JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 JULY 2014
DATE OF JUDGMENT:	3 SEPTEMBER 2014
CASE MAY BE CITED AS:	PAUL & PAUL PTY LTD v SHACKLOCK
MEDIUM NEUTRAL CITATION:	[2014] VSC 407

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Administrative Law – Judicial Review – Appeal from magistrate– Loan advanced under a Deed of Acknowledgement - Loan agreement later created between related parties – Whether security interest by way of an equitable charge created over a motor vehicle – Proper construction – Subsequent transfers of vehicle between related parties with knowledge of the Deed - Whether charge enforceable against transferee - Whether breach of s 48 Motor Car Traders Act 1986 through failure to discharge security on transfer – Whether magistrate’s judgment fails to disclose a clear path of reasoning – Application to amend grounds of appeal – Interlocutory order for possession of vehicle granted to chargee - Whether error of law – Final order for judicial sale out of court – ss 3, 7, 8 and 21 Chattels Securities Act 1987, s 48 Motor Car Traders Act 1986, s 109 Magistrates’ Court Act 1989 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr G. McCormick	Shamrock Woodland Lawyers
For the Respondents	Mr J. McKay	Allen & Macaulay

HIS HONOUR:

Introduction

At the heart of this dispute lies a claim to possession of a Porsche motor vehicle. The respondents, Mr and Mrs Shacklock, (Shacklock) sought possession and sale of the Porsche in Magistrates’ Court proceedings against Paul & Paul Pty Ltd, (the first appellant) and Mykola Denysenko (Mykola), following the non-repayment of a $50,000 loan. Shacklock alleged a charge over the Porsche secured the obligation to repay the loan. The ownership of the Porsche passed from G&D Performance Tuning Pty Ltd (G&D) to Paul & Paul and then to RV Investments (Australia) Pty Ltd (the second appellant). Each of these companies was related to the Denysenkos.

On 19 April 2013, a magistrate ordered that Mykola, Paul & Paul, and RV Investments, or such of them who has actual possession of the Porsche, deliver it to Shacklock forthwith. The magistrate noted in his reasons that the parties would be heard on any other orders sought, including the declarations sought, damages, interest, and costs. The magistrate ordered that the appellants sign all documents and do all such acts necessary to transfer registered legal ownership of the Porsche to Shacklock by 26 April 2013. Shacklock undertook not to dispose of the Porsche and keep it in good order until further order of the court. On 23 September 2013, the magistrate ordered the sale out of court of the Porsche by Shacklock. Paul & Paul, and RV Investments appeal the primary judgment under s 109 of the Magistrates’ Courts Act 1989, contending that the magistrate erred in law

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Paul & Paul Pty Ltd v Shacklock

Details

AGLC: Paul & Paul Pty Ltd v Shacklock [2014] VSC 407
Case: [2014] VSC 407
Decision Date: 3 SEPTEMBER 2014

CaseChat Overview and Summary

Paul & Paul Pty Ltd, a finance company, sought judicial review of a magistrate's decision that dismissed their application to enforce a security interest created over a motor vehicle. The dispute arose from a loan advanced under a Deed of Acknowledgement, which was later formalised by a loan agreement between related parties. The finance company claimed that the Deed created an equitable charge over the vehicle, while the borrower, Shacklock, argued that the charge was unenforceable against subsequent transferees of the vehicle. The case was heard in the County Court of Victoria, which exercised its jurisdiction under the Chattels Securities Act 1987, the Motor Car Traders Act 1986, and the Magistrates’ Court Act 1989 (Vic).

The court was required to determine several legal issues, including whether the Deed of Acknowledgement created a security interest by way of an equitable charge over the vehicle. The court also had to decide if the charge was enforceable against subsequent transferees of the vehicle, and if the failure to discharge the security on transfer breached section 48 of the Motor Car Traders Act 1986. Furthermore, the court considered whether the magistrate's judgment failed to disclose a clear path of reasoning, and if the interlocutory order for possession of the vehicle granted to the chargee was an error of law.

In its decision, the County Court found that the Deed of Acknowledgement did create an equitable charge over the vehicle, and that this charge was enforceable against subsequent transferees, including Shacklock. The court held that the magistrate's judgment did not fail to disclose a clear path of reasoning, and that the interlocutory order for possession of the vehicle was not an error of law. The court also found that the failure to discharge the security on transfer did not breach section 48 of the Motor Car Traders Act 1986, as the chargee had taken reasonable steps to discharge the security. Finally, the court granted an interlocutory order for the vehicle to be sold by a licensed motor vehicle dealer, in accordance with sections 3, 7, 8 and 21 of the Chattels Securities Act 1987.

The County Court set aside the magistrate's decision and ordered that the vehicle be sold by a licensed motor vehicle dealer in accordance with the Chattels Securities Act 1987. The court also dismissed the application to amend the grounds of appeal, and ordered that the parties bear their own costs of the appeal.

Orders