Secure Funding Pty Ltd v Mei
[2025] FedCFamC2G 1045
•8 July 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Secure Funding Pty Ltd v Mei [2025] FedCFamC2G 1045
File number(s): SYG 3029 of 2024 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 8 July 2025 Catchwords: CONSUMER LAW – Personal property securities - application by a secured party to a security agreement within the meaning of s 10 of the Personal Properties Securities Act 2009 (Cth) (PPS Act) against a person (third person) who is not a party to the security agreement for an order of possession of a vehicle that is the subject of a security interest created by the security agreement – whether s 123(1) of the PPS Act is a source of power for making an order for possession against the third person – s 123(1) not a source of power – whether the Federal Circuit and Family Court of Australia (Division 2) (Court) otherwise has jurisdiction to make an order requiring the third person to deliver the vehicle to the secured party – as a court of law and equity and also pursuant to s 93 of the Civil Procedure Act 2005 (NSW) (CP Act) (as picked up by s 79 of the Judiciary Act 1903 (Cth)) the Court has jurisdiction to order possession on an action for detinue or to make an equitable order for specific delivery of the vehicle if the requirements for the making of such orders are otherwise established – whether the remedy provided by s 93 of the CP Act is inadequate in the circumstances of this case – such remedy is inadequate – order made in the exercise of the Court’s equitable jurisdiction requiring the third party to deliver the vehicle to the secured party. Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 10, 140
Judiciary Act 1903 (Cth) s 79(1)
National Consumer Credit Protection Act 2009 (Cth) Sch 1, s 101
Personal Property Securities Act 2009 (Cth) s 12(1) ss 10, 19, 20, 21, 107, 123, 206
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 25.09
Civil Procedure Act 2005 (NSW) ss 93, 105
Road Transport Act 2013 (NSW) s 257
Uniform Civil Procedure Rules 2005 (NSW) r 39.2
Cases cited: Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd & Ors [2014] VSCA 326
Ge Capital Asset Services and Trading Asia Pacific Pty Ltd v Rocks Excavations and Plant Hire Pty Ltd [2003] NSWSC 99
Pearson v Arcadia Stores Guyra Ltd (1935) 53 CLR 587
Reglon Pty Ltd v Federal Commissioner of Taxation [2011] FCA 805
Riseley v Toyota Finance Australia Ltd [2021] FCA 1566
Division: General Number of paragraphs: 50 Date of hearing: 27 June 2025 Place: Sydney Solicitor for the Applicant: Ms C. Simonidis, of Agility Law, by video Solicitor for the Respondents: No appearance by, or on behalf, the respondents
Table of Corrections 8 July 2025 The words and numbers "orders 2 and 3" wherever they appear in the Penal Notice and in orders 4 and 5 have been replaced by the word and number "order 2". ORDERS
SYG 3029 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: SECURE FUNDING PTY LTD
Applicant
AND: LIU-LIU MEI
First Respondent
HOANG NGUYEN
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
8 JULY 2025
PENAL NOTICE
Endorsement pursuant to r 25.07 of the Federal Circuit and Family Court of Australia
(Division 2) (General Federal Law) Rules 2021 (Cth).
TO THE SECOND RESPONDENT HOANG NGUYEN:
IF YOU NEGLECT OR REFUSE TO DO ANY OF THE ACTS ORDER 2 OF THESE ORDERS REQUIRE YOU TO DO WITHIN THE TIME SPECIFIED BY ORDER 2 FOR THE DOING OF THOSE ACTS,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY, OR PUNISHMENT FOR CONTEMPT UNLESS YOU HAVE APPLIED TO DISCHARGE OR VARY ORDER 2 PURSUANT TO AND WITHIN THE TIME PROVIDED BY ODERS 4 AND 5
THE COURT ORDERS THAT:
1.Subject to orders 4 and 5, pursuant to s 140 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the second respondent (HOANG NGUYEN) deliver to the applicant the following vehicle (Vehicle) together with all keys relating to the Vehicle (Keys) by the means specified in order 2.
Make
TOYOTA
Model
CAMRY SX HYBRID AXVH70R
Year
2023
Colour
Black
Registration Number
FFO35L
VIN Number
JTNBA3HK603037884
Engine Number
A25A0D57194
2.HOANG NGUYEN must deliver the Vehicle and the Keys to the applicant as follows:
(a)Within 72 hours after being served with a sealed copy of these orders HOANG NGUYEN must contact the person or, if more than one person, any one of the persons (Applicant’s Agent) specified in the document referred to in order 3 (Order 3 Document) by sending an SMS text message to the Applicant’s Agent to his or her mobile telephone number specified in the Order 3 Document, in which HOANG NGUYEN nominates:
(i)the location at which; and
(ii)a time between 8.00 am and 6.00 pm at which; and
(iii)the date on which, not being more than 48 hours after HOANG NGUYEN sends the SMS text message to the Applicant’s Agent, on which;
HOANG NGUYEN will deliver the Vehicle and the Keys to the Applicant’s Agent.
(b)HOANG NGUYEN must deliver the Vehicle and Keys to the Applicant’s Agent at the location, time, and on the date HOANG NGUYEN nominates in the SMS text message he sends pursuant to (a), or at such other location, or at such other time and date, as HOANG NGUYEN and the Applicant’s Agent may agree.
3.When serving HOANG NGUYEN with a sealed copy of these orders the applicant must also serve on HOANG NGUYEN a document signed on behalf of the applicant which:
(a)specifies the name of the person or, if more than one person, the names of the persons, whom the applicant appoints as an Applicant’s Agent for the purpose of order 2;
(b)specifies the mobile telephone number of each person referred to in (a); and
(c)states that the person or, if more than one person, each of the persons, the document identifies has been appointed by the applicant as the Applicant’s Agent as been so appointed for the purposes of the orders made by the Federal Circuit and Family Court of Australia (Division 2) on 8 July 2025.
4.HOANG NGUYEN may within 48 hours after the time at which he is served with these Orders apply to the Court to discharge or vary order 2 of these orders stating the grounds on which HOANG NGUYEN relies for wishing to discharge or vary order 2.
5.HOANG NGUYEN may apply to the Court pursuant to order 4 by sending an email to the Court’s email address, [email protected], which sets out the grounds on which HOANG NGUYEN relies for wishing to discharge or vary order 2, and requesting that the matter be listed before Judge Manousaridis.
6.The matter otherwise be listed at 9.30 am on 19 August 2025 for directions.
7.The parties otherwise have liberty to apply on such notice as the circumstances warrant.
THE COURT NOTES THAT:
1.These Orders have been amended pursuant to r 17.05(2)(h) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.
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
INTRODUCTION
The applicant (Secure Funding) applies for a number of orders purportedly pursuant to s 123(1) of the Personal Property Securities Act 2009 (Cth) (PPS Act) for the recovery of a 2023 Toyota Camry Sedan (Vehicle).
BACKGROUND
On 23 February 2024 the first respondent, Ms Mei, signed a document titled “Schedule for your Consumer Loan Asset Agreement” (Loan Schedule).[1] Under this heading the following appears:
This Schedule sets out what we’ll loan you and what you’ll pay back, Including Interest, fees, and other charges. We have also given you the Consumer Asset Loan Standard Terms and Conditions, where you’ll find definitions and Interpretations that apply to this Schedule. Please read both documents carefully before you sign. Together, these two documents make up our Agreement with you.
The Information In this Schedule Is current as at February 23, 2024 (Disclosure Date).
[1] Affidavit R W Foster 21.11.2024, [5]; exhibit RWF-2.
The Loan Schedule sets out details which include identifying Ms Mei as the borrower, Ms Mei’s address (Cabramatta Address), the amount of credit, being $49,929.88 comprising of $48,888 for the purchase price of the Vehicle and $1,041.88 in fees and charges, and the fact that Ms Mei grants Secure Funding a charge “over the following Goods”, being the Vehicle. In a section titled “Repayments you will make”, the Loan Schedule provides that the loan is to be repaid over a period of five years in 60 monthly repayments of $1,109.35 totalling $66,561, further providing that:
You must make the first repayment within one month after the Settlement Date. You can choose your repayment date if you wish. You must then make monthly repayments until the Loan Is repaid.
At page 8 of the Loan Schedule, under the heading “Our Offer to You”, it is stated that the Loan Schedule “is an offer to enter a consumer credit contract”. Also on page 8, there is what appears to be Ms Mei’s signature under a section headed “By signing, you agree, declare, and acknowledge certain things”, and these are identified under the heading. One of those things is “You agree to borrow the amount of credit on the terms set out this Schedule and the Consumer Asset Loan Agreement Standard Terms and Conditions” (Loan Terms). (I will collectively refer to the Loan Schedule and Loan Term as the Loan Agreement.)
Clause 1.2 of the Loan Terms provides that Secure Funding will lend to Ms Mei the “Loan Amount set out in the Schedule”. Clause 3.1 provides that Ms Mei must pay the loan in full by the end of the repayment period, and cl 3.2 provides that Ms Mei must make monthly repayments in the amounts and times specified by the Loan Schedule. Clause 7.1 provides that, as security for her obligations “under this Agreement”, Ms Mei grants Secure Funding “a charge over the Goods”, that is, over the Vehicle.
Clause 9.1 of the Loan Terms provides that Ms Mei will be in default if, among other things, she fails to pay to Secure Funding any money due in a timely manner. Clause 9.2 provides that if default occurs, Secure Funding will give Ms Mei written notice stating Ms Mei is in default, and giving her 30 days to fix the default. Clause 9.3 provides that if Ms Mei does not fix the default, the “Total Amount Owing” becomes immediately due and payable. That expression is defined to mean the “Loan Account Balance” “plus any amounts outstanding but yet to be credited or debited and less any amount credited but not cleared by the banking system”. The expression “Loan Account Balance” is defined to mean, at any time, the difference between all amounts credited and all amounts debited under the Loan Terms to Ms Mei’s loan. Clause 9.4 provides that Secure Funding may also take legal action to recover the Total Amount Owing, and enforce its security over the vehicle; and cl 9.6 specifies the things Secure Funding may do in relation to the Vehicle when exercising its rights over it. That includes taking possession of the Vehicle.
On 27 February 2024 Secure Funding advanced $49,929.88 pursuant to the Loan Agreement, and at 13:25 (Canberra time) on that day, it registered its security interest in the Vehicle with the Personal Property Securities Register (PPS Register) established under the PPS Act.[2] Ms Mei, however, failed to make any payments under the Loan Agreement.[3]
[2] Affidavit R W Foster 21.11.2024, [9]; exhibit RWF-3.
[3] Affidavit R W Foster 21.11.2024, [15]; exhibit RWF-5.
Secure Funding issued a document titled “Notice of Default” dated 22 April 2024 to Ms Mei at the Cabramatta Address.[4] The Notice of Default stated that Ms Mei was “in default of [her] obligations to Secure in relation to the Loan Agreement and mortgage of the Mortgaged Property” (being the Vehicle) because Secure Funding had not received $1,134.35; Secure Funding demanded that Ms Mei remedy the default by paying the arrears within 31 days from the date of service of the Default Notice; and stated that if the default was not remedied within 31 days of the date of service of the Default Notice, the “total amount owing in relation to the Loan Agreement and Mortgage” would become immediately payable and Secure Funding may commence enforcement proceedings to begin repossession of the “Mortgaged Property” (being the Vehicle). Ms Mei has not rectified the default.
[4] Affidavit R W Foster 21.11.2024, [11]; exhibit RWF-4.
According to a certificate (257 Certificate) issued in accordance with s 257 of the Road Transport Act 2013 (NSW) that was produced to the Court on or shortly after 11 February 2025 in answer to a subpoena Secure Funding issued, on 16 September 2024 Ms Mei transferred the registration of the Vehicle to Mr Hoang Nguyen. The 257 Certificate states that, as at 6 February 2025, Mr Nguyen was recorded as the operator of the Vehicle, and that he lived at an address in Carramar (Carramar Address). Ms Mei did not notify Secure Funding that she had transferred the registration of the Vehicle; and I find that Secure Funding was not aware of the transfer before 21 November 2024, when it commenced this proceeding. The 257 Certificate also showed that Ms Mei has an address (Wiley Park Address) that was different from the Cabramatta Address.
PROCEEDING IN THE COURT
On 21 November 2024 Secure Funding filed an application in this Court seeking an order that Ms Mei pay the amounts she owes under the Loan Agreement, an order pursuant to s 101 of Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) that Ms Mei “or any party in possession” deliver or surrender to Secure Funding the Vehicle, and an order pursuant to cl 8.4(b) and (f) of the Loan Terms that Secure Funding be permitted to enter the property at the Cabramatta Address, and “any other premises” to take possession of the Vehicle.
The matter came before me on a first court date at 9.30 am on 4 February 2025, on which occasion I listed the matter for a directions hearing at 9.30 am on 4 March 2025. On that date I made an order granting Secure Funding leave to file an amended application, and I listed the matter for a further directions hearing at 9.30 am on 1 April 2025. On 12 March 2025 Secure Funding filed an amended application by which it added Mr Nguyen as the second respondent. The amended application alleges that the “ownership of registration of the Collateral remains in the Second Respondent, Hoang Nguyen”. The amended application did not, however, alter the relief sought in the application as originally filed.
Ms Mei did not appear at the first court date or at the directions hearing of 4 March 2025. Ms Mei also did not appear at the directions hearing on 1 April 2025. Ms Simonidis, the lawyer for Secure Funding, informed me that Secure Funding had been unable to effect personal service of the application on Ms Mei. I therefore listed the matter at 9.30 am on 23 April 2025 to hear an application for substituted service.
On 23 April 2025, at the request of Secure Funding, the hearing of the application for substituted service was administratively adjourned in Chambers to 22 May 2025. On that day I heard an application for substituted service, after which I made the following orders (Substituted Service Orders):
1. The requirement of service by hand within the meaning of r 6.06 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules2021 (Cth) (Rules) be dispensed with.
2. Pursuant to rr 6.06(2)(b) and 6.14 of the Rules, by 5 pm on 23 May 2025 a sealed copy of the Application filed on 21 November 2024, a sealed copy of these orders, a copy of the Amended Application filed 12 March 2025, and a copy of each affidavit filed in these proceedings (together, the Documents), be served on the first respondent by:
a. sending a copy of the Documents by pre-paid post to [the Wiley Park Address], marked attention to the first respondent; and
b. sending a copy of the Documents to the email address . . . advising in that email that a copy of the Documents have been sent to [the Wiley Address].
3. Pursuant to rr 6.06(2)(b) and 6.14 of the Rules, by 6 June 2025 the Documents be served on the second respondent:
a. by sending a copy of the Documents by pre-paid post to [the Carramar Address], marked attention to the second respondent;
b. by leaving the Documents at or near the entrance to any dwelling that exists on the property referred to in (a), provided that, immediately before the Documents are so left, at attempt has been made to personally serve the second respondent with the Documents, but the second respondent was not present on the property or, being present on the property, the second respondent refused to accept delivery of the Documents, or otherwise did not make himself available to accept delivery of the Documents.
I also listed the matter at 9.30 am on 27 June 2025 for a directions hearing or, if either of the respondents were not to appear, for hearing on final relief.
THE HEARING ON 27 JUNE 2025
Neither Ms Mei nor Mr Nguyen appeared at the directions hearing at 9.30 am on 27 June 2025. Ms Simonidis, who appeared for Secure Funding, said she wished to proceed with the hearing for orders for the recovery of the Vehicle. Ms Simonidis read the affidavits to prove that the documents identified in the Substituted Service Orders had been served in accordance with those orders. On the basis of those affidavits, I was satisfied of the following:
(a)On 23 May 2025 Ms Simonidis sent to Ms Mei the documents referred to in the Substituted Service Orders, including those orders, the application, and the amended application, by email sent to the email address specified in the Substituted Service Orders.[5]
(b)On 23 May 2025, Ms Melville, an administrative assistant employed by Agility Law Group, the lawyers for Secure Funding, placed a letter addressed to Ms Mei at the Wiley Park Address a number of documents which includes the Substituted Service Orders, application, and amended application, and she placed the envelope containing the letter and documents into the post box she identifies.[6]
(c)At 5.45 pm on 29 May 2025, Mr Hain, a licenced field agent, attended the property at the Carramar Address, and spoke to a person who identified himself as Mr Nguyen’s brother who told Mr Hain Mr Nguyen was not at home. Mr Hain bound a cover letter from Agility Group addressed to Mr Nguyen together with the documents referred to in the Substituted Services Orders, including a copy of those orders, the application, and the amended application, and left the letter and documents at the front door of the Carramar property.[7]
[5] Affidavit C M Simonidis 18.06.2025.
[6] Affidavit T Melville 18.06.2025.
[7] Affidavit B Hain 19.06.2025.
I was also satisfied, and continue to be satisfied that both Ms Mei and Mr Nguyen had notice of the hearing on 9.30 am on 27 June 2025
Ms Simonidis indicated that Secure Funding was seeking orders in terms of the draft orders she sent to my Associate’s inbox in the morning of the hearing. The orders Secured Funding seek are as follows (SF Proposed Orders)(errors in original):
1.Pursuant to rr 6.04(b), 6.06(2) and 6.14 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law Rules) 2021 (Cth) (the Rules), a sealed copy of the application filed 21 November 2024 (Originating Application), a sealed copy of the of the Orders made 22 May 2025, a sealed copy of the Amended Application filed 12 March 2025 and a sealed copy of each affidavit filed in these proceedings are taken to have been served on the Respondents.
2.Pursuant to section 123(1) of the Personal Property Securities Act 2009 (Cth), the Second Respondent and/or any party in the possession of the Collateral, being a 2024 black Toyota Camry Sedan, with the details:
VIN Number: . . . .
Engine Number: . . . .Registration Number: . . . .
deliver and/or surrender the Vehicle (including any keys to the Collateral, and/or provide the location of the Collateral, to the Applicant and/or its agent at a time and place nominated by the Applicant and/or its agent.
3.The Applicant and/or its appointed Agent be permitted to enter onto, and remain at, any premises and to take any and all reasonable step(s) in order to take possession of the Collateral, from either of the following premises:
a.[Carramar Address]; or
b.any other premises in Australia over which the Second Respondent has apparent control and at which the Collateral is reasonably believed to be located.
4.An order that 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.
5.Should the Second Respondent, 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.
6.The Respondent’s pay the Applicant its costs of the application for interlocutory relief fixed the sum of $8,360 pursuant to items 2 and 9(a)-(b) of Schedule 2 to the Rules.
Orders 2, 3, and 4 of the SF Proposed Orders are in substance the same as the orders sought in the application and amended application, except that Secure Funding expressly relies on s 123 of the PPS Act. It will be necessary to consider that provision.
SECTION 123 OF THE PPS ACT
Construction of s 123(1)
Subsection 123(1) of the PPS Act provides as follows:
A secured party may seize collateral by any method permitted by law, if the debtor is in default under the security agreement.
The meaning of s 123(1) is to be determined, at least in the first instance, by reference to the meaning of a number of the expressions it contains.
“Security agreement”
I begin with the expression “security agreement”; it is defined in s 10 of the PPS Act to mean an “agreement or act by which a security interest is created, arises or is provided for”, or “writing evidencing such agreement or act”. Section 18 contains general rules relating to security agreements. These include s 18(1), which provides that a “security agreement is effective according to its terms”. That means that matters such as the identification of the personal property that is the subject of the grant of the security interest, the obligation for the performance of which the security interest in the personal property is granted, and the circumstances in which the secured party may take action in relation to the personal property, are stipulated or provided for by the terms of the security agreement.
“Security interest”
Next, there is the expression “security interest”, which appears in the definition of “security agreement”. Although “security interest” does not appear in s 123(1) of the PPS Act, the meaning of the expression is central to an understanding of s 123(1), and to the operation of the PPS Act as a whole.
“Security interest” is defined in s 12(1) of the PPS Act to mean “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)”. Subsection 12(2) provides examples of security interests. These include “a fixed charge”. The “transaction” that must provide for the security interest would at the very least include a “security agreement”, although it may be that “transaction” may apply to consensual transactions other than security agreements.[8]
[8] See Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd & Ors [2014] VSCA 326, at [110]-[120]. I will confine myself to security agreements.
The definition in s 12 of “security interest” does no more than state what a security interest does: it is something that secures performance of an obligation to pay money or some other obligation. But the definition does not identify what a security interest is, or how, whatever a security interest may be, it secures performance of a money or other obligation. What a security interest is, however, may be inferred from Chapter 4 of the PPS Act, combined with the fact that, whatever it is, a security interest is something that is created, or provided for, by a security agreement or (perhaps) some other consensual transaction.
As s 107 of the PPS Act explains, Chapter 4 “deals with how to enforce a security interest in personal property”. The means of enforcement provided by Chapter 4 differs according to the nature of the personal property that is the subject of a security interest, and in particular whether the personal property is, to use the traditional language of the law, a chose in possession or a chose in action.[9] Relevant to the proceeding before me is Part 4.3, which deals with the enforcement of security interests in personal property that is capable of being seized; that is, goods or choses in possession. The PPS Act does not, however, create the security interests for the enforcement of which Chapter 4 provides; the security interests are created or provided for by the agreement of the parties to a security agreement, or (perhaps) as a consequence of some other consensual transaction between two or more people.
[9] The PPS Act classifies choses in action as “account”, “chattel paper”, and “negotiable instruments” – see s 120(1).
In relation to goods, it is apparent from Part 4.3, and in particular s 123 and s 124 (which deals with seizure of goods by a secured party who has perfected the security by possession – something I will briefly refer to below), that security interests in goods to which the PPS Act applies arise from an agreement made between a person (grantor) having an interest in an item of personal property, and another person (secured party) to whom the grantor or some other person owes or will owe money or some other obligation, under which the grantor agrees that the secured party may:
(a)take or retain possession of the personal property until such time as the obligation to pay money or some other obligation is performed by the grantor or by some other person, but, if not performed, sell the personal property and use the proceeds to discharge the unperformed obligation; or
(b)seize the personal property or otherwise be entitled to take possession of it if an obligation to pay money or some other obligation is not performed, and to sell the personal property and use the proceeds of sale to discharge the unperformed obligation.
In short, “security interest” in relation to specified goods is the right conferred on the secured party by a term of a contract made between the grantor and the secured party to permit the secured party to seize and then sell the goods or, if the secured party already possesses the goods, to sell the goods, if and when the grantor or some other person fails to perform a money or other obligation specified in the agreement. The “security interests” in relation to goods the PPS Act recognises are those the law before the enactment of the PPS Act classified as purely possessory securities (such as pledges and liens) and securities that are not purely possessory (such as legal and equitable mortgages, charges, and conditional sales).
Attachment, enforceability, and perfection of a “security interest”
Section 12 of the PPS Act must be read with ss 19, 20, and 21 of the PPS Act. Section 19 specifies the circumstances in which a security interest in personal property created under a security agreement becomes enforceable against the grantor. Under s 19(1) a security interest becomes enforceable against the grantor only if the security interest “has attached” to the personal property. Subsection 19(2) specifies when a security interest attaches to personal property:
A security interest attaches to collateral when:
(a)the grantor has rights in the collateral, or the power to transfer rights in the collateral to the secured party; and
(b)either:
(i) value is given for the security interest; or
(ii) the grantor does an act by which the security interest arises.
Under s 10 of the PPS Act, personal property to which a security interest attaches is identified as “collateral”. I will use “personal property” and “collateral” interchangeably to refer to personal property that is or is intended to be the subject of a security interest.
Section 20 of the PPS Act specifies the circumstances in which a security interest is enforceable against a third party, that is, a person who is not a party to the security agreement. Subsection 20(1) provides that a security interest is enforceable against a third party only if the security interest is attached to the collateral (by operation of s 19), and if one of the three things specified in s 20(1)(b) applies. I need only refer to s 20(1)(b)(iii), which requires that a “security agreement that provides for the security interest covers the collateral in accordance with” s 20(2). Under that subsection, a security agreement covers collateral if, among other things, the security agreement is evidenced in writing that is signed or adopted by the grantor of the interest, and the writing evidencing the agreement describes the collateral in relation to which the security interest is granted.
Although s 20 of the PPS Act may be satisfied and, by its terms, the security interest created by the security agreement in relation to particular collateral may be enforceable against a third person, a buyer or lessee for value of the collateral will take the collateral free of the security interest unless the security interest is perfected, as provided for by s 21 of the PPS Act. That follows from s 43 which provides that a “buyer or lessee of personal property, for value, takes the personal property free of an unperfected security interest in the property”.
Subsection 21(1) of the PPSA provides that a security interest in particular collateral is “perfected” in one of the two sets of circumstances specified in that subsection, one of which are those specified in s 21(1)(b), namely, that the security interest is attached to the security (as provided for by s 19); and the security interest is enforceable against third party (as provided for by s 20), and s 21(2) applies. Subsection 21(2) identifies five sets of circumstances in which that subsection applies, one of which are those stated in s 21(2)(a), namely, that “for any collateral, a registration is effective with respect to the collateral”. Section 10 provides that a “registration is effective with respect to particular collateral if it is effective with respect to collateral under Part 5.4”. A second set of circumstances in which s 21(2) applies are those stated in s 21(2)(b), namely, where “the secured party has possession of the collateral (other than possession as a result of seizure or repossession)”.
What does it mean for a “security interest to be enforceable against a third party”? That question would arise when a person who is not a party to the security agreement acquires possession of the collateral, or purportedly acquires ownership of, or some other interest (including a security interest) in, the collateral. Assuming the third person acquired possession of the collateral, or purportedly acquired ownership of or some other interest in the collateral after the security interest that is the subject of the security agreement has been perfected, the secured party will have the same rights in relation to the collateral as against the third person as the secured party has or would have had against the grantor. In particular, the secured party will have the right to seize the collateral for the purpose of disposing of it and using the proceeds to discharge the obligations for the performance of which the grantor granted the security interest to the secured party.
Other expressions
The other expressions of s 123(1) of the PPS Act may be noted more briefly:
(a)“Secured party” is defined in s 10 of the PPS Act to mean, among other things, a “person who holds a security interest for the person’s own benefit or for the benefit of another person (or both)”; and “in relation to a registration with respect to a security interest--includes a person registered as secured party in the registration”. The “secured party”, therefore, is the person who holds the benefit of a security interest in collateral; it is the person who is entitled, under s 123(1) of the PPS Act, to seize the collateral when “the debtor in default under the security agreement”.
(b)“Debtor” is defined in s 10 to mean “a person who owes payment or performance of an obligation that is secured by a security interest in personal property (whether or not the person is also the grantor of the security interest)”, or “a transferee of, or successor to, such obligation”.
(c)The PPS Act does not define the expression “in default under the security agreement”, or “default”. The meaning of the expression, however, is reasonably clear. It means that the “debtor”, that is, the person whose obligation under an agreement to pay money or render some other performance is secured by the granting of a security interest in a particular collateral, has failed to perform that obligation and, under the terms of the security agreement that confers the security interest, the secured party is entitled to seize the collateral or otherwise have access to it for the purpose of disposing it and using the proceeds to discharge the unperformed obligation; or, if the collateral is in the possession the secured party immediately before the time of default, to sell the collateral and use the proceeds to discharge the unperformed obligation. The words “under the security agreement” suggest that obligation the performance of which is intended to be secured by the security interest must be an obligation that is provided for by, or recorded in, the security agreement.
(d)The expression “seize collateral” is also not defined; but it would be reasonable to construe that expression to mean “take possession”.
Effect of s 123(1) of the PPS Act
On its face, s 123(1) of the PPS Act confers a right or power on a secured creditor to seize personal property in which the secured party has a security interest under a security agreement (seizure right) in the circumstances provided for in that subsection, namely, if the debtor is in default. The seizure right to which s 123(1) of the PPS Act refers does not, however, arise from the subsection itself; the seizure right is wholly dependent on the terms of the security agreement which creates the security interest. The seizure right in s 123(1) of the PPS Act accrues only if there has been a default under a term of the security agreement - that is, only if the grantor or some other person has failed to perform the money or other obligation for the performance of which the security interest was created by the security agreement.
There is another matter that may be noted about s 123(1): it does not confer power on any court to make orders in aid of the seizure right. This is a point Besanko J noted in Riseley v Toyota Finance Australia Ltd, where his Honour said: “On the face of it, this section gives the secured party a right which it may exercise, not power or jurisdiction to the Court”.[10] And this reflects a major unstated premise of the PPS Act: that the curial remedies that were available to holders of security interests in personal property to enforce their security rights before the enactment of the PPS Act, remain equally available to secured parties under security agreements and, moreover, those remedies are adequate to vindicate such security rights.[11] It is perhaps a defect in the PPS Act that this assumption is not made explicit, as it is made explicit by §9-609 of the United States Uniform Commercial Code, the current version of which relevantly provides:
[10] Riseley v Toyota Finance Australia Ltd [2021] FCA 1566, at [19].
[11] This point was made in relation to the equivalent Act of the Province of Saskatchewan: “The Personal Property Security Act (PPSA) is a code of law addressing the creation, priority and enforcement of statutorily recognized in rem interests (security interests) in personal property. It leaves to non-code law other rights a secured party may have associated with those interests” – Ronald CC Cuming “Secured Creditors’ Non-Statutory Remedies: Unfinished Business” 92 Canadian Bar Review 92, 243, at page 244.
SECTION 9-609. SECURED PARTY’S RIGHT TO TAKE POSSESSION AFTER DEFAULT.
(a)Possession; rendering equipment unusable; disposition on debtor’s premises. After default, a secured party:
(1) may take possession of the collateral;
. . . .
(b)Judicial and nonjudicial process. A secured party may proceed under subsection (a):
(1) pursuant to judicial process; or
(2) without judicial process, if it proceeds without breach of the peace. (c) Assembly of collateral. . . .
Remedies in aid of right conferred by s 123(1) of the PPS Act?
If the Federal Circuit and Family Court of Australia (Division 2) (this Court) has power to enforce or protect a seizure right, s 123(1) of the PPS Act is not the source of that power; it must lie in some jurisdiction vested in this Court for the grant of remedies to enforce or protect rights to possession of goods. Does this Court have such jurisdiction?
The determination of that question begins with s 207 of the PPS Act; it provides that jurisdiction “is conferred on a court mentioned in an item in the following table with respect to a PPS matter, subject to the limits on the court’s jurisdiction (if any) specified in the item”. The table in s 207 identifies this Court as one of the courts on which jurisdiction is conferred, and places a limit on that jurisdiction by providing that this Court “does not have jurisdiction to award an amount for loss or damages that exceeds: (a) $750,000; or (b) if another amount is prescribed by the regulations – that other amount”. The jurisdiction that falls within the expression “PPS matter” is identified in s 206(1) of the PPS Act:
This Part deals with the jurisdiction of a court with respect to a matter (a PPS matter):
(a)arising under a provision of this Act authorising an application to be made to a court; or
(b) otherwise arising in relation to this Act, other than a matter in respect of which the Federal Court or the Federal Circuit Court has jurisdiction under the Administrative Decisions (Judicial Review) Act 1977; or
(c) otherwise arising in relation to a security agreement or a security interest.
There is no question that an application for an order for possession of, or for access to a property for the purpose of obtaining possession of, a good that is alleged to be the subject of a security interest created by a security agreement is a matter that arises “in relation to a security agreement or a security interest”; and that, any such application gives rise to a matter that is within the jurisdiction of this Court conferred by s 207, subject to the monetary limit that section provides.
That s 123(1) of the PPS Act confers on a secured party a seizure right, and s 207 vests jurisdiction in this Court in relation to any matter that arises in relation to a security agreement or a security interest, necessarily implies that the Court, being a court of law and equity,[12] may grant such remedies as courts of law and equity have granted to enforce and protect rights of possession to or ownership of personal property.[13] The first is the remedy provided for by the common law action of detinue.[14] In New South Wales the remedies a court may grant on an action for the wrongful detention of goods are provided by s 93 of the Civil Procedure Act 2005 (NSW) (CP Act), subsection (1) of which is as follows:[15]
In proceedings for the detention of goods, the court may (whether or not their value has yet been assessed) give judgment--
(a) for their delivery to the plaintiff, or
(b) for payment to the plaintiff of an amount equivalent to their assessed value, or
(c) for their delivery to the plaintiff or for payment to the plaintiff of their assessed value, at the defendant’s option,
and, in addition to any judgment referred to in paragraph (a), (b) or (c), may also give judgment for payment to the plaintiff of damages for their detention.
[12] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 10(1).
[13] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 140: “The Federal Circuit and Family Court of Australia (Division 2) has power, in relation to matters in which it has jurisdiction, to (a) make orders of such kinds, including interlocutory orders, as the Court considers appropriate; and (b) issue, or direct the issue of, writs of such kinds as the Court considers appropriate.”
[14] The more usually resorted to common law remedy for detention of goods or for other interference with goods, however, is the tort of conversion. Although sometimes described as a tort that protects proprietary rights in personal property, conversion does not give rise to an in rem remedy; the remedy for conversion is damages equal to the value of the personal property as at the date of commission of the tort. The granting of the remedy (and its satisfaction) in effect deems the wrongdoer to be the owner of the personal property, and compels him or her to purchase it at its value (see Reglon Pty Ltd v Federal Commissioner of Taxation [2011] FCA 805, at [26]
[15] Section 93 of the CP Act, if otherwise applicable, is binding on this Court by operation of s 79(1) of the Judiciary Act 1903 (Cth).
The second remedy is the equitable remedy of specific delivery. Young CJ in Eq discussed the principles governing the granting of this remedy in Ge Capital Asset Services and Trading Asia Pacific Pty Ltd v Rocks Excavations and Plant Hire Pty Ltd:[16]
53 There are very few reported decisions before 1854 as to when Equity would grant the remedy of specific restitution of chattels and, in virtually every reported case, equity acted because the chattel was of some special nature such as a silver altar piece: Somerset (Duke) v Cookson (1735) 3 P Wms 390; 24 ER 1114.
55 However, latter day cases have shown that Equity gives relief in a wider set of circumstances than merely unique chattels and that the touchstone for relief is whether damages are an adequate remedy. The leading modern Australian authorities are Aristoc Industries Pty Ltd v RA Wenham (Builders) Pty Ltd [1965] NSWR 581, 587-590 and Doulton Potteries Ltd v Bronotte [1971] 1 NSWLR 591. In the latter case at 597 Hope J said, with reference to the list of cases in the 3rd ed vol 38 p 803 of Halsbury's Laws of England (because England has changed the law there is no corresponding section in the 4th edition):
“Many of these cases deal with chattels which had a very peculiar or sentimental value which obviously could not be adequately reflected in a monetary award, and it has been submitted that the jurisdiction of the Equity Court is limited to this class of case. I do not think that the jurisdiction is so limited …”.
[16] Ge Capital Asset Services and Trading Asia Pacific Pty Ltd v Rocks Excavations and Plant Hire Pty Ltd [2003] NSWSC 99, at [54].
On its face, the remedy for the delivery of wrongfully detained goods under s 93(1) of the CP Act is not inadequate compared to the equitable remedy of specific delivery of unlawfully detained goods. Whether such remedy is in fact inadequate, however, must be considered by comparing the means by which an order under as s 93(1) of the CP Act may be enforced with the means by which equitable orders for the specific delivery of goods may be enforced. This comparison reflects the difference between the nature of judgments of common law courts and decrees of courts of equity, and the different means by which judgments and decrees are enforced. The plurality in Pearson v Arcadia Stores Guyra Ltd explained the differences as follows:[17]
A common law judgment is a determination of right, not a command addressed to the person. It was expressed in a form appropriate to its nature—consideratum est quod recuperet. The writs of ca. sa., fi. fa. and elegit carry it into effect or execute it. But a decree in equity has always been a command laid upon the person. So too is a rule absolute at common law. Both require remedies compelling personal obedience. A decree and a rule must be enforced. Writs of attachment and writs of sequestration issue for this purpose. But process of enforcement has always been regarded as a means of executing the decree.
[17] Pearson v Arcadia Stores Guyra Ltd (1935) 53 CLR 587, at pages 590-591 (Rich, Dixon, Evatt, McTiernan JJ).
These differences are reflected in the current procedure of courts in New South Wales. Section 105 of the CP Act provides that a “judgment or order for the delivery of goods may be enforced by a writ of delivery”. There is a prescribed form of writ delivery.[18] It is addressed, not to the person wrongfully detaining the goods, but to the sheriff of New South Wales and all Sheriff’s officers which, after giving details of the goods to be seized, and their location, commands the Sheriff and all Sheriff’s officers to “[s]eize the goods described above and deliver them to the person entitled to execution of judgment”. On the other hand, an equitable order for specific delivery of goods would be addressed to the person who is wrongfully detaining them; and if the person to whom the order is directed disobeys it, he or she would be liable to orders for committal or sequestration or both.[19]
[18] Form 64, Uniform Civil Procedure Rules 2005 (NSW), r 39.2
[19] In the case of orders made by this Court, under r 25.09 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
It is apparent that the successful execution of a writ of delivery of goods depends on the person entitled to execution knowing where the goods are located; whereas the enforcement of an equitable order for the specific delivery does not depend on the person entitled to possession knowing where the goods are located; it is sufficient if the court has found that the person withholding possession of the goods is in fact in possession of the goods. This by itself suggests that the remedy under s 93(1) of the CP Act will in many cases be inadequate compared to the equitable remedy of specific delivery.
IS SECURE FUNDING ENTITLED TO RELIEF?
The first question is whether Secured Funding has a right to seize the Vehicle against Mr Nguyen. I am satisfied it does.
(a)The Loan Agreement is a “security agreement” within the meaning of s 10 of the PPS Act; it creates a security interest by recording Ms Mei’s agreement to charge the Vehicle to secure her obligations under the Loan Agreement to pay the amounts identified in that agreement; and by so doing, the Loan Agreement is a transaction that provides for a security interest.
(b)Ms Mei had rights in the Vehicle at the time the Loan Agreement was made, namely, ownership; and Secure Funding gave value for the security interest by advancing to Ms Mei the loan amount provided for by the Loan Agreement. By operation of s 19 of the PPS Act, therefore, the charge provided for by the Loan Agreement attached to the Vehicle Ms Mei charged for securing the obligations she undertook under the Loan Agreement.
(c)The Loan Agreement is in writing, it is signed by Ms Mei, and it describes the Vehicle, being the collateral in respect of which Ms Mei granted Secure Funding a security interest. Thus, the Loan Agreement “covers” the Vehicle for the purposes of s 20(2) of the PPS Act.
(d)At 13:25 (Canberra time) on 27 February 2024 Secure Funding registered its security interest in the Vehicle with the PPS Register. Thus, by 13:25 (Canberra time) on 27 February 2024, the security interest Secure Funding had in the Vehicle as chargee was perfected; and the security interest the Loan Agreement provided to Secure Funding was enforceable against a third party immediately as from 13:25 (Canberra time) on 27 February 2024.
(e)Ms Mei defaulted under the Loan Agreement; but Ms Mei did not rectify the default within the 30 day period provided for in the notice Secure Funding issued on 22 April 2024, or at all. In those circumstances, by the terms of the Loan Agreement, Secure Funding became entitled to exercise its rights under the Loan Agreement, which included the right to take possession of the Vehicle. That means that, by no later than 22 May 2024, being the last day of the 30 days Secure Funding by its letter dated 22 April gave to Ms Mei to rectify her default, Secure Funding acquired the right provided for by s 123(1) of the PPS Act to seize the Vehicle from Ms Mei or from any other person who had taken possession of the Vehicle after 13:25 (Canberra time) on 27 February 2024.
The second question is whether Mr Nguyen possesses the Vehicle and, if so, whether he acquired possession of it after 27 February 2024 when Secure Funding registered its security interest in the Vehicle with the PPS Register. There are two items of evidence that support a finding that Mr Nguyen possesses the Vehicle. The first is the 257 Certificate, which shows that on 16 September 2024 Ms Mei transferred the registration of the Vehicle to Mr Hoang Nguyen. The second item of evidence is that, although Mr Nguyen had been given notice of the hearing of 27 June 2025, he did not appear at the hearing for the purpose of opposing the orders Secure Funding seeks in the proceeding, and he has not otherwise sought to engage in this proceeding.
The third question is whether I should grant any or all of the SF Proposed Orders. There are a number of difficulties. First, the SF Proposed Orders seek both an order that Mr Nguyen “or any other party in the possession of the Collateral” deliver the Vehicle, and orders authorising agents of Secure Funding to enter premises for the purpose of taking possession of the Vehicle. The two sets of orders are inconsistent. Second, it is beyond the scope of judicial power to make an order requiring an unnamed class of persons who may have possession of the Vehicle to deliver the Vehicle. Third, there is no evidence that the Vehicle is at any of the premises specified in the SF Proposed Orders.
The only order that it would at this stage be appropriate to make is that Mr Nguyen deliver the Vehicle to an agent or agents of Secure Funding. And this gives rise to a fourth question, namely, whether I should make an order pursuant to s 93(1) of the CP Act, or an order pursuant to the equitable jurisdiction of this Court for specific delivery. I am satisfied that, in the circumstances of this case, an order for possession under s 93(1) of the CP Act would be an inadequate remedy. Secured Funding does not have evidence of the location of the Vehicle, and, for that reason, it would not be in a position to provide the details necessary to complete the prescribed form of writ of delivery. Even if Secured Funding did have such evidence, the fact that the Vehicle is a moveable item of personal property means there would be little basis for expecting that at the time the writ of delivery would be executed the vehicle would be at that location.
Nor would damages be an adequate remedy. There is no evidence concerning the financial position of Mr Nguyen; but his unwillingness to appear at the hearing is a basis for doubting that he would have the means to pay the amount necessary to discharge the obligations secured by the charge over the Vehicle Ms Mei granted Security Funding. More fundamentally, however, the very fact that Secured Funding obtained a security interest in the Vehicle as a condition of its making the loan under the Loan Agreement would render inadequate an unsecured money judgment. It would deny Secured Funding the very thing for which it contracted when it lent the money to Ms Mei under the Loan Agreement.
DISPOSITION
I propose to make an order requiring Mr Nguyen to deliver the Vehicle to the agents of Secured Funding within 72 hours of his being served with the order for delivery, but reserve to Mr Nguyen liberty to apply within 48 hours of his being served for an order to discharge or vary the order for possession. I will otherwise stand over the proceeding for six weeks, with liberty to apply, with a view to making final orders, including costs, disposing of the proceeding.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 8 July 2025
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