Volkswagen Financial Services Australia Pty Limited v Tate
[2024] FedCFamC2G 491
•13 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Volkswagen Financial Services Australia Pty Limited v Tate [2024] FedCFamC2G 491
File number(s): SYG 239 of 2024 Judgment of: JUDGE CAMERON Date of judgment: 13 May 2024 Catchwords: CONSUMER LAW – Chattel mortgage – Business purposes – Contractual right to enter premises and seize mortgaged goods – Right of entry does not extend to properties over which borrower does not have control. Legislation: Personal Property Securities Act 2009 (Cth) s 123
National Consumer Credit Protection Act 2009 (Cth) ss 4, 5, 88, 99, 100, 101
Division: General Number of paragraphs: 23 Date of hearing: 13 May 2024 Place: Sydney Counsel for the Applicant: Ms S. Erian Solicitor for the Applicant: Celtic Legal Counsel for the Respondent: No appearance by or on behalf of the respondent
Table of Corrections 13 June 2024 In the Appearances on the cover page in the field Counsel for the Applicant, the words “No appearance by or on behalf of the applicant” have been replaced with “Ms S. Erian”. 13 June 2024 In the Appearances on the cover page, the field Solicitor for the Applicant has been added and the words “Celtic Legal” have been inserted into the righthand column. 13 June 2024 In the Appearances on the cover page in the field Counsel for the Respondent, the words “Ms S. Erian” have been replaced with “No appearance by or on behalf of the respondent” 13 June 2024 In the Appearances on the cover page, the field Solicitor for the Respondent has been removed. ORDERS
SYG 239 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: VOLKSWAGEN FINANCIAL SERVICES AUSTRALIA PTY LIMITED
Applicant
AND: KRISTY LEANNE TATE
Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
13 MAY 2024
THE COURT DECLARES THAT:
1.The applicant is entitled to take possession of the vehicle bearing identification:
(a)VIN: SAJAC60F1 H8K40515;
(b)Engine No: 16060107490306PS; and
(c)Registration No: ETN07M.
2.The applicant and its lawfully appointed representatives may enter:
(a)XXX XXXXX Road, XXXXX XXX XXX XXXX; and
(b)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.
THE COURT ORDERS THAT:
1.The respondent pay the applicant’s costs fixed in the amount of $3,277.
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
INTRODUCTION
This proceeding concerns an application brought pursuant to the National Credit Code (Code) with respect to a 2016 Jaguar Coupe with VIN: SAJAC60F1H8K40515, engine number: 16060107490306PS and registration: ETN07M (Vehicle). The respondent executed a chattel mortgage agreement with the applicant to finance the purchase of the Vehicle (Agreement) but defaulted on her obligations under the Agreement and failed to comply with a notice of default issued on 18 February 2023.
The applicant has submitted that it is entitled to exercise contractual rights in relation to the Vehicle and, in addition to the Code, relies on s.123 of the Personal Property Securities Act 2009 (Cth) (PPS Act). The applicant seeks orders which will assist it to take possession of the Vehicle.
The proceeding was originally brought under the Court’s small claims procedures, but that position was altered upon the filing of an amended application to which further reference will be made. The amended application was filed, by leave, on 17 April 2024.
LEGISLATION AND RULES
The Code is contained in sch.1 of the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act). Section 4 of the Code relevantly provides:
4 Meaning of credit contract
For the purposes of this Code, a credit contract is a contract under which credit is or may be provided, being the provision of credit to which this Code applies.
Section 5 of the Code relevantly provides:
5 Provision of credit to which this Code applies
(1) This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of precontractual obligations) is proposed to be entered into:
(a) the debtor is a natural person or a strata corporation; and
(b) the credit is provided or intended to be provided wholly or predominantly:
(i) for personal, domestic or household purposes …
…
Section 88 of the Code provides:
Enforcement of credit contract
(1)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 …
Enforcement of mortgage
(2) A credit provider must not begin enforcement proceedings against a mortgagor to recover payment of money due or take possession of, sell, appoint a receiver for or foreclose in relation to property subject to a mortgage, unless:
(a) the mortgagor is in default under the mortgage; and
(b) the credit provider has given the mortgagor a default notice, complying with this section, allowing the mortgagor 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.
…
Default notice requirements
(3)A default notice must contain a prominent heading at its top stating that it is a default notice and specify:
(a) the default; and
(b) the action necessary to remedy the default; and
(c) a period for remedying the default; and
(d)the date after which enforcement proceedings in relation to the default, and, if relevant, repossession of mortgaged property may begin if the default has not been remedied; and
(e)that repossession and sale of mortgaged property may not extinguish the debtor’s liability; and
…
Sections 99 to 101 of the Code relevantly provide:
99 Entry to residential property to take possession of goods
(1) A credit provider, or an agent of a credit provider, must not enter any part of premises used for residential purposes for the purpose of taking possession of mortgaged goods under a goods mortgage unless:
(a) the court has authorised the entry; or
(b)the occupier of the premises has, after being informed in writing of the provisions of this section, consented in writing to the entry.
100 Court may order entry
The court may, on the application of a credit provider that is entitled to take possession of mortgaged goods, authorise the credit provider to enter residential premises for the purpose of taking possession of mortgaged goods.
101 Order for possession
(1)The court may, on the application of a credit provider that is entitled to take possession of mortgaged goods, order a person who has possession of the goods to deliver them to the credit provider at a specified time or place or within a specified period.
…
Section 123 of the PPS Act relevantly provides:
123 Secured party may seize collateral
(1)A secured party may seize collateral, by any method permitted by law, if the debtor is in default under the security agreement.
…
BACKGROUND
The following facts, which I find, are drawn from the affidavit of Brendan Long sworn 13 February 2024.
On 29 July 2022, the respondent executed the Agreement with the applicant for the financing of the Vehicle. The Agreement required the respondent to pay the Vehicle’s purchase price to the applicant by:
(a)59 monthly instalments of $2,390; and
(b)one final payment of $2,389.62.
In or around February 2023, the respondent defaulted on her obligations under the Agreement by failing to pay a monthly instalment when it was due. On 18 February 2023, the applicant issued a default notice (Notice) to the respondent. The Notice required the respondent to pay the sum of $2,495 on or before 4 March 2023. The respondent did not comply with the Notice and the last payment she made was for $2,390 on 29 July 2023.
Mr Long annexed to his affidavit copies of the following documents:
(a)the Agreement;
(b)a Personal Property Securities Register search certificate concerning the Vehicle; and
(c)the Notice.
The Agreement relevantly stated:
4. Mortgage
4.1 You give us a mortgage of the Goods described in the Schedule
…
9 Default
9.1 You will be in default under this Agreement if an Event of Default occurs.
9.2 On default, you must pay us the full amount owing under this Agreement which may include the balance outstanding, arrears, interest, fees and charges, enforcement to expenses and costs…
9.3 On default we do any one or more of the following:
…
e) enter any premises and take possession of the Goods:
f) sell or otherwise deal with the goods.
…
PROCEEDING IN THIS COURT
In its amended application, the applicant alleged:
1.On 29 July 2022, the Applicant and the Respondent entered into a Chattel Loan and Mortgage (Agreement) with respect to the purchase of the Vehicle;
2. In or around February 2023, the Respondent defaulted on her obligations under the Agreement (Default);
3. On 18 February 2023, the Applicant issued a notice of default to the Respondent; and
4. Despite request the Respondent has failed, neglected and/or refused to remedy the Default.
It sought the following relief:
4. An Order, pursuant to section 101 of the National Credit Code (Code), requiring the Respondent to deliver the 2016 Jaguar Coupe bearing the below identifiers (Vehicle) and any keys to the Vehicle:
(a) VIN: SAJAC60F1 H8K40515
(b) Engine No: 16060107490306PS
(c) Registration No: ETN07M
to the Applicant, or its lawfully appointed representatives, at such time and at an address nominated by the Applicant.
5. Pursuant to section 101 of the Code, the Applicant and/or its lawfully appointed representatives be permitted to:
(a) enter and remain on any premises/land and is further authorised to take any and all steps reasonable and necessary in order to take possession of, and take any reasonable actions to facilitate the removal of, the Vehicle from the following premises:
i. XXX XXXXX Road, XXXXX XXX XXX XXXX; and
ii. any other premises in Australia at which the Vehicle is reasonably believed to be located.
6. A declaration that the Application is the owner of the Vehicle.
Substituted service
On 15 April 2024 orders for substituted service on the respondent were made in the following terms:
3.In lieu of personal service, the application, any amended application and affidavits filed by the applicant in this proceeding together with this order for substituted service be served by:
a. posting the documents to the respondent’s address at XXX XXXXX Road, XXXXX XXX XXX XXXX; and
b. affixing a copy of the documents to the front gate of the property marked for the attention of the respondent.
The affidavits of service of Teonee Lorenzen-Taylor and Arlen Tierney satisfy me that the following documents were served in accordance with those orders:
(a)Order dated 15 April 2024;
(b)Application filed 15 February 2024;
(c)Affidavit of Brendan Long sworn 13 February 2024; and
(d)Amended Application filed 17 April 2024.
Respondent’s evidence
The respondent filed no material in this proceeding and she did not appear at any stage, including the hearing, although notified of the occasions on which the matter was listed.
CONSIDERATION
The Agreement described the respondent as the borrower and, above what I take to be her signature on the first page of the Agreement, there is a declaration in the following terms:
Business Use Declaration
I declare that the credit to be provided to me/us by the credit provider is to be wholly or predominantly for:
-business investment; or
-investment purposes other than investment in residential property.
On that basis I find that the Agreement was not governed by the Code.
Although the Code does not apply in this case, the Agreement provides sufficient legal basis for the applicant to take possession of the Vehicle. That right is supported in the circumstances of this case by s.123 of the PPS Act, which governs dealings with security interests and which, in effect, provides that the PPS Act is not a barrier to the applicant’s exercise of its rights under the Agreement.
The applicant submitted that in circumstances where relief was available under the Agreement and the PPS Act, rather than the Code, instead of a declaration of ownership of the Vehicle, it sought a declaration of its entitlement to take possession of it. I consider it appropriate to make such a declaration as it would provide a clear statement of the applicant’s rights in relation to the Vehicle.
The applicant also sought orders that it might enter any premises in order to take possession of the Vehicle. I was not taken to any statutory provision associated with the relief which is to be granted which would permit the Court to make an order in such wide terms. The applicant submitted that, in addition to the premises identified in the Agreement as the respondent’s address there were two further addresses over which it might be inferred that the respondent had some control. I do not think that the evidence supports an assumption that such control existed. However, an order referring to premises over which the applicant has apparent control will go some way to addressing fact that the Agreement cannot empower the Court to make orders over premises which the applicant does not control unless the law otherwise provides for it, which I do not understand to be the case here.
CONCLUSION
Consequently, there will be declarations that the applicant is entitled to take possession of the Vehicle and may enter premises over which the respondent has apparent control for the purpose of taking possession of the Vehicle.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 3 June 2024
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