Secure Funding Pty Ltd v Judge
[2024] FedCFamC2G 1069
•22 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Secure Funding Pty Ltd v Judge [2024] FedCFamC2G 1069
File number: MLG 2399 of 2024 Judgment of: JUDGE SYMONS Date of judgment: 22 October 2024 Catchwords: CONSUMER LAW – where applicant seeks orders pursuant to ss 100 and 101 of the National Credit Code – where applicant seeks orders authorising entry into residential premises of respondent – where applicant seeks orders authorising delivery of vehicle – where respondent has not filed any material – whether evidence supports making of such orders – order made requiring the respondent to deliver vehicle within 7 days – order made that the applicant can enter the respondent’s residential property for the purposes of repossessing the vehicle – order that respondent pay applicant’s costs Legislation: National Consumer Credit Protection Act 2009 (Cth) Sch 1, ss 99, 100, 101
Personal Property Securities Act 2009 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), Sch 2Cases cited: Volkwagen Financial Services Australia Pty Ltd v Mandalavi & Anor [2018] FCCA 752
Volkswagen Financial Services Australia Pty Limited v Pogue [2024] FedCFamC2G 898
Division: Division 2 General Federal Law Number of paragraphs: 41 Date of last submissions: 10 October 2024 Date of hearing: 10 October 2024 Place: Melbourne Solicitor for the Applicant: Mr S Lane of Agility Law Group Respondent: Appeared on her own behalf ORDERS
MLG 2399 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: SECURE FUNDING PTY LTD ABN 25 081 982 872
Applicant
AND: SUZANNE JUDGE
Respondent
ORDER MADE BY:
JUDGE SYMONS
DATE OF ORDER:
22 OCTOBER 2024
THE COURT ORDERS THAT:
1.Pursuant to s 101 of Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) (Code) the respondent deliver to the applicant, or the applicant’s lawfully appointed agent, the following vehicle (Vehicle) together with all keys to the Vehicle:
Type: 2021 Honda Odyssey Wagon
VIN: JHMRC1830MC201010
Engine Number: K24W72550909
Registration Number: 1UD4XH
2.The respondent deliver the Vehicle and keys to the Vehicle to the applicant, or the applicant’s agent, at a time, date, and place the applicant nominates and communicates to the respondent, being a time and date that is no earlier than 29 October 2024.
3.The applicant and/or its lawfully appointed agent may enter X/X XXX XXXX, Leopold, Victoria 3224, for the purpose of taking possession of the Vehicle.
4.The respondent pay the applicant’s costs fixed in the amount of $5,749.
THE COURT NOTES THAT:
A.Subsection 101(3) of the Code provides that a person who contravenes an order made under s 101 of the Code commits an offence.
B.The applicant may report the Vehicle as stolen if it is unable to recover the Vehicle.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE SYMONS:
INTRODUCTION
The applicant (Secure Funding) seeks an order pursuant to s 101 of Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) (Code) that the respondent, Ms Suzanne Judge, deliver to Secure Funding or its agent, a 2021 Honda Odyssey Wagon (Vehicle) and if she fails to do so, an order pursuant to s 100 of the Code that Secure Funding or its agent have access to identified residential premises for the purpose of repossessing the Vehicle.
FACTS
On 23 June 2021 Ms Judge signed a document titled “Consumer Loan Agreement Schedule” (Loan Schedule).[1] The Loan Schedule did not purport to contain all the terms of the loan agreement but was intended to be read together with a Consumer Loan Agreement Standard Terms and Conditions (Loan Terms) a copy of which was also in evidence and signed electronically by Ms Judge.[2] The Loan Schedule and the Loan Terms are referred to going forward as the Loan Agreement.
[1] Annexure RWF-2 to the affidavit of Robert Walter Foster dated 19 July 2024 (Foster affidavit).
[2] Annexure RWF-2 to the Foster affidavit.
The Loan Schedule identified Ms Judge as the Customer and recorded various information including Ms Judge’s address (Leopold address) and the amount of credit ($50,050.00), $49,547 of which was to be applied towards the purchase of the Vehicle, with the balance to be paid in “fees and charges”.
In a section headed “Repayments”, the Loan Schedule provided that the loan was to be repaid over a period of five years by Ms Judge making 60 monthly instalments in the amount of $968.11 with the first payment to be made within one month of the settlement date.
In a section headed “Security”, the Loan Schedule identified the Vehicle as the “Security Interest… to be taken by us” and recorded the Leopold address as the place that the Vehicle was garaged/stored.
Clause 11 of the Loan Terms was said to apply if the Security box in the Loan Schedule was completed. It contained an acknowledgement by “You” (Ms Judge) that she granted “us” (Secure Funding) a security interest in the goods, with “the goods” being the Vehicle. Clause 15 defined “security interest” as meaning (among other things) “any mortgage, charge, lien, pledge, trust, power or other rights given as or in effect as security, for the payment of money or performance of obligations”.
Clause 8 of the Loan Terms deals with Defaults including by:
(a)specifying that default occurs in circumstances that include a failure by Ms Judge to pay on time all amounts due under the agreement (cl 8.1(a));
(b)specifying that if default occurs, Secure Funding may give Ms Judge a notice of default requiring her to correct the default within any period given in the notice or required by law (cl 8.2);
(c)requiring Ms Judge to pay the full amount owing under the loan agreement if she does not comply with the default notice (cl 8.2);
(d)specifying that Secure Funding may, if a default persists, sue Ms Judge for the total amount owing, or enforce any security, or do both (cl 8.2) with enforcement involving, among other things, taking possession of the goods (cl 8.4(b)) and entering any place Secure Funding believes the goods are held in order to take possession of the goods (cl 8.4(f)).
On 23 June 2021 Secure Funding registered a security interest against the Vehicle with the Personal Property Securities Register established under the Personal Property Securities Act 2009 (Cth) (PPS Act).[3]
[3] Annexure RWF-3 to the Foster Affidavit.
On 23 January 2023, Ms Judge ceased making payments to Secure Funding.[4]
[4] Annexure RWF-5 to the Foster affidavit is a statement of Ms Judge’s loan account that records a final payment of $968.11 being made on 23 January 2023. All subsequent payments made by Ms Judge to Secure Funding were reversed.
On 23 June 2023, Secure Funding issued a document titled “Notice of Default” to Ms Judge.[5]
[5] Annexure RWF-4 to the Foster affidavit.
The Default Notice was sent to the Leopold address and stated that Ms Judge was “in default of [her] obligations to Secure in relation to the Loan Agreement and mortgage of the Mortgaged Property” (being the Vehicle) because the “Default Amount” of $4,212.38 had not been paid by Ms Judge to Secure Funding. The Default Notice contained a demand that Ms Judge pay the Default Amount, in addition to a payment of $968.11, by 23 July 2023. It stated that unless the Default Amount was paid within 31 days, the total amount outstanding “in relation to the Loan Agreement and Mortgage” would become immediately due for payment, and Secure Funding may “commence enforcement proceedings in relation to the total amount owing, including taking action to repossess and sell the Mortgaged Property”. Ms Judge did not comply with the Default Notice.
PROCEEDING IN THIS COURT
On 19 July 2024, Secure Funding made an application seeking to invoke this Court’s jurisdiction under the National Consumer Credit Protection Act 2009 (Cth). In support of its application, Secure Funding filed an affidavit of Robert Walter Foster sworn 18 July 2024 (Foster affidavit) and an affidavit of Levi Jonathan Smouha dated 27 August 2024 (Smouha affidavit). Mr Foster was described as the authorised agent of Secure Funding, appointed pursuant to a letter of authorisation dated 17 July 2024.[6] Mr Smouha is a solicitor with Agility Law Group, the firm that represents Secure Funding in this proceeding.
[6] Annexure RWF-1 to the Foster affidavit.
The matter first came before me for a directions hearing on 4 September 2024. On this date, Ms Simonidis, solicitor, appeared for Secure Funding, and Ms Judge appeared on her own behalf (both via Microsoft Teams).
Ms Judge acknowledged that she had received copies of the application document, the Foster affidavit and the Smouha affidavit and confirmed that she wished to participate in the proceeding, including by filing responsive documents. I made orders including that Ms Judge file and serve any response and affidavit to the applicant’s application by 17 September 2024, as well as an address for service. The date of 17 September 2024 was fixed having first heard from Ms Judge as to the amount of time she required to prepare her material. The matter was listed for a further directions hearing on 10 October 2024.
Ms Judge did not file any material and neither did she make a request for a filing extension or seek an adjournment of the next hearing date.
On 10 October 2024, Mr Lane, solicitor, appeared on behalf of Secure Funding and Ms Judge appeared on her own behalf, along with her husband. Ahead of the hearing, Secure Funding filed a set of written submissions which addressed the relief sought in its application.
At hearing, Mr Lane read the Foster affidavit and the Smouha affidavit and spoke to the written submissions, including to identify the statutory and evidentiary basis for the orders sought.
Although Ms Judge had not filed any responsive material, I invited her to make submissions as it was clear she opposed the application and orders sought by Secure Funding.
Ms Judge levelled a series of criticisms to Secure Funding and to the firm acting on its behalf, including that they were using language that was not intelligible, that they had engaged in perjury, had conducted a stalking operation and that the evidence they relied upon to establish that there was a loan agreement, was hearsay and inadmissible. Ms Judge was especially concerned however to inform the Court that she had written letters to Secure Funding on 27 March and 26 April 2023, requesting a written copy of the “loan agreement” be delivered to her, and had ceased making repayments as a result of Secure Funding’s failure to provide the contract. Ms Judge told the Court that amongst the orders she was seeking was one for discovery to show “all of the authentic, original documentation in relation to this matter, all signed applications, notes, bills, commercial paper, contracts etc. to prove the equity it is claiming and provide full disclosure”.
DETERMINATION
In its application Secure Funding seeks the following orders:
1. Pursuant to section 101 of the National Credit Code (the Code) that the Respondent and/or any party in possession of the Collateral, being a 2021 Honda Odyssey Wagon with the details:
VIN Number: JHMRC1830MC201010
Engine Number: K24W72550909
Registration Number: 1UD4XH
deliver, surrender and/or provide the location of the Collateral (including and Key or Keys to the Collateral) to the Applicant and/or its Agent at a time and place nominated by the Applicant and/or its agent.
2. Pursuant to section 100 of the Code that the Applicant and/or its appointed Agent be permitted to enter onto, and remain at, any premises and any and all reasonable step(s) in order to take possession of the Collateral, from either of the following premises:
a) [X/X XXX XXXX] Leopold Victoria 3224
b) Any other premises in Australia at which the Collateral is reasonably believed to be located.
3. The Applicant and/or its duly appointed agent be assisted by any officer of any Australian State or Territory Police for the purpose of taking possession of and taking any reasonable action to facilitate the peaceful removal of the Collateral from such premises.
4. Should the Respondent/s, or any person in possession of the Collateral following service of these orders, fail to surrender or divulge such information regarding the whereabouts of the Collateral, so as to enable possession to be taken of the Collateral, the Applicant and/or its duly appointed agent be permitted to report the Collateral as stolen and enter the action on the Personal Properties Securities Register.
Section 101 of the Code
Section 101 of the Code provides:
1) The court may, on the application of a credit provider that is entitled to take possession of mortgaged goods, order a person who has possession of the goods to deliver them to the credit provider at a specified time or place or within a specified period.
2) The court may, on the application of a credit provider or other person required to deliver goods to a credit provider, by order vary the place at which or time or period within which goods must be delivered to the credit provider.
3) A person who contravenes an order under this section commits an offence.
Is Secure Funding entitled to possession of the Vehicle?
Secure Funding is a “credit provider”
I am satisfied that Secure Funding is a “credit provider”. In this regard I accept the submission of Mr Lane that Secure Funding acted in this capacity when it provided credit to Ms Judge for the purpose of the purchase of the Vehicle, and in circumstances where payment of the debt was deferred over a five-year loan period. Ms Judge is self-evidently a natural person, and credit was provided to her for personal, domestic or household purposes. I accept that Secure Funding provided credit in the course of a business of providing credit carried on in this jurisdiction.
Secure Funding is entitled to take possession of mortgaged goods
The primary concern agitated by Ms Judge at hearing was that she had been denied evidence of a signed loan agreement; the implication being that the failure of Secure Funding to provide this documentation somehow disentitled Secure Funding to the relief sought in this proceeding and relieved Ms Judge of her obligations under the loan agreement.
Mr Lane responded to this submission by noting that in addition to the Loan Agreement annexed to the Foster affidavit, included with the Smouha affidavit was a document titled “Motor Loan Agreement Pack – 3636259 Final Audit Report”[7] which recorded, among other things, that a document was created by “Document Esign” on 23 June 2021, the document was emailed to Ms Judge “for signature” to the email address used by her in connection with this proceeding, that within a minute Ms Judge viewed the email and within a further few minutes, the document was “e-signed” by Ms Judge. The document was then returned to the person who had approved the document (Lucas Spokes) for signature. The agreement was recorded as “completed” on the same day.
[7] Annexure LJS-3 to the Smouha affidavit.
I am satisfied in all of these circumstances – and where, in any case, the parties have (for a time) acted consistently with there being a Loan Agreement (money was advanced and applied to the purchase of the Vehicle, and until 23 January 2023, Ms Judge made regular payments in reduction of the loan amount) – that the Loan Agreement was validly executed by the parties.
By reference therefore to the terms of the Loan Agreement I am satisfied that Ms Judge granted Secure Funding an interest in, or a power over the Vehicle to secure Ms Judge’s obligations to make the loan repayments as provided for in the Loan Agreement. More particularly, by executing the Loan Agreement, Ms Judge gave to Secure Funding a mortgage over the Vehicle on terms that, if Ms Judge were in default and, after being given notice to remedy the default, failed to remedy the default, Secure Funding would be entitled to take possession of the Vehicle.
As I have recorded earlier, Ms Judge defaulted under the Loan Agreement by failing to pay by 23 June 2023 an amount of $4,212.38 that by then had become payable under the Loan Agreement. On 23 June 2023 Secure Funding issued the Default Notice to Ms Judge requiring that she remedy the default within 31 days. It is not in dispute that Ms Judge failed to remedy the default identified in the Default Notice within the time provided by the Default Notice, or at all although I note the position of Ms Judge is that she was entitled to do so.
For completeness, I find that the Default Notice complied with the various requirements of s 88(3) of the Code.
Ms Judge has possession of the Vehicle
Before a court may make an order under s 101 of the Code, it must be satisfied that the person against whom an order under s 101 is sought does have possession of the mortgaged goods, in this case, the Vehicle.
Mr Foster deposes that Secure Funding has, by its appointed collection agents, attended on Ms Judge’s last known address, being the Leopold address, on three occasions in November 2023 and on one occasion in December 2023.[8] On 21 November 2023 the Vehicle was sighted at Ms Judge’s property and photographs depicting the Vehicle were taken on this date.[9]
[8] Foster affidavit at [24].
[9] Annexure RWF-7 to the Foster affidavit.
At the hearing, Mr Lane submitted that although it could not be certain that the Vehicle was currently in the possession of Ms Judge, including because its registration had expired and not been renewed as at 23 June 2024,[10] there was no suggestion from Ms Judge to the contrary. There was a proper basis for the Court to find that Ms Judge has retained possession of the Vehicle, and it remains garaged at the Leopold address. I accept this submission.
[10] Annexure RWF-6 to the Foster affidavit is a VicRoads registration search for the Vehicle dated 17 July 2024.
I am satisfied that it would be appropriate for me to order Ms Judge to deliver the Vehicle to Secure Funding, or an authorised agent, and that she do so within seven days of the making of these orders. I do not consider it necessary at this time to enlarge the orders to make provision for “any party in possession of the Collateral” to be subject to the same obligation. There is no evidence of any such person fitting this description.
Section 100 of the Code
Secure Funding seeks a related order in aid of enforcement under s 100 of the Code which section provides:
The court may, on the application of a credit provider that is entitled to take possession of mortgaged goods, authorise the credit provider to enter residential premises for the purpose of taking possession of mortgaged goods.
I have earlier found that Secure Funding is a “credit provider” and is “entitled to take possession of mortgaged goods”. I have also found that the mortgaged goods, being the Vehicle, is presently garaged at the Leopold address, which I understand to be the residential premises of Ms Judge. The necessary conditions for the making of an order under s 100 are therefore present and I am satisfied that it is appropriate to make an order that would permit Secure Funding to enter the Leopold address for the purpose of taking possession of the Vehicle.
The orders sought by Secure Funding however go further in that they seek permission to enter what are described as “any other premises in Australia at which the Collateral is reasonably believed to be located”.
Orders of this kind have been made in other proceedings. However, in Volkswagen Financial Services Australia Pty Limited v Pogue[2024] FedCFamC2G 898 (a decision cited by Secure Funding, although in respect of a different proposition) Judge Manousaridis revisited the appropriateness of an order of this breadth and concluded that it was not one authorised by s 100 of the Code, including as read together with s 99(1) of the Code. His Honour concluded that on its proper construction, “s 100 of the Code empowers a court with jurisdiction to make an order authorising entry into residential premises only where the credit provider proves that mortgaged goods…are located on particular residential premises” (Pogue at [30]). I respectfully adopt this conclusion for the reasons given by his Honour at [28]-[29] and therefore decline to make orders for entry in the more expansive terms proposed by Secure Funding.
Should the Court make an order requiring the involvement of police?
Secure Funding also seeks an order that it be assisted by an officer of any Australian State or Territory Police for the purpose of taking possession of the Vehicle.
In Volkwagen Financial Services Australia Pty Ltd v Mandalavi & Anor [2018] FCCA 752 Judge Cameron had occasion to consider an application for an order of similar effect. His Honour declined to make such an order in circumstances where a source of power had not been identified, the dispute in respect of which assistance was sought was private in nature and where no Australian police force had been a party to the proceeding. The same circumstances apply in this case, and I am similarly unpersuaded that an order of this kind would be appropriate or within power.
Notations
As far as Secure Funding seeks an order that would permit it to report the Vehicle as stolen and enter the action on the Personal Properties Securities Register it seems to me that there would be nothing to prevent Secure Funding from taking such steps, independent of any order made by this Court. I will however include a notation to the orders that foreshadows such action being taken, as well as a notation that states – for the avoidance of doubt – that a person who contravenes an order made under s 101 of the Code commits an offence.
Costs
Secure Funding claims costs in the amount of $5,437 plus a filing fee of $1,960. The costs amount is said to comprise an amount of $3,938 pursuant to item 2 of Schedule 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules), an amount of $321 in respect of the hearing on 4 September 2024, pursuant to item 9(a) of Schedule 2 to the Rules and an amount of $1,178 in respect of the hearing on 10 October 2024, pursuant to item 9(b) of Schedule 2 to the Rules.
I note that item 2 refers to the initiation of an application which includes interim orders. Although interim orders were identified in the application, they mirror the final orders sought by the applicant. The application for substituted service was not pursued. I consider that the appropriate item (if the Scale is to apply) is item 1 instead, which fixes an amount of $3,147. I will allow the amount of $321 for the directions hearing on 4 September 2024 and a further amount of $321 for the hearing on 10 October 2024 which went for no longer than one hour. I will order that the respondent pay the applicant’s costs fixed in the amount of $5,749.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons. Associate:
Dated: 22 October 2024
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