Volkswagen Financial Services Australia Pty Limited v Mohammadalizadehsamani
[2024] FedCFamC2G 897
•13 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Volkswagen Financial Services Australia Pty Limited v Mohammadalizadehsamani [2024] FedCFamC2G 897
File number(s): SYG 367 of 2024 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 13 September 2024 Catchwords: CONSUMER LAW – Practice and procedure – where applicant creditor applies for orders under s 100 and s 101 of the National Credit Code in relation to default by borrower of terms of a credit facility – where application has not been personally served but is said to have been served according to the term of the loan agreement between the creditor and the debtor – whether the term of the loan agreement engages r 10.28(1) of the Federal Court Rules – terms of loan agreement do not do so because r 10.28(1) of the Federal Court Rules applies to an agreement for service of an originating application or for service any other document filed in the proceeding – application therefore has not been served – matter listed for further directions. Legislation: National Consumer Credit Protection Act 2009 (Cth) Sch 1, ss 88(1), 100, 101
Personal Property Securities Act 2009 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.06(2), 6.06, 6.14, 6.15, 17.05
Federal Court Rules 2011 (Cth) r 10.28(1)
Cases cited: Volkswagen Financial Services Australia Pty Ltd v Adra [2024] FedCFamC2G 653
Volkswagen Financial Services Australia Pty Limited v Feili [2024] FedCFamC2G 712
Division: General Number of paragraphs: 24 Date of hearing: 27 March 2024 Place: Sydney Solicitor for the Applicant: Mr B Lavery of Celtic Legal, by telephone The Respondent: No appearance by, or on behalf of, the respondent ORDERS
SYG 367 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LIMITED (ABN 20 097 071 460)
ApplicantAND: FARIBA MOHAMMADALIZADEHSAMANI
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
13 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.The matter be listed for a directions hearing at 9.30 am on 11 October 2024.
[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
The applicant (VFSA) seeks an order pursuant to s 101 of Schedule 1 (Code) to the National Consumer Credit Protection Act 2009 (Cth) that the respondent deliver to VFSA’s agents a 2019 Volkswagen Polo (Vehicle) and, if she fails to do so, an order pursuant to s 100 of the Code that VFSA have access to residential premises for the purpose of enabling it to take possession of the Vehicle.
FACTS
On 25 October 2019 the respondent signed a document headed “Consumer Loan Contract – Secured Loan Schedule” (Loan Schedule), under which the following appears:
This is an offer by you, the Borrower/s named below, to us, Volkswagen Financial Services (“we”, “us”). You have asked us to lend you money under the terms and conditions of the Consumer 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 automatically 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 Loan Schedule then sets out details which include identifying the respondent as the borrower, the respondent’s address (Northmead address), and the amount of credit ($47,157.08), $44,894.99 of which was to be applied towards the purchase price of the Vehicle, $975 for payment of a “Dealer Administration Fee”, and $889.09 for payment of “GAP Insurance”.
In a section headed “Repayments” the Loan Schedule provides that the loan is to be repaid over a period of 49 months by the respondent making 48 monthly instalments, 47 of which would each be in the amount of $910.24, and the final payment would be $16,553.26. The Loan Schedule further provides that:
All monthly repayments are due on the same date each month, commencing one month after the date you sign this offer. If a month does not have the same date (e.g. 31st of the month), the payment is due on the last business day of that month. If the due date falls on a day which is not a business day, the payment must be made on the next business day.
Section 8 of the Loan Schedule provides that a “mortgage is given to secure your obligations under this Contract over the Goods described below”, the “Goods” being the Vehicle.
An officer of VFSA signed the Loan Schedule on 25 October 2019.
There is in evidence a document titled “Terms and Conditions Consumer” which contains two sets of terms, one of which is titled “Consumer Loan Contract – Secured Terms & Conditions” (Loan Terms). Clause 1.1 provides that VFSA will lend the respondent the “total amount of credit as set out in the Loan Schedule”, noting that “[t]his is the loan which you must repay”. Clause 3.1 provides that the respondent must pay the loan in full by the end of the repayment period, and cl 3.2 provides that the respondent must make the repayments as specified in the Loan Schedule. Clause 6 provides that the respondent “gives us a legal mortgage over the Goods specified in the Loan Schedule”, the “Goods” being the Vehicle.
Clause 11 of the Loan Terms, which deals with default:
(a)defines when default occurs, and this includes the respondent’s failing to pay VFSA on time any money due (cl 11.1(a));
(b)provides that if default occurs, VFSA must give a written default notice requiring the respondent to correct the default, at least where the law would require VFSA to give such notice (cl 11.2); and
(c)requires the respondent to pay the full amount owing under the loan agreement if the respondent does not comply with the default notice (cl 11.3).
Further, cl 11.6 provides that if the respondent does not or cannot fix the default VFSA will be entitled to take possession of the Vehicle.
On 26 October 2019 VFSA registered a security interest against the Vehicle with the Personal Property Securities Register established under the Personal Property Securities Act 2009 (Cth) (PPS Act).
VFSA issued a document titled “Default Notice” dated 8 March 2022 addressed to the respondent at an address in Riverstone, New South Wales (Riverstone Address). The Default Notice: stated that the respondent was “currently in default of the Credit Contract” because VFSA had not received $11,674.08; demanded that the respondent remedy the default by paying this amount by 12 April 2022; and stated that if the default is not remedied by 12 April 2022, the total amount outstanding “under the Credit Contract and Mortgage” would become outstanding, and VFSA may begin enforcement proceedings, and VFSA may begin repossession of the “Mortgaged Goods” (these being the Vehicle).
VFSA, in its written submissions, correctly proceeds on the premise that s 88(1) of the Code applies to the Mortgage. Subsection 88(1) of the Code provides:
A credit provider must not begin enforcement proceedings against a debtor in relation to a credit contract unless:
(a) the debtor is in default under the credit contract; and
(b)the credit provider has given the debtor, and any guarantor, a default notice, complying with this section, allowing the debtor a period of at least 30 days from the date of the notice to remedy the default; and
(c) the default has not been remedied within that period; and
(d)if the credit contract is for a reverse mortgage, the credit provider has spoken to one of the following persons by telephone or in person in that period and has thus both confirmed that the debtor received the default notice and informed the person of the consequences of failure to remedy the default, or has made reasonable efforts to do so:
(i) the debtor;
(ii) a practising lawyer representing the debtor;
(iii) a person with a power of attorney relating to the debtor’s financial affairs.
PROCEEDING IN THIS COURT
The matter came before me on a first court date on 27 March 2024. The respondent did not appear.
Mr Lavery, who appeared for VFSA, read the following affidavits:
(a)An affidavit of service made by Mr Tadros on 14 March 2024 in which he deposes to serving on the respondent a letter, the application, and the affidavit of Mr Brendan Long made on 6 March 2024 (Long affidavit) (to which I refer below) by leaving the documents at the respondent’s address for service at the Riverstone Address.
(b)An affidavit made by Mr O’Sullivan on 20 March 2024 in which he deposes to having sent an email to the respondent at an email address “fariba.samani . . . @ . . .” attaching the application and the Long affidavit. Mr O’Sullivan is a paralegal working in the offices of VFSA’s lawyers.
(c)An affidavit made by Ms Johnson on 21 March 2024, in which she deposes to having placed the application and the Long affidavit in an ordinary post envelope addressed to the respondent at the Riverstone Address, and depositing the sealed envelope in the Australian Post postal box at 4 Ebor Street, Toowong. Ms Johnson is a receptionist working in the offices of VFSA’s lawyers.
(d)An affidavit made by Mr O’Sullivan on 25 March 2024 in which he deposes he sent by email to an email address “fariba.samani . . . @ . . .” attaching an email (Associate’s Email) which my Associate, at my direction, sent to VFSA’s lawyers. The Associate’s Email noted that the first court date, which had been listed before me at 9:30 am on 27 March 2024, was to proceed by telephone, and provided dial-in details.
(e)An affidavit made by Ms Lorenzen-Taylor on 25 March 2024 deposing that on 22 March 2024 she posted the Associate’s Email to the respondent at the Riverstone Address.
(f)The Long affidavit in which Mr Long, VFSA’s lawyer, annexes the Loan Schedule, Loan Terms, extract from the PPS Act Register, and the Default Notice.
After Mr Lavery read his affidavits, I reserved judgment.
DETERMINATION
It is apparent from the affidavits of service that the respondent has not been personally served with the application.
Service of documents starting a proceeding in this Court is governed, in the first instance, by r 6.06 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules), which provides:
(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.
Rule 6.06 is subject to r 6.14 and r 6.15 of the GFL Rules:
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.
In its written submissions VFSA relies on cl 13.4 of the Loan Terms, which provides:
Unless stated otherwise, if we need to give you a document we can do so by:
a)delivering it to you personally; or
b)leaving it at, or sending it by post or facsimile to, your residential or postal address, or facsimile number, last known to us; or
c)emailing it, where the Code allows, to the email address you have authorised and only if you have agreed to receive documents this way; or
d)making it securely available on our website for retrieval by electronic communication, where the Code allows and only if you have agreed to receive documents this way.
Clause 13.4 of the Loan terms potentially comes within the scope of r 10.28(1) of the Federal Court Rules 2011 (Cth) (Federal Court Rules), which may apply to a proceeding in this Court pursuant to r 1.06(2) of the GFL Rules. Subrule 10.28(1) 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.
In Volkswagen Financial Services Australia Pty Ltd v Adra,[1] I held that a differently worded clause engaged r 10.28(1) of the Federal Court Rules and, on that basis, found that personal service in that case was not required. In Volkswagen Financial Services Australia Pty Limited v Feili, [2] however, Judge Cameron held that the clause did not have the effect I held it did. His Honour said:[3]
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.
[1] Volkswagen Financial Services Australia Pty Ltd v Adra [2024] FedCFamC2G 653
[2] Volkswagen Financial Services Australia Pty Limited v Feili [2024] FedCFamC2G 712
[3] Volkswagen Financial Services Australia Pty Limited v Feili [2024] FedCFamC2G 712, at [6]
In his Honour’s view, r 10.28(1) of the Federal Court Rules does not apply to an agreement concerning the service of documents unless the agreement expressly or by implication applies to an originating document. On reflection, I am satisfied his Honour is plainly correct. That means that the respondent in this proceeding has not been served with the application; and, for that reason, it is not open to me to make any order other than to list the matter for a further directions hearing at 9.30 am on 11 October 2024.
There is another difficulty with service. The affidavits of service refer to posting the application to the Riverstone Address (rather than to the Northmead Address) and to an email address. There is no evidence, however, that the Riverstone Address is the current address of the respondent, or that the email address is the respondent’s email address.
DISPOSITION
The only order I propose to make is to list the matter for a directions hearing at 9.30 am on 11 October 2024.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 13 September 2024
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