Toyota Finance Australia Ltd v Naous

[2025] FedCFamC2G 1520

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Toyota Finance Australia Ltd v Naous [2025] FedCFamC2G 1520

File number:

MLG 913 of 2025

Judgment of:

JUDGE CHAMPION

Date of judgment:

1 September 2025

Catchwords:

CONSUMER PROTECTION – RECOVERY ACTION FOR MOTOR VEHICLE – Applicant seeks a declaration and orders for recovery of a vehicle under the Personal Property Securities Act 2009 (Cth) in respect of which it loaned moneys to the first respondent– Where the respondents each have not engaged in the proceedings – Finding that the Applicant is entitled to recovery of the vehicle under s.123 of the Personal Property Securities Act 2009 (Cth) – Declarations and orders made for recovery.

Legislation:

Personal Property Securities Act 2009 (Cth), ss. 111, 123

National Consumer Credit Protection Act 2009 (Cth) Sch 1, cl. 5

Cases cited:

Mercedes-Benz Financial Services Australia Pty Limited v RPO Pty Limited [2025] FCA 714

Anthony Duggan, ‘Australian Personal Property Securities Law’ (2024, 4th ed, LexisNexis)

Division:

Division 2 General Federal Law

Number of paragraphs:

31

Date of hearing:

1 September 2025

Place:

Melbourne

Solicitor for the Applicant:

Mr A Foster of Sinisgalli Foster Legal

First Respondent:

No appearance

Second Respondent:

No appearance

Third Respondent:

No appearance

ORDERS

MLG 913 of 2025

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

TOYOTA FINANCE AUSTRALIA LTD (ACN 002 435 181)

Applicant

AND:

MOHAMAD NAOUS (ABN 002 435 181)

First Respondent

IBRAHIM EL KASSAB

Second Respondent

SARAH KHACHOUF

Third Respondent

ORDER MADE BY:	JUDGE CHAMPION
DATE OF ORDER:	1 SEPTEMBER 2025

THE COURT ORDERS THAT:

Procedural

1.Under r. 22.04(1)(b)(i) of the Federal Circuit and Family Court of Australia (General Federal Law) Rules 2025 (Cth), the hearing of the matter proceed generally in the absence of the first to third respondents. 

THE COURT DECLARES THAT:

2.The Applicant holds a security interest for the purposes of the Personal Property Securities Act 2009 (Cth) (PPS Act) over the Vehicle as identified in Order 1 below (the Vehicle).

3.The Applicant is entitled to seize the Vehicle pursuant to s. 123(1) of the PPS Act and/or clause 10.2 of the Business Vehicle Loan Terms and Conditions between the Applicant and Mr Mohamed Naous dated 26 November 2020.

THE COURT FURTHER ORDERS THAT:

4.The Applicant is entitled to possession of the black 2022 Toyota Hilux with the

Registration Number EZH02K or DGP59H, Engine Number MR0BA3CD60003080868, and Vehicle Identification Number

MR0BA3CD60003080868 (the Vehicle).

5.The First Respondent is in default of his obligations pursuant to the Loan Agreement dated 26 November 2020.

6.The Applicant is entitled to seize the Vehicle pursuant to s 123(1) of the PPS Act and/or clause 11 (b) of the Loan Agreement between the Applicant and the First Respondent.

7.The Third Respondent, within seven days of coming into possession of the

8.Vehicle, deliver, surrender and/or provide the location of the Vehicle to the Applicant and/or its duly authorized agents.

9.The Applicant and/or its duly authorized agents, are permitted to take reasonable step(s) in order to take possession of the Vehicle from any public place, business premises, or residential premises in Australia at which the Vehicle is reasonably believed to be located.

10.Upon seizure of the Vehicle, the Applicant will:

(a)inform the police of the State or Territory in which the Vehicle was seized that the Vehicle has been seized pursuant to a Court Order and of the contact details by which the Applicant and/or its solicitors can be contacted by or on behalf of any affected person;

(b)affix a copy of a Notice in the form set out at Schedule 1 to these orders, with the applicable Vehicle details completed, and to which is attached a copy of these orders, to a prominent location in the immediate vicinity of any location from which the vehicle may be seized;

(c)deliver a copy of the Notice by hand to any person appearing to the Applicant and/or Applicant’s duly authorised agent at the time of seizure of the Vehicle to be interested in the Vehicle, to be objecting to seizure, or to be in possession or control of the land or premises from which the Vehicle is seized; and

(d)within 48 hours of the seizure of the Vehicle, send a copy of the Notice and a copy of these Orders by registered post to the address from which the Vehicle was seized (if it was seized from private property).

11.The Applicant is to pay any such fee(s) or charge(s) as have accrued in respect of parking and/or reasonable storage costs so levied at the point of surrender/collection to secure the release of the Vehicle, or as otherwise agreed between the Applicant and the person in possession of the Vehicle and/or operator of any car park or storage facility at or in which the Vehicle is or has been stored.

12.The Applicant will, at its own expense, store and preserve, and shall take no steps to dispose of, the Vehicle, for a period of 28 days from the date of seizure.

13.If no person or party has exercised the liberty to apply conferred by paragraph 14 within 21 days of the date of seizure in accordance with the terms of the Notice, the Applicant shall, after the expiry of 28 days from the date of seizure, is at liberty to treat the Vehicle as seized property pursuant to s 123(1) of the PPS Act and to sell or otherwise dispose of such Vehicle in accordance with its rights as holder of a perfected security interest in the Vehicle.

14.Nothing in these Orders shall prohibit any third party claiming an interest in any the Vehicle from making any claim in relation to such collateral, including in relation to any proceeds of sale of such Vehicle, after the expiry of 21 days from the date of seizure.

15.Subject to paragraph 12, the First, Second and Third Respondents and any other person asserting an interest affected by these orders has liberty to apply at short notice.

16.Unless the Court orders otherwise, upon the expiry of six months from the date of these orders the proceeding shall be finalized forthwith on the basis that, in respect of any relief sought in the Amended Originating Application that is not the subject

17.of these orders, such relief is not pressed by the Applicant and no orders are made in respect of it.

18.The Applicant will forthwith forward by prepaid express post a copy of these orders to the First, Second and Third Respondents.

19.The parties have liberty to apply.

Costs

20.The first, second and third respondents are jointly and severally liable to pay the Applicant’s costs fixed in the sum of $10,232.00.

AND THE COURT NOTES THAT:

A.The first, second and third respondents were each called out of court at 2:19pm today and there was no response to the calls.

B.These orders were made in the absence of the first, second and third respondents.

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 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

‘SCHEDULE 1’

Notice to Interested Persons Seizure of Vehicle

2022 Toyota Hilux Make/model:

Colour:   Black

Vehicle Identity Number:             MR0BA3CD600030868

Vehicle Registration Number:      EZH02K

Date of Seizure:

The vehicle described above (Vehicle) has been seized by Toyota Finance Australia

Limited, ACN 002 435 181,(Toyota Finance) pursuant to the attached Order of the Federal Circuit and Family Court of Australia dated 1 September 2025 in proceeding MLG913/2025 (the Orders).

The Orders require that Toyota Finance store the Vehicle for a period of at least 21 days from the date of seizure, during which any person or party who claims to have an interest in the Vehicle may take steps to assert their interest or challenge Toyota Finance’s entitlement to seize the Vehicle.

Any person claiming to have an interest in the Vehicle or wishing to challenge Toyota Finance’s entitlement to seize or sell the vehicle may file an application in the Federal Circuit and Family Court of Australia Proceeding MLG 913 of 2025 within 21 days of the Date of Seizure.

For further information please contact Toyota Finance’s solicitors at the following address:

Sinisgalli Foster Legal 

Level 7, 224 Queen Street
Melbourne, VIC, 3000
Attention: Alan Foster
Phone: [phone]

Email:  [email protected]

Toyota Finance is entitled to proceed to sell or otherwise dispose of the Vehicle if no person or party asserts an interest in the Vehicle in the manner prescribed by the Orders within 21 days of seizure.

EX-TEMPORE REASONS FOR JUDGMENT
Revised from transcript

JUDGE CHAMPION:

INTRODUCTION

1. Toyota Finance Australia Limited (Toyota) seeks orders for the recovery of a 2022 Toyota HiLux. The named respondents are Mr Mohamad Naous, the First Respondent;  Mr Ibrahim El Kassab, the Second Respondent; and Ms Sarah Khachouf, the Third Respondent.  I will provide a little more detail as to the position of each respondent in due course in these reasons.

2. By way of necessary procedural background, I note that on 3 July 2025, I made orders that Toyota be granted leave to add Ms Khachouf as the Third Respondent to the proceeding.  To the best of Toyota's knowledge and on the most recent material available to it, Ms Khachouf was in possession, and was the registered owner of the vehicle at least on or about the date of those orders. Also on 3 July 2025, I made orders for substituted service on Ms Khachouf and orders that I would conduct a final hearing if the respondents did not file a response to Toyota's application or otherwise appear today, 1 September 2025.

3. Since the orders on 3 July 2025, Toyota has filed various affidavits of service relating to each of the respondents, such that I am satisfied that they are on notice of today's hearing. Those affidavits of service are exhibits A2, A3, A4, A5 and A6 in the matter. I note that none of the three respondents filed a response to Toyota's initiating application, and although the matter was called this afternoon, none of the respondents appeared.

4. Toyota relied on an affidavit of Ms Indika Egan made on 24 March 2025, which is Exhibit A1.  Ms Egan's affidavit annexed the critical documents which underpinned Toyota's claim to recovery of the vehicle.

5. I will make orders intended to enable Toyota to recover the vehicle.  My reasons follow.

   THE AGREEMENT

6. On 26 November 2020, Toyota agreed to lend Mr Naous the sum of $64,472 at a fixed annual interest rate of 5.59 percent for a term of 48 months and with total interest charges of $11,078, for Mr Naous' purchase of the vehicle (‘the loan agreement’). Under the loan agreement, Mr Naous was to pay 47 equal monthly instalments of $898 and a final payment of $33,686 (rounded to the nearest dollar).  Mr Naous agreed (among other matters) not to sell, transfer or otherwise part with possession or control of the vehicle without Toyota's written consent (see clause 8.3A, Ex A1).

7. Under the loan agreement, the loan is secured by a first-ranking security interest over the vehicle in favour of Toyota (see clause 7(i)).  In the event Mr Naous defaulted in the performance of his obligations under the loan agreement, its terms permitted Toyota to take enforcement action, including by enforcing its security interest by repossessing the vehicle (see clauses 10.2A(ii) and 11A(i)).

8. The terms of the loan agreement permit Toyota with the necessary consent or court order to enter any premises where it believes the vehicle to be located in order to recover possession of the vehicle (clause 11B). 

9. On 26 November 2020 under the loan agreement, Toyota advanced the sum of $64,472 to Mr Naous.

   SECURITY INTEREST

10. On or about 25 November 2020, Toyota perfected its security interest over the vehicle by registration of its security interest on the Personal Property Securities Register maintained under the Personal Property Securities Act 2009 (Cth) (‘PPS Act’).

    DEFAULT

11. Ms Egan deposed – and I accept – that on 21 April 2023 Mr Naous defaulted under the terms of the loan agreement by failing to pay the total sum of $3,564.  Toyota issued a default notice requiring rectification of his default within 35 days.  Mr Naous failed to make the necessary rectification of his default (Ex A1, 14-16).

    THE SECOND RESPONDENT

12. Later, on a date which is not entirely clear to me, Mr El Kassab, the Second Respondent, became the registered owner of the vehicle. It is also not clear as to how Mr El Kassab ceased to be the registered owner of the vehicle and Ms Khachouf became the registered owner in his stead.

    THE THIRD RESPONDENT, MS KHACHOUF

13. On 3 June 2025, Toyota issued a subpoena to Transport for New South Wales as to the name and address of the current registered owner for the vehicle.  The documents Transport for New South Wales produced in answer to that subpoena set out that Ms Khachouf (the Third Respondent) was the registered owner of the vehicle at the time, and it was in those circumstances I granted leave to Toyota to join Ms Khachouf as the third respondent on 3 July 2025.

14. Mr Foster, who appeared for Toyota today, submitted that it was not known to him or to Toyota as to whether Ms Khachouf remained the registered owner of the vehicle.  As noted, none of the respondents have filed a response to Toyota's application or appeared at the hearing today.

    A HEARING IN THE ABSENCE OF THE RESPONDENTS

15. Given the affidavits of service to which I previously referred, I am satisfied that each of the respondents has been served with the initiating application in accordance with orders previously made.  In the context of each respondent's default in filing a response to the initiating application within the 28 days permitted under the rules and given their absence from the scheduled hearing today, 1 September 2025, I acceded to Mr Foster's submission to proceed with the hearing generally today in their absence, which I am permitted to do under rule 22.04(1)(b).

    WHAT IS MY ANALYSIS?

16. I have jurisdiction and powers with respect to a PPS matter under sections 206 and 207 of the PPS Act.  I note that in submissions today, Toyota relied exclusively on my jurisdiction under the PPS Act.

17. Toyota  did not rely upon its alternative cause of action under the National Consumer Credit Protection Act 2009 (Cth).

18. As to any claim under the National Consumer Credit Protection Act, Toyota also conceded that the loan agreement was a business loan as titled and, therefore, under clause 5(1)(b)(i) of the National Credit Code (‘the Code’) which forms a schedule to the National Consumer Credit Protection Act, the Code does not apply because the credit was not provided for "personal, domestic or household purposes". I therefore put considerations under that Act and the Code to one side.

19. Returning to the PPS Act, I note that under section 123 of the PPS Act:

    A secured party may seize collateral, by any method permitted by law, if the debtor is in default under the security agreement.

20. I am satisfied that there is a "security agreement" made by Toyota and Mr Naous, the First Respondent, within the meaning of section 123.  The security agreement means an agreement by which a security interest is created (PPS Act Dictionary, section 10).  Toyota is the "secured party", and Mr Naous is the "debtor" under section 123.  Mr Naous as the debtor is in "default under the security agreement" because payments have not been made as and when they fell due under the security agreement.

21. Further, Mr Naous has transferred the vehicle to another party without Toyota's consent, in default of his obligations under the security agreement and Mr Naous has not remedied his default.

22. Toyota submits (and I accept) that because it did not expressly or impliedly authorise Mr Naous to transfer the vehicle to any other person, any person now in possession of the vehicle, that is, a person in the position of Ms Khachouf or otherwise, who took possession of the vehicle after the registration of Toyota's security interest under the PPS Act took the vehicle impressed with notice of Toyota's prior registered security interest (see PPS Act sections 32(1)(a), 43(1) and 79(2); Anthony Duggan, ‘Australian Personal Property Securities Law’ (4th edition, LexisNexis 2024 330-331).

23. In this regard, I also refer to the observations of Charlesworth J in Mercedes-Benz Financial Services Australia Pty Limited v RPO Pty Limited [2025] FCA 714 at [34(4)] that any person taking possession of the vehicle took possession subject the applicant's security interests under the PPS Act. Each of the elements of s. 123(1) appear to be satisfied such that it is appropriate to make an order that Toyota as the secured party "may seize collateral by any method permitted by law".

    RELIEF

24. I have a discretion as to the making of a declaration under section 141 of the Federal Circuit and Family Court of Australia Act 2021 (Cth). As to the form of the orders I will make, in Mercedes-Benz Financial Services Australia v RPO, Charlesworth J examined the powers of Courts with federal jurisdiction under the PPS Act (see [28] to [33]) as to how a party may seize collateral "by any method permitted by law".  Charlesworth J was satisfied that the Court had a discretionary power to make orders which authorised the applicant or its agents to enter on to private land for the purposes of seizure, relying on section 123 of the Act.

25. Charlesworth J said at [22] of her judgment that Her Honour’s orders:

    ...would put beyond doubt that the entry onto land for the purpose of seizing [the vehicle] would constitute a “method permitted by law” for the purposes of s 123 of the PPS Act, notwithstanding that entry for that (or any) purpose may not otherwise have been authorised under the general law.

26. I am satisfied that it is appropriate that I make the orders Toyota seeks in its amended application, including that I make orders under section 123 of the PPS Act, that Toyota may seize the vehicle from any public place, business premises or residential premises in Australia at which the vehicle is reasonably believed to be located.  I note that under section 111 of the PPS Act, Toyota must exercise all its rights, duties and obligations that arise under chapter 4 of the Act – of which section 123 forms a part – honestly and in a commercially sensible manner.  Section 111 will apply to Toyota's exercise of its rights to seize the vehicle the subject of these reasons.

27. Adopting the same approach that Charlesworth J took in Mercedes-Benz Financial Services Australia v RPO, I note that a consequence of the orders I will make today is that interested parties who may not be before the court may still assert an interest in the vehicle.  In Mercedes-Benz Financial Services Australia v RPO, Charlesworth J said at [35] that:

    …The identity of the interest of non-parties and the nature of the interest they may assert is presently unknown.

28. Charlesworth J's observations apply with equal force in this case.

29. For that reason, I will make orders in a similar form to the orders Charlesworth J made in that upon seizure of the vehicle in Mercedes-Benz Financial Services Australia v RPO. I will order that Toyota affix a notice in a prominent location as to the vehicle’s seizure [order 9(b)]; require Toyota, at its expense, to store and preserve and take no steps to dispose the vehicle for a period of 28 days from the date of the seizure (order 11) and grant liberty to apply to any person asserting an interest affected by these orders at short notice (order 14).

    COSTS

1. Toyota, as the successful party, is entitled to its costs in accordance with the ordinary principle that costs follow the event.

2. I will make an order that the respondents are jointly and severally liable for Toyota’s costs fixed in the amount of $10,232.

I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Champion.

Associate:       C.N

Dated:       18 September 2025