Volkswagen Financial Services Australia Pty Limited v Feili
[2024] FedCFamC2G 712
•26 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Volkswagen Financial Services Australia Pty Limited v Feili [2024] FedCFamC2G 712
File number(s): SYG 467 of 2024
SYG 556 of 2024
SYG 1141 of 2024Judgment of: JUDGE CAMERON Date of judgment: 26 July 2024 Catchwords: PRACTICE AND PROCEDURE - requirement for personal service – whether dispensed with by contract – criteria for dispensing with service and for substituted service. Legislation: Federal Court Rules 2011 (Cth) r 10.28(1)
Federal Circuit and Family Court (Division 2) (General Federal Law)) Rules 2021 (Cth) r 6.06(1)
Cases cited: Volkswagen Financial Services Australia Pty Ltd v Adra [2024] FedCFamC2G 653
Kosmos Capital Pty Ltd v Turiya Ventures LLC [2019] FCA 528
Division: General Number of paragraphs: 14 Date of hearing: 26 July 2024 Place: Canberra Solicitor for the Applicant: Ms E. Flack, Celtic Legal Counsel for the Respondent: No appearance by or for the respondent ORDERS
SYG 467 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LIMITED ABN 20 097 071 460
Applicant
AND: SIAMAK ROODBARY FEILI
Respondent
SYG 556 of 2024 BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LIMITED ABN 20 097 071 460
Applicant
AND: ABBAS IMANINEJAD
Respondent
SYG 1141 of 2024 BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LIMITED ABN 20 097 071 460
Applicant
AND: KHOUDOR AOULI
Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
26 JULY 2024
THE COURT ORDERS THAT:
1.The matter be listed for further directions on 26 August 2024 at 10:15am.
2.The applicant have leave to appear at the listing by Teams.
3.Costs of today be reserved.
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 Cameron
These three proceedings concern motor vehicle finance agreements where the borrowers are in default and the lender wishes to secure possession of the relevant collateral security, namely the motor vehicle whose purchase was financed by the particular finance agreement. In none of the matters has the initiating application been served personally on the borrower. In those matters in which an amended application has been filed, there has not been personal service of that document either. In each case, relevant court documents have apparently been posted and emailed to, and left at the address of, the relevant borrower.
I raised the question of personal service with the solicitor appearing for the applicants in these proceedings, Ms Flack, and indicated my view that the matters could not proceed until service had been properly effected.
In support her argument that they could proceed in the circumstances, Ms Flack referred to Volkswagen Financial Services Australia Pty Ltd v Adra [2024] FedCFamC2G 653 where it was held that process could be served in the manner attempted in these matters because it was authorised by the combined effect of finance agreement considered in that case and the Federal Court Rules 2011 (Cth),which can be applied in this Court, in the exercise of discretion. The finance agreement in Adra’s case relevantly provided:
16.2If the Lender needs to give the Borrower or Guarantor a document about this Agreement, the Lender can do so by:
a) delivering it to the Borrower or Guarantor personally; or
b) leaving it at, or sending it by post or facsimile to, the Borrower’s or Guarantor’s residential, business or postal address, or facsimile number, last known to the Lender; or
c) sending it to the email address the Borrower or Guarantor has authorised and only if the Borrower or Guarantor has agreed to receive documents this way; or
d) making it securely available on the Lender's website for retrieval by electronic communication and only if the Borrower or Guarantor has agreed to receive documents this way.
Rule 10.28(1) of the Federal Court Rules provides:
If a respondent in a proceeding has agreed that an originating application or other document in the proceeding may be served on the respondent, or on another person for the respondent, in a way or at a place mentioned in the agreement, the document may be served in accordance with the agreement.
The finance agreements underlying the present proceedings contain the same provision as the one considered in Adra’s case.
It has been submitted, in reliance on Adra’s case, that the Court has a discretion whether or not to accept the sort of service pressed on the Court in this case, namely service by post, service by email, and service by delivery at the last known address, as sufficient to satisfy the requirements of r.10.28(1) of the Federal Court Rules. With great respect, I cannot agree that it does. Although the contractual relationship between the parties provides that the lender may give notice to the borrower in accordance with the finance agreement, the agreement does not purport to affect the operation of the Court's rules concerning personal service in a proceeding’s initial stages, as was the case with the agreement considered in Kosmos Capital Pty Ltd v Turiya Ventures LLC [2019] FCA 528.
The Court's Rules provide an important protection for respondent litigants: that they be made aware of proceedings being brought against them. Considerable injustice could arise if proceedings were able to be maintained against a person who had no idea of their existence. In that regard, r.6.06(1) of the Federal Circuit and Family Court (Division 2) (General Federal Law)) Rules 2021 (Cth) (Rules) provides:
6.06 When is service by hand required
(1) Service by hand is required for an application starting a proceeding or a subpoena requiring attendance of a person.
(2) However, service by hand is not required if:
(a) there are current proceedings for which there is a notice of address for service for the person to be served; or
(b) the Court directs that an application may be served in another way; or
(c) a lawyer accepts service for a party and subsequently files an address of service; or
(d) a lawyer accepts service for a person other than a party
However, the Rules also acknowledge that personal service may be unduly difficult or even impossible in some circumstances, including those where a respondent is evading service. The mechanism to address circumstances such as that is found in r.6.14, which deals with substituted service, and r.6.15, which deals with matters to be taken into account when considering whether to dispense with service or to make an order for substituted service. They state:
6.14 Substituted service
(1) If, for any reason, it is impracticable to serve a document in a way required under this Part, the Court may make an order dispensing with service or substituting another way of serving the document.
(2) The Court may specify the steps to be taken for bringing the document to the attention of the person to be served.
(3) The Court may specify that the document is to be taken to have been served on the happening of a specified event or at the end of a specified time.
6.15 Matters to be taken into account
In making an order for dispensing with service or for substituted service, the Court may have regard to:
(a) whether reasonable steps have been taken to attempt to serve the document; and
(b) whether it is likely that the steps that have been taken have brought the existence and nature of the document to the attention of the person to be served; and
(c) whether the person to be served could become aware of the existence and nature of the document by means of advertising or another means of communication that is reasonably available; and
(d) the likely cost to the party serving the document, the means of that party and the nature of the proceedings; and
(e) any other relevant matter.
The essential criterion for an order for substituted service, according to r.6.14, is that it is impracticable to serve a document in the way required by the Rules. Parties may not, under the Rules, contract out of those rights or obligations.
It is understandable that the finance provider in this matter seeks to rely on the contractual agreement reached between the parties as to how notices might be provided. It is also unsurprising that it calls in aid another provision of the contractual agreement, cl.5.4, which requires the borrower to advise the lender of the location of the collateral security, and thus to infer that any new notice or absence of notice may be relied upon as an indication of the last known whereabouts of the collateral security, and thus where the borrower may be found. That is logical enough, but it does not satisfy the tests under the Rules.
The Rules make it clear that before substituted service is to be permitted, it must be demonstrated that personal service is impractical. Further, as already noted, r.6.15 sets out criteria to which regard must be had when deciding whether personal service might be dispensed with and substituted service ordered in lieu. The first of those is whether reasonable steps have been taken to attempt to serve the document. In these cases, there is no evidence that any attempt at personal service has been made, and no explanation given for why personal service might not be effective. Similarly, the Court should have regard to whether it is likely that the steps taken have in fact brought the existence and nature of the document to the attention of the person to be served. It is not clear that the steps which have been taken in these cases are likely to have brought the documents to the attention of the respondents. For instance, there is no evidence before the Court that the borrowers are still associated with the addresses to which the documents have been sent. There are other criteria in that rule which might usefully also be addressed.
In sum, the evidence before the Court in relation to service on the respondents in these matters do not evidence an attempt to serve the documents by personal service as the Rules require. The evidence does not indicate that it is impracticable to serve the documents personally, what steps would be reasonable in the circumstances to have been taken in order to justify an order for substituted service, and whether the steps which have already been taken, or other steps which might alternatively be taken, would be likely to bring the documents to the attention of the respondents.
In making these comments, I do not wish to give the impression that an order for substituted service would not be available in these matters. What I am saying is that the material before the Court at the moment does not justify the making of such an order or the acceptance of the attempts at service already undertaken by the applicant as sufficient to merit an order validating them as a form of substituted service.
The matters will stand over for further directions to 26 August 2024 at 10:15am.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 7 August 2024
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