Toyota Finance Australia Ltd v Tsalach Construction Pty Ltd
[2025] FedCFamC2G 1068
•9 July 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Toyota Finance Australia Ltd v Tsalach Construction Pty Ltd [2025] FedCFamC2G 1068
File number: MLG 1167 of 2025 Judgment of: JUDGE FORBES Date of judgment: 9 July 2025 Catchwords: CONSUMER LAW – matter arising under the Personal Property Securities Act 2009 (Cth) – application for orders sanctioning seizure and recovery of vehicle pursuant to security agreement – where respondents have defaulted – security interest registered under the PPSA – Declaration that applicant is entitled to take possession of the vehicle – Orders made for the applicant to recover vehicle if not delivered by the respondents Legislation: Personal Property Securities Act 2009 (Cth) ss 10, 19(2), 20(2), 32, 43, 123, 207
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 9.04, 17.05(2)
Cases cited: Volkswagen Financial Services Australia Pty Ltd v Victorian Inspection Testing and Compliancing Services Pty Ltd [2024] FedCFamC2G 64 Division: Division 2 General Federal Law Number of paragraphs: 57 Date of hearing: 20 June 2025 Place: Melbourne Solicitor for the Applicant: Mr Foster of Sinisgalli Foster The Respondents: No appearance ORDERS
MLG 1167 of 2025 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: TOYOTA FINANCE AUSTRALIA LTD
Applicant
AND: TSALACH CONSTRUCTION PTY LTD
First Respondent
TANIELU (DAVID) SAUAO TANIELU
Second Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
20 JUNE 2025
THE COURT DECLARES THAT:
1.The applicant is entitled to possession of 2019 Toyota Hiace Commuter (12 seats) with the Registration number YPL17R, the Vehicle Identification number JTFHB8CP306003712 and Engine Number 1GD8433922 (the Vehicle).
THE COURT ORDERS THAT:
2.The Respondent/s, or any other persons in possession of the Vehicle, deliver up, surrender and/or provide the location of the Vehicle to the Applicant or its duly authorised agent within fourteen (14) days of making this order.
3.Upon failure to comply with order 2 above, the Applicant, or its duly authorised agent, be entitled to take reasonable steps to recover the Vehicle including entering XXX Road Hoppers Crossing VIC 3029, including any garage or carport, or any other premises in Australia over which the Respondent has apparent control and at which the Vehicle is reasonably believed to be located for the purpose of taking possession of the Vehicle pursuant to section 123 of the Personal Property Securities Act 2009 (Cth).
4.The First and/or Second Respondent, and/or Occupier of the Property where the Vehicle is situated, be restrained from interfering or otherwise impeding the Applicant’s access to the property.
5.The Respondents pay the Applicant’s costs of the Application, fixed in the sum of $5,999.00.
6.The declaration and orders above be stayed for a period of seven (7) days.
7.Any application by the Respondents to set aside or vary these orders pursuant to r 17.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules) be made by no later than 4.00pm on 27 June 2025 and be supported by evidence on affidavit as to why the orders should be set aside or varied.
8.The reasons for these orders will be published from Chambers at later date.
AND THE COURT NOTES THAT:
A.Chambers received a written request for an adjournment from Ms Tanielu on behalf of the Respondents at 5.28pm yesterday.
B.The matter was listed to commence at 9.30am, but adjourned to 9.40am to allow appearance from the Respondents.
C.At 9.40am, there was no appearance by the Respondents.
D.The Applicant opposed the request for an adjournment.
E.The Court refused the request for adjournment and gave ex tempore reasons for doing so.
F.Pursuant to r 13.06(1)(e) of the Rules, where a party is absent from a hearing the Court may proceed with the hearing generally or in relation to any claim for relief in the proceeding.
G.Pursuant to r 17.05 of the Rules, the Court may vary or set aside a judgment or order made in the absence of a party.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE FORBES
INTRODUCTION
By an application filed on 11 April 2025, the applicant Toyota Finance Australia Ltd (ACN 002 435 181) (Toyota) seeks relief against the respondents pursuant to s 123 of the Personal Property Securities Act 2009 (Cth) (PPSA) by seizing collateral which is the subject of a security agreement.
Pursuant to its registered interest in a property security, Toyota seeks a declaration that it is entitled to possession of a 2019 Toyota Hiace 12-seat Commuter (vehicle).
The vehicle is currently in the possession and control of the respondents, and apparently usually kept at a property in Hoppers Crossing, Victoria. By reason of the respondent’s default under a loan agreement which facilitated the purchase of the vehicle, Toyota, as the secured party, also seeks orders that:
(a)the respondents or any other persons in possession of the vehicle, deliver up, surrender and/or provide the location of the vehicle to the applicant or its duly authorised agent;
(b)in the event of the failure of the respondents to do so, Toyota or its duly authorised agent be entitled to take reasonable steps to recover the vehicle, including by entering the Hoppers Crossing property or any other premises over which the respondents have apparent control and at which the vehicle is recently believed to be located for the purpose of taking possession of the vehicle;
(c)the respondent and/or occupier of any property where the vehicle is situated, be restrained from interfering or otherwise impeding Toyota’s access to the property; and
(d)the respondents pay Toyota’s costs of this application.
Following an uncontested hearing of the application on 20 June 2025, I made orders substantially in the terms sought by Toyota, save that I ordered that there be a stay of the operation of the orders for 7 days.
These reasons explain why Toyota is entitled to the relief it seeks.
BACKGROUND
In seeking relief pursuant to s 123 of the PPSA, Toyota relies upon the following documents:
(a)affidavit of Tarryn Joy Mackenzie affirmed 10 April 2025;
(b)affidavit of service of Tarryn Joy Mackenzie affirmed 23 April 2025;
(c)outline of submissions filed by the Applicant on 9 May 2025;
(d)affidavit of Alexander Martin affirmed on 9 May 2025;
(e)affidavit of Alan Foster sworn 5 June 2025.
Toyota is represented in these proceedings by the law firm Sinisgalli Foster Legal. The deponents of the various affidavits on which Toyota relies include the principal of that firm Mr Foster, a paralegal Ms Mackenzie and a law clerk Mr Martin.
There were two directions hearings in this proceeding before the making of orders sought by Toyota. On each of those occasions, Ms Regina Tanielu was granted leave to appear on behalf the respondents. Ms Tanielu is the wife of the second respondent and she is also a guarantor of the loan agreement pursuant to which Toyota has a registered security interest in the subject vehicle.
The respondents have not filed a response or any evidence which opposes the application. It was evident in the directions hearings, based on submissions made by Ms Tanielu, that she and her husband are in possession of the vehicle. They acknowledge default under the terms of the security agreement. The position of the respondents has not been to deny Toyota’s interest or its entitlement to relief, but to seek time for them to rectify their breach and to reach some other arrangement which accommodates their difficult financial circumstances and capacity to pay.
I am satisfied that the affidavits and outline of submissions on which Toyota relies accurately describes the circumstances which led to the application for relief. Those circumstances are as follows.
Toyota operates under its business name, Toyota Finance. The business provides financial services to individuals and businesses purchasing motor vehicles, by way of consumer loans. Toyota operates under Australian Credit Licence number 392536.
The first respondent, Tsalach Construction Pty Ltd is a privately owned company. The second respondent, Mr Tanielu, is a director of Tsalach Construction. He and his wife, Ms Tanielu, are guarantors of the finance agreement under which Toyota loaned funds for the purchase of the vehicle.
On 15 November 2022, pursuant to a finance agreement between Toyota and Tsalach Construction, Toyota agreed to lend the company $63,380 at a fixed interest rate of 9.42% per annum for a term of 60 months (with total interest charged of $16,337.20), to facilitate the company’s purchase of the vehicle.
The finance agreement between the Toyota and Tsalach Construction was a contract regulated by the PPSA. The secured vehicle, the subject of these proceedings, is a 2019 Toyota Hiace Commuter, Registration Number YPL17R, with Vehicle Identification Number (VIN) JTFHB8CP306003712 and Engine Number 1GD8433922.
Relevantly, the finance agreement between Toyota and the Tsalach Construction comprised:
(a)a “Loan Offer – Toyota Access Business Vehicle Loan” dated 15 November 2022; and
(b)a “Business Vehicle Loan Booklet – Standard Terms and Conditions” (Terms and Conditions).
The funds advanced pursuant to the finance agreement are secured by way of a first-ranking security interest over the vehicle in favour of Toyota[1]. Documents annexed to the affidavit of Ms Mackenzie affirmed on 10 April 2025 confirmed that Toyota registered its security interest in the subject motor vehicle on 14 November 2022. A search of the PPSR dated 15 March 2025 confirms that the vehicle is on the Register. By reason of the registration of the vehicle on the Personal Property Securities Register (PPSR), the transferee of the vehicle holds it subject to the security interest of Toyota[2].
[1] Terms and Conditions, clause 7(a)(i)
[2] See ss 32 and 43 of the PPSA
The Terms and Conditions of the security agreement between Toyota and Tsalach Construction relevantly provided, inter alia:
4. Your Payment Obligations
4.1 Repayments
(a) You must repay the Loan, together with all interest on it, by making the Repayments set out in your Schedule and, in any case, on or by the last day of the Term
….
7. We have an interest in the Vehicle, Proceeds and Insurance
(a) By signing your Schedule, you grant a first ranking Security Interest to us over:
(i) the Vehicle;
(ii) any replacement vehicle and any additions or securities added to the Vehicle;
(iii) any proceeds of the Vehicle (for example, any insurance proceeds for loss or damage to the Vehicle or other Proceeds); and
(iv) any rebate relating to any insurance or warranty financed under this Contract.
….
10. Default
10.1 When a Default occurs
You will be in default of your obligations under this Contract if:
(a) you do not pay us an amount when it is due;
(b) you do not perform any of your other obligations under this Contract fully and on time…;
(c) you do anything which you have agreed not to do under this Contract;
(d) we cannot locate you or the Vehicle after making reasonable efforts to do so;
(e) anything you warrant to us is not true when you make that warranty or repeat it;
(f) we were induced by mistake, misrepresentation or fraud to provide you with the Loan;
(g) you dispose of the Vehicle, or intend to dispose of the Vehicle, without our permission;
…
Pursuant to clause 4.1(a) of the Terms and Conditions and the Loan Schedule, the first respondent was to pay 60 monthly instalments of $1,336.62 commencing on or around 15 December 2022 and then by the same date of each subsequent month.
Other provisions of the Terms and Conditions entitled Toyota to charge interest on any unpaid amount and to add that default interest to any balance owing, at the default interest rate of 9.42% (clause 4.3). The first respondent was also responsible for the payment of all fees associated with the loan, including the loan account establishment fee and the account administration fee (clause 5(a)).
In the event of a default under the agreement, which is not rectified within 14 days of written notice, Toyota is entitled to take any enforcement action, including enforcing its Security Interest, by taking possession of the vehicle (clauses 10.2(b) and 11(a)). In order to enforce its interests, Toyota is authorised to enter any premises at which the vehicle is believed to be located with the necessary consent or court order (clause 11(b)) and the first respondent is responsible for paying any expenses incurred by Toyota in enforcing its interest (clause 10.2(b)).
Account Statements annexed to the affidavit of Ms Mackenzie affirmed on 10 April 2025 reveal that funds for the acquisition of the vehicle were advanced to the first respondent on 15 November 2022. Repayments of $1,336.62 were made from December 2022 until September 2023. Not all those repayments were made on the scheduled monthly date, resulting in some additional interest charges and administration fees.
On 5 December 2024, Toyota sent a notice of default to the respondents at its registered business address, being an ACT address given by the respondents and recorded in the loan agreement. The default notice, a copy of which was annexed to Ms Mackenzie’s affidavit affirmed on 10 April 2025, demanded rectification by the payment of $4,087.61 within 35 days, failing which Toyota reserved the right to take possession of the vehicle or seek enforcement orders to recover all monies due and payable under the agreement.
The respondents failed to rectify the default. Toyota asserts that by failing, refusing or neglecting to rectify the default, the balance of the loan and all monies payable by the respondents under the agreement became due and payable as at 8 January 2025. Toyota also contends that by reason of the default, it is entitled to take enforcement action, including by enforcing its security interest by way of seizing and selling the vehicle.
In her 10 April affidavit, Ms Mackenzie deposes that Toyota engaged an agent to recover the vehicle. After confirming the currency of the vehicle’s registration number (YPL17R) the agent made three visits to the first respondent’s ACT address, but the vehicle was not sighted there. Efforts to contact the respondents by telephone were unsuccessful.
Subsequent enquiries by the agent established that the vehicle was located at an address in Hoppers Crossing in Victoria. An agent’s report annexed to Ms Mackenzie’s affidavit described the property as comprising a large grey commercial building housing an organisation known as XXXX. Based on signage at the premises, the agent formed a belief that the second respondent (a guarantor of the loan agreement) occupied a leadership role in that organisation.
Ms Mackenzie deposes that the agent made 7 visits to the Hoppers Crossing property and although the vehicle was sighted on each occasion, it was not possible to gain entry to the premises.
At the time of commencing these proceedings, Toyota pressed for relief on the basis that the first respondent was in default of the agreement and that the respondents had been evading enforcement agent attempts to recover the vehicle from where it was located.
TOYOTA’S APPLICATION
Toyota commenced these proceedings by an application filed on 10 April 2025. The application was initially returnable on 12 May 2025.
On 23 April 2025, Toyota’s solicitors filed two affidavits where the paralegal Ms Mackenzie deposed to service of the application and affidavits in support on each of the respondents. The affidavits depose to service of these documents on the respondents at the ACT address which they used at the time of entering the finance agreement and by mail directed to the Hoppers Crossing address.
On 9 May 2025, Toyota’s solicitors filed a further affidavit of law clerk Alexander Martin. In that affidavit Mr Martin deposed to correspondence received from the respondents in which they:
(a)gave details of their alleged financial hardship and an application they had made for relief;
(b)clarified the respondents’ email address for service;
(c)corrected the identity of the second respondent; and
(d)offered to resume repayment of the loan.
Mr Martin also deposed to a telephone conversation between his principal, Mr Foster, and the second respondent’s wife, Ms Regina Tanielu, in which she said it was the respondents’ intention to regularise the loan agreement. Ms Tanielu was told to contact Toyota Finance directly or its mercantile agent if she wished to discuss that issue.
At the directions hearing on 12 May 2025, Mr Foster appeared for Toyota and Ms Regina Tanielu sought leave to appear on behalf of the respondents. As previously mentioned, Ms Tanielu is the wife of the second respondent and also a guarantor of the loan agreement. She is also a director of the first respondent, Tsalach Construction.
On the occasion of that hearing, Ms Tanielu did not challenge the factual basis of the application but said that she and her family had been attempting to renegotiate or reinstate the loan agreement with Toyota but had been unsuccessful in doing so. Although there was no formal evidence before the court, Ms Tanielu stated that various phone calls had been made and emails sent to Toyota and the mercantile agency which was taking the recovery action. It was plain from what Ms Tanielu said that the respondents were aware of and had received the relevant court documents and there was no real dispute about the existence of the loan agreement or the respondents’ default. Rather, she said that the respondents found themselves in difficult financial circumstances from which they were trying to extricate themselves by reaching an agreement with Toyota.
The 12 May hearing was adjourned at the suggestion of Toyota’s representative, in order to enable the respondents an opportunity to file a notice of address for service and to obtain advice regarding the orders sought. I explained to Ms Tanielu that pursuant to rule 9.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), a corporation such as the first respondent may not carry on a proceeding otherwise than by a lawyer, unless leave was granted. I made an express notation to that effect in the orders I made that day.
On 28 May 2025, the respondents filed a notice of address for service, citing their physical address as XXX Road, Hoppers Crossing VIC 3029 – the location where the vehicle had been sighted on numerous previous occasions.
On 5 June 2025, Toyota’s solicitor Mr Foster filed an affidavit in which he deposed to further correspondence between his office and the respondents. Documents annexed to Mr Foster’s affidavit revealed that the respondents were hoping to reinstate the loan agreement and resume regular payments, however Toyota maintained that it would only accept a full payout of the loan immediately, or repossession of the vehicle.
The proceeding returned to court on 11 June 2025. On that occasion, Mr Foster, on behalf of Toyota, said that the parties were at a practical deadlock, negotiations had not resolved the dispute and that his client sought orders for recovery and repossession of the vehicle. Ms Tanielu again appeared on behalf of the respondents and explained that they were still willing to pay out what was owed on the loan and had endeavoured to make contact with Toyota to press a claim for financial hardship. She said that those efforts were still awaiting a response.
During the course of the proceedings on 11 June it was again apparent that the respondents were not pressing any legal response to Toyota’s claims. In answer to questions I raised with Ms Tanielu, she confirmed that the respondents accept the validity of the loan agreement, accept that they are bound by its terms and conditions and are in possession of and using the vehicle. Again, it was plain that the respondents were hoping that a further indulgence might result in agreement being reached to avoid enforcement orders being made.
I agreed to adjourn the application for a further week (to 20 June 2025) in order to facilitate further discussions between Toyota and the respondents. However, given the absence of any legal defence, I made it clear to the respondents that in the absence of agreement between the parties and unless persuaded otherwise, the hearing of the application would proceed on 20 June. I informed Ms Tanielu and the respondents should anticipate the making of orders substantially in the form of those sought in the application. I again urged the respondents, via Ms Tanielu to seek legal advice.
At 5:28pm on 19 June 2025, Ms Tanielu sent an email to my chambers in which she requested an adjournment of the hearing the following morning. In that email, Ms Tanielu asserted that she had been unwell over the past week, confined to bed and had been attending ongoing medical appointments. She did not attach any medical evidence but stated that she would provide a certificate as evidence of her condition should the court require it. Ms Tanielu’s email did not come to my attention until the morning of 20 June.
The following morning after becoming aware of this request, I caused an email to be sent to the parties in the following terms:
Dear Ms Tanielu,
We refer to your email below.
We note that you have requested that the application against the first respondent, Tsalach Construction Pty Ltd and the second respondent, Mr Tanielu (David) Sauao Tanielu be adjourned to allow you to recover from illness.
Whilst His Honour understands that the adjournment was sought on the basis of your illness, no reason has been provided to the Court to explain why the first respondent cannot be represented by a lawyer, or why the second respondent cannot appear personally to represent himself and the company
His Honour has determined that the matter is to remain listed for hearing at 9:30am this morning. The Court will hear any submissions made on behalf of the applicant in relation to your request for an adjournment and will then determine whether the matter should proceed.
Please be aware that if the court decides not to grant your request for an adjournment, the matter will proceed, and orders may be made against the respondents.
The details to join the hearing are provided again below:
…
At the time of the scheduled hearing, Mr Foster was in attendance on behalf of Toyota but there was no appearance on behalf of the respondents. I delayed the commencement of the hearing until 9:40am to afford the respondents an opportunity to join the electronic hearing, but that time arrived and passed.
When the proceeding commenced, I afforded Mr Foster an opportunity to express his view regarding the respondent’s request for an adjournment. He said his client opposed the adjournment and gave reasons why I should not grant it. For reasons which I gave ex tempore, I refused the application for an adjournment and decided to proceed to hear Toyota’s application.
CONSIDERATION
Pursuant to s 207 of the PPSA this court is vested with federal jurisdiction in relation to matters arising under that Act.
In this case the Security Agreement has attached to the vehicle within the meaning of s 19(2) of the PPSA, in that:
(a)the First Respondent, being the purchaser of the Vehicle, has rights in the Vehicle;
(b)the Second Respondent, being the Guarantor and Director of the First Respondent, has rights in the Vehicle;
(c)Toyota gave value for the security interest (within the meaning of s 10 of the PPSA) by advancing the sum of $63,380.00 to the First Respondent, so the First Respondent could acquire the Vehicle.
Further, the Security Agreement covers the Vehicle (within the meaning of s 20(2) of the PPSA), in that:
(a)the Security Agreement is evidenced in writing signed by the First and Second Respondents; and
(b)the writing contains a description of the Vehicle.
Evidence before the court confirms that Toyota registered its security interest in the vehicle on 14 November 2022.
The Vehicle Identification Number (VIN) of the vehicle registered in the name of the first respondent pursuant to the security agreement (page 4 of the exhibit bundle) is recorded as JTFHB8CP306003712, and the vehicle description is the same as that in the PPSR.
Where the secured party has correctly described the chattel by its VIN in its registration on the PPSR, the transferee holds the collateral subject to the security interest (PPSA ss 32 & 43).
I am satisfied on the evidence before me that Toyota’s security interest in the vehicle is a perfected security interest and is enforceable against the respondents.
Section 123 of the PPSA provides that a secured party may seize collateral, by any method permitted by law if the debtor is in default under the security agreement.
There is no doubt on the evidence that the respondents failed to meet their repayment obligations under the terms of the security agreement. The act of default is clearly made out and it has not been rectified despite demands from the applicant.
The applicant is entitled to take all lawful steps to seize the vehicle.
The applicant’s lawful right of entry must be limited by the power granted to it by the agreement. The relief sought by the applicants must be framed to ensure that it allows enforcement of its rights, but not overstep so as to sanction trespass or any breach of the peace[3].
[3] see Volkswagen Financial Services Australia Pty Ltd v Victorian Inspection Testing and Compliancing Services Pty Ltd [2024] FedCFamC2G 641 at [36] per Judge Champion
The orders I made on 20 June 2025 strike that appropriate balance. Based on the affidavit material relied upon by the applicant and the oral submissions made by the parties, I am satisfied that the respondents are in possession of the Vehicle and that it is usually kept at XXX Road, Hoppers Crossing. That is the address given by the respondents in their Notice of Address for Service and it is the place where the vehicle has been observed on numerous occasions by the applicant’s agent. I am also satisfied that the respondents have apparent control of the vehicle.
Pursuant to rule 17.05(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), the Court may vary or set aside a judgment or order if it was made in the absence of a party. The orders I made on 20 June 2025 were made in the absence of the respondents. In the circumstances, I have decided that the orders for seizure and recovery of the vehicle should be stayed for a period of 7 days to afford the respondents an opportunity to make any application to vary or set aside my orders.
Finally, I am satisfied that the applicant is entitled to its costs of this proceeding. The applicant has been put to the cost of enforcing its rights under the security agreement and the PPSA. Mr Foster on behalf of Toyota seeks the costs of filing the initiating application and his appearance at the two directions hearings, with such costs to be calculated in accordance with the relevant court scale. I accept the calculation presented in his proposed order and I consider it appropriate to fix those costs in the sum of $5,999.00.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes. Associate:
Dated: 9 July 2025
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