Nco Finance Australia Pty Ltd v Australian Pacific Airports (Melbourne) Pty Ltd
[2013] FCCA 2274
•24 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NCO FINANCE AUSTRALIA PTY LTD v AUSTRALIAN PACIFIC AIRPORTS (MELBOURNE) PTY LTD | [2013] FCCA 2274 |
| Catchwords: CONSUMER LAW – Consumer credit – security interests – competing claims for priority – effect of Personal Property Securities Act 2009 – date of registration the same – application of transitional provisions – application of priority entitlement under pre-existing legislative regimes. |
| Legislation: Personal Property Securities Act 2009 (Cth), ss.8, 10, 12(1), 55(4), 55(5), 55(6), 73, 321, 330 and 332 National Consumer Credit Protection Act 2009, Schedule 1 National Credit Code, s.88 Chattel Securities Act 1987, s.10(4) |
| Applicant: | NCO FINANCE AUSTRALIA PTY LTD (ACN 122 981 533) |
| Respondent: | AUSTRALIAN PACIFIC AIRPORTS (MELBOURNE) PTY LTD (ACN 076 999 114) |
| File Number: | MLG 943 of 2012 |
| Judgment of: | Judge O’Dwyer |
| Hearing date: | 21 August 2012 |
| Date of Last Submission: | 21 August 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 24 December 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Greenway |
| Solicitors for the Applicant: | Forbes Dowling Lawyers |
| Solicitor for the Respondent: | Ms McDevitt |
ORDERS
The application filed on 3 August 2012 is dismissed.
The applicant pay the respondent’s costs as agreed, but failing agreement, as taxed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 943 of 2012
| NCO FINANCE AUSTRALIA PTY LTD (ACN 122 981 533) |
Applicant
And
| AUSTRALIAN PACIFIC AIRPORTS (MELBOURNE) PTY LTD (ACN 076 999 114) |
Respondent
REASONS FOR JUDGMENT
Introduction
By an application under the National Consumer Credit Code[1] (“the Code”) the applicant seeks orders for the delivery up of a 2007 black Holden Astra Hatchback (reg no GKA70 - VIN WOLOAHL4882078611 and engine number Z19DTHI7306883) (“the vehicle”) in the possession of the respondent; or in the alternative, authorisation to enter the respondent’s Long Term Car Park at the Melbourne Airport, Tullamarine, for the purpose of taking possession of the vehicle.
[1] Schedule 1, National Consumer Credit Protection Act 2009.
The respondent is the operator of the Long Term Car Park at the Melbourne Airport, Tullamarine, where the vehicle is presently parked and in whose possession the vehicle is held. The respondent has a competing claim for the right to possess the vehicle, it says, until outstanding parking fees have been paid.
The applicant relies on the sworn affidavit of Ms Amber Tran in respect of setting out the legal arrangements subsisting between the applicant and St George Finance Limited (“St George”) that gives rise to the applicant’s standing in this proceeding and its right to possession. I am satisfied the applicant has standing.
This case centres on the question of whether the applicant or the respondent has priority in respect of their competing claims to the possession of the vehicle.
Background
No issue has been taken by either party in respect of the facts in this case, which are set out below.
On 16 April 2009, St George advanced the sum of $21,383.80 to
Ms Susan Ann Bessalem (“the purchaser”) for the purchase of the vehicle (“the loan agreement”).
The vehicle entered the respondent’s Short Term Car Park on or about 27 September 2011. It was first detected by Melbourne Airport staff as possibly abandoned on 4 October 2011. It was thereafter monitored until 14 December 2011, on which date it was deemed to have been abandoned and was relocated to the respondent’s Long Term Car Park. As of 14 December 2011, car parking fees had accrued in the sum of $3,905 and thereafter, in the Long Term Car Park to the date of hearing, a further $2,414. In addition, there was a cost of $440 incurred in towing the vehicle between the two car parks.
The purchaser defaulted under the loan agreement with St George and on 23 April 2011, a default notice pursuant to s.88 of the Code was forwarded to her demanding the sum of $18,520.43. Despite the demand, the purchaser failed to pay the sum due, or any part of it.
On 19 April 2010, St George had entered into an arrangement with the applicant under which St George could assign bad debts to the applicant, which, I am satisfied, it lawfully did in respect of this delinquent loan. By a notice in writing dated 26 July 2011, the applicant had notified the purchaser of the assignment of the debt arising under the loan.
Do the parties have a security interest?
The Personal Property Security Act 2009 (Cth) (“the PPSA”) was enacted to ensure consistency and uniformity throughout Australia concerning all transactions, in the broad, that serve to secure the purchase price or amount lent by a financier for the acquisition of goods by a debtor. Prior to its enactment, there existed different State based legislative regimes to effect the same general purpose. To effect consistency and uniformity, the PPSA introduced the concept of a ‘security interest’ to be applied Australia wide.
The PPSA provides for a single unified registration system and a comprehensive set of priority rules that apply to all security interests based upon the time of registration, known as “the priority time”.
The party claiming a security interest is, under the PPSA, required to register the security interest on the Personal Property Securities Register (“the PPSR”) to ensure the start of its priority time.
To transition to the PPSA regime, the PPSA provided a mechanism to protect earlier perfected security interests subsisting under the then relevant various State legislative regimes.
Under the PSSA a ‘security interest’ is defined as:
… an interest in relation to personal property provided 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).[2]
[2] S.12(1), Personal Property Securities Act 2009 (Cth) (“the PPSA”)
The applicant’s security interest
I am satisfied that the consensual agreement entered into by the purchaser and St George was a ‘transaction’ which is not excluded as one of those set out in s.8 of the PPSA. I am further satisfied that the subject motor vehicle is ‘personal property’ as defined in the PPSA.[3]
[3] See s.10 of the PPSA
Again, I am satisfied that as a consequence of the assignment of this delinquent loan from St George to the applicant, the applicant has a security interest which it is entitled to pursue against third parties; in this instance, against the respondent.
The security interest of the applicant was registered by the applicant’s agent, Australian Receivables on the Queensland Register of Encumbered Vehicles on 12 August 2011 pursuant to the then subsisting legislative regime in Queensland. That Register is defined as a “transitional register” [4] under the PPSA and the security interest is relevantly also defined as a “migrated security interest” [5] under the PPSA.
[4] s.330 of the PPSA
[5] ss.10 and 332 of the PPSA
Under the PSSA, migrated security interests are those registered security interests that are migrated from the State based system to the new Personal Property Securities Register (“PPSR”). The security interest of the applicant was migrated into the PPSR on 21 November 2011 in anticipation and preparatory to the commencement of the PPSA.
The respondent’s security interest
The respondent also claims a security interest in the vehicle arising out of its consensual terms and conditions by which every user of its car parks are said to be bound. The respondent’s security interest had not been registered on the PPSR, but the respondent relies on the transitional provision that it can register its security interest without loss of priority until 1 February 2014.[6] That security agreement is not disqualified under s.8 of the PPSA and is caught by s.73.
[6] s.332(1) of the PPSA
Clause 7 of the respondent’s terms is the basis for the security interest claimed. It states:
Without limiting the general and/or particular lien we have over the vehicle left in the car park (which liens are expressly preserved), we reserve the right to retain possession of the vehicle until all parking fees and other costs incurred by us in respect of the vehicle have been paid. Parking fees will continue to accrue during the period that we retain the vehicle until we recover all fees and costs.
The parking of the vehicle in the respondent’s car park for a fee meets the definition, in my view of a “transaction” under the PPSA.
By that clause, the respondent purports to create a possessory lien.
I am satisfied the respondent does have a “security agreement”, and consequentially a security interest in the vehicle which is enforceable against third parties provided it is perfected.
Was the security interest perfected?
The act of registering the applicant’s security interest in Queensland, in my view, “perfected” that security interest for the purposes of the applicable Queensland regime.
The respondent contends that its security interest was perfected when it took possession of the vehicle on 21 September 2011. I am satisfied that the leaving of the vehicle in the respondent’s possession under a bailment for fee on the term set out above amounts to perfection of that security interest. The applicant conceded as much.
Who has the superior priority?
The PSSA creates general rules of application for all transactions that are security interests. Where there are competing security interests that arise under the new legislative framework, generally speaking, it is the first to register that security interest that has priority ahead of any other. However, in the present case, both security interests arise under pre-existing legislative regimes and under s.322 of the PPSA they are, for the purposes of the PPSA regime, again perfected on the day immediately preceeding the commencement time of the PPSA; i.e. 30 January 2012.
Section 55 of the PPSA sets out how priority disputes are to be determined, and in respect of competing perfected security interests, ss.55(4) and 55(5) have application. Those subsections provide:
(4) Priority between 2 or more security interests in collateral that are currently perfected is to be determined by the order in which the priority time (see subsection (5)) for each security interest occurs.
(5)For the purposes of subsection (4), the priority time for a security interest in collateral is, subject to subsection (6), the earliest of the following times to occur in relation to the security interest:
(a) the registration time for the collateral;
…
Section 55(6) requires the security interest to be continuously perfected; which in the case of the applicant was from 12 August 2011 when it was registered on the Queensland Register of Encumbered Vehicles and for the respondent when it took possession of the vehicle on 21 September 2011 and has retained possession to date.
The applicant contends that it has priority, as the registration of the security interest on the Queensland Register of Encumbered Vehicles on 12 August 2011 predates the perfection as the security agreement itself between the purchaser and the respondent, as the respondent’s perfection, was on a later date; namely, 21 September 2011.
Under s.321 of the PPSA, the requisite attachment of the security interest to the collateral (ie the vehicle) was immediately before the ‘registration commencement time’, which is 30 January 2012.
The respondent contends that its perfected security interest, although not registered, pursuant to s.322(1) can, up to 1 February 2014, be registered on the PPSR, without loss of priority. In other words, the respondent’s security interest can be deemed to have been registered on the PPSR at the same time as that of the applicant.
Accordingly, there subsists two continuously perfected security interests in the same collateral registered (or potentially - one being capable of registration) with the same registration time, being the commencement time of the PPSA as ‘registration time’ is defined in the PPSA as commencing on the ‘registration commencement time’[7].
[7] See s.322(1) of the PPSA
In such a circumstance, the PPSA under s.323 provides the solution. That section states:
If the priority between 2 transitional security interests is not otherwise able to be determined under this Act, they have the priority between themselves that they would have had under the law that applied to such priority immediately before the registration commencement time, and as if this Act had not been enacted.
The applicant relies upon the registration on 12th of August 2011 as establishing its priority.
The respondent says that its priority is established by s.10(4) of the applicable Victorian legislation at the operative time, the Chattel Securities Act 1987. Section 10(4) provides:
A repairer’s lien on goods, whether or not registered under Part 3, ranks in priority to any registered security interest in respect of those goods irrespective of the date and time of the registration of that registered security interest.
The applicant sought to draw a distinction between a "repairer’s lien" and the general possessory lien established under the respondent’s terms and conditions. The applicant contended that the nature of the respondent’s possessory right could not properly be a repairer’s lien.
It was submitted that, for there to be a repairer’s lien, the “repairer” must show that value has been added to the chattel by the repairer, such as is commonly understood to be the case where a motor vehicle is repaired or serviced by a mechanic.The applicant drew my attention to authority which drew a distinction to the effect suggested by the applicant.
Apart from the limited authority provided, neither party could provide an adequate definition of “repairer’s lien”. However, a repairer’s lien is defined in the Victorian legislation itself as:
repairer’s lien means a lien on goods in the possession of a person as security for payment for services or materials furnished in respect of those goods by that person in the ordinary course of business.
The applicant's attempts, therefore, to draw a distinction between a repairer’s lien and the possessory lien is clearly frustrated by the definition outlined above.
I am satisfied that the respondent, indeed, had a "repairer’s lien" within the meaning of the Chattel Securities Act 1987 as it possessed the vehicle as a security for payment of its fees, which in turn, were charged for the provision of parking services furnished in the ordinary course of the respondent’s business.
In light of that, s.10(4) of the Chattel Securities Act 1987 is enlivened and provides the respondent with a superior security interest over that of the applicant, notwithstanding the applicant’s earlier registration of that interest pursuant to the Queensland legislation.
Accordingly, the applicant has not made out its right for the orders it seeks and the application must be dismissed.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge O’Dwyer
Associate:
Date: 24 December 2013
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