by the defendant in the proceeding.
20According to Mr Patel, on 4 July 2019, the plaintiff sent a Default Notice by prepaid post to the defendant at his address in Rockdale NSW, being the address nominated in his finance application. On 18 July 2019 and 16 August 2019, further payments from the defendant to the plaintiff in the sum of $3,772.74 from the BOS Account to the plaintiff were dishonoured.
21The plaintiff thereafter took a number of steps in response to the defendant’s default as follows:
(a) on 15 January 2020, relying on the provisions of the agreement, the plaintiff lodged a caveat over two properties registered in the name of the defendant in Bacchus Marsh, Victoria;
(b) on 6 February 2020, the plaintiff wrote to the defendant at the Rockdale address providing a Notice of Intention to Report Credit Default, confirming that the plaintiff had terminated the agreement and requesting the amount then due under the agreement of $284,670.23;
(c) on 11 March 2020, the plaintiff sent a final demand by prepaid post to the defendant at his address in Rockdale NSW again requesting payment of the $284,670.23 owing under the agreement;
(d) in or about June 2020, Mr Patel corresponded with the defendant by email about the agreement and the caveats lodged by the plaintiff. According to Mr Patel, at no point during that correspondence did the defendant take issue with the agreement, apart from asking for information concerning the amount outstanding.
22The properties in Bacchus Marsh that were the subject of the caveats were sold during 2021, and after the payment of the mortgagee and the resolution of a dispute with another caveator, the plaintiff received $79,536.05 which it applied to the debt owing by the defendant to the plaintiff.
23Mr Patel’s evidence included details of the calculation of the amount owing by the defendant as at 2 March 2022 pursuant to the agreement including interest and after taking into account the proceeds received from the sale of the Bacchus Marsh properties. That amount is $258,778.23. I am satisfied that Mr Patel’s calculations result in an amount that is no more than the sum presently owing under the terms of the agreement.
The agreement
24Mr Patel gave evidence (and I accept) that the agreement relevantly provides as follows:
(a) the plaintiff agreed to advance $253,440 to assist in the defendant’s purchase of the vehicle;
(b) the defendant was required to pay the plaintiff $338,492.53 (“loan sum”), which some included various fees, the price of the vehicle plus interest charges;
(c) the defendant was required to pay the loan sum by way of 60 monthly instalments of $3772.74 with the first instalment due on 18 February 2019 and a balloon payment of $112,128.13 due on the expiration of the agreement term;
(d) clause 1.6 provides:
“Default Interest Rate means the annual implicit contract interest rate plus 5% per annum, but the combined total is to be no less than the rate set from time to time under s2 of the Penalty Interest Rates Act 1983 (Vic).”;
(e) clause 1.19 defines Security Interest to include a security interest as defined in the Personal Property Securities Act (Cth);
(f) by clauses 4.1 to 4.3, the defendant agreed to pay the sums due and comply with his other obligations under the agreement;
(g) by clause 6.1, the defendant granted a Security Interest in the vehicle to securities obligations to the plaintiff under the agreement;
(h) clause 7 provides for the consequences of default, including that the defendant will be in default if he does not pay any amount owed to the plaintiff under the agreement and that the plaintiff’s remedies for default include charging interest at the “Default Interest Rate”, charging various expenses and charges, issuing a Default Notice, taking possession of the vehicle, terminating the agreement and suing for any money owing by the defendant to the plaintiff;
(i) clause 9.1 provides as follows:
“If you are subjected to any claims, losses, injuries, expenses or costs related to the use, maintenance or condition of the Vehicle, I will pay all of your resulting reasonable costs and expenses, including legal costs (on a full indemnity basis) except to the extent such claims, losses, injuries, expenses or costs are caused by you.”; and
(j) clause 13.2 provides that notice may be given to either party under the agreement by (among other methods) sending it by email or post to the address of the addressee’s place of residence or business last known to the person giving the notice.
The issues
25In my view, any defence based on the assertion that the defendant did not sign the agreement is entirely without merit. The evidence overwhelmingly establishes that:
(a) the plaintiff and defendant engaged in extensive communications in the lead up to the signing of the agreement;
(b) it was the defendant who attended the business premises of Mr Milios and arranged for Mr Milios to certify the defendant’s identification documents, including his passport and driver’s licence;
(c) the signed agreement was sent by the defendant to 3 Point Motors using the defendant’s email address;
(d) it was the defendant who attended the premises of 3 Point Motors on 19 January 2019, presented identification documents again including his passport and driver’s licence for copying, signed the VicRoads Dealership Transfer and collected the vehicle; and
(e) it was the defendant who made the first four payments due under the agreement from his BOS Account and later corresponded with the plaintiff in relation to his default under the agreement.
26Turning to the question of the Default Notice, to the extent this was required before the plaintiff took enforcement action under the agreement, I am satisfied that the Default Notice dated 4 July 2019 was duly given by the plaintiff to the defendant in accordance with the terms of the agreement. More particularly, it was sent by prepaid post to the defendant at his address stated in the agreement at Rockdale in NSW. Mr Patel gave brief oral evidence at trial confirming that this was the address of the defendant last known to the plaintiff.
27I am further satisfied that the Final Demand dated 11 March 2020 was likewise duly given by the plaintiff to the defendant in accordance with the terms of the agreement. Further, it is clear from the email correspondence between Mr Patel and the defendant in June 2020 that the defendant was aware of the plaintiff’s demands and its intentions to pursue enforcement action.
Conclusion
28I am otherwise satisfied based on the evidence of the plaintiff’s witnesses and the business records and other documents produced by the plaintiff in the course of the trial, that the plaintiff has established its claims in the proceeding and is entitled to judgment in the sum of $258,778.23 and an order for possession of the vehicle and costs. On the issue of costs, while I am not persuaded that the circumstances of the defendant’s conduct in the proceeding justify a special order for costs (except perhaps in respect of the costs of the trial), I am satisfied that clause 9.1 of the agreement confers a contractual entitlement on the plaintiff to an order for indemnity costs.
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Certificate
I certify that these 11 pages are a true copy of the judgment of His Honour Judge Woodward delivered on 2 March 2022.
Dated: 2 March 2022
Lyn Nguyen
Associate to His Honour Judge Woodward
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