Volkswagen Financial Services Australia Pty Limited v Concierge Corporation Pty Ltd
[2024] FedCFamC2G 576
•28 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Volkswagen Financial Services Australia Pty Limited v Concierge Corporation Pty Ltd [2024] FedCFamC2G 576
File number(s): SYG 668 of 2024 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 28 June 2024 Catchwords: CONSUMER LAW – where applicant lender applies for orders under s 100 and s 101 of the National Credit Code for the delivery of a motor vehicle that is the subject of a chattel mortgage purportedly executed by the respondent – where the respondent says it did not execute the chattel mortgage – whether applicant lender has proved that respondent executed chattel mortgage – applicant lender has not so proved – application dismissed. Legislation: National Consumer Credit Protection Act 2009 (Cth) Sch 1, ss 100, 101 Division: General Number of paragraphs: 23 Date of hearing: 25 June 2024 Place: Sydney Solicitor for the Applicant: Mr B O’Sullivan of Celtic Legal, by video Solicitor for the Respondent: Mr J Nasr of Jeresyn Legal, by video ORDERS
SYG 668 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LIMITED (ABN 20 097 460)
Applicant
AND: CONCIERGE CORPORATION PTY LTD (ACN 664 539 557)
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
28 JUNE 2024
THE COURT ORDERS THAT:
1.The application is dismissed.
2.Subject to order 3 the applicant pay the respondent’s costs set in the amount of $3,500.
3.The parties have liberty to apply to vary or discharge order 2 within 28 days after the date on which these orders are pronounced.
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
On 12 April 2024 the applicant (VFSA) filed an application in this Court claiming an order under s 100 of Schedule 1 (Code) to the National Consumer Credit Protection Act 2009 (Cth) that VFSA have access to residential premises for the purpose of enabling it to repossess a 2022 Ram 1500 (Vehicle) or, in the alternative, an order under s 101 of the Code that the respondent (CCPL) deliver the Vehicle to VFSA or its agents. VFSA’s claims are based on the allegations that CCPL defaulted under a loan agreement it entered into with VFSA, and that such default gave rise to a right in VFSA to repossess the Vehicle pursuant to a chattel mortgage CCPL granted to VFSA as security for its obligations under the loan agreement.
CCPL denies it entered into any loan agreement with VFSA, or that it applied or authorised any person on its behalf to apply for any loan from VFSA, or that it had ever possessed the Vehicle, or that it executed any loan agreement or chattel mortgage in relation to the Vehicle.
The principal question that arises in this proceeding, therefore, is whether VFSA has adduced sufficient evidence to prove that CCPL or a person on its behalf executed any loan agreement or chattel mortgage in relation to the Vehicle.
EVIDENCE
There is in evidence a document headed “Chattel Mortgage Loan Schedule” (Loan Schedule), on the second page of which, under the heading “Contract no: . . . .”, the following appears:
This is an offer by you, the Borrower/s named below, to us, Volkswagen Financial Services Australia Pty Ltd (“we”, “us”). You have asked us to lend you money under the terms and conditions of the Chattel Loan and Mortgage (Loan Contract), which is made up of this Loan Schedule (“Loan Schedule”) and the Terms and Conditions (“Terms and Conditions”). If we accept your offer it will form a binding contract between us (“Contract”). As security for your obligations under this Contract, this Contract creates a mortgage over the Goods described below.
The “Terms and Conditions” appear to be a reference to the terms contained in a document titled “Chattel Mortgage Terms and Conditions” (Mortgage Terms).
Clause 1.2 of the Mortgage Terms provides that VFSA accepts “your offer” to borrow the “Amount of Credit” set out in the Loan Schedule “when our authorised officer signs the [Loan] Schedule or when we disburse the Amount of Credit in accordance with your directions, whichever occurs first”. “Your” is a reference to CCPL, whose name appears in the Loan Schedule as the Borrower. The Loan Schedule states that the “Amount of Credit” is $99,425.
Clause 2.1 of the Mortgage Terms provides that the “Amount of Credit” must be repaid “in accordance with these Terms”. The “Terms” include the term set out in the Loan Schedule under the heading “Repayments”, which provides that the “loan” is to be repaid by 60 monthly instalments, the first 59 instalments each being for $1,749.79, and the last instalment being for $41,750.11. The Loan Schedule provides that the first payment will occur “in accordance with your payment structure”, but does not provide a date.
Clause 9.1 of the Mortgage Terms provides that the borrower will be in default if an “Event of Default” (as defined in cl 17.1) occurs. One of those events is the borrower not paying any amount payable under the loan agreement. If an event of default occurs, cl 9.2 provides that the borrower must pay the full amount owing “under this Agreement”, which may include the balance outstanding. Paragraphs (e) and (f) of cl 9.3 provide that, if the borrower is in default, VFSA may also “enter any premises and take possession of the Goods; sell or otherwise deal with the Goods”. Item 10 of the Loan Schedule identifies “the Goods” to be the Vehicle; and it provides that a “mortgage is given to secure your obligations under this Contract over “the Goods””.
Clause 14.1 of the Mortgage Terms concerns the liability of “[t]he Guarantor”. It provides:
The Guarantor unconditionally and irrevocably guarantees the Borrower will pay the Lender all amounts payable under this Agreement when they are due. If the Borrower does not pay any amount under this Agreement on time and in accordance with this Agreement, then the Guarantor agrees to pay that amount to the Lender on demand from the Lender (whether or not the Lender made demand on the Borrower).
Item 9 of the Loan Schedule identifies “Kevin Edomwonyi Osifo” as the guarantor.
The Loan Schedule contains a section (Execution Page) where the borrower, if a company, must sign “in accordance with section 127 of the Corporation Act 2001 (Cth): (For ALL companies, at least two directors or a director and company secretary are required to sign below for this contract to be validly executed)”. In a box that appears above the word “Signature” there is a handwritten mark. Underneath the word “Signature” there are two further boxes, in each of which there is printed the name “Kevin Edomwonyi Osifo”. Below the second of the two boxes in which the name “Kevin Edomwonyi Osifo” appears there is printed “(Sole Director / Director / company Secretary)”, and the date “17.03.2023”.
The Execution Page also provides for the signature of the guarantor. In a box above the words “Signature Guarantor” there appears a handwritten mark. In the box that appears under the words “Signature Guarantor” there appears the name “Kevin Edomwonyi Osifo”, and the date “17.03.2023”.
On 7 September 2023 VFSA issued a “Default Notice” addressed to CCPL. It states:
You are currently in default of your credit contract. Your account is currently 21 days overdue because we have not received the following agreed repayments:
Contract Number: . . . . .
Balance Outstanding $1,819.79
Including Fees of: $70.00
(“Default”) *if the Default is a residual on a Finance or Novated Lease the amount is shown as GST exclusive.
The action necessary to remedy the default(s) is payment of the Balance Outstanding within 14 days from the date of this letter.
Failure to make the payment may result in us taking possession of the collateral. We may also disclose information about the Balance Outstanding of $1,819.79 to an external credit reporting body. The information will be included in your credit information file.
Mr Osifo, the person whose purported signature appears in the Loan Schedule, has made an affidavit in which he confirms he is the sole director and secretary of CCPL. He deposes to dealings he had with a Mr C. Mr Osifo deposes he knew Mr C from school, and that he renewed contact with Mr C in about July 2022 after Mr C had been released from prison. Mr C was the subject of a public warning issued by NSW Fair Trading on 11 December 2020, which included the following:
Consumers are warned not to deal with [Mr C], or his suspected aliases . . . associated with The Car Buying Agency Pty Ltd (ACN 635785625) (the Trader) which operates as a broking service, sourcing motor vehicles for consumers via its website >
Mr Osifo also deposed as follows:
In about February 2024, I attend an interview with Fair Trade. In this interview Fair Trading outline all the loans and debts [Mr C] has incurred in my name. I was not aware of any of these loans.
In the interview I found out that I was registered with ASIC as the director of [CCPL] on 16 December 2022. At this point in time, to my knowledge the business didn’t even have a logo, nothing was finalised.
I was registered as the director of OMNIONE on 1 April 2013. I had not consented to be the director of OMNIONE until mid to late May 2023. I do not recognise the Rozelle or North Strathfield addresses that the business was registered to.
I have now found out that [Mr C] has done this to other people.
I have never applied for credit with [VFSA]. I have never received or had use of any motor vehicles or other products that the credit was used towards. I do not know where any of the vehicles are or what [Mr C] has done to them.
There are no vehicles in question on my property or at any premises over which I have control or access that has any vehicles that are the subject of the loan agreement with the applicant.
Mr Osifo was not cross-examined; and there is no reason why I should not accept the truth of the matters to which Mr Osifo has deposed. I therefore accept as true the matters to which Mr Osifo deposes.
DETERMINATION
VFSA’s claims for relief are premised on CCPL being bound by the Mortgage Terms. VFSA does not allege that CCPL became bound by the Mortgage Terms by any means other than by its having executed the Loan Schedule. Given that CCPL, through Mr Osifo, denies he ever applied for finance with VFSA, or that he had ever received or had used any vehicle that may have been acquired by the credit pursuant to the Mortgage Terms, it follows that VFSA bears the onus of proving that an officer or some other authorised agent of CCPL executed the Loan Schedule and, for that reason became bound by the Mortgage Terms.
The only evidence on which VFSA relies for claiming that CCPL executed the Mortgage Terms is the handwritten mark that appears in the signature box above the word “[s]ignature” which, in turn, appears above the words “Kevin Edomwonyi Osifo”. CCPL submits I should be satisfied that the handwritten mark constitutes the signature of the “Sole Director / Director / company Secretary” of CCPL. VFSA has not adduced any evidence that identifies the “Sole Director / Director / company Secretary” of CCPL as at 17 March 2023. That by itself, however, poses no difficulty, because Mr Osifo deposes that he was appointed director of CCPL in December 2022.
More problematic, however, is VFSA’s having failed to adduce any evidence that is capable of showing that the handwritten mark on the Loan Schedule that purports to be the signature of Mr Osifo is in fact his signature. There are a number of possible ways by which it was reasonably open to VFSA to attempt to prove that the handwritten mark that appears on the Loan Schedule is indeed the signature of Mr Osifo.[1] One way was for VFSA to call as a witness or witnesses its employee or employees, or agent or agents, who arranged to enter into the Mortgage Terms in relation to the Vehicle, and to adduce contemporaneous business records that were created in connection with the granting of the loan that is the subject of the Mortgage Terms.
[1] As for the method of proving handwriting, see Cross on Evidence, LexisNexis Australia, online edition, accessed 26.06.2024, at [39090]: “There are three types of evidence of handwriting which call for discussion — testimonial or hearsay evidence, opinion and comparison.”
It is the case that Mr Osifo does not in terms depose that the handwritten mark on the Loan Schedule that purports to be his signature is not his signature. As I have already noted, however, Mr Osifo has deposed that he had never applied for credit with VFSA, and that he had never received or had use of any motor vehicle or other products “that the credit was used towards”; and Mr Osifo was not cross-examined. On the basis of this evidence I am prepared to find that Mr Osifo intended also to depose that he did not sign the Loan Schedule.
Even if it were not open to me to find that Mr Osifo intended to depose that he did not sign the Loan Schedule, I could not have been satisfied solely from the Loan Schedule that the handwritten mark on the Loan Schedule that purports to be Mr Osifo’s signature is in fact his signature.
DISPOSITION
Given that VFSA has not discharged the burden of proving the signature that purports to be that of Mr Osifo is in fact his signature, and it has not proved that the signature is that of some other person who had authority to sign the Loan Schedule on behalf of CCPL, it follows that VFSA’s claims against CCPL for orders in relation to the Vehicle must fail. I propose, therefore, to dismiss the application.
There is no reason why costs should not follow the event. I am satisfied that $3,500 would provide a fair indemnity for the costs CCPL has incurred in defending this proceeding. I therefore also propose to order that VFSA pay to CCPL costs set in the amount of $3,500. Given, however, I have not heard submissions from the parties about costs, I also propose to reserve to the parties liberty to apply within 28 days after I pronounce orders to vary or discharge the order for costs I propose to make.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 28 June 2024
0
0
1