Toyota Finance Australia Limited v Peppercorn Residential Pty Ltd (No 1)

[2024] NSWDC 675

District Court

New South Wales

Medium Neutral Citation:

Toyota Finance Australia Limited v Peppercorn Residential Pty Ltd (No 1) [2024] NSWDC 675

Hearing dates:

30-31 May 2024

Date of orders:

31 May 2024

Decision date:

31 May 2024

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

See pars [21]-[22].

Catchwords:

PRACTICE AND PROCEDURE – Application for adjournment – Failure to comply with earlier orders – Failure of defendant to serve any evidence – Alleged illness of defendant – Defendant’s solicitor still on record – Adjournment refused.

CONTRACT – Repudiating conduct by defendant – Finance of 2021 Ferrari two door coupe – Failure to pay instalments – Orders that defendant deliver to plaintiff motor vehicle and authorising plaintiff to repossess vehicle and ancillary orders.

Legislation Cited:

Civil Procedure Act 2005, s 93.

Evidence Act 1995, s 160.

Cases Cited:

Shevill v Builders Licencing Board [1982] HCA 47

Texts Cited:

Nil.

Category:

Principal judgment

Parties:

Plaintiff: Toyota Finance Australia Limited
First Defendant: Peppercorn Residential Pty Ltd
Second Defendant: Hannan Elgammal

Representation:

Representatives:
Plaintiff: Mr Farrar, D. (Farrar Lawyers)
First Defendant: No appearance.
Second Defendant: Mr Elgammal, A. (non-solicitor).

File Number(s):

2023/00320859

Publication restriction:

Nil.

Judgment

Application for Adjournment

1. HIS HONOUR: This is an application made on behalf of the second defendant by her son, Mr Ayman Elgammal, for an adjournment on the basis that his mother is unable to attend Court today, when she did not attend Court yesterday. Yesterday, the defendants were represented by a solicitor, Mr Halabi, from the firm of solicitors on the record for defendants, the firm being Millennium Lawyers, of whom the principal is Mr Zaki Hajjar. The defence filed on 5 December 2023 admits each of the first nine paragraphs of the Statement of Claim. The same defence denies each of the following paragraphs of the Statement of Claim, namely paragraphs [10] to [16]. Paragraph [9], which is admitted, is this:

“The company made some payments as required under the agreement, but did not make all payments.”

2. Paragraph [10], the first paragraph to be denied, is of a demand made by the plaintiff on the defendants to pay an outstanding sum of $22,889.61. The relief claimed in the Statement of Claim is an order pursuant to s 93 of the Civil Procedure Act 2005, that there be judgment for the plaintiff, Toyota Finance Australia Ltd, against the defendant, requiring the defendants forthwith to deliver up to the plaintiff a 2021 Ferrari two-door coupe, having registration number DGG65N, as well as an order for the payment to the plaintiff of all monies payable under the terms of the agreement between the plaintiff and the defendants.

3. As I understand it, the agreement also provided a personal guarantee, by the second defendant, who was admitted in the pleadings at all material times, the sole director and secretary of the company, the controlling mind and will of the company, and the holder of 100 ordinary shares in the paid-up capital of the company, which is the first defendant. Besides the denials of paragraphs [10] to [16], there is no positive assertion in any part of the defence of any defence which would deny the plaintiff the entitlement sought, if the plaintiff be able to prove that entitlement. On 28 March 2024, the Judicial Registrar, in the presence of Mr Farrar for the plaintiff and Mr Halabi for the defendant, made these orders:

1. List for hearing on 30 May 2024 with an estimate of one day.

2. Standard orders for hearing.

3. Parties to participate in an informal settlement conference to be held by 10 May 2024.

4. The defendant to serve affidavits by 19 April 2024, after which the defendant may not rely on any further evidence without the leave of the Court.

5. Plaintiff to serve all affidavits in reply by 26 April 2024.

6. Defendant to pay the plaintiff’s costs of today.

4. That followed on an unsatisfactory state of affairs arising in the online Court on 27 March 2024. Suffice it to say that there has been no compliance with the fourth order made by the Judicial Registrar on 28 March 2024, such that the defendants are unable to adduce any affidavit evidence and therefore are unable to adduce any evidence at all. When the matter was listed before me yesterday, I was handed two documents which I marked for identification 1. Earlier today, Mr Elgammal sought to tender them, but it was not necessary, as copies of them were MFI 1. The documents suggested that the second defendant attended St George Hospital yesterday at 9.03am.

5. There was no evidence in MFI 1 of whatever may have been wrong with the second defendant. Yesterday, I noted the following matters and made the following orders:

“Noted that the defendants failed to comply with orders made by the Judicial Registrar on 28 March 2024. Noted that there is currently no evidence available to explain why the defendants failed to comply with the orders made by the Judicial Registrar if it were possible to do so. Noted the second defendant is a director of the first defendant was taken to St George Hospital this morning and patient armband is time of 9.03am, but no diagnosis has been provided. On the defendant’s application, opposed by the plaintiff, adjourned to Friday 31 March 2024 at 10.30am before me. A further adjournment will not be granted without:

1. The second defendant being able to persuade the Court that she has a true disability which makes her unable to attend Court; and

2. An explanation, if any can be provided, as to why the defendant has failed to comply with the orders made by the Judicial Registrar on 28 March 2020.”

6. I reserved the costs of yesterday. Today, Mr Elgammal, has handed to me certain documents. Exhibit 1-1 is a medical/attendance certificate bearing the date 30 May 2024. It is signed by Dr Grace Ko, the Emergency Department Registrar. It records that the second defendant attended the emergency department at St George Hospital on 30 May 2024 and that she would be unfit to attend work/school/her usual occupation from 30 May 2024 to 2 June 2024. However, it provides absolutely no diagnosis. Exhibit 2-2 is a certificate from Dr Stephen Howe of 10 Park Road, Hurstville. A stamp attached to the document indicates that that is the HealthPac Medical Centre at level two of 10 Park Road, Hurstville.

7. The certificate is this:

“Mrs Hannan Elgammal has a medical condition and will be unfit for work from 30 May 2024 to 7 June 2024. She has a chronic medical condition.”

8. There is no diagnosis provided. Exhibit 3-3, which could be shortly described as the discharge referral document from the St George Hospital, dated yesterday, is addressed to a Dr Magda El Kateb. It says this:

“Thank you for reviewing Hannan Elgammal, a 60-year-old female to be discharged on 30 May 2024 from the emergency department, St George Hospital. A summary of their presentation and condition is documented below.

Summary of Care

Thank you for your ongoing care of Hannan, a 60-year-old female who presented to St George Emergency Department with chest pain. On review:

Well.

Vital signs, BTF.

RR16. Spso2 100% RA. No respiratory distress. Chest: AE bilaterally.

BP 167 over 118 HR 70, HSDNM. No pitting, soft calves.

ASNT.

ECG-SR. Low voltage precordial. No acute capital ST\T changes suggesting acute ischaemia. No pericarditis.

CXR-no consolidation\PTx\pleural effusion.

Trop-7 (onset of pain greater than four hours).

Impression.

Low heart score for ACS, possible arrhythmia.

Recent EST reassuring for CAD.

TSH added to ensure NAD (no abnormality detected) - GP to kindly chase up.”

Outpatient halter monitoring\TTE (if not done, if not done). IxNAD. Thank you.”

The document also sets out results of blood testing and discloses that a chest x-ray and thyroid function test were ordered on 30 May 2024, but the tests have not been reported. The document is signed by Dr Grace Ko, who, after her name, gives the initials JMO, meaning Junior Medical Officer. If the plaintiff, who was 60 years old, had true chest pain, she would not have been discharged from the hospital yesterday, the day that she presented there. It would appear that her complaints were limited probably to yesterday.

9. In any event, even if the defendant be unable to attend Court to represent herself, the fact remains that none of what I have stated today overcomes the problem that the defendant did not comply with the order made by the Judicial Registrar that the defendant was to serve an affidavit by 19 April 2024 and cannot overcome the fact that there is nothing which can be said because of a lack of evidence to overcome the plaintiff’s case, if the plaintiff can prove what it must prove. The application for an adjournment is accordingly refused.

Substantive Matter

10. The plaintiff, Toyota Finance Australia Ltd, brings an action against Peppercorn Residential Pty Ltd and Ms Hannan Elgammal. The first nine paragraphs of the Statement of Claim are specifically admitted by each defendant in the defence filed on 5 December 2023. Those allegations are these:

“1. At all material times, the Plaintiff, Toyota Finance Australia Limited ABN 48 002 435 181 (TFAL), is and was:

1.1. a corporation within the meaning of the Corporations Act 2001 (Cth) (Act);

1.2. able to sue in its corporate name, style and capacity;

1.3. able to enter into legally binding agreements; and

1.4. in the business of providing finance in connection with the hire and/or purchase of motor vehicles.

2. At all material times, the First Defendant, Peppercorn Residential Pty Ltd ACN 601 712 181 (Company), is and was:

2.1. a corporation within the meaning of the Act;

2.2. capable of being sued in its corporate name, style and capacity; and

2.3. able to enter into legally binding agreements.

3. At all material times, the Second Defendant, Hannan Elgammal (Director), is and was the:

3.1. sole director and secretary of the Company;

3.2. controlling mind and will of the Company;

3.3. holder of 100 ordinary shares in the paid up capital of the Company.

4. On or about 24 November 2021, TFAL entered a Business Vehicle Loan (Agreement) with the Company as the borrower and with the Director as guarantor and indemnifier to purchase a 2021 Ferrari 2D coupe with vehicle identification number ZFF92LMD000270215 bearing registration number DGG65N (Vehicle).

Particulars

4.1. It was express and in writing;

4.2. It comprised the following documents;

(a) A document styled “Loan Offer – Business Vehicle Loan” (Schedule);

(b) Signed by the Director as sole director and secretary of the Company an by the Director as guarantor and indemnifier of TFAL and witnessed by Ahmed Algammal;

(c) A booklet styled “Business Vehicle Loan Booklet” (Booklet).

4.3. TFAL relies upon the full terms and conditions of the Booklet as if they were fully pleaded in this SOC.

5. The Agreement contained terms and conditions which included the following:

5.1. The term was for 61 months;

5.2. The Company was to make 60 monthly payments of $5,549.92 and a final balloon payment of $335,000;

5.3. The Company was required to make the repayments as referred to in the Schedule: clause 4.1 of the Booklet;

5.4. The Company was required to make payments of interest as referred to in the Schedule: clause 4.2 of the Booklet.

5.5. The Company was required to make payments of default interest, if interest was not paid on time, as referred to in the Schedule: clause 4.3 of the Booklet.

5.6. The Company was required to pay fees and charges: clause 4.4 of the Booklet.

5.7. TFAL was granted a security interest over the Vehicle within the meaning of the Personal Property Securities Act 2009 (Cth) (PPSA): clause 7 of the Booklet;

5.8. The Company made certain warranties to TFAL: clause 9 of the Booklet;

5.9. The Company would be in default of the Agreement if it did any of [the] things referred to in sub-clauses 10.1(a) to (j) of the Booklet;

5.10. If the Company was in default of the Agreement, TFAL could exercise various rights under clause 10.2 of the Booklet;

5.11. TFAL was entitled to enforce its security interest over the Vehicle if an event of default occurred under sub-clause 10.2(a)(ii) of the Booklet;

5.12. The Director was obliged to guarantee the Company’s obligations under the Agreement: clause 14.1 of the Booklet;

5.13. The Director was obliged to indemnify TFAL for all loss and damage under the Agreement: clause 14.2 of the Booklet;

5.14. TFAL was entitled to give notices to the Defendants under clause 15.2 of the Booklet;

6. On or about the date of the Agreement, TFAL advanced funds for the purchase of the Vehicle.

7. On 25 November 2021, TFAL registered its security interest over the Vehicle on the personal property securities register (PPSR).

8. Following the advance of funds, the Defendants obtained possession of the Vehicle.

9. The Company made some payments as required under the Agreement but did not make all payments.”

11. The defendants have not served any evidence and in particular have failed to comply with a guillotine order made by the Judicial Registrar on 28 March 2024. As they did not comply with the Judicial Registrar’s order, they have not been, since 28 March 2024, been permitted to serve or rely on any evidence except with the leave of the Court, which leave has not been granted. In fact, no such leave has been sought. The terms of the agreement are not in dispute. Clause 5.2 of the Booklet, which forms part of the agreement, deals with the giving of notices and includes posting them to the last address notified by the defendants to the plaintiff under cl 15.2(a)(ii) of the Booklet.

12. Under s 160 of the Evidence Act 1995 it is presumed (unless evidence sufficient to raise doubt about the presumption is adduced), that a postal article sent by prepaid post addressed to a person at a specified address in Australia was received at that address on the seventh working day after having been posted. There is no contrary provision in the contract. What is a working day is defined in s 160(3) of the Evidence Act. The address always given by each defendant was an address known as 79 Carrington Avenue, Hurstville in this state.

13. A default notice was sent by the plaintiff to the address for both defendants on 17 March 2023. The seventh working day after the posting on 17 March 2023 was 28 March 2023. The default notice was deemed to have been received by each of the defendants in the absence of any evidence to the contrary, and there is none. There is evidence before me that the letter sent on 17 March 2023 was not returned to sender or was otherwise identified by Australia Post as being undeliverable.

14. The default notice required the defendants to comply with its terms within 35 days. 35 days from 28 March 2023 is 2 May 2023. No payment was received by the plaintiff in response to the default notice on 2 March 2023, or at all. The default notice required payment of $22,889.61. As has been submitted by the plaintiff, the Court is satisfied that the default notice was sent to the defendants and the defendants have failed to make repayment to the plaintiff as required by the default notice.

15. It was a default under the agreement if the defendants did not pay an amount to the plaintiff when the amount was due. That is provided for in cl 10.1 of the Booklet. The agreement reached between the parties is that the first defendant would pay to the plaintiff 60 monthly instalments each of $5,549.92 and a final balloon payment of $335,000, such that the total payment would be $667,995.20. The default on which the plaintiff acted had been preceded by earlier defaults. As a result of the default, the plaintiff was entitled to ask for immediate payment of the balance owing as defined in the cl 10.2(a) of the Booklet.

16. On 4 September 2023, the plaintiff demanded payment of the balance owing under the agreement, namely $562,642.88. This has been referred to as the “Total Debt”. The defendants did not pay the Total Debt as claimed, or at all. The failure to pay the total debt was a further default under the agreement. Under the agreement the plaintiff was entitled to charge the defendants its costs of the enforcement after a default occurred. That is provided for in cl 10.2(b) of the Booklet. A further consequence of the monetary defaults was that the plaintiff became entitled to enforce its security interest in the vehicle which had been the subject of the agreement. That is provided for in cl 10.2(a)(ii) of the Booklet.

17. One of the annexures to the affidavit evidence relied upon is a certificate from the Personal Property Securities Register. That indicates that on 25 November 2021, a personal property security was registered, given by the first defendant over a two-door coupe, white in colour, the maker being Ferrari, the model number being a 458 Italia and the register records the identification number of the vehicle, its engine number and the fact that its registered number was DGG65N. The plaintiff’s rights to enforce the security interest, including taking or attempting to take possession of the vehicle is provided for in cl 11(a)(i) of the Booklet.

18. Between 1 May 2023 and 10 July 2023, the plaintiff, through its appointed agent, attempted to recover possession of the vehicle but was unsuccessful. Of interest is the fact that the mercantile agent was able to ascertain that there was a third party in possession of the motor vehicle being the second defendant’s son, Ayman Elgammal. The agent was able to have a telephone conversation with Mr Ayman Elgammal, who confirmed that he lived at 79 Carrington Avenue, Hurstville, and the second defendant appointed Ayman Elgammal to act for her as he was the driver of the Ferrari.

19. In Shevill v Builders Licencing Board [1982] HCA 47, the Court held that repudiation occurs when one party to a contract evinces an intention to be no longer bound by the contract or to fulfil it only in a manner substantially inconsistent with the terms of the contract itself. I have no hesitation in finding that the first defendant repudiated its obligation under the contract, to make a payment in accordance with the contract, to comply with the terms of the default notice, to voluntarily surrender the vehicle after default had been made, and to comply with the terms of the notice for payment of the Total Debt, or to make any payment to the plaintiff at all since 16 August 2023.

20. The Court is satisfied that both defendants have engaged in repudiatory conduct and that the plaintiff has a right to possession of the vehicle based on the contractual terms identified, the failure of the defendants to comply with their obligations and a failure to deliver up the vehicle after they were in default.

21. For those reasons, I make an order pursuant to s 93 of the Civil Procedure Act 2005 that there be judgement for the plaintiff against the defendants requiring the defendants to forthwith deliver up to the plaintiff a 2021 Ferrari two-door coupe with vehicle identification number ZFF92LMD000270215 bearing registration number DGG65N.

22. I order that in default of compliance by the defendants with the first order that the plaintiff, through its servants or agents be authorised to enter onto any real property owned or occupied by either of the defendants to collect the vehicle. I order that the defendants pay the plaintiff’s costs on an indemnity basis pursuant to their agreement. Such costs are to be agreed or assessed.

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Decision last updated: 21 May 2025